Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Options Market LLC Facility To Establish Section IV.D.2 (“Strategy QCC Transactions”), 48744-48747 [2022-17104]

Download as PDF 48744 Federal Register / Vol. 87, No. 153 / Wednesday, August 10, 2022 / Notices to make available publicly. All submissions should refer to File Number SR–NYSE–2022–20 and should be submitted on or before August 31, 2022. V. Accelerated Approval of Amendment No. 1 As noted above,20 in Amendment No. 1, as compared to the original proposal,21 the Exchange: (i) represents that Directed Orders will not be routed to an ATS with which the Exchange has a financial arrangement; and (ii) updates the anticipated implementation date of the proposed rule change from the second quarter to the third quarter of 2022. The Commission finds that Amendment No. 1 to the proposal raises no novel regulatory issues, that it is reasonably designed to protect investors and the public interest, and that it is consistent with the requirements of the Act. Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act,22 to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. VI. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,23 that the proposed rule change (SR–NYSE–2022– 20), as modified by Amendment No. 1, be, and hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.24 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–17099 Filed 8–9–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 34664; File No. 812–15350] Runway Growth Finance Corp., et al. August 4, 2022. Securities and Exchange Commission (‘‘Commission’’ or ‘‘SEC’’). ACTION: Notice. khammond on DSKJM1Z7X2PROD with NOTICES AGENCY: Notice of application for an order (‘‘Order’’) under sections 17(d) and 57(i) of the Investment Company Act of 1940 (the ‘‘Act’’) and rule 17d–1 under the Act to permit certain joint transactions otherwise prohibited by sections 17(d) 20 See supra note 5. Notice, supra note 3. 22 15 U.S.C. 78s(b)(2). 23 15 U.S.C. 78s(b)(2). 24 17 CFR 200.30–3(a)(12). 21 See VerDate Sep<11>2014 17:26 Aug 09, 2022 Jkt 256001 and 57(a)(4) of the Act and rule 17d–1 under the Act. SUMMARY OF APPLICATION: Applicants request an order to amend a previous order granted by the Commission that permits certain business development companies (‘‘BDCs’’) and closed-end management investment companies to co-invest in portfolio companies with each other and with certain affiliated investment entities. APPLICANTS: Runway Growth Finance Corp., Runway Growth Finance L.P., Runway Growth Capital LLC, RWAY IP Holdings LLC and Runway Growth Finance Opportunities Fund I LP. FILING DATES: The application was filed on June 15, 2022 and amended on July 29, 2022. HEARING OR NOTIFICATION OF HEARING: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing on any application by emailing the SEC’s Secretary at Secretarys-Office@sec.gov and serving the Applicants with a copy of the request by email, if an email address is listed for the relevant Applicant below, or personally or by mail, if a physical address is listed for the relevant Applicant below. Hearing requests should be received by the Commission by 5:30 p.m. on August 29, 2022, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0–5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by emailing the Commission’s Secretary at Secretarys-Office@sec.gov. ADDRESSES: The Commission: Secretarys-Office@sec.gov. Applicants: Thomas B. Raterman at tr@ runwaygrowth.com. Steven B. Boehm, Esq. and Anne G. Oberndorf, Esq., Eversheds Sutherland (US) LLP, at anneoberndorf@evershedssutherland.us. FOR FURTHER INFORMATION CONTACT: Bruce R. MacNeil, Senior Counsel, or Kaitlin C. Bottock, Branch Chief, at (202) 551–6825 (Division of Investment Management, Chief Counsel’s Office). SUPPLEMENTARY INFORMATION: For Applicants’ representations, legal analysis, and conditions, please refer to Applicants’ first amended and restated application, dated July 29, 2022, which may be obtained via the Commission’s website by searching for the file number PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 at the top of this document, or for an Applicant using the Company name search field, on the SEC’s EDGAR system. The SEC’s EDGAR system may be searched at, at https://www.sec.gov/ edgar/searchedgar/legacy/ companysearch.html. You may also call the SEC’s Public Reference Room at (202) 551–8090. For the Commission, by the Division of Investment Management, under delegated authority. J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–17118 Filed 8–9–22; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–95430; File No. SR–BOX– 2022–24) Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Options Market LLC Facility To Establish Section IV.D.2 (‘‘Strategy QCC Transactions’’) August 4, 2022. 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 August 1, 2022, 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 to amend the Fee Schedule for trading on BOX to establish Section IV.D.2 (‘‘Strategy QCC Transactions’’) on the BOX Options Market LLC (‘‘BOX’’) options facility. While changes to the fee schedule 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 E:\FR\FM\10AUN1.SGM 10AUN1 Federal Register / Vol. 87, No. 153 / Wednesday, August 10, 2022 / Notices pursuant to this proposal will be effective upon filing, the changes will become operative on August 1, 2022. 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 khammond on DSKJM1Z7X2PROD with NOTICES 1. Purpose The Exchange proposes to amend the Fee Schedule for trading on BOX to establish Section IV.D.2 (‘‘Strategy QCC Transactions’’). Currently, the transaction fees for Qualified Contingent Cross (‘‘QCC’’) Orders, including strategy QCC Orders, are detailed in Section IV.D. in the Fee Schedule. Broker Dealer and Market Maker QCC transactions are assessed $0.17 per contract for both the Agency Order and the Contra Order. Public Customers and Professional Customers are assessed $0.00 for both the Agency Order and the Contra Order and are eligible for a rebate if at least one side of the QCC transaction is a Broker Dealer or Market Maker.5 To further incentivize Participants to execute strategy 6 QCC transactions on 5 See BOX Fee Schedule, Section IV.D, ‘‘Qualified Contingent Cross (‘‘QCC’’) Transactions.’’ 6 Strategy orders are defined as one of the following: A ‘‘short stock interest strategy’’ is defined as a transaction done to achieve a short stock interest arbitrage involving the purchase, sale, and exercise of in-the-money options of the same class. A ‘‘long stock interest strategy’’ is defined as a transaction done to achieve long stock involving the purchase, sale, and exercise of in-the-money options of the same class. A ‘‘merger strategy’’ is defined as transactions done to achieve a merger arbitrage involving the purchase, sale and exercise of options of the same class and expiration date, each executed prior to the date on which shareholders of record are required to elect their respective form of consideration, i.e., cash or stock. A ‘‘reversal strategy’’ is established by combining a short security position with a short put and a long VerDate Sep<11>2014 17:26 Aug 09, 2022 Jkt 256001 BOX, the Exchange now proposes to establish Section IV.D.2 that will detail the fees assessed for these transactions.7 Specifically, the Exchange proposes to assess no fees for strategy QCC transactions which are comprised of an originating order to buy or sell at least 1,000 contracts, or 10,000 mini-option contracts, that is identified as being part of a qualified contingent trade, as that term is defined in IM–7110–2 below, coupled with a contra-side order or orders totaling an equal number of contracts. IM–7110–2 provides a ‘‘qualified contingent trade’’ is a transaction consisting of two or more component orders, executed as agent or principal, where: (1) At least one component is an NMS Stock, as defined in Rule 600 of Regulation NMS under the Exchange Act; (2) all components are effected with a product or price contingency that either has been agreed to by all the respective counterparties or arranged for by a broker dealer as principal or agent; (3) the execution of one component is contingent upon the execution of all other components at or near the same time; (4) the specific relationship between the component orders (e.g., the spread between the prices of the component orders) is determined by the time the contingent order is placed; (5) the component orders bear a derivative relationship to one another, represent different classes of shares of the same issuer, or involve the securities of participants in mergers or with intentions to merge that have been announced or cancelled; and (6) the transaction is fully hedged (without regard to any prior existing position) as a result of other components of the contingent trade.8 Because these transactions will not be assessed a fee, the Exchange proposes that strategy QCC transactions will not be eligible for a QCC Rebate and will not count toward QCC Agency Order volume detailed in Section IV.D.1. The Exchange notes that strategy QCC transactions will continue to count toward Market Maker and Public Customer monthly executed volume on BOX detailed in Section IV.A.1 of the BOX Fee Schedule but will not be eligible for the QCC Rebate in Section IV.D.1 and will not be counted towards the QCC Rebate Tiers. The proposed change is designed to compete with open outcry fee caps for strategy orders.9 The Exchange believes that Participants may choose to execute strategy orders that would qualify as strategy QCC Orders either in open outcry or as electronic QCC transactions depending on convenience, fees, and access to Floor Brokers. The Exchange believes that Participants are otherwise indifferent to whether a strategy order is executed in open outcry or electronically. Therefore, the proposed change is designed to further incentivize certain Participants to direct strategy order volume to BOX’s electronic QCC mechanism rather than to another exchange’s trading floor. 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,10 in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other 8 BOX Rule 7110(c)(6). Exchange’s proposal to not assess fees on strategy QCC transactions is similar to Cboe Exchange, Inc. (‘‘CBOE’’), which caps open outcry strategy transactions at $0.00. See CBOE Fee Schedule, ‘‘QCC Rate Table’’; footnote 13. CBOE’s fee cap applies to open outcry strategy transactions. Although, the proposed strategy QCC Orders are executed electronically, the Exchange believes that executing strategy orders as QCC orders is an alternative for trading strategy orders in open outcry. As such, the proposed change will allow BOX to compete with other exchanges who offer strategy orders at no cost. BOX notes that other exchanges offer fee caps on open outcry strategy transactions as well. See generally NYSE American Options Fee Schedule, Section I(J), ‘‘Options Transaction Fees and Credits’’ (Strategy transactions in open outcry and QCC reversal and conversion strategies are capped at $1,000 on the same trading day. The cap is reduced to $200 per trading day for ATP Holders that trade at least 25,000 billable contract sides in qualifying strategy executions) and Nasdaq PHLX LLC Rules Options 7, Section 4 (reversal and conversion strategies capped at $200 per day; merger, short stock interest, and box spread strategies capped at $1,000 per day if more than one class of options or $700 per day if in a single class of options; dividend strategies capped at $1,100 per day; all strategies capped at $65,000 per month per member organization). 10 15 U.S.C. 78f(b)(4) and (5). 9 The call position that shares the same strike and expiration. A ‘‘conversion strategy’’ is established by combining a long position in the underlying security with a long put and a short call position that shares the same strike and expiration. A ‘‘jelly roll strategy’’ is created by entering into two separate positions simultaneously. One position involves buying a put and selling a call with the same strike price and expiration. The second position involves selling a put and buying a call, with the same strike price, but with a different expiration from the first position. A ‘‘box spread strategy’’ is a strategy that synthesizes long and short stock positions to create a profit. Specifically, a long call and short put at one strike is combined with a short call and long put at a different strike to create synthetic long and synthetic short stock positions, respectively. A ‘‘dividend strategy’’ is defined as a transaction done to achieve a dividend arbitrage involving the purchase, sale and exercise of in-the-money options of the same class, executed the first business day prior to the date on which the underlying stock goes ex-dividend. See BOX Fee Schedule, notes 29 and 35. 7 The Exchange notes that Public Customers and Professional Customers are not charged a fee for QCC Orders. Therefore, the Exchange believes that Public Customers and Professional Customers will not be as incentivized as other Participants by the proposed fees. PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 48745 E:\FR\FM\10AUN1.SGM 10AUN1 khammond on DSKJM1Z7X2PROD with NOTICES 48746 Federal Register / Vol. 87, No. 153 / Wednesday, August 10, 2022 / Notices charges among BOX Participants and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers. The Exchange notes that it operates in a highly competitive environment. Indeed, there are currently 16 registered options exchanges that trade options. Based on publicly available information, no single options exchange has more than 16% of the market share and currently the Exchange represents only approximately 6% of the market share.11 The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Particularly, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system ‘‘has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.’’ 12 As stated above, the Exchange 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. The proposed fee changes reflect a competitive pricing structure designed to incentivize market participants to direct their order flow to the Exchange. The Exchange believes the proposed change is reasonable, equitable, and not unfairly discriminatory as there are other exchanges with similar fees or fee caps for strategy orders 13 and the proposed fees are uniformly applicable to all Participants. The Exchange also believes the proposed change would further incentivize certain Participants to execute strategy QCC Orders on BOX and may encourage Participants to aggregate all types of strategy orders (i.e. QCC Orders and Qualified Open Outcry (‘‘QOO’’) Orders) at BOX as a primary execution venue. The Exchange believes that Participants may consolidate different order types for execution on a single exchange because it increases the volume counted towards volume-based fee incentives, in particular, the Tiered Volume Rebate for Non-Auction Transactions in Section IV.A.1., of BOX’s Fee Schedule, which provides 11 See Cboe Global Markets U.S. Options Market Month-to-Date Volume Summary (June 16, 2022), available at https://markets.cboe.com/us/options/ market_statistics/. 12 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) (‘‘Regulation NMS Adopting Release’’). 13 See supra note 9. VerDate Sep<11>2014 17:26 Aug 09, 2022 Jkt 256001 Participants with incentives to achieve certain volume thresholds on BOX. To the extent that the proposed change attracts more strategy orders to BOX, some of which may be executed as QCC Orders and others as QOO Orders, this increased order flow may make BOX a more competitive venue for order execution. The Exchange also believes that the ever-shifting market share among the exchanges from month to month demonstrates that market participants can shift order flow or discontinue or reduce use of certain categories of products, in response to fee changes. Accordingly, competitive forces constrain options exchange transaction fees. Stated otherwise, changes to exchange transaction fees can have a direct effect on the ability of an exchange to compete for order flow. The Exchange believes the proposed change is a reasonable attempt to further incentivize certain Participants to execute strategy orders on BOX and in turn to increase the depth of its market to the benefit of all market participants. The Exchange also notes that Participants may avail themselves to the proposed strategy order pricing or they can opt for similar offerings at several other exchanges.14 The Exchange believes that not allowing strategy QCC transactions to be eligible for a rebate is reasonable, equitable and not unfairly discriminatory because, as proposed, a fee is not assessed for these transactions. As such, the Exchange believes that Participants do not require additional incentives to execute these transactions on BOX. The QCC Rebate and Tiers detailed in Section IV.D.1 of the BOX Fee Schedule were designed to reduce the QCC fees assessed to Participants in Section IV.D. The proposal discussed herein is to assess no fee on strategy QCC Orders therefore there is no fee to reduce. Further, the Exchange believes that it is reasonable, equitable and not unfairly discriminatory to not count strategy QCC Order volume towards QCC Tiers because the Exchange does not believe that Participants need additional incentives to transact strategy QCC Orders on BOX. The Exchange believes that it is reasonable, equitable and not unfairly discriminatory to continue to count strategy QCC transactions toward the Tiered Volume Rebate for Non-Auction Transactions in Section IV.A.1., which provides Participants with incentives to achieve certain volume thresholds on BOX. These volume tiers are designed to reflect a reasonable and competitive 14 See PO 00000 supra note 9. Frm 00128 Fmt 4703 pricing structure, to incentivize market participants to direct their order flow to BOX, and to enhance market quality. The Exchange believes that allowing strategy QCC orders to count toward customer volume tiers is equitable and not unfairly discriminatory because BOX has historically aimed to improve markets for investors and develop various features within the market structure for public customer benefit. The Exchange believes further that allowing strategy QCC orders to count toward Market Maker volume tiers is equitable and not unfairly discriminatory because of the significant contribution to overall market quality that Market Makers provide. Specifically, Market Makers provide higher volumes of liquidity which ultimately benefits all Participants trading on BOX. 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 proposed change is designed to attract additional order flow to BOX. The Exchange believes that the proposed change could further incentivize certain market participants to direct their strategy QCC Orders to BOX. As noted herein, the proposed strategy QCC Order fees would be applicable to all similarly situated market participants, and, as such, the proposed change would not impose a disparate burden on competition among Participants on BOX. Further, the Exchange also does not believe that the proposed fees will impose any burden on intermarket competition that is not necessary or appropriate in furtherance of the Act because, as noted above, competing options exchanges currently have similar fees in place in connection with strategy orders.15 Because competitors are free to modify their own fees or fee caps in response to competing exchanges, BOX believes that the degree to which changes in this market may impose any burden on competition is limited. Further, the Exchange believes that the proposed change could promote competition between BOX and other execution venues, including those that currently offer similar strategy order fees or fee caps. Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues. In such an environment, the 15 Id. Sfmt 4703 E:\FR\FM\10AUN1.SGM 10AUN1 Federal Register / Vol. 87, No. 153 / Wednesday, August 10, 2022 / Notices Exchange must continually review, and consider adjusting, its fees and credits to remain competitive with other exchanges. 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 16 and Rule 19b–4(f)(2) thereunder,17 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 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–BOX–2022–24. 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 17 17 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). VerDate Sep<11>2014 17:26 Aug 09, 2022 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 J. Matthew DeLesDernier, Deputy Secretary. [FR Doc. 2022–17104 Filed 8–9–22; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF STATE [Public Notice: 11802] • 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–2022–24 on the subject line. 16 15 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–2022–24, and should be submitted on or before August 31, 2022. Public Meeting of the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) Scientific Advisory Board ACTION: In accordance with the Federal Advisory Committee Act, the U.S. Department of State announces that the PEPFAR Scientific Advisory Board (SAB) will be holding a virtual meeting of the full board. The meeting will be open to the public; a public comment session will be held during the meeting. Pre-registration is required for both public viewing and comment. DATES: The meeting will be held on Thursday, September 8, 2022, from approximately 8 a.m. to 1 p.m. (EDT) SUMMARY: 18 17 Jkt 256001 Notice of public meeting. PO 00000 CFR 200.30–3(a)(12). Frm 00129 Fmt 4703 Sfmt 4703 48747 utilizing an online platform. Individuals wishing to view are asked to pre-register at https://forms.gle/ FrENNQyoX8Xav2zp8. The agenda is briefly summarized below and will also be sent to all registrants. It will also be posted on the PEPFAR SAB web page at www.state.gov/scientific-advisoryboard-pepfar one week in advance of the meeting, along with instructions on how to access the meeting. Requests to view the meeting must be received no later than August 31, 2022. Requests for reasonable accommodations must be received no later than August 31, 2022. Requests made after August 31, 2022, will be considered but might not be able to be fulfilled. FOR FURTHER INFORMATION CONTACT: Dr. Sara Klucking, Designated Federal Officer for the SAB, Office of the U.S. Global AIDS Coordinator and Health Diplomacy at KluckingSR@state.gov or (202) 615–4350. SUPPLEMENTARY INFORMATION: Background: The SAB is established under the general authority of the Secretary of State and the Department of State (‘‘the Department’’) as set forth in 22 U.S.C. 2656, and consistent with the Federal Advisory Committee Act, as amended (5 U.S.C. Appendix). The SAB serves the U.S. Global AIDS Coordinator solely in an advisory capacity concerning scientific, implementation, and policy issues related to the global response to HIV/AIDS. Agenda: SAB members will be discussing two topics: considerations for PEPFAR implementation of tools for recent HIV infection surveillance and considerations for PEPFAR implementation of the dapivirine vaginal ring. Meeting materials from prior SAB meetings may be accessed here: www.state.gov/scientific-advisoryboard-pepfar. Public comment: Members of the public who wish to view the meeting are asked to register directly at the link listed in the DATES and ADDRESSES section or by sending an email to Dr. Sara Klucking at KluckingSR@state.gov not later than August 31, 2022. Individuals are required to provide their name, email address, and organization. Individuals interested in making a public comment at the meeting should indicate interest with their registration. Registered members of the public wishing to make a comment will be permitted to participate in a comment period in accordance with the Chair’s instructions. In addition, the Department will consider any written comments provided within 10 days after ADDRESSES: E:\FR\FM\10AUN1.SGM 10AUN1

Agencies

[Federal Register Volume 87, Number 153 (Wednesday, August 10, 2022)]
[Notices]
[Pages 48744-48747]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17104]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-95430; File No. SR-BOX-2022-24)


Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee 
Schedule on the BOX Options Market LLC Facility To Establish Section 
IV.D.2 (``Strategy QCC Transactions'')

August 4, 2022.
    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 August 1, 2022, 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 to 
amend the Fee Schedule for trading on BOX to establish Section IV.D.2 
(``Strategy QCC Transactions'') on the BOX Options Market LLC (``BOX'') 
options facility. While changes to the fee schedule

[[Page 48745]]

pursuant to this proposal will be effective upon filing, the changes 
will become operative on August 1, 2022. 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 
to establish Section IV.D.2 (``Strategy QCC Transactions'').
    Currently, the transaction fees for Qualified Contingent Cross 
(``QCC'') Orders, including strategy QCC Orders, are detailed in 
Section IV.D. in the Fee Schedule. Broker Dealer and Market Maker QCC 
transactions are assessed $0.17 per contract for both the Agency Order 
and the Contra Order. Public Customers and Professional Customers are 
assessed $0.00 for both the Agency Order and the Contra Order and are 
eligible for a rebate if at least one side of the QCC transaction is a 
Broker Dealer or Market Maker.\5\
---------------------------------------------------------------------------

    \5\ See BOX Fee Schedule, Section IV.D, ``Qualified Contingent 
Cross (``QCC'') Transactions.''
---------------------------------------------------------------------------

    To further incentivize Participants to execute strategy \6\ QCC 
transactions on BOX, the Exchange now proposes to establish Section 
IV.D.2 that will detail the fees assessed for these transactions.\7\ 
Specifically, the Exchange proposes to assess no fees for strategy QCC 
transactions which are comprised of an originating order to buy or sell 
at least 1,000 contracts, or 10,000 mini-option contracts, that is 
identified as being part of a qualified contingent trade, as that term 
is defined in IM-7110-2 below, coupled with a contra-side order or 
orders totaling an equal number of contracts. IM-7110-2 provides a 
``qualified contingent trade'' is a transaction consisting of two or 
more component orders, executed as agent or principal, where: (1) At 
least one component is an NMS Stock, as defined in Rule 600 of 
Regulation NMS under the Exchange Act; (2) all components are effected 
with a product or price contingency that either has been agreed to by 
all the respective counterparties or arranged for by a broker dealer as 
principal or agent; (3) the execution of one component is contingent 
upon the execution of all other components at or near the same time; 
(4) the specific relationship between the component orders (e.g., the 
spread between the prices of the component orders) is determined by the 
time the contingent order is placed; (5) the component orders bear a 
derivative relationship to one another, represent different classes of 
shares of the same issuer, or involve the securities of participants in 
mergers or with intentions to merge that have been announced or 
cancelled; and (6) the transaction is fully hedged (without regard to 
any prior existing position) as a result of other components of the 
contingent trade.\8\ Because these transactions will not be assessed a 
fee, the Exchange proposes that strategy QCC transactions will not be 
eligible for a QCC Rebate and will not count toward QCC Agency Order 
volume detailed in Section IV.D.1. The Exchange notes that strategy QCC 
transactions will continue to count toward Market Maker and Public 
Customer monthly executed volume on BOX detailed in Section IV.A.1 of 
the BOX Fee Schedule but will not be eligible for the QCC Rebate in 
Section IV.D.1 and will not be counted towards the QCC Rebate Tiers.
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    \6\ Strategy orders are defined as one of the following: A 
``short stock interest strategy'' is defined as a transaction done 
to achieve a short stock interest arbitrage involving the purchase, 
sale, and exercise of in-the-money options of the same class. A 
``long stock interest strategy'' is defined as a transaction done to 
achieve long stock involving the purchase, sale, and exercise of in-
the-money options of the same class. A ``merger strategy'' is 
defined as transactions done to achieve a merger arbitrage involving 
the purchase, sale and exercise of options of the same class and 
expiration date, each executed prior to the date on which 
shareholders of record are required to elect their respective form 
of consideration, i.e., cash or stock. A ``reversal strategy'' is 
established by combining a short security position with a short put 
and a long call position that shares the same strike and expiration. 
A ``conversion strategy'' is established by combining a long 
position in the underlying security with a long put and a short call 
position that shares the same strike and expiration. A ``jelly roll 
strategy'' is created by entering into two separate positions 
simultaneously. One position involves buying a put and selling a 
call with the same strike price and expiration. The second position 
involves selling a put and buying a call, with the same strike 
price, but with a different expiration from the first position. A 
``box spread strategy'' is a strategy that synthesizes long and 
short stock positions to create a profit. Specifically, a long call 
and short put at one strike is combined with a short call and long 
put at a different strike to create synthetic long and synthetic 
short stock positions, respectively. A ``dividend strategy'' is 
defined as a transaction done to achieve a dividend arbitrage 
involving the purchase, sale and exercise of in-the-money options of 
the same class, executed the first business day prior to the date on 
which the underlying stock goes ex-dividend. See BOX Fee Schedule, 
notes 29 and 35.
    \7\ The Exchange notes that Public Customers and Professional 
Customers are not charged a fee for QCC Orders. Therefore, the 
Exchange believes that Public Customers and Professional Customers 
will not be as incentivized as other Participants by the proposed 
fees.
    \8\ BOX Rule 7110(c)(6).
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    The proposed change is designed to compete with open outcry fee 
caps for strategy orders.\9\ The Exchange believes that Participants 
may choose to execute strategy orders that would qualify as strategy 
QCC Orders either in open outcry or as electronic QCC transactions 
depending on convenience, fees, and access to Floor Brokers. The 
Exchange believes that Participants are otherwise indifferent to 
whether a strategy order is executed in open outcry or electronically. 
Therefore, the proposed change is designed to further incentivize 
certain Participants to direct strategy order volume to BOX's 
electronic QCC mechanism rather than to another exchange's trading 
floor.
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    \9\ The Exchange's proposal to not assess fees on strategy QCC 
transactions is similar to Cboe Exchange, Inc. (``CBOE''), which 
caps open outcry strategy transactions at $0.00. See CBOE Fee 
Schedule, ``QCC Rate Table''; footnote 13. CBOE's fee cap applies to 
open outcry strategy transactions. Although, the proposed strategy 
QCC Orders are executed electronically, the Exchange believes that 
executing strategy orders as QCC orders is an alternative for 
trading strategy orders in open outcry. As such, the proposed change 
will allow BOX to compete with other exchanges who offer strategy 
orders at no cost. BOX notes that other exchanges offer fee caps on 
open outcry strategy transactions as well. See generally NYSE 
American Options Fee Schedule, Section I(J), ``Options Transaction 
Fees and Credits'' (Strategy transactions in open outcry and QCC 
reversal and conversion strategies are capped at $1,000 on the same 
trading day. The cap is reduced to $200 per trading day for ATP 
Holders that trade at least 25,000 billable contract sides in 
qualifying strategy executions) and Nasdaq PHLX LLC Rules Options 7, 
Section 4 (reversal and conversion strategies capped at $200 per 
day; merger, short stock interest, and box spread strategies capped 
at $1,000 per day if more than one class of options or $700 per day 
if in a single class of options; dividend strategies capped at 
$1,100 per day; all strategies capped at $65,000 per month per 
member organization).
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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,\10\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees, and other

[[Page 48746]]

charges among BOX Participants and other persons using its facilities 
and does not unfairly discriminate between customers, issuers, brokers 
or dealers.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange notes that it operates in a highly competitive 
environment. Indeed, there are currently 16 registered options 
exchanges that trade options. Based on publicly available information, 
no single options exchange has more than 16% of the market share and 
currently the Exchange represents only approximately 6% of the market 
share.\11\ The Commission has repeatedly expressed its preference for 
competition over regulatory intervention in determining prices, 
products, and services in the securities markets. Particularly, in 
Regulation NMS, the Commission highlighted the importance of market 
forces in determining prices and SRO revenues and, also, recognized 
that current regulation of the market system ``has been remarkably 
successful in promoting market competition in its broader forms that 
are most important to investors and listed companies.'' \12\ As stated 
above, the Exchange 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. The proposed fee changes reflect a 
competitive pricing structure designed to incentivize market 
participants to direct their order flow to the Exchange.
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    \11\ See Cboe Global Markets U.S. Options Market Month-to-Date 
Volume Summary (June 16, 2022), available at https://markets.cboe.com/us/options/market_statistics/.
    \12\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
---------------------------------------------------------------------------

    The Exchange believes the proposed change is reasonable, equitable, 
and not unfairly discriminatory as there are other exchanges with 
similar fees or fee caps for strategy orders \13\ and the proposed fees 
are uniformly applicable to all Participants. The Exchange also 
believes the proposed change would further incentivize certain 
Participants to execute strategy QCC Orders on BOX and may encourage 
Participants to aggregate all types of strategy orders (i.e. QCC Orders 
and Qualified Open Outcry (``QOO'') Orders) at BOX as a primary 
execution venue. The Exchange believes that Participants may 
consolidate different order types for execution on a single exchange 
because it increases the volume counted towards volume-based fee 
incentives, in particular, the Tiered Volume Rebate for Non-Auction 
Transactions in Section IV.A.1., of BOX's Fee Schedule, which provides 
Participants with incentives to achieve certain volume thresholds on 
BOX. To the extent that the proposed change attracts more strategy 
orders to BOX, some of which may be executed as QCC Orders and others 
as QOO Orders, this increased order flow may make BOX a more 
competitive venue for order execution.
---------------------------------------------------------------------------

    \13\ See supra note 9.
---------------------------------------------------------------------------

    The Exchange also believes that the ever-shifting market share 
among the exchanges from month to month demonstrates that market 
participants can shift order flow or discontinue or reduce use of 
certain categories of products, in response to fee changes. 
Accordingly, competitive forces constrain options exchange transaction 
fees. Stated otherwise, changes to exchange transaction fees can have a 
direct effect on the ability of an exchange to compete for order flow. 
The Exchange believes the proposed change is a reasonable attempt to 
further incentivize certain Participants to execute strategy orders on 
BOX and in turn to increase the depth of its market to the benefit of 
all market participants. The Exchange also notes that Participants may 
avail themselves to the proposed strategy order pricing or they can opt 
for similar offerings at several other exchanges.\14\
---------------------------------------------------------------------------

    \14\ See supra note 9.
---------------------------------------------------------------------------

    The Exchange believes that not allowing strategy QCC transactions 
to be eligible for a rebate is reasonable, equitable and not unfairly 
discriminatory because, as proposed, a fee is not assessed for these 
transactions. As such, the Exchange believes that Participants do not 
require additional incentives to execute these transactions on BOX. The 
QCC Rebate and Tiers detailed in Section IV.D.1 of the BOX Fee Schedule 
were designed to reduce the QCC fees assessed to Participants in 
Section IV.D. The proposal discussed herein is to assess no fee on 
strategy QCC Orders therefore there is no fee to reduce. Further, the 
Exchange believes that it is reasonable, equitable and not unfairly 
discriminatory to not count strategy QCC Order volume towards QCC Tiers 
because the Exchange does not believe that Participants need additional 
incentives to transact strategy QCC Orders on BOX.
    The Exchange believes that it is reasonable, equitable and not 
unfairly discriminatory to continue to count strategy QCC transactions 
toward the Tiered Volume Rebate for Non-Auction Transactions in Section 
IV.A.1., which provides Participants with incentives to achieve certain 
volume thresholds on BOX. These volume tiers are designed to reflect a 
reasonable and competitive pricing structure, to incentivize market 
participants to direct their order flow to BOX, and to enhance market 
quality. The Exchange believes that allowing strategy QCC orders to 
count toward customer volume tiers is equitable and not unfairly 
discriminatory because BOX has historically aimed to improve markets 
for investors and develop various features within the market structure 
for public customer benefit. The Exchange believes further that 
allowing strategy QCC orders to count toward Market Maker volume tiers 
is equitable and not unfairly discriminatory because of the significant 
contribution to overall market quality that Market Makers provide. 
Specifically, Market Makers provide higher volumes of liquidity which 
ultimately benefits all Participants trading on BOX.

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 proposed change is designed to attract additional order flow to 
BOX. The Exchange believes that the proposed change could further 
incentivize certain market participants to direct their strategy QCC 
Orders to BOX. As noted herein, the proposed strategy QCC Order fees 
would be applicable to all similarly situated market participants, and, 
as such, the proposed change would not impose a disparate burden on 
competition among Participants on BOX.
    Further, the Exchange also does not believe that the proposed fees 
will impose any burden on intermarket competition that is not necessary 
or appropriate in furtherance of the Act because, as noted above, 
competing options exchanges currently have similar fees in place in 
connection with strategy orders.\15\ Because competitors are free to 
modify their own fees or fee caps in response to competing exchanges, 
BOX believes that the degree to which changes in this market may impose 
any burden on competition is limited. Further, the Exchange believes 
that the proposed change could promote competition between BOX and 
other execution venues, including those that currently offer similar 
strategy order fees or fee caps. Finally, the Exchange notes that it 
operates in a highly competitive market in which market participants 
can readily favor competing venues. In such an environment, the

[[Page 48747]]

Exchange must continually review, and consider adjusting, its fees and 
credits to remain competitive with other exchanges. For the reasons 
described above, the Exchange believes that the proposed rule change 
reflects this competitive environment.
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    \15\ Id.
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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 \16\ and Rule 19b-4(f)(2) 
thereunder,\17\ because it establishes or changes a due, or fee.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \17\ 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.

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-2022-24 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-2022-24. 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-2022-24, and should be submitted on 
or before August 31, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-17104 Filed 8-9-22; 8:45 am]
BILLING CODE 8011-01-P
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