[Federal Register Volume 82, Number 18 (Monday, January 30, 2017)]
[Notices]
[Pages 8777-8779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-01896]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79869; File No. SR-BOX-2017-02]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Rule 7130 (Execution and Price/Time Priority) To Include a 
Participant ID, if Elected, To Be Included in BOX's Proprietary High 
Speed Vendor Feed (``HSVF'') for Orders Exposed Pursuant to Rule 
7130(b)(3)(ii)

January 24, 2017.
    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 17, 2017, BOX Options Exchange LLC (``BOX'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 7130 (Execution and Price/Time 
Priority) to include a Participant ID, if elected, to be included in 
BOX's proprietary High Speed Vendor Feed (``HSVF'') for orders exposed 
pursuant to Rule 7130(b)(3)(ii). 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.

[[Page 8778]]

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 and 
7110. Specifically, the Exchange proposes to adopt Rule 
7130(b)(3)(iii), which states that a Participant may elect to include 
their Participant ID, including any supplemental clearing information, 
in the HSVF for any orders exposed pursuant to Rule 7130(b)(3)(ii).\3\ 
Accordingly, the Exchange proposes to amend Rule 7130(a)(2) which 
details the information available to all market participants through 
the HSVF. Specifically, the Exchange proposes to amend Rule 7130(a)(2) 
to specify the addition of the Participant ID, including any 
supplemental clearing information, if elected, to be included in the 
HSVF pursuant to proposed Rule 7130(b)(b)(iii). The Exchange notes that 
similar functionality exists at another options exchange in the 
industry.\4\
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    \3\ If a Participant elects to turn on or off this 
functionality, the change will be effective the following business 
day.
    \4\ See EDGX Exchange, Inc. (``EDGX'') Rule 11.6(a). The 
Exchange notes that on EDGX, the ``Attributable'' instruction to 
designate an order for display on the EDGX Book Feed with the 
Member's market participant identifier (``MPID'') is voluntary and 
on an order-by-order basis or port-by-port basis; while BOX is 
proposing that the Participant ID be revealed in the HSVF for all 
orders exposed pursuant to the circumstances in Rule 7130(b)(3)(ii). 
The Exchange does not believe this difference is significant.
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    The HSVF is a proprietary product that contains: (i) Trades and 
trade cancelation information; (ii) best-ranked price level to buy and 
the best-ranked price level to sell; (iii) instrument summaries 
(including information such as high, low, and last trade price and 
traded volume); (iv) the five best limit prices and the best-ranked 
Legging Order \5\ (if any), for each option instrument, and the five 
best limit prices and the best-ranked Implied Order \6\ (if any), for 
each Complex Order Strategy; (v) request for Quote messages; \7\ (vi) 
PIP Order, COPIP Order, Improvement Order and Block Trade Order 
(Facilitation and Solicitation) information; \8\ (vii) orders exposed 
at NBBO \9\ and Complex Orders exposed; \10\ (viii) instrument 
dictionary (e.g., strike price, expiration date, underlying symbol, 
price threshold, and minimum trading increment for instruments traded 
on BOX); (ix) options class and instrument status change notices (e.g., 
whether an instrument or class is in pre-opening, continuous trading, 
closed, halted, or prohibited from trading); (x) options class opening 
time and (xi) Public Customer bid/ask volume at the best limit.
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    \5\ As set forth in Exchange Rule 7240(c)(1).
    \6\ As set forth in Exchange Rule 7240(d)(1).
    \7\ See Exchange Rules 100(a)(57), 7070(h) and 8050.
    \8\ As set forth in Exchange Rules 7150, 7245, and 7270, 
respectively.
    \9\ As set forth in Exchange Rules 7130(b)(3) and 8040(d)(6), 
respectively.
    \10\ As set forth in Exchange Rule 7240(b)(3)(iii)(B).
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    The HSVF provides data to enhance the ability of subscribers to 
analyze market conditions and to create and test trading models and 
analytical strategies. The Exchange believes that the HSVF is a 
valuable tool that can be used to gain comprehensive insight into the 
trading activity in a particular option series. The addition of the 
voluntary Participant ID, including any supplemental clearing 
information, for orders exposed pursuant to Rule 7130(b)(b)(ii) will 
further increase the value of this tool by allowing market participants 
to better gauge exposed orders and partake in enhanced executions.
    The Exchange also proposes to reflect the proposed changes 
discussed above in BOX Rule 7110(f). Currently, Rule 7110(f) states 
that the identity of Options Participants who submit orders to the 
Trading Host will remain anonymous to market participants at all times, 
except orders submitted through the Directed Order process, during 
error resolution or through the normal clearing process as set forth in 
Rule 7130. The Exchange proposes to include reference to certain 
exposed orders as set forth in proposed Rule 7130(b)(3)(iii) which will 
allow the Participant ID to be revealed in the HSVF, if elected by the 
Participant.
    The Exchange intends to implement the proposed change no later than 
March 31, 2017. The Exchange will provide Participants with notice, via 
Information Circular, of the exact implementation date.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\11\ in general, and Section 
6(b)(5) of the Act,\12\ in particular, in that it is 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 facilitating transactions in 
securities, to remove impediments to and perfect the mechanisms of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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    The proposed rule change will allow the Exchange to reveal 
Participant IDs in the HSVF for orders exposed pursuant to Rule 
7130(b)(3)(iii). The Exchange believes that the proposed change will 
enhance subscribers' ability to make more informed and timely trading 
decisions. Additionally, as set forth above, the Exchange believes this 
proposed change is reasonable and appropriate as another exchange has 
similar functionality.\13\ Lastly, the Exchange believes that the 
proposed change is not unfairly discriminatory because it treats all 
market participants equally and will not have an adverse impact on any 
market participant.
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    \13\ See supra note 4.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change would allow the Exchange to disseminate 
additional information in its propriety market data product, the HSVF. 
This enhancement to the HSVF will give market participants greater 
information on which to base their trading strategies. 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.

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

    Because the foregoing 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 for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \14\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\15\
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    \14\ 15 U.S.C. 78s(b)(3)(a)(iii).
    \15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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.

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[[Page 8779]]

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of 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 No. SR-BOX-2017-02 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BOX-2017-02. 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-2017-02 and should be 
submitted on or before February 21, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-01896 Filed 1-27-17; 8:45 am]
BILLING CODE 8011-01-P