[Federal Register Volume 79, Number 47 (Tuesday, March 11, 2014)]
[Notices]
[Pages 13726-13728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-05176]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71650; File No. SR-BOX-2014-09]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of Proposed Clerical and Non-
Controversial Rule Changes

March 5, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on February 26, 2014, BOX Options Exchange LLC (``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the self-regulatory organization. The Commission 
is publishing this notice to solicit comments on the proposed rule from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to make non-controversial and clerical 
amendments to its rules. 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 self-regulatory organization 
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 self-regulatory organization 
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 purpose of the proposed rule change is to amend Rules 7130 
(Execution and Price/Time Priority) and 7230 (Limitation on Liability) 
and Interpretive Material to Rule 15010 (Order Protection) to make 
clerical corrections to the BOX Rulebook. Additionally, the Exchange 
proposes to make non-controversial amendments to Rules 7110 (Order 
Entry) and 8050 (Market Maker Quotations).
    First, there is a numbering issue within Rule 7130 which needs to 
be corrected. Specifically, 7130(a)(4)(v) is incorrectly numbered and 
needs to be changed to 7130(a)(4)(iv). Although this numbering issue 
has been in place since the inception of the BOX Rulebook,\3\ BOX 
recently became aware of it.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 66871 (April 27, 
2012) (File No. 10-206).
---------------------------------------------------------------------------

    Second, on May 9, 2012, BOX filed a proposed rule change to amend 
BOX Rule 7230 \4\ to clarify and codify certain provisions within Rule 
7230 and to establish the maximum monthly compensation amount. The 
changes to that filing became operative on May 9, 2012. The purpose of 
this filing is to correct clerical and grammatical errors that were 
created by that filing.

[[Page 13727]]

Specifically, in subsection (a)(2), the Exchange would like to update 
the two instances of ``Exchange Related Persons or Entities'' to '' 
Exchange Related Persons and/or Entities''. Additionally, in subsection 
(c), the Exchange would like to correct the grammatical error by 
removing the word ``any'' from the last sentence. Lastly, in subsection 
(d), the Exchange would like to make another clerical correction by 
changing ``Exchange Related Persons and/or Entity'' to ``Exchange 
Related Persons and/or Entities''.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 66982 (May 14, 
2012), 77 FR 29718 (May 18, 2012) (SR-BOX-2012-001).
---------------------------------------------------------------------------

    Third, the Interpretative Material to BOX Rule 15010 is incorrectly 
titled as ``IM-15020-1''. The Exchange would like to correct this 
typographical error by amending the Interpretative Material to read 
``IM-15010-1''. Although this numbering issue has been in place since 
the inception of the BOX Rulebook,\5\ BOX recently became aware of it.
---------------------------------------------------------------------------

    \5\ See supra note 3.
---------------------------------------------------------------------------

    Fourth, the Exchange is proposing to amend Rule 7110(e)(1)(i) by 
adding a provision to the existing order designation, Good `Till 
Cancelled (``GTC'').\6\ Specifically, the proposal adds subsection (E) 
which states that orders with the GTC designation will be cancelled in 
the event of a corporate action that results in an adjustment to the 
terms of an option contract. Further, the addition of this provision is 
based on a filing recently submitted by the International Securities 
Exchange, Inc [sic] (``ISE'').\7\
---------------------------------------------------------------------------

    \6\ A GTC designation can be added to Limit Orders and remain in 
the BOX Book until the order: (A) Trades; (B) is withdrawn by the 
relevant responsible trader or BOX at the Options Participant's 
request; (C) is automatically withdrawn by the Trading Host at 
market close on the date specified at the time of order entry; or 
(D) is automatically cancelled by the Trading Host on expiration of 
the contract month to which the order is related. See Rule 
7110(e)(1)(i).
    \7\ See Securities Exchange Act Release No. 71153 (December 20, 
2013), 78 FR 79037 (December 27, 2013) (Notice of Filing and 
Immediate Effectiveness of SR-ISE-2013-67).
---------------------------------------------------------------------------

    Last, the Exchange is proposing to remove Rule 8050(d)(3), which 
states that within thirty seconds of receipt of a Customer Order to buy 
or sell an option in an amount greater than its published quotation 
size, a Market Maker will execute the entire order or that portion of 
the order equal to its published quotation size and the bid or offer 
price will be revised. The Exchange believes this Rule is obsolete and 
no longer applicable because the BOX system is fully automated and all 
orders, including Customer Orders, are executed automatically and both 
orders execute against the full size of the Market Maker quote in 
compliance with Rule 602(c)(3) of Regulation NMS. Although this 
provision is being removed from the Exchange's Rulebook, brokers or 
dealers are still subject to the Thirty Second Response Obligation 
under Rule 602(c)(3) of Regulation NMS. The Exchange notes that the BOX 
system is programmed to ensure compliance with such obligation. 
Additionally, the removal of this provision is based on a filing 
recently submitted by the ISE.\8\
---------------------------------------------------------------------------

    \8\ Id.
---------------------------------------------------------------------------

 2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\9\ in general, and Section 
6(b)(5) of the Act,\10\ in particular, [sic] that it is designed to 
promote just and equitable principles of trade, remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system, and, in general protect investors and the public 
interest. The Exchange believes it is appropriate to make these non-
controversial and clerical corrections to its rules so that Exchange 
participants and investors have a clear and accurate understanding of 
the meaning of the Exchange's rules. By removing obsolete rule text as 
well as making clerical corrections, the Exchange is eliminating any 
potential for confusion by simplifying the Exchange Rules, ensuring 
that Participants, regulators and the public can more easily navigate 
the Exchange's Rulebook. The additional provision to the GTC 
designation codifies and clarifies what happens in the event of a 
corporate action, and therefore, will serve to eliminate investor 
confusion. There is nothing new or novel with respect to this order 
designation and ISE has this identical provision in its rules.\11\ The 
Exchange believes that the proposed rule change is not unfairly 
discriminatory because it treats all market participants equally and 
will not have an adverse impact on any market participant.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ See ISE Rule 715(r).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    Most of the proposed rule changes are non-substantive corrections 
to the Exchange's rules and therefore do not implicate the competition 
analysis. The other proposed rule changes are based on a recent filing 
by the ISE.\12\ As such, 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.
---------------------------------------------------------------------------

    \12\ See supra note 7.
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(6) thereunder.\14\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6) thereunder.\16\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change 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.

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

[[Page 13728]]

     Send an email to [email protected]. Please include 
File Number SR-BOX-2014-09 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-2014-09. 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 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-2014-09 and should be 
submitted on or before April 1, 2014.
---------------------------------------------------------------------------

    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-05176 Filed 3-10-14; 8:45 am]
BILLING CODE 8011-01-P