Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Expand the Execution Range for a Customer Cross Order, 18171-18173 [2017-07634]
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18171
Federal Register / Vol. 82, No. 72 / Monday, April 17, 2017 / Notices
Previous Requests for Comments: The
RRB has already published the initial
60-day notice (82 FR 9250 on February
3, 2017) required by 44 U.S.C.
3506(c)(2). That request elicited no
comments.
Information Collection Request (ICR)
Title: Self-Employment/Corporate
Officer Work and Earnings Monitoring.
OMB Control Number: 3220–0202.
Form(s) submitted: G–252.
Type of request: Extension without
change of a currently approved
collection.
Affected public: Individuals or
Households.
Abstract: To determine entitlement or
continued entitlement to a disability
annuity, the RRB will obtain
information from disability annuitants
who claim to be self-employed or a
corporate officer or who the RRB
determines to be self-employed or a
corporate officer after a continuing
disability review.
Changes proposed: The RRB proposes
no changes to Form G–252.
The burden estimate for the ICR is as
follows:
Annual
responses
Form number
Time
(minutes)
Burden
(hours)
G–252 ..........................................................................................................................................
100
20
33
Total ......................................................................................................................................
100
........................
33
Additional Information or Comments:
Copies of the forms and supporting
documents can be obtained from Dana
Hickman at (312) 751–4981 or
Dana.Hickman@RRB.GOV.
Comments regarding the information
collection should be addressed to Brian
Foster, Railroad Retirement Board, 844
North Rush Street, Chicago, Illinois
60611–1275 or Brian.Foster@rrb.gov and
to the OMB Desk Officer for the RRB,
Fax: 202–395–6974, Email address:
OIRA_Submission@omb.eop.gov.
Martha P. Rico,
Secretary to the Board.
BILLING CODE 7905–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80428; File No. SR–BOX–
2017–10]
Self-Regulatory Organizations; BOX
Options Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change to Expand
the Execution Range for a Customer
Cross Order
mstockstill on DSK30JT082PROD with NOTICES
April 11, 2017.
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 March 29,
2017, BOX Options Exchange LLC (the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
The Exchange proposes to expand the
execution range for a Customer Cross
Order. 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.
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization has
prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Same as Item 3a in the 19b–4 Purpose
section. [sic] Make sure all the footnotes
copy correctly. [sic] The Exchange
proposes to amend BOX Rule 7110(c)(5)
(Customer Cross Order) to expand the
execution range for a Customer Cross
Order. This is a competitive filing that
is based on the rules of another
exchange.3
3 See MIAX Rule 515(h)(1). The Exchange is not
copying all aspects of MIAX Rule 515(h)(1).
Specifically, BOX is not copying the references to
1 15
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
17:14 Apr 14, 2017
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2017–07632 Filed 4–14–17; 8:45 am]
VerDate Sep<11>2014
solicit comments on the proposed rule
change from interested persons.
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A Customer Cross Order is comprised
of a non-Professional, Public Customer
Order to buy and a non-Professional,
Public Customer Order to sell at the
same price and for the same quantity.4
Rule 7110(c)(5) provides that Customer
Cross Orders are automatically executed
upon entry provided that the execution
is between the best bid and offer on
BOX and will not trade through the
NBBO. Customer Cross Orders are
automatically canceled if they cannot be
executed. Customer Cross Orders may
only be entered in the regular trading
increments applicable to the options
classes under Rule 7050. IM–7140–1 5
applies to the entry and execution of
Customer Cross Orders.
The Exchange is now proposing to
expand the execution range for
Customer Cross Orders. Specifically, a
Customer Cross Order will
automatically execute if the execution
price is at or between the best bid and
offer on BOX, provided that it is not at
the same price as a Public Customer
Order on the BOX Book. This is
opposed to the current requirement that
the execution price be strictly between
the best bid and offer on BOX. The
a liquidity refresh pause or route timer because the
Exchange does not offer these functionalities.
4 See Rule 7110(c)(5).
5 This Rule prevents an Options Participant
executing agency orders to increase its economic
gain from trading against the order without first
giving other trading interest on BOX an opportunity
to trade with the agency order pursuant to Rule
7150 (Price Improvement Period), Rule 7245
(Complex Order Price Improvement Period) or Rule
7270 (Block Trades). However, the Exchange
recognizes that it may be possible for an Options
Participant to establish a relationship with a
Customer or other person (including affiliates) to
deny agency orders the opportunity to interact on
BOX and to realize similar economic benefits as it
would achieve by executing agency orders as
principal. It will be a violation of this Rule for an
Options Participant to circumvent this Rule by
providing an opportunity for a Customer or other
person (including affiliates) to execute against
agency orders handled by the Options Participant
immediately upon their entry into the Trading Host.
E:\FR\FM\17APN1.SGM
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18172
Federal Register / Vol. 82, No. 72 / Monday, April 17, 2017 / Notices
requirement that the Customer Cross
Order not trade through the NBBO will
remain the same. The Exchange notes
this is the same execution parameters of
another exchange.6
The following examples are designed
to illustrate the current behavior of a
Customer Cross Order in addition to
how a Customer Cross Order will
behave after the proposed change.
Example 1
3.13. The NBBO for ABC is 3.08–3.13.
The following interest is present on the
BOX Book when the Customer Cross
Order is received.
The Exchange receives a Customer
Cross Order for 100 contracts in ABC at
BOX BOOK FOR ABC
Account
Quantity
Buy
Sell
Quantity
Account
MM .......................................................................................
10
3.08
3.13
10
MM
Pursuant to Rule 7110(c)(5), the
Customer Cross Order would be rejected
because the execution price (3.13) is at
the best offer on the BOX Book, not
between the best bid and offer on BOX.
After the proposed change is
implemented, the Customer Cross Order
would be accepted. The Customer Cross
Order will execute at 3.13 because, after
the proposed change, a Customer Cross
Order can execute at a price at or
between the best bid and offer on BOX.
Additionally, the execution price of 3.13
will not trade through the NBBO.
mstockstill on DSK30JT082PROD with NOTICES
Example 2
Assume the same situation as
Example 1 with the exception that the
ABC sell order on the BOX Book is for
the account of a Public Customer not a
Market Maker. Pursuant to Rule
7110(c)(5), the Customer Cross Order
would be rejected because the execution
price (3.13) is at the best offer on the
BOX Book, not between the best bid and
offer on BOX. After the proposed change
is implemented, the Customer Cross
Order would still be rejected; however,
it would be due to the fact that there is
a Public Customer Order on the BOX
Book at the execution price, not because
the execution price is equal to the best
offer on the BOX Book.
Lastly, the Exchange proposes to
detail the additional circumstances of
when a Customer Cross Order is
rejected. Specifically, the Exchange will
reject a Customer Cross Order if there is
an ongoing auction 7 or an exposed
order on the option series. The
Exchange notes that this has been in
place on the Exchange for PIP and
exposed orders.8 BOX now proposes to
expand the rejection of Customer Cross
Orders to all ongoing auctions,
including COPIP, Facilitation and
Solicitation Auctions.
6 See
supra, note 3.
auction mechanisms include the Price
Improvement Period (‘‘PIP’’), Complex Order Price
Improvement Period (‘‘COPIP’’), Facilitation
Auction and Solicitation Auction.
7 BOX’s
VerDate Sep<11>2014
17:14 Apr 14, 2017
Jkt 241001
The Exchange anticipates
implementing the proposed change
during the second quarter of 2017. The
Exchange will provide notice of the
exact implementation date, via Circular,
prior to implementing the proposed
change.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),9 in general, and Section 6(b)(5)
of the Act,10 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general to protect investors and the
public interest. In particular, the
Exchange believes that the proposed
rule change to amend BOX Rule
7110(c)(5) to expand the execution
range of a Customer Cross Order on
BOX is designed to help BOX remain
competitive among options exchanges.
The proposal to expand the execution
range is designed to facilitate
transactions, to remove impediments to
and perfect the mechanism for a free
and open market to the benefit of market
participants by increasing opportunities
for Customer Cross Orders to execute on
the Exchange. Further, the Exchange
believes that the proposed change is
reasonable and appropriate as another
options exchange in the industry has a
similar rule currently in place at their
exchange.11
The Exchange believes that detailing
the additional circumstances for when a
8 See IC–2012–004 available at https://
boxexchange.com/assets/Informational_Circular_
2012-004_Customer_Cross_Orders.pdf. In this
Circular, BOX states that Customer Cross Orders are
not accepted on an option instrument while there
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
Customer Cross Order may be rejected is
reasonable and appropriate because it
will make clear to Participants these
circumstances and in turn will
eliminate any potential for investor
confusion.
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. In this regard
and as indicated above, the Exchange
notes that the rule change is being
proposed as a competitive response to
the rules of another exchange.12 The
Exchange does not believe the proposal
will impose any burden on intermarket
competition, as the proposed rule will
allow BOX to compete with other
options exchanges in the industry. The
Exchange notes that it operates in a
highly competitive market in which
market participants can readily direct
order flow to competing venues who
offer similar functionality.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change
does not (i) significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate if
is a PIP auction in progress or while an order is
being exposed for the same option instrument.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
11 See supra, note 3.
12 Id.
E:\FR\FM\17APN1.SGM
17APN1
Federal Register / Vol. 82, No. 72 / Monday, April 17, 2017 / Notices
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 13 and Rule 19b–4(f)(6)
thereunder.14
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
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–
2017–10, and should be submitted on or
before May 8, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–07634 Filed 4–14–17; 8:45 am]
BILLING CODE 8011–01–P
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–2017–10 on the subject line.
Paper Comments
mstockstill on DSK30JT082PROD with NOTICES
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–BOX–2017–10. 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
13 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission.
14 17
VerDate Sep<11>2014
17:14 Apr 14, 2017
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80429; File No. SR–ISE–
2017–30]
Self-Regulatory Organizations; Nasdaq
ISE, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Obvious
Errors
April 11, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 3,
2017, Nasdaq ISE, LLC (‘‘ISE’’ or
‘‘Exchange’’) 3 filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. 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 Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 720 (‘‘Current Rule’’), entitled
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 ISE was renamed Nasdaq ISE, LLC in a rule
change that became operative on April 3, 2017. See
Securities Exchange Act Release No. 80325 (March
29, 2017) (SR–ISE–2017–25).
18173
‘‘Nullification and Adjustment of
Options Transactions including Obvious
Errors’’ by adding a new Supplementary
Material .05 to Rule 720.
The text of the proposed rule change
is available on the Exchange’s Web site
at www.ise.com, at the principal office
of the Exchange, and at the
Commission’s Public Reference Room.
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
Last year, the Exchange and other
options exchanges adopted a new,
harmonized rule related to the
adjustment and nullification of
erroneous options transactions,
including a specific provision related to
coordination in connection with largescale events involving erroneous
options transactions.4 The Exchange
believes that the changes the options
exchanges implemented with the new,
harmonized rule have led to increased
transparency and finality with respect to
the adjustment and nullification of
erroneous options transactions.
However, as part of the initial initiative,
the Exchange and other options
exchanges deferred a few specific
matters for further discussion.
Specifically, the options exchanges
have been working together to identify
ways to improve the process related to
the adjustment and nullification of
erroneous options transactions as it
relates to complex orders 5 and stockoption orders. The goal of the process
that the options exchanges have
undertaken is to further harmonize rules
related to the adjustment and
nullification of erroneous options
transactions. As described below, the
1 15
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4 See Securities Exchange Act Release No. 76232
(October 22, 2015), 80 FR 66063 (October 28, 2015)
(SR–ISE–2015–34).
5 See Rule 722(a)(1) defining a complex order and
(a)(2) definition a stock-option order.
E:\FR\FM\17APN1.SGM
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]]>Agencies
[Federal Register Volume 82, Number 72 (Monday, April 17, 2017)]
[Notices]
[Pages 18171-18173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07634]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80428; File No. SR-BOX-2017-10]
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change to
Expand the Execution Range for a Customer Cross Order
April 11, 2017.
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 March 29, 2017, BOX Options Exchange LLC (the ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the self-regulatory organization. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to expand the execution range for a Customer
Cross Order. The text of the proposed rule change is available from the
principal office of the Exchange, at the Commission's Public Reference
Room and also on the Exchange's Internet Web site at https://boxexchange.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in Sections A, B, and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Same as Item 3a in the 19b-4 Purpose section. [sic] Make sure all
the footnotes copy correctly. [sic] The Exchange proposes to amend BOX
Rule 7110(c)(5) (Customer Cross Order) to expand the execution range
for a Customer Cross Order. This is a competitive filing that is based
on the rules of another exchange.\3\
---------------------------------------------------------------------------
\3\ See MIAX Rule 515(h)(1). The Exchange is not copying all
aspects of MIAX Rule 515(h)(1). Specifically, BOX is not copying the
references to a liquidity refresh pause or route timer because the
Exchange does not offer these functionalities.
---------------------------------------------------------------------------
A Customer Cross Order is comprised of a non-Professional, Public
Customer Order to buy and a non-Professional, Public Customer Order to
sell at the same price and for the same quantity.\4\ Rule 7110(c)(5)
provides that Customer Cross Orders are automatically executed upon
entry provided that the execution is between the best bid and offer on
BOX and will not trade through the NBBO. Customer Cross Orders are
automatically canceled if they cannot be executed. Customer Cross
Orders may only be entered in the regular trading increments applicable
to the options classes under Rule 7050. IM-7140-1 \5\ applies to the
entry and execution of Customer Cross Orders.
---------------------------------------------------------------------------
\4\ See Rule 7110(c)(5).
\5\ This Rule prevents an Options Participant executing agency
orders to increase its economic gain from trading against the order
without first giving other trading interest on BOX an opportunity to
trade with the agency order pursuant to Rule 7150 (Price Improvement
Period), Rule 7245 (Complex Order Price Improvement Period) or Rule
7270 (Block Trades). However, the Exchange recognizes that it may be
possible for an Options Participant to establish a relationship with
a Customer or other person (including affiliates) to deny agency
orders the opportunity to interact on BOX and to realize similar
economic benefits as it would achieve by executing agency orders as
principal. It will be a violation of this Rule for an Options
Participant to circumvent this Rule by providing an opportunity for
a Customer or other person (including affiliates) to execute against
agency orders handled by the Options Participant immediately upon
their entry into the Trading Host.
---------------------------------------------------------------------------
The Exchange is now proposing to expand the execution range for
Customer Cross Orders. Specifically, a Customer Cross Order will
automatically execute if the execution price is at or between the best
bid and offer on BOX, provided that it is not at the same price as a
Public Customer Order on the BOX Book. This is opposed to the current
requirement that the execution price be strictly between the best bid
and offer on BOX. The
[[Page 18172]]
requirement that the Customer Cross Order not trade through the NBBO
will remain the same. The Exchange notes this is the same execution
parameters of another exchange.\6\
---------------------------------------------------------------------------
\6\ See supra, note 3.
---------------------------------------------------------------------------
The following examples are designed to illustrate the current
behavior of a Customer Cross Order in addition to how a Customer Cross
Order will behave after the proposed change.
Example 1
The Exchange receives a Customer Cross Order for 100 contracts in
ABC at 3.13. The NBBO for ABC is 3.08-3.13. The following interest is
present on the BOX Book when the Customer Cross Order is received.
BOX Book for ABC
--------------------------------------------------------------------------------------------------------------------------------------------------------
Account Quantity Buy Sell Quantity Account
--------------------------------------------------------------------------------------------------------------------------------------------------------
MM................................................................. 10 3.08 3.13 10 MM
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pursuant to Rule 7110(c)(5), the Customer Cross Order would be
rejected because the execution price (3.13) is at the best offer on the
BOX Book, not between the best bid and offer on BOX. After the proposed
change is implemented, the Customer Cross Order would be accepted. The
Customer Cross Order will execute at 3.13 because, after the proposed
change, a Customer Cross Order can execute at a price at or between the
best bid and offer on BOX. Additionally, the execution price of 3.13
will not trade through the NBBO.
Example 2
Assume the same situation as Example 1 with the exception that the
ABC sell order on the BOX Book is for the account of a Public Customer
not a Market Maker. Pursuant to Rule 7110(c)(5), the Customer Cross
Order would be rejected because the execution price (3.13) is at the
best offer on the BOX Book, not between the best bid and offer on BOX.
After the proposed change is implemented, the Customer Cross Order
would still be rejected; however, it would be due to the fact that
there is a Public Customer Order on the BOX Book at the execution
price, not because the execution price is equal to the best offer on
the BOX Book.
Lastly, the Exchange proposes to detail the additional
circumstances of when a Customer Cross Order is rejected. Specifically,
the Exchange will reject a Customer Cross Order if there is an ongoing
auction \7\ or an exposed order on the option series. The Exchange
notes that this has been in place on the Exchange for PIP and exposed
orders.\8\ BOX now proposes to expand the rejection of Customer Cross
Orders to all ongoing auctions, including COPIP, Facilitation and
Solicitation Auctions.
---------------------------------------------------------------------------
\7\ BOX's auction mechanisms include the Price Improvement
Period (``PIP''), Complex Order Price Improvement Period
(``COPIP''), Facilitation Auction and Solicitation Auction.
\8\ See IC-2012-004 available at https://boxexchange.com/assets/Informational_Circular_2012-004_Customer_Cross_Orders.pdf. In this
Circular, BOX states that Customer Cross Orders are not accepted on
an option instrument while there is a PIP auction in progress or
while an order is being exposed for the same option instrument.
---------------------------------------------------------------------------
The Exchange anticipates implementing the proposed change during
the second quarter of 2017. The Exchange will provide notice of the
exact implementation date, via Circular, prior to implementing the
proposed change.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Securities Exchange Act of 1934
(the ``Act''),\9\ in general, and Section 6(b)(5) of the Act,\10\ in
particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general to protect investors and the
public interest. In particular, the Exchange believes that the proposed
rule change to amend BOX Rule 7110(c)(5) to expand the execution range
of a Customer Cross Order on BOX is designed to help BOX remain
competitive among options exchanges. The proposal to expand the
execution range is designed to facilitate transactions, to remove
impediments to and perfect the mechanism for a free and open market to
the benefit of market participants by increasing opportunities for
Customer Cross Orders to execute on the Exchange. Further, the Exchange
believes that the proposed change is reasonable and appropriate as
another options exchange in the industry has a similar rule currently
in place at their exchange.\11\
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ See supra, note 3.
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The Exchange believes that detailing the additional circumstances
for when a Customer Cross Order may be rejected is reasonable and
appropriate because it will make clear to Participants these
circumstances and in turn will eliminate any potential for investor
confusion.
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. In this regard and as indicated
above, the Exchange notes that the rule change is being proposed as a
competitive response to the rules of another exchange.\12\ The Exchange
does not believe the proposal will impose any burden on intermarket
competition, as the proposed rule will allow BOX to compete with other
options exchanges in the industry. The Exchange notes that it operates
in a highly competitive market in which market participants can readily
direct order flow to competing venues who offer similar functionality.
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\12\ Id.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change does not (i) significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate if
[[Page 18173]]
consistent with the protection of investors and the public interest,
the proposed rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(6) thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-BOX-2017-10 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BOX-2017-10. 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-2017-10, and should be
submitted on or before May 8, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07634 Filed 4-14-17; 8:45 am]
BILLING CODE 8011-01-P
