[Federal Register Volume 86, Number 93 (Monday, May 17, 2021)]
[Notices]
[Pages 26765-26767]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10272]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91836; File No. SR-BOX-2021-08]


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 Facility To Establish a Policy 
Relating to Billing Errors

May 11, 2021.
    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 May 6, 2021, BOX Exchange LLC (``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 Exchange. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act,\3\ and Rule 19b-4(f)(6) thereunder.\4\ 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)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Fee Schedule on the BOX Options 
Market LLC (``BOX'') facility to establish a policy relating to billing 
errors. 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 purpose of the proposed rule change is to amend its Fee 
Schedule to establish a provision related to billing errors and fee 
disputes. More specifically, the Exchange would adopt language in 
Section VII.B of the BOX Fee Schedule (Fee Disputes) that would provide 
that all fees and rebates assessed prior to the three full calendar 
months before the month in which the Exchange becomes aware of a 
billing error shall be considered final. Particularly, the Exchange 
will resolve an error by crediting or debiting Participants and Non-
Participants based on the fees or rebates that should have been applied 
in the three full calendar months preceding the month in which the 
Exchange became aware of the error, which includes all impacted 
transactions that occurred during those months.\5\ The Exchange will 
apply the three month look back regardless of whether the error was 
discovered by the Exchange or by a Participant or Non-Participant that 
submitted a fee dispute to the Exchange.\6\
---------------------------------------------------------------------------

    \5\ For example, if the Exchange becomes aware of a transaction 
fee billing error on April 1, 2021, the Exchange will resolve the 
error by crediting or debiting Participants based on the fees or 
rebates that should have been applied to any impacted transactions 
during January, February and March 2021. The Exchange notes that 
because it bills in arrears, the Exchange would be able to correct 
the error in advance of issuing the April 2021 invoice and 
therefore, transactions impacted through the date of discovery (in 
this example, April 1, 2021) and thereafter, would be billed 
correctly.
    \6\ The Exchange notes that the current policy which states that 
all fee disputes must be submitted no later than sixty (60) calendar 
days after receipt of a billing invoice will remain in place.
---------------------------------------------------------------------------

    The purpose of the proposed change is to encourage Participants and 
Non-Participants to promptly review their Exchange invoices so that any 
disputed charges can be addressed in a timely manner. The Exchange 
notes that it provides Participants with both daily and monthly fee 
reports and thus believes they should be aware of any potential billing 
errors within three months. Further, any fees assessed on Non-
Participants are sent as monthly

[[Page 26766]]

invoices, and thus these firms will likewise receive sufficient notice 
of any potential billing errors. Requiring that Participants and Non-
Participants submit disputes in writing and provide supporting 
documentation encourages them to promptly review their invoices so that 
any disputed charges can be addressed in a timely manner while the 
information and data underlying those charges (e.g., applicable fees 
and order information) is still easily and readily available. This 
practice will avoid issues that may arise when Participants or Non-
Participants do not dispute an invoice in a timely manner and will 
conserve Exchange resources that would have to be expended to resolve 
untimely billing disputes. As such, the proposed rule change would 
alleviate administrative burdens related to billing disputes, which 
could divert staff resources away from the Exchange's regulatory and 
business purposes. The proposed rule change to provide all fees and 
rebates are final after three calendar months also provides both the 
Exchange and Participants and Non-Participants finality and the ability 
to close their books after a known period of time.
    The Exchange notes that the proposed change is similar to a policy 
currently in place at another exchange.\7\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 90897 (January 11, 
2021), 86 FR 4161 (January 15, 2021) (SR-CboeBZX-2020-094).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \9\ requirements that the rules of an exchange be 
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 regulating, clearing, 
settling, processing information with respect to, and 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. Additionally, 
the Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \10\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
---------------------------------------------------------------------------

    The Exchange believes that providing that all fees and rebates are 
final after three months (i.e., resolving billing errors only for the 
three full calendar months preceding the month in which the Exchange 
became aware of the error), is reasonable as both the Exchange and 
Participants and Non-Participants have an interest in knowing when its 
fee assessments are final and when reliance can be placed on those 
assessments. Indeed, without some deadline on billing errors, the 
Exchange and Participants and Non-Participants would never be able to 
close their books with any confidence. Furthermore, as noted above, 
another Exchange similarly considers their fees final after a similar 
period of time. The proposed change is also equitable, and not unfairly 
discriminatory because it will apply equally to all Participants (and 
Non-Participants that pay Exchange fees) and apply in cases where 
either the Participant (or Non-Participant) discovers the error or the 
Exchange discovers the error.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change has any 
impact on competition. The proposed rule change would establish a clear 
process that would apply equally to all Participants. Additionally, the 
proposed rule change is similar to rules of another exchange. The 
Exchange does not believe such proposed changes would impair the 
ability of Participants or competing order execution venues to maintain 
their competitive standing in the financial markets. Moreover, because 
the proposed changes would apply equally to all Participants, the 
proposal does not impose any burden on competition.

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 after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to 19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) \12\ 
thereunder. The Exchange believes that the proposal is non-
controversial, does not pose an undue burden on competition, and does 
not raise any novel issues because the proposed change is designed to 
establish a practice related to billing errors and fee disputes that 
will apply uniformly to all Participants and Non-Participants and is 
similar to the billing policy in effect on another national securities 
exchange.\13\ According to the Exchange, the proposal would allow the 
Exchange and market participants to consider all fees and rebates final 
after three calendar months, which in turn would provide both the 
Exchange and Participants and Non-Participants finality and the ability 
to close their books after a known period of time.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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.
    \13\ See supra note 7.
---------------------------------------------------------------------------

    The Exchange has asked the Commission to waive the 30-day operative 
delay for this filing, so that the proposed rule change will become 
operative immediately. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest because it will allow the Exchange to modify the BOX 
Fee Schedule to adopt a provision related to billing errors and fee 
disputes that is designed to provide clarity and certainty with respect 
to when Exchange fees and rebates may be considered final. Further, the 
proposed rule change would allow BOX to adopt a billing policy that is 
similar in all material respects to provisions currently in effect on 
other national securities exchanges \14\ and therefore does not raise 
any new or novel regulatory issues. Accordingly, the Commission 
designates the proposed rule change as operative upon filing.\15\
---------------------------------------------------------------------------

    \14\ See, e.g., supra note 7.
    \15\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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

[[Page 26767]]

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-2021-08 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-2021-08. 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 the 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-2021-08 and should be submitted on 
or before June 7, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-10272 Filed 5-14-21; 8:45 am]
BILLING CODE 8011-01-P