82 FR 48302 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule To Adopt a Strategy QOO Order Fee Cap
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 199 (October 17, 2017)
Federal Register Volume 82, Issue 199 (October 17, 2017)
| Page Range | 48302-48304 | |
| FR Document | 2017-22389 |
[Federal Register Volume 82, Number 199 (Tuesday, October 17, 2017)] [Notices] [Pages 48302-48304] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-22389] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81852; File No. SR-BOX-2017-32] Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule To Adopt a Strategy QOO Order Fee Cap October 11, 2017. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on September 29, 2017, BOX Options Exchange LLC (the ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A)(ii). \4\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- [[Page 48303]] I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange is filing with the Securities and Exchange Commission (``Commission'') a proposed rule change to amend the Fee Schedule on the BOX Market LLC (``BOX'') options facility. While changes to the fee schedule pursuant to this proposal will be effective upon filing, the changes will become operative on October 2, 2017. The text of the proposed rule change is available from the principal office of the Exchange, at the Commission's Public Reference Room and also on the Exchange's Internet Web site at http://boxexchange.com. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Fee Schedule for trading on BOX to establish monthly and daily fee caps for certain manual transactions fees on the BOX open-outcry Trading Floor (``Trading Floor''). Manual transactions consist of Qualified Open Outcry (``QOO'') Orders.\5\ A QOO Order must be entered as a two-sided order, an initiating side and a contra-side, and the QOO Order fees, rebates and applicable fee and rebate caps will apply to both sides of the order. --------------------------------------------------------------------------- \5\ See BOX Rule 7600. The QOO Order must be entered as a two- sided order when it is submitted to the Exchange for execution through the BOX Order Gateway (``BOG''). --------------------------------------------------------------------------- Specifically, the Exchange proposes to add Section II.D ``Strategy QOO Fee Cap'' where manual transactions fees will be capped at $700 for all reversal, conversion, jelly roll, and box spread strategies \6\ executed on the same trading day in the same option class. QOO Order fees in these combined Strategies will further be capped at $25,000 per month per Participant. The Exchange then proposes to specify that executions subject to the Strategy QOO Order Fee Cap will not be subject to the Broker Dealer manual transaction fee cap of $75,000 per month in Section II.A, and the QOO Order Rebate outlined in Section II.C. --------------------------------------------------------------------------- \6\ A ``reversal strategy'' is established by combining a short security position with a short put and a long call position that shares the same strike and expiration. A ``conversion strategy'' is established by combining a long position in the underlying security with a long put and a short call position that shares the same strike and expiration. A ``jelly roll strategy'' is created by entering into two separate positions simultaneously. One position involves buying a put and selling a call with the same strike price and expiration. The second position involves selling a put and buying a call, with the same strike price, but with a different expiration from the first position. A ``box spread strategy'' is a strategy that synthesizes long and short stock positions to create a profit. Specifically, a long call and short put at one strike is combined with a short call and long put at a different strike to create synthetic long and synthetic short stock positions, respectively. These definitions are identical to the terms defined in the Chicago Board Options Exchange, Inc. (``CBOE'') Fee Schedule; NYSE American Options Fee Schedule ``(``NYSE'') and Phlx Pricing Schedule (``PHLX''), Strategy Caps on Multiply Listed Options Fees. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act, in general, and Section 6(b)(4) and 6(b)(5) of the Act,\7\ in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among BOX Participants and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- The Exchange believes that the proposed Strategy QOO Order fee cap is reasonable and appropriate. The proposed fee cap of $700 per day for certain strategies executed on the same trading day in the same option class; and $25,000 per month per Participant are the same amount strategy fee caps at a competing exchanges with an open outcry trading floor.\8\ Further, the Exchange believes that this proposed fee cap is equitable and not unfairly discriminatory because it provides incentives for all Participants to submit certain strategy orders to the BOX Trading Floor, which brings increased liquidity and order flow to the floor for the benefit of all market participants. Finally, the Exchange believes it is reasonable, equitable and not unfairly discriminatory to exempt all transactions subject to the Strategy QOO Fee Cap from the Broker Dealer monthly QOO fee cap and the QOO Order Rebate as additional incentives for these orders will no longer be necessary. --------------------------------------------------------------------------- \8\ See CBOE Fee Schedule Footnote 13; NYSE Fee Schedule, Limit of Fees on Options Strategy Executions on page 18; and Phlx Pricing Schedule, Strategy Caps on Multiply Listed Options Fees. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Further, the Exchange does not believe that capping the fees for certain Strategy QOO Orders will impose an undue burned on intra-market competition because all Floor Participants are eligible for the fee cap. Further, the Exchange believes that the fee cap will promote competition by allowing the Exchange to remain competitive with other exchanges with open outcry trading floors. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Exchange Act \9\ and Rule 19b-4(f)(2) thereunder,\10\ because it establishes or changes a due, or fee. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(A)(ii). \10\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend the rule change if it appears to the Commission that the action is necessary or appropriate in the public interest, for the protection of investors, or would otherwise further the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or [[Page 48304]] Send an email to [email protected]. Please include File Number SR-BOX-2017-32 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-BOX-2017-32. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-BOX-2017-32, and should be submitted on or before November 7, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\ --------------------------------------------------------------------------- \11\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-22389 Filed 10-16-17; 8:45 am] BILLING CODE 8011-01-P
![48302 Federal Register / Vol. 82, No. 199 / Tuesday, October 17, 2017 / Notices
C. Self-Regulatory Organization’s operative delay and designates the Washington, DC 20549 on official
Statement on Comments on the proposed rule change operative upon business days between the hours of
Proposed Rule Change Received From filing.16 10:00 a.m. and 3:00 p.m. Copies of such
Members, Participants, or Others At any time within 60 days of the filing also will be available for
No written comments were either filing of the proposed rule change, the inspection and copying at the principal
solicited or received. Commission summarily may office of the Exchange. All comments
temporarily suspend such rule change if received will be posted without change;
III. Date of Effectiveness of the it appears to the Commission that such the Commission does not edit personal
Proposed Rule Change and Timing for action is necessary or appropriate in the
Commission Action identifying information from
public interest, for the protection of submissions. You should submit only
Because the foregoing proposed rule investors, or otherwise in furtherance of information that you wish to make
change does not: (i) Significantly affect the purposes of the Act. If the available publicly. All submissions
the protection of investors or the public Commission takes such action, the
should refer to File Number SR–
interest; (ii) impose any significant Commission shall institute proceedings
NASDAQ–2017–103, and should be
burden on competition; and (iii) become to determine whether the proposed rule
change should be approved or submitted on or before November 7,
operative for 30 days from the date on
which it was filed, or such shorter time disapproved. 2017.
as the Commission may designate, it has For the Commission, by the Division of
IV. Solicitation of Comments
become effective pursuant to Section Trading and Markets, pursuant to delegated
19(b)(3)(A) of the Act and Rule 19b– Interested persons are invited to authority.17
4(f)(6) thereunder.12 submit written data, views, and Eduardo A. Aleman,
A proposed rule change filed arguments concerning the foregoing, Assistant Secretary.
pursuant to Rule 19b–4(f)(6) under the including whether the proposed rule
[FR Doc. 2017–22392 Filed 10–16–17; 8:45 am]
Act 13 normally does not become change is consistent with the Act.
BILLING CODE 8011–01–P
operative for 30 days after the date of its Comments may be submitted by any of
filing. However, Rule 19b–4(f)(6)(iii) 14 the following methods:
permits the Commission to designate a Electronic Comments SECURITIES AND EXCHANGE
shorter time if such action is consistent
with the protection of investors and the • Use the Commission’s Internet COMMISSION
public interest. The Exchange has asked comment form (http://www.sec.gov/
the Commission to waive the 30-day rules/sro.shtml); or [Release No. 34–81852; File No. SR–BOX–
operative delay so that the Exchange • Send an email to rule-comments@ 2017–32]
may immediately extend the ELO sec.gov. Please include File Number SR–
implementation date. The Exchange NASDAQ–2017–103 on the subject line. Self-Regulatory Organizations; BOX
stated that it will not be able to Options Exchange LLC; Notice of
Paper Comments Filing and Immediate Effectiveness of
implement ELO by the end of the third
quarter of 2017. According to the • Send paper comments in triplicate a Proposed Rule Change To Amend
Exchange, it has encountered to Brent J. Fields, Secretary, Securities the Fee Schedule To Adopt a Strategy
unforeseen issues in developing ELO, and Exchange Commission, 100 F Street QOO Order Fee Cap
and these issues will require additional NE., Washington, DC 20549–1090.
All submissions should refer to File October 11, 2017.
thoughtful and methodical development
efforts to ensure that risks are Number SR–NASDAQ–2017–103. This Pursuant to Section 19(b)(1) of the
adequately addressed and the System file number should be included on the Securities Exchange Act of 1934 (the
will accurately account for the new ELO subject line if email is used. To help the ‘‘Act’’),1 and Rule 19b–4 thereunder,2
priority. The Exchange also stated that Commission process and review your notice is hereby given that on
waiving the operative delay will allow comments more efficiently, please use September 29, 2017, BOX Options
it to implement the proposed only one method. The Commission will Exchange LLC (the ‘‘Exchange’’) filed
implementation delay and provide post all comments on the Commission’s with the Securities and Exchange
notice to market participants thereof.15 Internet Web site (http://www.sec.gov/ Commission (‘‘Commission’’) the
The Commission believes that waiving rules/sro.shtml). Copies of the proposed rule change as described in
the 30-day operative delay is consistent submission, all subsequent Items I, II, and III below, which Items
with the protection of investors and the amendments, all written statements have been prepared by the Exchange.
public interest. Therefore, the with respect to the proposed rule
The Exchange filed the proposed rule
Commission hereby waives the change that are filed with the
change pursuant to Section
Commission, and all written
12 17 CFR 240.19b–4(f)(6). As required under Rule communications relating to the 19(b)(3)(A)(ii) of the Act,3 and Rule
19b–4(f)(6)(iii), the Exchange provided the proposed rule change between the 19b–4(f)(2) thereunder,4 which renders
Commission with written notice of its intent to file
Commission and any person, other than the proposal effective upon filing with
the proposed rule change, along with a brief the Commission. The Commission is
description and the text of the proposed rule those that may be withheld from the
change, at least five business days prior to the date public in accordance with the publishing this notice to solicit
of filing of the proposed rule change, or such provisions of 5 U.S.C. 552, will be comments on the proposed rule change
sradovich on DSK3GMQ082PROD with NOTICES
shorter time as designated by the Commission. from interested persons.
13 17 CFR 240.19b–4(f)(6).
available for Web site viewing and
14 17 CFR 240.19b–4(f)(6)(iii). printing in the Commission’s Public
15 The Exchange stated that, as it originally Reference Room, 100 F Street NE., 17 17 CFR 200.30–3(a)(12).
committed to do, it will notify market participants 1 15 U.S.C. 78s(b)(1).
via an Equity Trader Alert once a specific date for 16 For purposes only of waiving the 30-day
2 17 CFR 240.19b–4.
the initial rollout is determined and will publish operative delay, the Commission has considered the
3 15 U.S.C. 78s(b)(3)(A)(ii).
the symbols that are eligible for ELO on its Web proposed rule’s impact on efficiency, competition,
site. and capital formation. See 15 U.S.C. 78c(f). 4 17 CFR 240.19b–4(f)(2).
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![48304 Federal Register / Vol. 82, No. 199 / Tuesday, October 17, 2017 / Notices
• Send an email to rule-comments@ SECURITIES AND EXCHANGE II. Self-Regulatory Organization’s
sec.gov. Please include File Number SR– COMMISSION Statement of the Purpose of, and
BOX–2017–32 on the subject line. Statutory Basis for, the Proposed Rule
[Release No. 34–81850; File No. SR–BOX– Change
Paper Comments
2017–31] In its filing with the Commission, the
• Send paper comments in triplicate Exchange included statements
to Secretary, Securities and Exchange Self-Regulatory Organizations; BOX concerning the purpose of and basis for
Commission, 100 F Street NE., Options Exchange LLC; Notice of the proposed rule change and discussed
Washington, DC 20549–1090. Filing and Immediate Effectiveness of any comments it received on the
a Proposed Rule Change To Amend proposed rule change. The text of these
All submissions should refer to File the Fee Schedule To Update Certain statements may be examined at the
Number SR–BOX–2017–32. This file Fees Assessed Under Section VI.A places specified in Item IV below. The
number should be included on the (Connectivity Fees) Exchange has prepared summaries, set
subject line if email is used. To help the forth in Sections A, B, and C below, of
Commission process and review your October 11, 2017. the most significant aspects of such
comments more efficiently, please use Pursuant to Section 19(b)(1) of the statements.
only one method. The Commission will Securities Exchange Act of 1934 (the
post all comments on the Commission’s A. Self-Regulatory Organization’s
‘‘Act’’),1 and Rule 19b–4 thereunder,2 Statement of the Purpose of, and
Internet Web site (http://www.sec.gov/ notice is hereby given that on
rules/sro.shtml). Copies of the Statutory Basis for, the Proposed Rule
September 29, 2017, BOX Options Change
submission, all subsequent Exchange LLC (the ‘‘Exchange’’) filed
amendments, all written statements with the Securities and Exchange 1. Purpose
with respect to the proposed rule Commission (‘‘Commission’’) the The Exchange proposes to amend the
change that are filed with the proposed rule change as described in Fee Schedule for trading on BOX to
Commission, and all written Items I, II, and III below, which Items update the connectivity fees that are
communications relating to the assessed on market participants.
have been prepared by the Exchange.
proposed rule change between the Section VI.A. of the BOX Fee
The Exchange filed the proposed rule
Commission and any person, other than Schedule ‘‘Connectivity Fees’’, was
change pursuant to Section
those that may be withheld from the created to detail the fees applicable to
19(b)(3)(A)(ii) of the Act,3 and Rule
public in accordance with the market participants who connect to the
19b–4(f)(2) thereunder,4 which renders
provisions of 5 U.S.C. 552, will be BOX market network at Point of
the proposal effective upon filing with
available for Web site viewing and Presence (‘‘PoP’’) sites. These sites are
the Commission. The Commission is
printing in the Commission’s Public owned and operated by third-party
publishing this notice to solicit
Reference Room, 100 F Street NE., external vendors, and the fees listed in
comments on the proposed rule change
Washington, DC 20549 on official this section are meant to encompass the
from interested persons.
business days between the hours of fees that could be charged based on each
10:00 a.m. and 3:00 p.m. Copies of such I. Self-Regulatory Organization’s market participant’s particular
filing also will be available for Statement of the Terms of the Substance configuration. BOX does not assess
inspection and copying at the principal of the Proposed Rule Change Connectivity Fees; these fees are
office of the Exchange. All comments assessed by the datacenters and are
received will be posted without change; The Exchange is filing with the billed directly to the market participant.
the Commission does not edit personal Securities and Exchange Commission Connectivity fees can include one-time
identifying information from (‘‘Commission’’) a proposed rule change set-up fees and monthly fees charged by
submissions. You should submit only to amend the Fee Schedule [sic] to the third-party vendor in exchange for
information that you wish to make amend the Fee Schedule to update the services provided to the market
available publicly. All submissions certain fees assessed under Section VI.A participant.
should refer to File Number SR–BOX– (Connectivity Fees). While changes to The Exchange proposes to update the
2017–32, and should be submitted on or the fee schedule pursuant to this fees applicable for the datacenters
before November 7, 2017. proposal will be effective upon filing, where market participants may connect
the changes will become operative on to the BOX network: NY4, owned and
For the Commission, by the Division of
October 2, 2017. The text of the operated by Equinix; and 65 Broadway,
Trading and Markets, pursuant to delegated
proposed rule change is available from owned and operated by 365 Main; and
authority.11
the principal office of the Exchange, at the connectivity fees applicable,
Eduardo A. Aleman, the Commission’s Public Reference depending upon connection type.
Assistant Secretary. Room and also on the Exchange’s Market participants are currently
[FR Doc. 2017–22389 Filed 10–16–17; 8:45 am] Internet Web site at http:// assessed the following fees when
BILLING CODE 8011–01–P boxexchange.com. connecting to the BOX network:
NY4 65 Broadway
Connection Type
sradovich on DSK3GMQ082PROD with NOTICES
One-time One-time
Monthly Monthly
set-up set-up
POTS ............................................................................................................... $100 $25 $50 $25
Ethernet ........................................................................................................... N/A N/A 250 175
11 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. 4 17 CFR 240.19b–4(f)(2).
1 15 U.S.C. 78s(b)(1). 3 15 U.S.C. 78s(b)(3)(A)(ii).
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Document Created: 2017-10-17 01:11:37
Document Modified: 2017-10-17 01:11:37
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 82 FR 48302 |
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