83 FR 33969 - Self-Regulatory Organizations; BOX Options Exchange LLC; Order Granting Approval of a Proposed Rule Change To Adopt IM-7130-1 to Rule 7130

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 138 (July 18, 2018)

Page Range		33969-33970
FR Document		2018-15290
Federal Register, Volume 83 Issue 138 (Wednesday, July 18, 2018)
[Federal Register Volume 83, Number 138 (Wednesday, July 18, 2018)]
[Notices]
[Pages 33969-33970]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-15290]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83624; File No. SR-BOX-2018-18]


Self-Regulatory Organizations; BOX Options Exchange LLC; Order 
Granting Approval of a Proposed Rule Change To Adopt IM-7130-1 to Rule 
7130

July 12, 2018.

I. Introduction

    On May 16, 2018, 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 adopt IM-7130-1 to BOX Rule 7130 to provide 
certain BOX Book \3\ information to Participants \4\ upon request. The 
proposed rule change was published for comment in the Federal Register 
on May 31, 2018.\5\ The Commission received no comments on the proposed 
rule change. This order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The term ``BOX Book'' means the electronic book of orders on 
each single option series maintained by the BOX Trading Host. See 
BOX Rule 100(a)(10).
    \4\ The term ``Participant'' means a firm, or organization that 
is registered with the Exchange pursuant to the BOX Rule 2000 Series 
for purposes of participating in options trading on BOX as an 
``Order Flow Provider'' or ``Market Maker.'' See BOX Rule 
100(a)(41).
    \5\ See Securities Exchange Act Release No. 83318 (May 24, 
2018), 83 FR 25079 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    BOX proposes to adopt new IM-7130-1 to Rule 7130 to provide that, 
upon request, the Exchange may make available to a Participant the 
amount of any priority interest on the BOX Book. For purposes of the 
proposed new rule, the term ``priority interest'' means the number of 
Public Customer contracts and Non-Public Customer contracts that are 
ranked ahead of such Public Customer contracts at a given price for a 
specific option class.\6\ The information would be verbally provided to 
Participants for no fee, on a best efforts basis, and would be for 
advisory purposes only.\7\ All BOX Book information would be provided 
on an anonymous basis.\8\
---------------------------------------------------------------------------

    \6\ See proposed BOX Rule IM-7130-1. ``Public Customer'' means a 
person that is not a broker or dealer in securities. See BOX Rule 
100(a)(52).
    \7\ See proposed BOX Rule IM-7130-1.
    \8\ See id.
---------------------------------------------------------------------------

    Under the proposed rule, Floor Brokers would inquire with an 
Options Exchange Official or his or her designee, and all other 
Participants would inquire with BOX's Market Operations Center.\9\ 
Participants would be required to request this information each time 
and the Exchange would not provide continuous updated information.\10\ 
The Exchange represents that an Options Exchange Official will provide 
the requested information when doing so does not interfere with their 
regulatory responsibilities.\11\
---------------------------------------------------------------------------

    \9\ See id. The term ``Market Operations Center'' or ``MOC'' 
means the BOX Market Operations Center, which provides market 
support for Options Participants during the trading day. See BOX 
Rule 100(a)(32).
    \10\ See proposed BOX Rule IM-7130-1.
    \11\ See Notice, supra note 5, at 25080 n.5.
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change will provide 
Participants greater clarity on the composition and availability of 
liquidity on the BOX Book.\12\ With respect to the BOX Trading Floor, 
the Exchange believes that the availability of this information will 
lead to increased interaction with the BOX Book, because Floor Brokers 
will be aware of the liquidity available on the BOX Book that could 
interact with their Qualified Open Outcry Order (``QOO Order'') \13\ 
and may choose to use such liquidity when executing orders from the 
Trading Floor or using a separate order to sweep that interest.\14\
---------------------------------------------------------------------------

    \12\ See Notice, supra note 5, at 25080.
    \13\ A QOO Order has two sides; the initiating side and the 
contra-side. The initiating side is the order which must be filled 
in its entirety. The contra-side must guarantee the full size of the 
initiating side of the QOO Order and may provide a book sweep size 
as provided in BOX Rule 7600(h). See BOX Rule 7600(a)(1). The 
initiating side of a QOO Order will execute against Public Customer 
Orders on the BOX Book and any other orders or quotes ranked ahead 
of such Public Customer Orders at the execution price first. See BOX 
Rule 7600(d)(2).
    \14\ See Notice, supra note 5, at 25080.
---------------------------------------------------------------------------

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

[[Page 33970]]

securities exchange.\15\ In particular, the Commission finds that the 
proposed rule change is consistent with Section 6(b)(5) of the Act,\16\ 
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.
---------------------------------------------------------------------------

    \15\ 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).
    \16\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission notes that the proposed rule change, which would 
make priority interest information available upon request for all 
Participants, will provide increased transparency to Participants, 
which the Exchange believes has the potential to result in more 
liquidity on the Exchange and increased interaction with the BOX Book. 
The Commission also notes that the proposed rule change, with respect 
to floor trading, is similar to the procedures of another options 
exchange that operates a trading floor.\17\ For the foregoing reasons, 
the Commission finds that the proposed rule change is consistent with 
Section 6(b)(5) of the Act \18\ and the rules and regulations 
thereunder applicable to a national securities exchange.
---------------------------------------------------------------------------

    \17\ See NYSE Arca Regulatory Bulletin RB-16-04 (February 19, 
2016) (stating that Floor Brokers on NYSE Arca may inquire with the 
Trading Official at the post to the amount of any priority interest 
on NYSE Arca's electronic book). In addition, the Commission notes 
that some other options exchanges provide similar information on a 
real-time basis to data feed subscribers. See, e.g., Securities 
Exchange Act Release No. 74759 (April 17, 2018), 82 FR 22749 (April 
23, 2015) (SR-MIAX-2015-28) (describing MIAX Order Feed which 
provides the origin of orders on the MIAX order book).
    \18\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\19\ that the proposed rule change (SR-BOX-2018-18) be, and hereby 
is, approved.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78s(b)(2).
    \20\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-15290 Filed 7-17-18; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 83, No. 138 / Wednesday, July 18, 2018 / Notices 33969

IV. Solicitation of Comments For the Commission, by the Division of a specific option class.6 The information
Trading and Markets, pursuant to delegated would be verbally provided to
Interested persons are invited to authority.22 Participants for no fee, on a best efforts
submit written data, views, and Eduardo A. Aleman, basis, and would be for advisory
arguments concerning the foregoing, Assistant Secretary. purposes only.7 All BOX Book
including whether the proposed rule [FR Doc. 2018–15289 Filed 7–17–18; 8:45 am] information would be provided on an
change is consistent with the Act. BILLING CODE 8011–01–P anonymous basis.8
Comments may be submitted by any of Under the proposed rule, Floor
the following methods: Brokers would inquire with an Options
SECURITIES AND EXCHANGE Exchange Official or his or her designee,
Electronic Comments COMMISSION and all other Participants would inquire
• Use the Commission’s internet with BOX’s Market Operations Center.9
comment form (http://www.sec.gov/ [Release No. 34–83624; File No. SR–BOX– Participants would be required to
rules/sro.shtml); or 2018–18] request this information each time and
the Exchange would not provide
• Send an email to rule-comments@ Self-Regulatory Organizations; BOX continuous updated information.10 The
sec.gov. Please include File Number SR– Options Exchange LLC; Order Exchange represents that an Options
NASDAQ–2018–051 on the subject line. Granting Approval of a Proposed Rule Exchange Official will provide the
Change To Adopt IM–7130–1 to Rule requested information when doing so
Paper Comments
7130 does not interfere with their regulatory
• Send paper comments in triplicate July 12, 2018.
responsibilities.11
to Secretary, Securities and Exchange The Exchange believes that the
Commission, 100 F Street NE, I. Introduction proposed rule change will provide
Washington, DC 20549–1090. On May 16, 2018, BOX Options Participants greater clarity on the
Exchange LLC (the ‘‘Exchange’’ or composition and availability of liquidity
All submissions should refer to File
‘‘BOX’’) filed with the Securities and on the BOX Book.12 With respect to the
Number SR–NASDAQ–2018–051. This BOX Trading Floor, the Exchange
file number should be included on the Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the believes that the availability of this
subject line if email is used. To help the information will lead to increased
Commission process and review your Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a interaction with the BOX Book, because
comments more efficiently, please use Floor Brokers will be aware of the
proposed rule change to adopt IM–
only one method. The Commission will liquidity available on the BOX Book that
7130–1 to BOX Rule 7130 to provide
post all comments on the Commission’s could interact with their Qualified Open
certain BOX Book 3 information to
internet website (http://www.sec.gov/ Participants 4 upon request. The Outcry Order (‘‘QOO Order’’) 13 and
rules/sro.shtml). Copies of the proposed rule change was published for may choose to use such liquidity when
submission, all subsequent comment in the Federal Register on executing orders from the Trading Floor
amendments, all written statements May 31, 2018.5 The Commission or using a separate order to sweep that
with respect to the proposed rule received no comments on the proposed interest.14
change that are filed with the rule change. This order approves the III. Discussion and Commission
Commission, and all written proposed rule change. Findings
communications relating to the
proposed rule change between the II. Description of the Proposed Rule After careful review, the Commission
Commission and any person, other than Change finds that the proposed rule change is
those that may be withheld from the BOX proposes to adopt new IM– consistent with the requirements of the
public in accordance with the 7130–1 to Rule 7130 to provide that, Act and the rules and regulations
provisions of 5 U.S.C. 552, will be upon request, the Exchange may make thereunder applicable to a national
available for website viewing and available to a Participant the amount of
6 See proposed BOX Rule IM–7130–1. ‘‘Public
printing in the Commission’s Public any priority interest on the BOX Book.
Customer’’ means a person that is not a broker or
Reference Room, 100 F Street NE, For purposes of the proposed new rule, dealer in securities. See BOX Rule 100(a)(52).
Washington, DC 20549 on official the term ‘‘priority interest’’ means the 7 See proposed BOX Rule IM–7130–1.

business days between the hours of number of Public Customer contracts 8 See id.

10:00 a.m. and 3:00 p.m. Copies of the and Non-Public Customer contracts that 9 See id. The term ‘‘Market Operations Center’’ or

filing also will be available for are ranked ahead of such Public ‘‘MOC’’ means the BOX Market Operations Center,
Customer contracts at a given price for which provides market support for Options
inspection and copying at the principal Participants during the trading day. See BOX Rule
office of the Exchange. All comments 100(a)(32).
22 17
CFR 200.30–3(a)(12). 10 See proposed BOX Rule IM–7130–1.
received will be posted without change. 1 15
U.S.C. 78s(b)(1). 11 See Notice, supra note 5, at 25080 n.5.
Persons submitting comments are 2 17 CFR 240.19b–4. 12 See Notice, supra note 5, at 25080.
cautioned that we do not redact or edit 3 The term ‘‘BOX Book’’ means the electronic 13 A QOO Order has two sides; the initiating side
personal identifying information from book of orders on each single option series and the contra-side. The initiating side is the order
comment submissions. You should maintained by the BOX Trading Host. See BOX which must be filled in its entirety. The contra-side
amozie on DSK3GDR082PROD with NOTICES1

Rule 100(a)(10). must guarantee the full size of the initiating side of
submit only information that you wish 4 The term ‘‘Participant’’ means a firm, or the QOO Order and may provide a book sweep size
to make available publicly. All organization that is registered with the Exchange as provided in BOX Rule 7600(h). See BOX Rule
submissions should refer to File pursuant to the BOX Rule 2000 Series for purposes 7600(a)(1). The initiating side of a QOO Order will
Number SR–NASDAQ–2018–051, and of participating in options trading on BOX as an execute against Public Customer Orders on the BOX
‘‘Order Flow Provider’’ or ‘‘Market Maker.’’ See Book and any other orders or quotes ranked ahead
should be submitted on or before BOX Rule 100(a)(41). of such Public Customer Orders at the execution
August 8, 2018. 5 See Securities Exchange Act Release No. 83318 price first. See BOX Rule 7600(d)(2).
(May 24, 2018), 83 FR 25079 (‘‘Notice’’). 14 See Notice, supra note 5, at 25080.

VerDate Sep<11>2014 19:19 Jul 17, 2018 Jkt 244001 PO 00000 Frm 00053 Fmt 4703 Sfmt 4703 E:\FR\FM\18JYN1.SGM 18JYN1
Document Created: 2018-11-06 10:25:17
Document Modified: 2018-11-06 10:25:17
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		83 FR 33969