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, 50777-50780 [2016-18205]
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Federal Register / Vol. 81, No. 148 / Tuesday, August 2, 2016 / Notices
filing will also 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–
NYSEArca–2016–101 and should be
submitted on or before August 23, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.34
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–18204 Filed 8–1–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–78427; File No. SR–BOX–
2016–34]
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
July 27, 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 July 18,
2016, BOX Options Exchange LLC (the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Exchange filed the proposed rule change
pursuant to Section 19(b)(3)(A)(ii) of the
Act,3 and Rule 19b–4(f)(2) thereunder,4
which renders the proposal effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange is filing with the
Securities and Exchange Commission
(‘‘Commission’’) a proposed rule change
to amend the Fee Schedule to 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 August 1, 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 make a
number of changes to the BOX Fee
Schedule.
Exchange Fees
PIP and COPIP Transactions
The Exchange proposes to remodel
the current fee structure for PIP and
COPIP Transactions. Currently, PIP and
COPIP transactions are assessed fees
based upon the account type of the
Participant and whether the order is a:
(i) PIP or COPIP Order; (ii) Improvement
Order in PIP or COPIP; or (iii) Primary
Improvement Order. The current PIP
and COPIP Transactions fee structure is
as follows:
Account type
Public customer
PIP Order or COPIP Order 5 ....................
Improvement Order in PIP or COPIP 6 .....
Primary Improvement Order 7 ...................
Professional
customer
Broker dealer
$0.00 ...........................
$0.15 ...........................
See Section I. B.1 .......
$0.15 ...........................
$0.37 ...........................
See Section I. B.1 .......
$0.15 ...........................
$0.37 ...........................
See Section I. B.1 .......
mstockstill on DSK3G9T082PROD with NOTICES
First, the Exchange proposes to
restructure the PIP and COPIP
Transactions fee schedule to
differentiate between fees assessed in
Penny and Non-Penny Pilot Classes.
Next, the Exchange proposes to adjust
the Improvement Order fees assessed for
Broker Dealers, Professional Customers
34 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17
CFR 240.19b–4(f)(2).
PIP Order or COPIP Order is a Customer
Order (an agency order for the account of either a
customer or a broker-dealer) designated for the PIP
or COPIP, respectively.
5A
1 15
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18:35 Aug 01, 2016
and Market Makers. Specifically, the
Exchange proposes to establish a fee of
$0.12 for Broker Dealers, Professional
Customer and Market Maker
Improvement Orders in Penny Pilot
Classes. For Improvement Orders in
Non-Penny Pilot Classes, the Exchange
proposes to establish a fee of $0.38 for
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Market maker
$0.15.
$0.30.
See Section I. B.1.
Market Makers, Broker Dealers and
Professional Customers. Public
Customer Improvement Order fees will
remain the same, as well as the PIP and
COPIP Order fees for all Participants.
The proposed PIP and COPIP fee
structure will be as follows:
6 An Improvement Order is a response to a PIP
or COPIP auction.
7 A Primary Improvement Order is the matching
contra order submitted to the PIP or COPIP on the
opposite side of the PIP or COPIP order.
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Federal Register / Vol. 81, No. 148 / Tuesday, August 2, 2016 / Notices
PIP and COPIP orders 8
Account type
Penny pilot
classes
Public Customer ..............................................................................................
Professional Customer or Broker Dealer .........................................................
Market Maker ...................................................................................................
The Exchange is also proposing to
remove the Primary Improvement Order
row in the schedule which references
the Tiered Fee Schedule for Initiating
Participants in Section 1.B.1 as well as
amend the footnotes in the PIP and
COPIP Transactions subsection to reflect
to revised fee structure.
Tiered Fee Schedule for Initiating
Participants
The Exchange proposes to rename
Section I.B.1 from ‘‘Tiered Fee Schedule
for Initiating Participants’’ to ‘‘Primary
.......................................................
.......................................................
.......................................................
.......................................................
.......................................................
0.000%
0.160%
0.340%
1.000%
1.250%
First, the Exchange is proposing to
lower the per contract rebate for PIP and
COPIP Orders of 100 and under that
trade solely with their contra order.
Specifically, the Exchange is proposing
.......................................................
.......................................................
.......................................................
.......................................................
.......................................................
0.000%
0.160%
0.340%
1.000%
1.250%
Liquidity Fees and Credits
mstockstill on DSK3G9T082PROD with NOTICES
Improvement Order’’ to clarify that this
section reflects the per contract
execution fees for Primary Improvement
Orders. The Exchange is also proposing
to amend the footnotes in proposed
Section I.B.1 to include the definition of
a Primary Improvement Order.
BOX Volume Rebate
The Exchange proposes to amend the
BOX Volume Rebate (‘‘BVR’’) in Section
I.B.2 of the Fee Schedule.
Under the current BVR, the Exchange
offers a tiered per contract rebate for all
Non-penny
pilot classes
$0.15
0.12
0.12
$0.15
0.38
0.38
PIP Orders and COPIP Orders of 100
contracts and under. PIP and COPIP
executions of 100 contracts and under
are awarded a per contract rebate
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
current per contract rebate for
Participants in PIP and COPIP
Transactions under the BVR is:
Per contract rebate
(all account types)
PIP
to 0.159% .....................................................................................
to 0.339% .....................................................................................
to 0.999% .....................................................................................
to 1.249% .....................................................................................
and Above ....................................................................................
to lower the rebate to $0.03 per contract
from $0.05 per contract. Next, the
Exchange proposes to lower the per
contract rebates associated with each
volume tier in PIP transactions. The per
Penny pilot
classes
$0.00
0.15
0.15
COPIP
($0.00)
($0.04)
($0.11)
($0.14)
($0.18)
($0.00)
($0.02)
($0.04)
($0.06)
($0.06)
contract rebates associated with COPIP
Orders remain unchanged. The new
BVR set forth in Section I.B.2 of the
BOX Fee Schedule will be as follows:
Per contract rebate
(all account types)
Percentage thresholds of national customer volume
in multiply-listed options classes
(monthly)
Tier
1
2
3
4
5
$0.00
0.15
0.15
Percentage thresholds of national customer volume in
multiply-listed options classes
(monthly)
Tier
1
2
3
4
5
Non-penny
pilot classes
Improvement orders 9
PIP
to 0.159% .....................................................................................
to 0.339% .....................................................................................
to 0.999% .....................................................................................
to 1.249% .....................................................................................
and Above ....................................................................................
($0.00)
($0.02)
($0.04)
($0.07)
($0.10)
COPIP
($0.00)
($0.02)
($0.04)
($0.06)
($0.06)
The Exchange then proposes to
amend Section II.A. of the BOX Fee
Schedule, liquidity fees and credits for
PIP and COPIP transactions.
Specifically, the Exchange proposes to
increase the fees and credits for PIP and
COPIP transactions in Penny and NonPenny Pilot Classes. The Exchange
proposes to raise the fees for adding
liquidity in PIP and COPIP Transactions
to $0.77 from $0.75 in Non-Penny Pilot
Classes, and to $0.38 from $0.35 in
Penny Pilot Classes. The Exchange also
proposes to increase the credits for
removing liquidity in PIP and COPIP
Transactions. Specifically, the Exchange
proposes to increase the credit to $0.77
from $0.75 in Non-Penny Pilot Classes,
and to $0.38 from $0.35 in Penny Pilot
Classes.
Lastly, the Exchange also proposes to
make non-substantive technical chances
8 A PIP Order or COPIP Order is a Customer
Order (an agency order for the account of either a
customer or a broker-dealer) designated for the PIP
or COPIP, respectively.
9 An Improvement Order is a response to a PIP
or COPIP auction.
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18:35 Aug 01, 2016
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Federal Register / Vol. 81, No. 148 / Tuesday, August 2, 2016 / Notices
[sic] to renumber the footnotes within
the BOX Fee Schedule.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the Act,
in general, and Section 6(b)(4) and
6(b)(5)of the Act,10 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.
Exchange Fees
PIP and COPIP Transactions
The Exchange believes that
remodeling the fee structure for PIP and
COPIP Transactions is reasonable,
equitable, and not unfairly
discriminatory. In particular, the
proposed revisions will allow the
Exchange to apply separate fees for
transactions in Penny and Non-Penny
Pilot Classes, a distinction that is made
in many other section [sic] of the BOX
Fee Schedule, including Section I.A
(Non-Auction Transactions) and Section
III.A (All Complex Orders).
The Exchange also believes the
proposed fees for Broker Dealers,
Professional Customer and Market
Makers submitting Improvement Orders
in Penny and Non-Penny Pilot classes
are reasonable equitable and not
unfairly discriminatory. Professional
Customers and Broker Dealers are
currently charged a flat fee of $0.37 for
Improvement Orders, while Market
Makers are charged a flat fee of $0.30.
The proposal lowers the Improvement
Order fees for these Participants to $0.12
for Penny Pilot Classes, while slightly
raising the fee for Non-Penny Pilot
Classes to $0.38. The Exchange believes
these fees are reasonable as they are in
line with other exchanges in the
industry.11
mstockstill on DSK3G9T082PROD with NOTICES
Tiered Fee Schedule for Initiating
Participants
The Exchange believes that the
proposal to rename sections [sic] I.B.1 to
‘‘Primary Improvement Order is
reasonable equitable and not unfairly
discriminatory, as it will provide further
clarity to the fee schedule and will
eliminate any potential investor
confusion.
10 15
U.S.C. 78f(b)(4) and (5).
NASDAQ OMX PHLX, (‘‘PHLX’’) Pricing
Schedule, where Responders to the PIXL are
charged $0.25.
11 See
VerDate Sep<11>2014
18:35 Aug 01, 2016
Jkt 238001
BOX Volume Rebate
The Exchange believes the proposed
changes to the BVR 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. The Exchange believes
providing a rebate to Participants that
reach a certain volume threshold is
equitable and non-discriminatory as the
rebate will apply to all Participants
uniformly.
The Exchange believes it is
reasonable, equitable and nondiscriminatory to reduce the flat rebate
in the BVR for PIP Orders and COPIP
Orders of 100 and under contracts that
trade solely with their contra order. The
Exchange recently amended the BVR to
introduce the flat $0.05 rebate,
regardless of tier.12 The Exchange now
believes it is reasonable to lower the flat
rebate to $0.03 per contract, regardless
of tier. The BVR is intended to
incentivize Participants to direct
Customer order flow to the Exchange,
and while the Exchange believes that
the potentially higher BVR rebate tiers
are not necessary for internalized PIP
Orders that only trade against their
contra order, a flat $0.03 rebate will
continue to be the appropriate incentive
for these orders. The Exchange also
believes that the proposed flat $0.03
rebate for internalized COPIP Orders
that only trade against their contra order
will continue to be a reasonable
incentive.
The Exchange believes that lowering
the rebates associated with each volume
tier for PIP transactions is reasonable.
Once the volume threshold is met the
Exchange will continue to pay rebates
on applicable PIP Orders. The Exchange
also believes the proposed rebates are
equitable and not unfairly
discriminatory because Participants are
eligible to receive the rebate provided
they meet the volume and order type
requirements. The Exchange believes
that applying the rebate to PIP Orders
will continue to provide these
Participants with an added incentive to
transact a greater number of Public
Customer Orders on the Exchange to the
benefit of all market participants.
Liquidity Fees and Credits
BOX believes that the changes to PIP
and COPIP transaction liquidity fees
and credits are equitable and not
unfairly discriminatory in that they
12 See Securities Exchange Release No. 77694
(April 22, 2016), 81 FR 25460 (April 28, 2016)
(Notice of Filing and Immediate Effectiveness SR–
BOX–2016–17).
PO 00000
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50779
apply to all categories of participants
and across all account types. The
Exchange notes that liquidity fees and
credits on BOX are meant to offset one
another in any particular transaction.
The liquidity fees and credits do not
directly result in revenue to BOX, but
simply allow BOX to provide incentives
to Participants to attract order flow. The
Exchange also believes the liquidity fees
and credits are reasonable and
competitive when compared to similar
fees at competing venues.
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 proposed fee
changes are reasonably designed to
enhance competition in BOX
transactions, particularly auction
transactions.
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 13
and Rule 19b–4(f)(2) thereunder,14
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:
13 15
14 17
E:\FR\FM\02AUN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
02AUN1
50780
Federal Register / Vol. 81, No. 148 / Tuesday, August 2, 2016 / Notices
Electronic Comments
SMALL BUSINESS ADMINISTRATION
• 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–2016–34 on the subject line.
Paper Comments
mstockstill on DSK3G9T082PROD with NOTICES
All submissions should refer to File
Number SR–BOX–2016–34. 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–
2016–34, and should be submitted on or
before August 23, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–18205 Filed 8–1–16; 8:45 am]
BILLING CODE 8011–01–P
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
20:32 Aug 01, 2016
North Carolina Disaster # NC–00075
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
This is a notice of an
Administrative declaration of a disaster
for the State of North Carolina dated 07/
26/2016.
Incident: High Winds, Flooding and
Severe Storms.
Incident Period: 07/16/2016.
DATES: Effective Date: 07/26/2016.
Physical Loan Application Deadline
Date: 09/26/2016.
Economic Injury (EIDL) Loan
Application Deadline Date: 04/26/2017.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
Administrator’s disaster declaration,
applications for disaster loans may be
filed at the address listed above or other
locally announced locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Durham.
Contiguous Counties:
North Carolina: Chatham, Granville,
Orange, Person, Wake.
The Interest Rates are:
SUMMARY:
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
15 17
[Disaster Declaration # 14784 and # 14785]
Jkt 238001
For Physical Damage:
Homeowners With Credit Available Elsewhere ......................
Homeowners Without Credit
Available Elsewhere ..............
Businesses With Credit Available Elsewhere ......................
Businesses
Without
Credit
Available Elsewhere ..............
Non-Profit Organizations With
Credit Available Elsewhere ...
Non-Profit Organizations Without Credit Available Elsewhere .....................................
For Economic Injury:
Businesses & Small Agricultural
Cooperatives Without Credit
Available Elsewhere ..............
Non-Profit Organizations Without Credit Available Elsewhere .....................................
PO 00000
Frm 00099
Fmt 4703
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The number assigned to this disaster
for physical damage is 14784 B and for
economic injury is 14785 0.
The States which received an EIDL
Declaration # are NORTH CAROLINA.
Dated: July 26, 2016.
Maria Contreras-Sweet,
Administrator.
[FR Doc. 2016–18274 Filed 8–1–16; 8:45 am]
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
Announcement of Funding Pool Size
for the Growth Accelerator Fund
Competition
U.S. Small Business
Administration
ACTION: Notice.
AGENCY:
On May 4, 2016, the U.S.
Small Business Administration (SBA)
published a notice in the Federal
Register (81 FR 26861) to announce the
2016 Growth Accelerator Fund
Competition, pursuant to the America
Competes Act (15 U.S.C. 3719), to
identify the nation’s most innovative
accelerators and similar organizations
and award them cash prizes they may
use to fund their operations costs and
allow them to bring startup companies
to scale and new ideas to life, including
providing assistance to small businesses
submitting proposals through the Small
Business Innovation Research and/or
Small Business Technology Transfer
Programs (SBIR/STTR). In partnership
with several U.S. agencies, SBA will be
awarding prizes to winners from a total
funding pool size of up to $3.4 million.
The $50,000 prize to each winner will
be paid from the total funding pool,
Percent
including SBA’s appropriated funds,
and will be provided to each winner via
check. This notice serves as an update
3.250 to the original notice affecting only the
funding pool size of prizes to be
1.625 awarded to competition winners. All
rules and requirements outlined in the
6.250 May 4, 2016, Federal Register notice
will remain in effect.
SUMMARY:
4.000
2.625
2.625
4.000
2.625
Competition Details
• Prizes for Winners: SBA is
partnering with the National Institutes
of Health (NIH), the National Science
Foundation (NSF), and the Department
of Education (DoED) to create a total
funding pool size of up to $3.4 million
to provide additional prizes to
accelerators that assist entrepreneurs in
submitting SBIR/STTR proposals.
Special consideration will be given to
E:\FR\FM\02AUN1.SGM
02AUN1
]]>Agencies
[Federal Register Volume 81, Number 148 (Tuesday, August 2, 2016)]
[Notices]
[Pages 50777-50780]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18205]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-78427; File No. SR-BOX-2016-34]
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
July 27, 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 July 18, 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 to 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 August 1, 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 make a number of changes to the BOX Fee
Schedule.
Exchange Fees
PIP and COPIP Transactions
The Exchange proposes to remodel the current fee structure for PIP
and COPIP Transactions. Currently, PIP and COPIP transactions are
assessed fees based upon the account type of the Participant and
whether the order is a: (i) PIP or COPIP Order; (ii) Improvement Order
in PIP or COPIP; or (iii) Primary Improvement Order. The current PIP
and COPIP Transactions fee structure is as follows:
----------------------------------------------------------------------------------------------------------------
Account type
-------------------------------------------------------------------------------
Professional
Public customer customer Broker dealer Market maker
----------------------------------------------------------------------------------------------------------------
PIP Order or COPIP Order \5\.... $0.00............. $0.15............. $0.15............. $0.15.
Improvement Order in PIP or $0.15............. $0.37............. $0.37............. $0.30.
COPIP \6\.
Primary Improvement Order \7\... See Section I. B.1 See Section I. B.1 See Section I. B.1 See Section I.
B.1.
----------------------------------------------------------------------------------------------------------------
First, the Exchange proposes to restructure the PIP and COPIP
Transactions fee schedule to differentiate between fees assessed in
Penny and Non-Penny Pilot Classes. Next, the Exchange proposes to
adjust the Improvement Order fees assessed for Broker Dealers,
Professional Customers and Market Makers. Specifically, the Exchange
proposes to establish a fee of $0.12 for Broker Dealers, Professional
Customer and Market Maker Improvement Orders in Penny Pilot Classes.
For Improvement Orders in Non-Penny Pilot Classes, the Exchange
proposes to establish a fee of $0.38 for Market Makers, Broker Dealers
and Professional Customers. Public Customer Improvement Order fees will
remain the same, as well as the PIP and COPIP Order fees for all
Participants.
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\5\ A PIP Order or COPIP Order is a Customer Order (an agency
order for the account of either a customer or a broker-dealer)
designated for the PIP or COPIP, respectively.
\6\ An Improvement Order is a response to a PIP or COPIP
auction.
\7\ A Primary Improvement Order is the matching contra order
submitted to the PIP or COPIP on the opposite side of the PIP or
COPIP order.
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The proposed PIP and COPIP fee structure will be as follows:
[[Page 50778]]
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PIP and COPIP orders \8\ Improvement orders \9\
---------------------------------------------------------------
Account type Penny pilot Non-penny Penny pilot Non-penny
classes pilot classes classes pilot classes
----------------------------------------------------------------------------------------------------------------
Public Customer................................. $0.00 $0.00 $0.15 $0.15
Professional Customer or Broker Dealer.......... 0.15 0.15 0.12 0.38
Market Maker.................................... 0.15 0.15 0.12 0.38
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The Exchange is also proposing to remove the Primary Improvement
Order row in the schedule which references the Tiered Fee Schedule for
Initiating Participants in Section 1.B.1 as well as amend the footnotes
in the PIP and COPIP Transactions subsection to reflect to revised fee
structure.
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\8\ A PIP Order or COPIP Order is a Customer Order (an agency
order for the account of either a customer or a broker-dealer)
designated for the PIP or COPIP, respectively.
\9\ An Improvement Order is a response to a PIP or COPIP
auction.
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Tiered Fee Schedule for Initiating Participants
The Exchange proposes to rename Section I.B.1 from ``Tiered Fee
Schedule for Initiating Participants'' to ``Primary Improvement Order''
to clarify that this section reflects the per contract execution fees
for Primary Improvement Orders. The Exchange is also proposing to amend
the footnotes in proposed Section I.B.1 to include the definition of a
Primary Improvement Order.
BOX Volume Rebate
The Exchange proposes to amend the BOX Volume Rebate (``BVR'') in
Section I.B.2 of the Fee Schedule.
Under the current BVR, the Exchange offers a tiered per contract
rebate for all PIP Orders and COPIP Orders of 100 contracts and under.
PIP and COPIP executions of 100 contracts and under are awarded a per
contract rebate 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
current per contract rebate for Participants in PIP and COPIP
Transactions under the BVR is:
----------------------------------------------------------------------------------------------------------------
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)
----------------------------------------------------------------------------------------------------------------
First, the Exchange is proposing to lower the per contract rebate
for PIP and COPIP Orders of 100 and under that trade solely with their
contra order. Specifically, the Exchange is proposing to lower the
rebate to $0.03 per contract from $0.05 per contract. Next, the
Exchange proposes to lower the per contract rebates associated with
each volume tier in PIP transactions. The per contract rebates
associated with COPIP Orders remain unchanged. 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%................ ($0.02) ($0.02)
3............................................. 0.340% to 0.999%................ ($0.04) ($0.04)
4............................................. 1.000% to 1.249%................ ($0.07) ($0.06)
5............................................. 1.250% and Above................ ($0.10) ($0.06)
----------------------------------------------------------------------------------------------------------------
Liquidity Fees and Credits
The Exchange then proposes to amend Section II.A. of the BOX Fee
Schedule, liquidity fees and credits for PIP and COPIP transactions.
Specifically, the Exchange proposes to increase the fees and credits
for PIP and COPIP transactions in Penny and Non-Penny Pilot Classes.
The Exchange proposes to raise the fees for adding liquidity in PIP and
COPIP Transactions to $0.77 from $0.75 in Non-Penny Pilot Classes, and
to $0.38 from $0.35 in Penny Pilot Classes. The Exchange also proposes
to increase the credits for removing liquidity in PIP and COPIP
Transactions. Specifically, the Exchange proposes to increase the
credit to $0.77 from $0.75 in Non-Penny Pilot Classes, and to $0.38
from $0.35 in Penny Pilot Classes.
Lastly, the Exchange also proposes to make non-substantive
technical chances
[[Page 50779]]
[sic] to renumber the footnotes within the BOX Fee Schedule.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act, in general, and Section
6(b)(4) and 6(b)(5)of the Act,\10\ 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.
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\10\ 15 U.S.C. 78f(b)(4) and (5).
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Exchange Fees
PIP and COPIP Transactions
The Exchange believes that remodeling the fee structure for PIP and
COPIP Transactions is reasonable, equitable, and not unfairly
discriminatory. In particular, the proposed revisions will allow the
Exchange to apply separate fees for transactions in Penny and Non-Penny
Pilot Classes, a distinction that is made in many other section [sic]
of the BOX Fee Schedule, including Section I.A (Non-Auction
Transactions) and Section III.A (All Complex Orders).
The Exchange also believes the proposed fees for Broker Dealers,
Professional Customer and Market Makers submitting Improvement Orders
in Penny and Non-Penny Pilot classes are reasonable equitable and not
unfairly discriminatory. Professional Customers and Broker Dealers are
currently charged a flat fee of $0.37 for Improvement Orders, while
Market Makers are charged a flat fee of $0.30. The proposal lowers the
Improvement Order fees for these Participants to $0.12 for Penny Pilot
Classes, while slightly raising the fee for Non-Penny Pilot Classes to
$0.38. The Exchange believes these fees are reasonable as they are in
line with other exchanges in the industry.\11\
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\11\ See NASDAQ OMX PHLX, (``PHLX'') Pricing Schedule, where
Responders to the PIXL are charged $0.25.
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Tiered Fee Schedule for Initiating Participants
The Exchange believes that the proposal to rename sections [sic]
I.B.1 to ``Primary Improvement Order is reasonable equitable and not
unfairly discriminatory, as it will provide further clarity to the fee
schedule and will eliminate any potential investor confusion.
BOX Volume Rebate
The Exchange believes the proposed changes to the BVR 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. The Exchange believes providing a rebate to Participants that
reach a certain volume threshold is equitable and non-discriminatory as
the rebate will apply to all Participants uniformly.
The Exchange believes it is reasonable, equitable and non-
discriminatory to reduce the flat rebate in the BVR for PIP Orders and
COPIP Orders of 100 and under contracts that trade solely with their
contra order. The Exchange recently amended the BVR to introduce the
flat $0.05 rebate, regardless of tier.\12\ The Exchange now believes it
is reasonable to lower the flat rebate to $0.03 per contract,
regardless of tier. The BVR is intended to incentivize Participants to
direct Customer order flow to the Exchange, and while the Exchange
believes that the potentially higher BVR rebate tiers are not necessary
for internalized PIP Orders that only trade against their contra order,
a flat $0.03 rebate will continue to be the appropriate incentive for
these orders. The Exchange also believes that the proposed flat $0.03
rebate for internalized COPIP Orders that only trade against their
contra order will continue to be a reasonable incentive.
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\12\ See Securities Exchange Release No. 77694 (April 22, 2016),
81 FR 25460 (April 28, 2016) (Notice of Filing and Immediate
Effectiveness SR-BOX-2016-17).
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The Exchange believes that lowering the rebates associated with
each volume tier for PIP transactions is reasonable. Once the volume
threshold is met the Exchange will continue to pay rebates on
applicable PIP Orders. The Exchange also believes the proposed rebates
are equitable and not unfairly discriminatory because Participants are
eligible to receive the rebate provided they meet the volume and order
type requirements. The Exchange believes that applying the rebate to
PIP Orders will continue to provide these Participants with an added
incentive to transact a greater number of Public Customer Orders on the
Exchange to the benefit of all market participants.
Liquidity Fees and Credits
BOX believes that the changes to PIP and COPIP transaction
liquidity fees and credits are equitable and not unfairly
discriminatory in that they apply to all categories of participants and
across all account types. The Exchange notes that liquidity fees and
credits on BOX are meant to offset one another in any particular
transaction. The liquidity fees and credits do not directly result in
revenue to BOX, but simply allow BOX to provide incentives to
Participants to attract order flow. The Exchange also believes the
liquidity fees and credits are reasonable and competitive when compared
to similar fees at competing venues.
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
proposed fee changes are reasonably designed to enhance competition in
BOX transactions, particularly auction transactions.
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 \13\ and Rule 19b-4(f)(2)
thereunder,\14\ because it establishes or changes a due, or fee.
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\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
\14\ 17 CFR 240.19b-4(f)(2).
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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:
[[Page 50780]]
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-2016-34 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-2016-34. 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-2016-34, and should be
submitted on or before August 23, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Robert W. Errett,
Deputy Secretary.
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\15\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-18205 Filed 8-1-16; 8:45 am]
BILLING CODE 8011-01-P
