Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Add Rule 7290 (Price Protection for Limit Orders), 4207-4209 [2014-01400]
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Federal Register / Vol. 79, No. 16 / Friday, January 24, 2014 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(ii) of the Act 23 and
subparagraph (f)(6) of Rule 19b–4
thereunder.24 At any time within 60
days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
TKELLEY on DSK3SPTVN1PROD with NOTICES
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–2014–006 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2014–006. 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–2014–006 and should be
submitted on or before February 14,
2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–01404 Filed 1–23–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71346; File No. SR–BOX–
2014–04]
Self-Regulatory Organizations; BOX
Options Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Add Rule
7290 (Price Protection for Limit Orders)
January 17, 2014.
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 January 6,
2014, BOX Options Exchange LLC
(‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
from interested persons.
25 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
23 15
U.S.C. 78s(b)(3)(a)(ii).
24 17 CFR 240.19b–4(f)(6).
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4207
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to add Rule
7290 (Price Protection for Limit Orders)
to codify an existing price protection
feature. The text of the proposed rule
change is available from the principal
office of the Exchange, on the
Exchange’s Web site at https://
boxexchange.com, at the Commission’s
Public Reference Room, and on the
Commission’s Web site at https://sec.gov.
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 proposing to add
BOX Rule 7290 (Price Protection for
Limit Orders) to codify and clarify a
price protection feature already
available on the Exchange. Specifically,
the Exchange currently has a price
check feature in place that prevents
incoming limit orders 3 and limit order
modifications from automatically
executing at potentially erroneous
prices. The Exchange believes this
feature helps maintain a fair and orderly
market by mitigating the risks associated
with erroneously priced limit orders
that have the potential to cause price
dislocation.
Proposed Rule 7290 will codify the
price protection feature in the BOX
Rulebook and provide clarity on its
functionality. As set forth in proposed
Rule 7290, the Exchange employs a
filter on all incoming limit orders and
limit order modifications, pursuant to
which the Trading Host will cancel
these orders if priced outside an
acceptable price parameter set by the
Exchange. Specifically, as the Exchange
receives limit orders and limit order
3 See BOX Rule 7110(c)(1). Limit Orders entered
into the BOX Book are executed at the price stated
or better.
E:\FR\FM\24JAN1.SGM
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Federal Register / Vol. 79, No. 16 / Friday, January 24, 2014 / Notices
modifications, the Trading Host
compares the price of each order against
the contra-side NBBO at the time of
order entry to determine if the price is
outside the acceptable price parameter.4
If the order is priced outside of the
acceptable price parameter, it will be
rejected.
Unless determined otherwise by the
Exchange and announced to the
Participants via Informational Circular,
the price parameters will be set at the
price 100% greater than the NBO (for
incoming buy orders), and 100% less
than the NBB (for incoming sell orders),
when the NBB/NBO is priced at or
below $0.25; and the price parameters
will be set at the price 50% greater than
the NBO (for incoming buy orders), and
50% less than the NBB (for incoming
sell orders), when the NBB/NBO is
priced above $0.25. The Exchange will
reject all incoming buy (sell) orders that
are priced above (below) those
parameters. For example, if the NBO is
$1.20, a buy order priced at or above
$1.80 ($1.20 * 1.50) will be rejected.
Likewise, if the NBB is $1.10, a sell
order priced at or below $0.55 ($1.10 *
0.50) will be rejected. If the NBO is
$0.10, a buy order priced at or above
$0.20 ($0.10*2.00) will be rejected.
However, if the NBB is less than or
equal to $0.25, the default limits set
above will result in all incoming sell
orders being accepted regardless of their
limit.
The price protection feature will be
operational each trading day after the
opening until the close of trading, and
will apply only to incoming limit orders
and limit order modifications.5 The
Exchange further notes that this feature
will be available to all Participants;
however, it will be disabled until the
Participant enables it by contacting the
BOX Market Operations Center
(‘‘MOC’’).
The Exchange believes this feature
will prevent the entry of limit orders
that are priced so significantly beyond
the prevailing market price that the
execution of such orders could cause
substantial price dislocation in the
market. The Exchange also believes that
this feature will further serve to mitigate
the occurrence of erroneous executions.
TKELLEY on DSK3SPTVN1PROD with NOTICES
4 The
price parameter is set by the Exchange and
is a percentage of the NBBO on the opposite side
of the incoming order.
5 Pursuant to Rule 7110(g) orders can be modified
once they are held in the BOX Book. If the price
of a limit order on the BOX Book is modified by
a Participant, the updated price will be checked
against the contra-side NBBO to determine whether
the order’s new price is outside the acceptable price
range. If the modified order price is outside the
price range the order will be rejected, regardless of
whether the original price of the limit order was
within the price range.
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2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the Act,6
in general, and Section 6(b)(5) of the
Act,7 in particular, in that it 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 in 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. In particular, the
Exchange believes that rejecting
incoming limit orders which are priced
a significant percentage away from the
NBB or NBO assures that executions
will not occur at erroneous prices,
thereby promoting a fair and orderly
market. Additionally, the Exchange
believes that the proposed feature is
reasonable as it will protect Participants
by mitigating the risk of having orders
executed at erroneous prices.
Furthermore, Participants may choose
whether or not to subscribe to this
feature.
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 the proposal will
provide market participants with
additional protection against erroneous
executions. The Exchange does not
believe the proposed rule change
imposes any burden on intramarket
competition as the feature is available to
all Participants. The Exchange also
notes that it is not mandatory for
Participants to use this feature and it is
only enabled when requested by the
Participant. Thus, the Exchange does
not believe the proposal creates any
significant impact on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received comments on the proposed
rule change.
6 15
7 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00059
Fmt 4703
Sfmt 4703
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A) of the Act 8 and Rule 19b–
4(f)(6) thereunder.9 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act10 and Rule 19b–4(f)(6)
thereunder.11
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
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–2014–04 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–BOX–2014–04. This file
number should be included on the
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
10 15 U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
9 17
E:\FR\FM\24JAN1.SGM
24JAN1
Federal Register / Vol. 79, No. 16 / Friday, January 24, 2014 / Notices
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 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–
2014–04, and should be submitted on or
before February 14, 2014].
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–01400 Filed 1–23–14; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
received no comment letters on the
proposals.
[Release No. 34–71353; File Nos. SR–
BSECC–2013–001; SR–BX–2013–057; SR–
NASDAQ–2013–148; SR-Phlx-2013–115;
SR–SCCP–2013–01]
II. Discussion
Self-Regulatory Organizations; Boston
Stock Exchange Clearing Corporation;
NASDAQ OMX BX, Inc.; the NASDAQ
Stock Market LLC; NASDAQ OMX
PHLX LLC; Stock Clearing Corporation
of Philadelphia; Order Approving
Proposed Rule Changes To Amend the
Restated Certificate of Incorporation
and By-Laws of the NASDAQ OMX
Group, Inc.
January 17, 2014.
I. Introduction
On November 27, 2013, Boston Stock
Exchange Clearing Corporation
(‘‘BSECC’’), NASDAQ OMX BX, Inc.
(‘‘BX’’), the NASDAQ Stock Market LLC
(‘‘NASDAQ’’), NASDAQ OMX PHLX
LLC (‘‘Phlx’’), and the Stock Clearing
Corporation of Philadelphia (‘‘SCCP’’
and, together with BSECC, BX,
NASDAQ and Phlx, the ‘‘SROs’’ or
‘‘Self-Regulatory Subsidiaries’’), filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) 1 of the Securities
Exchange Act of 1934 (‘‘Act’’),2 and
Rule 19b–4 thereunder,3 proposed rule
changes with respect to amendments to
the Restated Certificate of Incorporation
(‘‘Charter’’) and By-Laws (the ‘‘ByLaws’’) of the NASDAQ OMX Group,
Inc. (‘‘NASDAQ OMX’’), the parent
company of the SROs.4 The proposed
rule changes were published for
comment in the Federal Register on
December 12, 2013.5 The Commission
BILLING CODE 8011–01–P
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 Certain provisions of NASDAQ OMX’s Charter
and By-Laws are rules of a self-regulatory
organization if they are stated policies, practices, or
interpretations, as defined in Rule 19b–4 under the
Act, of the self-regulatory organization, and must be
filed with the Commission pursuant to Section
19(b) of the Act and Rule 19b–4 thereunder. See
Securities Exchange Act Release Nos. 58183 (July
17, 2008), 73 FR 42850 (July 23, 2008) (File No. SR–
NASDAQ–2008–035); 58324 (August 7, 2008), 73
FR 46936 (August 12, 2008) (File Nos. SR–BSE–
2008–02; SR–BSE–2008–23; SR–BSE–2008–25; SR–
BSECC–2008–01); and 58180 (July 17, 2008), 73 FR
42890 (July 23, 2008) (File No. SR–SCCP–2008–01).
Accordingly, the SROs have filed with the
Commission proposed changes to the NASDAQ
OMX Charter and By-Laws.
5 See Securities Exchange Act Release Nos. 71019
(December 6, 2013), 78 FR 75633 (December 12,
2013) (SR–BSECC–2013–001); 71011 (December 6,
2013), 78 FR 75645 (December 12, 2013) (SR–BX–
2013–057); 71013 (December 6, 2013), 78 FR 75619
(December 12, 2013) (SR–NASDAQ–2013–148)
(‘‘NASDAQ Notice’’); 71010 (December 6, 2013), 78
FR 75661 (December 12, 2013) (SR-Phlx-2013–115);
TKELLEY on DSK3SPTVN1PROD with NOTICES
2 15
12 17
CFR 200.30–3(a)(12).
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A. Proposed Amendments to the Charter
1. Removal and Replacement of
Supermajority Voting Requirements
The SROs are proposing amendments
to provisions of the Charter to replace
each supermajority voting requirement
in the Charter with a ‘‘majority of
outstanding shares’’ voting requirement.
The Charter currently includes the
following three supermajority voting
requirements pertaining to the: (1)
Removal of directors; 6 (2) adoption,
alteration, amendment or repeal of any
By-Law; 7 and (3) amendment, repeal, or
adoption of provisions inconsistent with
certain charter provisions.8 For each of
the three foregoing provisions, the SROs
are proposing to remove the
requirement for an affirmative vote of at
least 662⁄3% of the total voting power of
the Voting Stock and replace it with a
voting standard requiring the affirmative
vote of a majority of the outstanding
Voting Stock.
The SROs state that, in developing
this proposal, NASDAQ OMX
considered the relative weight of the
arguments for and against supermajority
voting requirements.9 The SROs believe
71020 (December 6, 2013), 78 FR 75598 (December
12, 2013) (SR–SCCP–2013–01) (collectively,
‘‘Notices’’).
6 Article Fifth, Paragraph D provides that, except
for the Preferred Stock Directors (as defined in
Article Fifth, Paragraph B), any director, or the
entire Board of Directors (‘‘Board’’), may be
removed from office at any time, but only by the
affirmative vote of at least 662⁄3% of the total voting
power of the outstanding shares of NASDAQ OMX’s
capital stock entitled to vote generally in the
election of directors (‘‘Voting Stock’’), voting
together as a single class.
7 Article Eighth, Paragraph A provides that the
affirmative vote of the holders of at least 662⁄3% of
the total voting power of the outstanding Voting
Stock, voting together as a single class, shall be
required in order for the stockholders to adopt,
alter, amend or repeal any By-Law.
8 Article Ninth, Paragraph A provides that the
affirmative vote of the holders of at least 662⁄3% of
the voting power of the outstanding Voting Stock,
voting together as a single class, shall be required
to amend, repeal or adopt any provision
inconsistent with paragraph C of Article Fourth,
Article Fifth, Article Seventh, Article Eighth, or
Article Ninth of the Charter.
Article Fourth, Paragraph C sets forth the 5%
voting limitation, which provides that holders of
NASDAQ OMX’s voting securities may not cast
votes in excess of 5% of NASDAQ OMX’s
outstanding voting securities. The SROs note that
NASDAQ OMX is not proposing any change to the
5% voting limitation itself. According to the SROs,
NASDAQ OMX only proposes that any future
amendment of the 5% voting limitation will require
the approval of stockholders holding a majority of
the outstanding shares, rather than stockholders
holding 662⁄3% of the outstanding shares.
9 See, e.g., NASDAQ Notice, 78 FR at 75620. The
SROs remark that, historically, supermajority voting
E:\FR\FM\24JAN1.SGM
Continued
24JAN1
]]>Agencies
[Federal Register Volume 79, Number 16 (Friday, January 24, 2014)]
[Notices]
[Pages 4207-4209]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-01400]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71346; File No. SR-BOX-2014-04]
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To Add
Rule 7290 (Price Protection for Limit Orders)
January 17, 2014.
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 January 6, 2014, BOX Options Exchange LLC (``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by the self-regulatory organization. The Commission is
publishing this notice to solicit comments on the proposed rule 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 add Rule 7290 (Price Protection for Limit
Orders) to codify an existing price protection feature. The text of the
proposed rule change is available from the principal office of the
Exchange, on the Exchange's Web site at https://boxexchange.com, at the
Commission's Public Reference Room, and on the Commission's Web site at
https://sec.gov.
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 proposing to add BOX Rule 7290 (Price Protection
for Limit Orders) to codify and clarify a price protection feature
already available on the Exchange. Specifically, the Exchange currently
has a price check feature in place that prevents incoming limit orders
\3\ and limit order modifications from automatically executing at
potentially erroneous prices. The Exchange believes this feature helps
maintain a fair and orderly market by mitigating the risks associated
with erroneously priced limit orders that have the potential to cause
price dislocation.
---------------------------------------------------------------------------
\3\ See BOX Rule 7110(c)(1). Limit Orders entered into the BOX
Book are executed at the price stated or better.
---------------------------------------------------------------------------
Proposed Rule 7290 will codify the price protection feature in the
BOX Rulebook and provide clarity on its functionality. As set forth in
proposed Rule 7290, the Exchange employs a filter on all incoming limit
orders and limit order modifications, pursuant to which the Trading
Host will cancel these orders if priced outside an acceptable price
parameter set by the Exchange. Specifically, as the Exchange receives
limit orders and limit order
[[Page 4208]]
modifications, the Trading Host compares the price of each order
against the contra-side NBBO at the time of order entry to determine if
the price is outside the acceptable price parameter.\4\ If the order is
priced outside of the acceptable price parameter, it will be rejected.
---------------------------------------------------------------------------
\4\ The price parameter is set by the Exchange and is a
percentage of the NBBO on the opposite side of the incoming order.
---------------------------------------------------------------------------
Unless determined otherwise by the Exchange and announced to the
Participants via Informational Circular, the price parameters will be
set at the price 100% greater than the NBO (for incoming buy orders),
and 100% less than the NBB (for incoming sell orders), when the NBB/NBO
is priced at or below $0.25; and the price parameters will be set at
the price 50% greater than the NBO (for incoming buy orders), and 50%
less than the NBB (for incoming sell orders), when the NBB/NBO is
priced above $0.25. The Exchange will reject all incoming buy (sell)
orders that are priced above (below) those parameters. For example, if
the NBO is $1.20, a buy order priced at or above $1.80 ($1.20 * 1.50)
will be rejected. Likewise, if the NBB is $1.10, a sell order priced at
or below $0.55 ($1.10 * 0.50) will be rejected. If the NBO is $0.10, a
buy order priced at or above $0.20 ($0.10*2.00) will be rejected.
However, if the NBB is less than or equal to $0.25, the default limits
set above will result in all incoming sell orders being accepted
regardless of their limit.
The price protection feature will be operational each trading day
after the opening until the close of trading, and will apply only to
incoming limit orders and limit order modifications.\5\ The Exchange
further notes that this feature will be available to all Participants;
however, it will be disabled until the Participant enables it by
contacting the BOX Market Operations Center (``MOC'').
---------------------------------------------------------------------------
\5\ Pursuant to Rule 7110(g) orders can be modified once they
are held in the BOX Book. If the price of a limit order on the BOX
Book is modified by a Participant, the updated price will be checked
against the contra-side NBBO to determine whether the order's new
price is outside the acceptable price range. If the modified order
price is outside the price range the order will be rejected,
regardless of whether the original price of the limit order was
within the price range.
---------------------------------------------------------------------------
The Exchange believes this feature will prevent the entry of limit
orders that are priced so significantly beyond the prevailing market
price that the execution of such orders could cause substantial price
dislocation in the market. The Exchange also believes that this feature
will further serve to mitigate the occurrence of erroneous executions.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\6\ in general, and Section
6(b)(5) of the Act,\7\ in particular, in that it 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 in 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. In particular, the Exchange believes
that rejecting incoming limit orders which are priced a significant
percentage away from the NBB or NBO assures that executions will not
occur at erroneous prices, thereby promoting a fair and orderly market.
Additionally, the Exchange believes that the proposed feature is
reasonable as it will protect Participants by mitigating the risk of
having orders executed at erroneous prices. Furthermore, Participants
may choose whether or not to subscribe to this feature.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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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 the
proposal will provide market participants with additional protection
against erroneous executions. The Exchange does not believe the
proposed rule change imposes any burden on intramarket competition as
the feature is available to all Participants. The Exchange also notes
that it is not mandatory for Participants to use this feature and it is
only enabled when requested by the Participant. Thus, the Exchange does
not believe the proposal creates any significant impact on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\ Because
the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act\10\ and Rule 19b-
4(f)(6) thereunder.\11\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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-2014-04 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BOX-2014-04. This file
number should be included on the
[[Page 4209]]
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
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-2014-04, and should be submitted on or before
February 14, 2014].
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-01400 Filed 1-23-14; 8:45 am]
BILLING CODE 8011-01-P
