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, 29584-29587 [2016-11153]
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29584
Federal Register / Vol. 81, No. 92 / Thursday, May 12, 2016 / Notices
with the guidance of ANSI/ANS 15.16–
1982, ‘‘Emergency Planning for
Research Reactors’’, the operations
boundary is defined as the EPZ
boundary for each reactor facility. For
the NTR, the operations boundary is
defined by the portions of Building 105
occupied by NTR facilities. The NRC
staff has concluded that the
environmental impacts of reducing the
licensed site would be similarly
bounded and that there would be no
environmental impact associated with
the continued operation of the NTR in
relation to the proposed release of the
247-hectare (610-acre) parcel.
The shutdown, defueled testing
facility, the GETR, NRC License TR–1,
Docket 50–70 is not the subject of any
license amendment request. The GETR
is in SAFSTOR status. The GETR
license does not contain a site
description and as such, there is no
need to amend the GETR license to
reflect the release of the 247-hectare
(610-acre) parcel. In any event, the NRC
staff considers this EA to encompass
and bound any environmental impacts
resulting from the proposed release of
the 247-hectare (610-acre) parcel in
relation to the ongoing shutdown,
SAFSTOR status of the GETR.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Environmental Impacts of the
Alternatives to the Proposed Action
As an alternative to the proposed
action, the NRC staff considered denial
of the proposed release of the 247hectare (610-acre) parcel (i.e., the ‘‘noaction’’ alternative). Denial of the
request would result in the 247-hectare
(610-acre) parcel remaining part of the
licensed site and subject to NRC
jurisdiction. As the licensee has no need
for the parcel, its current use as a site
for cattle grazing would most likely
continue. As there is no policy or
regulatory reason for the NRC to require
a licensee to retain land that is not
radiologically impacted and for which
the licensee has no further operational
need, the no-action alternative is not
further considered.
Conclusion
The NRC staff has concluded that the
proposed action will not significantly
impact the quality of the human
environment, and that the proposed
action is the preferred alternative.
Agencies and Persons Consulted
The NRC contacted the California
Department of Public Health concerning
this request. There were no comments,
concerns or objections from the State
official.
A public meeting to obtain comments
on the release approval request was
VerDate Sep<11>2014
17:02 May 11, 2016
Jkt 238001
announced on the NRC public meeting
Web site on July 7, 2015 (ADAMS
Accession No. ML15188A344). A notice
of GEH’s request to release the 247hectare (610-acre) parcel and the public
meeting, including a request for
comment, was also published in the TriValley Herald, Livermore, CA on July
15, 2015 (ADAMS Accession No.
ML15292A519). The NRC staff
published a notice of the receipt of
GEH’s request, including a request for
comment, in the Federal Register on
July 20, 2015 (80 FR 42846). The NRC
staff conducted the public meeting in
Pleasanton, CA on July 22, 2015. A
summary of the public meeting, which
includes copies of the presentations
made and a copy of the transcript of the
meeting, is available in ADAMS at
Accession No. ML15260A199. No
comments were made on the Federal
Rulemaking Web site, or were received
by mail or email, and all questions
asked at the meeting were answered in
the meeting.
III. Finding of No Significant Impact
The NRC staff has prepared this EA as
part of its review of the proposed action.
On the basis of this EA, the NRC finds
that there are no significant
environmental impacts from the
proposed action, and that preparation of
an environmental impact statement is
not warranted. Accordingly, the NRC
has determined that a finding of no
significant impact (FONSI) is
appropriate. In accordance with 10 CFR
51.32(a)(4), this FONSI incorporates the
EA set forth in this notice by reference.
Dated at Rockville, Maryland, this 4th day
of May 2016.
For the Nuclear Regulatory Commission.
John R. Tappert,
Director, Division of Decommissioning,
Uranium Recovery, and Waste Programs,
Office of Nuclear Material Safety and
Safeguards.
[FR Doc. 2016–11206 Filed 5–11–16; 8:45 am]
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77778; File No. SR–BOX–
2016–21]
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
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
Frm 00063
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 on the BOX
Market LLC (‘‘BOX’’) options facility.
While changes to the fee schedule
pursuant to this proposal will be
effective upon filing, the changes will
become operative on May 2, 2016. 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
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.
1 15
May 6, 2016.
PO 00000
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 29,
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.
Fmt 4703
Sfmt 4703
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
2 17
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PIP and COPIP Transactions
The Exchange first proposes to amend
certain PIP and COPIP Transaction fees
for Professional Customers, Broker
Dealer and Market Makers in Section I.B
of the BOX Fee Schedule. Specifically,
the Exchange proposes to reduce the PIP
and COPIP Order fees for Professional
Customers and Broker Dealers from
$0.37 to $0.15 and the PIP and COPIP
Order Fees for Market Makers from
$0.20 to $0.15.
The revised pricing structure for PIP
and COPIP Transactions will be as
follows:
Account type
Public
customer
PIP Order or COPIP Order
Improvement Order in PIP
or COPIP.
Primary Improvement
Order.
Professional
customer
Broker
dealer
$0.00 .................................
0.15 ...................................
$0.15 .................................
0.37 ...................................
$0.15 .................................
0.37 ...................................
$0.15.
0.30.
See Section I. B.1 .............
See Section I. B.1 .............
See Section I. B.1 .............
See Section I. B.1.
The Exchange also proposes to make
a clerical correction to Section I.B. of
the BOX Fee Schedule. Specifically, the
Primary Improvement Order row
references ADV (Average Daily
Volume). The Exchange no longer uses
a Participant’s ADV to determine
volume based tiers for rebates and fees.
Instead, the qualification thresholds are
based on a percentage of the
Participant’s volume relative to the
account type’s overall total industry
equity and ETF option volume.
Therefore, the Exchange proposes to
remove the reference ADV and only
refer to Section I.B.1.
BVR
Under the BVR, the Exchange offers a
tiered per contract rebate for all PIP
Orders and COPIP orders of 100
contracts and under that do not trade
solely with their contra order.
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 establish
an additional tier within the BVR for
percentage thresholds of 1.250% and
.......................................................
.......................................................
.......................................................
.......................................................
.......................................................
0.000%
0.160%
0.340%
1.000%
1.250%
Complex Orders
asabaliauskas on DSK3SPTVN1PROD with NOTICES
above. Participants whose PIP and
COPIP volume submitted to BOX,
relative to the total national Customer
volume in multiply-listed options
classes, is 1.250% or above will receive
a per contract rebate of $0.18 in PIP
transactions and $0.06 in COPIP
transactions. With this, the Exchange
also proposes to adjust the threshold in
Tier 4 to end at 1.249%.
The new BVR set forth in Section
I.B.2 of the BOX Fee Schedule will be
as follows:
Percentage
thresholds of national customer
volume in multiply-listed options
classes (monthly)
Tier
1
2
3
4
5
Market
maker
The Exchange then proposes to adjust
certain fees within the Complex Order
Pricing Structure in Section III.A. of the
BOX Fee Schedule (All Complex
Orders). The Exchange recently
introduced a pricing structure where
Complex Orders are assessed
transaction fees and credits dependent
upon three factors: (i) The account type
of the Participant submitting the order;
(ii) whether the Participant is a liquidity
provider or liquidity taker; and (iii) the
account type of the contra party.5
Per contract rebate
(all account types)
PIP
to 0.159% .....................................................................................
to 0.339% .....................................................................................
to 0.999% .....................................................................................
to 1.249% .....................................................................................
and Above ....................................................................................
The Exchange now proposes to adjust
certain fees and rebates within the new
pricing structure. Specifically, the
Exchange proposes to replace the $0.10
credit applied to Market Makers,
Professional Customer and Broker
Dealers making liquidity against a
Public Customer in Penny Pilot Classes.
The Exchange proposes to instead assess
Professional Customers or Broker
Dealers $0.45 and Market Makers $0.40
when their Penny Pilot Complex Order
makes liquidity against a Public
Customer Complex Order.
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PO 00000
Frm 00064
Fmt 4703
Sfmt 4703
($0.00)
(0.02)
(0.04)
(0.06)
(0.06)
For Complex Orders in Non-Penny
Pilot Classes, the Exchange proposes to
replace the $0.10 credit applied to
Market Makers, Professional Customer
and Broker Dealers making liquidity
against a Public Customer. The
Exchange proposes to instead assess
Professional Customers and Broker
Dealers $0.80 and Market Makers $0.75
when their Non-Penny Pilot Complex
Order makes liquidity against a Public
Customer Complex Order.
The revised Complex Order Pricing
Structure will be as follows:
5 See Securities Exchange Act Release No. 77568
(April 8, 2016), 81 FR 22151 (April 14, 2016) (SR–
BOX–2016–15).
VerDate Sep<11>2014
($0.00)
(0.04)
(0.11)
(0.14)
(0.18)
COPIP
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Federal Register / Vol. 81, No. 92 / Thursday, May 12, 2016 / Notices
Penny pilot classes
Non-penny pilot classes
Account type
Contra party
Public Customer ..
Public Customer ............................................................
Professional Customer/Broker Dealer ...........................
Market Maker .................................................................
Public Customer ............................................................
$0.00
(0.35)
(0.35)
0.45
$0.00
(0.35)
(0.35)
0.45
$0.00
(0.70)
(0.70)
0.80
$0.00
(0.70)
(0.70)
0.80
Professional Customer/Broker Dealer ...........................
Market Maker .................................................................
Public Customer ............................................................
Professional Customer/Broker Dealer ...........................
Market Maker .................................................................
(0.10)
(0.10)
0.40
(0.10)
(0.10)
0.30
0.30
0.40
0.30
0.30
(0.10)
(0.10)
0.75
(0.10)
(0.10)
0.45
0.45
0.75
0.45
0.45
Professional Customer or Broker
Dealer.
Market Maker .......
asabaliauskas on DSK3SPTVN1PROD with NOTICES
For example, if a Market Maker’s
Complex Order in a Penny Pilot Class
interacted with a Public Customer’s
Complex Order, regardless of whether
the Complex Order was making or
taking liquidity, the Market Maker
would now be charged $0.40 and the
Public Customer would be credited
$0.35.
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,6 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.
The Exchange believes that reducing
the PIP and COPIP Order Fees to $0.15
for Market Makers, Professional
Customers and Broker Dealers is
reasonable. Reducing these fees is meant
to encourage auction order flow to the
Exchange, which will benefit all market
participants on the Exchange. BOX
believes the $0.15 fee is equitable and
not unfairly discriminatory, as it applies
to all Market Marker, Professional
Customers and Broker Dealers
submitting PIP and COPIP Orders to
these auction mechanisms. Further, the
Exchange believes it is equitable and not
unfairly discriminatory to charge Public
Customers less than Non-Public
Customers for their PIP and COPIP
Orders. The practice of incentivizing
increased Public Customer order flow is
common in the options markets.
The Exchange believes the proposed
amendments to the BVR in Section I.B.2
of the BOX Fee Schedule are reasonable,
equitable and non-discriminatory. The
BVR was adopted to attract Public
Customer order flow to the Exchange by
offering these Participants incentives to
6 15
U.S.C. 78f(b)(4) and (5).
VerDate Sep<11>2014
17:02 May 11, 2016
Jkt 238001
Maker fee/
credit
Taker fee/
credit
Maker fee/
credit
Taker fee/
credit
submit their PIP and COPIP Orders to
the Exchange and the Exchange believes
it is appropriate to now amend the BVR.
The Exchange believes it is equitable
and not unfairly discriminatory to
establish an additional tier within the
BVR, as all Participants have the ability
to qualify for a rebate, and rebates are
provided equally to qualifying
Participants. Finally, the Exchange
believes it is reasonable and appropriate
to continue to provide incentives for
Public Customers, which will result in
greater liquidity and ultimately benefit
all Participants trading on the Exchange.
BOX believes it is reasonable,
equitable and not unfairly
discriminatory to adjust the monthly
Percentage Thresholds of National
Customer Volume in Multiply-Listed
Options Classes. The volume thresholds
and applicable rebates are meant to
incentivize Participants to direct order
flow to the Exchange to obtain the
benefit of the rebate, which will in turn
benefit all market participants by
increasing liquidity on the Exchange.
Other exchanges employ similar
incentive programs,7 and the Exchange
believes that the proposed changes to
the volume thresholds and rebates are
reasonable and competitive when
compared to incentive structures at
other exchanges.
The Exchange believes amending the
Complex Order pricing structure is
reasonable, equitable and not unfairly
discriminatory. The fee structure for
Complex Orders was recently adopted
and the Exchange believes it is now
appropriate to adjust certain fees and
credits. The Complex Order fee
structure is generally intended to attract
order flow to the Exchange by offering
all market participants incentives to
submit their Complex Orders to the
Exchange.
The Exchange believes that the
proposed fees for Professional
Customers, Broker Dealers and Market
Makers interacting with Public
Customer Complex Orders are
reasonable. A Professional Customer or
Broker Dealer interacting against a
Public Customer will now be charged
$0.45 in Penny Pilot Classes and $0.80
Non-Penny Pilot Classes, regardless if it
is making or taking liquidity. A Market
Maker interacting against a Public
Customer will now be charged $0.40 in
Penny Pilot Classes and $0.75 NonPenny Pilot Classes, regardless of
whether it is making or taking liquidity.
The Exchange believes these proposed
Complex Order fees remain competitive
when compared to the Complex Order
fees on another exchange.8
The Exchange believes that charging
Professional Customers and Broker
Dealers higher fees than Public
Customers for Complex Orders is
equitable and not unfairly
discriminatory. Professional Customers,
while Public Customers by virtue of not
being Broker Dealers, generally engage
in trading activity more similar to
Broker Dealer proprietary trading
accounts (submitting more than 390
standard orders per day on average).
The Exchange believes that the higher
level of trading activity from these
Participants will draw a greater amount
of BOX system resources than that of
non-professional, Public Customers.
Because this higher level of trading
activity will result in greater ongoing
operational costs, the Exchange aims to
recover its costs by assessing
Professional Customers and Broker
Dealers higher fees for transactions.
The Exchange also believes it is
equitable and not unfairly
discriminatory for BOX Market Makers
to be assessed lower fees than
7 See Section B of the PHLX Pricing Schedule
entitled ‘‘Customer Rebate Program;’’ ISE Gemini’s
Qualifying Tier Thresholds (page 6 of the ISE
Gemini Fee Schedule); and CBOE’s Volume
Incentive Program (VIP).
8 Comparative Complex Order fees at another
exchanges [sic] range from $0.30 [sic] to $0.88. See
Section II of the International Securities Exchange
(‘‘ISE’’) Schedule of Fees entitled ‘‘Complex Order
Fees and Rebates.’’
PO 00000
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asabaliauskas on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 81, No. 92 / Thursday, May 12, 2016 / Notices
Professional Customers and Broker
Dealers for certain Complex Order
executions because of the significant
contributions to overall market quality
that Market Makers provide.
Specifically, Market Makers can provide
higher volumes of liquidity and
lowering their fees will help attract a
higher level of Market Maker order flow
to the BOX Book and create liquidity,
which the Exchange believes will
ultimately benefit all Participants
trading on BOX. As such, the Exchange
believes it is appropriate that Market
Makers be charged lower transaction
fees than Professional Customers and
Broker Dealers for certain Complex
Order executions.
The Exchange also believes it is
reasonable, equitable and not unfairly
discriminatory to charge Non-Public
Customers a higher fee when their
Complex Order interacts with a Public
Customer’s Complex Order, when
compared to the fee assessed when their
Complex Order interacts with a NonPublic Customer’s Complex Order. To
attract Public Customer order flow,
Public Customers are given credit when
their Complex Order executes against a
non-Public Customer. The securities
markets generally, and BOX in
particular, have historically aimed to
improve markets for investors and
develop various features within the
market structure for Public Customer
benefit. Similar to payment for order
flow and other pricing models that have
been adopted by the Exchange and other
exchanges to attract Public Customer
order flow, the Exchange increases fees
to non-Public Customers to provide
incentives for Public Customers. The
Exchange believes that providing
incentives for Complex Orders by Public
Customers is reasonable and, ultimately,
will benefit all Participants trading on
the Exchange by attracting Public
Customer order flow.
Finally, the Exchange also believes it
is reasonable to charge Professional
Customers, Broker Dealers, and Market
Makers less for certain executions in
Penny Pilot issues compared to NonPenny Pilot issues because these classes
are typically more actively traded;
assessing lower fees will further
incentivize order flow in Penny Pilot
issues on the Exchange, ultimately
benefiting all Participants trading on
BOX.
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
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17:02 May 11, 2016
Jkt 238001
Exchange is simply proposing to reduce
PIP and COPIP Order fees and establish
a new qualification tier in the BVR. The
Exchange believes doing so will
increase intermarket and intramarket
competition by incenting Participants to
direct their order flow to the exchange,
which benefits all participants by
providing more trading opportunities
and improves competition on the
Exchange. The Exchange also believes
amending certain Complex Order fees
and credits will enhance competition
between exchanges because it is
designed to allow the Exchange to better
compete with other exchanges for
Complex Order flow.
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 9 and
Rule 19b–4(f)(2) thereunder,10 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 rule-comments@
sec.gov. Please include File Number SR–
BOX–2016–21 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–2016–21. 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–
2016–21, and should be submitted on or
before June 2, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–11153 Filed 5–11–16; 8:45 am]
BILLING CODE 8011–01–P
U.S.C. 78s(b)(3)(A)(ii).
10 17 CFR 240.19b–4(f)(2).
9 15
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11 17
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CFR 200.30–3(a)(12).
12MYN1
]]>Agencies
[Federal Register Volume 81, Number 92 (Thursday, May 12, 2016)]
[Notices]
[Pages 29584-29587]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11153]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77778; File No. SR-BOX-2016-21]
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
May 6, 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 April 29, 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).
---------------------------------------------------------------------------
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 on
the BOX Market LLC (``BOX'') options facility. While changes to the fee
schedule pursuant to this proposal will be effective upon filing, the
changes will become operative on May 2, 2016. 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 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.
[[Page 29585]]
PIP and COPIP Transactions
The Exchange first proposes to amend certain PIP and COPIP
Transaction fees for Professional Customers, Broker Dealer and Market
Makers in Section I.B of the BOX Fee Schedule. Specifically, the
Exchange proposes to reduce the PIP and COPIP Order fees for
Professional Customers and Broker Dealers from $0.37 to $0.15 and the
PIP and COPIP Order Fees for Market Makers from $0.20 to $0.15.
The revised pricing structure for PIP and COPIP Transactions will
be as follows:
----------------------------------------------------------------------------------------------------------------
Account type
-------------------------------------------------------------------------------
Professional
Public customer customer Broker dealer Market maker
----------------------------------------------------------------------------------------------------------------
PIP Order or COPIP Order........ $0.00............. $0.15............. $0.15............. $0.15.
Improvement Order in PIP or 0.15.............. 0.37.............. 0.37.............. 0.30.
COPIP.
Primary Improvement Order....... See Section I. B.1 See Section I. B.1 See Section I. B.1 See Section I.
B.1.
----------------------------------------------------------------------------------------------------------------
The Exchange also proposes to make a clerical correction to Section
I.B. of the BOX Fee Schedule. Specifically, the Primary Improvement
Order row references ADV (Average Daily Volume). The Exchange no longer
uses a Participant's ADV to determine volume based tiers for rebates
and fees. Instead, the qualification thresholds are based on a
percentage of the Participant's volume relative to the account type's
overall total industry equity and ETF option volume. Therefore, the
Exchange proposes to remove the reference ADV and only refer to Section
I.B.1.
BVR
Under the BVR, the Exchange offers a tiered per contract rebate for
all PIP Orders and COPIP orders of 100 contracts and under that do not
trade solely with their contra order. 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 establish an additional tier within the
BVR for percentage thresholds of 1.250% and above. Participants whose
PIP and COPIP volume submitted to BOX, relative to the total national
Customer volume in multiply-listed options classes, is 1.250% or above
will receive a per contract rebate of $0.18 in PIP transactions and
$0.06 in COPIP transactions. With this, the Exchange also proposes to
adjust the threshold in Tier 4 to end at 1.249%.
The new BVR set forth in Section I.B.2 of the BOX Fee Schedule will
be as follows:
----------------------------------------------------------------------------------------------------------------
Percentage thresholds of Per contract rebate (all
national customer volume in account types)
Tier multiply-listed options classes -------------------------------
(monthly) PIP COPIP
----------------------------------------------------------------------------------------------------------------
1............................................. 0.000% to 0.159%................ ($0.00) ($0.00)
2............................................. 0.160% to 0.339%................ (0.04) (0.02)
3............................................. 0.340% to 0.999%................ (0.11) (0.04)
4............................................. 1.000% to 1.249%................ (0.14) (0.06)
5............................................. 1.250% and Above................ (0.18) (0.06)
----------------------------------------------------------------------------------------------------------------
Complex Orders
The Exchange then proposes to adjust certain fees within the
Complex Order Pricing Structure in Section III.A. of the BOX Fee
Schedule (All Complex Orders). The Exchange recently introduced a
pricing structure where Complex Orders are assessed transaction fees
and credits dependent upon three factors: (i) The account type of the
Participant submitting the order; (ii) whether the Participant is a
liquidity provider or liquidity taker; and (iii) the account type of
the contra party.\5\
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\5\ See Securities Exchange Act Release No. 77568 (April 8,
2016), 81 FR 22151 (April 14, 2016) (SR-BOX-2016-15).
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The Exchange now proposes to adjust certain fees and rebates within
the new pricing structure. Specifically, the Exchange proposes to
replace the $0.10 credit applied to Market Makers, Professional
Customer and Broker Dealers making liquidity against a Public Customer
in Penny Pilot Classes. The Exchange proposes to instead assess
Professional Customers or Broker Dealers $0.45 and Market Makers $0.40
when their Penny Pilot Complex Order makes liquidity against a Public
Customer Complex Order.
For Complex Orders in Non-Penny Pilot Classes, the Exchange
proposes to replace the $0.10 credit applied to Market Makers,
Professional Customer and Broker Dealers making liquidity against a
Public Customer. The Exchange proposes to instead assess Professional
Customers and Broker Dealers $0.80 and Market Makers $0.75 when their
Non-Penny Pilot Complex Order makes liquidity against a Public Customer
Complex Order.
The revised Complex Order Pricing Structure will be as follows:
[[Page 29586]]
----------------------------------------------------------------------------------------------------------------
Penny pilot classes Non-penny pilot classes
---------------------------------------------------------------
Account type Contra party Maker fee/ Taker fee/ Maker fee/ Taker fee/
credit credit credit credit
----------------------------------------------------------------------------------------------------------------
Public Customer............... Public Customer. $0.00 $0.00 $0.00 $0.00
Professional (0.35) (0.35) (0.70) (0.70)
Customer/Broker
Dealer.
Market Maker.... (0.35) (0.35) (0.70) (0.70)
Professional Customer or Public Customer. 0.45 0.45 0.80 0.80
Broker Dealer.
Professional (0.10) 0.30 (0.10) 0.45
Customer/Broker
Dealer.
Market Maker.... (0.10) 0.30 (0.10) 0.45
Market Maker.................. Public Customer. 0.40 0.40 0.75 0.75
Professional (0.10) 0.30 (0.10) 0.45
Customer/Broker
Dealer.
Market Maker.... (0.10) 0.30 (0.10) 0.45
----------------------------------------------------------------------------------------------------------------
For example, if a Market Maker's Complex Order in a Penny Pilot
Class interacted with a Public Customer's Complex Order, regardless of
whether the Complex Order was making or taking liquidity, the Market
Maker would now be charged $0.40 and the Public Customer would be
credited $0.35.
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,\6\ 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.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange believes that reducing the PIP and COPIP Order Fees to
$0.15 for Market Makers, Professional Customers and Broker Dealers is
reasonable. Reducing these fees is meant to encourage auction order
flow to the Exchange, which will benefit all market participants on the
Exchange. BOX believes the $0.15 fee is equitable and not unfairly
discriminatory, as it applies to all Market Marker, Professional
Customers and Broker Dealers submitting PIP and COPIP Orders to these
auction mechanisms. Further, the Exchange believes it is equitable and
not unfairly discriminatory to charge Public Customers less than Non-
Public Customers for their PIP and COPIP Orders. The practice of
incentivizing increased Public Customer order flow is common in the
options markets.
The Exchange believes the proposed amendments to the BVR in Section
I.B.2 of the BOX Fee Schedule are reasonable, equitable and non-
discriminatory. The BVR was adopted to attract Public Customer order
flow to the Exchange by offering these Participants incentives to
submit their PIP and COPIP Orders to the Exchange and the Exchange
believes it is appropriate to now amend the BVR. The Exchange believes
it is equitable and not unfairly discriminatory to establish an
additional tier within the BVR, as all Participants have the ability to
qualify for a rebate, and rebates are provided equally to qualifying
Participants. Finally, the Exchange believes it is reasonable and
appropriate to continue to provide incentives for Public Customers,
which will result in greater liquidity and ultimately benefit all
Participants trading on the Exchange.
BOX believes it is reasonable, equitable and not unfairly
discriminatory to adjust the monthly Percentage Thresholds of National
Customer Volume in Multiply-Listed Options Classes. The volume
thresholds and applicable rebates are meant to incentivize Participants
to direct order flow to the Exchange to obtain the benefit of the
rebate, which will in turn benefit all market participants by
increasing liquidity on the Exchange. Other exchanges employ similar
incentive programs,\7\ and the Exchange believes that the proposed
changes to the volume thresholds and rebates are reasonable and
competitive when compared to incentive structures at other exchanges.
---------------------------------------------------------------------------
\7\ See Section B of the PHLX Pricing Schedule entitled
``Customer Rebate Program;'' ISE Gemini's Qualifying Tier Thresholds
(page 6 of the ISE Gemini Fee Schedule); and CBOE's Volume Incentive
Program (VIP).
---------------------------------------------------------------------------
The Exchange believes amending the Complex Order pricing structure
is reasonable, equitable and not unfairly discriminatory. The fee
structure for Complex Orders was recently adopted and the Exchange
believes it is now appropriate to adjust certain fees and credits. The
Complex Order fee structure is generally intended to attract order flow
to the Exchange by offering all market participants incentives to
submit their Complex Orders to the Exchange.
The Exchange believes that the proposed fees for Professional
Customers, Broker Dealers and Market Makers interacting with Public
Customer Complex Orders are reasonable. A Professional Customer or
Broker Dealer interacting against a Public Customer will now be charged
$0.45 in Penny Pilot Classes and $0.80 Non-Penny Pilot Classes,
regardless if it is making or taking liquidity. A Market Maker
interacting against a Public Customer will now be charged $0.40 in
Penny Pilot Classes and $0.75 Non-Penny Pilot Classes, regardless of
whether it is making or taking liquidity. The Exchange believes these
proposed Complex Order fees remain competitive when compared to the
Complex Order fees on another exchange.\8\
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\8\ Comparative Complex Order fees at another exchanges [sic]
range from $0.30 [sic] to $0.88. See Section II of the International
Securities Exchange (``ISE'') Schedule of Fees entitled ``Complex
Order Fees and Rebates.''
---------------------------------------------------------------------------
The Exchange believes that charging Professional Customers and
Broker Dealers higher fees than Public Customers for Complex Orders is
equitable and not unfairly discriminatory. Professional Customers,
while Public Customers by virtue of not being Broker Dealers, generally
engage in trading activity more similar to Broker Dealer proprietary
trading accounts (submitting more than 390 standard orders per day on
average). The Exchange believes that the higher level of trading
activity from these Participants will draw a greater amount of BOX
system resources than that of non-professional, Public Customers.
Because this higher level of trading activity will result in greater
ongoing operational costs, the Exchange aims to recover its costs by
assessing Professional Customers and Broker Dealers higher fees for
transactions.
The Exchange also believes it is equitable and not unfairly
discriminatory for BOX Market Makers to be assessed lower fees than
[[Page 29587]]
Professional Customers and Broker Dealers for certain Complex Order
executions because of the significant contributions to overall market
quality that Market Makers provide. Specifically, Market Makers can
provide higher volumes of liquidity and lowering their fees will help
attract a higher level of Market Maker order flow to the BOX Book and
create liquidity, which the Exchange believes will ultimately benefit
all Participants trading on BOX. As such, the Exchange believes it is
appropriate that Market Makers be charged lower transaction fees than
Professional Customers and Broker Dealers for certain Complex Order
executions.
The Exchange also believes it is reasonable, equitable and not
unfairly discriminatory to charge Non-Public Customers a higher fee
when their Complex Order interacts with a Public Customer's Complex
Order, when compared to the fee assessed when their Complex Order
interacts with a Non-Public Customer's Complex Order. To attract Public
Customer order flow, Public Customers are given credit when their
Complex Order executes against a non-Public Customer. The securities
markets generally, and BOX in particular, have historically aimed to
improve markets for investors and develop various features within the
market structure for Public Customer benefit. Similar to payment for
order flow and other pricing models that have been adopted by the
Exchange and other exchanges to attract Public Customer order flow, the
Exchange increases fees to non-Public Customers to provide incentives
for Public Customers. The Exchange believes that providing incentives
for Complex Orders by Public Customers is reasonable and, ultimately,
will benefit all Participants trading on the Exchange by attracting
Public Customer order flow.
Finally, the Exchange also believes it is reasonable to charge
Professional Customers, Broker Dealers, and Market Makers less for
certain executions in Penny Pilot issues compared to Non-Penny Pilot
issues because these classes are typically more actively traded;
assessing lower fees will further incentivize order flow in Penny Pilot
issues on the Exchange, ultimately benefiting all Participants trading
on BOX.
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 is simply
proposing to reduce PIP and COPIP Order fees and establish a new
qualification tier in the BVR. The Exchange believes doing so will
increase intermarket and intramarket competition by incenting
Participants to direct their order flow to the exchange, which benefits
all participants by providing more trading opportunities and improves
competition on the Exchange. The Exchange also believes amending
certain Complex Order fees and credits will enhance competition between
exchanges because it is designed to allow the Exchange to better
compete with other exchanges for Complex Order flow.
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 \9\ and Rule 19b-4(f)(2)
thereunder,\10\ because it establishes or changes a due, or fee.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 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-2016-21 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-2016-21. 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-2016-21, and should be
submitted on or before June 2, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-11153 Filed 5-11-16; 8:45 am]
BILLING CODE 8011-01-P
