[Federal Register Volume 84, Number 35 (Thursday, February 21, 2019)]
[Notices]
[Pages 5521-5523]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02900]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85139; File No. SR-BOX-2019-02]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee
Schedule on the BOX Options Market LLC (``BOX'') Facility To Modify
Certain Agency Order Fees for Facilitation and Solicitation
Transactions
February 14, 2019.
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 February 1, 2019, BOX 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
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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
amend the Fee Schedule [sic] on the BOX Options Market LLC (``BOX'')
options facility. 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://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
to amend Section I.C (Facilitation and Solicitation Transactions).\5\
Specifically, the Exchange proposes to decrease the Agency Order \6\
fees for Professional Customers, Broker Dealers and Market Makers from
$0.15 to $0.00 for Penny Pilot and Non-Penny Pilot Classes.
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\5\ Transactions executed through the Solicitation Auction
mechanism and Facilitation Auction mechanism.
\6\ An Agency Order is a block-size order that an Order Flow
Provider seeks to facilitate as agent through the Facilitation
Auction or Solicitation Auction mechanism.
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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,\7\ 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.
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\7\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that the proposed changes are reasonable as
the Exchange is eliminating the fees for Professional Customers, Broker
Dealers and Market Makers for their Agency Orders in the Facilitation
and Solicitation mechanism.\8\ The Exchange believes that eliminating
these fees will attract order flow to these mechanisms which will
result in greater liquidity and ultimately benefit all Participants
trading on the Exchange. Further, the Exchange believes that the
proposed change is equitable and not unfairly discriminatory, as the
proposed change applies to all Professional Customers, Broker Dealers
and Market Makers. The Exchange notes that there is no fee charged to
Public Customers for their Agency Orders in the Facilitation and
Solicitation mechanism.
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\8\ The Exchange notes that it previously did not charge Broker
Dealers, Professional Customers and Market Makers for Agency Orders
in the Facilitation and Solicitation mechanism. See SR-BOX-2015-29.
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Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing exchanges. In such an environment, the Exchange must
continually review, and consider adjusting, its fees to remain
competitive with other exchanges. For the reasons described above, the
Exchange believes that the proposed rule change reflects this
competitive environment.
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 changes to the Facilitation and Solicitation Transaction fees
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 the Facilitation and Solicitation
mechanisms. Submitting an order is entirely voluntary and Participants
can determine which order type 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. The
Exchange does not believe that the proposed change will burden
competition by creating a disparity between the fees an initiator pays
and the fees a competitive responder pays that would result in certain
Participants being unable to compete with initiators. In fact, the
Exchange believes that these changes will not impair these Participants
from adding liquidity and competing in the Facilitation and
Solicitation mechanisms, and will help promote competition by providing
incentives for market participants to submit Agency Orders, and thus
benefit all Participants trading on the Exchange by attracting customer
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-2019-02 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.
[[Page 5523]]
All submissions should refer to File Number SR-BOX-2019-02. 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 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, 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. 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-2019-02, and should be submitted on
or before March 14, 2019.
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\11\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-02900 Filed 2-20-19; 8:45 am]
BILLING CODE 8011-01-P