[Federal Register Volume 83, Number 166 (Monday, August 27, 2018)]
[Notices]
[Pages 43711-43713]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-18426]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83895; File No. SR-BOX-2018-27]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To Make 
a Number of Non-Substantive Changes to the Rulebook

August 21, 2018.
    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 August 10, 2018, BOX Options Exchange LLC (the ``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.
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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 make a number of non-substantive changes 
to the rulebook. 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 website at http://boxoptions.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 Exchange is proposing to make a number of non-substantive 
changes to the rulebook. Currently, the Exchange's rulebook is 
singularly focused on the trading of options. The Exchange is now 
proposing to amend certain sections of the rulebook that do not 
specifically apply to the trading of options in order to provide 
broader rules that apply to Participants of the Exchange in general.\3\ 
The Exchange believes these changes are necessary to provide the 
Exchange with greater flexibility.
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    \3\ For example, Exchange rules dealing with membership apply to 
all Participants of the Exchange as opposed to rules related to 
trading on BOX, which is product-specific.
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    First, the Exchange is proposing to amend the definitions of 
``Options Participant'' and ``Participant'' in Rule 100(a)(41). 
Specifically, the Exchange is proposing to amend the definitions in 
order to cover Participants of the Exchange regardless of whether they 
participate in the trading of options. Additionally, the Exchange is 
proposing that the definition clarify that Participants register with 
the Exchange for purposes of participating in trading on ``a facility 
of the Exchange.'' \4\ The Exchange notes that another options exchange 
uses similar non-options specific language.\5\
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    \4\ BOX is an options trading facility of the Exchange.
    \5\ See Nasdaq ISE Rule 100(a)(30) defining a Member as an 
organization that has been approved to exercise trading rights 
associated with Exchange Rights.
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    Next, the Exchange is replacing the term ``Options Participant'' 
with ``Participant'' in a number of rules as outlined below. Certain 
Exchange rules are not options specific and therefore the Exchange 
believes it is appropriate to replace ``Options Participant'' with 
``Participant'' to provide more general coverage. The proposed change 
will clarify that these Exchange rules apply to Participants of the 
Exchange regardless of whether they participate in the trading of 
options.\6\
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    \6\ The Exchange notes that the Options facility is the only 
facility of the Exchange. If the Exchange decides trade other 
products it will first file a proposal with the Commission.
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    The Exchange proposes to amend its rules as it relates to usage of 
the term ``Options Participant'' as follows:
     The Exchange proposes to replace ``Options Participant'' 
with ``Participant'' in Rule 100(a)(4) which defines associated person 
or a person associated with a Participant.

[[Page 43712]]

     The Exchange is proposing to replace ``Options 
Participant'' with ``Participant'' in Rule 1060 (Exchange's Cost of 
Defending Legal Proceedings).\7\
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    \7\ See proposed changes to Rule 1060(a).
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     The Exchange is proposing to replace ``Options 
Participant'' with ``Participant'' in Rules 2000 (Right, Privileges, 
and Duties of Options Participants), 2010 (Obligations of Options 
Participants, BOX and the Exchange), 2020 (Participant Eligibility and 
Registration), 2040 (Restrictions), IM-2040-1, 2050 (Application 
Procedures for Options Participants or to become an Associated Person 
of a Participant), 2060 (Revocation of Options Participant Status or 
Association with a Participant), 2070 (Voluntary Termination of Rights 
as an Options Participant), 2080 (Dues, Assessments and Other Charges), 
and 2090 (Affiliation between Exchange and an Options Participant).\8\
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    \8\ See proposed changes to Rules 2000, 2010, 2020(a), 2040(a), 
2040(f), IM-2040-1, 2050(a)-(e), and (g), 2060, 2070, 2080, 2090. 
The Exchange notes that is also replacing ``Options Participant'' 
with ``Participant'' in the titles of rules 2050, 2060, 2070, and 
2090.
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     The Exchange is proposing to replace ``Options 
Participant'' with ``Participant'' in Rules 3000 (Just and Equitable 
Principles of Trade), IM-3000-1, 3010 (Adherence to Law), 3020 (Sharing 
Offices and Wire Connections), 3040 (False Statements), 3050 
(Manipulation), 3060 (Gratuities), 3070 (Conduct and Compliance with 
the Rules), 3080 (Rumors), 3090 (Prevention of the Misuse of Material 
Nonpublic Information), 3100 (Disciplinary Action by Other 
Organizations), 3110 (Other Restrictions on Participants), 3180 
(Mandatory Systems Testing), and 3220 (Disruptive Quoting and Trading 
Activity Prohibited).\9\
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    \9\ See proposed changes to Rules 3000(a), IM-3000-1, 3010, 
3020, 3040, 3050(a) and (b), 3060, 3070(a), 3080, 3090(a), and (c)-
(e), 3100, 3110, 3180(a)-(c), 3220(a).
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     The Exchange is proposing to replace ``Options 
Participant'' with ``Participant'' in Rules 4160 (Transfer of 
Accounts), 4190 (Public Customer Complaints), and 4200 (Telephone 
Solicitation).\10\
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    \10\ See proposed changes to Rules 4160(a), 4160(h), 4160(i), 
4190(c) and (d), 4200(c) and (d).
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     The Exchange is proposing to replace ``Options 
Participant'' with ``Participant'' in Rules 10000 (Maintenance, 
Retention and Furnishing of Books, Records and Other Information), 
10020 (Financial Reports), 10030 (Audits), 10040 (Automated Submission 
of Trade Data), 10050 (Regulatory Cooperation), and 10070 (Anti-Money 
Laundering Compliance Program).\11\
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    \11\ See proposed changes to Rules 10000(a)-(c), 10020, 
10030(a)-(c), 10040(a)-(d), 10050(c) and (d), 10070(a) and (b).
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     The Exchange is proposing to replace ``Options 
Participant'' with ``Participant'' in Rules 10200 (Minimum 
Requirements), 10210 (Early Warning'' Notification Requirements), and 
10220 (Power of CRO to Impose Restrictions).\12\
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    \12\ See proposed changes to Rules 10200, 10210, 10220.
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     The Exchange is proposing to replace ``Options 
Participant'' with ``Participant'' in Rules 11000 (Imposition of 
Suspension), 11010 (Investigation Following Suspension), 11020 
(Reinstatement), and 11040 (Termination of Rights by Suspension).\13\
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    \13\ See proposed changes to Rules 11000(a) and (b), 11010(a) 
and (b), 11020(a) and (c), 11040.
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     The Exchange is proposing to replace ``Options 
Participant'' with ``Participant'' in Rules 12000 (Disciplinary 
Jurisdiction), 12010 (Requirement to Furnish Information), 12020 
(Investigation), 12030 (Letters of Consent), 12040 (Charges), 12060 
(Hearing), 12110 (Judgement and Sanction), 12120 (Procedural Matters), 
and Rule 12160 (Expedited Suspension Provision).\14\
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    \14\ See proposed changes to Rules 12000(a)-(c), 12010(a), 
12020, 12030(a), 12040(a), 12060(b), (e) and (f), 12110(a), (c) and 
(d), 12120(a), 12160(a).
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     The Exchange is proposing to replace ``Options 
Participant'' with ``Participant'' in Rule 13000 (Scope of Series).\15\
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    \15\ See proposed changes to Rule 13000.
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     The Exchange is proposing to replace ``Options 
Participant'' with ``Participant'' in Rule 14000 (Arbitration).\16\
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    \16\ See proposed changes to Rule 14000(b), (c) and (e).
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    Lastly, the Exchange is proposing to amend Rule 2040(e)(3). 
Specifically, the Exchange proposes to remove the term ``BOX'' and 
replace it with ``a facility of the Exchange.'' The Exchange notes that 
BOX is a facility of the Exchange and therefore the Exchange is not 
proposing to substantively change the rule.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Securities Exchange Act of 1934 
(the ``Act''),\17\ in general, and Section 6(b)(5) of the Act,\18\ 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 mechanism 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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    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system by ensuring that market participants can 
easily navigate, understand and comply with the Exchange's rulebook. 
The Exchange believes that the proposed rule change enables the 
Exchange to continue to enforce the Exchange's rules. The Exchange 
believes that none of the proposed changes discussed herein alter the 
application of any rules. As such, the proposed amendments would foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities and would remove impediments to and perfect 
the mechanism of a free and open market and a national exchange system. 
Further, the Exchange believes that, by ensuring the rulebook 
accurately reflects the intention of the Exchange's rules, the proposed 
rule change reduces potential investor or market participant confusion.

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 this regard and as indicated 
above, the Exchange notes that the proposed changes will not alter any 
of the Exchange's rules. Therefore, the proposed changes will have no 
impact on competition as they are not designed to address any 
competitive issues but rather are designed to make non-substantive 
changes.

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 rule does not (i) significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative

[[Page 43713]]

for 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, provided that the self-regulatory 
organization has given 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,\19\ the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \20\ and Rule 19b-
4(f)(6) thereunder.\21\
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    \19\ The Exchange has fulfilled this requirement.
    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f)(6).
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    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 necessary or 
appropriate in the public interest, for the protection of investors, or 
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 Number SR-BOX-2018-27 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-2018-27. 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 website (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 website viewing and printing in 
the Commission's Public Reference Room, on official business days 
between the hours of 10:00 a.m. and 3:00 p.m., located at 100 F Street 
NE, Washington, DC 20549. 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. Persons submitting 
comments are cautioned that we do not redact or edit personal 
identifying information from comment submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BOX-2018-27 and should be 
submitted on or before September 17, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-18426 Filed 8-24-18; 8:45 am]
 BILLING CODE 8011-01-P