[Federal Register Volume 81, Number 228 (Monday, November 28, 2016)]
[Notices]
[Pages 85656-85657]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28459]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79362; File No. SR-BOX-2016-53]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend the Fee Schedule on the BOX Market LLC (``BOX'') Options Facility

November 21, 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 November 10, 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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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 on 
the BOX Market LLC (``BOX'') options facility. Changes to the Fee 
Schedule pursuant to this proposal will be effective November 11, 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 amend the Fee Schedule for trading on BOX. 
Specifically, the Exchange proposes to revise certain qualification 
thresholds in Sections I.B.1 of the BOX Fee Schedule, Primary 
Improvement Order and I.B.2 of the BOX Fee Schedule, the BOX Volume 
Rebate (``BVR''). Changes to the Fee Schedule pursuant to this proposal 
will be effective November 11, 2016.\5\
---------------------------------------------------------------------------

    \5\ The Exchange notes that while a Participant's monthly volume 
and percentage threshold will remain unchanged, under this proposal 
their percentage threshold may fall into a different Tier for the 
remaining trading days in the month. Consequently, a Participant may 
receive a higher rebate/lower fee for transactions executed within 
these trading days.
---------------------------------------------------------------------------

Primary Improvement Order
    Under the tiered fee schedule for Primary Improvement Orders, the 
Exchange assesses a per contract execution fee to all Primary 
Improvement Order executions where the corresponding PIP or COPIP Order 
is from the account of a Public Customer. Percentage thresholds are 
calculated on a monthly basis by totaling the Initiating Participant's 
Primary Improvement Order volume submitted to BOX, relative to the 
total national Customer volume in multiply-listed options classes. The 
Exchange proposes to adjust the percentage thresholds in Tiers 4 and 5. 
Specifically, the Exchange proposes to change Tier 4 from ``0.500% to 
0.949%'' to ``0.500% to 0.799%'' and Tier 5 from ``0.950% and Above'' 
to ``0.800% and Above.'' The Exchange notes that it is not proposing 
any changes to the fees within the Primary Improvement Order fee 
structure and the quantity submitted will continue to be calculated on 
a monthly basis by totaling the Initiating Participant's Primary 
Improvement Order volume submitted to BOX, relative to the total 
national Customer volume in multiply-listed options classes.
BVR
    Next, the Exchange proposes to adjust certain percentage thresholds 
within the BVR. Under the BVR, the Exchange offers a tiered per 
contract rebate for all Public Customer PIP Orders and COPIP Orders of 
100 and under contracts 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. The Exchange proposes to adjust the percentage 
thresholds in Tiers 3 and 4. Specifically, the Exchange proposes to 
change Tier 3 from ``0.340% to 0.949%'' to ``0.340% to 0.799%'' and 
Tier 4 from ``0.950% and Above'' to ``0.800% and Above.'' The Exchange 
notes that is it not proposing any changes to the fees within the BVR. 
The quantity submitted will continue to be 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.
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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    BOX believes it is reasonable, equitable and not unfairly 
discriminatory to adjust the monthly Percentage Thresholds of National 
Customer Volume in Multiply-Listed Options Classes. The volume 
thresholds with their tiered fees and rebates are meant to incentivize 
Participants to direct order flow to the Exchange to obtain the benefit 
of the lower fee or higher rebate, which in turn benefits all market 
participants by increasing liquidity on the Exchange.
    The Exchange believes the proposed amendments to the Primary

[[Page 85657]]

Improvement Order percentage thresholds are reasonable, equitable and 
not unfairly discriminatory. The proposed changes to the thresholds are 
equitable and not unfairly discriminatory as they are available to all 
BOX Participants that initiate Auction Transactions, and Participants 
may choose whether or not to take advantage of the percentage 
thresholds and their applicable discounted fees. Further, the Exchange 
believes that the proposed changes are reasonable and competitive as 
they will further incentivize Participants to direct order flow to the 
Exchange, benefiting all market participants.
    The Exchange also believes the proposed amendments to the BVR in 
Section I.B.2 of the BOX Fee Schedule 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 Public Customer PIP and COPIP Orders to the Exchange and 
the Exchange believes it is appropriate to now amend the BVR. The 
Exchange believes it is equitable and not unfairly discriminatory to 
amend the BVR, as all Participants have the ability to qualify for a 
rebate, and rebates are provided equally to qualifying Participants. 
Other exchanges employ similar incentive programs; \7\ and the Exchange 
believes that the proposed changes to the volume thresholds are 
reasonable and competitive when compared to incentive structures at 
other exchanges. Finally, the Exchange believes it is reasonable and 
appropriate to continue to provide incentives for Public Customers, 
which will result in greater liquidity and ultimately benefit all 
Participants trading on the Exchange.
---------------------------------------------------------------------------

    \7\ See Section B of the PHLX Pricing Schedule entitled 
``Customer Rebate Program;'' ISE Gemini's Qualifying Tier Thresholds 
(page 6 of the ISE Gemini Fee Schedule); and CBOE's Volume Incentive 
Program (VIP).
---------------------------------------------------------------------------

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 is simply 
proposing to amend certain percentage thresholds for Auction 
Transaction fees and rebates in the BOX Fee Schedule. The Exchange 
believes that the volume based rebates and fees increase intermarket 
and intramarket competition by incenting Participants to direct their 
order flow to the exchange, which benefits all participants by 
providing more trading opportunities and improves competition on the 
Exchange.

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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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-2016-53 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-2016-53. 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-2016-53, and should be 
submitted on or before December 19, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-28459 Filed 11-25-16; 8:45 am]
 BILLING CODE 8011-01-P