Self-Regulatory Organizations; BOX Options Exchange LLC; Order Approving a Proposed Rule Change To Adopt IM-8040-3 To Exchange Rule 8040 to Permit Directed Orders To Be Submitted With an Auction Only Designation, 14304-14305 [2018-06690]
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14304
Federal Register / Vol. 83, No. 64 / Tuesday, April 3, 2018 / Notices
become operative for 30 days after the
date of the filing. However, Rule 19b–
4(f)(6)(iii) 8 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. In its
filing, ISE requests that the Commission
waive the 30-day operative delay to
allow the proposed one-year extension
of the time for re-introducing the legging
functionality for Stock-Option Orders to
begin at the conclusion of the current
delay period, which was scheduled to
end on March 21, 2018. As noted above,
ISE states that extending the delay for
re-introducing the legging functionality
for Stock-Option Orders will provide
ISE with additional time to develop and
test the legging functionality on INET.
ISE further states that no Members have
notified ISE of a significant impact on
execution quality as a result of the
delayed implementation of the legging
functionality for Stock-Option Orders
and, accordingly, the Exchange does not
believe that extending the delay will
have a significant impact on market
participants. The Commission believes
that waiving the operative delay is
consistent with the protection of
investors and the public interest
because it will provide ISE with
additional time to develop and test the
legging functionality for Stock-Option
Orders. Accordingly, the Commission
waives the 30-day operative delay and
designates the proposed rule change
operative upon filing.9
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) 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.
amozie on DSK30RV082PROD 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:
8 17
CFR 240.19b–4(f)(6)(iii).
purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
9 For
VerDate Sep<11>2014
16:47 Apr 02, 2018
Jkt 244001
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–
ISE–2018–21 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–ISE–2018–21. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (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 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 the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
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–ISE–2018–21, and should
be submitted on or before April 24,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Jill Peterson,
Assistant Secretary.
[FR Doc. 2018–06692 Filed 4–2–18; 8:45 am]
BILLING CODE 8011–01–P
10 17
PO 00000
CFR 200.30–3(a)(12) and (59).
Frm 00067
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82959; File No. SR–BOX–
2018–06]
Self-Regulatory Organizations; BOX
Options Exchange LLC; Order
Approving a Proposed Rule Change To
Adopt IM–8040–3 To Exchange Rule
8040 to Permit Directed Orders To Be
Submitted With an Auction Only
Designation
March 28, 2018.
I. Introduction
On February 5, 2018, BOX Options
Exchange LLC (‘‘BOX’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to adopt IM–8040–3 to Exchange
Rule 8040 to permit Directed Orders 3 to
be submitted with an Auction Only
designation. The proposed rule change
was published for comment in the
Federal Register on February 16, 2018.4
The Commission received no comment
letters on the proposed rule change.
This order approves the proposed rule
change.
II. Description of the Proposed Rule
Change
The Exchange proposes to adopt IM–
8040–3 to Exchange Rule 8040 to allow
Options Participants 5 to apply a new
optional Auction Only designation to
Directed Orders. A Directed Order with
an Auction Only designation will be
cancelled if it is not entered into the
Price Improvement Period (‘‘PIP’’) 6 by
the Executing Participant (‘‘EP’’).7
Market Makers 8 may receive and
handle Directed Orders on an agency
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 The term ‘‘Directed Order’’ means any Customer
Order to buy or sell contracts on a single option
series that has been directed to a particular market
maker by an Order Flow Provider (‘‘OFP’’). See
Exchange Rule 100(a)(19).
4 See Securities Exchange Act Release No. 82690
(February 12, 2018), 83 FR 7084 (‘‘Notice’’).
5 The term ‘‘Options Participant’’ or ‘‘Participant’’
means a firm, or organization that is registered with
the Exchange pursuant to the BOX Rule 2000 Series
for purposes of participating in options trading on
BOX as an OFP or Market Maker. See Exchange
Rule 100(a)(41).
6 See Exchange Rule 7150.
7 An Executing Participant (‘‘EP’’) is a market
maker that desires to accept Directed Orders. See
Notice, supra note 4, at 7085 n.4.
8 The term ‘‘Market Maker’’ means an Options
Participant registered with the Exchange for the
purpose of making markets in options contracts
traded on the Exchange and that is vested with the
rights and responsibilities specified in the BOX
Rule 8000 Series. All Market Makers are designated
2 17
E:\FR\FM\03APN1.SGM
03APN1
Federal Register / Vol. 83, No. 64 / Tuesday, April 3, 2018 / Notices
amozie on DSK30RV082PROD with NOTICES
basis, in accordance with the
procedures set forth in Exchange Rule
8040(d). Upon receipt of a Directed
Order from an OFP,9 an EP must either
submit the Directed Order to the PIP, or
send the Directed Order to the BOX
Book.10 In addition, the BOX Trading
Host will send the Directed Order to the
BOX Book: (i) If the EP has not taken
action within one second of receipt of
a Directed Order; 11 (ii) if the Market
Maker that the order is directed to has
not systematically indicated that it is an
EP; 12 (iii) upon receipt of a subsequent
Directed Order for the same EP for the
same series and side of the market if a
Guaranteed Directed Order (‘‘GDO’’) 13
has been automatically generated and is
pending; 14 or (iv) if a Directed Order is
modified once the BOX Trading Host
has established a GDO.15
As noted above, BOX proposes that if
a Directed Order with an Auction Only
designation would be sent to the BOX
Book for any reason, it will instead be
cancelled back to the OFP that
submitted the Directed Order.16 The
Exchange notes that, under the
proposal, the Auction Only designation
will be automatically applied by the
system, and the designation will not be
disclosed to the EP.17
The Exchange represents that it will
provide at least two weeks’ notice to
Participants via Circular prior to the
launch of the proposed change, which
the Exchange anticipates will be during
the second quarter of 2018.18
as specialists on the Exchange for all purposes
under the Act or Rules thereunder. See Exchange
Rule 100(a)(31).
9 An OFP is an Options Participant representing
as agent Customer Orders on the Exchange or a nonMarket Maker Participant conducting proprietary
trading. See Exchange Rule 100(a)(46).
10 See Exchange Rule 8040(d)(3).
11 See Exchange Rule 8040(d)(4).
12 See Exchange Rule 8040(d)(1).
13 If a Directed Order is executable against the
current national best bid or offer (‘‘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 guarantee the EP’s
execution of the Directed Order for at least the price
and size of the EP’s quote. This guarantee is the
GDO, and the EP’s quote will not be reestablished
until the Directed Order has been processed
pursuant to Exchange Rule 8040(d). See Exchange
Rule 8040(d)(2)(i).
14 See Exchange Rule 8040(d)(2)(ii).
15 See Exchange Rule 8040(d)(5).
16 The Exchange notes that interest on the BOX
Book may still interact with a Directed Order that
has an Auction Only designation via the PIP
allocation. See Exchange Rule 7150(g).
17 The Exchange notes that existing restrictions on
an EP’s behavior will continue to apply.
Specifically, an EP shall not submit to the Exchange
a contra order to the Directed Order for its
proprietary account during the one second
following submission of the Directed Order to the
Exchange. See Exchange Rule 8040(d)(6)(i).
18 See Notice, supra note 4, at 7085.
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III. Discussion and Commission’s
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.19 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,20 which requires,
among other things, that the rules of a
national securities exchange be
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating 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, and not be designed
to permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Commission also finds that the
proposed rule change is consistent with
Section 6(b)(8) of the Act,21 which
requires that the rules of an exchange
not impose any burden on competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
The Commission believes that the
Auction Only designation will provide
OFPs with greater control over how
their Directed Orders are handled by the
EP, as OFPs will have certainty that
their Directed Orders with the Auction
Only designation will either be executed
in the PIP or cancelled.22 In addition,
should the Directed Order be entered
into the PIP, the Directed Order will
receive the opportunity for price
improvement.23 Moreover, the
Commission notes that an EP will not be
notified whether a Directed Order was
submitted with the Auction Only
designation,24 and current restrictions
on an EP’s behavior with respect to
Directed Orders will continue to
apply.25 Accordingly, the Commission
believes that the Exchange’s proposal is
consistent with the Act.
19 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
20 15 U.S.C. 78f(b)(5).
21 15 U.S.C. 78f(b)(8).
22 The Exchange notes that, pursuant to Exchange
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 and as such, the order is guaranteed to be
fully executed. See Notice, supra note 4, at 7085
n.13.
23 See Exchange Rule 7150.
24 See proposed IM–8040–3 to Exchange Rule
8040.
25 See supra note 17.
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14305
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,26 that the
proposed rule change (SR–BOX–2018–
06) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Jill Peterson,
Assistant Secretary.
[FR Doc. 2018–06690 Filed 4–2–18; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #15460 and #15461;
PENNSYLVANIA Disaster Number PA–
00083]
Administrative Declaration of a
Disaster for the Commonwealth of
Pennsylvania
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
This is a notice of an
Administrative declaration of a disaster
for the Commonwealth of Pennsylvania
dated 03/27/2018.
Incident: Severe Storms and
Tornadoes.
Incident Period: 02/15/2018 through
02/17/2018.
DATES: Issued on 03/27/2018.
Physical Loan Application Deadline
Date: 05/29/2018.
Economic Injury (EIDL) Loan
Application Deadline Date: 12/27/2018.
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, (202) 205–6734.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
Administrator’s disaster declaration,
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filed at the address listed above or other
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The following areas have been
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Primary Counties: Fayette
Contiguous Counties:
Pennsylvania: Greene, Somerset,
Washington, Westmoreland
Maryland: Garrett
SUMMARY:
26 15
27 17
E:\FR\FM\03APN1.SGM
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
03APN1
]]>Agencies
[Federal Register Volume 83, Number 64 (Tuesday, April 3, 2018)]
[Notices]
[Pages 14304-14305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-06690]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82959; File No. SR-BOX-2018-06]
Self-Regulatory Organizations; BOX Options Exchange LLC; Order
Approving a Proposed Rule Change To Adopt IM-8040-3 To Exchange Rule
8040 to Permit Directed Orders To Be Submitted With an Auction Only
Designation
March 28, 2018.
I. Introduction
On February 5, 2018, BOX Options Exchange LLC (``BOX'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to adopt IM-8040-3 to Exchange Rule 8040 to permit
Directed Orders \3\ to be submitted with an Auction Only designation.
The proposed rule change was published for comment in the Federal
Register on February 16, 2018.\4\ The Commission received no comment
letters on the proposed rule change. This order approves the proposed
rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ The term ``Directed Order'' means any Customer Order to buy
or sell contracts on a single option series that has been directed
to a particular market maker by an Order Flow Provider (``OFP'').
See Exchange Rule 100(a)(19).
\4\ See Securities Exchange Act Release No. 82690 (February 12,
2018), 83 FR 7084 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
The Exchange proposes to adopt IM-8040-3 to Exchange Rule 8040 to
allow Options Participants \5\ to apply a new optional Auction Only
designation to Directed Orders. A Directed Order with an Auction Only
designation will be cancelled if it is not entered into the Price
Improvement Period (``PIP'') \6\ by the Executing Participant
(``EP'').\7\
---------------------------------------------------------------------------
\5\ The term ``Options Participant'' or ``Participant'' means a
firm, or organization that is registered with the Exchange pursuant
to the BOX Rule 2000 Series for purposes of participating in options
trading on BOX as an OFP or Market Maker. See Exchange Rule
100(a)(41).
\6\ See Exchange Rule 7150.
\7\ An Executing Participant (``EP'') is a market maker that
desires to accept Directed Orders. See Notice, supra note 4, at 7085
n.4.
---------------------------------------------------------------------------
Market Makers \8\ may receive and handle Directed Orders on an
agency
[[Page 14305]]
basis, in accordance with the procedures set forth in Exchange Rule
8040(d). Upon receipt of a Directed Order from an OFP,\9\ an EP must
either submit the Directed Order to the PIP, or send the Directed Order
to the BOX Book.\10\ In addition, the BOX Trading Host will send the
Directed Order to the BOX Book: (i) If the EP has not taken action
within one second of receipt of a Directed Order; \11\ (ii) if the
Market Maker that the order is directed to has not systematically
indicated that it is an EP; \12\ (iii) upon receipt of a subsequent
Directed Order for the same EP for the same series and side of the
market if a Guaranteed Directed Order (``GDO'') \13\ has been
automatically generated and is pending; \14\ or (iv) if a Directed
Order is modified once the BOX Trading Host has established a GDO.\15\
---------------------------------------------------------------------------
\8\ The term ``Market Maker'' means an Options Participant
registered with the Exchange for the purpose of making markets in
options contracts traded on the Exchange and that is vested with the
rights and responsibilities specified in the BOX Rule 8000 Series.
All Market Makers are designated as specialists on the Exchange for
all purposes under the Act or Rules thereunder. See Exchange Rule
100(a)(31).
\9\ An OFP is an Options Participant representing as agent
Customer Orders on the Exchange or a non-Market Maker Participant
conducting proprietary trading. See Exchange Rule 100(a)(46).
\10\ See Exchange Rule 8040(d)(3).
\11\ See Exchange Rule 8040(d)(4).
\12\ See Exchange Rule 8040(d)(1).
\13\ If a Directed Order is executable against the current
national best bid or offer (``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 guarantee the EP's execution of the
Directed Order for at least the price and size of the EP's quote.
This guarantee is the GDO, and the EP's quote will not be
reestablished until the Directed Order has been processed pursuant
to Exchange Rule 8040(d). See Exchange Rule 8040(d)(2)(i).
\14\ See Exchange Rule 8040(d)(2)(ii).
\15\ See Exchange Rule 8040(d)(5).
---------------------------------------------------------------------------
As noted above, BOX proposes that if a Directed Order with an
Auction Only designation would be sent to the BOX Book for any reason,
it will instead be cancelled back to the OFP that submitted the
Directed Order.\16\ The Exchange notes that, under the proposal, the
Auction Only designation will be automatically applied by the system,
and the designation will not be disclosed to the EP.\17\
---------------------------------------------------------------------------
\16\ The Exchange notes that interest on the BOX Book may still
interact with a Directed Order that has an Auction Only designation
via the PIP allocation. See Exchange Rule 7150(g).
\17\ The Exchange notes that existing restrictions on an EP's
behavior will continue to apply. Specifically, an EP shall not
submit to the Exchange a contra order to the Directed Order for its
proprietary account during the one second following submission of
the Directed Order to the Exchange. See Exchange Rule 8040(d)(6)(i).
---------------------------------------------------------------------------
The Exchange represents that it will provide at least two weeks'
notice to Participants via Circular prior to the launch of the proposed
change, which the Exchange anticipates will be during the second
quarter of 2018.\18\
---------------------------------------------------------------------------
\18\ See Notice, supra note 4, at 7085.
---------------------------------------------------------------------------
III. Discussion and Commission's Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\19\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(5) of the Act,\20\ which
requires, among other things, that the rules of a national securities
exchange be designed to promote just and equitable principles of trade,
to foster cooperation and coordination with persons engaged in
regulating 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,
and not be designed to permit unfair discrimination between customers,
issuers, brokers, or dealers. The Commission also finds that the
proposed rule change is consistent with Section 6(b)(8) of the Act,\21\
which requires that the rules of an exchange not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
---------------------------------------------------------------------------
\19\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\20\ 15 U.S.C. 78f(b)(5).
\21\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
The Commission believes that the Auction Only designation will
provide OFPs with greater control over how their Directed Orders are
handled by the EP, as OFPs will have certainty that their Directed
Orders with the Auction Only designation will either be executed in the
PIP or cancelled.\22\ In addition, should the Directed Order be entered
into the PIP, the Directed Order will receive the opportunity for price
improvement.\23\ Moreover, the Commission notes that an EP will not be
notified whether a Directed Order was submitted with the Auction Only
designation,\24\ and current restrictions on an EP's behavior with
respect to Directed Orders will continue to apply.\25\ Accordingly, the
Commission believes that the Exchange's proposal is consistent with the
Act.
---------------------------------------------------------------------------
\22\ The Exchange notes that, pursuant to Exchange 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 and as such, the order is guaranteed to be fully executed. See
Notice, supra note 4, at 7085 n.13.
\23\ See Exchange Rule 7150.
\24\ See proposed IM-8040-3 to Exchange Rule 8040.
\25\ See supra note 17.
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\26\ that the proposed rule change (SR-BOX-2018-06) be, and hereby
is, approved.
---------------------------------------------------------------------------
\26\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
---------------------------------------------------------------------------
\27\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Jill Peterson,
Assistant Secretary.
[FR Doc. 2018-06690 Filed 4-2-18; 8:45 am]
BILLING CODE 8011-01-P
