83 FR 6281 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule To Amend the BOX Volume Rebate

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 30 (February 13, 2018)

[Federal Register Volume 83, Number 30 (Tuesday, February 13, 2018)]
[Notices]
[Pages 6281-6283]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-02865]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82655; File No. SR-BOX-2018-03]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend the Fee Schedule To Amend the BOX Volume Rebate

February 7, 2018.
    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 January 31, 2018, 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.
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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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).

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[[Page 6282]]

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. 
While changes to the fee schedule pursuant to this proposal will be 
effective upon filing, the changes will become operative on February 1, 
2018. 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 website 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. 
Specifically, the Exchange proposes to amend the BOX Volume Rebate 
(``BVR'') in Section I.B.2 of the Fee Schedule (Electronic Transaction 
Fees).
    Under the current BVR, the Exchange offers a tiered per contract 
rebate for all Public Customer PIP Orders and COPIP orders of 100 
contracts and under that do not trade solely with their contra order. 
Percentage thresholds are calculated on a monthly basis by totaling the 
Participant's PIP and COPIP volume submitted to BOX, relative to the 
total national Customer volume in multiply-listed options classes. 
Further, Public Customer PIP Orders of 100 and under contracts that 
trade solely with their contra order receive a $0.03 per contract 
rebate, regardless of tier.
    The Exchange now proposes to increase the BVR contract threshold 
necessary to qualify for the tiered contract rebate for all Public 
Customer PIP Orders and COPIP Orders to 250 contracts and under that do 
not trade solely with their contra order. The calculation of the 
percentage threshold will remain based on a Participant's PIP and COPIP 
volume submitted to BOX, relative to the total national Customer volume 
in multiply-listed options classes. The Exchange also proposes to 
increase the BVR contract threshold for Public Customer PIP Orders that 
trade solely with their contra order to 250 contracts and under. These 
orders will continue to receive a $0.03 per contract rebate, regardless 
of tier.
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,\5\ 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.
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    \5\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes the proposed amendments to the BVR in Section 
I.B.2 are reasonable, equitable and not unfairly discriminatory. The 
BVR was adopted to attract Public Customer order flow to the Exchange 
by offering these Participants incentives to submit their PIP and COPIP 
Orders to the Exchange. Other Exchanges employ similar incentive 
programs.\6\ The Exchange believes it is reasonable and appropriate to 
provide incentives for Public Customers, which will result in greater 
liquidity and ultimately benefit all Participants trading on the 
Exchange. Further, the Exchange continues to believe that exempting 
Non-Public Customer PIP and COPIP Orders from the BVR is reasonable as 
specific incentives for Public Customer volume is common within the 
options industry.\7\
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    \6\ See Section B of the Phlx Pricing Schedule entitled 
``Customer Rebate Program'' and CBOE's Volume Incentive Program 
(VIP). CBOE's Volume Incentive Program (``VIP'') pays certain tiered 
rebates to Trading Permit Holders for electronically executed 
multiply-listed option orders which include AIM orders.
    \7\ Id.
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    As mentioned above, the BVR is intended to incentivize Public 
Customers to direct order flow to the Exchange. As such, the Exchange 
believes it is reasonable to increase the threshold eligibility for 
Public Customer PIP and COPIP Orders to 250 contracts and under. 
Increasing the BVR will result in greater liquidity and ultimately 
benefit all Participants trading on the Exchange. Further, the Exchange 
believes that the proposed change is equitable and not unfairly 
discriminatory as it will apply to all Public Customers uniformly.

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. The Exchange does not believe 
that the proposed change burdens competition and will instead help 
promote competition by continuing to providing incentives for market 
participants to submit customer order flow to BOX and thus, create a 
greater opportunity for price improvement.

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 \8\ and Rule 19b-4(f)(2) 
thereunder,\9\ because it establishes or changes a due, or fee.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
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    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 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-2018-03 on the subject line.

[[Page 6283]]

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-2018-03. 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 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-2018-03, and should be submitted on 
or before March 6, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-02865 Filed 2-12-18; 8:45 am]
BILLING CODE 8011-01-P