[Federal Register Volume 86, Number 176 (Wednesday, September 15, 2021)]
[Notices]
[Pages 51410-51414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-19864]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92926; File No. SR-BOX-2021-19]


Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing 
of Proposed Rule Change Related to BOX Exchange LLC and BOX Holdings 
Group LLC Ownership Transfer Transactions

September 9, 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 August

[[Page 51411]]

27, 2021, BOX Exchange LLC (the ``Exchange'') filed with the Securities 
and Exchange Commission (the ``Commission'') the proposed rule change 
as described in Items I and II below, which Items have been prepared by 
the Exchange. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to update its ownership schedule and 
accomplish the following ownership transfer transactions, resulting in 
changes to the ownership of the Exchange and BOX Holdings Group LLC, an 
affiliate of the Exchange (``BOX Holdings''): (i) The Exchange proposes 
to repurchase the ownership interests in the Exchange held by Citigroup 
Financial Products Inc. (``Citi'') and CSFB Next Fund Inc. (``CSFB''); 
(ii) BOX Holdings proposes to repurchase the ownership interests in BOX 
Holdings held by Citi and CSFB; and (iii) Wolverine Holdings, L.P. 
(``Wolverine'') proposes to purchase an ownership interest in the 
Exchange from MX US 2, Inc., a wholly-owned subsidiary of TMX Group 
Limited (``MXUS2''). 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 a limited liability company, organized under the 
laws of the State of Delaware on August 26, 2010. The Exchange's 
charter is a Second Amended and Restated Limited Liability Company 
Agreement, dated as of May 29, 2020, as amended November 30, 2020 (the 
``Exchange LLC Agreement''). Each of Citi, CSFB and MXUS2 became a 
Member \3\ of the Exchange on May 10, 2012. Wolverine is not currently 
a Member of the Exchange.
---------------------------------------------------------------------------

    \3\ A ``Member'' of the Exchange means the current owners of 
Economic Units and Voting Units of the Exchange and will include any 
person subsequently admitted to the Exchange as an additional or 
substitute Member of the Exchange. See Exchange LLC Agreement Sec.  
1.1.
---------------------------------------------------------------------------

    BOX Holdings is a limited liability company, organized under the 
laws of the State of Delaware on August 26, 2010. BOX Holdings is the 
sole owner of BOX Options Market LLC, a facility of the Exchange (``BOX 
Options''). The BOX Holdings charter is a Second Amended and Restated 
Limited Liability Company Agreement, dated as of September 13, 2018 
(the ``Holdings LLC Agreement''). Each of Citi and CSFB became a Member 
\4\ of BOX Holdings on May 10, 2012.
---------------------------------------------------------------------------

    \4\ A ``Member'' of BOX Holdings means the current owners of 
Units of BOX Holdings and will include any Person subsequently 
admitted to BOX Holdings as an additional or substitute Member of 
BOX Holdings. See Holdings LLC Agreement Sec.  1.1. Current Members 
of BOX Holdings are: MXUS2, IB Exchange Corp., Citadel Securities 
Principal Investments LLC; Citigroup Financial Products Inc., UBS 
Americas Inc., CSFB Next Fund Inc., JPMC Strategic Investments I 
Corporation, Wolverine and Aragon Solutions Ltd.
---------------------------------------------------------------------------

    6,445 Economic Units \5\ and 8,388 Voting Units \6\ represent 
Citi's interest in the Exchange, comprising 7.683% of all outstanding 
Economic Units and 9.999% of all outstanding Voting Units of the 
Exchange, respectively (the ``Citi Exchange Units''). 1,155 Class A 
Units \7\ and 25 Class B Units \8\ represent Citi's interest in BOX 
Holdings, comprising 7.853% of all outstanding Class A Units and Class 
B Units (collectively, ``Units'') of BOX Holdings (the ``Citi Holdings 
Units'' and, together with the Citi Exchange Units, the ``Citi 
Units''). Citi's voting power with respect to votes of Members of BOX 
Holdings is 8.13% and Citi's voting power on the Board of Directors of 
BOX Holdings is 8.38%.
---------------------------------------------------------------------------

    \5\ ``Economic Units'' of the Exchange means equal units of 
limited liability company interest in the Exchange collectively 
comprising all interests in the profits and losses of the Exchange 
and all rights to receive distributions from the Exchange as set 
forth in the Exchange LLC Agreement. See Exchange LLC Agreement 
Sec.  2.5(a).
    \6\ ``Voting Units'' of the Exchange means equal units of 
limited liability company interest in the Exchange collectively 
comprising all voting interests of Members with respect to Exchange 
matters. See Exchange LLC Agreement Sec.  2.5(b).
    \7\ ``Class A Units'' of BOX Holdings means equal units of 
limited liability company interest in BOX Holdings, including an 
interest in the ownership and profits and losses of BOX Holdings and 
the right to receive distributions from BOX Holdings. See Holdings 
LLC Agreement Sec.  1.1.
    \8\ ``Class B Units'' of BOX Holdings are identical to Class A 
Units except Class B Units include conversion rights, a liquidation 
preference and class voting rights with respect to those matters. 
See Holdings LLC Agreement Sec. Sec.  1.1 and 2.5.
---------------------------------------------------------------------------

    6,123 Economic Units and 8,388 Voting Units represent CSFB's 
interest in the Exchange, comprising 7.299% of all outstanding Economic 
Units and 9.999% of all outstanding Voting Units of the Exchange, 
respectively (the ``CSFB Exchange Units''). 475 Class A Units represent 
CSFB's interest in BOX Holdings, comprising 3.161% of all outstanding 
Units of BOX Holdings (the ``CSFB Holdings Units'' and, together with 
the CSFB Exchange Units, the ``CSFB Units''). CSFB's voting power with 
respect to votes of Members of BOX Holdings is 3.27% and CSFB's voting 
power on the Board of Directors of BOX Holdings is 3.37%.
    33,554 Economic Units and 16,777 Voting Units represent MXUS2's 
interest in the Exchange, comprising 40% of all outstanding Economic 
Units and 20% of all outstanding Voting Units of the Exchange, 
respectively. Wolverine currently does not hold any interest in the 
Exchange.
    The Exchange has agreed with Citi to purchase the Citi Exchange 
Units. BOX Holdings has agreed with Citi to purchase the Citi Holdings 
Units. Accordingly, it is proposed that Citi transfer all of the Citi 
Exchange Units to the Exchange and all of the Citi Holdings Units to 
BOX Holdings (the ``Citi Transfer'').
    The Exchange has agreed with CSFB to purchase the CSFB Exchange 
Units. BOX Holdings has agreed with CSFB to purchase the CSFB Holdings 
Units. Accordingly, it is proposed that CSFB transfer all of the CSFB 
Exchange Units to the Exchange and all of the CSFB Holdings Units to 
BOX Holdings (the ``CSFB Transfer'').
    Wolverine has agreed with MXUS2 to purchase one (1) Economic Unit 
in the Exchange from MXUS2. Accordingly, it is proposed that MXUS2 
transfer one (1) Economic Unit to Wolverine (the ``Wolverine Transfer'' 
and, together with the Citi Transfer and the CSFB Transfer, the 
``Transfers''). Wolverine is an existing Exchange Facility 
Participant.\9\ At the time of the Wolverine Transfer, Wolverine will 
become a Member of the Exchange. As a holder of one (1) Economic Unit 
in the Exchange, Wolverine will also be allocated 2,637 Voting Units as 
provided in the

[[Page 51412]]

Exchange LLC Agreement,\10\ comprising 0.002% of all outstanding 
Economic Units and 5.026% of all outstanding Voting Units of the 
Exchange, respectively.
---------------------------------------------------------------------------

    \9\ ``Exchange Facility Participant'' means a firm or 
organization that is registered with the Exchange pursuant to the 
Exchange Rules for purposes of participating in trading on any 
Exchange Facility. See Exchange LLC Agreement Sec.  1.1.
    \10\ As discussed below, Sec.  7.3(g) of the Exchange LLC 
Agreement provides that a Member of the Exchange may hold a 
different number of Voting Units than Economic Units due to the 
application of Voting Ownership Limits to other Members.
---------------------------------------------------------------------------

    Pursuant to the Exchange LLC Agreement, Wolverine will not become a 
Member of the Exchange unless Wolverine is first accepted and approved 
as a transferee \11\ and admitted as a Member by the affirmative vote 
of Members holding a majority of the Voting Percentage Interest,\12\ 
Wolverine executes a counterpart of the Exchange LLC Agreement and 
agrees in writing to assume the obligations of a Member under the 
Exchange LLC Agreement, and the Board determines the Wolverine Transfer 
is permitted by the Exchange LLC Agreement.\13\ Attached [sic] as 
Exhibit 5A is a form of Instrument of Accession to be executed by 
Wolverine prior to closing of the Wolverine Transfer to comply with the 
foregoing requirements.
---------------------------------------------------------------------------

    \11\ To be eligible for such approval, the proposed transferee 
must (x) be of high professional and financial standing, (y) be able 
to carry out its duties as a Member hereunder, if admitted as such, 
and (z) be under no regulatory or governmental bar or 
disqualification. See Exchange LLC Agreement Sec.  7.1(a).
    \12\ ``Voting Percentage Interest'' with respect to a Member 
means the ratio of the number of Voting Units held by the Member, 
directly or indirectly, of record or beneficially, to the total of 
all of the issued and outstanding Voting Units held by Members, 
expressed as a percentage. Voting Units held by a Member that are 
ineligible to vote shall not be counted in the numerator or the 
denominator when determining such ratio. See Exchange LLC Agreement 
Sec.  1.1.
    \13\ See Exchange LLC Agreement Sec.  7.1(c).
---------------------------------------------------------------------------

    After the Citi Transfer, the Citi Units will no longer be 
outstanding and Citi will have no remaining rights under the Exchange 
LLC Agreement or the Holdings LLC Agreement. After the CSFB Transfer, 
the CSFB Units will no longer be outstanding and CSFB will have no 
remaining rights under the Exchange LLC Agreement or the Holdings LLC 
Agreement. In connection with the Transfers, the Exchange proposes to 
amend Schedule A to the Exchange LLC Agreement, in the form of Exhibit 
5B to this filing, to reflect the changes in Exchange ownership. No 
amendment of the Holdings LLC Agreement is proposed.
    As provided in Section 7.3(f) of the Exchange LLC Agreement, ``no 
Person, alone or together with any Related Persons, shall own, directly 
or indirectly, of record or beneficially, an aggregate Economic 
Percentage Interest \14\ greater than 40% (or 20% if such Person is an 
Exchange Facility Participant) (the ``Economic Ownership Limit'') . . . 
.'' Accordingly, because the total number of outstanding Economic Units 
of the Exchange are reduced in the Transfers, outstanding Economic 
Units held by any remaining Members of the Exchange will be cancelled 
to the extent necessary to ensure compliance with the Economic 
Ownership Limit.
---------------------------------------------------------------------------

    \14\ ``Economic Percentage Interest'' with respect to a Member 
means the ratio of the number of Economic Units held by the Member, 
directly or indirectly, of record or beneficially, to the total of 
all of the issued and outstanding Economic Units held by Members, 
expressed as a percentage. See Exchange LLC Agreement Sec.  1.1.
---------------------------------------------------------------------------

    As provided in Section 7.3(g) of the Exchange LLC Agreement, ``no 
Person, alone or together with any Related Persons, shall own, directly 
or indirectly, of record or beneficially, an aggregate Voting 
Percentage Interest of greater than 20% (the ``Voting Ownership 
Limit'') . . . .'' \15\ Further, Section 7.3(g) of the Exchange LLC 
Agreement provides that, upon any change in economic ownership, the 
number of Voting Units held by each Member of the Exchange shall 
automatically adjust to maintain compliance with the Voting Ownership 
Limit. Accordingly, because the number of Economic Units held by 
Members of the Exchange are reduced by the Transfers, the number of 
outstanding Voting Units of the Exchange will be reduced accordingly 
and the number of Voting Units held by each of the remaining Members of 
the Exchange, including Wolverine, will be adjusted to the extent 
necessary to ensure compliance with the Voting Ownership Limit.
---------------------------------------------------------------------------

    \15\ Any Member may voluntarily set a lower Voting Ownership 
Limit for itself at its own discretion. See Exchange LLC Agreement 
Sec.  7.3(g)(i).
---------------------------------------------------------------------------

    As discussed above, all ownership limits relating to the Exchange 
will continue to be strictly respected. The Transfer will not result in 
any Member of the Exchange exceeding its applicable Economic Ownership 
Limit or Voting Ownership Limit (collectively, its ``Ownership 
Limits''). Prior to the Transfers, some Members of the Exchange already 
held the maximum ownership percentages allowed under the Exchange LLC 
Agreement. The ownership percentages held by these Members will remain 
below the applicable Ownership Limits after giving effect to the 
Transfers. For other Members of the Exchange, adjustments to ownership 
percentages resulting from the Transfer will be made to comply with all 
Ownership Limits.\16\ After giving effect to the Transfers, no Member 
will hold more than 40% Economic Percentage Interest, no Exchange 
Facility Participant will hold more than 20% Economic Percentage 
Interest, and no Member will hold more than 20% Voting Percentage 
Interest in the Exchange. Upon the closing of the Transfers, each of 
MXUS2 and IB Exchange Corp. (``IB'') would hold the maximum number of 
Economic Units permitted under its applicable Economic Ownership Limit 
and each Member of the Exchange except Wolverine would hold the maximum 
number of Voting Units permitted under its applicable Voting Ownership 
Limit.
---------------------------------------------------------------------------

    \16\ Any Economic Units held by a Member in excess of its 
Economic Ownership Limit are cancelled because the existence of such 
Units is not permitted by the Exchange LLC Agreement. The number and 
allocation of Voting Units automatically adjust upon any change in 
ownership of Economic Units pursuant to Exchange LLC Agreement Sec.  
7.3(g)(iii).
---------------------------------------------------------------------------

    The composition of the Board of Directors of the Exchange will 
remain unaffected by the Transfer. The makeup of the Board will still 
be comprised of at least 20% of Directors who are Participant 
Directors,\17\ a majority of Directors who are Non-industry 
Directors,\18\ and one (1) Director who is also an officer or director 
of BOX Holdings, if BOX Holdings chooses to exercise its right to 
appoint such a director.\19\
---------------------------------------------------------------------------

    \17\ ``Participant Director'' means a Director of the Exchange 
who is an officer, director or employee of an Exchange Facility 
Participant. See BOX Exchange LLC Bylaws Sec.  1.01.
    \18\ ``Non-industry Director'' means a Director of the Exchange 
who (i) has no material business relationship with the Exchange or 
any Affiliate of the Exchange, or any Exchange Facility Participant 
or any Affiliate of any Exchange Facility Participant and is not 
associated with any broker or dealer as required pursuant to Section 
6(b)(3) of the Securities Exchange Act of 1934, as amended or (ii) 
is not an Industry Representative. ``Industry Representative'' means 
an individual who is an officer, director or employee of a broker or 
dealer or who has been employed in any such capacity at any time 
within the prior three (3) years, as well as an individual who has, 
or has had, a consulting or employment relationship with the 
Exchange, or any Affiliate of the Exchange, at any time within the 
prior three (3) years. See BOX Exchange LLC Bylaws Sec.  1.01.
    \19\ See BOX Exchange LLC Bylaws Sec.  4.02.
---------------------------------------------------------------------------

    Section 7.4(e) of the Holdings LLC Agreement provides that BOX 
Holdings shall provide the SEC with written notice ten (10) days prior 
to the closing date of any acquisition that results in a Member's 
Percentage Interest \20\ meeting or crossing the threshold level of 5% 
or

[[Page 51413]]

the successive levels of 10% and 15%. Although Citadel Securities 
Principal Investments LLC (``Citadel'') is not acquiring any additional 
Units of BOX Holdings in the Transfers, the reduction of the total 
number of outstanding Units of BOX Holdings in connection with the 
Transfers will result in a corresponding increase in the Percentage 
Interest held by Citadel from 13.80% to 15.50% and thereby crossing the 
15% level.
---------------------------------------------------------------------------

    \20\ ``Percentage Interest'' with respect to a Member of BOX 
Holdings means the ratio of the number of Units held by the Member 
to the total of all of the issued Units, expressed as a percentage 
and determined with respect to each class of Units, whenever 
applicable. See Holdings LLC Agreement Sec.  1.1.
---------------------------------------------------------------------------

    The change in Citadel's Percentage Interest resulting from the 
Transfers will also increase the voting power of Citadel in BOX 
Holdings. After giving effect to the Transfers, Citadel's voting power 
with respect to votes of Members of BOX Holdings will increase from 
14.28% to 16.65% and Citadel's total voting power on the Board of 
Directors of BOX Holdings will increase from 14.73% to 16.65%. Citadel 
currently has the power to appoint one (1) representative to the BOX 
Holdings Board of Directors \21\ and, after giving effect to the 
Transfers, Citadel will have the power to appoint two (2) Directors of 
BOX Holdings.\22\
---------------------------------------------------------------------------

    \21\ See Holdings LLC Agreement Sec.  4.1(a)(i).
    \22\ See Holdings LLC Agreement Sec.  4.1(a)(iii).
---------------------------------------------------------------------------

    Section 7.4(f) of the Holdings LLC Agreement provides that a rule 
filing pursuant to Section 19 of the Exchange Act is required with 
respect to certain transactions that result in the acquisition and 
holding by a person of an aggregate Percentage Interest in BOX Holdings 
which meets or crosses the threshold level of 20% or any successive 5% 
level. Although MXUS2 is not acquiring any additional Units of BOX 
Holdings in connection with the Transfers, the reduction of the total 
number of outstanding Units of BOX Holdings in connection with the 
Transfers will result in a corresponding increase in the Percentage 
Interest held by MXUS2 from 42.62% to 47.89% and thereby crossing the 
45% level. Although IB is not acquiring any additional Units of BOX 
Holdings in connection with the Transfers, the reduction of the total 
number of outstanding Units of BOX Holdings in connection with the 
Transfers will result in a corresponding increase in the Percentage 
Interest held by IB from 22.69% to 25.50% and thereby crossing the 25% 
level.
    The change in IB's ownership percentage of Holdings resulting from 
the Transfers will not affect IB's voting percentage because, as an 
Exchange Facility Participant on BOX Options, IB's allowable voting 
percentage is limited to 20%, as provided by the Holdings LLC Agreement 
\23\ and will remain at 19.999%. As a result of this limitation of IB's 
voting percentage, the changes resulting from the Transfers will also 
increase the voting power of MXUS2 in BOX Holdings as IB's voting power 
above 19.999% will be reallocated among other Members of BOX Holdings. 
After giving effect to the Transfers, MXUS2's voting power with respect 
to votes of Members of BOX Holdings will increase from 44.10% to 51.43% 
and MXUS2's total voting power on the Board of Directors of BOX 
Holdings will increase from 45.50% to 51.43%, providing MXUS2 the 
ability to control votes of the Board of Directors of BOX Holdings that 
require a simple majority vote. MXUS2 currently has the power to 
appoint three (3) representatives to the BOX Holdings Board of 
Directors \24\ and, after giving effect to the Transfers, MXUS2 will 
still have the power to appoint the same number of Directors of BOX 
Holdings.
---------------------------------------------------------------------------

    \23\ See Holdings LLC Agreement Sec.  7.4(h).
    \24\ See Holdings LLC Agreement Sec.  4.1(a)(iv).
---------------------------------------------------------------------------

    No other Member of BOX Holdings will have its ownership percentage 
in BOX Holdings adjusted by more than 1% of the total BOX Holdings 
ownership as a result of the Transfers.
    Section 7.3(e) of the Exchange LLC Agreement provides that the 
Exchange shall provide the SEC with written notice ten (10) days prior 
to the closing date of any acquisition that would result in a Member 
having a Voting Percentage Interest of five percent (5%) or more. 
Although Wolverine proposes to acquire only one (1) Exchange Economic 
Unit of the Exchange, the allocation of Exchange Voting Units resulting 
from the Transfers would result in Wolverine holding 2,637 Exchange 
Voting Units, representing a 5.03% Voting Percentage Interest and 
thereby crossing the 5% level.
    As discussed above, all Exchange owners are subject to a Voting 
Ownership Limit of 20%. Although Aragon Solutions Ltd. (``Aragon'') is 
not acquiring any additional Economic Units of the Exchange in the 
Transfers, the reallocation of Exchange Voting Units resulting from the 
Transfers would result in Aragon holding 10,493 Exchange Voting Units, 
representing 19.999% Voting Percentage Interest, compared with 6.294% 
prior to the Transfers.
    No other Member of the Exchange will have its Economic Percentage 
Interest or its Voting Percentage Interest in the Exchange adjusted by 
more than 5% of the total BOX Holdings ownership as a result of the 
Transfers.
    The consideration paid to Citi and CSFB by the Exchange will not 
materially affect the Exchange's capitalization. After payment by the 
Exchange of the purchase price to each of Citi and CSFB, the Exchange 
will continue to reserve sufficient assets to operate and fulfill its 
regulatory responsibilities with respect to itself and BOX Options. The 
Exchange Board of Directors remains committed to ensuring the Exchange 
is sufficiently capitalized to meet its obligations. The Exchange and 
BOX Options continue to be subject to a written Facility Agreement, 
which provides that the Exchange receives and retains all assets deemed 
to be necessary for regulatory purposes by the Exchange.\25\ 
Accordingly, payments made to consummate the Transfers will not have a 
material effect on the Exchange's ability to carry out its duties and 
obligations as an SRO.
---------------------------------------------------------------------------

    \25\ See Securities Exchange Act Release No. 34-66871 (April 27, 
2012) 77 FR 26323 (May 3, 2012) (Order granting approval of BOX 
Exchange).
---------------------------------------------------------------------------

    LabMorgan Corp., a Member of the Exchange, notified the Exchange it 
has changed its legal name to JPMC Strategic Investments I Corporation. 
The updated name of this Member is reflected in the amendment to the 
Exchange LLC Agreement attached [sic] hereto as Exhibit 5B.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\26\ in general, and furthers 
the objectives of Section 6(b)(1),\27\ in particular, in that it 
enables the Exchange to be so organized so as to have the capacity to 
be able to carry out the purposes of the Act and to comply, and to 
enforce compliance by its exchange members and persons associated with 
its exchange members, with the provisions of the Act, the rules and 
regulations thereunder, and the rules of the Exchange.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b).
    \27\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed name change and changes in 
ownership are necessary to accommodate the desires of certain Members 
to arrange their affairs, including to exit ownership of the Exchange 
and BOX Holdings. The Exchange believes that this filing furthers the 
objectives of Section 6(b)(5) of the Act because the proposed rule 
change would be consistent with and facilitate a governance and 
regulatory structure that 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

[[Page 51414]]

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. Accordingly, the proposed ownership changes will ensure the 
continued operation of both the Exchange and BOX Holdings without any 
detrimental effect on the operations of either the Exchange or its 
facility.
    Further, the Exchange believes the proposed name change and 
ownership changes are consistent with, and will not interfere with, the 
self-regulatory obligations of BOX Exchange. The Exchange importantly 
notes that it is not proposing to amend any of the provisions within 
the Holdings LLC Agreement or the BOX Exchange LLC Agreement dealing 
with the availability or protection of information, books and records, 
undue influence, conflicts of interest, unfair control by an affiliate, 
and regulatory independence of BOX Exchange.\28\ In addition, the 
ownership changes proposed by the Exchange in this filing are 
consistent with past ownership and voting levels held by Members of BOX 
Holdings, MXUS2 has previously held voting power in BOX Holdings in 
excess of 50% \29\ and IB has previously held a Percentage Interest in 
BOX Holdings greater than 25%.\30\ The ability of the Exchange to 
operate and fulfill its regulatory responsibilities will continue 
unaffected by this proposal and the Exchange will continue to be able 
to serve its independent regulatory functions as an SRO after the 
proposed transactions are consummated.
---------------------------------------------------------------------------

    \28\ See Securities Exchange Act Release No. 34-66871 (April 27, 
2012) 77 FR 26323 (May 3, 2012) (Order granting approval of BOX 
Exchange).
    \29\ See Securities Exchange Act Release No. 74477 (March 11, 
2015), 80 FR 13932 (March 17, 2015) (SR-BOX-2015-14).
    \30\ See Securities Exchange Act Release No. 74403 (March 18, 
2016), 81 FR 15772 (March 24, 2016) (SR-BOX-2016-12).
---------------------------------------------------------------------------

    The Exchange also believes that this filing furthers the objectives 
of Section 6(b)(5) of the Act \31\ in that it is designed to facilitate 
transactions in securities, 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. 
The Exchange believes these objectives are supported by having active, 
interested owners of the Exchange. The Exchange further believes 
accommodating the transfer of ownership interests in the Exchange and 
its facility between willing buyers and sellers ensures the health and 
vitality of the Exchange and encourages robust interest in the 
Exchange's operations, which promotes effective, efficient markets.
---------------------------------------------------------------------------

    \31\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

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 because the changes proposed are 
limited to ownership of the Exchange and an affiliate of a facility of 
the Exchange and do not change the operation of the Exchange or any 
facility of the Exchange. The proposed rule change is not designed to 
address any competitive issue or have any impact on competition; rather 
the proposed rule change lays out the transfer ownership interests.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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-2021-19 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-2021-19. 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-2021-19, and should be submitted on 
or before October 6, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\32\
---------------------------------------------------------------------------

    \32\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-19864 Filed 9-14-21; 8:45 am]
BILLING CODE 8011-01-P