83_FR_48131 83 FR 47947 - Self-Regulatory Organizations; BOX Options Exchange LLC; Suspension of and Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Amend the Fee Schedule on the BOX Market LLC Options Facility To Establish BOX Connectivity Fees for Participants and Non-Participants Who Connect to the BOX Network

83 FR 47947 - Self-Regulatory Organizations; BOX Options Exchange LLC; Suspension of and Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Amend the Fee Schedule on the BOX Market LLC Options Facility To Establish BOX Connectivity Fees for Participants and Non-Participants Who Connect to the BOX Network

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 184 (September 21, 2018)

Page Range47947-47949
FR Document2018-20548

Federal Register, Volume 83 Issue 184 (Friday, September 21, 2018) 
[Federal Register Volume 83, Number 184 (Friday, September 21, 2018)]
[Notices]
[Pages 47947-47949]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-20548]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84168; File No. SR-BOX-2018-24]


Self-Regulatory Organizations; BOX Options Exchange LLC; 
Suspension of and Order Instituting Proceedings To Determine Whether To 
Approve or Disapprove a Proposed Rule Change To Amend the Fee Schedule 
on the BOX Market LLC Options Facility To Establish BOX Connectivity 
Fees for Participants and Non-Participants Who Connect to the BOX 
Network

September 17, 2018.

I. Introduction

    On July 19, 2018, BOX Options Exchange LLC (``BOX'' or the 
``Exchange'') 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 (File No. SR-BOX-2018-24) to amend the BOX fee 
schedule to establish certain connectivity fees and reclassify its high 
speed vendor feed (``HSVF'') connection as a port fee. The proposed 
rule change was immediately effective upon filing with the Commission 
pursuant to Section 19(b)(3)(A) of the Act.\3\ The proposed rule change 
was published for comment in the Federal Register on August 2, 2018.\4\ 
The Commission has received one comment letter on the proposal \5\ and 
one response letter from the Exchange.\6\ Under Section 19(b)(3)(C) of 
the Act,\7\ the Commission is hereby: (i) Temporarily suspending the 
proposed rule change; and (ii) instituting proceedings to determine 
whether to approve or disapprove the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ See Securities Exchange Act Release No. 83728 (July 27, 
2018), 83 FR 37853 (``Notice'').
    \5\ See Letter from Tyler Gellasch, Executive Director, The 
Healthy Markets Association, to Brent J. Fields, Secretary, 
Commission, dated August 23, 2018 (``Healthy Markets Letter'').
    \6\ See Letter from Lisa J. Fall, President, BOX, to Brent J. 
Fields, Secretary, Commission, dated September 12, 2018 (``BOX 
Response Letter'').
    \7\ 15 U.S.C. 78s(b)(3)(C).
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II. Description of the Proposed Rule Change

    The Exchange proposes to amend its fee schedule to establish 
connectivity fees for Participants \8\ and non-Participants who connect 
to the BOX network. Specifically, the Exchange proposes to charge 
Participants and non-Participants with 10 Gigabit connections a monthly 
fee of $5,000 per connection, and Participants and non-Participants 
with non-10 Gigabit connections a monthly fee of $1,000 per connection. 
The Exchange would charge the applicable connectivity fee for each 
calendar month to any Participant or non-Participant connected as of 
the last trading day of that month.
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    \8\ A participant is defined under BOX Rule 100(a)(41) as a firm 
or organization that is registered with the Exchange pursuant to the 
BOX Rule 2000 Series for purposes of participating in trading on a 
facility of the Exchange (``Participant'').
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    The Exchange also proposes to amend its fee schedule to reclassify 
the HSVF connection as a port fee and to state that subscribers must be 
credentialed by the Exchange to receive the HSVF. According to the 
Exchange, the HSVF subscription is not dependent on a physical 
connection to the Exchange, and thus is a port and not a physical 
connectivity option.\9\ The amount of the HSVF fee would remain 
unchanged, and the Exchange would continue to assess an HSVF port fee 
of $1,500 per month for each month a Participant or non-Participant is 
credentialed to use the HSVF port.
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    \9\ See Notice, supra note 4, at 37853.
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III. Suspension of the Proposed Rule Change

    Pursuant to Section 19(b)(3)(C) of the Act,\10\ at any time within 
60 days of the date of filing of a proposed rule change pursuant to 
Section 19(b)(1) of the Act,\11\ the Commission summarily may 
temporarily suspend the change in the rules of a self-regulatory 
organization (``SRO'') 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. 
As discussed below, the Commission believes a temporary suspension of 
the proposed rule change is necessary and appropriate to allow for 
additional analysis of the proposed rule change's consistency with the 
Act and the rules thereunder.
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    \10\ 15 U.S.C. 78s(b)(3)(C).
    \11\ 15 U.S.C. 78s(b)(1).
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    As noted above, the Commission received one comment letter on the

[[Page 47948]]

proposal \12\ and one response letter from the Exchange.\13\ The 
commenter argues that the Exchange did not provide sufficient 
information in its filing to support a finding that the proposal is 
consistent with the Act.\14\ Specifically, the commenter objects to the 
Exchange's reliance on the fees of other exchanges to demonstrate that 
its fee increases are consistent with the Act. In addition, the 
commenter argues that the Exchange did not offer any details to support 
its basis for asserting that the proposed fees are consistent with the 
Act.\15\ The commenter further argues that the requirement that 
Participants or non-Participants be credentialed to use the HSVF port, 
added in connection with the redesignation of the HSVF fee, appears to 
discriminate between market participants.\16\ In its response letter, 
the Exchange rejects the commenter's suggestion that the Exchange 
should be required to provide additional information to support its 
belief that the proposed rule change is consistent with the Act. In 
addition, the Exchange argues that additional review, as requested by 
the commenter, is unnecessary because the Exchange submitted its 
proposal as an immediately effective rule change under the Act.\17\
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    \12\ See Healthy Markets Letter, supra note 5.
    \13\ See BOX Response Letter, supra note 6.
    \14\ See Healthy Markets Letter, supra note 5, at 4-5.
    \15\ See id. at 5-6, 10.
    \16\ See id. at 4.
    \17\ See BOX Response Letter, supra note 6, at 1.
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    When exchanges file their proposed rule changes with the 
Commission, including fee filings like the Exchange's present proposal, 
they are required to provide a statement supporting the proposal's 
basis under the Act and the rules and regulations thereunder applicable 
to the exchange.\18\ The instructions to Form 19b-4, on which exchanges 
file their proposed rule changes, specify that such statement ``should 
be sufficiently detailed and specific to support a finding that the 
proposed rule change is consistent with [those] requirements.'' \19\
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    \18\ See 17 CFR 240.19b-4 (Item 3 entitled ``Self-Regulatory 
Organization's Statement of the Purpose of, and Statutory Basis for, 
the Proposed Rule Change'').
    \19\ See id.
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    Among other things, exchange proposed rule changes are subject to 
Section 6 of the Act, including Sections 6(b)(4), (5), and (8), which 
requires the rules of an exchange to: (1) Provide for the equitable 
allocation of reasonable fees among members, issuers, and other persons 
using the exchange's facilities; \20\ (2) perfect the mechanism of a 
free and open market and a national market system, protect investors 
and the public interest, and not be designed to permit unfair 
discrimination between customers, issuers, brokers, or dealers; \21\ 
and (3) not impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act.\22\
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    \20\ 15 U.S.C. 78f(b)(4).
    \21\ 15 U.S.C. 78f(b)(5).
    \22\ 15 U.S.C. 78f(b)(8).
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    In temporarily suspending the Exchange's fee change, the Commission 
intends to further consider whether assessing the proposed fees to 
connect to the Exchange is consistent with the statutory requirements 
applicable to a national securities exchange under the Act. In 
particular, the Commission will consider whether the proposed rule 
change satisfies the standards under the Act and the rules thereunder 
requiring, among other things, that an exchange's rules provide for the 
equitable allocation of reasonable fees among members, issuers, and 
other persons using its facilities; not permit unfair discrimination 
between customers, issuers, brokers or dealers; and do not impose any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act.\23\
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    \23\ See 15 U.S.C. 78f(b)(4), (5), and (8), respectively.
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    Therefore, the Commission finds that it is appropriate in the 
public interest, for the protection of investors, and otherwise in 
furtherance of the purposes of the Act, to temporarily suspend the 
proposed rule changes.\24\
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    \24\ For purposes of temporarily suspending the proposed rule 
change, the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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IV. Proceedings To Determine Whether To Approve or Disapprove the 
Proposed Rule Change

    The Commission is instituting proceedings pursuant to Sections 
19(b)(3)(C) \25\ and 19(b)(2)(B) of the Act \26\ to determine whether 
the proposed rule change should be approved or disapproved. Institution 
of proceedings does not indicate that the Commission has reached any 
conclusions with respect to any of the issues involved. Rather, the 
Commission seeks and encourages interested persons to provide 
additional comment on the proposed rule change to inform the 
Commission's analysis of whether to disapprove the proposed rule 
change.
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    \25\ 15 U.S.C. 78s(b)(3)(C). Once the Commission temporarily 
suspends a proposed rule change, Section 19(b)(3)(C) of the Act 
requires that the Commission institute proceedings under Section 
19(b)(2)(B) to determine whether a proposed rule change should be 
approved or disapproved.
    \26\ 15 U.S.C. 78s(b)(2)(B).
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    Pursuant to Section 19(b)(2)(B) of the Act,\27\ the Commission is 
providing notice of the grounds for possible disapproval under 
consideration:
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    \27\ 15 U.S.C. 78s(b)(2)(B).
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     Section 6(b)(4) of the Act, which requires that the rules 
of a national securities exchange ``provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and issuers and other persons using its facilities,'' \28\
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    \28\ 15 U.S.C. 78f(b)(4).
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     Section 6(b)(5) of the Act, which requires, among other 
things, that the rules of a national securities exchange be ``designed 
to perfect the operation of a free and open market and a national 
market system'' and ``protect investors and the public interest,'' and 
not be ``designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers,'' \29\ and
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    \29\ 15 U.S.C. 78f(b)(5).
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     Section 6(b)(8) of the Act, which requires that the rules 
of a national securities exchange ``not impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of [the Act].'' \30\
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    \30\ 15 U.S.C. 78f(b)(8).
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    As noted above, the proposal imposes new fees for physical 
connections to the Exchange. The Exchange states that these fees would 
allow the Exchange to recover costs associated with offering 
connections.\31\ In addition, the Exchange believes that it does not 
have market power necessary to set fees that would be inconsistent with 
the Act.\32\ The commenter, among other concerns, asserts that the 
Exchange has not offered sufficient detail to support that the proposed 
fees are consistent with the Act and, in particular, whether the 
proposed fees are reasonable.\33\
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    \31\ See Notice, supra note 4, at 37854.
    \32\ See id.
    \33\ See Healthy Markets Letter, supra note 5, at 5-6, 10.
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    Under the Commission's Rules of Practice, the ``burden to 
demonstrate that a proposed rule change is consistent with the [Act] 
and the rules and regulations issued thereunder . . . is on the [SRO] 
that proposed the rule change.'' \34\ The description of a proposed 
rule change, its purpose and operation, its effect, and a legal 
analysis of its consistency with applicable requirements must all be 
sufficiently detailed and specific to support an affirmative Commission 
finding,\35\ and

[[Page 47949]]

any failure of an SRO to provide this information may result in the 
Commission not having a sufficient basis to make an affirmative finding 
that a proposed rule change is consistent with the Act and the 
applicable rules and regulations.\36\
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    \34\ Rule 700(b)(3), Commission Rules of Practice, 17 CFR 
201.700(b)(3).
    \35\ See id.
    \36\ See id.
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    The Commission is instituting proceedings to allow for additional 
consideration and comment on the issues raised herein, including as to 
whether the proposed fees are consistent with the Act, and 
specifically, with its requirements that exchange fees be reasonable 
and equitably allocated; be designed to perfect the mechanism of a free 
and open market and the national market system, protect investors and 
the public interest, and not be unfairly discriminatory; or not impose 
an unnecessary or inappropriate burden on competition.\37\
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    \37\ See 15 U.S.C. 78f(b)(4), (5), and (8).
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V. Commission's Solicitation of Comments

    The Commission requests written views, data, and arguments with 
respect to the concerns identified above as well as any other relevant 
concerns. Such comments should be submitted by October 12, 2018. 
Rebuttal comments should be submitted by October 26, 2018. Although 
there do not appear to be any issues relevant to approval or 
disapproval which would be facilitated by an oral presentation of 
views, data, and arguments, the Commission will consider, pursuant to 
Rule 19b-4, any request for an opportunity to make an oral 
presentation.\38\
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    \38\ 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act grants the 
Commission flexibility to determine what type of proceeding--either 
oral or notice and opportunity for written comments--is appropriate 
for consideration of a particular proposal by an SRO. See Securities 
Acts Amendments of 1975, Report of the Senate Committee on Banking, 
Housing and Urban Affairs to Accompany S. 249, S. Rep. No. 75, 94th 
Cong., 1st Sess. 30 (1975).
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    The Commission asks that commenters address the sufficiency and 
merit of the Exchange's statements in support of the proposal, in 
addition to any other comments they may wish to submit about the 
proposed rule change.
    Interested persons are invited to submit written data, views, and 
arguments concerning the proposed rule change, 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 rule-comments@sec.gov. Please include 
File Number SR-BOX-2018-24 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE, 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BOX-2018-24. 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 website (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 website 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 the 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-2018-24 and should be submitted on 
or before October 12, 2018. Rebuttal comments should be submitted by 
October 26, 2018.

VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(3)(C) of the 
Act,\39\ that File No. SR-BOX-2018-24 be and hereby is, temporarily 
suspended. In addition, the Commission is instituting proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.
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    \39\ 15 U.S.C. 78s(b)(3)(C).
    \40\ 17 CFR 200.30-3(a)(57) and (58).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\40\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-20548 Filed 9-20-18; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Notices 47947 action is necessary or appropriate in the For the Commission, by the Division of approve or disapprove the proposed public interest, for the protection of Trading and Markets, pursuant to delegated rule change. investors, or otherwise in furtherance of authority.16 Eduardo A. Aleman, II. Description of the Proposed Rule the purposes of the Act. Assistant Secretary. Change IV. Solicitation of Comments The Exchange proposes to amend its [FR Doc. 2018–20544 Filed 9–20–18; 8:45 am] Interested persons are invited to BILLING CODE 8011–01–P fee schedule to establish connectivity submit written data, views and fees for Participants 8 and non- arguments concerning the foregoing, Participants who connect to the BOX including whether the proposal is SECURITIES AND EXCHANGE network. Specifically, the Exchange consistent with the Act. Comments may COMMISSION proposes to charge Participants and be submitted by any of the following non-Participants with 10 Gigabit methods: [Release No. 34–84168; File No. SR–BOX– connections a monthly fee of $5,000 per 2018–24] connection, and Participants and non- Electronic Comments Participants with non-10 Gigabit • Use the Commission’s internet Self-Regulatory Organizations; BOX connections a monthly fee of $1,000 per comment form (http://www.sec.gov/ Options Exchange LLC; Suspension of connection. The Exchange would charge rules/sro.shtml); or and Order Instituting Proceedings To the applicable connectivity fee for each • Send an email to rule-comments@ Determine Whether To Approve or calendar month to any Participant or sec.gov. Please include File No. SR– Disapprove a Proposed Rule Change non-Participant connected as of the last CboeBZX–2018–071 on the subject line. To Amend the Fee Schedule on the trading day of that month. BOX Market LLC Options Facility To The Exchange also proposes to amend Paper Comments Establish BOX Connectivity Fees for its fee schedule to reclassify the HSVF • Send paper comments in triplicate Participants and Non-Participants Who connection as a port fee and to state that to Secretary, Securities and Exchange Connect to the BOX Network subscribers must be credentialed by the Commission, 100 F Street NE, Exchange to receive the HSVF. September 17, 2018. Washington, DC 20549–1090. According to the Exchange, the HSVF All submissions should refer to File No. I. Introduction subscription is not dependent on a SR–CboeBZX–2018–071. This file On July 19, 2018, BOX Options physical connection to the Exchange, number should be included on the Exchange LLC (‘‘BOX’’ or the and thus is a port and not a physical subject line if email is used. To help the ‘‘Exchange’’) filed with the Securities connectivity option.9 The amount of the Commission process and review your and Exchange Commission HSVF fee would remain unchanged, and comments more efficiently, please use (‘‘Commission’’), pursuant to Section the Exchange would continue to assess only one method. The Commission will 19(b)(1) of the Securities Exchange Act an HSVF port fee of $1,500 per month post all comments on the Commission’s of 1934 (‘‘Act’’),1 and Rule 19b–4 for each month a Participant or non- internet website (http://www.sec.gov/ thereunder,2 a proposed rule change Participant is credentialed to use the rules/sro.shtml). Copies of the (File No. SR–BOX–2018–24) to amend HSVF port. submission, all subsequent the BOX fee schedule to establish III. Suspension of the Proposed Rule amendments, all written statements certain connectivity fees and reclassify Change with respect to the proposed rule its high speed vendor feed (‘‘HSVF’’) Pursuant to Section 19(b)(3)(C) of the change that are filed with the connection as a port fee. The proposed Act,10 at any time within 60 days of the Commission, and all written rule change was immediately effective date of filing of a proposed rule change communications relating to the upon filing with the Commission pursuant to Section 19(b)(1) of the proposed rule change between the pursuant to Section 19(b)(3)(A) of the Act,11 the Commission summarily may Commission and any person, other than Act.3 The proposed rule change was temporarily suspend the change in the those that may be withheld from the published for comment in the Federal rules of a self-regulatory organization public in accordance with the Register on August 2, 2018.4 The (‘‘SRO’’) if it appears to the Commission provisions of 5 U.S.C. 552, will be Commission has received one comment that such action is necessary or available for website viewing and letter on the proposal 5 and one appropriate in the public interest, for printing in the Commission’s Public response letter from the Exchange.6 the protection of investors, or otherwise Reference Room, 100 F Street NE, Under Section 19(b)(3)(C) of the Act,7 in furtherance of the purposes of the Washington, DC 20549, on official the Commission is hereby: (i) Act. As discussed below, the business days between the hours of Temporarily suspending the proposed Commission believes a temporary 10:00 a.m. and 3:00 p.m. Copies of the rule change; and (ii) instituting suspension of the proposed rule change filing also will be available for proceedings to determine whether to is necessary and appropriate to allow for inspection and copying at the principal additional analysis of the proposed rule office of the Exchange. All comments 16 17 CFR 200.30–3(a)(12). change’s consistency with the Act and received will be posted without change. 1 15 U.S.C. 78s(b)(1). the rules thereunder. Persons submitting comments are 2 17 CFR 240.19b–4. As noted above, the Commission 3 15 U.S.C. 78s(b)(3)(A). cautioned that we do not redact or edit received one comment letter on the 4 See Securities Exchange Act Release No. 83728 personal identifying information from (July 27, 2018), 83 FR 37853 (‘‘Notice’’). daltland on DSKBBV9HB2PROD with NOTICES comment submissions. You should 5 See Letter from Tyler Gellasch, Executive 8 A participant is defined under BOX Rule submit only information that you wish Director, The Healthy Markets Association, to Brent 100(a)(41) as a firm or organization that is registered to make available publicly. All J. Fields, Secretary, Commission, dated August 23, with the Exchange pursuant to the BOX Rule 2000 submissions should refer to File No. 2018 (‘‘Healthy Markets Letter’’). Series for purposes of participating in trading on a 6 See Letter from Lisa J. Fall, President, BOX, to facility of the Exchange (‘‘Participant’’). SR–CboeBZX–2018–071 and should be 9 See Notice, supra note 4, at 37853. Brent J. Fields, Secretary, Commission, dated submitted on or before October 12, September 12, 2018 (‘‘BOX Response Letter’’). 10 15 U.S.C. 78s(b)(3)(C). 2018. 7 15 U.S.C. 78s(b)(3)(C). 11 15 U.S.C. 78s(b)(1). VerDate Sep<11>2014 17:30 Sep 20, 2018 Jkt 244001 PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 E:\FR\FM\21SEN1.SGM 21SEN1

47948 Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Notices proposal 12 and one response letter from facilities; 20 (2) perfect the mechanism of proposed rule change to inform the the Exchange.13 The commenter argues a free and open market and a national Commission’s analysis of whether to that the Exchange did not provide market system, protect investors and the disapprove the proposed rule change. sufficient information in its filing to public interest, and not be designed to Pursuant to Section 19(b)(2)(B) of the support a finding that the proposal is permit unfair discrimination between Act,27 the Commission is providing consistent with the Act.14 Specifically, customers, issuers, brokers, or notice of the grounds for possible the commenter objects to the Exchange’s dealers; 21 and (3) not impose any disapproval under consideration: reliance on the fees of other exchanges burden on competition not necessary or • Section 6(b)(4) of the Act, which to demonstrate that its fee increases are appropriate in furtherance of the requires that the rules of a national consistent with the Act. In addition, the purposes of the Act.22 securities exchange ‘‘provide for the commenter argues that the Exchange did In temporarily suspending the equitable allocation of reasonable dues, not offer any details to support its basis Exchange’s fee change, the Commission fees, and other charges among its for asserting that the proposed fees are intends to further consider whether members and issuers and other persons consistent with the Act.15 The assessing the proposed fees to connect using its facilities,’’ 28 commenter further argues that the to the Exchange is consistent with the • Section 6(b)(5) of the Act, which requirement that Participants or non- statutory requirements applicable to a requires, among other things, that the Participants be credentialed to use the national securities exchange under the rules of a national securities exchange HSVF port, added in connection with Act. In particular, the Commission will be ‘‘designed to perfect the operation of the redesignation of the HSVF fee, consider whether the proposed rule a free and open market and a national appears to discriminate between market change satisfies the standards under the market system’’ and ‘‘protect investors participants.16 In its response letter, the Act and the rules thereunder requiring, and the public interest,’’ and not be Exchange rejects the commenter’s among other things, that an exchange’s ‘‘designed to permit unfair suggestion that the Exchange should be rules provide for the equitable discrimination between customers, required to provide additional allocation of reasonable fees among issuers, brokers, or dealers,’’ 29 and information to support its belief that the members, issuers, and other persons • Section 6(b)(8) of the Act, which proposed rule change is consistent with using its facilities; not permit unfair requires that the rules of a national the Act. In addition, the Exchange discrimination between customers, securities exchange ‘‘not impose any argues that additional review, as issuers, brokers or dealers; and do not burden on competition not necessary or requested by the commenter, is impose any burden on competition not appropriate in furtherance of the unnecessary because the Exchange necessary or appropriate in furtherance purposes of [the Act].’’ 30 As noted above, the proposal imposes submitted its proposal as an of the purposes of the Act.23 new fees for physical connections to the immediately effective rule change under Therefore, the Commission finds that Exchange. The Exchange states that the Act.17 it is appropriate in the public interest, these fees would allow the Exchange to When exchanges file their proposed for the protection of investors, and recover costs associated with offering rule changes with the Commission, otherwise in furtherance of the purposes connections.31 In addition, the including fee filings like the Exchange’s of the Act, to temporarily suspend the Exchange believes that it does not have present proposal, they are required to proposed rule changes.24 market power necessary to set fees that provide a statement supporting the IV. Proceedings To Determine Whether would be inconsistent with the Act.32 proposal’s basis under the Act and the To Approve or Disapprove the The commenter, among other concerns, rules and regulations thereunder Proposed Rule Change asserts that the Exchange has not offered applicable to the exchange.18 The sufficient detail to support that the instructions to Form 19b–4, on which The Commission is instituting proceedings pursuant to Sections proposed fees are consistent with the exchanges file their proposed rule Act and, in particular, whether the changes, specify that such statement 19(b)(3)(C) 25 and 19(b)(2)(B) of the Act 26 to determine whether the proposed fees are reasonable.33 ‘‘should be sufficiently detailed and Under the Commission’s Rules of specific to support a finding that the proposed rule change should be Practice, the ‘‘burden to demonstrate proposed rule change is consistent with approved or disapproved. Institution of that a proposed rule change is [those] requirements.’’ 19 proceedings does not indicate that the consistent with the [Act] and the rules Commission has reached any Among other things, exchange and regulations issued thereunder . . . conclusions with respect to any of the proposed rule changes are subject to is on the [SRO] that proposed the rule issues involved. Rather, the Commission Section 6 of the Act, including Sections change.’’ 34 The description of a seeks and encourages interested persons 6(b)(4), (5), and (8), which requires the to provide additional comment on the proposed rule change, its purpose and rules of an exchange to: (1) Provide for operation, its effect, and a legal analysis the equitable allocation of reasonable 20 15 U.S.C. 78f(b)(4). of its consistency with applicable fees among members, issuers, and other 21 15 U.S.C. 78f(b)(5). requirements must all be sufficiently persons using the exchange’s 22 15 U.S.C. 78f(b)(8). detailed and specific to support an 23 See 15 U.S.C. 78f(b)(4), (5), and (8), affirmative Commission finding,35 and 12 See respectively. Healthy Markets Letter, supra note 5. 24 For purposes of temporarily suspending the 13 See 27 15 U.S.C. 78s(b)(2)(B). BOX Response Letter, supra note 6. 14 See Healthy Markets Letter, supra note 5, proposed rule change, the Commission has 28 15 U.S.C. 78f(b)(4). considered the proposed rule’s impact on 29 15 U.S.C. 78f(b)(5). at 4–5. daltland on DSKBBV9HB2PROD with NOTICES efficiency, competition, and capital formation. See 30 15 U.S.C. 78f(b)(8). 15 See id. at 5–6, 10. 15 U.S.C. 78c(f). 16 See id. at 4. 31 See Notice, supra note 4, at 37854. 25 15 U.S.C. 78s(b)(3)(C). Once the Commission 17 See BOX Response Letter, supra note 6, at 1. 32 See id. temporarily suspends a proposed rule change, 18 See 17 CFR 240.19b–4 (Item 3 entitled ‘‘Self- 33 See Healthy Markets Letter, supra note 5, at 5– Section 19(b)(3)(C) of the Act requires that the Regulatory Organization’s Statement of the Purpose Commission institute proceedings under Section 6, 10. of, and Statutory Basis for, the Proposed Rule 19(b)(2)(B) to determine whether a proposed rule 34 Rule 700(b)(3), Commission Rules of Practice, Change’’). change should be approved or disapproved. 17 CFR 201.700(b)(3). 19 See id. 26 15 U.S.C. 78s(b)(2)(B). 35 See id. VerDate Sep<11>2014 17:30 Sep 20, 2018 Jkt 244001 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 E:\FR\FM\21SEN1.SGM 21SEN1

Federal Register / Vol. 83, No. 184 / Friday, September 21, 2018 / Notices 47949 any failure of an SRO to provide this • Send an email to rule-comments@ For the Commission, by the Division of information may result in the sec.gov. Please include File Number SR– Trading and Markets, pursuant to delegated Commission not having a sufficient BOX–2018–24 on the subject line. authority.40 basis to make an affirmative finding that Eduardo A. Aleman, a proposed rule change is consistent Paper Comments Assistant Secretary. with the Act and the applicable rules • Send paper comments in triplicate [FR Doc. 2018–20548 Filed 9–20–18; 8:45 am] and regulations.36 BILLING CODE 8011–01–P The Commission is instituting to Brent J. Fields, Secretary, Securities proceedings to allow for additional and Exchange Commission, 100 F Street consideration and comment on the NE, Washington, DC 20549–1090. SECURITIES AND EXCHANGE issues raised herein, including as to All submissions should refer to File COMMISSION whether the proposed fees are Number SR–BOX–2018–24. This file consistent with the Act, and number should be included on the Sunshine Act Meetings specifically, with its requirements that subject line if email is used. To help the exchange fees be reasonable and FEDERAL REGISTER CITATION OF PREVIOUS Commission process and review your ANNOUNCEMENT: 83 FR 47215, September equitably allocated; be designed to comments more efficiently, please use perfect the mechanism of a free and 18, 2018. only one method. The Commission will PREVIOUSLY ANNOUNCED TIME AND DATE OF open market and the national market system, protect investors and the public post all comments on the Commission’s THE MEETING: Thursday, September 20, interest, and not be unfairly internet website (http://www.sec.gov/ 2018 at 2:00 p.m. discriminatory; or not impose an rules/sro.shtml). Copies of the CHANGES IN THE MEETING: The Closed unnecessary or inappropriate burden on submission, all subsequent Meeting scheduled for Thursday, competition.37 amendments, all written statements September 20, 2018 at 2:00 p.m. has with respect to the proposed rule been changed to Thursday, September V. Commission’s Solicitation of change that are filed with the Comments 20, 2018 at 1:30 p.m. Commission, and all written CONTACT PERSON FOR MORE INFORMATION: The Commission requests written communications relating to the For further information and to ascertain views, data, and arguments with respect proposed rule change between the what, if any, matters have been added, to the concerns identified above as well Commission and any person, other than deleted or postponed, please contact the as any other relevant concerns. Such those that may be withheld from the Office of the Secretary at (202) 551– comments should be submitted by public in accordance with the 5400. October 12, 2018. Rebuttal comments provisions of 5 U.S.C. 552, will be should be submitted by October 26, Dated: September 19, 2018. available for website viewing and 2018. Although there do not appear to Brent J. Fields, printing in the Commission’s Public be any issues relevant to approval or Secretary. Reference Room, 100 F Street NE, disapproval which would be facilitated [FR Doc. 2018–20742 Filed 9–19–18; 4:15 pm] by an oral presentation of views, data, Washington, DC 20549 on official BILLING CODE 8011–01–P and arguments, the Commission will business days between the hours of consider, pursuant to Rule 19b–4, any 10:00 a.m. and 3:00 p.m. Copies of the request for an opportunity to make an filing also will be available for SECURITIES AND EXCHANGE oral presentation.38 inspection and copying at the principal COMMISSION The Commission asks that office of the Exchange. All comments commenters address the sufficiency and received will be posted without change. Proposed Collection; Comment merit of the Exchange’s statements in Persons submitting comments are Request support of the proposal, in addition to cautioned that we do not redact or edit Upon Written Request, Copies Available any other comments they may wish to personal identifying information from From: Securities and Exchange submit about the proposed rule change. comment submissions. You should Interested persons are invited to Commission, Office of FOIA Services, submit only information that you wish 100 F Street NE, Washington, DC submit written data, views, and to make available publicly. All arguments concerning the proposed rule 20549–2736 submissions should refer to File change, including whether the proposed Extension: Number SR–BOX–2018–24 and should Rule 17Ad–15; SEC File No. 270–360, rule change is consistent with the Act. be submitted on or before October 12, Comments may be submitted by any of OMB Control No. 3235–0409 2018. Rebuttal comments should be the following methods: submitted by October 26, 2018. Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 Electronic Comments VI. Conclusion (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the • Use the Commission’s internet Securities and Exchange Commission comment form (http://www.sec.gov/ It is therefore ordered, pursuant to (‘‘Commission’’) is soliciting comments rules/sro.shtml); or Section 19(b)(3)(C) of the Act,39 that File on the existing collection of information No. SR–BOX–2018–24 be and hereby is, provided for in Rule 17Ad–15 (17 CFR 36 See id. temporarily suspended. In addition, the 240.17Ad–15) under the Securities 37 See 15 U.S.C. 78f(b)(4), (5), and (8). Commission is instituting proceedings Exchange Act of 1934 (15 U.S.C. 78a et daltland on DSKBBV9HB2PROD with NOTICES 38 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act grants the Commission flexibility to determine what to determine whether the proposed rule seq.). The Commission plans to submit type of proceeding—either oral or notice and change should be approved or this existing collection of information to opportunity for written comments—is appropriate disapproved. the Office of Management and Budget for consideration of a particular proposal by an (‘‘OMB’’) for extension and approval. SRO. See Securities Acts Amendments of 1975, Report of the Senate Committee on Banking, Rule 17Ad–15 (17 CFR 240.17Ad–15) Housing and Urban Affairs to Accompany S. 249, 39 15 U.S.C. 78s(b)(3)(C). under the Securities Exchange Act of S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). 40 17 CFR 200.30–3(a)(57) and (58). 1934 (15 U.S.C. 78a et seq.) (the ‘‘Act’’) VerDate Sep<11>2014 17:30 Sep 20, 2018 Jkt 244001 PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 E:\FR\FM\21SEN1.SGM 21SEN1


Document Created: 2018-09-21 00:23:39
Document Modified: 2018-09-21 00:23:39
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation83 FR 47947 
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