Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Regarding the Transfer of Ownership Interest in the Exchange, 13932-13934 [2015-06020]
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13932
Federal Register / Vol. 80, No. 51 / Tuesday, March 17, 2015 / Notices
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BOX–2015–15 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
[Release No. 34–74477; File No. SR–BOX–
2015–14]
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–BOX–2015–15. 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 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–
2015–15, and should be submitted on or
before April 7, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Brent J. Fields,
Secretary.
[FR Doc. 2015–06017 Filed 3–16–15; 8:45 am]
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BILLING CODE 8011–01–P
Self-Regulatory Organizations; BOX
Options Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Regarding
the Transfer of Ownership Interest in
the Exchange
March 11, 2015.
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 February
26, 2015, BOX Options Exchange LLC
(the ‘‘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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to repurchase
the ownership interest in the Exchange
held by Strategic Investments II Inc.
(‘‘SI’’) and BOX Holdings Group LLC, an
affiliate of the Exchange (‘‘BOX
Holdings’’), proposes to repurchase the
ownership interest in BOX Holdings
held by SI. 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.
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.
1 15
10 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
18:09 Mar 16, 2015
2 17
Jkt 235001
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00111
Fmt 4703
Sfmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is a limited liability
company, organized under the laws of
the State of Delaware on August 26,
2010. The Exchange’s charter is a
Limited Liability Company Agreement,
dated as of May 10, 2012 (the ‘‘Exchange
LLC Agreement’’). SI became a Member
of the Exchange on May 10, 2012.
BOX Holdings is a limited liability
company, organized under the laws of
the State of Delaware on August 26,
2010. BOX Holdings is the sole owner
of BOX Market LLC, a facility of the
Exchange (‘‘BOX Market’’). The BOX
Holdings charter is a Limited Liability
Company Agreement, dated as of May
10, 2012 (the ‘‘Holdings LLC
Agreement’’). SI became a Member of
BOX Holdings on May 10, 2012. 6,445
Economic Units and 4,990 Voting Units
represent SI’s ownership interest in the
Exchange, comprising 6.455% of all
outstanding interests and 4.99% of all
outstanding voting interests of the
Exchange, respectively (the ‘‘Exchange
Units’’). 500 Class A Units represent SI’s
ownership interest in BOX Holdings,
comprising 4.203% of all outstanding
ownership interests of BOX Holdings
(the ‘‘Holdings Units’’ and, together
with the Exchange Units, the ‘‘SI
Units’’).
Each of the Exchange and BOX
Holdings has agreed with SI to purchase
the SI Units. Accordingly, it is proposed
that SI transfer all of the Exchange Units
to the Exchange and all of the Holdings
Units to BOX Holdings (the ‘‘Transfer’’).
After the Transfer, the SI Units will no
longer be outstanding, references to SI
in each of the Exchange LLC Agreement
and the Holdings LLC Agreement will
be removed, and SI will have no
remaining rights under the Exchange
LLC Agreement or the Holdings LLC
Agreement.
As provided in Section 7.3(f) of the
Exchange LLC Agreement, ‘‘no Person,
alone or together with any Related
Persons, shall own, directly or
indirectly, of record or beneficially, an
aggregate Economic Percentage Interest
greater than 40% (or 20% if such Person
is a BOX Options Participant) (the
‘‘Economic Ownership Limit’’).’’
Accordingly, because the total number
of outstanding Economic Units of the
Exchange are reduced in the Transfer,
outstanding Economic Units held by
any remaining Members of the Exchange
will be cancelled to the extent necessary
to ensure compliance with the
Economic Ownership Limit.
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mstockstill on DSK4VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 51 / Tuesday, March 17, 2015 / Notices
As provided in Section 7.3(g) of the
Exchange LLC Agreement, ‘‘no Person,
alone or together with any Related
Persons, shall own, directly or
indirectly, of record or beneficially, an
aggregate Voting Percentage Interest of
greater than 20% (the ‘‘Voting
Ownership Limit’’).’’ Further, Section
7.3(g) of the Exchange LLC Agreement
provides that, upon any change in
economic ownership, the number of
Voting Units held by each Member of
the Exchange shall be adjusted to
maintain compliance with the Voting
Ownership Limit. Accordingly, because
the number of Economic Units held by
Members of the Exchange are reduced in
the Transfer, the number of outstanding
Voting Units of the Exchange, and the
number of Voting Units held by each of
the remaining Members of the
Exchange, will be adjusted to the extent
necessary to ensure compliance with the
Economic Ownership Limit.
As discussed above, all ownership
limits relating to the Exchange will
continue to be strictly respected. The
Transfer will not result in any Member
of the Exchange exceeding its applicable
Economic Ownership Percentage or
Voting Ownership Percentage
(collectively, its ‘‘Ownership
Percentages’’). Prior to the Transfer,
some Members of the Exchange already
held the maximum Ownership
Percentages allowed under the
Exchange LLC Agreement. The
Ownership Percentages held by these
Members will remain completely
unchanged after giving effect to the
Transfer. For other Members of the
Exchange, adjustments to Ownership
Percentages resulting from the Transfer
will be insubstantial, such that no
Member of the Exchange will have its
Ownership Percentage adjusted by more
than 2.2% of the Exchange’s ownership.
After giving effect to the Transfer, no
Member will hold more than 40%
Economic Ownership Percentage, no
Participant will hold more than 20%
Economic Ownership Percentage, and
no Member will hold more than 20%
Voting Ownership Percentage in the
Exchange.
The Board of Directors of the
Exchange will remain unaffected by the
Transfer. The makeup of the Board will
still be comprised of a majority of
Directors that are Non-industry
Directors, at least 20% that are
Participant Directors and one (1)
Director that is also an officer or director
of BOX Holdings.3
Further, Section 7.4(f) of the Holdings
LLC Agreement provides that a rule
3 See § 4.02 of the BOX Options Exchange LLC
Bylaws.
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18:09 Mar 16, 2015
Jkt 235001
filing pursuant to Section 19 of the
Exchange Act is required with respect to
certain transactions that result in the
acquisition and holding by a person of
an aggregate ownership interest in BOX
Holdings which meets or crosses the
threshold level of 20% or any
successive 5% level. Although MX US
2, Inc., a wholly-owned subsidiary of
TMX Group Limited (‘‘MXUS2’’), is not
acquiring any additional ownership
Units of BOX Holdings in the Transfer,
the reduction of the total number of
outstanding ownership Units of BOX
Holdings in the Transfer will result in
a corresponding increase in the
ownership interest held by MXUS2 from
53.83% to 56.19% and thereby crossing
a 5% level of fifty-five percent.
This change in MXUS2’s ownership
percentage by less than 2.4% of the
overall ownership of BOX Holdings is
insubstantial and will not materially
alter the ownership or voting power of
MXUS2 in BOX Holdings. Even though
the MXUS2’s ownership percentage will
experience this small increase, no
additional power or control will accrue
to MXUS2 as a result. For example, as
the current holder of a majority of the
outstanding ownership interests in BOX
Holdings, MXUS2 has the ability to
control any vote of the Members or the
Board of Directors of BOX Holdings that
requires a simple majority vote. After
giving effect to the Transfer, MXUS2
will still control such votes. Further,
MXUS2 currently has the power to
appoint up to five (5) representatives to
the BOX Holdings Board of Directors.
After giving effect to the Transfer,
MXUS2 will still have the power to
appoint the same number of Directors of
BOX Holdings. As a 56.19% owner,
MXUS2 would have no additional
voting or veto rights and no other ability
to exercise power over the operations of
BOX Holdings or its subsidiary, BOX
Market. No other Member of BOX
Holdings will have its ownership
percentage in BOX Holdings adjusted by
more than 0.9% of the total BOX
Holdings ownership as a result of the
Transfer.
The consideration paid to SI by BOX
Holdings and the Exchange in
connection with the Transfer was paid
almost entirely by BOX Holdings with
only a de minimis amount paid by the
Exchange. The Exchange continues to
reserve sufficient assets to operate and
fulfill its regulatory responsibilities with
respect to itself and the BOX Market.
The Exchange Board of Directors
remains committed to ensuring the
Exchange is sufficiently capitalized to
meet its obligations. The Exchange and
BOX Market continue to be subject to a
written agreement which provides that
PO 00000
Frm 00112
Fmt 4703
Sfmt 4703
13933
the Exchange receives and retains all
assets deemed to be necessary for
regulatory purposes by the Exchange.
Accordingly, payments made to
consummate the Transfer will not have
any negative effect on the Exchange’s
ability to carry out its duties and
obligations as an SRO.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the Act,
in general, and furthers the objectives of
Section 6(b)(1), in particular, in that it
enables the Exchange to be so organized
so as to have the capacity to be able to
carry out the purposes of the Act and to
comply, and to enforce compliance by
its exchange members and persons
associated with its exchange members,
with the provisions of the Act, the rules
and regulations thereunder, and the
rules of the Exchange. The Exchange
also believes that this filing furthers the
objectives of Section 6(b)(5) of the Act
in that it is designed to facilitate
transactions in securities, to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to
and perfect the mechanism of a free and
open market and a national market
system, and in general, to protect
investors and the public interest.
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.
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)(iii) of the Act 4 and Rule
19b–4(f)(6) thereunder.5 Because the
proposed rule change does not: (i)
Significantly affect the protection of
4 15
5 17
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
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13934
Federal Register / Vol. 80, No. 51 / Tuesday, March 17, 2015 / Notices
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, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)
thereunder.6
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay
because the Transfer is intended to be
completed in less than 30 days. The
Commission believes that an earlier
operative date will ensure that the filing
is effective prior to the intended
completion of the Transfer in less than
30 days. Based on the foregoing, the
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest.7 The Commission
hereby grants the Exchange’s request
and designates the proposal operative
upon filing.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
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:
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6 In
addition, Rule 19b–4(f)(6)(iii) 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 Commission has waived the 5day prefiling requirement in this case.
7 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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18:09 Mar 16, 2015
Jkt 235001
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–
SR–BOX–2015–14 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–2015–14. 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–BOX–
2015–14 and should be submitted on or
before April 7, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Brent J. Fields,
Secretary.
[FR Doc. 2015–06020 Filed 3–16–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74483; File No. SR–CFE–
2015–002]
Self-Regulatory Organizations; CBOE
Futures Exchange, LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Regarding
Exchange of Contract for Related
Position Transactions and Block
Trades
March 11, 2015.
Pursuant to Section 19(b)(7) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
February 25, 2015 CBOE Futures
Exchange, LLC (‘‘CFE’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change described in
Items I, II, and III below, which Items
have been prepared by CFE. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons. CFE
also has filed this proposed rule change
with the Commodity Futures Trading
Commission (‘‘CFTC’’). CFE filed a
written certification with the CFTC
under Section 5c(c) of the Commodity
Exchange Act (‘‘CEA’’)2 on February 25,
2015.
I. Self-Regulatory Organization’s
Description of the Proposed Rule
Change
The Exchange proposes to amend its
rules related to Exchange of Contract for
Related Position (‘‘ECRP’’) transactions
and block trades. The scope of this filing
is limited solely to the application of the
rule amendments to security futures
traded on CFE. The only security futures
currently traded on CFE are traded
under Chapter 16 of CFE’s Rulebook
which is applicable to Individual Stock
Based and Exchange-Traded Fund
Based Volatility Index security futures.
The text of the proposed rule change is
attached as Exhibit 4 to the filing but is
not attached to the publication of this
notice.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, CFE
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
1 15
8 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00113
Fmt 4703
27
Sfmt 4703
U.S.C. 78s(b)(7).
U.S.C. 7a–2(c).
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]]>Agencies
[Federal Register Volume 80, Number 51 (Tuesday, March 17, 2015)]
[Notices]
[Pages 13932-13934]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06020]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74477; File No. SR-BOX-2015-14]
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change
Regarding the Transfer of Ownership Interest in the Exchange
March 11, 2015.
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 February 26, 2015, BOX Options Exchange LLC (the ``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 repurchase the ownership interest in the
Exchange held by Strategic Investments II Inc. (``SI'') and BOX
Holdings Group LLC, an affiliate of the Exchange (``BOX Holdings''),
proposes to repurchase the ownership interest in BOX Holdings held by
SI. 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.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in Sections A, B, and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is a limited liability company, organized under the
laws of the State of Delaware on August 26, 2010. The Exchange's
charter is a Limited Liability Company Agreement, dated as of May 10,
2012 (the ``Exchange LLC Agreement''). SI became a Member of the
Exchange on May 10, 2012.
BOX Holdings is a limited liability company, organized under the
laws of the State of Delaware on August 26, 2010. BOX Holdings is the
sole owner of BOX Market LLC, a facility of the Exchange (``BOX
Market''). The BOX Holdings charter is a Limited Liability Company
Agreement, dated as of May 10, 2012 (the ``Holdings LLC Agreement'').
SI became a Member of BOX Holdings on May 10, 2012. 6,445 Economic
Units and 4,990 Voting Units represent SI's ownership interest in the
Exchange, comprising 6.455% of all outstanding interests and 4.99% of
all outstanding voting interests of the Exchange, respectively (the
``Exchange Units''). 500 Class A Units represent SI's ownership
interest in BOX Holdings, comprising 4.203% of all outstanding
ownership interests of BOX Holdings (the ``Holdings Units'' and,
together with the Exchange Units, the ``SI Units'').
Each of the Exchange and BOX Holdings has agreed with SI to
purchase the SI Units. Accordingly, it is proposed that SI transfer all
of the Exchange Units to the Exchange and all of the Holdings Units to
BOX Holdings (the ``Transfer''). After the Transfer, the SI Units will
no longer be outstanding, references to SI in each of the Exchange LLC
Agreement and the Holdings LLC Agreement will be removed, and SI will
have no remaining rights under the Exchange LLC Agreement or the
Holdings LLC Agreement.
As provided in Section 7.3(f) of the Exchange LLC Agreement, ``no
Person, alone or together with any Related Persons, shall own, directly
or indirectly, of record or beneficially, an aggregate Economic
Percentage Interest greater than 40% (or 20% if such Person is a BOX
Options Participant) (the ``Economic Ownership Limit'').'' Accordingly,
because the total number of outstanding Economic Units of the Exchange
are reduced in the Transfer, outstanding Economic Units held by any
remaining Members of the Exchange will be cancelled to the extent
necessary to ensure compliance with the Economic Ownership Limit.
[[Page 13933]]
As provided in Section 7.3(g) of the Exchange LLC Agreement, ``no
Person, alone or together with any Related Persons, shall own, directly
or indirectly, of record or beneficially, an aggregate Voting
Percentage Interest of greater than 20% (the ``Voting Ownership
Limit'').'' Further, Section 7.3(g) of the Exchange LLC Agreement
provides that, upon any change in economic ownership, the number of
Voting Units held by each Member of the Exchange shall be adjusted to
maintain compliance with the Voting Ownership Limit. Accordingly,
because the number of Economic Units held by Members of the Exchange
are reduced in the Transfer, the number of outstanding Voting Units of
the Exchange, and the number of Voting Units held by each of the
remaining Members of the Exchange, will be adjusted to the extent
necessary to ensure compliance with the Economic Ownership Limit.
As discussed above, all ownership limits relating to the Exchange
will continue to be strictly respected. The Transfer will not result in
any Member of the Exchange exceeding its applicable Economic Ownership
Percentage or Voting Ownership Percentage (collectively, its
``Ownership Percentages''). Prior to the Transfer, some Members of the
Exchange already held the maximum Ownership Percentages allowed under
the Exchange LLC Agreement. The Ownership Percentages held by these
Members will remain completely unchanged after giving effect to the
Transfer. For other Members of the Exchange, adjustments to Ownership
Percentages resulting from the Transfer will be insubstantial, such
that no Member of the Exchange will have its Ownership Percentage
adjusted by more than 2.2% of the Exchange's ownership. After giving
effect to the Transfer, no Member will hold more than 40% Economic
Ownership Percentage, no Participant will hold more than 20% Economic
Ownership Percentage, and no Member will hold more than 20% Voting
Ownership Percentage in the Exchange.
The Board of Directors of the Exchange will remain unaffected by
the Transfer. The makeup of the Board will still be comprised of a
majority of Directors that are Non-industry Directors, at least 20%
that are Participant Directors and one (1) Director that is also an
officer or director of BOX Holdings.\3\
---------------------------------------------------------------------------
\3\ See Sec. 4.02 of the BOX Options Exchange LLC Bylaws.
---------------------------------------------------------------------------
Further, Section 7.4(f) of the Holdings LLC Agreement provides that
a rule filing pursuant to Section 19 of the Exchange Act is required
with respect to certain transactions that result in the acquisition and
holding by a person of an aggregate ownership interest in BOX Holdings
which meets or crosses the threshold level of 20% or any successive 5%
level. Although MX US 2, Inc., a wholly-owned subsidiary of TMX Group
Limited (``MXUS2''), is not acquiring any additional ownership Units of
BOX Holdings in the Transfer, the reduction of the total number of
outstanding ownership Units of BOX Holdings in the Transfer will result
in a corresponding increase in the ownership interest held by MXUS2
from 53.83% to 56.19% and thereby crossing a 5% level of fifty-five
percent.
This change in MXUS2's ownership percentage by less than 2.4% of
the overall ownership of BOX Holdings is insubstantial and will not
materially alter the ownership or voting power of MXUS2 in BOX
Holdings. Even though the MXUS2's ownership percentage will experience
this small increase, no additional power or control will accrue to
MXUS2 as a result. For example, as the current holder of a majority of
the outstanding ownership interests in BOX Holdings, MXUS2 has the
ability to control any vote of the Members or the Board of Directors of
BOX Holdings that requires a simple majority vote. After giving effect
to the Transfer, MXUS2 will still control such votes. Further, MXUS2
currently has the power to appoint up to five (5) representatives to
the BOX Holdings Board of Directors. After giving effect to the
Transfer, MXUS2 will still have the power to appoint the same number of
Directors of BOX Holdings. As a 56.19% owner, MXUS2 would have no
additional voting or veto rights and no other ability to exercise power
over the operations of BOX Holdings or its subsidiary, BOX Market. No
other Member of BOX Holdings will have its ownership percentage in BOX
Holdings adjusted by more than 0.9% of the total BOX Holdings ownership
as a result of the Transfer.
The consideration paid to SI by BOX Holdings and the Exchange in
connection with the Transfer was paid almost entirely by BOX Holdings
with only a de minimis amount paid by the Exchange. The Exchange
continues to reserve sufficient assets to operate and fulfill its
regulatory responsibilities with respect to itself and the BOX Market.
The Exchange Board of Directors remains committed to ensuring the
Exchange is sufficiently capitalized to meet its obligations. The
Exchange and BOX Market continue to be subject to a written agreement
which provides that the Exchange receives and retains all assets deemed
to be necessary for regulatory purposes by the Exchange. Accordingly,
payments made to consummate the Transfer will not have any negative
effect on the Exchange's ability to carry out its duties and
obligations as an SRO.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act, in general, and furthers the
objectives of Section 6(b)(1), in particular, in that it enables the
Exchange to be so organized so as to have the capacity to be able to
carry out the purposes of the Act and to comply, and to enforce
compliance by its exchange members and persons associated with its
exchange members, with the provisions of the Act, the rules and
regulations thereunder, and the rules of the Exchange. The Exchange
also believes that this filing furthers the objectives of Section
6(b)(5) of the Act in that it is designed to facilitate transactions in
securities, to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and in general, to protect investors and the public interest.
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.
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)(iii) of the Act \4\ and Rule 19b-4(f)(6) thereunder.\5\
Because the proposed rule change does not: (i) Significantly affect the
protection of
[[Page 13934]]
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, the proposed rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.\6\
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\4\ 15 U.S.C. 78s(b)(3)(A)(iii).
\5\ 17 CFR 240.19b-4(f)(6).
\6\ In addition, Rule 19b-4(f)(6)(iii) 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 Commission has waived the 5-day
prefiling requirement in this case.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange has asked the Commission to waive the
30-day operative delay because the Transfer is intended to be completed
in less than 30 days. The Commission believes that an earlier operative
date will ensure that the filing is effective prior to the intended
completion of the Transfer in less than 30 days. Based on the
foregoing, the Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest.\7\ The Commission hereby grants the Exchange's request and
designates the proposal operative upon filing.
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\7\ For purposes only of waiving the 30-day operative delay, the
Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule 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-SR-BOX-2015-14 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-2015-14. 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-BOX-2015-14 and should be
submitted on or before April 7, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-06020 Filed 3-16-15; 8:45 am]
BILLING CODE 8011-01-P
