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 (“BOX”) Facility for Complex Order Transactions, 57795-57799 [2019-23424]
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Federal Register / Vol. 84, No. 208 / Monday, October 28, 2019 / Notices
designates the proposed rule change
operative upon filing.13
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
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–2019–27 and should be
submitted on or before November 18,
2019.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Jill M. Peterson,
Assistant Secretary.
Electronic Comments
[FR Doc. 2019–23425 Filed 10–25–19; 8:45 am]
• 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–2019–27 on the subject line.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87378; File No. SR–BOX–
2019–30]
khammond on DSKJM1Z7X2PROD with NOTICES
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–2019–27. 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
13 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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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 (‘‘BOX’’) Facility for Complex
Order Transactions
October 22, 2019.
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 October
10, 2019, 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
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
1 15
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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
Options Market LLC (‘‘BOX’’) facility.
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
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 for trading on BOX. The
Exchange first notes that it operates in
a highly competitive market in which
market participants can readily direct
order flow to competing venues if they
deem fee levels at a particular venue to
be excessive or incentives to be
insufficient. More specifically, the
Exchange is one of 16 options venues to
which market participants may direct
their order flow. The Exchange believes
that the ever-shifting market share
among the exchanges from month to
month demonstrates that market
participants can shift order flow, or
discontinue to reduce use of certain
categories of products, in response to fee
changes. Accordingly, competitive
forces constrain the Exchange’s
transaction fees, and market participant
can readily trade on competing venues
if they deem pricing levels at those
other venues to be more favorable.
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Federal Register / Vol. 84, No. 208 / Monday, October 28, 2019 / Notices
In response to this competitive
environment, the Exchange has
established a Make/Take pricing model
for Complex Orders which was intended
to attract Complex Orders to the
Exchange by offering market
participants incentives (i.e. maker or
taker credits) to submit their Complex
Orders to the Exchange, which could
result in greater overall liquidity on
BOX, ultimately benefiting all
Participants trading on the Exchange.
These Make/Take pricing models have
been accepted by both the Commission
and the industry.5 The result of this
structure is that a Participant does not
know the fee it will be charged when
submitting the Complex Order.
Therefore, the Participant must
recognize that it could be charged the
highest applicable fee on the Exchange’s
Complex Order schedule, which may,
instead be lowered or changed to a
credit depending upon how the
Complex Order interacts.
Proposal
The Exchange proposes to adjust
certain fees and credits within the
Complex Order pricing structure.
Specifically, the Exchange proposes to
increase the maker and taker credits for
Public Customers interacting with
Professional Customers/Broker Dealers
or Market Makers in both Penny and
Non-Penny Pilot Classes. Here, the
Exchange proposes to increase the credit
Public Customers receive when
interacting with Professional Customers,
Broker Dealers or Market Makers,
regardless of whether they are adding or
removing liquidity to $0.50 from $0.35
(Penny Pilot Classes) and to $0.90 from
$0.70 (Non-Penny Pilot Classes).
The Exchange also proposes to adjust
the Maker credits and Taker fees for
Professional Customers or Broker
Dealers in both Penny Pilot and NonPenny Pilot Classes. Specifically, when
a Professional Customer or Broker
Dealer interacts with a Public Customer
in a Penny Pilot Class, the Exchange
proposes to raise this fee to $0.50 from
$0.45 for making liquidity and to $0.50
from $0.45 for taking liquidity. For NonPenny Pilot Classes, the Exchange
proposes to raise the fees in this same
type of interaction to $0.98 from $0.80
for making liquidity and to $0.98 from
$0.80 for taking liquidity. For when a
Professional Customer or Broker Dealer
interacts with another Professional
Customer or Broker Dealer in Penny
Pilot Classes, the Exchange proposes to
raise the credit for making liquidity to
$0.30 from $0.10 and raise the fee for
taking liquidity to $0.50 from $0.30. For
Non-Penny Pilot Classes, the Exchange
proposes to raise the fees and credits in
this same type of interaction.
Specifically, the Exchange proposes to
raise the credit for making liquidity to
$0.30 from $0.10 and increase the fee for
taking liquidity to $1.00 from $0.45. For
when a Professional Customer or Broker
Dealer interacts with a Market Maker in
Penny Pilot Classes, the Exchange
proposes to raise the credit for making
liquidity to $0.30 from $0.10 and
increase the fee for taking liquidity to
$0.50 from $0.30. For Non-Penny Pilot
Classes the Exchange proposes to raise
the fees and credits in this same type of
interaction. Specifically, the Exchange
proposes to increase the credit for
making liquidity to $0.30 from $0.10
and increase the fee for taking liquidity
to $1.00 from $0.45.
The Exchange also proposes to adjust
the Maker and Taker fees and credits for
Market Makers in both Penny Pilot and
Non-Penny Pilot Classes. Specifically,
when a Market Maker interacts with a
Public Customer in a Penny Pilot Class,
the Exchange proposes to raise the fee
to $0.50 from $0.40 for making liquidity
and to $0.50 from $0.40 for taking
liquidity. For Non-Penny Pilot Classes,
the Exchange proposes to raise the fees
in this same type of interaction to $0.98
from $0.75 for making liquidity and to
$0.98 from $0.75 for taking liquidity.
For when a Market Maker interacts with
a Professional Customer or Broker
Dealer in Penny Pilot Classes, the
Exchange proposes to raise the credit for
making liquidity to $0.30 from $0.10
and raise the fee for taking liquidity to
$0.50 from $0.30. For Non-Penny Pilot
Classes, the Exchange proposes to raise
the fees and credits in this same type of
interaction. Specifically, the Exchange
proposes to raise the credit for making
liquidity to $0.30 from $0.10 and
increase the fee for taking liquidity to
$1.00 from $0.45. For when a Market
Maker interacts with another Market
Maker in Penny Pilot Classes, the
Exchange proposes to raise the credit for
making liquidity to $0.30 from $0.10
and increase the fee for taking liquidity
to $0.50 from $0.30. For Non-Penny
Pilot Classes, the Exchange proposes to
raise the fees and credits in this same
type of interaction. Specifically, the
Exchange proposes to increase the credit
for making liquidity to $0.30 from $0.10
and increase the fee for taking liquidity
to $1.00 from $0.45.
The revised Complex Order Pricing
Structure will be as follows:
Penny pilot classes
Contra party
Public Customer ................................
Public Customer ...............................
Professional Customer/Broker Dealer.
Market Maker ...................................
Public Customer ...............................
$0.00
(0.50)
$0.00
(0.50)
$0.00
(0.90)
$0.00
(0.90)
(0.50)
0.50
(0.50)
0.50
(0.90)
0.98
(0.90)
0.98
Professional Customer/Broker Dealer.
Market Maker ...................................
Public Customer ...............................
Professional Customer/Broker Dealer.
Market Maker ...................................
(0.30)
0.50
(0.30)
1.00
(0.30)
0.50
(0.30)
0.50
0.50
0.50
(0.30)
0.98
(0.30)
1.00
0.98
1.00
(0.30)
0.50
(0.30)
1.00
Professional Customer or Broker
Dealer.
Market Maker ....................................
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Non-penny pilot classes
Account type
Maker fee/
credit
Taker fee/
credit
5 The ‘‘Make/Take’’ model is currently used by
Nasdaq ISE LLC (‘‘ISE’) and NASDAQ PHLX LLC
(‘‘PHLX’’).
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Maker fee/
credit
Taker fee/
credit
Federal Register / Vol. 84, No. 208 / Monday, October 28, 2019 / Notices
The Exchange next proposes to amend
Section IV (Complex Order Transaction
Fees) of the BOX Fee Schedule to
establish a $0.12 per contract surcharge
on any electronic non-Public Customer
Complex Order that executes against an
electronic Public Customer Complex
Order (the ‘‘Complex Surcharge’’). The
Exchange notes that the proposed
Complex Surcharge is consistent with
charges imposed by other options
exchanges.6
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,7 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.
khammond on DSKJM1Z7X2PROD with NOTICES
Complex Order Transaction Fees
The Exchange believes that amending
the Complex Order pricing structure is
reasonable, equitable and not unfairly
discriminatory. The fee structure for
Complex Order Transactions has been
well received by Participants and the
industry since it was adopted in 2016,8
and the Exchange believes it is now
appropriate to adjust certain fees and
credits in order to remain competitive
with other options exchanges in the
industry. As discussed above, the
Complex Order fee structure is generally
intended to attract order flow to the
Exchange by offering all market
participants incentives to submit their
Complex Orders to the Exchange.
The Exchange believes that the
proposed increase in the amount of
credits for Public Customer Complex
Orders are reasonable. Under the
proposed fee structure, Public
Customers will either receive a $0.50
credit for making or taking liquidity in
Penny Pilot Classes when interacting
with a Professional Customer, Broker
Dealer or Market Maker or receive a
$0.90 credit for making or taking
liquidity in Non-Penny Pilot Classes
when interacting with a Professional
Customer, Broker Dealer or Market
Maker. Public Customers will continue
to be charged no fee when interacting
6 See NYSE American LLC (‘‘NYSE American’’)
Fee Schedule (imposing a $0.12 per contract
surcharge to certain complex orders). See also
Miami Securities International Exchange, LLC
(‘‘MIAX’’) fee schedule (imposing a $0.12 fee on
certain complex orders).
7 15 U.S.C. 78f(b)(4) and (5).
8 See Securities Exchange Act Release No. 77568
(April 8, 2016), 81 FR 22151 (April 14, 2016)
(SRBOX–2016–15.
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with another Public Customer. The
Exchange believes providing an
increased credit and charging no fee to
Public Customers for Complex Orders is
equitable and not unfairly
discriminatory. The securities markets
generally, and BOX in particular, have
historically aimed to improve markets
for investors and develop various
features within the market structure for
Public Customer benefit. Accordingly,
the Exchange believes that charging no
fee or providing a credit for Public
Customers is appropriate and not
unfairly discriminatory. Public
Customers are less sophisticated than
other Participants and the proposed
increased credit will help to attract a
high level of Public Customer order flow
to the BOX Book and create liquidity,
which the Exchange believes will
ultimately benefit all Participants
trading on BOX.
The Exchange also believes it is
reasonable, equitable and not unfairly
discriminatory to give Public Customers
a credit when their Complex Order
executes against a non-Public Customer
and, accordingly, charge non-Public
Customers a higher fee when their
Complex Order executes against a
Public Customer. As stated above, the
Exchange aims to improve markets by
developing features for the benefit of its
Public Customers. Similar to the
payment for order flow and other
pricing models that have been adopted
by the Exchange and other exchanges to
attract Public Customer order flow, the
Exchange increases fees to non-Public
Customers to provide incentives for
Public Customers. The Exchange
believes that providing incentives for
Complex Orders by Public Customers is
reasonable and, ultimately, will benefit
all Participants trading on the Exchange
by attracting Public Customer order
flow.
The Exchange believes that the
proposed fees and credits for
Professional Customers and Broker
Dealers in Complex Orders are
reasonable. Under the proposed fee
structure, a Professional Customer or
Broker Dealer making liquidity and
interacting with a Public Customer will
be charged $0.50 in Penny Pilot Classes
and $0.98 in Non-Penny Pilot Classes.
Further, Professional Customers or
Broker Dealers making liquidity and
interacting with another Professional
Customer, Broker Dealer or Market
Maker will be credited $0.30 for
Complex Orders in Penny Pilot Classes.
If the Professional Customer or Broker
Dealer is instead taking liquidity and
interacting with another Professional
Customer, Broker Dealer or Market
Maker, they will be charged $0.50 for
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57797
Complex Orders in Penny Pilot Classes.
For Complex Orders in Non-Penny Pilot
Classes, the Professional Customer or
Broker Dealer will be charged $0.98 if
the Complex Order interacts with a
Public Customer’s Complex Order in the
Non-Penny Pilot Classes. Further,
Professional Customers and Broker
Dealers will be credited $0.30 when
making liquidity in Non-Penny Pilot
Classes and interacting with another
Professional Customer, Broker Dealer or
Market Maker. Lastly, Professional
Customers and Broker Dealers taking
liquidity in Non-Penny Pilot Classes
will be charged $1.00 if the Complex
Order interacts with a Professional
Customer or Broker Dealer or a Market
Maker.
The Exchange believes that charging
Professional Customers and Broker
Dealers higher fees than Public
Customers for Complex Orders is
equitable and not unfairly
discriminatory. Professional Customers,
while Public Customers by virtue of not
being Broker Dealers, generally engage
in trading activity more similar to
Broker Dealer proprietary trading
accounts (submitting more than 390
standard orders per day on average).
The Exchange believes that the higher
level of trading activity from these
Participants will draw a greater amount
of BOX system resources than that of
nonprofessional, Public Customers.
Because this higher level of trading
activity will result in greater ongoing
operational costs, the Exchange aims to
recover its costs by assessing
Professional Customers and Broker
Dealers higher fees for transactions.
Finally, the Exchange believes that
the proposed fees for Market Makers in
Complex Orders are reasonable. Under
the proposed fee structure, a Market
Maker making or taking liquidity and
interacting with a Public Customer will
be charged $0.50 for Complex Orders in
Penny Pilot Classes. A Market Maker
making liquidity and interacting with a
Professional Customer, Broker Dealer or
Market Marker will be credited $0.30 for
Complex Orders in both Penny Pilot
Classes and Non-Penny Pilot Classes. If
the Market Maker is instead taking
liquidity, for Complex Orders in Penny
Pilot Classes it will be charged $0.50 if
the Complex Order interacts with a
Professional Customer or Broker Dealer
or a Market Maker. For Market Maker
Complex Orders making or taking
liquidity and interacting with a Public
Customer in Non-Penny Pilot Classes,
the Market Maker will be charged $0.98.
Further, Market Makers will be credited
$0.30 when making liquidity in NonPenny Pilot Classes and interacting with
another Professional Customer or Broker
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Federal Register / Vol. 84, No. 208 / Monday, October 28, 2019 / Notices
Dealer or Market Maker. Lastly, Market
Makers taking liquidity in Non-Penny
Pilot Classes will be charged $1.00 if the
Complex Order interacts with a
Professional Customer or Broker Dealer
or a Market Maker.
The Exchange believes it is equitable
and not unfairly discriminatory for BOX
Market Makers to be assessed the same
fees as Professional Customers and
Broker Dealers as the proposed change
will provide uniformity throughout the
Complex Order pricing structure for
non-Public Customers which will
provide clarity and reduce investor
confusion.
The Exchange believes it is
reasonable, equitable and not unfairly
discriminatory for Professional
Customers, Broker Dealers and Market
Makers to be charged a higher fee for
orders removing liquidity when
compared to the credit they receive for
orders that add liquidity. Giving a credit
to Complex Orders that add liquidity
will promote liquidity on the Exchange
and ultimately benefit all participants
on BOX. Further, the concept of
incentivizing orders that add liquidity
over orders that remove liquidity is
commonly accepted within the industry
as part of the ‘‘Make/Take’’ liquidity
model.9
Finally, the Exchange also believes it
is reasonable to charge Professional
Customers, Broker Dealers, and Market
Makers less for certain executions in
Penny Pilot issues compared to NonPenny Pilot issues because these classes
are typically more actively traded;
assessing lower fees will further
incentivize order flow in Penny Pilot
issues on the Exchange, ultimately
benefiting all Participants trading on
BOX. Additionally, the Exchange
believes it is reasonable to give a greater
credit to Public Customers for Complex
Orders in Non-Penny Pilot issues as
compared to Penny Pilot issues. Since
these classes have wider spreads and are
less actively traded, giving a larger
credit will further incentivize Public
Customers to trade in these classes,
ultimately benefitting all Participants
trading on BOX.
The Exchange believes that the
proposed Complex Order fee structure
will keep the Exchange competitive
with other exchanges and will be
applied in an equitable manner among
all BOX Participants. The Exchange
believes the proposed fee structure is
reasonable and competitive with fee
structures in place on other exchanges.
Further, the Exchange believes that the
9 The ‘‘Make/Take’’ model is currently used by
Nasdaq ISE LLC (‘‘ISE’) and NASDAQ PHLX LLC
(‘‘PHLX’’).
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competitive marketplace impacts the
fees proposed for BOX.
Complex Surcharge
The Exchange believes the proposed
Complex Surcharge is reasonable,
equitable and not unfairly
discriminatory, as it applies to all nonPublic Customer orders. Applying the
surcharge to all market participants
except Public Customers is equitable
and not unfairly discriminatory because
Public Customer order flow enhances
liquidity on the Exchange for the benefit
of all market participants. Specifically,
Public Customer liquidity benefits all
market participants by providing more
trading opportunities, which attracts
Market Makers. An increase in the
activity of Market Makers in turn
facilities tighter spreads, which may
cause an additional corresponding
increase in order flow from other market
participants.
In addition, the proposed Complex
Surcharge is reasonable, equitable, and
not unfairly discriminatory as it is
consistent with fees charged by other
options exchanges.10 Specifically, NYSE
American imposes a $0.12 per contract
surcharge to any electronic noncustomer complex order that executes
against a customer complex order which
may result in an overall per contract fee
of $0.62.11 The Exchange notes that the
proposed Complex Surcharge of $0.12 is
identical to the surcharges imposed on
both NYSE American and MIAX. In
addition, the Exchange believes that the
proposed surcharge is not new or novel
as it incorporates aspects of the
surcharges that are already imposed on
NYSE American and MIAX.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes the proposed
10 See
supra note 6.
On NYSE American, NYSE American
Market Makers have a potential total per contract
fee of $0.62 in the Penny Pilot classes which
includes a ‘‘Rate Per Contract for Electronic
Transactions,’’ a per contract ‘‘Marketing Charge,’’
and a $0.12 complex order surcharge. NYSE
American Broker Dealers also have a potential total
per contract fee of $0.62 in the Penny Pilot classes
which includes a ‘‘Rate Per Contract for Electronic
Transactions’’ and the complex surcharge.
Similarly, on MIAX, Market Makers who qualify for
Tier 1 of the Market Maker Sliding Scale fee
structure have a potential total per contract fee of
$0.62 which includes a $0.25 ‘‘Complex Per
Contract Fee for Penny Classes,’’ a $.25 per contract
‘‘Marketing Fee,’’ and a $0.12 ‘‘Per Contract
Surcharge for Trading Against a Priority Customer
Complex Order for Penny and Non-Penny Classes.’’
11 Id.
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Complex Surcharge would not impose
an unfair burden on competition as it is
consistent with fees charged by other
exchanges.12 Further, the Exchange
believes that amending certain Complex
Order fees and credits will enhance
competition between exchanges because
it is designed to allow the Exchange to
better compete with other exchanges for
Complex Order flow.
In addition, the proposal does not
impose an undue burden on intramarket competition because the changes
will apply equally to all similarly
situated Participants. Further, the
Exchange does not believe the proposed
changes impose a unnecessary burden
on intra-market competition, as they are
merely designed to allow the Exchange
to stay competitive within the industry
where Participants already pay similar
fees at other competitor exchanges.
Finally, the Exchange notes that it
operates in a highly competitive market
in which market participants can
readily favor competing exchanges. In
such an environment, the Exchange
must continually review, and consider
adjusting, its fees and credits to remain
competitive with other exchanges. For
the reasons described above, the
Exchange believe that the proposed rule
change reflects this competitive
environment.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Exchange Act 13
and Rule 19b–4(f)(2) thereunder,14
because it establishes or changes a due,
or fee.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend the rule change if
it appears to the Commission that the
action is necessary or appropriate in the
public interest, for the protection of
investors, or would otherwise further
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
12 See
supra notes 6 and 11.
U.S.C. 78s(b)(3)(A)(ii).
14 17 CFR 240.19b–4(f)(2).
13 15
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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:
[FR Doc. 2019–23424 Filed 10–25–19; 8:45 am]
BILLING CODE 8011–01–P
Electronic Comments
SOCIAL SECURITY ADMINISTRATION
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BOX–2019–30 on the subject line.
[Docket No. SSA–2019–0041]
Paper Comments
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ACTION:
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processing and handling summonses
and complaints in lawsuits involving
judicial review of our final decisions on
individual claims for benefits under
titles II, VIII, and XVI of the Social
Security Act (Act), and individual
claims for a Medicare Part D subsidy
under title XVIII of the Act. This notice
sets out the names and current
addresses of those offices and the
jurisdictions for which each office has
responsibility.
FOR FURTHER INFORMATION CONTACT:
David Mansfield, Office of the General
Counsel, Office of Program Law, Social
Security Administration, 6401 Security
Boulevard, Baltimore, MD 21235–6404,
(410) 966–2305. For information on
eligibility or filing for benefits, call our
national toll-free number, 1–800–772–
1213 or TTY 1–800–325–0778, or visit
our internet site, Social Security Online,
at https://www.socialsecurity.gov.
SUPPLEMENTARY INFORMATION: You
should mail summonses and complaints
in cases involving judicial review of our
final decisions on individual claims for
benefits under titles II, VIII, and XVI of
the Act and individual claims for a
Medicare Part D subsidy under title
XVIII of the Act directly to the OGC
location responsible for the jurisdiction
in which the complaint has been filed.
This notice replaces the notice we
published on December 12, 2018 (83 FR
63962), and reflects the current
jurisdictional assignments for our
Regional Chief Counsels’ Offices and
our Office of Program Law. The changes
in this notice from our 2018 notice
reflect the relocation and new mailing
address of the Office of the Regional
Chief Counsel, Dallas (Region VI), and
an indication that summonses and
complaints in cases involving judicial
SUMMARY:
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
khammond on DSKJM1Z7X2PROD with NOTICES
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Jill M. Peterson,
Assistant Secretary.
All submissions should refer to File
Number SR–BOX–2019–30. 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–2019–30, and should
be submitted on or before November 18,
2019.
15 17
VerDate Sep<11>2014
16:58 Oct 25, 2019
Jkt 250001
PO 00000
CFR 200.30–3(a)(12).
Frm 00112
Fmt 4703
Sfmt 4703
57799
review of final decisions on individual
claims for a Medicare Part D subsidy
should be served in the same manner
described in this notice. The
jurisdictional responsibilities, names,
and addresses of our OGC offices are as
follows:
Alabama
U.S. District Court—Middle District of
Alabama: Office of the Regional Chief
Counsel, Atlanta (Region IV).
U.S. District Court—Northern District of
Alabama: Office of the Regional Chief
Counsel, Atlanta (Region IV).
U.S. District Court—Southern District of
Alabama: Office of the Regional Chief
Counsel, Atlanta (Region IV).
Alaska
U.S. District Court—Alaska: Office of the
Regional Chief Counsel, Seattle (Region X).
Arizona
U.S. District Court—Arizona: Office of the
Regional Chief Counsel, San Francisco
(Region IX).
Arkansas
U.S. District Court—Eastern District of
Arkansas: Office of the Regional Chief
Counsel, Dallas (Region VI).
U.S. District Court—Western District of
Arkansas: Office of the Regional Chief
Counsel, Dallas (Region VI).
California
U.S. District Court—Central District of
California: Office of the Regional Chief
Counsel, San Francisco (Region IX).
U.S. District Court—Eastern District of
California: Office of the Regional Chief
Counsel, San Francisco (Region IX).
U.S. District Court—Northern District of
California: Office of the Regional Chief
Counsel, San Francisco (Region IX).
U.S. District Court—Southern District of
California: Office of the Regional Chief
Counsel, San Francisco (Region IX).
Colorado
U.S. District Court—Colorado: Office of the
Regional Chief Counsel, Denver (Region
VIII).
Connecticut
U.S. District Court—Connecticut: Office of
the Regional Chief Counsel, New York
(Region II).
Delaware
U.S. District Court—Delaware: Office of the
Regional Chief Counsel, Philadelphia
(Region III).
District of Columbia
U.S. District Court—District of Columbia:
Office of the Regional Chief Counsel,
Philadelphia (Region III).
Florida
U.S. District Court—Middle District of
Florida: Office of the Regional Chief
Counsel, Atlanta (Region IV).
U.S. District Court—Northern District of
Florida: Office of the Regional Chief
Counsel, Atlanta (Region IV).
E:\FR\FM\28OCN1.SGM
28OCN1
]]>Agencies
[Federal Register Volume 84, Number 208 (Monday, October 28, 2019)]
[Notices]
[Pages 57795-57799]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23424]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87378; File No. SR-BOX-2019-30]
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 (``BOX'') Facility for Complex
Order Transactions
October 22, 2019.
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 October 10, 2019, 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 Options Market LLC (``BOX'') facility. 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 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 for trading on BOX.
The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is one of 16 options venues to which market participants may
direct their order flow. The Exchange believes that the ever-shifting
market share among the exchanges from month to month demonstrates that
market participants can shift order flow, or discontinue to reduce use
of certain categories of products, in response to fee changes.
Accordingly, competitive forces constrain the Exchange's transaction
fees, and market participant can readily trade on competing venues if
they deem pricing levels at those other venues to be more favorable.
[[Page 57796]]
In response to this competitive environment, the Exchange has
established a Make/Take pricing model for Complex Orders which was
intended to attract Complex Orders to the Exchange by offering market
participants incentives (i.e. maker or taker credits) to submit their
Complex Orders to the Exchange, which could result in greater overall
liquidity on BOX, ultimately benefiting all Participants trading on the
Exchange. These Make/Take pricing models have been accepted by both the
Commission and the industry.\5\ The result of this structure is that a
Participant does not know the fee it will be charged when submitting
the Complex Order. Therefore, the Participant must recognize that it
could be charged the highest applicable fee on the Exchange's Complex
Order schedule, which may, instead be lowered or changed to a credit
depending upon how the Complex Order interacts.
---------------------------------------------------------------------------
\5\ The ``Make/Take'' model is currently used by Nasdaq ISE LLC
(``ISE') and NASDAQ PHLX LLC (``PHLX'').
---------------------------------------------------------------------------
Proposal
The Exchange proposes to adjust certain fees and credits within the
Complex Order pricing structure. Specifically, the Exchange proposes to
increase the maker and taker credits for Public Customers interacting
with Professional Customers/Broker Dealers or Market Makers in both
Penny and Non-Penny Pilot Classes. Here, the Exchange proposes to
increase the credit Public Customers receive when interacting with
Professional Customers, Broker Dealers or Market Makers, regardless of
whether they are adding or removing liquidity to $0.50 from $0.35
(Penny Pilot Classes) and to $0.90 from $0.70 (Non-Penny Pilot
Classes).
The Exchange also proposes to adjust the Maker credits and Taker
fees for Professional Customers or Broker Dealers in both Penny Pilot
and Non-Penny Pilot Classes. Specifically, when a Professional Customer
or Broker Dealer interacts with a Public Customer in a Penny Pilot
Class, the Exchange proposes to raise this fee to $0.50 from $0.45 for
making liquidity and to $0.50 from $0.45 for taking liquidity. For Non-
Penny Pilot Classes, the Exchange proposes to raise the fees in this
same type of interaction to $0.98 from $0.80 for making liquidity and
to $0.98 from $0.80 for taking liquidity. For when a Professional
Customer or Broker Dealer interacts with another Professional Customer
or Broker Dealer in Penny Pilot Classes, the Exchange proposes to raise
the credit for making liquidity to $0.30 from $0.10 and raise the fee
for taking liquidity to $0.50 from $0.30. For Non-Penny Pilot Classes,
the Exchange proposes to raise the fees and credits in this same type
of interaction. Specifically, the Exchange proposes to raise the credit
for making liquidity to $0.30 from $0.10 and increase the fee for
taking liquidity to $1.00 from $0.45. For when a Professional Customer
or Broker Dealer interacts with a Market Maker in Penny Pilot Classes,
the Exchange proposes to raise the credit for making liquidity to $0.30
from $0.10 and increase the fee for taking liquidity to $0.50 from
$0.30. For Non-Penny Pilot Classes the Exchange proposes to raise the
fees and credits in this same type of interaction. Specifically, the
Exchange proposes to increase the credit for making liquidity to $0.30
from $0.10 and increase the fee for taking liquidity to $1.00 from
$0.45.
The Exchange also proposes to adjust the Maker and Taker fees and
credits for Market Makers in both Penny Pilot and Non-Penny Pilot
Classes. Specifically, when a Market Maker interacts with a Public
Customer in a Penny Pilot Class, the Exchange proposes to raise the fee
to $0.50 from $0.40 for making liquidity and to $0.50 from $0.40 for
taking liquidity. For Non-Penny Pilot Classes, the Exchange proposes to
raise the fees in this same type of interaction to $0.98 from $0.75 for
making liquidity and to $0.98 from $0.75 for taking liquidity. For when
a Market Maker interacts with a Professional Customer or Broker Dealer
in Penny Pilot Classes, the Exchange proposes to raise the credit for
making liquidity to $0.30 from $0.10 and raise the fee for taking
liquidity to $0.50 from $0.30. For Non-Penny Pilot Classes, the
Exchange proposes to raise the fees and credits in this same type of
interaction. Specifically, the Exchange proposes to raise the credit
for making liquidity to $0.30 from $0.10 and increase the fee for
taking liquidity to $1.00 from $0.45. For when a Market Maker interacts
with another Market Maker in Penny Pilot Classes, the Exchange proposes
to raise the credit for making liquidity to $0.30 from $0.10 and
increase the fee for taking liquidity to $0.50 from $0.30. For Non-
Penny Pilot Classes, the Exchange proposes to raise the fees and
credits in this same type of interaction. Specifically, the Exchange
proposes to increase the credit for making liquidity to $0.30 from
$0.10 and increase the fee for taking liquidity to $1.00 from $0.45.
The revised Complex Order Pricing Structure will be as follows:
----------------------------------------------------------------------------------------------------------------
Penny pilot classes Non-penny pilot classes
---------------------------------------------------------------
Account type Contra party Maker fee/ Taker fee/ Maker fee/ Taker fee/
credit credit credit credit
----------------------------------------------------------------------------------------------------------------
Public Customer............... Public Customer. $0.00 $0.00 $0.00 $0.00
Professional (0.50) (0.50) (0.90) (0.90)
Customer/Broker
Dealer.
Market Maker.... (0.50) (0.50) (0.90) (0.90)
Professional Customer or Public Customer. 0.50 0.50 0.98 0.98
Broker Dealer.
Professional (0.30) 0.50 (0.30) 1.00
Customer/Broker
Dealer.
Market Maker.... (0.30) 0.50 (0.30) 1.00
Market Maker.................. Public Customer. 0.50 0.50 0.98 0.98
Professional (0.30) 0.50 (0.30) 1.00
Customer/Broker
Dealer.
Market Maker.... (0.30) 0.50 (0.30) 1.00
----------------------------------------------------------------------------------------------------------------
[[Page 57797]]
The Exchange next proposes to amend Section IV (Complex Order
Transaction Fees) of the BOX Fee Schedule to establish a $0.12 per
contract surcharge on any electronic non-Public Customer Complex Order
that executes against an electronic Public Customer Complex Order (the
``Complex Surcharge''). The Exchange notes that the proposed Complex
Surcharge is consistent with charges imposed by other options
exchanges.\6\
---------------------------------------------------------------------------
\6\ See NYSE American LLC (``NYSE American'') Fee Schedule
(imposing a $0.12 per contract surcharge to certain complex orders).
See also Miami Securities International Exchange, LLC (``MIAX'') fee
schedule (imposing a $0.12 fee on certain complex orders).
---------------------------------------------------------------------------
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,\7\ 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.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
Complex Order Transaction Fees
The Exchange believes that amending the Complex Order pricing
structure is reasonable, equitable and not unfairly discriminatory. The
fee structure for Complex Order Transactions has been well received by
Participants and the industry since it was adopted in 2016,\8\ and the
Exchange believes it is now appropriate to adjust certain fees and
credits in order to remain competitive with other options exchanges in
the industry. As discussed above, the Complex Order fee structure is
generally intended to attract order flow to the Exchange by offering
all market participants incentives to submit their Complex Orders to
the Exchange.
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release No. 77568 (April 8,
2016), 81 FR 22151 (April 14, 2016) (SRBOX-2016-15.
---------------------------------------------------------------------------
The Exchange believes that the proposed increase in the amount of
credits for Public Customer Complex Orders are reasonable. Under the
proposed fee structure, Public Customers will either receive a $0.50
credit for making or taking liquidity in Penny Pilot Classes when
interacting with a Professional Customer, Broker Dealer or Market Maker
or receive a $0.90 credit for making or taking liquidity in Non-Penny
Pilot Classes when interacting with a Professional Customer, Broker
Dealer or Market Maker. Public Customers will continue to be charged no
fee when interacting with another Public Customer. The Exchange
believes providing an increased credit and charging no fee to Public
Customers for Complex Orders is equitable and not unfairly
discriminatory. The securities markets generally, and BOX in
particular, have historically aimed to improve markets for investors
and develop various features within the market structure for Public
Customer benefit. Accordingly, the Exchange believes that charging no
fee or providing a credit for Public Customers is appropriate and not
unfairly discriminatory. Public Customers are less sophisticated than
other Participants and the proposed increased credit will help to
attract a high level of Public Customer order flow to the BOX Book and
create liquidity, which the Exchange believes will ultimately benefit
all Participants trading on BOX.
The Exchange also believes it is reasonable, equitable and not
unfairly discriminatory to give Public Customers a credit when their
Complex Order executes against a non-Public Customer and, accordingly,
charge non-Public Customers a higher fee when their Complex Order
executes against a Public Customer. As stated above, the Exchange aims
to improve markets by developing features for the benefit of its Public
Customers. Similar to the payment for order flow and other pricing
models that have been adopted by the Exchange and other exchanges to
attract Public Customer order flow, the Exchange increases fees to non-
Public Customers to provide incentives for Public Customers. The
Exchange believes that providing incentives for Complex Orders by
Public Customers is reasonable and, ultimately, will benefit all
Participants trading on the Exchange by attracting Public Customer
order flow.
The Exchange believes that the proposed fees and credits for
Professional Customers and Broker Dealers in Complex Orders are
reasonable. Under the proposed fee structure, a Professional Customer
or Broker Dealer making liquidity and interacting with a Public
Customer will be charged $0.50 in Penny Pilot Classes and $0.98 in Non-
Penny Pilot Classes. Further, Professional Customers or Broker Dealers
making liquidity and interacting with another Professional Customer,
Broker Dealer or Market Maker will be credited $0.30 for Complex Orders
in Penny Pilot Classes. If the Professional Customer or Broker Dealer
is instead taking liquidity and interacting with another Professional
Customer, Broker Dealer or Market Maker, they will be charged $0.50 for
Complex Orders in Penny Pilot Classes. For Complex Orders in Non-Penny
Pilot Classes, the Professional Customer or Broker Dealer will be
charged $0.98 if the Complex Order interacts with a Public Customer's
Complex Order in the Non-Penny Pilot Classes. Further, Professional
Customers and Broker Dealers will be credited $0.30 when making
liquidity in Non-Penny Pilot Classes and interacting with another
Professional Customer, Broker Dealer or Market Maker. Lastly,
Professional Customers and Broker Dealers taking liquidity in Non-Penny
Pilot Classes will be charged $1.00 if the Complex Order interacts with
a Professional Customer or Broker Dealer or a Market Maker.
The Exchange believes that charging Professional Customers and
Broker Dealers higher fees than Public Customers for Complex Orders is
equitable and not unfairly discriminatory. Professional Customers,
while Public Customers by virtue of not being Broker Dealers, generally
engage in trading activity more similar to Broker Dealer proprietary
trading accounts (submitting more than 390 standard orders per day on
average). The Exchange believes that the higher level of trading
activity from these Participants will draw a greater amount of BOX
system resources than that of nonprofessional, Public Customers.
Because this higher level of trading activity will result in greater
ongoing operational costs, the Exchange aims to recover its costs by
assessing Professional Customers and Broker Dealers higher fees for
transactions.
Finally, the Exchange believes that the proposed fees for Market
Makers in Complex Orders are reasonable. Under the proposed fee
structure, a Market Maker making or taking liquidity and interacting
with a Public Customer will be charged $0.50 for Complex Orders in
Penny Pilot Classes. A Market Maker making liquidity and interacting
with a Professional Customer, Broker Dealer or Market Marker will be
credited $0.30 for Complex Orders in both Penny Pilot Classes and Non-
Penny Pilot Classes. If the Market Maker is instead taking liquidity,
for Complex Orders in Penny Pilot Classes it will be charged $0.50 if
the Complex Order interacts with a Professional Customer or Broker
Dealer or a Market Maker. For Market Maker Complex Orders making or
taking liquidity and interacting with a Public Customer in Non-Penny
Pilot Classes, the Market Maker will be charged $0.98. Further, Market
Makers will be credited $0.30 when making liquidity in Non-Penny Pilot
Classes and interacting with another Professional Customer or Broker
[[Page 57798]]
Dealer or Market Maker. Lastly, Market Makers taking liquidity in Non-
Penny Pilot Classes will be charged $1.00 if the Complex Order
interacts with a Professional Customer or Broker Dealer or a Market
Maker.
The Exchange believes it is equitable and not unfairly
discriminatory for BOX Market Makers to be assessed the same fees as
Professional Customers and Broker Dealers as the proposed change will
provide uniformity throughout the Complex Order pricing structure for
non-Public Customers which will provide clarity and reduce investor
confusion.
The Exchange believes it is reasonable, equitable and not unfairly
discriminatory for Professional Customers, Broker Dealers and Market
Makers to be charged a higher fee for orders removing liquidity when
compared to the credit they receive for orders that add liquidity.
Giving a credit to Complex Orders that add liquidity will promote
liquidity on the Exchange and ultimately benefit all participants on
BOX. Further, the concept of incentivizing orders that add liquidity
over orders that remove liquidity is commonly accepted within the
industry as part of the ``Make/Take'' liquidity model.\9\
---------------------------------------------------------------------------
\9\ The ``Make/Take'' model is currently used by Nasdaq ISE LLC
(``ISE') and NASDAQ PHLX LLC (``PHLX'').
---------------------------------------------------------------------------
Finally, the Exchange also believes it is reasonable to charge
Professional Customers, Broker Dealers, and Market Makers less for
certain executions in Penny Pilot issues compared to Non-Penny Pilot
issues because these classes are typically more actively traded;
assessing lower fees will further incentivize order flow in Penny Pilot
issues on the Exchange, ultimately benefiting all Participants trading
on BOX. Additionally, the Exchange believes it is reasonable to give a
greater credit to Public Customers for Complex Orders in Non-Penny
Pilot issues as compared to Penny Pilot issues. Since these classes
have wider spreads and are less actively traded, giving a larger credit
will further incentivize Public Customers to trade in these classes,
ultimately benefitting all Participants trading on BOX.
The Exchange believes that the proposed Complex Order fee structure
will keep the Exchange competitive with other exchanges and will be
applied in an equitable manner among all BOX Participants. The Exchange
believes the proposed fee structure is reasonable and competitive with
fee structures in place on other exchanges. Further, the Exchange
believes that the competitive marketplace impacts the fees proposed for
BOX.
Complex Surcharge
The Exchange believes the proposed Complex Surcharge is reasonable,
equitable and not unfairly discriminatory, as it applies to all non-
Public Customer orders. Applying the surcharge to all market
participants except Public Customers is equitable and not unfairly
discriminatory because Public Customer order flow enhances liquidity on
the Exchange for the benefit of all market participants. Specifically,
Public Customer liquidity benefits all market participants by providing
more trading opportunities, which attracts Market Makers. An increase
in the activity of Market Makers in turn facilities tighter spreads,
which may cause an additional corresponding increase in order flow from
other market participants.
In addition, the proposed Complex Surcharge is reasonable,
equitable, and not unfairly discriminatory as it is consistent with
fees charged by other options exchanges.\10\ Specifically, NYSE
American imposes a $0.12 per contract surcharge to any electronic non-
customer complex order that executes against a customer complex order
which may result in an overall per contract fee of $0.62.\11\ The
Exchange notes that the proposed Complex Surcharge of $0.12 is
identical to the surcharges imposed on both NYSE American and MIAX. In
addition, the Exchange believes that the proposed surcharge is not new
or novel as it incorporates aspects of the surcharges that are already
imposed on NYSE American and MIAX.
---------------------------------------------------------------------------
\10\ See supra note 6.
\11\ Id. On NYSE American, NYSE American Market Makers have a
potential total per contract fee of $0.62 in the Penny Pilot classes
which includes a ``Rate Per Contract for Electronic Transactions,''
a per contract ``Marketing Charge,'' and a $0.12 complex order
surcharge. NYSE American Broker Dealers also have a potential total
per contract fee of $0.62 in the Penny Pilot classes which includes
a ``Rate Per Contract for Electronic Transactions'' and the complex
surcharge. Similarly, on MIAX, Market Makers who qualify for Tier 1
of the Market Maker Sliding Scale fee structure have a potential
total per contract fee of $0.62 which includes a $0.25 ``Complex Per
Contract Fee for Penny Classes,'' a $.25 per contract ``Marketing
Fee,'' and a $0.12 ``Per Contract Surcharge for Trading Against a
Priority Customer Complex Order for Penny and Non-Penny Classes.''
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes the
proposed Complex Surcharge would not impose an unfair burden on
competition as it is consistent with fees charged by other
exchanges.\12\ Further, the Exchange believes that amending certain
Complex Order fees and credits will enhance competition between
exchanges because it is designed to allow the Exchange to better
compete with other exchanges for Complex Order flow.
---------------------------------------------------------------------------
\12\ See supra notes 6 and 11.
---------------------------------------------------------------------------
In addition, the proposal does not impose an undue burden on intra-
market competition because the changes will apply equally to all
similarly situated Participants. Further, the Exchange does not believe
the proposed changes impose a unnecessary burden on intra-market
competition, as they are merely designed to allow the Exchange to stay
competitive within the industry where Participants already pay similar
fees at other competitor exchanges.
Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing exchanges. In such an environment, the Exchange must
continually review, and consider adjusting, its fees and credits to
remain competitive with other exchanges. For the reasons described
above, the Exchange believe that the proposed rule change reflects this
competitive environment.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Exchange Act \13\ and Rule 19b-4(f)(2)
thereunder,\14\ because it establishes or changes a due, or fee.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
\14\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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.
[[Page 57799]]
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-BOX-2019-30 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-2019-30. 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-2019-30, and should be submitted on
or before November 18, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-23424 Filed 10-25-19; 8:45 am]
BILLING CODE 8011-01-P
