Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Market LLC (“BOX”) Options Facility, 57977-57981 [2016-20212]

Download as PDF Federal Register / Vol. 81, No. 164 / Wednesday, August 24, 2016 / Notices Managed Fund Shares to comply with the continued listing requirements, and, pursuant to its obligations under Section 19(g)(1) of the Act, the Exchange will monitor for compliance with the continued listing requirements. If the Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under the Nasdaq Rule 5800 Series. For these reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,62 the Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Instead, the Exchange believes that the proposed rule change would facilitate the listing and trading of additional types of Managed Fund Shares and result in a significantly more efficient process surrounding the listing and trading of Managed Fund Shares, which will enhance competition among market participants, to the benefit of investors and the marketplace. The Exchange believes that this would reduce the time frame for bringing Managed Fund Shares to market, thereby reducing the burdens on issuers and other market participants and promoting competition. In turn, the Exchange believes that the proposed change would make the process for listing Managed Fund Shares more competitive by applying uniform listing standards with respect to Managed Fund Shares. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. mstockstill on DSK3G9T082PROD with NOTICES 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 Exchange consents, the Commission shall: (a) by order approve or disapprove such proposed rule change, or (b) institute proceedings to determine 62 15 U.S.C. 78f(b)(8). VerDate Sep<11>2014 20:16 Aug 23, 2016 Jkt 238001 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NASDAQ–2016–104 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–NASDAQ–2016–104. 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 Web site (https://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 Web site 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; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NASDAQ–2016–104 and should be submitted on or before September 14, 2016. PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 57977 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.63 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–20210 Filed 8–23–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78618; File No. SR–BOX– 2016–41] Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Market LLC (‘‘BOX’’) Options Facility August 18, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on August 15, 2016, BOX Options Exchange LLC (the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange is filing with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change to amend the Fee Schedule to make a number of changes to the fees and credits for PIP and COPIP Transactions on the BOX Market LLC (‘‘BOX’’) options facility. The text of the proposed rule change is available from the principal office of the Exchange, at the Commission’s Public Reference Room and also on the Exchange’s Internet Web site at https:// boxexchange.com. 63 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 1 15 E:\FR\FM\24AUN1.SGM 24AUN1 57978 Federal Register / Vol. 81, No. 164 / Wednesday, August 24, 2016 / Notices II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Fee Schedule for trading on BOX to make a number of changes to the fees and credits for PIP and COPIP Transactions.5 Overall, the Exchange proposes to amend the Fee Schedule to differentiate between those PIP and COPIP transactions where the PIP or COPIP Order is from the account of a Public Customer; and those PIP and COPIP transactions where a PIP or COPIP Order is from the account of a Professional Customer, Broker Dealer or Market Maker (‘‘Non-Public Customer’’). While most PIP and COPIP Orders are from the account of a Public Customer, any type of BOX Participant may submit a PIP or COPIP Order with a matching contra order equal to the full size of the PIP or COPIP Order to the PIP and COPIP auction mechanisms. Therefore, the Exchange believes this distinction is appropriate, as the current fees, rebates, and credits for PIP and COPIP transactions within the BOX Fee Schedule are meant to incentivize Public Customer order flow to the PIP and COPIP auctions. The Exchange believes that similar incentives are not necessary for Non-Public Customer PIP and COPIP order flow and the proposed fees and credits below are meant to establish separate fees and credits for Non-Public Customer PIP and COPIP Order flow which, taken as a whole, do not offer the same level of inducement. Further, the Exchange notes that the distinction between auction transactions from a Public Customer versus a NonPublic Customer is already in place on another options exchange.6 Exchange Fees PIP and COPIP Orders The Exchange proposes to adjust certain fees for PIP and COPIP Transactions. Currently, Professional Customers, Broker Dealers and Market Makers are assessed a fee of $0.15 for PIP and COPIP Orders 7 and Public Customers are assessed no fee. The Exchange proposes to reduce the fees assessed to Professional Customers, Broker Dealers and Market Makers for PIP and COPIP Orders in Penny and Non-Penny Pilot Classes to $0.05. Primary Improvement Order Under the Primary Improvement Order 8 tiered fee structure, the Exchange assesses a per contract execution fee to all Primary Improvement Order executions initiated by the particular Initiating Participant. Percentage thresholds are calculated on a monthly basis by totaling the Initiating Participant’s Primary Improvement Order volume submitted to BOX, relative to the total national Customer volume in multiply-listed options classes. The Exchange proposes to first add language that will specify that the tiered fee schedule for initiating participants will only apply to Primary Improvement Order executions where the corresponding PIP or COPIP Order is from the account of a Public Customer. The Exchange then proposes to introduce a flat per contract fee of $0.05 for all Primary Improvement Orders where the corresponding PIP or COPIP Order is from the account of a NonPublic Customer. BOX Volume Rebate (‘‘BVR’’) The Exchange then proposes to amend Section I.B.2 of the Fee Schedule (BVR). Under the current BVR, the Exchange offers a tiered per contract rebate for all PIP Orders and COPIP orders of 100 contracts and under. Percentage thresholds are calculated on a monthly basis by totaling the Participant’s PIP and COPIP volume submitted to BOX, relative to the total national Customer volume in multiplylisted options classes. The Exchange proposes to add language that will specify that only Public Customer PIP and COPIP Orders are eligible for the BVR. Liquidity Fees and Credits The Exchange then proposes to amend Section II.A. of the BOX Fee Schedule, Liquidity Fees and Credits for PIP and COPIP transactions. Specifically, the Exchange proposes to amend Section II.A. to differentiate between PIP and COPIP transactions where the PIP and COPIP Orders are from the accounts of Public Customers and PIP and COPIP transactions where the PIP and COPIP Orders are from the accounts of Non-Public Customers. First, the Exchange proposes to specify that the current liquidity fees and credits will only apply to PIP and COPIP transactions where the PIP and COPIP Order is from the account of a Public Customer. The liquidity fees and credits for these PIP and COPIP Orders, the Primary Improvement Order and any corresponding Improvement Orders remain unchanged and will be as follows: Fee for adding liquidity mstockstill on DSK3G9T082PROD with NOTICES Non-Penny Pilot Classes ......................................................................................................................... Penny Pilot Classes ................................................................................................................................. $0.77 $0.38 Credit for removing liquidity ($0.77) ($0.38) The Exchange then proposes to establish a new section for the Liquidity Fees and Credits of PIP and COPIP transactions where the PIP and COPIP Order is from the account of a NonPublic Customer. First, the Exchange proposes to specify that PIP or COPIP Orders from the account of a Non-Public Customer are assessed the ‘‘removal’’ credit only if the PIP or COPIP Order does not trade with its contra order (the Primary Improvement Order). The 5 Transactions executed through Price Improvement Period (‘‘PIP’’) and the Complex Order Price Improvement Period (‘‘COPIP’’) auction mechanisms. All COPIP transactions will be charged per contract per leg. 6 See Miami International Securities Exchange LLC (‘‘MIAX’’) Fee Schedule Section I(A)(v) available at https://www.miaxoptions.com/content/ fees. 7 A PIP Order or COPIP Order is a Customer Order (an agency order for the account of either a customer or a broker-dealer) designated for the PIP or COPIP, respectively. 8 A Primary Improvement Order is the matching contra order submitted to the PIP or COPIP on the opposite side of the PIP or COPIP order. VerDate Sep<11>2014 20:16 Aug 23, 2016 Jkt 238001 PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 E:\FR\FM\24AUN1.SGM 24AUN1 Federal Register / Vol. 81, No. 164 / Wednesday, August 24, 2016 / Notices Exchange also proposes to specify that only responses to PIP and COPIP Orders from the account of a Non-Public Customer that are executed in these mechanisms, also known as Improvement Orders, shall continue to be charged the ‘‘add’’ fee. Specifically, a PIP or COPIP Order from the account of a Non-Public Customer that does not trade with its Primary Improvement Order, and the corresponding Improvement Orders will subject to the fees and credits in the following table: Fee for adding liquidity Non-Penny Pilot Classes ......................................................................................................................... Penny Pilot Classes ................................................................................................................................. For example, if a Broker Dealer submits a PIP Order for the account of a Non-Public Customer to buy 100 contracts in the PIP and there are no responders, the PIP Order would execute against the matching Primary Improvement Order to sell 100 contracts and neither Order would be assessed a liquidity fee or credit. If, instead, the same PIP Order receives an Improvement Order response to sell 75 contracts, at the end of the auction the PIP Order would now execute against the Improvement Order for 75 contracts and the Primary Improvement Order for 25 contracts, and liquidity fees and credits would only be assessed on the 75 contracts which executed against the Improvement Order. Specifically, the 75 contracts from the PIP Order will receive the removal credit and the 75 contracts from the Improvement Order will be charged the add fee. Lastly, the Exchange also proposes to update the footnote numbering and make other non-substantive technical changes within the BOX Fee Schedule. 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act, in general, and Section 6(b)(4) and 6(b)(5)of the Act,9 in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among BOX Participants and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers. mstockstill on DSK3G9T082PROD with NOTICES Exchange Fees PIP and COPIP Transactions The Exchange believes that reducing the fees assessed to Professional Customers, Broker Dealers and Market Makers for PIP and COPIP Orders in Penny and Non-Penny Pilot Classes is reasonable, equitable, and not unfairly discriminatory. In particular, the Exchange believes that reducing these fees will encourage auction order flow to the Exchange, which will benefit all market participants on the Exchange. 9 15 U.S.C. 78f(b)(4) and (5). VerDate Sep<11>2014 20:16 Aug 23, 2016 Jkt 238001 BOX believes that the proposed fee reductions from $0.15 to $0.05 are reasonable and in line with similar fees on other exchanges.10 Further, the Exchange believes the $0.05 fee is equitable and not unfairly discriminatory, as it applies equally to all Market Maker, Professional Customers and Broker Dealers submitting PIP and COPIP Orders to the PIP and COPIP auction mechanisms. The Exchange believes it is equitable and not unfairly discriminatory to charge these Non-Public Customers more for their PIP and COPIP Orders in Penny and Non-Penny Pilot Classes than Public Customers. The practice of incentivizing increased Public Customer order flow is common in the options markets. Primary Improvement Order The Exchange believes that adding language to specify that the tiered fee schedule for initiating participants will only apply to Primary Improvement Order executions where the corresponding PIP or COPIP Order is from the account of a Public Customer, as well as introducing a flat per contract fee of $0.05 for all Primary Improvement Orders where the corresponding PIP or COPIP Order is from the account of a Non-Public Customer is reasonable, equitable and not unfairly discriminatory. The Exchange also believes the proposed $0.05 fee for Primary Improvement Order executions where the corresponding PIP or COPIP Order is from the account of a NonPublic Customer is reasonable, as it is within the range of fees currently assessed on all Primary Improvement Orders on BOX.11 The Exchange believes that this distinction is reasonable and competitive, as it is made on another options exchange.12 10 See MIAX Fee Schedule Section I(A)(v); Phlx Pricing Schedule Section IV and ISE Fee Schedule Section I. Comparable fees at these exchanges range from $0.05 to $0.30. 11 For Primary Improvement Order executions, contract fees range from $0.25 to $0.02. 12 PHLX also distinguishes between a PIXL Order from the account of a Non-Customer as compared to a PIXL Order from the account of a Customer. See NASDAQ PHLX LLC (‘‘Phlx’’) Fee Schedule PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 57979 $0.77 $0.38 Credit for removing liquidity ($0.77) ($0.38) Finally, the Exchange believes that differentiating between Public Customer and Non-Public Customer PIP and COPIP Orders, and their corresponding Primary Improvement Orders is equitable and not unfairly discriminatory. As stated above, the current fees, credit and rebates for PIP and COPIP transactions are meant to encourage Public Customer order flow to the PIP and COPIP auction mechanisms. Specifically, the tiered fee schedule for initiating participants encourages Order Flow Providers to submit Public Customer orders to the PIP or COPIP to gain the benefit of a lower fee. The Exchange believes that this incentive is not necessary for NonPublic Customer PIP and COPIP order flow and that the proposed flat $0.05 fee is appropriate. Specifically, when taken as a whole, the proposed Non-Public Customer PIP and COPIP transactions fees will result in the PIP or COPIP Order always being assessed a $0.05 fee with no rebate potential,13 and the corresponding Primary Improvement Order being assessed a flat $0.05 fee. In comparison, the Initiating Participant’s Primary Improvement Order for a Public Customer PIP or COPIP Order could potentially be assessed a fee as low as $0.02,14 while the corresponding PIP or COPIP Order would be assessed no fee and could obtain a rebate of up $0.12 (PIP Orders) or $0.06 (COPIP Orders) depending on the Participant’s volume. BOX Volume Rebate The Exchange believes the proposed changes to the BVR are reasonable, equitable and not unfairly discriminatory. The BVR was adopted to attract Public Customer order flow to the Exchange by offering these Section V. When a PIXL Order is contra to a PIXL Auction Responder, a Customer PIXL Order will be assessed $0.00 per contract where a Non-Customer PIXL Order will be assessed $0.30 per contract in Penny Pilot Options or $0.38 in Non-Penny Pilot Options. 13 These transactions will be exempt from the BVR. 14 The Exchange notes that a majority of Primary Improvement Order executions are assessed Tier 4 and 5 fees within the tiered fee schedule for Initiating Participants. E:\FR\FM\24AUN1.SGM 24AUN1 57980 Federal Register / Vol. 81, No. 164 / Wednesday, August 24, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES Participants incentives to submit their PIP and COPIP Orders to the Exchange.15 As such, the Exchange believes it is reasonable and appropriate to exempt Non-Public Customer PIP and COPIP Orders from the BVR. Further, the Exchange believes this exemption is equitable and not unfairly discriminatory as it will apply to all Non-Public Customers uniformly. As stated above, providing specific incentives for Public Customer volume is common both within the options industry and elsewhere in the BOX Fee Schedule. Liquidity Fees and Credits The Exchange believes amending the Liquidity Fees and Credits for PIP and COPIP transactions to differentiate between PIP and COPIP transactions where the PIP or COPIP Order is from the account of a Public Customer, and the PIP or COPIP Order is from the account of a Non-Public Customer is reasonable, equitable and not unfairly discriminatory. As stated above, the current liquidity fees and credits for PIP and COPIP transactions are focused on incentivizing Public Customer order flow to the PIP and COPIP auctions. Therefore, the Exchange believes it is equitable and not unfairly discriminatory to establish different fees and credits for Non-Public Customer order flow to these auction mechanisms. The Exchange notes that the liquidity fees and credits for PIP and COPIP transactions where the PIP and COPIP Order is from the account of a Public Customer remain unchanged. Accordingly, the Exchange believes the proposed liquidity fees and credits for PIP and COPIP transactions where the PIP or COPIP Order are from the account of a Non-Public Customer are reasonable, equitable and not unfairly discriminatory as they are identical to the current liquidity fees and credits assessed for PIP and COPIP transactions where the PIP or COPIP Order is from the account of a Public Customer. The Exchange also believes it is reasonable, equitable and not unfairly discriminatory to only apply the liquidity fees and credits to the portion of the PIP or COPIP Order from the account of a Non-Public Customer that does not trade with its contra order, and the Improvement Order responses. Liquidity fees and credits on BOX do not directly result in revenue to BOX, but are meant to incentivize Participants to attract order flow. Because of the value of Public Customer order flow, the 15 See Securities Exchange Release No. 73547 (November 6, 2014), 79 FR 67520 (November 13, 2014) (SR–BOX–2014–25). VerDate Sep<11>2014 20:16 Aug 23, 2016 Jkt 238001 Exchange believes these incentives are appropriate even if the Public Customer PIP or COPIP Order is fully internalized and trades only against its matching Primary Improvement Order. However, as stated above, the Exchange believes that the same level of incentives is not necessary for Non-Public Customer PIP or COPIP order flow. Therefore, the Exchange believes it reasonable to only provide these incentives to the portion of the Non-Public Customer PIP or COPIP Orders where liquidity is being added in the form of Improvement Order responses. Further, the Exchanges notes that the liquidity fees and credits for transactions within the Facilitation and Solicitation auction mechanism (Section II.B. of the BOX Fee Schedule) are assessed in a similar manner, and that the distinction is also made within the price improvement mechanism fees and rebates on another exchange in the options industry.16 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed adjustments to the Non-Public Customer PIP and COPIP Transactions fees will not impose a burden on competition among various Exchange Participants. Rather, BOX believes that the changes will result in the Participants being charged appropriately for their Non-Public Customer PIP and COPIP Transactions and is designed to enhance competition in Auction transactions on BOX. Submitting an order is entirely voluntary and Participants can determine which type of order they wish to submit, if any, to the Exchange. The Exchange also believes that amending the proposed liquidity fees and credits for Non-Public Customer PIP and COPIP Transactions will not impose a burden on competition among various Exchange Participants. The Exchange believes that the proposed changes will result these Participants being charged or credited appropriately for these transactions. Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing exchanges. In such an environment, the Exchange 16 Under Section I of the ISE Fee Schedule, the initiator receives a $0.35 ‘‘break-up’’ rebate only for contracts that are submitted to the PIM that do not trade with their contra order. The responder fee for these Orders is only applied to any contracts for which the rebate is provided. PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 must continually review, and consider adjusting, its fees and credits to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Exchange Act 17 and Rule 19b–4(f)(2) thereunder,18 because it establishes or changes a due, or fee. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend the rule change if it appears to the Commission that the action is necessary or appropriate in the public interest, for the protection of investors, or would otherwise further the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–BOX–2016–41 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–2016–41. This file number should be included on the subject line if email is used. To help the Commission process and review your 17 15 18 17 E:\FR\FM\24AUN1.SGM U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 24AUN1 Federal Register / Vol. 81, No. 164 / Wednesday, August 24, 2016 / Notices comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://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 Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–BOX– 2016–41, and should be submitted on or before September 14, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–20212 Filed 8–23–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78614; File No. SR– NYSEArca–2016–64] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, To List and Trade Shares of the AdvisorShares KIM Korea Equity ETF mstockstill on DSK3G9T082PROD with NOTICES August 18, 2016. On May 2, 2016, NYSE Arca, Inc. (‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to 19 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 20:16 Aug 23, 2016 Jkt 238001 list and trade shares (‘‘Shares’’) of the AdvisorShares KIM Korea Equity ETF (‘‘Fund’’) under NYSE Arca Equities Rule 8.600. On May 13, 2016, the Exchange submitted Amendment No. 1 to the proposed rule change.3 The Commission published notice of the proposed rule change, as modified by Amendment No. 1, in the Federal Register on May 23, 2016.4 On May 23, 2016, the Exchange submitted Amendment No. 2 to the proposed rule change.5 On July 7, 2016, pursuant to Section 19(b)(2) of the Act,6 the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.7 The Commission received no comments on the proposed rule change. This order institutes proceedings under Section 19(b)(2)(B) of the Act 8 to determine whether to approve or disapprove the proposed rule change, as modified by Amendment Nos. 1 and 2. I. The Exchange’s Description of the Proposal 9 The Exchange proposes to list and trade the Shares under NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares on the Exchange. The Shares will be offered by AdvisorShares Trust (‘‘Trust’’), an open-end management 3 Amendment No. 1 replaced and superseded the original filing in its entirety. Amendment No. 1 is available at https://www.sec.gov/comments/srnysearca-2016-64/nysearca201664-1.pdf. 4 See Securities Exchange Act Release No. 34– 77847 (May 17, 2016), 81 FR 32364 (NYSEArca– 2016–64) (‘‘Notice’’). 5 In Amendment No. 2, which replaced and superseded the original filing in its entirety, the Exchange clarified certain statements relating to the Fund’s investments in Depositary Receipts and certain representations by the Exchange relating to surveillance. Amendment No. 2 is available at https://www.sec.gov/comments/sr-nysearca-201664/nysearca201664-2.pdf. Because Amendment No. 2 does not materially alter the substance of the proposed rule change or raise unique or novel regulatory issues, Amendment No. 2 is not subject to notice and comment. 6 15 U.S.C. 78s(b)(2). 7 See Securities Exchange Act Release No. 78240, 81 FR 45332 (July 13, 2016). The Commission designated August 21, 2016, as the date by which the Commission would either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change. 8 15 U.S.C. 78s(b)(2)(B). 9 Additional information regarding the Fund, the Shares, and the Trust (as defined herein), including investment strategies, risks, creation and redemption procedures, fees, portfolio holdings, disclosure policies, calculation of net asset value, distributions, and taxes, among other things, can be found in the Notice and the Registration Statement, as applicable. See Notice, supra note 4, and Registration Statement, infra note 10. PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 57981 investment company.10 The investment adviser to the Fund will be AdvisorShares Investments LLC (‘‘Adviser’’) and Korea Investment Management Co., Ltd. will be the Fund’s sub-adviser (‘‘Sub-Adviser’’). Foreside Fund Services, LLC will be the principal underwriter and distributor of the Fund’s Shares, and the Bank of New York Mellon will serve as the administrator, custodian, and transfer agent for the Fund. The Fund’s Principal Investments The Exchange states that the investment objective of the Fund will be to seek to provide long-term capital appreciation above the capital appreciation of its primary benchmark, the MSCI Korea Index, and other Koreafocused indexes. The Fund will seek to achieve its investment objective by investing primarily in growth-oriented stocks of any capitalization range listed on the Korea Exchange. Under normal circumstances,11 the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities listed on the Korea Exchange.12 The Exchange states that the SubAdviser will manage the Fund’s portfolio by buying and holding stocks of companies at attractive valuation that it believes have growth potential. The Sub-Adviser will focus on corporate fundamental research in its stock selection, often called ‘‘bottom up’’ analysis. The Sub-Adviser will invest the Fund’s assets with a mid- to- longterm view, typically seeking to avoid short-term trading. In selecting investments for the Fund’s portfolio, the Sub-Adviser will place emphasis on fundamentals rather than on short-term momentum and continuously monitor market risks. In deciding whether to sell 10 The Exchange states that the Trust is registered under the Investment Company Act of 1940 (‘‘1940 Act’’) and that on March 25, 2016, the Trust filed with the Commission amendments to its registration statement on Form N–1A under the Securities Act of 1933 (‘‘Securities Act’’) and under the 1940 Act relating to the Fund (File Nos. 333– 157876 and 811–22110) (‘‘Registration Statement’’). In addition, the Exchange states that the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 29291(May 28, 2010) (File No. 812–13677). 11 The Exchange states that the term ‘‘under normal circumstances’’ means, without limitation, the absence of extreme volatility or trading halts in the equity markets or the financial markets generally; operational issues causing dissemination of inaccurate market information; or force majeure type events such as systems failure, natural or manmade disaster, act of God, armed conflict, act of terrorism, riot or labor disruption or any similar intervening circumstance. 12 The Korea Exchange is a member of the Intermarket Surveillance Group (‘‘ISG’’). E:\FR\FM\24AUN1.SGM 24AUN1

Agencies

[Federal Register Volume 81, Number 164 (Wednesday, August 24, 2016)]
[Notices]
[Pages 57977-57981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20212]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78618; File No. SR-BOX-2016-41]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend the Fee Schedule on the BOX Market LLC (``BOX'') Options Facility

August 18, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 15, 2016, BOX Options Exchange LLC (the ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III below, which 
Items have been prepared by the Exchange. The Exchange filed the 
proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,\3\ 
and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange is filing with the Securities and Exchange Commission 
(``Commission'') a proposed rule change to amend the Fee Schedule to 
make a number of changes to the fees and credits for PIP and COPIP 
Transactions on the BOX Market LLC (``BOX'') options facility. The text 
of the proposed rule change is available from the principal office of 
the Exchange, at the Commission's Public Reference Room and also on the 
Exchange's Internet Web site at https://boxexchange.com.

[[Page 57978]]

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule for trading on BOX 
to make a number of changes to the fees and credits for PIP and COPIP 
Transactions.\5\ Overall, the Exchange proposes to amend the Fee 
Schedule to differentiate between those PIP and COPIP transactions 
where the PIP or COPIP Order is from the account of a Public Customer; 
and those PIP and COPIP transactions where a PIP or COPIP Order is from 
the account of a Professional Customer, Broker Dealer or Market Maker 
(``Non-Public Customer''). While most PIP and COPIP Orders are from the 
account of a Public Customer, any type of BOX Participant may submit a 
PIP or COPIP Order with a matching contra order equal to the full size 
of the PIP or COPIP Order to the PIP and COPIP auction mechanisms. 
Therefore, the Exchange believes this distinction is appropriate, as 
the current fees, rebates, and credits for PIP and COPIP transactions 
within the BOX Fee Schedule are meant to incentivize Public Customer 
order flow to the PIP and COPIP auctions. The Exchange believes that 
similar incentives are not necessary for Non-Public Customer PIP and 
COPIP order flow and the proposed fees and credits below are meant to 
establish separate fees and credits for Non-Public Customer PIP and 
COPIP Order flow which, taken as a whole, do not offer the same level 
of inducement. Further, the Exchange notes that the distinction between 
auction transactions from a Public Customer versus a Non-Public 
Customer is already in place on another options exchange.\6\
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    \5\ Transactions executed through Price Improvement Period 
(``PIP'') and the Complex Order Price Improvement Period (``COPIP'') 
auction mechanisms. All COPIP transactions will be charged per 
contract per leg.
    \6\ See Miami International Securities Exchange LLC (``MIAX'') 
Fee Schedule Section I(A)(v) available at https://www.miaxoptions.com/content/fees.
---------------------------------------------------------------------------

Exchange Fees
PIP and COPIP Orders
    The Exchange proposes to adjust certain fees for PIP and COPIP 
Transactions. Currently, Professional Customers, Broker Dealers and 
Market Makers are assessed a fee of $0.15 for PIP and COPIP Orders \7\ 
and Public Customers are assessed no fee. The Exchange proposes to 
reduce the fees assessed to Professional Customers, Broker Dealers and 
Market Makers for PIP and COPIP Orders in Penny and Non-Penny Pilot 
Classes to $0.05.
---------------------------------------------------------------------------

    \7\ A PIP Order or COPIP Order is a Customer Order (an agency 
order for the account of either a customer or a broker-dealer) 
designated for the PIP or COPIP, respectively.
---------------------------------------------------------------------------

Primary Improvement Order
    Under the Primary Improvement Order \8\ tiered fee structure, the 
Exchange assesses a per contract execution fee to all Primary 
Improvement Order executions initiated by the particular Initiating 
Participant. Percentage thresholds are calculated on a monthly basis by 
totaling the Initiating Participant's Primary Improvement Order volume 
submitted to BOX, relative to the total national Customer volume in 
multiply-listed options classes.
---------------------------------------------------------------------------

    \8\ A Primary Improvement Order is the matching contra order 
submitted to the PIP or COPIP on the opposite side of the PIP or 
COPIP order.
---------------------------------------------------------------------------

    The Exchange proposes to first add language that will specify that 
the tiered fee schedule for initiating participants will only apply to 
Primary Improvement Order executions where the corresponding PIP or 
COPIP Order is from the account of a Public Customer. The Exchange then 
proposes to introduce a flat per contract fee of $0.05 for all Primary 
Improvement Orders where the corresponding PIP or COPIP Order is from 
the account of a Non-Public Customer.
BOX Volume Rebate (``BVR'')
    The Exchange then proposes to amend Section I.B.2 of the Fee 
Schedule (BVR). Under the current BVR, the Exchange offers a tiered per 
contract rebate for all PIP Orders and COPIP orders of 100 contracts 
and under. Percentage thresholds are calculated on a monthly basis by 
totaling the Participant's PIP and COPIP volume submitted to BOX, 
relative to the total national Customer volume in multiply-listed 
options classes. The Exchange proposes to add language that will 
specify that only Public Customer PIP and COPIP Orders are eligible for 
the BVR.
Liquidity Fees and Credits
    The Exchange then proposes to amend Section II.A. of the BOX Fee 
Schedule, Liquidity Fees and Credits for PIP and COPIP transactions. 
Specifically, the Exchange proposes to amend Section II.A. to 
differentiate between PIP and COPIP transactions where the PIP and 
COPIP Orders are from the accounts of Public Customers and PIP and 
COPIP transactions where the PIP and COPIP Orders are from the accounts 
of Non-Public Customers.
    First, the Exchange proposes to specify that the current liquidity 
fees and credits will only apply to PIP and COPIP transactions where 
the PIP and COPIP Order is from the account of a Public Customer. The 
liquidity fees and credits for these PIP and COPIP Orders, the Primary 
Improvement Order and any corresponding Improvement Orders remain 
unchanged and will be as follows:

------------------------------------------------------------------------
                                    Fee for adding        Credit for
                                       liquidity      removing liquidity
------------------------------------------------------------------------
Non-Penny Pilot Classes.........               $0.77             ($0.77)
Penny Pilot Classes.............               $0.38             ($0.38)
------------------------------------------------------------------------

    The Exchange then proposes to establish a new section for the 
Liquidity Fees and Credits of PIP and COPIP transactions where the PIP 
and COPIP Order is from the account of a Non-Public Customer. First, 
the Exchange proposes to specify that PIP or COPIP Orders from the 
account of a Non-Public Customer are assessed the ``removal'' credit 
only if the PIP or COPIP Order does not trade with its contra order 
(the Primary Improvement Order). The

[[Page 57979]]

Exchange also proposes to specify that only responses to PIP and COPIP 
Orders from the account of a Non-Public Customer that are executed in 
these mechanisms, also known as Improvement Orders, shall continue to 
be charged the ``add'' fee. Specifically, a PIP or COPIP Order from the 
account of a Non-Public Customer that does not trade with its Primary 
Improvement Order, and the corresponding Improvement Orders will 
subject to the fees and credits in the following table:

------------------------------------------------------------------------
                                    Fee for adding        Credit for
                                       liquidity      removing liquidity
------------------------------------------------------------------------
Non-Penny Pilot Classes.........               $0.77             ($0.77)
Penny Pilot Classes.............               $0.38             ($0.38)
------------------------------------------------------------------------

    For example, if a Broker Dealer submits a PIP Order for the account 
of a Non-Public Customer to buy 100 contracts in the PIP and there are 
no responders, the PIP Order would execute against the matching Primary 
Improvement Order to sell 100 contracts and neither Order would be 
assessed a liquidity fee or credit. If, instead, the same PIP Order 
receives an Improvement Order response to sell 75 contracts, at the end 
of the auction the PIP Order would now execute against the Improvement 
Order for 75 contracts and the Primary Improvement Order for 25 
contracts, and liquidity fees and credits would only be assessed on the 
75 contracts which executed against the Improvement Order. 
Specifically, the 75 contracts from the PIP Order will receive the 
removal credit and the 75 contracts from the Improvement Order will be 
charged the add fee.
    Lastly, the Exchange also proposes to update the footnote numbering 
and make other non-substantive technical changes within the BOX Fee 
Schedule.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act, in general, and Section 
6(b)(4) and 6(b)(5)of the Act,\9\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees, and other 
charges among BOX Participants and other persons using its facilities 
and does not unfairly discriminate between customers, issuers, brokers 
or dealers.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

Exchange Fees
PIP and COPIP Transactions
    The Exchange believes that reducing the fees assessed to 
Professional Customers, Broker Dealers and Market Makers for PIP and 
COPIP Orders in Penny and Non-Penny Pilot Classes is reasonable, 
equitable, and not unfairly discriminatory. In particular, the Exchange 
believes that reducing these fees will encourage auction order flow to 
the Exchange, which will benefit all market participants on the 
Exchange. BOX believes that the proposed fee reductions from $0.15 to 
$0.05 are reasonable and in line with similar fees on other 
exchanges.\10\ Further, the Exchange believes the $0.05 fee is 
equitable and not unfairly discriminatory, as it applies equally to all 
Market Maker, Professional Customers and Broker Dealers submitting PIP 
and COPIP Orders to the PIP and COPIP auction mechanisms. The Exchange 
believes it is equitable and not unfairly discriminatory to charge 
these Non-Public Customers more for their PIP and COPIP Orders in Penny 
and Non-Penny Pilot Classes than Public Customers. The practice of 
incentivizing increased Public Customer order flow is common in the 
options markets.
---------------------------------------------------------------------------

    \10\ See MIAX Fee Schedule Section I(A)(v); Phlx Pricing 
Schedule Section IV and ISE Fee Schedule Section I. Comparable fees 
at these exchanges range from $0.05 to $0.30.
---------------------------------------------------------------------------

Primary Improvement Order
    The Exchange believes that adding language to specify that the 
tiered fee schedule for initiating participants will only apply to 
Primary Improvement Order executions where the corresponding PIP or 
COPIP Order is from the account of a Public Customer, as well as 
introducing a flat per contract fee of $0.05 for all Primary 
Improvement Orders where the corresponding PIP or COPIP Order is from 
the account of a Non-Public Customer is reasonable, equitable and not 
unfairly discriminatory. The Exchange also believes the proposed $0.05 
fee for Primary Improvement Order executions where the corresponding 
PIP or COPIP Order is from the account of a Non-Public Customer is 
reasonable, as it is within the range of fees currently assessed on all 
Primary Improvement Orders on BOX.\11\ The Exchange believes that this 
distinction is reasonable and competitive, as it is made on another 
options exchange.\12\ Finally, the Exchange believes that 
differentiating between Public Customer and Non-Public Customer PIP and 
COPIP Orders, and their corresponding Primary Improvement Orders is 
equitable and not unfairly discriminatory. As stated above, the current 
fees, credit and rebates for PIP and COPIP transactions are meant to 
encourage Public Customer order flow to the PIP and COPIP auction 
mechanisms. Specifically, the tiered fee schedule for initiating 
participants encourages Order Flow Providers to submit Public Customer 
orders to the PIP or COPIP to gain the benefit of a lower fee. The 
Exchange believes that this incentive is not necessary for Non-Public 
Customer PIP and COPIP order flow and that the proposed flat $0.05 fee 
is appropriate. Specifically, when taken as a whole, the proposed Non-
Public Customer PIP and COPIP transactions fees will result in the PIP 
or COPIP Order always being assessed a $0.05 fee with no rebate 
potential,\13\ and the corresponding Primary Improvement Order being 
assessed a flat $0.05 fee. In comparison, the Initiating Participant's 
Primary Improvement Order for a Public Customer PIP or COPIP Order 
could potentially be assessed a fee as low as $0.02,\14\ while the 
corresponding PIP or COPIP Order would be assessed no fee and could 
obtain a rebate of up $0.12 (PIP Orders) or $0.06 (COPIP Orders) 
depending on the Participant's volume.
---------------------------------------------------------------------------

    \11\ For Primary Improvement Order executions, contract fees 
range from $0.25 to $0.02.
    \12\ PHLX also distinguishes between a PIXL Order from the 
account of a Non-Customer as compared to a PIXL Order from the 
account of a Customer. See NASDAQ PHLX LLC (``Phlx'') Fee Schedule 
Section V. When a PIXL Order is contra to a PIXL Auction Responder, 
a Customer PIXL Order will be assessed $0.00 per contract where a 
Non-Customer PIXL Order will be assessed $0.30 per contract in Penny 
Pilot Options or $0.38 in Non-Penny Pilot Options.
    \13\ These transactions will be exempt from the BVR.
    \14\ The Exchange notes that a majority of Primary Improvement 
Order executions are assessed Tier 4 and 5 fees within the tiered 
fee schedule for Initiating Participants.
---------------------------------------------------------------------------

BOX Volume Rebate
    The Exchange believes the proposed changes to the BVR are 
reasonable, equitable and not unfairly discriminatory. The BVR was 
adopted to attract Public Customer order flow to the Exchange by 
offering these

[[Page 57980]]

Participants incentives to submit their PIP and COPIP Orders to the 
Exchange.\15\ As such, the Exchange believes it is reasonable and 
appropriate to exempt Non-Public Customer PIP and COPIP Orders from the 
BVR. Further, the Exchange believes this exemption is equitable and not 
unfairly discriminatory as it will apply to all Non-Public Customers 
uniformly. As stated above, providing specific incentives for Public 
Customer volume is common both within the options industry and 
elsewhere in the BOX Fee Schedule.
---------------------------------------------------------------------------

    \15\ See Securities Exchange Release No. 73547 (November 6, 
2014), 79 FR 67520 (November 13, 2014) (SR-BOX-2014-25).
---------------------------------------------------------------------------

Liquidity Fees and Credits
    The Exchange believes amending the Liquidity Fees and Credits for 
PIP and COPIP transactions to differentiate between PIP and COPIP 
transactions where the PIP or COPIP Order is from the account of a 
Public Customer, and the PIP or COPIP Order is from the account of a 
Non-Public Customer is reasonable, equitable and not unfairly 
discriminatory. As stated above, the current liquidity fees and credits 
for PIP and COPIP transactions are focused on incentivizing Public 
Customer order flow to the PIP and COPIP auctions. Therefore, the 
Exchange believes it is equitable and not unfairly discriminatory to 
establish different fees and credits for Non-Public Customer order flow 
to these auction mechanisms. The Exchange notes that the liquidity fees 
and credits for PIP and COPIP transactions where the PIP and COPIP 
Order is from the account of a Public Customer remain unchanged.
    Accordingly, the Exchange believes the proposed liquidity fees and 
credits for PIP and COPIP transactions where the PIP or COPIP Order are 
from the account of a Non-Public Customer are reasonable, equitable and 
not unfairly discriminatory as they are identical to the current 
liquidity fees and credits assessed for PIP and COPIP transactions 
where the PIP or COPIP Order is from the account of a Public Customer.
    The Exchange also believes it is reasonable, equitable and not 
unfairly discriminatory to only apply the liquidity fees and credits to 
the portion of the PIP or COPIP Order from the account of a Non-Public 
Customer that does not trade with its contra order, and the Improvement 
Order responses. Liquidity fees and credits on BOX do not directly 
result in revenue to BOX, but are meant to incentivize Participants to 
attract order flow. Because of the value of Public Customer order flow, 
the Exchange believes these incentives are appropriate even if the 
Public Customer PIP or COPIP Order is fully internalized and trades 
only against its matching Primary Improvement Order. However, as stated 
above, the Exchange believes that the same level of incentives is not 
necessary for Non-Public Customer PIP or COPIP order flow. Therefore, 
the Exchange believes it reasonable to only provide these incentives to 
the portion of the Non-Public Customer PIP or COPIP Orders where 
liquidity is being added in the form of Improvement Order responses. 
Further, the Exchanges notes that the liquidity fees and credits for 
transactions within the Facilitation and Solicitation auction mechanism 
(Section II.B. of the BOX Fee Schedule) are assessed in a similar 
manner, and that the distinction is also made within the price 
improvement mechanism fees and rebates on another exchange in the 
options industry.\16\
---------------------------------------------------------------------------

    \16\ Under Section I of the ISE Fee Schedule, the initiator 
receives a $0.35 ``break-up'' rebate only for contracts that are 
submitted to the PIM that do not trade with their contra order. The 
responder fee for these Orders is only applied to any contracts for 
which the rebate is provided.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.
    The Exchange believes that the proposed adjustments to the Non-
Public Customer PIP and COPIP Transactions fees will not impose a 
burden on competition among various Exchange Participants. Rather, BOX 
believes that the changes will result in the Participants being charged 
appropriately for their Non-Public Customer PIP and COPIP Transactions 
and is designed to enhance competition in Auction transactions on BOX. 
Submitting an order is entirely voluntary and Participants can 
determine which type of order they wish to submit, if any, to the 
Exchange.
    The Exchange also believes that amending the proposed liquidity 
fees and credits for Non-Public Customer PIP and COPIP Transactions 
will not impose a burden on competition among various Exchange 
Participants. The Exchange believes that the proposed changes will 
result these Participants being charged or credited appropriately for 
these transactions.
    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing exchanges. In such an environment, the Exchange must 
continually review, and consider adjusting, its fees and credits to 
remain competitive with other exchanges. For the reasons described 
above, the Exchange believes that the proposed rule change reflects 
this competitive environment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Exchange Act \17\ and Rule 19b-4(f)(2) 
thereunder,\18\ because it establishes or changes a due, or fee.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \18\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend the rule 
change if it appears to the Commission that the action is necessary or 
appropriate in the public interest, for the protection of investors, or 
would otherwise further the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-BOX-2016-41 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-2016-41. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your

[[Page 57981]]

comments more efficiently, please use only one method. The Commission 
will post all comments on the Commission's Internet Web site (https://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 Web site viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE., Washington, DC 20549 on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 
such filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-BOX-2016-41, and should be submitted on or before 
September 14, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-20212 Filed 8-23-16; 8:45 am]
 BILLING CODE 8011-01-P
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