Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing of Proposed Rule Change To Adopt IM-8040-3 to Rule 8040, 7084-7086 [2018-03199]

Download as PDF 7084 Federal Register / Vol. 83, No. 33 / Friday, February 16, 2018 / Notices available through the NRC Public Document Room at pdr.resource@ nrc.gov, or by calling the PDR at 1–800– 397–4209, or from the Publicly Available Records System (PARS) component of NRC’s document system (ADAMS) which is accessible from the NRC website at http://www.nrc.gov/ reading-rm/adams.html or http:// www.nrc.gov/reading-rm/doccollections/ACRS/. Video teleconferencing service is available for observing open sessions of ACRS meetings. Those wishing to use this service should contact Mr. Theron Brown, ACRS Audio Visual Technician (301–415–6702), between 7:30 a.m. and 3:45 p.m. (ET), at least 10 days before the meeting to ensure the availability of this service. Individuals or organizations requesting this service will be responsible for telephone line charges and for providing the equipment and facilities that they use to establish the video teleconferencing link. The availability of video teleconferencing services is not guaranteed. Dated at Rockville, Maryland, on February 13, 2018. For the Nuclear Regulatory Commission. Russell E. Chazell, Advisory Committee Management Officer. [FR Doc. 2018–03264 Filed 2–15–18; 8:45 am] BILLING CODE 7590–01–P POSTAL REGULATORY COMMISSION [Docket No. CP2018–167] New Postal Products Postal Regulatory Commission. Notice. AGENCY: ACTION: The Commission is noticing a recent Postal Service filing for the Commission’s consideration concerning negotiated service agreements. This notice informs the public of the filing, invites public comment, and takes other administrative steps. DATES: Comments are due: February 20, 2018. ADDRESSES: Submit comments electronically via the Commission’s Filing Online system at http:// www.prc.gov. Those who cannot submit comments electronically should contact the person identified in the FOR FURTHER INFORMATION CONTACT section by telephone for advice on filing alternatives. daltland on DSKBBV9HB2PROD with NOTICES SUMMARY: FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at 202–789–6820. SUPPLEMENTARY INFORMATION: VerDate Sep<11>2014 19:24 Feb 15, 2018 Jkt 244001 Timothy J. Schwuchow; Comments Due: February 20, 2018. Table of Contents I. Introduction II. Docketed Proceeding(s) I. Introduction The Commission gives notice that the Postal Service filed request(s) for the Commission to consider matters related to negotiated service agreement(s). The request(s) may propose the addition or removal of a negotiated service agreement from the market dominant or the competitive product list, or the modification of an existing product currently appearing on the market dominant or the competitive product list. Section II identifies the docket number(s) associated with each Postal Service request, the title of each Postal Service request, the request’s acceptance date, and the authority cited by the Postal Service for each request. For each request, the Commission appoints an officer of the Commission to represent the interests of the general public in the proceeding, pursuant to 39 U.S.C. 505 (Public Representative). Section II also establishes comment deadline(s) pertaining to each request. The public portions of the Postal Service’s request(s) can be accessed via the Commission’s website (http:// www.prc.gov). Non-public portions of the Postal Service’s request(s), if any, can be accessed through compliance with the requirements of 39 CFR 3007.40. The Commission invites comments on whether the Postal Service’s request(s) in the captioned docket(s) are consistent with the policies of title 39. For request(s) that the Postal Service states concern market dominant product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3622, 39 U.S.C. 3642, 39 CFR part 3010, and 39 CFR part 3020, subpart B. For request(s) that the Postal Service states concern competitive product(s), applicable statutory and regulatory requirements include 39 U.S.C. 3632, 39 U.S.C. 3633, 39 U.S.C. 3642, 39 CFR part 3015, and 39 CFR part 3020, subpart B. Comment deadline(s) for each request appear in section II. II. Docketed Proceeding(s) 1. Docket No(s).: CP2018–167; Filing Title: Notice of United States Postal Service of Filing a Functionally Equivalent Global Expedited Package Services 7 Negotiated Service Agreement and Application for NonPublic Treatment of Materials Filed Under Seal; Filing Acceptance Date: February 12, 2018; Filing Authority: 39 CFR 3015.5; Public Representative: PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 This notice will be published in the Federal Register. Stacy L. Ruble, Secretary. [FR Doc. 2018–03250 Filed 2–15–18; 8:45 am] BILLING CODE 7710–FW–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–82690; File No. SR–BOX– 2018–06] Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing of Proposed Rule Change To Adopt IM–8040–3 to Rule 8040 February 12, 2018. 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 February 5, 2018, 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. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to adopt IM– 8040–3 to Rule 8040. 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 website at http:// boxoptions.com. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. 1 15 2 17 E:\FR\FM\16FEN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 16FEN1 Federal Register / Vol. 83, No. 33 / Friday, February 16, 2018 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change daltland on DSKBBV9HB2PROD with NOTICES 1. Purpose The Exchange proposes to adopt IM– 8040–3 to Rule 8040. Specifically, the Exchange is proposing that Directed Orders 3 may be submitted with an Auction Only designation. Further, the Exchange is proposing that a Directed Order with an Auction Only designation will be cancelled if it is not entered into the PIP by the Executing Participant (‘‘EP’’).4 Pursuant to Rule 8040(d), upon receipt of a Directed Order from an Order Flow Provider (‘‘OFP’’) 5 an EP must either submit the Directed Order to the PIP process or send the Directed Order to the BOX Book. Further, a Directed Order is sent to the BOX Book if (i) the EP has not taken action within one second of receipt of a Directed Order,6 (ii) the Market Maker that the order is directed to has not systematically indicated that it is an EP,7 (iii) a Guaranteed Directed Order 8 has been automatically generated and is pending, then upon receipt of a subsequent Directed Order for the same EP for the same series and side of the market,9 or (iv) a Directed Order is modified once the Trading Host has established a GDO.10 Therefore, under the proposal, if the Directed Order with an Auction Only designation is to be sent to the BOX Book, regardless of the reason, it will instead be cancelled back to the OFP that submitted the Directed 3 The term ‘‘Directed Order’’ means any Customer Order to buy or sell contracts on a single option series which has been directed to a particular Market Maker by an Order Flow Provider. See Rule 100(a)(19). Unlike all other orders submitted to the BOX Trading Host, Directed Orders are not anonymous. The Options Participant identification number (‘‘Participant ID’’) of the OFP sending the Directed Order will be given to the Market Maker recipient. See Rule 8040(d). 4 An Executing Participant (‘‘EP’’) is a Market Maker who desires to accept Directed Orders. 5 The terms ‘‘Order Flow Provider’’ or ‘‘OFP’’ mean those Options Participants representing as agent Customer Orders on BOX and those nonMarket Maker Participants conducting proprietary trading. See Rule 100(a)(46). 6 See Rule 8040(d)(4). 7 See Rule 8040(d)(1). 8 If a Directed Order is executable against the current NBBO and the EP is also quoting at such NBBO on the opposite side of the Directed Order, then the Trading Host will immediately upon receipt of the Directed Order take down the EP’s quote and shall guarantee the EP’s execution of the Directed Order for at least the price and size of the EP’s quote. This guarantee shall be called a Guaranteed Directed Order (‘‘GDO’’). The EP’s quote shall not be reestablished until the Directed Order has been processed pursuant to Rule 8040(d). See Rule 8040(d)(2)(i). 9 See Rule 8040(d)(2)(ii). 10 See Rule 8040(d)(5). VerDate Sep<11>2014 19:24 Feb 15, 2018 Jkt 244001 Order.11 The Auction Only designation is automatically applied by the system and the designation is not disclosed to the EP. Therefore, the Exchange does not believe the proposed designation will alter the behavior of the EP or provide any advantage to the EP.12 The Exchange notes that the proposed Auction Only designation is an optional designation that the submitting OFP may decide to utilize. The Exchange believes the proposed change will provide increased flexibility to OFPs when executing orders on the Exchange as well as provide execution certainty because the Directed Order will either execute via the PIP or be cancelled back. The Exchange further believes that the proposed designation will make the Directed Order process more attractive to Participants that are searching for liquidity 13 and the potential for price improvement. The Exchange will provide at least two weeks’ notice to Participants via Circular prior to the launch of the proposed change. The Exchange anticipates launching in the second quarter of 2018. 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’’),14 in general, and Section 6(b)(5) of the Act,15 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 the proposed rule change is designed to remove impediments to and perfect the mechanisms of a free and open market and a national market system by providing an additional tool and greater 11 Interest on the BOX Book may still interact with a Directed Order that has the Auction Only designation via the PIP allocation. See Rule 7150(g). 12 The Exchange notes that there currently are restrictions on an EP’s behavior that will continue to apply. Specifically, an EP shall not submit to BOX a contra order to the Directed Order for his proprietary account during the one second following his submission of the Directed Order to BOX. See Rule 8040(d)(6)(i). 13 Pursuant to Rule 7150(f), a Customer Order that is submitted to the PIP must be submitted with a matching contra side order equal to the full size of the Customer Order, as such, the order is guaranteed to be fully executed. 14 15 U.S.C. 78f(b). 15 15 U.S.C. 78f(b)(5). PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 7085 flexibility for Participants executing orders on the Exchange as well as providing execution certainty. The Exchange also believes the proposal will provide opportunity for Participants to achieve better handling of orders by providing Participants with this additional functionality. As a result, adopting this proposal to allow Directed Orders to be submitted with the Auction Only designation will promote just and equitable principles of trade and foster cooperation and coordination with persons engaged in facilitating transactions in securities. As mentioned above, the EP is not notified that a Directed Order was submitted with the Auction Only designation and therefore there is no unfair advantage bestowed on the EP as a result of the proposal. As such, the proposal is designed to prevent fraudulent and manipulative acts and practices. The Exchange believes that the proposal removes impediments to and perfects the mechanism of a free and open market by enhancing the Exchange’s market by providing market participants the ability to send Directed Orders with an Auction Only designation to the Exchange. As such, BOX believes that the proposed change will increase flexibility to OFPs when executing orders on the Exchange. The Exchange believes that the proposed Auction Only designation will provide OFPs with a valuable tool when executing orders on the Exchange. As such, the Exchange believes that the proposed change removes impediments to and perfects the mechanism of a free and open market because the proposed change further promotes competition among options exchanges. The Exchange believes that the proposed additional functionality for executing Directed Orders will protect investors and the public interest by providing OFPs with greater flexibility and opportunity for their orders on the Exchange. The Exchange believes this increased opportunity will lead to enhanced order flow to the Exchange, which in turn will benefit and protect investors and the public interest through the potential for greater volume of orders and executions on BOX. The Exchange believes that the proposed rule change is not designed to permit unfair discrimination between customers, issues, brokers, or dealers because the proposed additional tool for Directed Orders is open to all OFPs and is completely voluntary. As such, the Exchange believes the proposed change is consistent with the Act. E:\FR\FM\16FEN1.SGM 16FEN1 7086 Federal Register / Vol. 83, No. 33 / Friday, February 16, 2018 / Notices 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 that is not necessary or appropriate in furtherance of the Act. On the contrary, the Exchange believes that the proposed feature to Directed Orders will enhance competition in the U.S. option markets by providing enhanced functionality thereby making the Exchange more competitive with other exchanges. Additionally, respecting intra-market competition, the additional feature for Directed Orders will be available to all OFPs that submit Directed Orders to the Exchange. 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 Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. 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 website (http://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 website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–BOX–2018–06, and should be submitted on or before March 9, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–03199 Filed 2–15–18; 8:45 am] Electronic Comments • Use the Commission’s internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BOX–2018–06 on the subject line. daltland on DSKBBV9HB2PROD with NOTICES 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: Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change Relating to Simplified Arbitration 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–2018–06. This file VerDate Sep<11>2014 19:24 Feb 15, 2018 Jkt 244001 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–82693; File No. SR–FINRA– 2018–003] February 12, 2018. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on January 29, 2018, Financial Industry Regulatory 16 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by FINRA. 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 FINRA is proposing to amend FINRA Rules 12600 and 12800 of the Code of Arbitration Procedure for Customer Disputes (‘‘Customer Code’’) and 13600 and 13800 of the Code of Arbitration Procedure for Industry Disputes (‘‘Industry Code,’’ and together with the Customer Code, the ‘‘Codes’’), to amend the hearing provisions to provide an additional hearing option for parties in arbitration with claims of $50,000 or less, excluding interest and expenses. The text of the proposed rule change is available on FINRA’s website at http://www.finra.org, at the principal office of FINRA 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, FINRA 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. FINRA 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 Codes provide two methods for administering arbitration cases with claims involving $50,000 or less, excluding interest and expenses. The default method is a decision by a single arbitrator based on the parties’ pleadings and other materials submitted by the parties. The alternative method involves a full hearing with a single arbitrator. Under the Customer Code, a customer may request a hearing (regardless of whether the customer is a claimant or respondent),3 and under the Industry Code, the claimant may request 1 15 PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 3 See E:\FR\FM\16FEN1.SGM FINRA Rule 12800(c). 16FEN1

Agencies

[Federal Register Volume 83, Number 33 (Friday, February 16, 2018)]
[Notices]
[Pages 7084-7086]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-03199]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82690; File No. SR-BOX-2018-06]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing of Proposed Rule Change To Adopt IM-8040-3 to Rule 8040

February 12, 2018.
    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 February 5, 2018, 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to adopt IM-8040-3 to Rule 8040. 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 website at http://boxoptions.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.

[[Page 7085]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to adopt IM-8040-3 to Rule 8040. 
Specifically, the Exchange is proposing that Directed Orders \3\ may be 
submitted with an Auction Only designation. Further, the Exchange is 
proposing that a Directed Order with an Auction Only designation will 
be cancelled if it is not entered into the PIP by the Executing 
Participant (``EP'').\4\
---------------------------------------------------------------------------

    \3\ The term ``Directed Order'' means any Customer Order to buy 
or sell contracts on a single option series which has been directed 
to a particular Market Maker by an Order Flow Provider. See Rule 
100(a)(19). Unlike all other orders submitted to the BOX Trading 
Host, Directed Orders are not anonymous. The Options Participant 
identification number (``Participant ID'') of the OFP sending the 
Directed Order will be given to the Market Maker recipient. See Rule 
8040(d).
    \4\ An Executing Participant (``EP'') is a Market Maker who 
desires to accept Directed Orders.
---------------------------------------------------------------------------

    Pursuant to Rule 8040(d), upon receipt of a Directed Order from an 
Order Flow Provider (``OFP'') \5\ an EP must either submit the Directed 
Order to the PIP process or send the Directed Order to the BOX Book. 
Further, a Directed Order is sent to the BOX Book if (i) the EP has not 
taken action within one second of receipt of a Directed Order,\6\ (ii) 
the Market Maker that the order is directed to has not systematically 
indicated that it is an EP,\7\ (iii) a Guaranteed Directed Order \8\ 
has been automatically generated and is pending, then upon receipt of a 
subsequent Directed Order for the same EP for the same series and side 
of the market,\9\ or (iv) a Directed Order is modified once the Trading 
Host has established a GDO.\10\ Therefore, under the proposal, if the 
Directed Order with an Auction Only designation is to be sent to the 
BOX Book, regardless of the reason, it will instead be cancelled back 
to the OFP that submitted the Directed Order.\11\ The Auction Only 
designation is automatically applied by the system and the designation 
is not disclosed to the EP. Therefore, the Exchange does not believe 
the proposed designation will alter the behavior of the EP or provide 
any advantage to the EP.\12\
---------------------------------------------------------------------------

    \5\ The terms ``Order Flow Provider'' or ``OFP'' mean those 
Options Participants representing as agent Customer Orders on BOX 
and those non-Market Maker Participants conducting proprietary 
trading. See Rule 100(a)(46).
    \6\ See Rule 8040(d)(4).
    \7\ See Rule 8040(d)(1).
    \8\ If a Directed Order is executable against the current NBBO 
and the EP is also quoting at such NBBO on the opposite side of the 
Directed Order, then the Trading Host will immediately upon receipt 
of the Directed Order take down the EP's quote and shall guarantee 
the EP's execution of the Directed Order for at least the price and 
size of the EP's quote. This guarantee shall be called a Guaranteed 
Directed Order (``GDO''). The EP's quote shall not be reestablished 
until the Directed Order has been processed pursuant to Rule 
8040(d). See Rule 8040(d)(2)(i).
    \9\ See Rule 8040(d)(2)(ii).
    \10\ See Rule 8040(d)(5).
    \11\ Interest on the BOX Book may still interact with a Directed 
Order that has the Auction Only designation via the PIP allocation. 
See Rule 7150(g).
    \12\ The Exchange notes that there currently are restrictions on 
an EP's behavior that will continue to apply. Specifically, an EP 
shall not submit to BOX a contra order to the Directed Order for his 
proprietary account during the one second following his submission 
of the Directed Order to BOX. See Rule 8040(d)(6)(i).
---------------------------------------------------------------------------

    The Exchange notes that the proposed Auction Only designation is an 
optional designation that the submitting OFP may decide to utilize. The 
Exchange believes the proposed change will provide increased 
flexibility to OFPs when executing orders on the Exchange as well as 
provide execution certainty because the Directed Order will either 
execute via the PIP or be cancelled back. The Exchange further believes 
that the proposed designation will make the Directed Order process more 
attractive to Participants that are searching for liquidity \13\ and 
the potential for price improvement.
---------------------------------------------------------------------------

    \13\ Pursuant to Rule 7150(f), a Customer Order that is 
submitted to the PIP must be submitted with a matching contra side 
order equal to the full size of the Customer Order, as such, the 
order is guaranteed to be fully executed.
---------------------------------------------------------------------------

    The Exchange will provide at least two weeks' notice to 
Participants via Circular prior to the launch of the proposed change. 
The Exchange anticipates launching in the second quarter of 2018.
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''),\14\ in general, and Section 6(b)(5) of the Act,\15\ 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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, the Exchange believes the proposed rule change is 
designed to remove impediments to and perfect the mechanisms of a free 
and open market and a national market system by providing an additional 
tool and greater flexibility for Participants executing orders on the 
Exchange as well as providing execution certainty. The Exchange also 
believes the proposal will provide opportunity for Participants to 
achieve better handling of orders by providing Participants with this 
additional functionality. As a result, adopting this proposal to allow 
Directed Orders to be submitted with the Auction Only designation will 
promote just and equitable principles of trade and foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities.
    As mentioned above, the EP is not notified that a Directed Order 
was submitted with the Auction Only designation and therefore there is 
no unfair advantage bestowed on the EP as a result of the proposal. As 
such, the proposal is designed to prevent fraudulent and manipulative 
acts and practices.
    The Exchange believes that the proposal removes impediments to and 
perfects the mechanism of a free and open market by enhancing the 
Exchange's market by providing market participants the ability to send 
Directed Orders with an Auction Only designation to the Exchange. As 
such, BOX believes that the proposed change will increase flexibility 
to OFPs when executing orders on the Exchange.
    The Exchange believes that the proposed Auction Only designation 
will provide OFPs with a valuable tool when executing orders on the 
Exchange. As such, the Exchange believes that the proposed change 
removes impediments to and perfects the mechanism of a free and open 
market because the proposed change further promotes competition among 
options exchanges. The Exchange believes that the proposed additional 
functionality for executing Directed Orders will protect investors and 
the public interest by providing OFPs with greater flexibility and 
opportunity for their orders on the Exchange. The Exchange believes 
this increased opportunity will lead to enhanced order flow to the 
Exchange, which in turn will benefit and protect investors and the 
public interest through the potential for greater volume of orders and 
executions on BOX. The Exchange believes that the proposed rule change 
is not designed to permit unfair discrimination between customers, 
issues, brokers, or dealers because the proposed additional tool for 
Directed Orders is open to all OFPs and is completely voluntary. As 
such, the Exchange believes the proposed change is consistent with the 
Act.

[[Page 7086]]

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 that is not necessary or appropriate 
in furtherance of the Act. On the contrary, the Exchange believes that 
the proposed feature to Directed Orders will enhance competition in the 
U.S. option markets by providing enhanced functionality thereby making 
the Exchange more competitive with other exchanges. Additionally, 
respecting intra-market competition, the additional feature for 
Directed Orders will be available to all OFPs that submit Directed 
Orders to the Exchange.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) by order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BOX-2018-06 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-2018-06. 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 website (http://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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-BOX-2018-06, and should be submitted on 
or before March 9, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-03199 Filed 2-15-18; 8:45 am]
BILLING CODE 8011-01-P