83 FR 1651 - Self-Regulatory Organizations; BOX Options Exchange LLC; Order Approving a Proposed Rule Change To Amend the Minimum Order Size for the Floor Broker Guarantee Provided in BOX Rule 7600(f)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 9 (January 12, 2018)

[Federal Register Volume 83, Number 9 (Friday, January 12, 2018)]
[Notices]
[Page 1651]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-00407]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82456; File No. SR-BOX-2017-33]


Self-Regulatory Organizations; BOX Options Exchange LLC; Order 
Approving a Proposed Rule Change To Amend the Minimum Order Size for 
the Floor Broker Guarantee Provided in BOX Rule 7600(f)

January 8, 2018.

I. Introduction

    On November 6, 2017, BOX Options Exchange LLC (the ``Exchange'' or 
``BOX'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend the minimum eligible order size from 500 
contracts to 50 contracts to qualify for the Floor Broker guarantee 
described in BOX Rule 7600(f). The proposed rule change was published 
for comment in the Federal Register on November 24, 2017.\3\ The 
Commission received no comments on the proposed rule change. This order 
approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 82112 (November 17, 
2017), 82 FR 55895 (``Notice'').
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II. Description of the Proposed Rule Change 4
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    \4\ For a more detailed description of the proposed rule change, 
see Notice, supra note 3.
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    Currently, BOX Rule 7600(f) provides that a Floor Broker holding an 
order of the eligible order size or greater is entitled to cross, after 
all equal or better priced Public Customer bids or offers on the BOX 
Book and any non-Public Customer bids or offers that are ranked ahead 
of such Public Customer bids or offers are filled, 40% of the remaining 
contracts in the order with other orders he is holding.\5\ Under the 
current rule, the Exchange may determine, on an option by option basis, 
the eligible order size for an order that may be transacted pursuant to 
BOX Rule 7600(f), but the minimum eligible order size may not be less 
than 500 contracts.\6\ Under the proposed rule change, the Exchange 
proposes to reduce the minimum eligible order size from 500 contracts 
to 50 contracts.\7\
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    \5\ See BOX Rule 7600(f).
    \6\ See BOX Rule 7600(f)(2). Pursuant to BOX Rule 7600(f)(2), 
the Exchange is required to communicate any changes to the eligible 
order size to Participants via circular.
    \7\ See proposed BOX Rule 7600(f)(2).
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange.\8\ 
In particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\9\ which requires, among 
other things, that the Exchange's rules be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system, and, 
in general, to protect investors and the public interest.
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    \8\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Commission notes that the proposed rule change does not modify 
the size of the Floor Broker guarantee, but rather modifies the size of 
the order necessary in order to receive the guarantee. Orders submitted 
by Floor Brokers for execution must execute at a price equal to or 
better than the NBBO and (1) may not trade through any equal or better 
priced Public Customer bids or offers on the BOX Book \10\ or any non-
Public Customer bids or offers on the BOX Book that are ranked ahead of 
such equal or better priced Public Customer bids or offers, and (2) may 
not trade through any non-Public Customer bids or offers on the BOX 
Book that are priced better than the proposed execution price.\11\ In 
addition, the Commission notes that the proposed change is similar to 
the rules of other options exchanges \12\ and therefore, the Commission 
does not believe that the reduction in the minimum order size 
requirement raises any new regulatory issues.
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    \10\ See BOX Rule 100(a)(10) (defining BOX Book).
    \11\ See BOX Rule 7600(c).
    \12\ See Cboe Options Rule 6.74(d) and NYSE Arca Inc. Rule 6.47-
O(b)(1).
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    For the foregoing reasons, the Commission finds that the proposed 
rule change is consistent with Section 6(b)(5) of the Act \13\ and the 
rules and regulations thereunder applicable to a national securities 
exchange.
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    \13\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\14\ that the proposed rule change (SR-BOX-2017-33), be, and it 
hereby is, approved.
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    \14\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-00407 Filed 1-11-18; 8:45 am]
BILLING CODE 8011-01-P