Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 7260 by Extending the Penny Pilot Program Through June 30, 2020, 66255-66257 [2019-26059]

Download as PDF Federal Register / Vol. 84, No. 232 / Tuesday, December 3, 2019 / Notices that sub-penny cabinet orders are already allowed on other exchanges and that waiver of the operative delay would permit the Exchange to compete for subpenny cabinet order flow. As the proposal raises no novel issues, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission waives the 30-day operative delay and designates the proposed rule change operative upon filing.17 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. 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–BOX–2019–33 and should be submitted on or before December 24, 2019. 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Jill M. Peterson, Assistant Secretary. lotter on DSKBCFDHB2PROD with NOTICES 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–2019–33 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–2019–33. 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 17 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). VerDate Sep<11>2014 18:27 Dec 02, 2019 Jkt 250001 [FR Doc. 2019–26159 Filed 12–2–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87632; File No. SR–BOX– 2019–34] Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 7260 by Extending the Penny Pilot Program Through June 30, 2020 November 26, 2019. 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 November 19, 2019, BOX Exchange LLC (the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule from interested persons. 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 66255 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend the effective time period of the Penny Pilot Program until June 30, 2020. 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:// boxoptions.com. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to extend the effective time period of the Penny Pilot Program that is currently scheduled to expire on December 31, 2019, until June 30, 2020.3 The Penny Pilot Program permits certain classes to be quoted in 3 The Penny Pilot Program has been in effect on the Exchange since its inception in May 2012. See Securities Exchange Act Release Nos. 66871 (April 27, 2012), 77 FR 26323 (May 3, 2012) (File No.10– 206, In the Matter of the Application of BOX Options Exchange LLC for Registration as a National Securities Exchange Findings, Opinion, and Order of the Commission), 67328 (June 29, 2012), 77 FR 40123 (July 6, 2012) (SR–BOX–2012– 007), 68425 (December 13, 2012), 77 FR 75234 (December 19, 2013) (SR–BOX–2012–021), 69789 (June 18, 2013), 78 FR 37854 (June 24, 2013) (SR– BOX–2013–31), 71056 (December 12, 2013), 78 FR 76691 (December 18, 2013) (SR–BOX–2013–56), 72348 (June 9, 2014), 79 FR 33976 (June 13, 2014) (SR–BOX–2014–17), 73822 (December 11, 2014), 79 FR 75606 (December 18, 2014) (SR–BOX–2014–29), 75295 (June 25, 2015), 80 FR 37690 (July 1, 2015) (SR–BOX–2015–23), 78172 (June 28, 2016), 81 FR 43325 (July 1, 2016) (SR–BOX–2016–24), 79429 (November 30, 2016), 81 FR 87991 (December 6, 2016) (SR–BOX–2016–55), 80828 (May 31, 2017), 82 FR 26175 (June 6, 2017) (SR–BOX–2017–18), 82353 (December 19, 2017) 82 FR 61087 (December 26, 2017) (SR–BOX–2017–37), 83500 (June 22, 2018), 83 FR 30471 (June 28, 2018) (SR–BOX–2018– 23), 84869 (December 19, 2018), 83 FR 66806 (December 27, 2018) (SR–BOX–2018–38), and 86053 (June 6, 2019), 84 FR 27388 (June 12, 2019) (SR–BOX–2019–20). The extension of the effective date is the only change to the Penny Pilot Program being proposed at this time. E:\FR\FM\03DEN1.SGM 03DEN1 66256 Federal Register / Vol. 84, No. 232 / Tuesday, December 3, 2019 / Notices penny increments. The minimum price variation for all classes included in the Penny Pilot program, except for PowerShares QQQ Trust (‘‘QQQQ’’)®, SPDR S&P 500 Exchange Traded Funds (‘‘SPY’’), and iShares Russell 2000 Index Funds (‘‘IWM’’), will continue to be $0.01 for all quotations in options series that are quoted at less than $3 per contract and $0.05 for all quotations in options series that are quoted at $3 per contract or greater. QQQQ, SPY, and IWM will continue to be quoted in $0.01 increments for all options series. The Exchange may replace any Pilot Program classes that have been delisted on the second trading day in the first month of each quarter. The Exchange notes that the replacement classes will be selected based on trading activity in the previous six months. The Exchange will employ the same parameters to prospective replacement classes as approved and applicable under the Pilot Program, including excluding highpriced underlying securities. The Exchange will distribute a Regulatory Circular notifying Participants which replacement classes shall be included in the Penny Pilot Program. BOX is specifically authorized to act jointly with the other options exchanges participating in the Pilot Program in identifying any replacement class. lotter on DSKBCFDHB2PROD with NOTICES 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act,4 in general, and Section 6(b)(5) of the Act,5 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general protect investors and the public interest. In particular, the proposed rule change, which extends the Penny Pilot until June 30, 2020, will enable public customers and other market participants to express their true prices to buy and sell options for the benefit of all market participants. This is consistent with the Act. 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 4 15 5 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). VerDate Sep<11>2014 18:27 Dec 02, 2019 Jkt 250001 necessary or appropriate in furtherance of the purposes of the Act. To the contrary, this proposal is procompetitive because it allows Penny Pilot issues to continue trading on the Exchange. Moreover, the Exchange believes that the proposed rule change will allow for further analysis of the Pilot and a determination of how the Pilot should be structured in the future; and will serve to promote regulatory clarity and consistency, thereby reducing burdens on the marketplace and facilitating investor protection. The Pilot is an industry wide initiative supported by all other option exchanges. The Exchange believes that extending the Pilot will allow for continued competition between market participants on the Exchange trading similar products as their counterparts on other exchanges, while at the same time allowing the Exchange to continue to compete for order flow with other exchanges in option issues trading as part of the Pilot. As such, 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. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 6 and Rule 19b– 4(f)(6) 7 thereunder. Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to 19(b)(3)(A) of the Act 8 and Rule 19b–4(f)(6) 9 thereunder. 6 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the 7 17 PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BOX–2019–34 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–2019–34. 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, on official business days between the hours of 10:00 a.m. and 3:00 p.m., located at 100 F Street NE, Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments Commission. The Exchange has satisfied this requirement. E:\FR\FM\03DEN1.SGM 03DEN1 Federal Register / Vol. 84, No. 232 / Tuesday, December 3, 2019 / Notices 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–2019–34 and should be submitted on or before December 24, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–26059 Filed 12–2–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87634; File No. SR– CboeEDGA–2019–015] Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Suspension of and Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Introduce a Small Retail Broker Distribution Program November 26, 2019. I. Introduction lotter on DSKBCFDHB2PROD with NOTICES On October 1, 2019, Cboe EDGA Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGA’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 a proposed rule change to amend the EDGA fee schedule to introduce a Small Retail Broker Distribution Program (the ‘‘Program’’). The proposed rule change was immediately effective upon filing with the Commission pursuant to Section 19(b)(3)(A) of the Act.3 The proposed rule change was published for comment in the Federal Register on October 17, 2019.4 The Commission received no comment letters regarding the proposed rule change. Under Section 19(b)(3)(C) of the Act,5 the Commission is hereby: (i) Temporarily suspending the proposed rule change; and (ii) instituting proceedings to 10 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). 4 See Securities Exchange Act Release No. 87294 (October 11, 2019), 84 FR 55638 (‘‘Notice’’). 5 15 U.S.C. 78s(b)(3)(C). 1 15 VerDate Sep<11>2014 18:27 Dec 02, 2019 Jkt 250001 determine whether to approve or disapprove the proposed rule change. II. Description of the Proposed Rule Change The Exchange proposes to amend its fee schedule to introduce a pricing program that would allow certain Distributors 6 to purchase the Cboe One Summary Feed 7 from the Exchange at discounted fees. Currently, the Exchange charges $5,000 per month for external distribution of Cboe One Summary Feed, and a Data Consolidation Fee of $1,000 per month. The Exchange also charges a fee $10 per month for each Professional User and $0.25 for each Non-Professional User.8 Under the Exchange’s proposal, Distributors that qualify for the Program would be charged a discounted fee of $3,500 per month for the distribution of Cboe One Summary Feed. Distributors that qualify for the Program would also be charged a discounted Data Consolidation Fee of $350 for Cboe One Summary Feed. The Exchange would continue to charge the current Professional and Non-Professional User fees for Cboe One Summary Feed. In order to qualify for the Program, a Distributor must meet the following criteria: (i) Distributor is a broker-dealer distributing Cboe One Summary Feed Data to Non-Professional Data Users with whom the broker-dealer has a 6 A Distributor of an Exchange market data product is any entity that receives the Exchange market data product directly from the Exchange or indirectly through another entity and then distributes it internally or externally to a third party. See EDGA Fee Schedule. 7 Cboe One Summary Feed is a data feed that offers top of book quotations and execution information based on equity orders submitted to the Exchange and its affiliated equities exchanges, i.e., Cboe EDGX Exchange, Inc., Cboe BZX Exchange, Inc., and Cboe BYX Exchange, Inc. See Notice, supra note 4, 84 FR at 55638. 8 A ‘‘Professional User’’ of an Exchange market data product is any user other than a NonProfessional User. See EDGA Fee Schedule. A ‘‘Non-Professional User’’ of an Exchange market data product is a natural person or qualifying trust that uses data only for personal purposes and not for any commercial purpose and, for a natural person who works in the United States, is not: (i) Registered or qualified in any capacity with the Commission, the Commodities Futures Trading Commission, any state securities agency, any securities exchange or association, or any commodities or futures contract market or association; (ii) engaged as an ‘‘investment adviser’’ as that term is defined in Section 202(a)(11) of the Investment Advisors Act of 1940 (whether or not registered or qualified under that Act); or (iii) employed by a bank or other organization exempt from registration under federal or state securities laws to perform functions that would require registration or qualification if such functions were performed for an organization not so exempt; or, for a natural person who works outside of the United States, does not perform the same functions as would disqualify such person as a Non-Professional User if he or she worked in the United States. Id. PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 66257 brokerage relationship; (ii) more than 50% of the Distributor’s total subscriber population must consist of NonProfessional subscribers, inclusive of any subscribers not receiving Cboe One Summary Feed; and (iii) Distributor distributes Cboe One Summary Feed to no more than 5,000 Non-Professional Data Users. III. Suspension of the Proposed Rule Change Pursuant to Section 19(b)(3)(C) of the Act,9 at any time within 60 days of the date of filing of a proposed rule change pursuant to Section 19(b)(1) of the Act,10 the Commission summarily may temporarily suspend the change in the rules of a self-regulatory organization (’’SRO’’) 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. As discussed below, the Commission believes a temporary suspension of the proposed rule change is necessary and appropriate to allow for additional analysis of the proposed rule change’s consistency with the Act and the rules thereunder. A fee change to introduce the Program was originally filed on August 1, 2019. That proposal, CboeEDGA–2019–013, was published for comment in the Federal Register on August 20, 2019.11 The Commission received no comment letters regarding the proposed rule change. On September 30, 2019, the Division of Trading and Markets (the ‘‘Division’’), acting on behalf of the Commission by delegated authority, issued an order temporarily suspending CboeEDGA–2019–013 pursuant to Section 19(b)(3)(C) of the Act 12 and simultaneously instituting proceedings under Section 19(b)(2)(B) of the Act 13 to determine whether to approve or disapprove that proposal.14 The Exchange continues to assert that the proposed fees for the Program ‘‘are reasonable as they represent a significant cost reduction for smaller, primarily regional, retail brokers that provide top of book data from EDGA and its affiliated exchanges to their retail investor clients.’’ 15 The Exchange also asserts that the ‘‘proposed fees are equitable and not unfairly discriminatory as the proposed fee 9 15 U.S.C. 78s(b)(3)(C). U.S.C. 78s(b)(1). 11 See Securities Exchange Act Release No. 86678 (August 14, 2019), 84 FR 43218. 12 15 U.S.C. 78s(b)(3)(C). 13 15 U.S.C. 78s(b)(2)(B). 14 See Securities Exchange Act Release No. 87163 (September 30, 2019), 84 FR 53203. 15 See Notice, supra note 4, 84 FR at 55641. 10 15 E:\FR\FM\03DEN1.SGM 03DEN1

Agencies

[Federal Register Volume 84, Number 232 (Tuesday, December 3, 2019)]
[Notices]
[Pages 66255-66257]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-26059]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87632; File No. SR-BOX-2019-34]


Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 
7260 by Extending the Penny Pilot Program Through June 30, 2020

November 26, 2019.
    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 November 19, 2019, BOX Exchange LLC (the ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I and II below, which Items have been 
prepared by the self-regulatory organization. The Commission is 
publishing this notice to solicit comments on the proposed rule from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the effective time period of the 
Penny Pilot Program until June 30, 2020. 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://boxoptions.com.

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

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
has prepared summaries, set forth in Sections A, B, and C below, of the 
most significant aspects of such statements.

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

1. Purpose
    The Exchange proposes to extend the effective time period of the 
Penny Pilot Program that is currently scheduled to expire on December 
31, 2019, until June 30, 2020.\3\ The Penny Pilot Program permits 
certain classes to be quoted in

[[Page 66256]]

penny increments. The minimum price variation for all classes included 
in the Penny Pilot program, except for PowerShares QQQ Trust 
(``QQQQ'')[supreg], SPDR S&P 500 Exchange Traded Funds (``SPY''), and 
iShares Russell 2000 Index Funds (``IWM''), will continue to be $0.01 
for all quotations in options series that are quoted at less than $3 
per contract and $0.05 for all quotations in options series that are 
quoted at $3 per contract or greater. QQQQ, SPY, and IWM will continue 
to be quoted in $0.01 increments for all options series.
---------------------------------------------------------------------------

    \3\ The Penny Pilot Program has been in effect on the Exchange 
since its inception in May 2012. See Securities Exchange Act Release 
Nos. 66871 (April 27, 2012), 77 FR 26323 (May 3, 2012) (File No.10-
206, In the Matter of the Application of BOX Options Exchange LLC 
for Registration as a National Securities Exchange Findings, 
Opinion, and Order of the Commission), 67328 (June 29, 2012), 77 FR 
40123 (July 6, 2012) (SR-BOX-2012-007), 68425 (December 13, 2012), 
77 FR 75234 (December 19, 2013) (SR-BOX-2012-021), 69789 (June 18, 
2013), 78 FR 37854 (June 24, 2013) (SR-BOX-2013-31), 71056 (December 
12, 2013), 78 FR 76691 (December 18, 2013) (SR-BOX-2013-56), 72348 
(June 9, 2014), 79 FR 33976 (June 13, 2014) (SR-BOX-2014-17), 73822 
(December 11, 2014), 79 FR 75606 (December 18, 2014) (SR-BOX-2014-
29), 75295 (June 25, 2015), 80 FR 37690 (July 1, 2015) (SR-BOX-2015-
23), 78172 (June 28, 2016), 81 FR 43325 (July 1, 2016) (SR-BOX-2016-
24), 79429 (November 30, 2016), 81 FR 87991 (December 6, 2016) (SR-
BOX-2016-55), 80828 (May 31, 2017), 82 FR 26175 (June 6, 2017) (SR-
BOX-2017-18), 82353 (December 19, 2017) 82 FR 61087 (December 26, 
2017) (SR-BOX-2017-37), 83500 (June 22, 2018), 83 FR 30471 (June 28, 
2018) (SR-BOX-2018-23), 84869 (December 19, 2018), 83 FR 66806 
(December 27, 2018) (SR-BOX-2018-38), and 86053 (June 6, 2019), 84 
FR 27388 (June 12, 2019) (SR-BOX-2019-20). The extension of the 
effective date is the only change to the Penny Pilot Program being 
proposed at this time.
---------------------------------------------------------------------------

    The Exchange may replace any Pilot Program classes that have been 
delisted on the second trading day in the first month of each quarter. 
The Exchange notes that the replacement classes will be selected based 
on trading activity in the previous six months. The Exchange will 
employ the same parameters to prospective replacement classes as 
approved and applicable under the Pilot Program, including excluding 
high-priced underlying securities. The Exchange will distribute a 
Regulatory Circular notifying Participants which replacement classes 
shall be included in the Penny Pilot Program.
    BOX is specifically authorized to act jointly with the other 
options exchanges participating in the Pilot Program in identifying any 
replacement class.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\4\ in general, and Section 
6(b)(5) of the Act,\5\ in particular, in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general protect investors 
and the public interest.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In particular, the proposed rule change, which extends the Penny 
Pilot until June 30, 2020, will enable public customers and other 
market participants to express their true prices to buy and sell 
options for the benefit of all market participants. This is consistent 
with the Act.

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. To the contrary, this proposal 
is pro-competitive because it allows Penny Pilot issues to continue 
trading on the Exchange. Moreover, the Exchange believes that the 
proposed rule change will allow for further analysis of the Pilot and a 
determination of how the Pilot should be structured in the future; and 
will serve to promote regulatory clarity and consistency, thereby 
reducing burdens on the marketplace and facilitating investor 
protection. The Pilot is an industry wide initiative supported by all 
other option exchanges. The Exchange believes that extending the Pilot 
will allow for continued competition between market participants on the 
Exchange trading similar products as their counterparts on other 
exchanges, while at the same time allowing the Exchange to continue to 
compete for order flow with other exchanges in option issues trading as 
part of the Pilot.
    As such, 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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \6\ and Rule 19b-4(f)(6) \7\ thereunder. Because 
the foregoing proposed rule change does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days after the date of the filing, or such shorter time as the 
Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) 
\9\ thereunder.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6).
    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BOX-2019-34 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-2019-34. 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, on official business days 
between the hours of 10:00 a.m. and 3:00 p.m., located at 100 F Street 
NE, Washington, DC 20549. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments

[[Page 66257]]

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-2019-34 and should be submitted on 
or before December 24, 2019.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-26059 Filed 12-2-19; 8:45 am]
 BILLING CODE 8011-01-P
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