[Federal Register Volume 86, Number 96 (Thursday, May 20, 2021)]
[Notices]
[Pages 27490-27497]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10579]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91897; File No. SR-BOX-2021-11]


Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Establish Rule 
7135 (Execution and Pro Rata Priority) and Rule 8055 (Lead Market 
Makers)

May 14, 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 April 29, 2021, BOX Exchange LLC (``Exchange'' or ``BOX'') 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 establish Rule 7135 (Execution and Pro 
Rata Priority) and Rule 8055 (Lead Market Makers). 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

[[Page 27491]]

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

Purpose
    The BOX Options Market launched on April 27, 2012 as a fully 
automated, Price/Time priority execution system.\3\ Currently, BOX Rule 
7130(a)(4) provides that the Trading Host \4\ accepts buy and sell 
orders in the respective sequence in which the Trading Host receives 
such orders and will have a single execution algorithm based on Price/
Time priority.\5\ At this time, the Exchange proposes to establish Rule 
7135 which will govern Pro Rata execution and priority on BOX. In order 
to make clear that only one of the two execution algorithms is 
applicable to a particular options class, BOX proposes to add 
introductory language to both Rule 7130(a)(4) and proposed Rule 7135 
which states that that the Exchange will determine to apply, for each 
option class, one of the base execution algorithms described in Rule 
7130(a)(4) (Price/Time Priority) or Rule 7135(b) (Pro Rata Priority). 
The Exchange will issue a Regulatory Circular specifying which 
execution algorithm will govern which options class any time it is 
modified.\6\ The Exchange notes that the proposed Pro Rata execution 
algorithm and priority rules discussed herein will apply only to 
electronic orders on the Exchange. Qualified Open Outcry Orders (``QOO 
Orders'') executed on the BOX Trading Floor will continue to be subject 
to the priority and allocation rules detailed in the 7600 rules series 
regardless of whether the options class is designated for Pro Rata or 
Price/Time priority in the electronic market.\7\ All QOO Orders are 
processed through the BOX Trading Host system which enforces the rules 
detailed in the 7600 series.
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    \3\ See Securities Exchange Act Release No. 66871 (April 27, 
2012) (File No. 10-206). See Securities Exchange Act Release No. 
66871 (April 27, 2012) 77 FR 26323 (May 3, 2012) (File No. 10-206).
    \4\ See Rule 100(a)(68). The term ``Trading Host'' means the 
automated trading system used by BOX for the trading of options 
contracts.
    \5\ The following criteria will determine order matching and 
trade execution for Price/Time priority: (i) Price. A buy order at 
the highest price and a sell order at the lowest price have priority 
over other orders in the same series/strategy; and (ii) Time. A buy/
sell order at the best price will trade in sequence according to the 
time it was accepted by the Trading Host, from earliest time stamp 
to latest. (iii) Trade. A trade occurs when orders or quotations 
match in the Trading Host. An order entered into the Trading Host 
that matches an order in the Trading host will trade at the price of 
the order in the Trading Host up to the available size.
    \6\ Price/Time Priority as described in Rule 7130(a)(4) will be 
in effect for all options classes until otherwise specified by the 
Exchange pursuant to a Regulatory Circular.
    \7\ Currently, on the BOX Trading Floor, QOO Orders (1) may not 
trade through any equal or better priced Public Customer bids or 
offers on the BOX Book or any non-Public Customer bids or offers on 
the BOX Book that are ranked ahead of such equal or better priced 
Public Customer bids or offers, and (2) may not trade through any 
non-Public Customer bids or offers on the BOX Book that are priced 
better than the proposed execution price. See BOX Rule 7600(c)(1). 
In addition, QOO Orders are subject to the allocation provisions 
detailed in Rule 7600(d). The Exchange notes that QOO Orders will 
continue to execute pursuant to these rules. To illustrate, consider 
the following: Options on XYZ are designated to execute through the 
Pro Rata algorithm pursuant to proposed Rule 7135(b) for electronic 
orders. Two XYZ buy orders rest on the BOX Book as follows (in the 
order of which the orders were received by the Exchange). The first 
order is a Broker Dealer Order to buy 15 XYZ at $1.00 and the second 
order is a Public Customer Order to buy 7 XYZ at $1.00. An incoming 
QOO Order to sell 25 XYZ is received by BOX. Pursuant to 7600(c) and 
(d), the incoming QOO Order to sell 25 XYZ will execute against the 
orders as follows: Broker Dealer will trade 15 XYZ at $1.00 and 
Public Customer will trade 7 XYZ at $1.00. The remaining quantity of 
3 will trade against the QOO contra-side order. The Exchange notes 
that in an electronic class designated as Pro Rata, the BOX system 
will continue to rank orders on the BOX Book in price-time priority 
in order for QOO Orders to execute against orders on the BOX Book 
pursuant to the priority and allocation provisions detailed in 
7600(d);however, orders on BOX Book in such class will be ranked in 
Pro Rata priority at the time of an electronic order execution.
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    Proposed Rule 7135(b) states that the System shall execute trading 
interest within the System in price priority, meaning it will execute 
all trading interest at the best price level within the System before 
executing trading interest at the next best price. Within each price 
level, if there are two or more quotes or orders at that price, trading 
interest will be executed based on the size of each Participant's quote 
or order as a percentage of the total size of all orders and quotes 
resting at that price. If the result is not a whole number, it will be 
rounded down to the nearest whole number. The Exchange notes that 
proposed Rule 7135(a) and (b) are similar to rules that currently exist 
on another options exchange.\8\
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    \8\ See Nasdaq BX LLC (``Nasdaq BX'') Options 3, Section 
10(a)(1) and (a)(1)(B) (Order Book Allocation).
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    Further, the Exchange proposes that (1) If there are residual 
contracts to be filled after the pro rata calculation has been 
completed, such contracts will be allocated, with no more than one 
contract per Participant, in the following sequence: (A) The 
Participant in the pool who has the largest fractional amount based on 
the pro rata calculation (trading interest will be executed based on 
the size of each Participant's quote or order as a percentage of the 
total size of all orders and quotes resting at that price) will receive 
the first contract, and each successive contract (if any) will be 
allocated to each subsequent Participant who has the next largest 
fractional share; (B) If the last residual contracts are to be 
allocated between two or more Participants with the same fractional 
amount, then the Participant with the first time priority in the pro 
rata pool will be allocated the next contract. Each successive contract 
(if any) will be allocated in the same manner. The Exchange notes that 
a similar rule currently exists at another options exchange.\9\
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    \9\ See NYSE American LLC (``NYSE Amer'') Rule 964NY(b)(3)(B).
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    The following example illustrates how the Exchange's system will 
execute with rounding and residual contracts:\10\
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    \10\ The Exchange notes in the example, the orders and quotes 
listed are in the order in which they were received, and all 
Priority Overlays are in effect. The example is intended to 
illustrate how rounding and residual contracts work pursuant to this 
proposal.

Market: $2.00 (86) x $2.03 (23)
Public Customer (PC): Buy order 7 contracts @$2.00
Market Maker A (MMA) Quote: $2.00 (55) x $2.03 (10)
Market Maker B (MMB) Quote: $2.00 (12) x $2.03 (5)
Market Maker C (MMC) Quote: $2.00 (12) x $2.03 (8)
Sell order received: 27 contracts @$2.00

    Public Customer Order is filled in its entirety and allocated 7 
contracts at $2.00.

MMA's quote represents 69.62% (55/79) of all orders and quotes resting 
at $2.00
    [cir] 69.62% of 20 contracts executed for MMA = 13.92,\11\ rounded 
down to 13 contracts
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    \11\ MMA's fractional amount is 0.92.
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MMB's quote represents 15.19% (12/79) of all orders and quotes resting 
at $2.00
    [cir] 15.19% of 20 contracts executed for MMB = 3.04,\12\ rounded 
down to 3 contracts
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    \12\ MMB's fractional amount is 0.04.

    MMC's quote represents 15.19% (12/79) of all orders and quotes 
resting at $2.00
    [cir] 15.19% of 20 contracts executed for MMC = 3.04,\13\ rounded 
down to 3 contracts
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    \13\ MMC's fractional amount is 0.04.

    The Exchange notes, due to rounding down, there will be 1 remaining 
residual contract from the incoming sell order (7 (Public Customer) + 
13 (MMA) + 3 (MMB) + 3 (MMC) = 26 out of 27 contracts allocated 
pursuant to Pro Rata calculation). MMA was the Participant with the 
largest fractional amount

[[Page 27492]]

pursuant to the Size Pro-Rata execution calculation, specifically, 0.92 
contracts. Therefore, MMA would receive the 1 remaining residual 
contract.\14\ The Exchange believes the proposed method for allocating 
residual contracts is a wholly sufficient process to fill any remaining 
contracts particularly because there is no theoretically plausible 
situation where the number of residual contracts is greater than the 
number of market participants being allocated under the priority 
scheme.
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    \14\ See proposed Rule 7135(b)(1). The Exchange notes, in the 
aforementioned example MMB and MMC both had an equal fractional 
amount of 0.04 contracts. There could be instances where the 
calculation methodology results in more than 1 residual contract. In 
the example above, assume there was 2 residual contracts, in such a 
scenario MMB would have received the second (and last) residual 
contract because it was first in time priority. The Exchange 
believes the proposed rounding and residual contract method is 
appropriate and fair and will be clear to Participants. Rounding 
down is a more efficient way to calculate the distribution of non-
whole number allocations because it avoids having the Exchange break 
ties when a Participant is entitled to half (0.5) of a contract. In 
addition, the Exchange believes Participants with the largest 
fractional shares should receive the first residual contracts 
because the allocation will more closely meet the fill expectations 
of market participants.
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    The Exchange next proposes Rule 7135(c) which governs the priority 
overlays applicable to the Size Pro Rata execution algorithm where the 
Exchange may apply designated Participant priority overlays detailed 
below when the Size Pro Rata execution algorithm is in effect. First, 
the Exchange proposes Rule 7135(c)(1) which details the Public Customer 
Priority. Specifically, the Exchange proposes that the highest bid and 
lowest offer shall have priority on a Pro Rata basis except that Public 
Customer orders shall have priority over non-Public Customer orders at 
the same price. If there are two or more Public Customer orders for the 
same options series at the same price, priority shall be afforded to 
such Public Customer orders in the sequence in which they are received 
by the System. For purposes of this Rule, a Public Customer order does 
not include a Professional Order. Public Customer Priority is always in 
effect when Size Pro-Rata execution algorithm is in effect. The 
Exchange notes that the proposed Public Customer Priority overlay is 
similar to a rule that currently exists at another exchange.\15\
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    \15\ See Nasdaq BX Rule Options 3, Section 10(a)(1)(C)(2)(i).
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    Next, the Exchange proposes Rule 7135(c)(2) which details Lead 
Market Maker (``LMM'') priority. An LMM may be assigned by the Exchange 
in each option class in accordance with proposed Rule 8055 detailed 
herein. After all Public Customer orders have been fully executed, upon 
receipt of an order, provided the LMM's bid/offer is at or improves on 
the Exchange's disseminated price, the LMM will be afforded a 
participation entitlement, unless the incoming order to be allocated is 
a Preferenced Order,\16\ in which case allocation would be pursuant to 
Rule 7135(c)(3) discussed below. The LMM shall not be entitled to 
receive a number of contracts that is greater than the displayed size 
associated with such LMM. LMM participation entitlements will be 
considered after the Opening Match. Rounding will be up or down to the 
nearest integer. The LMM participation entitlement is as follows (i) A 
BOX Options LMM shall receive the greatest of: (A) Lead Market Maker's 
Size Pro-Rata share under subparagraph (c)(4) (``Market Maker 
Priority''); (B) 50% of remaining interest if there is one or no other 
Market Maker at that price; (C) 4C0% of remaining interest if there is 
two other Market Makers at that price; or (D) 30% of remaining interest 
if there are more than two other Market Makers at that price. Further, 
the Exchange proposes Rule 7135(c)(2)(ii) which states that if the LMM 
is also the Preferred Market Maker, the LMM may receive the greater of 
the Preferred Market Maker participation entitlement set forth in 
subsection (c)(3) below or the LMM participation entitlement set forth 
in (c)(2)(i).
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    \16\ The term ``Preferenced Order'' means any order, whether on 
a single option instrument or on a Complex Order Strategy, for which 
a Preferred Market Maker is designated with respect to such order, 
upon submission of such order to BOX. See BOX Rule 7300(a)(1).
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    Further, the Exchange proposes Rule 7135(c)(2)(iii) which states 
that orders for 5 contracts or fewer shall be allocated in their 
entirety to the LMM. The Exchange will review this provision quarterly 
and will maintain the small order size at a level that will not allow 
orders of 5 contracts or less executed by the LMM to account for more 
than 40% of the volume executed on the Exchange. The Exchange notes 
that proposed Rule 7135(c)(2)(i)-(iii) are similar to rules in place at 
another options exchange.\17\
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    \17\ See Nasdaq BX Options 3, Section 10(a)(1)(C)(2)(ii).
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    The following example further illustrates how the Exchange's system 
will execute trades using the Pro-Rata allocation method including the 
PC, LMM, and MM priority overlays discussed herein:

Market: $1.00 (50)--$1.10 (50)
Public Customer: Sell 7 @$1.10
Lead Market Maker A (LMMA) Quote: $1.00 (20)-$1.10 (10)
Market Maker B (MMB) Quote: $1.00 (10)- $1.10 (15)
Market Maker C (MMC) Quote: $1.00 (20)-$1.10 (18)
Buy order received: Buy 27 @$1.10
Size Pro-Rata Results
     PC order is filled in its entirety and is allocated 7 
contracts at $1.10. There are 20 contracts remaining of the inbound 
order.

 LMMA's quote represents 23.26% (10/43) of all orders and 
quotes resting at $1.10
    [cir] 23.26% of 20 contracts executed for LMMA = 4.65, rounded down 
to 4 contracts
 MMB's quote represents 34.88% (15/43) of all orders and quotes 
resting at $1.10
    [cir] 34.88% of 20 contracts executed for MMB = 6.97, rounded down 
to 6 contracts
 MMC's quote represents 41.86% (18/43) of all orders and quotes 
resting at $1.10
    [cir] 41.86% of 20 contracts executed for MMC = 8.37, rounded down 
to 8 contracts
LMM Percentage Allocation Results
     PC is allocated 7 contracts @$1.10. There are 20 contracts 
remaining of the inbound order.
     LMMA is allocated 8 contracts @$1.10.\18\
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    \18\ Pursuant to proposed Rule 7135(c)(2)(i)(C), LMMs 
participation entitlement is 40% because there are two other Market 
Makers at that the same price. Specifically, LMM receives 40% of the 
remaining 20 contracts, 8 contracts total.
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    The LMM percentage allocation result prevails because the LMM will 
receive the higher quantity of 8 contracts.\19\
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    \19\ See proposed Rule 7135(c)(2)(i).
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    Market Makers will be allocated according to Size Pro-Rata as 
follows:

 MMB's quote represents 45.45% (15/33) of all orders and quotes 
resting at $1.10
    [cir] 45.45% of 12 contracts (remaining from incoming Buy order of 
27) executed for MMB = 5.45,\20\ rounded down to 5 contracts
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    \20\ MMB's fractional amount is 0.45.
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 MMC's quote represents 54.54% (18/33) of all orders and quotes 
resting at $1.10
    [cir] 54.54% of 12 contracts executed for MMC = 6.54,\21\ rounded 
down to 6 contracts
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    \21\ MMC's fractional amount is 0.54.
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    The Exchange notes, due to rounding down, there will be 1 remaining 
residual contract from the incoming order (12 (remaining)--5 (MMB)--6 
(MMC) = 11 contracts). MMC was the

[[Page 27493]]

Participant with the largest fractional amount pursuant to the Size 
Pro-Rata execution calculation, specifically, 0.54 contracts. 
Therefore, MMC would receive the 1 remaining residual contract.
    Next, the Exchange proposes Rule 7135(c)(3) which details Preferred 
Market Maker \22\ Priority. After all Public Customer orders at the 
same price or better have been fully executed, upon receipt of a 
Preferenced Order pursuant to Rule 7300, provided the Preferred Market 
Maker's quote is at the NBBO, the Preferred Market Maker will be 
afforded a participation entitlement. Preferred Market Maker 
participation entitlements will apply only after the Opening Match. 
When the Preferred Market Maker is at the same price as a non-Public 
Customer Order or Market Maker quote, pursuant to the Preferred Market 
Maker participation entitlement, the Preferred Market Maker shall 
receive, with respect to a Preferenced Order, the greatest of: (A) 60% 
of remaining interest if there is one other non-Public Customer Order 
or Market Maker quote at that price; (B) 40% of remaining interest if 
there are two or more other non-Public Customer Orders or Market Maker 
quotes at that price; or (C) the Preferred Market Maker's Size Pro Rata 
share under subparagraph (c)(4). The Exchange further proposes Rule 
7135(c)(3)(ii) which states that the Preferred Market Maker is also 
entitled to orders of 5 contracts or fewer under subparagraph 
(c)(2)(iii) if the Preferred Market Maker is also the Lead Market Maker 
and the incoming Order is for 5 contracts or fewer. If the Preferred 
Market Maker is not the Lead Market Maker, the Preferred Market Maker 
will be afforded the participation entitlement detailed in Rule 
7135(c)(3)(i). The Exchange notes that proposed Rule 7135(c)(3) is 
similar to rules at another options exchange in the industry.\23\
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    \22\ See BOX Rule 7300(a)(2). The term ``Preferred Market 
Maker'' or ``PMM'' means a Market Maker designated as such by a 
Participant with respect to an order submitted by such Participant 
to BOX.
    \23\ See Nasdaq ISE LLC (``ISE'') Options 3, Section 
10(c)(1)(C).
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    The following example further illustrates how the Exchange's system 
will execute trades using the Pro-Rata allocation method and the PMM 
priority overlay discussed herein:

Market: $1.00 (43)-$1.15 (16)
Public Customer: Sell 1@$1.15
Preferred Market Maker A (PMMA) \24\ Quote: $1.00 (10)-$1.15 (4)
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    \24\ In this example, assume PMMA is not a designated LMM in the 
class of the incoming order.
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Market Maker B (MMB) Quote: $1.00 (15)-$1.15 (5)
Market Maker C (MMC) Quote: $1.00 (18)-$1.15 (6)
Buy order received: Buy 5 @$1.15
Size Pro-Rata Results
     PC order is filled in its entirety and is allocated 1 
contract. There are 4 contracts remaining of the inbound order.
 PMMA's quote represents 26.66% (4/15) of all orders and quotes 
resting at $1.15
    [cir] 26.66% of 4 contracts executed for PMMA = 1.06, rounded down 
to 1 contract
 MMB's quote represents 33.33% (5/15) of all orders and quotes 
resting at $1.15
    [cir] 33.33% of 4 contracts executed for MMB = 1.33, rounded down 
to 1 contract
 MMC's quote represents 40.00% (6/15) of all orders and quotes 
resting at $1.15
    [cir] 40.00% of 4 contracts executed for MMC = 1.60, rounded down 
to 1 contract
PMM Percentage Allocation Results
     PC is allocated 1 contract @$1.15. There are 4 contracts 
remaining of the inbound order.
     PMMA is allocated 1.60 contracts--rounded down to 1 
contract @$1.15.\25\
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    \25\ Pursuant to proposed Rule 7135(c)(3)(i), PMMAs 
participation entitlement is 40% because there are two other Market 
Makers at that the same price. Specifically, PMMA receives 40% of 
the remaining 4 contracts, 1.60 contracts total--rounded down to 1 
contract.
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    Based on the calculations above, the PMM percentage allocation 
result prevails because PMMA will receive the higher quantity of 1.60 
contracts (rounded down to 1 contract).\26\
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    \26\ See proposed Rule 7135(c)(3)(i). The Exchange notes that 
the PMM's allocation in Size Pro-Rata was 1.06 contracts. The system 
will take the greatest of the percentage allocation and the Size 
Pro-Rata calculation. Because the percentage allocation resulted in 
a higher allocation (by fractional amount), the percentage 
allocation prevails.
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    Market Makers allocated according to Size Pro-Rata as follows:

 MMB's quote represents 45.45% (5/11) of all orders and quotes 
resting at $1.15
    [cir] 45.45% of 3 contracts (remaining from incoming order) 
executed for MMB = 1.36,\27\ rounded down to 1 contract
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    \27\ MMB's fractional amount is 0.36.
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 MMC's quote represents 54.54% (6/11) of all orders and quotes 
resting at $1.10
    [cir] 54.54% of 3 contracts executed for MMC = 1.63,\28\ rounded 
down to 1 contract
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    \28\ MMC's fractional amount is 0.63.

    The Exchange notes, due to rounding down, there will be 1 remaining 
residual contract from the incoming order (5 (remaining)--1 PC-1 
(PMMA)--1 (MMB)--1 (MMC) = 4 contracts). MMC was the Participant with 
the largest fractional amount pursuant to the Size Pro-Rata execution 
calculation, specifically, 0.63 contracts. Therefore, MMC would receive 
the 1 remaining residual contract.
    The Exchange next proposes Rule 7135(c)(4) which details Market 
Maker Priority. After all Public Customer orders have been fully 
executed and LMM and Preferred Market Maker participation entitlement 
applied, if applicable, BOX Market Makers (excluding LMMs and Preferred 
Market Makers) shall have priority over all other Participant orders at 
the same price. If there are two or more BOX Market Maker quotes and 
orders for the same options series at the same price, those shall be 
executed based on the Size Pro Rata execution algorithm. Lastly, the 
Exchange proposes Rule 7135(c)(5) which states that if there are 
contracts, such contracts shall be executed based on the Size Pro-Rata 
execution algorithm. The Exchange notes that a similar rule currently 
exists at another options exchange.\29\
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    \29\ See Nasdaq BX Options 3, Section 10(a)(1)(C)(2)(iv).
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    The Exchange next proposes to establish Rule 8055 which details 
designation and obligations of Lead Market Makers. First, the Exchange 
proposes 8055(a) (LMM Designation) which states that the Exchange may 
designate one Market Maker \30\ in good standing with an appointment in 
a class as an LMM. The term ``Lead Market Maker'' (``LMM'') has the 
meaning set forth in this Rule 8055. The proposal provides that the 
Exchange will appoint an LMM for a term of no less than the time until 
the end of the then-current expiration cycle (``term''), and the 
Exchange may approve one Market Maker to act as an LMM in each class 
during regular trading hours for terms of at least one month.\31\ In 
addition, the Exchange proposes factors for determining whether the 
Exchange will appoint a Market Maker as an LMM. Factors to be 
considered by the Exchange in selecting LMMs include:

[[Page 27494]]

Adequacy of capital, experience in trading options, and adherence to 
Exchange rules and ability to meet the obligations specified in this 
Rule 8055.\32\
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    \30\ Currently, Market Makers on BOX are subject to the rules 
and requirements detailed in the rule 8000 series. With respect to 
continuous quoting obligations, BOX Market Makers are required to 
``post valid quotes at least sixty percent (60%) of the time that 
the classes are open for trading. These obligations will apply to 
all of the Market Maker's appointed classes collectively, rather 
than on a class-by-class basis.'' See BOX Rule 8050(e).
    \31\ The Exchange notes this is substantively identical to 
Cboe's rule, except that Cboe's rule text provides for the 
possibility of appointing more than one LMM to a particular class 
which BOX does not seek to establish at this time.
    \32\ The Exchange notes the proposed rule 8055(a) is similar to 
Cboe Rule 3.55(a) with a few minor differences. Again, the Exchange 
proposes to only designate one (rather than one or more) Lead Market 
Maker in good standing per class. The Exchange believes appointing 
only one Lead Market Maker per class is appropriate at BOX. The 
Exchange also notes that another exchange allows only one Lead 
Market Maker per class for LMM designation. See Nasdaq BX, Inc 
(``Nasdaq BX'') Rule Options 2, Section 3(A)(a). Further, in 
proposed Rule 8055(a), the Exchange did not copy any rule language 
that relates to Cboe's On-Floor LMMs because, under the current 
proposal, the Exchange only wishes to establish designations for 
electronic LMMs (referred to as ``Off-Floor LMMs'' at Cboe). If the 
Exchange seeks to establish Floor LMMs in the future, it will file 
another proposal with the Commission at that time. Further, with 
regard to proposed Rule 8055(a), the Exchange notes that it did not 
include any mention of the DPM account type as this account type 
does not exist on BOX. The Exchange notes, that while being 
different market participant types within Cboe's market, the LMMs 
and DPMs have substantially similar functions and obligations (i.e., 
adequacy of capital, experience trading options, historical 
adherence to exchange rules, willingness and ability to promote the 
exchange etc.). The primary difference between LMMs and DPMs relates 
to the length of their appointment terms (e.g., LMM receives an 
appointment for a limited term while a DPM serves until it resigns 
or is removed by the exchange). Compare Cboe Rule 3.53 (DPMs), with 
Cboe Rule 3.55 (LMMs). Given that the Exchange is proposing to adopt 
an electronic LMM (similar to Cboe ``Off-Floor LMM'' or ``Off-Floor 
DPM'') participant type, when considering the selection of 
electronic LMMs, the factors to be considered may also include, but 
are not limited to, any one or more of the following: (1) Number and 
experience of support personnel performing functions related to 
LMM's business; (2) observance of generally accepted standards of 
conduct; (3) regulatory history of applicant LMM; (4) operational 
capacity; and (5) in the event one of more LMMs or associated 
persons is or has previously been an LMM or associated with an LMM, 
adherence by such LMM to the requirements set forth in proposed Rule 
8055 during the time period in which such person(s) held such 
position with the LMM. These factors are substantially similar to 
the DPM factors listed on Cboe. See Cboe Rule 3.53(b). Because the 
obligations of the two participant types are substantially similar 
and the Exchange does not have and is not proposing to adopt a DPM 
participant type, it is not proposing to adopt any similar rule text 
related to DPM obligations within its proposed Rule 8055. The 
Exchange did not include language that states that ``an LMM 
generally will operate on the Exchange's trading floor'' as this 
statement is not an accurate representation of how LMMs will operate 
on BOX. Lastly, the Exchange notes that it did not include Cboe Rule 
3.55(a)(1), (2) and (3) as these provisions provide for situations 
in which an LMM will operate on the trading floor, and BOX's current 
proposal only seeks to establish electronic LMMs at this time.
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    Next, the Exchange proposes Rule 8055(b) which states that the 
Exchange may remove an LMM if the LMM fails to meet the obligations set 
forth in Rule 8055(c), or any other applicable Rule. An LMM removed 
under the proposed Rule may seek review of that decision under Rule 
Series 13000. If an LMM is removed or if for any reason an LMM is no 
longer eligible for or resigns its appointment or fails to perform its 
duties, the Exchange may designate an LMM for the remainder of the term 
or shorter time period designated by the Exchange. The Exchange notes 
that this proposed rule language is identical to a rule currently in 
place at another options exchange.\33\
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    \33\ See Cboe Rule 3.55(b).
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    The Exchange next proposes to adopt Rule 8055(c) which governs Lead 
Market Maker Obligations on BOX. Specifically, each LMM must fulfill 
all the obligations of a Market Maker under the rule series 8000 and 
satisfy each of the following requirements: (i) During regular trading 
hours, provide continuous electronic quotes by submitting continuous 
bids and offers in 99% of the non-adjusted option \34\ series in a 
LMM's appointed class for 90% of the time the Exchange is open for 
trading in such options class. This obligation does not apply to any 
adjusted series or intra-day add-on series on the day during which such 
series are added for trading. An LMM may receive a participation 
entitlement in intra-day add-on series on the day during which such 
series are added for trading if it elects to quote in such series 
provided the LMM satisfies the quoting obligations in this Rule. The 
Exchange notes that this rule is similar to a rule at another 
exchange.\35\
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    \34\ See BOX Rule 7300(a)(2). As defined under BOX Rule 7300, 
``[a]n ``adjusted option series'' is an option series wherein, as a 
result of a corporate action by the issuer of the underlying 
security, one option contract in the series represents the delivery 
of other than 100 shares of underlying stocks or Units.'' That 
definition has the same meaning within this proposal. Therefore, 
non-adjusted option series have not been modified as a result of a 
corporate action and therefore continue to represent the delivery of 
100 shares.
    \35\ See Cboe Exchange Inc. (``Cboe'') Rule 5.55(a)(1). First, 
the Exchange notes that it is only copying the ``99% of the Non-
Adjusted Option series'' quoting obligation language and not 
including the ``100% of the non-adjusted options series minus one 
call-put pair'' language. The Exchange understands the 100% 
obligation to be a legacy Cboe rule that was put in place due to 
proprietary products traded on its exchange. As such, the Exchange 
does not believe it is appropriate to include in its proposal 
discussed herein. Furthermore, the Exchange believes this is 
reasonable because the proposal still requires the LMMs to 
continuously quote a significant part of the trading day in a 
significant percentage of the series. Next, the Exchange notes that 
it is not including Cboe Rule 5.55(a)(1)(B) as BOX intends to only 
appoint one Lead Market Maker per class. As such, the Cboe rule 
detailing that the LMM continuous quoting obligation may be 
satisfied individually or collectively with LMMs of the same 
Participant is unnecessary. The Exchange also notes that it is not 
copying Cboe Rule 5.55(a)(2) as the Exchange's proposal will not 
require its Lead Market Makers to enter opening quotes. The Exchange 
notes that another exchange does not require its Lead Market Makers 
to quote during the opening. See Securities Exchange Act Release No. 
89731 (September 1, 2020), 85 FR 55524 (September 8, 2020)(SR-BX-
2020-016). The BX filing states that ``. . .BX Lead Market Makers 
are not required to quote during the opening, that will remain 
unchanged. Today, BX Lead Market Makers may quote during the 
opening, but they are not obligated to quote.'' Further, the 
Exchange notes that it is not copying Cboe Rule 5.55(a)(2)(A) and 
(B) as they relate to the opening quote obligation at Cboe which, as 
discussed above, BOX does not intend to require in this proposal.
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    The Exchange further proposes the following obligations for LMMs in 
proposed Rule 8055(c)(2) make competitive markets on the Exchange and 
otherwise promote the Exchange in a manner that is likely to enhance 
the ability of the Exchange to compete successfully for order flow in 
the classes it trades; \36\ (3) continue to act as an LMM and fulfill 
the obligations of an LMM until the end of its term or until the 
Exchange relieves the LMM of its approval to act as an LMM or of its 
appointment and obligations to act as an LMM in a particular class and 
(4) promptly inform the Exchange of any material change in financial or 
operational condition or in personnel. The Exchange notes that the 
proposed requirements discussed above are similar to requirements 
currently in place for LMMs at other options exchanges.\37\
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    \36\ The Exchange notes this obligation is substantially similar 
to the current requirement under the BOX Rules that obligate Market 
Makers to maintain a market in their appointed classes in a manner 
that enhances the depth, liquidity and competitiveness of the 
market. See BOX Rule 8040(a)(1). The Exchange does not believe the 
proposed rule text imposes a new obligation on LMMs, as the current 
rules require Market Makers to be competitive; rather, it is 
replicated for clarity and to support the easier readability of the 
Exchange's rulebook.
    \37\ See Cboe Rule 5.55(a)(3) through (4) and NYSE Arca Rule 
6.82-O(c)(14). The Exchange notes that proposed Rule 8055(c)(1) (2) 
and (3) are identical to Cboe and proposed Rule 8055(c)(4) is 
identical to NYSE Arca. The Exchange believes that Arca's rule 
better aligns with the surveillance efforts currently in place at 
the Exchange. The Exchange notes, Market Makers are not currently 
subject to this notification obligation. The Exchange believes that 
imposing the proposed obligation to notify the Exchange upon any 
material changes in finances or operations will assist the Exchange 
in regulating LMMs and surveilling its marketplace. In particular, 
the Exchange will be able to more closely monitor LMM compliance 
with Exchange rules (e.g., position limits), ensure adequate 
capitalization levels of its Participants, and be made aware of any 
material organizational changes that may impact the Exchange's 
business operations or regulatory efforts (i.e., mergers/
combinations, Participants acting as Market Makers for the first 
time, changes in ownership and control) so the Exchange may act as 
it deems necessary. The Exchange believes that the proposed 
obligation is appropriate for LMMs and not regular Market Makers on 
BOX because LMMs are held to a higher quoting obligation as 
discussed herein.
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    Lastly, the Exchange proposes Rule 8055(d) which governs LMM 
Compliance. Rule 8055(d) states that compliance with LMM quoting

[[Page 27495]]

obligation applies to all of an LMM's appointed classes collectively. 
The Exchange will determine compliance by an LMM with this quoting 
obligation on a monthly basis. However, determining compliance with 
this obligation on a monthly basis does not relieve an LMM from meeting 
this obligation on a daily basis, nor does it prohibit the Exchange 
from taking disciplinary action against an LMM for failing to meet this 
obligation each trading day. The Exchange notes that proposed Rule 
8055(d) is similar to another rule in place at an options exchange.\38\
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    \38\ See Cboe Rule 5.55(e). The Exchange notes that it is not 
proposing to adopt subsections (1) and (2) of Cboe Rule 5.55(e) 
because as previously mentioned herein, the Exchange is only 
proposing to establish electronic LMMs and Cboe Rule 5.55(e)(1) and 
(2) account for varying obligations between their On-Floor LMMs and 
Off-Floor LMMs which are not applicable to the Exchange's proposal.
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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,\39\ in general, and Section 
6(b)(5) of the Act,\40\ in particular, in that it is designed to 
promote just and equitable principles of trade, remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system, and, in general protect investors and the public 
interest, because it will provide additional execution algorithms and 
priority overlays on BOX, which currently operate on other exchanges, 
as explained in detail herein.\41\ These additional execution 
algorithms and priority overlays provide Participants with additional 
choices among the many competing exchanges with regard to their 
execution needs and strategies and provision of liquidity and quoting. 
The Exchange believes that adding this flexibility to its rules will 
allow for greater customization, resulting in enhanced service to its 
Participants, which would continue to be a purely objective method for 
allocating option trades. The Exchange believes that, while the price/
time execution algorithm encourages liquidity providers to set the 
price, the Size Pro Rata execution algorithm encourages liquidity 
providers to add size to a bid/offer at a particular price, even if 
that Participant did not set the price. Rewarding liquidity providers 
(through the proposed participation entitlements discussed herein) who 
add size should encourage larger displayed markets, which should, in 
turn, benefit and protect investors and the public interest.
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    \39\ 15 U.S.C. 78f(b).
    \40\ 15 U.S.C. 78f(b)(5).
    \41\ See supra notes 8, 9, 15, 17, 23, and 29.
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    Further, BOX operates in an intensely competitive environment and 
seeks to offer the same or similar services that its competitors offer 
and in which its Participants would find value. As such, the Exchange 
believes the proposed addition of the Pro Rata execution algorithm will 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system by providing market participants an 
additional venue to execute trades and provide liquidity using the Pro 
Rata execution algorithm (if designated by the Exchange). The Exchange 
further notes that the Exchange's ability to determine which execution 
algorithm--Price/Time or Pro Rata--to apply to each option class is 
appropriate as the Commission has already found this practice 
consistent with the Act.\42\ The Exchange believes the proposed 
priority overlays applicable to the Size Pro Rata execution algorithm 
are consistent with the Act. First, the Exchange notes that the 
Commission has already found that these priority overlays to be 
consistent with the Act as the overlays exist on other exchanges in the 
industry as discussed herein. The Exchange believes that the proposed 
Public Customer priority overlay is appropriate as it recognizes the 
unique status of Public Customers in the marketplace and the role their 
orders play in price competition and adding depth to the marketplace. 
Further, the Exchange believes the proposal seeks to incentivize Public 
Customer order flow to the Exchange in order to compete and interact 
with other market participants who are able to quote and submit orders 
in greater quantities. As such, the Exchange believes the proposed 
Public Customer priority overlay can increase price competition and add 
depth to the marketplace. For these reasons, the Exchange also believes 
that the Public Customer priority overlay is designed to promote just 
and equitable principles of trade and to protect investors and the 
public interest.
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    \42\ See Securities Exchange Act Release No. 62317 (June 17, 
2010), 75 FR 36147 (June 24, 2010) (SR-CBOE-2010-038). In its Order 
Approving Cboe's proposal related to the hybrid matching algorithm, 
the Commission states that ``. . . the incoming order will be 
allocated among market participants using the underlying matching 
algorithm--price-time or pro-rata--both of which the Commission 
already has found consistent with the Act.'' See also See Securities 
Exchange Act Release No. 51822 (June 10, 2005), 70 FR 35321 (June 
17, 2005) (Adopting CBOE Rule 6.45B).
---------------------------------------------------------------------------

    The Exchange believes that offering LMMs participation entitlements 
promotes just and equitable principles of trade because LMMs will be 
held to a higher standard as compared to other market participants 
including Market Makers. Currently, a Market Maker is required to quote 
at least 60% of the time that the classes are open for trading.\43\ 
Under this proposal, LMMs are being held to a higher obligation and 
therefore are being rewarded with participation entitlements. The 
proposed rule change supports the quality of the Exchange's trading 
market by helping to incentivize that LMMs will be required to meet a 
higher quoting standard in order to reap the benefits of the proposed 
participation entitlement. The Exchange believes this proposed change 
to offer participation entitlements to LMMs is offset by LMMs' 
continued responsibilities to provide significant liquidity to the 
market to the benefit of market participants.
---------------------------------------------------------------------------

    \43\ See BOX Rule 8050(e).
---------------------------------------------------------------------------

    The Exchange believes that the Preferred Market Maker participation 
entitlement is designed to promote just and equitable principles of 
trade and to protect investors and the public interest, because it 
strikes a reasonable balance between encouraging vigorous price 
competition and rewarding Preferred Market Makers for their unique 
duties. In order to receive an allocation preference, Preferred Market 
Makers must meet heightened quoting requirements as Market Makers, and 
also be quoting at the NBBO at the time the Preferenced Order is 
received. Heightened quoting requirements mean that Preferred Market 
Makers must maintain a continuous two-sided market pursuant to Rule 
8050(c)(1), throughout the trading day, in 99% of the non-adjusted 
option series of each class for which it accepts Preferenced Orders, 
for 90% of the time the Exchange is open for trading in each such 
option class; provided that it is not required to so quote in intra-day 
add-on series or series that have a time to expiration of nine months 
or more.\44\ The Exchange also notes that Preferred Market Makers 
currently receive a Preferred Allocation in the Price/Time priority 
execution algorithm.\45\ The Exchange believes that the proposed 
Preferred Market Maker participation entitlement is consistent with the 
Act because it will provide important incentives for Preferred Market 
Makers on BOX to provide liquidity which, in turn, provides for greater 
opportunity for executions, tighter spreads and better pricing for all 
Participants. Additionally, the Exchange believes that the proposed 
Preferred Market Maker participation entitlement

[[Page 27496]]

percentages adequately balances the aim of rewarding the Preferred 
Market Maker with the aim of leaving a sizeable enough portion of the 
incoming Preferenced Order for the other Market Makers quoting at the 
same price. Further, the Exchange notes that Preferred Market Makers at 
other exchanges receive the same participation entitlement when the 
Pro-Rata execution is designated by the respective exchange.\46\
---------------------------------------------------------------------------

    \44\ See Rule 7300(a)(2).
    \45\ See BOX Rule 7300(c)(2).
    \46\ See supra note 23.
---------------------------------------------------------------------------

    The Exchange believes the Market Maker participation entitlement is 
appropriate as Market Makers are required to quote at least 60% of the 
time that the classes are open for trading. The Exchange believes the 
proposed participation entitlement strikes a reasonable balance between 
encouraging vigorous price competition and rewarding Market Makers for 
their unique duties. Further, the Exchange notes that a similar rule 
exists at another exchange when the Pro-Rata execution algorithm is 
enabled.\47\
---------------------------------------------------------------------------

    \47\ See supra note 29.
---------------------------------------------------------------------------

    The proposed rule relating to LMM Designation (proposed Rule 
8055(a)) seek to establish and promote just and equitable principles of 
trade by allowing the Exchange to designate one Market Maker in good 
standing with an appointment in a class as an LMM. The Exchange intends 
to foster cooperation and coordination by taking into account certain 
factors to be considered in selecting an LMM including the LMM's 
experience and capitalization and other information to ensure that an 
LMM is qualified when allocated an options series. The Exchange again 
notes that a similar rule exists at another options exchange.\48\
---------------------------------------------------------------------------

    \48\ See supra notes 31 and 32.
---------------------------------------------------------------------------

    With respect to an LMM's obligations, the Exchange would require 
LMMs be subject to heightened standards as compared to other Market 
Makers. Similar to Market Makers, LMMs add value through continuous 
quoting and the commitment of capital. In addition, the LMM quoting 
requirements promote liquidity and continuity in the marketplace in 
requiring LMMs to be held to a higher standard of quoting. The Exchange 
believes that the proposed rule change supports the quality of the 
Exchange's markets because it maintains the quoting obligations of 
Market Makers as LMMs at 99% of the non-adjusted option series in a 
LMM's appointed class for 90% of the time the Exchange is open for 
trading in such options class. LMM transactions must constitute a 
course of dealings reasonably calculated to contribute to the 
maintenance of a fair and orderly market. The Exchange believes that 
the obligations set forth for LMMs in its proposed rules will promote 
just and equitable principles of trade, foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, and, in general, to protect investors and the public 
interest. Further, the Exchange notes that a similar rule exists at 
another options exchange.\49\ Therefore, the proposed rule change also 
protects investors and the public interest by creating more uniformity 
and consistency among the Exchange's rules related to LMM obligations.
---------------------------------------------------------------------------

    \49\ See supra notes 35 and 37.
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    Lastly, with respect to proposed Rule 8055(d), LMM Compliance, the 
Exchange believes that adopting the proposed standards will enhance 
compliance efforts by Lead Market Makers and the Exchange. The proposed 
rule text fosters cooperation and coordination with persons engaged in 
facilitating transactions in securities because it clearly identifies 
that LMM quoting obligations apply to all of the LMM's appointed 
classes collectively, and thereby promotes compliance with the proposed 
rules. Furthermore, the proposed rule text protects investors and the 
public interest by giving notice to potential LMMs that quoting 
obligations must be met on a daily basis and that disciplinary action 
may be taken against an LMM for failing to meet their obligations on 
each trading day. Specifically, any violation of the proposed 
heightened quoting standard for LMMs will be subject to potential 
discipline under Rule Series 12000. As such, the Exchange believes the 
proposed LMM Compliance rule detailed in Rule 8055(d) is reasonable and 
appropriate as it is substantially similar to a rule currently in place 
on another options exchange.\50\
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    \50\ See supra note 38.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. To the contrary, 
the proposal is pro-competitive because it will enable the Exchange to 
better compete with other options exchanges that provide similar 
execution algorithms and participation entitlements. The Exchange does 
not believe the proposed changes will cause any unnecessary burden on 
intra-market competition because all Exchange Participants may utilize 
the Pro Rata execution algorithm and priority overlays if the Pro Rata 
execution algorithm is designated to the applicable options class by 
the Exchange pursuant to proposed Rule 7135(a). Further, the Exchange 
does not believe the proposed changes will cause any unnecessary burden 
on intermarket competition as the proposed rules will allow BOX to 
compete with other options exchanges in the industry. The proposed 
rules discussed herein will allow BOX to offer competing functionality 
on the Exchange that could be attractive to market participants, thus 
enabling market participants to submit order flow to an additional 
venue to execute trades. The Exchange does not believe the proposal to 
establish Lead Market Makers will impose any burden on competition that 
is not necessary or appropriate in furtherance of the purposes of the 
Act. The Exchange notes several competitors currently host this 
participant type on their exchange.\51\ In addition, LMMs will be 
subject to quoting obligations which are similar to those of at least 
one other options exchange.\52\ Further, Exchange believes that because 
this proposal establishes substantially similar quoting compliance 
standards that are already in place on other options exchanges, the 
proposal will not diminish market making activity on the Exchange and 
thereby may enhance intermarket competition. Moreover, the Exchange 
believes that the proposal will not burden intra-market competition 
because the LMM program on BOX is completely voluntary, and any Market 
Makers that choose to participate are subject to the same obligations 
under this proposal. All Market Makers that desire to become LMMs will 
be subject to the same review and scrutiny with respect to their LMM 
application and the ultimate assignment of options series. The Exchange 
believes that the proposed rule change will promote competition among 
Market Makers who desire to be assigned in options series and in turn 
promote trading activity on the Exchange to the benefit of the 
Exchange, its Participants, and market participants. The Exchange does 
not believe the proposed change will cause any unnecessary burden on 
inter-market competition because any qualifying LMM will be entitled to 
receive participation entitlements on options series they are obligated 
to meet higher quoting standards for under the proposed Rules.
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    \51\ See NYSEArca Rule 6.82-O. (Lead Market Makers) and NASDAQ 
BX Options 2, Section 3.
    \52\ See supra notes 35 and 37.

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[[Page 27497]]

    Lastly, as discussed herein, the proposed rule changes are 
substantially similar to rules currently in place at other options 
exchanges in the industry. 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) of the Act \53\ and Rule 19b-
4(f)(6) thereunder.\54\
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    \53\ 15 U.S.C. 78s(b)(3)(A).
    \54\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of 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.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \55\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, Rule 19b-4(f)(6)(iii) \56\ permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative immediately upon filing. The Exchange 
states that such waiver would allow BOX to immediately offer the 
proposed functionality to BOX Participants, which will allow for 
greater customization resulting in enhanced service to BOX 
Participants. The Exchange further states that similar execution 
algorithms and priority overlays are currently available to market 
participants at other options exchanges. For these reasons, and because 
the proposal does not raise any novel regulatory issues, the Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. Accordingly, the 
Commission hereby waives the 30-day operative delay and designates the 
proposed rule change as operative upon filing.\57\
---------------------------------------------------------------------------

    \55\ 17 CFR 240.19b-4(f)(6).
    \56\ 17 CFR 240.19b-4(f)(6)(iii).
    \57\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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 change 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-2021-11 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-2021-11. 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-2021-11 and should be 
submitted on or before June 10, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\58\
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    \58\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-10579 Filed 5-19-21; 8:45 am]
BILLING CODE 8011-01-P