82 FR 55888 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 7050 (Minimum Trading Increments)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 225 (November 24, 2017)

[Federal Register Volume 82, Number 225 (Friday, November 24, 2017)]
[Notices]
[Pages 55888-55890]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-25345]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82114; File No. SR-BOX-2017-34]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Rule 7050 (Minimum Trading Increments)

November 17, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on November 8, 2017, BOX Options Exchange LLC (the ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the self-regulatory organization. The Commission 
is publishing this notice to solicit comments on the proposed rule from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 7050 (Minimum Trading 
Increments). 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://boxoptions.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 self-regulatory organization 
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 self-regulatory organization 
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
    Currently, BOX Rule 7050(a) establishes minimum trading increments 
for single leg options contracts traded on BOX. Rule 7050(a) states 
that with regard to minimum trading increments for single leg options 
contracts, ``the following principles shall apply: (1) If the options 
contract is trading at less than $3.00 per option, five (5) cents; (2) 
if the options contract is trading at $3.00 per option or higher, ten 
(10) cents; and (3) if the options contract is traded pursuant to the 
procedures of the Improvement Period in Rules 7150 then one (1) cent.'' 
Further, BOX Rule 7050(b) establishes an exception \3\ to 7050(a) while 
Rule 7050(c) and (d) establish cross references to existing rules with

[[Page 55889]]

different minimum trading increments than those outlined in Rule 
7050(a).\4\
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    \3\ Rule 7050(b) states that ``the Exchange will operate a pilot 
program to permit options classes to be quoted and traded in 
increments as low as one (1) cent.''
    \4\ Rule 7050(c) states that ``the minimum trading increment for 
Mini Options shall be determined in accordance with IM-5050-10(d) to 
BOX Rule 5050.'' Rule 7050(d) states that the minimum trading 
increment for Jumbo SPY Options shall be determined in accordance 
with Rule 5050(e)(4).
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    The purpose of the proposed rule change is to amend Rule 7050 to 
establish a cross reference to an existing rule about minimum trading 
increments with regard to Complex Orders. Specifically, the Exchange 
proposes Rule 7050(e) which states that notwithstanding any provision 
of Rule 7050, the minimum trading increment for Complex Orders shall be 
determined in accordance with Rule 7240(b)(1).\5\ The Exchange notes 
that the proposed change will provide clarity with respect to the 
Exchange's minimum trading increment rule and how it relates to Complex 
Orders on the Exchange.
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    \5\ Bids and offers on Complex Orders may be expressed in any 
decimal price, and the leg(s) of a Complex Order may be executed in 
one cent increments, regardless of the minimum increments otherwise 
applicable to the individual legs of the order. See BOX Rule 
7240(b)(1).
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2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\6\ in general, and Section 
6(b)(5) of the Act,\7\ in particular, in that it is designed to promote 
just and equitable principles of trade, remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general protect investors and the public interest. The 
Exchange believes it is appropriate to make the proposed change to its 
rules so that market participants and investors have a clear and 
accurate understanding of the meaning of the Exchange's rules. By 
adding the proposed language, the Exchange is eliminating any potential 
for confusion and ensuring that market participants, regulators and the 
public can more easily navigate the Exchange's Rulebook. The Exchange 
believes that the proposed rule change is not unfairly discriminatory 
because it treats all market participants equally and will not have an 
adverse impact on any market participant.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. In particular, 
the Exchange does not believe that the proposal will impose a burden on 
intermarket competition because the proposed change simply attempts to 
clarify the Exchange rules and reduce any potential for investor 
confusion. Further, the Exchange does not believe that the proposed 
rule change imposes a burden on intramarket competition because the 
proposed provision applies to all market participants equally. As such, 
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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change does not (i) significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \10\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \11\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The 
Commission believes that waiver of the operative delay is consistent 
with the protection of investors and the public interest because the 
proposal will provide additional clarity to the Exchange's rules and 
reduce the potential for investor confusion. As noted above, BOX Rule 
7050 establishes the minimum trading increment for single options 
traded on the Exchange. The proposal modifies BOX Rule 7050 by adding a 
cross-reference to indicate that the trading increment for complex 
orders appears in existing BOX Rule 7240(b)(1). The Commission notes 
that the proposal does not modify the trading increment for complex 
orders. Accordingly, the Commission hereby waives the operative delay 
and designates the proposal as operative upon filing.\12\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change 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 Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BOX-2017-34 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-2017-34. 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

[[Page 55890]]

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, on official business days 
between the hours of 10:00 a.m. and 3:00 p.m., located at 100 F Street 
NE., Washington, DC 20549. 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. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BOX-2017-34 and should be 
submitted on or before December 15, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-25345 Filed 11-22-17; 8:45 am]
BILLING CODE 8011-01-P