Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Options Market LLC Facility To Revise Certain Qualification Thresholds and Fees in Sections I.B.1, Primary Improvement Order, and I.B.2, BOX Volume Rebate, 50422-50425 [2018-21683]
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50422
Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 59 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 60
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has
requested that the Commission waive
the 30-day operative delay so that the
proposed rule change may become
operative upon filing, noting that use of
MDOs on the Exchange is optional,
similar functionality is already offered
by other market centers, and operative
delay waiver would allow the Exchange
to make the proposed functionality
available to Exchange Users more
promptly. The Commission believes that
waiver of the 30-day operative delay is
consistent with the protection of
investors and the public interest.
Accordingly, the Commission hereby
waives the operative delay and
designates the proposed rule change
operative upon filing.61
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
change 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
daltland on DSKBBV9HB2PROD with NOTICES
• 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–
CboeEDGX–2018–041 on the subject
line.
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.
59 17 CFR 240.19b–4(f)(6).
60 17 CFR 240.19b–4(f)(6)(iii).
61 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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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–CboeEDGX–2018–041. 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–CboeEDGX–2018–041, and
should be submitted on or before
October 26, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.62
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–21680 Filed 10–4–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84323; File No. SR–BOX–
2018–33]
Self-Regulatory Organizations; BOX
Exchange LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Fee
Schedule on the BOX Options Market
LLC Facility To Revise Certain
Qualification Thresholds and Fees in
Sections I.B.1, Primary Improvement
Order, and I.B.2, BOX Volume Rebate
October 1, 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
September 20, 2018, BOX Exchange LLC
(the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Exchange filed the proposed rule change
pursuant to Section 19(b)(3)(A)(ii) of the
Act,3 and Rule 19b–4(f)(2) thereunder,4
which renders the proposal effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange is filing with the
Securities and Exchange Commission
(‘‘Commission’’) a proposed rule change
to amend the Fee Schedule on the BOX
Market LLC (‘‘BOX’’) options facility.
Changes to the fee schedule pursuant to
this proposal will be effective upon
filing. 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 https://boxexchange.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
2 17
62 17
PO 00000
CFR 200.30–3(a)(12).
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E:\FR\FM\05OCN1.SGM
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Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Fee Schedule on BOX. Specifically, the
.....................................
.....................................
.....................................
.....................................
Under the tiered fee schedule for
Primary Improvement Orders, the
Exchange assesses a per contract
execution fee to all Primary
Improvement Order executions where
Per contract
fee
(all account
types)
0.000%–0.079% ......................................................................................................................................
0.080%–0.159% ......................................................................................................................................
0.160%–0.499% ......................................................................................................................................
0.500% and Above ..................................................................................................................................
The Exchange proposes to adjust the
percentage thresholds in Tiers 1 through
4. Additionally, the Exchange proposes
to decrease the fees associated with
Tiers 2 and 3 from $0.20 to $0.12 and
$0.12 to $0.07, respectively. The new
.....................................
.....................................
.....................................
.....................................
Per contract
fee
(all account
types)
0.000%–0.049% ......................................................................................................................................
0.050%–0.129% ......................................................................................................................................
0.130%–0.449% ......................................................................................................................................
0.450% and Above ..................................................................................................................................
BVR
Next, the Exchange proposes to adjust
certain percentage thresholds and fees
within the BVR. Under the BVR, the
Exchange offers a tiered per contract
rebate for all Public Customer PIP
Orders and COPIP Orders of 250 and
under contracts that do not trade solely
with their contra order. Percentage
thresholds are calculated on a monthly
basis by totaling the Participant’s PIP
and COPIP volume submitted to BOX,
relative to the total national Customer
Per contract rebate
(all account
types)
PIP
daltland on DSKBBV9HB2PROD with NOTICES
1
2
3
4
................................
................................
................................
................................
0.000%
0.160%
0.340%
0.500%
to 0.159% ............................................................................................................
to 0.339% ............................................................................................................
to 0.499% ............................................................................................................
and Above ...........................................................................................................
The Exchange proposes to adjust the
percentage thresholds in Tiers 1 through
4. Additionally, the Exchange proposes
to increase the per contract rebates in
Tier 2, Tier 3 and Tier 4. Specifically,
the Exchange proposes to increase the
per contract rebate for Tier 2 to $0.05
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from $0.02 for PIP and COPIP Orders.
Further, the Exchange proposes to
increase the rebates in Tier 3 to $0.08
from $0.04 for PIP and COPIP Orders.
Lastly, the Exchange is proposing to
increase the per contract rebate for
COPIP Orders in Tier 4 to $0.11 from
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
$0.25
0.12
0.07
0.02
volume in multiply-listed options
classes. The current fee schedule for all
Public Customer PIP and COPIP Order
of 250 and under contracts that do not
trade solely with their contra order is as
follows:
Percentage thresholds of national customer volume in multiply-listed options classes
(monthly)
Tier
$0.25
0.20
0.12
0.02
tiered fee schedule for Primary
Improvement Orders will be as follows:
Percentage thresholds of national customer volume in multiply-listed options classes
(monthly)
Tier
1
2
3
4
Primary Improvement Order
the corresponding PIP or COPIP Order
is from the account of a Public
Customer. Percentage thresholds are
calculated on a monthly basis by
totaling the Initiating Participant’s
Primary Improvement Order volume
submitted to BOX, relative to the total
national Customer volume in multiplylisted options classes. The current tiered
fee schedule for Primary Improvement
Orders is as follows:
Percentage thresholds of national customer volume in multiply-listed options classes
(monthly)
Tier
1
2
3
4
Exchange proposes to revise certain
qualification thresholds and fees in
Sections I.B.1 of the BOX Fee Schedule,
Primary Improvement Order and I.B.2 of
the BOX Fee Schedule, the BOX Volume
Rebate (‘‘BVR’’).
($0.00)
(0.02)
(0.04)
(0.11)
COPIP
($0.00)
(0.02)
(0.04)
(0.08)
$0.08. The new fee schedule for all
Public Customer PIP and COPIP Orders
of 250 and under contracts that do not
trade solely with their contra order will
be as follows:
E:\FR\FM\05OCN1.SGM
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50424
Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices
Percentage thresholds of national customer volume in multiply-listed options classes
(monthly)
Tier
Per contract rebate
(all account
types)
PIP
1
2
3
4
................................
................................
................................
................................
0.000%
0.050%
0.300%
0.450%
to 0.049% ............................................................................................................
to 0.299% ............................................................................................................
to 0.449% ............................................................................................................
and Above ...........................................................................................................
daltland on DSKBBV9HB2PROD with NOTICES
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the Act,
in general, and Section 6(b)(4) and
6(b)(5) of the Act,5 in particular, in that
it provides for the equitable allocation
of reasonable dues, fees, and other
charges among BOX Participants and
other persons using its facilities and
does not unfairly discriminate between
customers, issuers, brokers or dealers.
BOX believes it is reasonable,
equitable and not unfairly
discriminatory to adjust the volume
based thresholds and fees within the
BOX Fee Schedule. The volume
thresholds with their tiered fees and
rebates are meant to incentivize
Participants to direct order flow to the
Exchange to obtain the benefit of the
lower fee or higher rebate, which in turn
benefits all market participants by
increasing liquidity on the Exchange.
The Exchange believes the proposed
amendments to the Primary
Improvement Order volume based
thresholds are reasonable, equitable and
not unfairly discriminatory. The
proposed changes to the thresholds in
Tiers 1 through 4 are equitable and not
unfairly discriminatory as they are
available to all BOX Participants that
initiate Auction Transactions on the
behalf of Public Customers, and
Participants may choose whether or not
to take advantage of the percentage
thresholds and their applicable
discounted fees. Further, the Exchange
believes that the proposed changes to
the thresholds in Tiers 1 through 4 are
reasonable and competitive as they are
intended to allow more Participants to
qualify for the higher tiers, which the
Exchange believes will incentivize
Participants to direct order flow to the
Exchange, in turn benefiting all market
participants on the Exchange. The
Exchange believes that the proposed
amendments to the fees associated with
Tiers 2 and 3 6 are reasonable and
appropriate, as this Tiered Fee Schedule
is in place to provide incentives to BOX
15 U.S.C. 78f(b)(4) and (5).
Exchange notes that the fees in Tiers 1 and
4 are not being changed.
5
6 The
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17:11 Oct 04, 2018
Jkt 247001
Participants to submit their Public
Customer Orders into the PIP for
potential price improvement. These
reduced fees combined with the lower
threshold levels are meant to incentivize
more Participants to submit Price
Improvement Orders to the Exchange,
which the Exchange believes will
further incentivize Participants to direct
order flow to the Exchange, in turn
benefiting all market participants on the
Exchange. The Exchange believes that
the proposed thresholds and fees remain
competitive when compared to the
auction transaction fees on other
exchanges.7
The Exchange also believes the
proposed amendments to the BVR in
Section I.B.2 of the BOX Fee Schedule
are reasonable, equitable and not
unfairly discriminatory. The BVR was
adopted to attract Public Customer order
flow to the Exchange by offering these
Participants incentives to submit their
Public Customer PIP and COPIP Orders
to the Exchange and the Exchange
believes it is appropriate to now amend
the BVR. The Exchange believes it is
equitable and not unfairly
discriminatory to amend the BVR, as all
Participants have the ability to qualify
for a rebate, and rebates are provided
equally to qualifying Participants. Other
exchanges employ similar incentive
programs; 8 and the Exchange believes
that the proposed changes to the volume
thresholds and fees are reasonable and
competitive when compared to
incentive structures at other exchanges.
Finally, the Exchange believes it is
reasonable and appropriate to continue
to provide incentives for Public
Customers, which will result in greater
liquidity and ultimately benefit all
Participants trading on the Exchange.
7 Comparative
fees at other exchanges range from
$0.02 to $0.20. See Section IV of the Phlx Pricing
Schedule entitled ‘‘PIXL Pricing’’; Nasdaq ISE LLC
(‘‘ISE’’) Schedule of Fees, Section I. Regular Order
Fees and Rebates ‘‘Select Symbols.’’
8 See Section B of the Nasdaq Phlx LLC Pricing
Schedule entitled ‘‘Customer Rebate Program’’ and
Cboe Exchange Inc. (‘‘Cboe’’) Volume Incentive
Program (VIP).
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
($0.00)
(0.05)
(0.08)
(0.11)
COPIP
($0.00)
(0.05)
(0.08)
(0.11)
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange is simply proposing to amend
certain percentage thresholds and fees
for Auction Transaction fees and rebates
in the BOX Fee Schedule. The Exchange
believes that the volume based rebates
and fees increase intermarket and
intramarket competition by incenting
Participants to direct their order flow to
the exchange, which benefits all
participants by providing more trading
opportunities and improves competition
on the Exchange.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Exchange Act 9 and
Rule 19b–4(f)(2) thereunder,10 because
it establishes or changes a due, or fee.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend the rule change if
it appears to the Commission that the
action is necessary or appropriate in the
public interest, for the protection of
investors, or would otherwise further
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
9 15
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
10 17
E:\FR\FM\05OCN1.SGM
05OCN1
Federal Register / Vol. 83, No. 194 / Friday, October 5, 2018 / Notices
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
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–2018–33 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.
daltland on DSKBBV9HB2PROD with NOTICES
All submissions should refer to File
Number SR–BOX–2018–33. 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 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–2018–33, and should
be submitted on or before October 26,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Eduardo A. Aleman,
Assistant Secretary.
[Release No. 34–84328; File No. SR–
NASDAQ–2018–077]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change to the Minimum
Quantity Order Attribute
October 1, 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
September 19, 2018, The Nasdaq Stock
Market LLC (‘‘Nasdaq’’ or ‘‘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 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 specify that
an Order with a Minimum Quantity
Order Attribute is ineligible to
participate in the Nasdaq Opening, Halt
or Closing Crosses and is not included
in the calculation of the Cross price.
The text of the proposed rule change
is available on the Exchange’s website at
https://nasdaq.cchwallstreet.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.
[FR Doc. 2018–21683 Filed 10–4–18; 8:45 am]
BILLING CODE 8011–01–P
1 15
11 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:11 Oct 04, 2018
2 17
Jkt 247001
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00095
Fmt 4703
Sfmt 4703
50425
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is proposing to specify
that an Order 3 with a Minimum
Quantity Order Attribute 4 is ineligible
to participate in the Nasdaq Opening,5
Halt 6 or Closing 7 Crosses (collectively,
the ‘‘Nasdaq Crosses’’) and is not
included in the calculation of the Cross
price. Minimum Quantity is an Order
Attribute that allows a Participant to
provide that an Order will not execute
unless a specified minimum quantity of
shares can be obtained. In 2011, the
Exchange amended its rules concerning
the Minimum Quantity Order Attribute
to remove a restriction from the rule,
which only allowed Orders with a
Minimum Quantity Order Attribute to
immediately execute.8 Thus, the
proposed change allowed an Order with
a Minimum Quantity Order Attribute to
post to the Nasdaq Book 9 if it is not able
to execute immediately and, once
posted to the Nasdaq Book, the Order
would execute if an incoming Order that
is marketable against it would satisfy its
minimum quantity requirement.10 In
proposing the new Order Attribute, the
Exchange did not address participation
of the Order Attribute in the Nasdaq
Crosses; however, it never intended for
Orders with a Minimum Quantity Order
Attribute to participate in any of the
Nasdaq Crosses. The Minimum Quantity
Order Attribute allows market
participants avoid transacting with
smaller Orders that they believe
3 The term ‘‘Order’’ means an instruction to trade
a specified number of shares in a specified System
Security submitted to the Nasdaq Market Center by
a Participant. An ‘‘Order Type’’ is a standardized
set of instructions associated with an Order that
define how it will behave with respect to pricing,
execution, and/or posting to the Nasdaq Book when
submitted to Nasdaq. An ‘‘Order Attribute’’ is a
further set of variable instructions that may be
associated with an Order to further define how it
will behave with respect to pricing, execution, and/
or posting to the Nasdaq Book when submitted to
Nasdaq. The available Order Types and Order
Attributes, and the Order Attributes that may be
associated with particular Order Types, are
described in Rules 4702 and 4703. One or more
Order Attributes may be assigned to a single Order;
provided, however, that if the use of multiple Order
Attributes would provide contradictory instructions
to an Order, the System will reject the Order or
remove non-conforming Order Attributes. See Rule
4701(e).
4 Id.
5 See Rule 4752.
6 See Rule 4753.
7 See Rule 4754.
8 See Securities Exchange Act Release No. 65536
(October 12, 2011), 76 FR 64411 (October 18, 2011)
(SR–NASDAQ–2011–140).
9 See Rule 4701(a)(1).
10 See note 8, supra.
E:\FR\FM\05OCN1.SGM
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]]>Agencies
[Federal Register Volume 83, Number 194 (Friday, October 5, 2018)]
[Notices]
[Pages 50422-50425]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-21683]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84323; File No. SR-BOX-2018-33]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee
Schedule on the BOX Options Market LLC Facility To Revise Certain
Qualification Thresholds and Fees in Sections I.B.1, Primary
Improvement Order, and I.B.2, BOX Volume Rebate
October 1, 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 September 20, 2018, BOX Exchange LLC (the ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I, II, and III below, which Items
have been prepared by the Exchange. The Exchange filed the proposed
rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,\3\ and Rule
19b-4(f)(2) thereunder,\4\ which renders the proposal effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend the Fee Schedule on
the BOX Market LLC (``BOX'') options facility. Changes to the fee
schedule pursuant to this proposal will be effective upon filing. 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 https://boxexchange.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the
[[Page 50423]]
places specified in Item IV below. The Exchange has prepared summaries,
set forth in Sections A, B, and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Fee Schedule on BOX.
Specifically, the Exchange proposes to revise certain qualification
thresholds and fees in Sections I.B.1 of the BOX Fee Schedule, Primary
Improvement Order and I.B.2 of the BOX Fee Schedule, the BOX Volume
Rebate (``BVR'').
Primary Improvement Order
Under the tiered fee schedule for Primary Improvement Orders, the
Exchange assesses a per contract execution fee to all Primary
Improvement Order executions where the corresponding PIP or COPIP Order
is from the account of a Public Customer. Percentage thresholds are
calculated on a monthly basis by totaling the Initiating Participant's
Primary Improvement Order volume submitted to BOX, relative to the
total national Customer volume in multiply-listed options classes. The
current tiered fee schedule for Primary Improvement Orders is as
follows:
------------------------------------------------------------------------
Percentage thresholds
of national customer Per contract
Tier volume in multiply- fee (all
listed options classes account
(monthly) types)
------------------------------------------------------------------------
1.............................. 0.000%-0.079%.......... $0.25
2.............................. 0.080%-0.159%.......... 0.20
3.............................. 0.160%-0.499%.......... 0.12
4.............................. 0.500% and Above....... 0.02
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The Exchange proposes to adjust the percentage thresholds in Tiers
1 through 4. Additionally, the Exchange proposes to decrease the fees
associated with Tiers 2 and 3 from $0.20 to $0.12 and $0.12 to $0.07,
respectively. The new tiered fee schedule for Primary Improvement
Orders will be as follows:
------------------------------------------------------------------------
Percentage thresholds
of national customer Per contract
Tier volume in multiply- fee (all
listed options classes account
(monthly) types)
------------------------------------------------------------------------
1.............................. 0.000%-0.049%.......... $0.25
2.............................. 0.050%-0.129%.......... 0.12
3.............................. 0.130%-0.449%.......... 0.07
4.............................. 0.450% and Above....... 0.02
------------------------------------------------------------------------
BVR
Next, the Exchange proposes to adjust certain percentage thresholds
and fees within the BVR. Under the BVR, the Exchange offers a tiered
per contract rebate for all Public Customer PIP Orders and COPIP Orders
of 250 and under contracts that do not trade solely with their contra
order. Percentage thresholds are calculated on a monthly basis by
totaling the Participant's PIP and COPIP volume submitted to BOX,
relative to the total national Customer volume in multiply-listed
options classes. The current fee schedule for all Public Customer PIP
and COPIP Order of 250 and under contracts that do not trade solely
with their contra order is as follows:
----------------------------------------------------------------------------------------------------------------
Per contract rebate (all
Percentage thresholds of national account types)
Tier customer volume in multiply-listed -------------------------------
options classes (monthly) PIP COPIP
----------------------------------------------------------------------------------------------------------------
1.......................................... 0.000% to 0.159%................... ($0.00) ($0.00)
2.......................................... 0.160% to 0.339%................... (0.02) (0.02)
3.......................................... 0.340% to 0.499%................... (0.04) (0.04)
4.......................................... 0.500% and Above................... (0.11) (0.08)
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The Exchange proposes to adjust the percentage thresholds in Tiers
1 through 4. Additionally, the Exchange proposes to increase the per
contract rebates in Tier 2, Tier 3 and Tier 4. Specifically, the
Exchange proposes to increase the per contract rebate for Tier 2 to
$0.05 from $0.02 for PIP and COPIP Orders. Further, the Exchange
proposes to increase the rebates in Tier 3 to $0.08 from $0.04 for PIP
and COPIP Orders. Lastly, the Exchange is proposing to increase the per
contract rebate for COPIP Orders in Tier 4 to $0.11 from $0.08. The new
fee schedule for all Public Customer PIP and COPIP Orders of 250 and
under contracts that do not trade solely with their contra order will
be as follows:
[[Page 50424]]
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Per contract rebate (all
Percentage thresholds of national account types)
Tier customer volume in multiply-listed -------------------------------
options classes (monthly) PIP COPIP
----------------------------------------------------------------------------------------------------------------
1.......................................... 0.000% to 0.049%................... ($0.00) ($0.00)
2.......................................... 0.050% to 0.299%................... (0.05) (0.05)
3.......................................... 0.300% to 0.449%................... (0.08) (0.08)
4.......................................... 0.450% and Above................... (0.11) (0.11)
----------------------------------------------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act, in general, and Section
6(b)(4) and 6(b)(5) of the Act,\5\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees, and other
charges among BOX Participants and other persons using its facilities
and does not unfairly discriminate between customers, issuers, brokers
or dealers.
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\5\ 15 U.S.C. 78f(b)(4) and (5).
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BOX believes it is reasonable, equitable and not unfairly
discriminatory to adjust the volume based thresholds and fees within
the BOX Fee Schedule. The volume thresholds with their tiered fees and
rebates are meant to incentivize Participants to direct order flow to
the Exchange to obtain the benefit of the lower fee or higher rebate,
which in turn benefits all market participants by increasing liquidity
on the Exchange.
The Exchange believes the proposed amendments to the Primary
Improvement Order volume based thresholds are reasonable, equitable and
not unfairly discriminatory. The proposed changes to the thresholds in
Tiers 1 through 4 are equitable and not unfairly discriminatory as they
are available to all BOX Participants that initiate Auction
Transactions on the behalf of Public Customers, and Participants may
choose whether or not to take advantage of the percentage thresholds
and their applicable discounted fees. Further, the Exchange believes
that the proposed changes to the thresholds in Tiers 1 through 4 are
reasonable and competitive as they are intended to allow more
Participants to qualify for the higher tiers, which the Exchange
believes will incentivize Participants to direct order flow to the
Exchange, in turn benefiting all market participants on the Exchange.
The Exchange believes that the proposed amendments to the fees
associated with Tiers 2 and 3 \6\ are reasonable and appropriate, as
this Tiered Fee Schedule is in place to provide incentives to BOX
Participants to submit their Public Customer Orders into the PIP for
potential price improvement. These reduced fees combined with the lower
threshold levels are meant to incentivize more Participants to submit
Price Improvement Orders to the Exchange, which the Exchange believes
will further incentivize Participants to direct order flow to the
Exchange, in turn benefiting all market participants on the Exchange.
The Exchange believes that the proposed thresholds and fees remain
competitive when compared to the auction transaction fees on other
exchanges.\7\
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\6\ The Exchange notes that the fees in Tiers 1 and 4 are not
being changed.
\7\ Comparative fees at other exchanges range from $0.02 to
$0.20. See Section IV of the Phlx Pricing Schedule entitled ``PIXL
Pricing''; Nasdaq ISE LLC (``ISE'') Schedule of Fees, Section I.
Regular Order Fees and Rebates ``Select Symbols.''
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The Exchange also believes the proposed amendments to the BVR in
Section I.B.2 of the BOX Fee Schedule are reasonable, equitable and not
unfairly discriminatory. The BVR was adopted to attract Public Customer
order flow to the Exchange by offering these Participants incentives to
submit their Public Customer PIP and COPIP Orders to the Exchange and
the Exchange believes it is appropriate to now amend the BVR. The
Exchange believes it is equitable and not unfairly discriminatory to
amend the BVR, as all Participants have the ability to qualify for a
rebate, and rebates are provided equally to qualifying Participants.
Other exchanges employ similar incentive programs; \8\ and the Exchange
believes that the proposed changes to the volume thresholds and fees
are reasonable and competitive when compared to incentive structures at
other exchanges. Finally, the Exchange believes it is reasonable and
appropriate to continue to provide incentives for Public Customers,
which will result in greater liquidity and ultimately benefit all
Participants trading on the Exchange.
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\8\ See Section B of the Nasdaq Phlx LLC Pricing Schedule
entitled ``Customer Rebate Program'' and Cboe Exchange Inc.
(``Cboe'') Volume Incentive Program (VIP).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange is simply
proposing to amend certain percentage thresholds and fees for Auction
Transaction fees and rebates in the BOX Fee Schedule. The Exchange
believes that the volume based rebates and fees increase intermarket
and intramarket competition by incenting Participants to direct their
order flow to the exchange, which benefits all participants by
providing more trading opportunities and improves competition on the
Exchange.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Exchange Act \9\ and Rule 19b-4(f)(2)
thereunder,\10\ because it establishes or changes a due, or fee.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend the rule
change if it appears to the Commission that the action is necessary or
appropriate in the public interest, for the protection of investors, or
would otherwise further the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act.
[[Page 50425]]
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 [email protected]. Please include
File Number SR-BOX-2018-33 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-BOX-2018-33. 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 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-2018-33, and should be submitted on
or before October 26, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-21683 Filed 10-4-18; 8:45 am]
BILLING CODE 8011-01-P
