[Federal Register Volume 78, Number 169 (Friday, August 30, 2013)]
[Notices]
[Pages 53812-53814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-21185]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70255; File No. SR-BOX-2013-42]


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

August 26, 2013.
    Pursuant to Section 19(b)(1) under the Securities Exchange Act of 
1934 (the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on August 19, 2013, BOX Options Exchange LLC (the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``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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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 to 
establish fees for the Proprietary Trader Program (S501) Continuing 
Education Regulatory Element Session on the BOX Market LLC (``BOX'') 
options facility. While changes to the fee schedule pursuant to this 
proposal will be effective upon filing, the changes will become 
operative on August 19, 2013. 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://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 
to establish fees for the Proprietary Trader Program (S501) Continuing 
Education Regulatory Element Session. Specifically, the Exchange is 
proposing to add subsection C., Continuing Education Fee, to Section VI 
(Regulatory Fees) in the BOX Fee Schedule and add a $60 session fee for 
each individual who is required to have Proprietary Trader (``Series 
56'') registration.
    BOX Rule 2020 (Participant Eligibility and Registration) outlines 
the registration and qualification requirements (including prerequisite 
examinations) for Options Participants. Each person associated with a 
Participant who is included within the definition of Representative \5\ 
may register with the Exchange as a Limited Representative--Proprietary 
Trader if A) his activities in the investment banking or securities 
business are limited solely to proprietary trading; and B) he passes an 
appropriate Qualification Examination for Limited Representative-
Proprietary Trader. The appropriate Qualification Examination is the 
Series 56; and C) he is an associated person of a proprietary trading 
firm.\6\ Interpretive Material 4 to BOX Rule 2040 requires the 
Regulatory Element of the Continuing Education Requirement for all 
persons engaged or to be engaged in the options securities business of 
[sic] Participant who are to function as Principals or Representatives 
of Members.\7\ Recently, the Exchange amended IM-2040-5 to enumerate 
the different Continuing Education (``CE'') programs offered by the 
Exchange including the S501 Series 56 Proprietary Trader Continuing 
Education Program (``S501'').\8\ The Exchange is now proposing to 
outline the necessary fee associated with the Regulation Element of the 
Series 56.
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    \5\ See BOX Rule 100 (a)(56). The term ``Representative'' means 
persons associated with a Participant, including assistant officers 
other than principals, who are engaged in the investment banking or 
securities business for the Participant including the functions of 
supervision, solicitation, or conduct of business in securities or 
who are engaged in the training of persons associated with a 
Participant for any of these functions.
    \6\ See BOX Rule 2020.
    \7\ See Interpretive Material 4 to BOX Rule 2040.
    \8\ See Securities Act [sic] Release No. 34-70224 (August 16, 
2013) (SR-BOX-2013-41) (immediately effective rule change to specify 
the different CE requirements for registered persons based upon 
their registration with the Exchange).
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    The Exchange has determined that these changes are necessary to 
administer the Series 56 CE program. Specifically, the $60 session fee 
will be used to fund the CE program administered to Proprietary Traders 
that have a Series 56 registration \9\ and are required to complete the 
S501.
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    \9\ Both individuals that have successfully passed the Series 56 
examination and individuals that have had the examination waived by 
the Exchange are required to take the S501.

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[[Page 53813]]

    Because the CE element is separate and different from the CE 
already administered, the proposed change would put Participants on 
notice of the associated fees. The proposed fee would allow the 
Exchange to fund the S501 which is more tailored to the Series 56 
registration. Also, the Exchange believes other exchanges will be 
assessing the same fee for this CE program. The proposed changes are to 
take effect on August 19, 2013.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b)(4) and Section 6(b)(5) of the Act.\10\ 
Specifically, the Exchange believes the proposed rule change is 
consistent with the requirements that the rules of an exchange be 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitation 
[sic] transactions in securities, 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. 
Additionally, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \11\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \10\ 15 U.S.C. 78f(b)(4) and (5).
    \11\ Id.
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    In particular, the proposed rule change [sic] is equitable and not 
unfairly discriminatory as it is allocated to all BOX Participants with 
a Series 56 registration which is required under BOX Rule 2020. In 
addition, the fee is reasonable as it is intended to recoup the costs 
of development and maintenance of the program. In addition, the 
Exchange believes other exchanges will be assessing the same fee for 
this CE program. The Exchange believes the proposed rule change will 
protect investors and the public interest by covering the 
administration of the program and allow the Exchange to tailor a CE fee 
for the Series 56. This allows the Exchange to better prevent 
fraudulent and manipulative acts and practices because the CE will 
properly educate Proprietary Traders in the topics of securities laws 
and other rules and help them to comply with those laws and rules.
    Finally, the Exchange also believes the proposed rule change is 
consistent with Section 6(b)(1) of the Act,\12\ which provides that the 
Exchange be organized and have the capacity to be able to carry out the 
purposes of the Act and to enforce compliance by the individuals with a 
series 56 registration with the Act, the rules and regulations 
thereunder, and the rules of the Exchange. The proposed rule change 
[sic] is designed to fund the administration of the S501, and, more 
specifically, to help more closely cover the costs of educating 
individuals that hold a Series 56 registration. Thus, the proposed 
changes will help the Exchange to enforce compliance of its 
Participants with the Act and Exchange rules.
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    \12\ 15 U.S.C. 78f(b)(1).
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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 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. In particular, the proposed 
rule change will not impose any burden on intermarket competition as it 
will merely serve to aid the Exchange in fulfilling its obligations as 
a Self-Regulatory Organization by further funding the administration of 
the new CE. The proposed rule change will not impose any burden on 
intramarket competition as all Participants are required to pass a 
qualification exam as outlined in BOX Rule 2020 and fulfill a CE 
requirement as outlined in IM-2040-5 to BOX Rule 2040. In addition, the 
Exchange believes other exchanges will be assessing the same fee for 
this CE program.

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 Effectiveness

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Exchange Act \13\ and Rule 19b-4(f)(2) 
thereunder,\14\ because it establishes or changes a due, fee, or other 
charge applicable only to a member.
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    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \14\ 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-2013-42 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BOX-2013-42. 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 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, 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; the Commission does not edit 
personal

[[Page 53814]]

identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-BOX-2013-42 and should be submitted on 
or before September 20, 2013.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-21185 Filed 8-29-13; 8:45 am]
BILLING CODE 8011-01-P