[Federal Register Volume 81, Number 27 (Wednesday, February 10, 2016)]
[Notices]
[Pages 7171-7172]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-02607]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77055; File No. SR-BOX-2016-02]
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the Fee Schedule To Lower Certain Fees for Non-Auction
Transactions on the BOX Market LLC (``BOX'') Options Facility
February 4, 2016.
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 27, 2016, 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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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
lower certain fees for Non-Auction transactions 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 February 1, 2016. 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 make changes to Section I.A. of the BOX
Fee Schedule, Exchange Fees for Non-Auction Transactions.
Specifically, the Exchange proposes to amend certain fees in the
pricing model outlined in Section I.A. (Non-Auction Transactions).\5\
In this section, fees and credits are assessed depending on upon three
factors: (i) The account type of the Participant submitting the order;
(ii) whether the Participant is a liquidity provider or liquidity
taker; and (iii) the account type of the contra party. Non-Auction
Transactions in Penny Pilot Classes are assessed different fees or
credits than Non-Auction Transactions in Non-Penny Pilot Classes.
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\5\ Non-Auction Transactions are those transactions executed on
the BOX Book.
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Specifically, the Exchange proposes to reduce the Taker fees for
Professional Customers, Broker Dealers and Market Makers interacting
with Public Customers in Penny Pilot Classes. The fee for Professional
Customers and Broker Dealers taking liquidity against Public Customers
will be lowered to $0.50 from $0.64 and the fee for Market Makers
taking liquidity against Public Customers will be lowered to $0.50 from
$0.55.
These transactions will remain exempt from the Liquidity Fees and
Credits outlined in Section II of the BOX Fee Schedule. The revised fee
structure for Non-Auction Transactions will be as follows:
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Penny pilot classes Non-penny pilot classes
Account type Contra party ---------------------------------------------------------------
Maker fee Taker fee Maker fee Taker fee
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Public Customer............... Public Customer. $0.00 $0.00 $0.00 $0.00
Professional 0.00 0.00 0.00 0.00
Customer/Broker
Dealer.
Market Maker.... 0.00 0.00 0.00 0.00
Professional Customer or Public Customer. 0.60 0.50 0.95 1.07
Broker Dealer.
Professional 0.25 0.40 0.35 0.40
Customer/Broker
Dealer.
Market Maker.... 0.25 0.44 0.35 0.44
Market Maker.................. Public Customer. 0.51 0.50 0.85 1.03
Professional 0.00 0.05 0.00 0.10
Customer/Broker
Dealer.
Market Maker.... 0.00 0.29 0.00 0.29
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[[Page 7172]]
The Exchange also proposes to make non-substantive technical
chances [sic] to Section I.A. of the BOX Fee Schedule (Non-Auction
Transactions) and remove references to credits.
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,\6\ 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. The proposed changes will allow the Exchange to be
competitive with other exchanges and to apply fees and credits [sic] in
a manner that is equitable among all BOX Participants. Further, the
Exchange operates within a highly competitive market in which market
participants can readily direct order flow to any other competing
exchange if they determine fees at a particular exchange to be
excessive.
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\6\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes it is equitable, reasonable and not unfairly
discriminatory to assess fees according to the account type of the
Participant originating the order and the contra party. This fee
structure has been in place on the Exchange for some time and the
Exchange is simply adjusting certain credits [sic] within the
structure.\7\ The result of this structure is that a Participant does
not know the fee it will be charged when submitting certain orders.
Therefore, the Participant must recognize that it could be charged the
highest applicable fee on the Exchange's schedule, which may, instead,
be lowered or changed to a credit depending upon how the order
interacts.
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\7\ See Securities Exchange Act Release No. 73547 (November 6,
2014), 79 FR 67520 (November 13, 2014) (Notice of Filing and
Immediate Effectiveness of SR-BOX-2014-25).
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The Exchange believes the proposed fees for Non-Auction [sic] for
Professional Customers, Broker Dealers and Market Makers when taking
liquidity against Public Customers are reasonable, equitable and not
unfairly discriminatory. The Exchange believes these fees are
reasonable as they are in line with the current fees assessed by other
competing exchanges.\8\
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\8\ Miami Securities International Exchange, LLC (``MIAX'')
charges $0.45 to firms and $0.47 to non-MIAX market makers, broker
dealers and public customers other than priority customers for
execution in Penny Pilot issues and NASDAQ OMX PHLX LLC (``PHLX'')
charges $0.48 to professional customers, broker dealers and firms
for execution in Penny Pilot issues. In addition, NASDAQ Options
Market LLC (``NOM'') and BATS BZX Exchange (``BATS'') charge a $0.50
take fee for removing liquidity in Penny Pilot issues.
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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. The Exchange believes that the
proposed adjustments to fees and rebates [sic] in the Non-Auction
Transactions fee structure will not impose a burden on competition
among various Exchange Participants. Rather, BOX believes that the
changes will result in the Participants being charged appropriately for
these transactions and are designed to enhance competition in Non-
Auction transactions on BOX. Submitting an order is entirely voluntary
and Participants can determine which type of order they wish to submit,
if any, to the Exchange. Further, the Exchange believes that this
proposal will enhance competition between exchanges because it is
designed to allow the Exchange to better compete with other exchanges
for order flow.
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 \9\ and Rule 19b-4(f)(2)
thereunder,\10\ because it establishes or changes a due, or fee.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 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-2016-02 on the subject line.
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-2016-02. 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-2016-02, and should be
submitted on or before March 2, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-02607 Filed 2-9-16; 8:45 am]
BILLING CODE 8011-01-P