Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Options Market LLC Facility, 23458-23460 [2021-09020]

Download as PDF 23458 Federal Register / Vol. 86, No. 83 / Monday, May 3, 2021 / Notices should be submitted on or before May 24, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.34 J. Matthew DeLesDernier, Assistant Secretary. BILLING CODE 8011–01–P Sunshine Act Meetings 2:00 p.m. on Thursday, May 6, 2021. PLACE: The meeting will be held via remote means and/or at the Commission’s headquarters, 100 F Street NE, Washington, DC 20549. STATUS: This meeting will be closed to the public. MATTERS TO BE CONSIDERED: Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present. In the event that the time, date, or location of this meeting changes, an announcement of the change, along with the new time, date, and/or place of the meeting will be posted on the Commission’s website at https:// www.sec.gov. The General Counsel of the Commission, or his designee, has certified that, in his opinion, one or more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matters at the closed meeting. The subject matter of the closed meeting will consist of the following topics: Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings; Resolution of litigation claims; and Other matters relating to examinations and enforcement proceedings. At times, changes in Commission priorities require alterations in the scheduling of meeting agenda items that may consist of adjudicatory, examination, litigation, or regulatory matters. CONTACT PERSON FOR MORE INFORMATION: For further information; please contact Vanessa A. Countryman from the Office of the Secretary at (202) 551–5400. jbell on DSKJLSW7X2PROD with NOTICES CFR 200.30–3(a)(12). VerDate Sep<11>2014 20:34 Apr 30, 2021 Jkt 253001 BILLING CODE 8011–01–P [Release No. 34–91670; File No. SR–BOX– 2021–05] SECURITIES AND EXCHANGE COMMISSION 34 17 [FR Doc. 2021–09398 Filed 4–29–21; 4:15 pm] SECURITIES AND EXCHANGE COMMISSION [FR Doc. 2021–09132 Filed 4–30–21; 8:45 am] TIME AND DATE: Dated: April 29, 2021. Vanessa A. Countryman, Secretary. Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Options Market LLC Facility April 26, 2021. 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 April 15, 2021, BOX Exchange LLC (‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange is filing with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change to amend the Fee Schedule on the BOX 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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 2 17 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 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 Section II.C (QOO Order Rebate) of the BOX Fee Schedule. Specifically, the Exchange proposes to reinstate the monthly rebate cap of $30,000 per month per Broker Dealer. The Exchange notes that the proposed rebate cap was previously in place when BOX established fees for the Trading Floor in 2017.5 Currently, Floor Brokers are eligible to receive a $0.075 per contract rebate for all Broker Dealer and Market Maker QOO Orders presented on the Trading Floor and $0.05 per contract rebate for all Professional Customer QOO Orders presented on the Trading Floor. The rebate is not applied to Public Customer executions, executions subject to the Strategy QOO Order Fee Cap, or Broker Dealer executions where the Broker Dealer is facilitating a Public Customer. Under this proposal, Floor Brokers will continue to be eligible to receive a per contract rebate for all applicable QOO Orders; however, the total monthly rebate for Broker Dealer orders will now be capped at $30,000 per month per Broker Dealer.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. BOX established the QOO Order Rebate program and the monthly rebate cap in August 2017. As discussed in BOX’s 2017 proposal to establish the QOO Order Rebate program and rebate 5 See Securities Exchange Act Release Nos. 81504 (August 30, 2017), 82 FR 42195 (September 6, 2017) (SR–BOX–2017–28) (Establishing Fees and Rebates for the Trading Floor on the BOX Market LLC Options Facility). 6 The Exchange notes that all Broker Dealer QOO Orders that are eligible for the rebate will also be subject to the rebate cap. 7 15 U.S.C. 78f(b)(4) and (5). E:\FR\FM\03MYN1.SGM 03MYN1 Federal Register / Vol. 86, No. 83 / Monday, May 3, 2021 / Notices jbell on DSKJLSW7X2PROD with NOTICES cap, the rebate was created to incentivize order flow to the BOX Trading Floor. Further, the QOO Order Rebate program was established to attract order flow by rewarding Floor Brokers with rebates for directing qualifying orders to the BOX Trading Floor.8 The Exchange notes that it is not making any changes to the amount of the QOO Order Rebate, and that the QOO rebate will continue to apply to both sides of the qualifying paired QOO Order.9 The Exchange notes that the rebate cap was removed in December 2019 to further incentivize Floor Brokers to bring QOO Order flow to the BOX Trading Floor.10 The Exchange now believes the same level of incentive is no longer necessary for Floor Brokers to bring additional order flow to the BOX Trading Floor and, as such, believes the proposed change to reinstate the rebate cap is reasonable and appropriate at this time.11 Further, the Exchange notes that Floor Brokers will continue to be offered the per contract rebate for applicable QOO Orders (subject to the proposed rebate cap) and fees for Broker Dealers will continue to be capped at $75,000 per month per Broker Dealer.12 The 8 Unlike competing exchanges, the Exchange does not offer a front-end order entry system to its Floor Brokers to submit orders on the BOX Trading Floor. Instead, Floor Brokers use their own proprietary front-end order entry systems on the BOX Trading Floor. Given this, Participants have two possible means of bringing orders to the Exchange’s Trading Floor for possible execution: (1) They can invest in the technology, systems and personnel to participate on the Trading Floor and deliver the order to the Exchange matching engines for validation and execution; or (2) they can utilize the services of another Participant acting as a Floor Broker. The Exchange notes that the investment in the technology, systems and personnel to establish a front-end order entry system on the BOX Trading Floor is substantial. As such, the Exchange established the QOO Order Rebate program to incentivize Participants to (1) make such an investment to become a Floor Broker on the BOX Trading Floor and (2) allow Floor Brokers to price their services at a level that would enable them to attract QOO order flow from participants who would otherwise utilize the front-end order entry mechanism offered by the Exchange’s competitors instead of incurring the cost in time and resources to install and develop their own internal systems to deliver QOO orders directly to the Exchange system. 9 As noted above, currently the rebate does not apply to Public Customer executions, executions subject to the Strategy QOO Order Fee Cap, or Broker Dealer executions where the Broker Dealer is facilitating a Public Customer. 10 See Securities Exchange Act Release No. 87704 (December 10, 2019), 84 FR 68499 (December 16, 2019) (SR–BOX–2019–35). 11 As with any incentive, there are multiple ways to reduce or raise the level. The Exchange notes it could have lowered the QOO Rebate amount, but instead decided to reinstate the QOO rebate cap that had already previously been in place on the Exchange. 12 The Exchange notes that QOO Order fees are capped for Broker Dealers only on the BOX Trading VerDate Sep<11>2014 20:34 Apr 30, 2021 Jkt 253001 Exchange believes that, despite the reinstatement of the proposed rebate cap, the current per contract rebate for Floor Brokers and fee cap for Broker Dealer QOO Orders will continue to incentivize Floor Brokers to bring Broker Dealer QOO order flow to the Exchange. The Exchange also believes the proposed rebate cap is reasonable as it was previously in place on the BOX Trading Floor.13 For the foregoing reasons, the Exchange believes it is appropriate to reinstate the rebate cap for Broker Dealer orders on the BOX Trading Floor. Lastly and as noted above, the Exchange further believes that the $30,000 rebate cap for Broker Dealer orders is equitable and not unfairly discriminatory as Broker Dealer QOO Order execution fees are currently capped at $75,000 per month and other QOO Order fees are not. Further, all similarly situated Floor Brokers on the BOX Trading Floor who receive rebates on Broker Dealer orders will be uniformly capped at $30,000 per month per Broker Dealer. 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 rebate cap will not impose an unfair burden on intramarket competition because all similarly situated Floor Brokers who receive rebates on Broker Dealer orders on the BOX Trading Floor would be uniformly capped at $30,000 per month per Broker Dealer.14 Further, the Exchange believes the proposed rule change does not impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the purposes of the Act as the Exchange operates in a highly competitive market in which market participants can readily choose to send their orders to other exchanges with trading floors if they deem rebate opportunities at other trading floors to be more favorable. In such an environment, the Exchange must Floor—Market Maker and Professional Customer order fees are not subject to any such fee cap. As such, the Exchange believes that reinstating the rebate cap for Broker Dealer orders is reasonable and appropriate at this time. 13 See supra note 5. 14 As mentioned above, the Exchange believes that reinstating the rebate cap for Broker Dealer orders is reasonable and appropriate because Broker Dealer orders are the only executions currently capped at $75,000 per month (Market Maker and Professional Customer orders are not subject to any fee cap). PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 23459 continually review, and consider adjusting, its fees and rebates to remain competitive within the industry. For the reasons described above, the Exchange believes 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 15 and Rule 19b–4(f)(2) thereunder,16 because it establishes or changes a due, or fee. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend the rule change if it appears to the Commission that the action is necessary or appropriate in the public interest, for the protection of investors, or would otherwise further the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. 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–2021–05 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–2021–05. 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 15 15 16 17 E:\FR\FM\03MYN1.SGM U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 03MYN1 23460 Federal Register / Vol. 86, No. 83 / Monday, May 3, 2021 / Notices 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–2021–05, and should be submitted on or before May 24, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–09020 Filed 4–30–21; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–91675; File No. SR– NASDAQ–2021–023] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Nasdaq Rule 5760 To Permit the Listing and Trading of Managed Portfolio Shares jbell on DSKJLSW7X2PROD with NOTICES April 26, 2021. 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 April 14, 2021, The Nasdaq Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 20:34 Apr 30, 2021 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. 1. Purpose The Exchange proposes to add new Nasdaq Rule 5760 for the purpose of permitting the listing and trading, or trading pursuant to unlisted trading privileges, of Managed Portfolio Shares, which are securities issued by an actively managed open-end management investment company. This proposed rule change to add new Nasdaq Rule 5760 is substantially similar to the recently approved rule change by Cboe BZX Exchange, Inc. (‘‘Cboe BZX’’) to adopt rule 14.11(k).3 Proposed Listing Rules Proposed Nasdaq Rule 5760(a) provides that the Exchange will consider for trading, whether by listing or pursuant to unlisted trading 3 See Securities and Exchange Act Release No. 87759 (December 16, 2019) 84 FR 70223 (December 20, 2019) (SR–CboeBZX–2019–047). 1 15 VerDate Sep<11>2014 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to adopt Nasdaq Rule 5760 to permit the listing and trading of Managed Portfolio Shares, which are shares of actively managed exchange-traded funds for which the portfolio is disclosed in accordance with standard mutual fund disclosure rules. The text of the proposed rule change is available on the Exchange’s website at https://listingcenter.nasdaq.com/ rulebook/nasdaq/rules, at the principal office of the Exchange, and at the Commission’s Public Reference Room. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION 17 17 and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. Jkt 253001 PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 privileges, Managed Portfolio Shares that meet the criteria of Nasdaq Rule 5760. Proposed Nasdaq Rule 5760(b) provides that Nasdaq Rule 5760 is applicable only to Managed Portfolio Shares and that, except to the extent inconsistent with Nasdaq Rule 5760, or unless the context otherwise requires, the rules and procedures of the Exchange’s Board of Directors shall be applicable to the trading on the Exchange of such securities. Proposed Nasdaq Rule 5760(b) provides further that Managed Portfolio Shares are included within the definition of ‘‘security’’ or ‘‘securities’’ as such terms are used in the Rules of the Exchange. Proposed Nasdaq Rule 5760(b)(1) provides that the Exchange will file separate proposals under Section 19(b) of the Act before the listing and trading of a series of Managed Portfolio Shares. Additionally, that all statements or representations regarding (a) the description of the portfolio or reference assets; (b) limitations on portfolio holdings or reference assets; (c) dissemination and availability of the reference asset or intraday indicative values and Verified Intraday Indicative Values (‘‘VIIV’’) (as applicable); or (d) the applicability of Nasdaq listing rules specified in such proposals shall constitute continued listing standards. Proposed Nasdaq Rule 5760(b)(2) provides that transactions in Managed Portfolio Shares will occur throughout the Exchange’s System Hours.4 Proposed Nasdaq Rule 5760(b)(3) provides that the minimum price variation for quoting and entry of orders in Managed Portfolio Shares is $0.01. Proposed Nasdaq Rule 5760(b)(4) provides that the Exchange will implement and maintain written surveillance procedures for Managed Portfolio Shares. As part of these surveillance procedures, the Investment Company’s investment adviser will upon request by the Exchange or FINRA, on behalf of the Exchange, make available to the Exchange or FINRA the daily portfolio holdings of each series of Managed Portfolio Shares. Proposed Nasdaq Rule 5760(b)(5) provides that, if the investment adviser to the Investment Company issuing Managed Portfolio Shares is registered as a broker-dealer or is affiliated with a broker-dealer, such investment adviser will erect and maintain a ‘‘fire wall’’ between the investment adviser and 4 See Nasdaq Equity Rules Equity 1. Section 1(a)(9). The term ‘‘System Hours’’ is defined as the period of time beginning at 4:00 a.m. E.T. and ending at 8:00 p.m. E.T. (or such earlier time as may be designated by Nasdaq on a day when Nasdaq closes early). E:\FR\FM\03MYN1.SGM 03MYN1

Agencies

[Federal Register Volume 86, Number 83 (Monday, May 3, 2021)]
[Notices]
[Pages 23458-23460]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-09020]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91670; File No. SR-BOX-2021-05]


Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee 
Schedule on the BOX Options Market LLC Facility

April 26, 2021.
    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 April 15, 2021, BOX Exchange LLC (``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).
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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 Section II.C (QOO Order Rebate) of 
the BOX Fee Schedule. Specifically, the Exchange proposes to reinstate 
the monthly rebate cap of $30,000 per month per Broker Dealer. The 
Exchange notes that the proposed rebate cap was previously in place 
when BOX established fees for the Trading Floor in 2017.\5\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release Nos. 81504 (August 30, 
2017), 82 FR 42195 (September 6, 2017) (SR-BOX-2017-28) 
(Establishing Fees and Rebates for the Trading Floor on the BOX 
Market LLC Options Facility).
---------------------------------------------------------------------------

    Currently, Floor Brokers are eligible to receive a $0.075 per 
contract rebate for all Broker Dealer and Market Maker QOO Orders 
presented on the Trading Floor and $0.05 per contract rebate for all 
Professional Customer QOO Orders presented on the Trading Floor. The 
rebate is not applied to Public Customer executions, executions subject 
to the Strategy QOO Order Fee Cap, or Broker Dealer executions where 
the Broker Dealer is facilitating a Public Customer. Under this 
proposal, Floor Brokers will continue to be eligible to receive a per 
contract rebate for all applicable QOO Orders; however, the total 
monthly rebate for Broker Dealer orders will now be capped at $30,000 
per month per Broker Dealer.\6\
---------------------------------------------------------------------------

    \6\ The Exchange notes that all Broker Dealer QOO Orders that 
are eligible for the rebate will also be subject to the rebate cap.
---------------------------------------------------------------------------

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).
---------------------------------------------------------------------------

    BOX established the QOO Order Rebate program and the monthly rebate 
cap in August 2017. As discussed in BOX's 2017 proposal to establish 
the QOO Order Rebate program and rebate

[[Page 23459]]

cap, the rebate was created to incentivize order flow to the BOX 
Trading Floor. Further, the QOO Order Rebate program was established to 
attract order flow by rewarding Floor Brokers with rebates for 
directing qualifying orders to the BOX Trading Floor.\8\ The Exchange 
notes that it is not making any changes to the amount of the QOO Order 
Rebate, and that the QOO rebate will continue to apply to both sides of 
the qualifying paired QOO Order.\9\
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    \8\ Unlike competing exchanges, the Exchange does not offer a 
front-end order entry system to its Floor Brokers to submit orders 
on the BOX Trading Floor. Instead, Floor Brokers use their own 
proprietary front-end order entry systems on the BOX Trading Floor. 
Given this, Participants have two possible means of bringing orders 
to the Exchange's Trading Floor for possible execution: (1) They can 
invest in the technology, systems and personnel to participate on 
the Trading Floor and deliver the order to the Exchange matching 
engines for validation and execution; or (2) they can utilize the 
services of another Participant acting as a Floor Broker. The 
Exchange notes that the investment in the technology, systems and 
personnel to establish a front-end order entry system on the BOX 
Trading Floor is substantial. As such, the Exchange established the 
QOO Order Rebate program to incentivize Participants to (1) make 
such an investment to become a Floor Broker on the BOX Trading Floor 
and (2) allow Floor Brokers to price their services at a level that 
would enable them to attract QOO order flow from participants who 
would otherwise utilize the front-end order entry mechanism offered 
by the Exchange's competitors instead of incurring the cost in time 
and resources to install and develop their own internal systems to 
deliver QOO orders directly to the Exchange system.
    \9\ As noted above, currently the rebate does not apply to 
Public Customer executions, executions subject to the Strategy QOO 
Order Fee Cap, or Broker Dealer executions where the Broker Dealer 
is facilitating a Public Customer.
---------------------------------------------------------------------------

    The Exchange notes that the rebate cap was removed in December 2019 
to further incentivize Floor Brokers to bring QOO Order flow to the BOX 
Trading Floor.\10\ The Exchange now believes the same level of 
incentive is no longer necessary for Floor Brokers to bring additional 
order flow to the BOX Trading Floor and, as such, believes the proposed 
change to reinstate the rebate cap is reasonable and appropriate at 
this time.\11\ Further, the Exchange notes that Floor Brokers will 
continue to be offered the per contract rebate for applicable QOO 
Orders (subject to the proposed rebate cap) and fees for Broker Dealers 
will continue to be capped at $75,000 per month per Broker Dealer.\12\ 
The Exchange believes that, despite the reinstatement of the proposed 
rebate cap, the current per contract rebate for Floor Brokers and fee 
cap for Broker Dealer QOO Orders will continue to incentivize Floor 
Brokers to bring Broker Dealer QOO order flow to the Exchange. The 
Exchange also believes the proposed rebate cap is reasonable as it was 
previously in place on the BOX Trading Floor.\13\ For the foregoing 
reasons, the Exchange believes it is appropriate to reinstate the 
rebate cap for Broker Dealer orders on the BOX Trading Floor.
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 87704 (December 10, 
2019), 84 FR 68499 (December 16, 2019) (SR-BOX-2019-35).
    \11\ As with any incentive, there are multiple ways to reduce or 
raise the level. The Exchange notes it could have lowered the QOO 
Rebate amount, but instead decided to reinstate the QOO rebate cap 
that had already previously been in place on the Exchange.
    \12\ The Exchange notes that QOO Order fees are capped for 
Broker Dealers only on the BOX Trading Floor--Market Maker and 
Professional Customer order fees are not subject to any such fee 
cap. As such, the Exchange believes that reinstating the rebate cap 
for Broker Dealer orders is reasonable and appropriate at this time.
    \13\ See supra note 5.
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    Lastly and as noted above, the Exchange further believes that the 
$30,000 rebate cap for Broker Dealer orders is equitable and not 
unfairly discriminatory as Broker Dealer QOO Order execution fees are 
currently capped at $75,000 per month and other QOO Order fees are not. 
Further, all similarly situated Floor Brokers on the BOX Trading Floor 
who receive rebates on Broker Dealer orders will be uniformly capped at 
$30,000 per month per Broker Dealer.

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 rebate cap will not impose an unfair burden on intramarket 
competition because all similarly situated Floor Brokers who receive 
rebates on Broker Dealer orders on the BOX Trading Floor would be 
uniformly capped at $30,000 per month per Broker Dealer.\14\ Further, 
the Exchange believes the proposed rule change does not impose any 
burden on intermarket competition that is not necessary or appropriate 
in furtherance of the purposes of the Act as the Exchange operates in a 
highly competitive market in which market participants can readily 
choose to send their orders to other exchanges with trading floors if 
they deem rebate opportunities at other trading floors to be more 
favorable. In such an environment, the Exchange must continually 
review, and consider adjusting, its fees and rebates to remain 
competitive within the industry. For the reasons described above, the 
Exchange believes that the proposed rule change reflects this 
competitive environment.
---------------------------------------------------------------------------

    \14\ As mentioned above, the Exchange believes that reinstating 
the rebate cap for Broker Dealer orders is reasonable and 
appropriate because Broker Dealer orders are the only executions 
currently capped at $75,000 per month (Market Maker and Professional 
Customer orders are not subject to any fee cap).
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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 \15\ and Rule 19b-4(f)(2) 
thereunder,\16\ because it establishes or changes a due, or fee.
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    \15\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \16\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend the rule 
change if it appears to the Commission that the action is necessary or 
appropriate in the public interest, for the protection of investors, or 
would otherwise further the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. 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-2021-05 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-2021-05. 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

[[Page 23460]]

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-
2021-05, and should be submitted on or before May 24, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-09020 Filed 4-30-21; 8:45 am]
BILLING CODE 8011-01-P
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