Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 7660 (Communications and Equipment), 42123-42126 [2023-13795]
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Federal Register / Vol. 88, No. 124 / Thursday, June 29, 2023 / Notices
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
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will be available for inspection and
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you should submit only information
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publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–Phlx–2023–26 and should be
submitted on or before July 20, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 2023–13790 Filed 6–28–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–456, OMB Control No.
3235–0515]
Dated: June 23, 2023.
J. Lynn Taylor,
Assistant Secretary.
Proposed Collection; Comment
Request; Extension: Schedule TO
lotter on DSK11XQN23PROD with NOTICES1
companies and investors before
companies file registration statements
involving tender offer statements.
Schedule TO takes approximately
44.752 hours per response and is filed
by approximately 1,378 issuers
annually. We estimate that 50% of the
44.752 hours per response (22.376
hours) is prepared by the issuer for an
annual reporting burden of 30,834 hours
(22.376 hours per response × 1,378
responses). An agency may conduct or
sponsor, and a person is not required to
respond to, a collection of information
unless it displays a currently valid
control number.
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information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function. Written comments and
recommendations for the proposed
information collection should be sent
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notice by July 31, 2023 to (i)
www.reginfo.gov/public/do/PRAMain
and (ii) David Bottom, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549, or by sending an email to:
PRA_Mailbox@sec.gov.
Upon Written Request Copies Available
From: Securities and Exchange
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Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission
(‘‘Commission’’) has submitted to the
Office of Management and Budget the
request for extension of the previously
approved collection of information
discussed below.
Schedule TO (17 CFR 240.14d–100)
must be filed by a reporting company
that makes a tender offer for its own
securities. Also, persons other than the
reporting company making a tender
offer for equity securities registered
under Section 12 of the Exchange Act
(15 U.S.C. 78l) (which offer, if
consummated, would cause that person
to own over 5% of that class of the
securities) must file Schedule TO. The
purpose of Schedule TO is to improve
communications between public
[FR Doc. 2023–13784 Filed 6–28–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97794; File No. SR–BOX–
2023–17]
Self-Regulatory Organizations; BOX
Exchange LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Rule 7660
(Communications and Equipment)
June 23, 2023.
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 June 12,
2023, 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 Exchange. The Commission is
1 15
18 17
CFR 200.30–3(a)(12).
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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publishing this notice to solicit
comments on the proposed rule from
interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 7660 (Communications and
Equipment). 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://
rules.boxexchange.com/rulefilings.
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 purpose of the proposed rule
change is to amend Rule 7660 to
modernize and clarify the scope of the
recordkeeping obligations for Floor
Participants 3 relating to communication
devices. Specifically, the Exchange is
proposing to amend Rule 7660 to: (1)
codify that the registration requirement
is only applicable to any
communication device to be used for
business purposes; and (2) explicitly
provide that Floor Participants must
maintain records of the use of any
communication devices on the Trading
Floor.4
Rule 7660, which applies to the use
of electronic communication devices on
the Trading Floor, was adopted in 2017
3 The term ‘‘Floor Participant’’ means Floor
Brokers as defined in Rule 7540 and Floor Market
Makers as defined in Rule 8510(b). See BOX Rule
100(a)(26).
4 The term ‘‘Trading Floor’’ or ‘‘Options Floor’’
means the physical trading floor of the Exchange
located in Chicago. The Trading Floor shall consist
of one ‘‘Crowd Area’’ or ‘‘Pit’’ where all option
classes will be located. The Crowd Area or Pit shall
be marked with specific visible boundaries on the
Trading Floor, as determined by the Exchange. A
Floor Broker must open outcry an order in the
Crowd Area. See BOX Rule 100(a)(68).
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Federal Register / Vol. 88, No. 124 / Thursday, June 29, 2023 / Notices
with the establishment of the BOX
Trading Floor. The Exchange is now
proposing to update and modernize
Rule 7660(k).
Currently Rule 7660(f) provides that
Floor Participants must register, prior to
use, any new communication device to
be used on the Trading Floor. Each
device registered with the Exchange
must be registered by category of user.
If there is a change in the category of
any user, the device must be reregistered with the Exchange. At the
time of registration, Floor Participant
representatives must sign a statement
that they are aware of and understand
the rules and procedures governing the
use of communication devices on the
Options Floor. The Exchange is
proposing to update Rule 7660(f) to
codify that the registration requirement
is only applicable to communication
devices to be used for business
purposes. Specifically, the Exchange is
proposing to amend Rule 7660(f) to
state: ‘‘Floor Participants must register,
prior to use, any new communication
device to be used for business purposes
on the Trading Floor. Each device
registered with the Exchange must be
registered by category of user. If there is
a change in the category of any user, the
device must be re-registered with the
Exchange. At the time of registration,
Floor Participant representatives must
sign a statement that they are aware of
and understand the rules and
procedures governing the use of
communication devices on the Options
Floor.’’
The proposed updates to Rule 7660(f)
are intended to codify an existing
requirement that Floor Participants
must register, prior to use, any new
communication device to be used for
business purposes on the Trading Floor.
The Exchange is proposing this
additional language to clarify that the
registration requirement is only
applicable to communication devices to
be used for business purposes. This
requirement is already reflected on the
BOX Communication Device
Registration Form and the Exchange is
not proposing to change the existing
practice. The Exchange is looking to
codify this existing requirement into the
Rulebook to provide additional clarity
to Floor Participants. The Exchange
believes that this proposed change will
help provide greater clarity to the
existing practices on the Trading Floor
and may reduce the potential for
confusion regarding the requirements
relating to communication devices on
the Trading Floor.
The Exchange notes that proposed
Rule 7660(f) is similar in relevant part
to an existing rule governing
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recordkeeping on the trading floor at
another exchange.5
Currently, Rule 7660(k) provides that
Floor Participants must maintain their
cellular or cordless telephone records,
including logs of calls placed, for a
period of not less than three years, the
first two in an easily accessible place.
The Exchange reserves the right to
inspect and/or examine such telephone
records. The Exchange is proposing to
modernize Rule 7660(k) to make it clear
that the recordkeeping obligations are
applicable to any registered
communication devices and not limited
to telephone records. Specifically, the
Exchange is proposing to update Rule
7660(k) to state: ‘‘Floor Participants
must maintain records of the use of
telephones and all other registered
communication devices, including, but
not limited to, logs of calls, emails, and
chats, for a period of not less than three
years, the first two in an easily
accessible place. The Exchange reserves
the right to inspect and/or examine such
records.’’
The proposed updates to Rule 7660(k)
are intended to modernize and clarify
that the recordkeeping obligations are
applicable to all registered
communication devices and that records
of Floor Participant’s use of any
communication devices, including, but
not limited to, emails and chats, are also
required to be maintained. The
Exchange believes that this proposed
change will help with the Exchange’s
surveillance function. Additionally, the
Exchange has notified all Participants
that their record keeping obligations
apply to all communication devices and
5 See Cboe Exchange, Inc. (‘‘Cboe’’) Rule 5.81(a).
The registration requirements relating to
communication devices and equipment on the
trading floor at Cboe explicitly provides that prior
to use, all communication devices for business
purposes must be registered with the exchange.
Proposed Rule 7660(f) states: Floor Participants
must register, prior to use, any new communication
device to be used for business purposes on the
Trading Floor. Each device registered with the
Exchange must be registered by category of user. If
there is a change in the category of any user, the
device must be re-registered with the Exchange. At
the time of registration, Floor Participant
representatives must sign a statement that they are
aware of and understand the rules and procedures
governing the use of communication devices on the
Options Floor. Cboe Rule 5.81(a) states: (a) Subject
to the requirements of this Rule, Trading Permit
Holders may use any communication device (e.g.,
any hardware or software related to a phone,
system, or other device, including an instant
messaging system, email system, or similar device)
on the trading floor and in any trading crowd of the
Exchange. Prior to using a communications device
for business purposes on the trading floor of the
Exchange, Trading Permit Holders must register the
communications device by identifying (in a form
and manner prescribed by the Exchange) the
hardware (i.e., headset, cellular telephone, tablet, or
other similar hardware).
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extend to chats and emails by
Regulatory Notice.6
The Exchange notes that proposed
Rule 7660(k) is similar in relevant part
to an existing rule governing
recordkeeping on the trading floor at
another exchange 7 and to an existing
Exchange recordkeeping rule.8
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the Act,9
in general, and Section 6(b)(5) of the
Act,10 in particular, in that it is designed
to promote just and equitable principles
of trade and to protect investors and the
public interest.
The Exchange believes that the rule
change will promote just and equitable
principles of trade by making the rules
clearer and easier to use. The Exchange
is proposing to update Rule 7660(f) to
codify the requirement that Floor
Participants must register, prior to use,
any new communication device to be
used for business purposes on the
Trading Floor. The Exchange is
proposing this additional language to
clarify that the registration requirement
is only applicable to communication
devices to be used for business
purposes. As noted above, the proposed
amendment to 7660(f) is an effort to
codify an existing Exchange practice
that is detailed in the BOX
Communication Device Policy and is
similar in relevant part to a provision
governing the registration of devices in
the communications and equipment
rules at another exchange.11 The
Exchange believes that this proposed
update to codify the requirement to
register all communication devices that
to be used for a business purpose on the
Trading Floor will help provide greater
6 See Exchange Notice 2023–11. Available at:
https://boxexchange.com/assets/Communicationsand-Equipment-Notice_2.28.2023.pdf.
7 See Cboe Rule 5.81(g). The recordkeeping
obligations relating to communication devices and
equipment on the trading floor at Cboe explicitly
covers all communication devices and includes
emails and chats as well. Proposed Rule 7660(k)
states: Floor Participants must maintain records of
the use of telephones and all other registered
communication devices, including, but not limited
to, logs of calls, emails, and chats, for a period of
not less than three years, the first two in an easily
accessible place. The Exchange reserves the right to
inspect and/or examine such records. Cboe Rule
5.81(g) states: Trading Permit Holders must
maintain records of the use of communication
devices, including, but not limited to, (1) logs of
calls placed, (2) emails, and (3) chats, for a period
of not less than three years, the first two years in
an easily accessible place. The Exchange reserves
the right to inspect such records pursuant to Rule
13.2.
8 See BOX Rule 7670(a)(1)(G).
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
11 See supra note 5.
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Federal Register / Vol. 88, No. 124 / Thursday, June 29, 2023 / Notices
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clarity into existing practices on the
Trading Floor and may reduce the
potential for confusion regarding the
requirements relating to communication
devices on the Trading Floor. As such,
the Exchange believes that the proposed
changes to codify this existing
registration requirement in Rule 7660(f)
is in the public interest, and therefore,
consistent with the Act.
The Exchange is also proposing to
modernize Rule 7660(k) to amend the
records retention requirement for
telephone records to explicitly provide
that, the recordkeeping obligations are
applicable to all registered
communication devices and that records
of Floor Participant’s use of any
communication devices, including, but
not limited to, emails and chats are also
required to be maintained for a period
of not less than three years, the first two
in an easily accessible place. As noted
above, these proposed amendments are
similar in relevant part to a provision
governing recordkeeping in the
communications and equipment rules at
another exchange 12 and to an existing
Exchange recordkeeping rule.13 The
Exchange believes that this
modernization and clarification of the
scope of the recordkeeping requirements
under Rule 7660(k), will help with the
Exchange’s surveillance function and
make the Rule clearer for Participants.
As such, the Exchange believes that the
proposed changes to modernize and
clarify Rule 7660(k) is in the public
interest, and therefore, 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 result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
The Exchange believes that the
proposed change will not impose a
burden on intermarket or intramarket
competition, as the proposed change
applies equally to all market
participants. While the Exchange does
not believe that the proposed noncontroversial change is a burden on
competition, or is competitive in nature,
the Exchange believes that proposed
updates to codify an existing practice
and provide for clearer, modernized
recordkeeping obligations will benefit
market participants. The Exchange also
notes that the proposed updates to
7660(f) are similar in relevant part to an
existing provision governing
communication device registration in
12 See
13 See
supra note 7.
supra note 8.
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the communications and equipment
rules at another options exchange 14 and
that the proposed updates to 7660(k) are
similar in relevant part to an existing
provision governing recordkeeping in
the communications and equipment
rules at another options exchange 15 and
to an existing Exchange recordkeeping
rule.16 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)(iii) of the Act 17 and Rule
19b–4(f)(6) thereunder.18 Because the
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
prior to 30 days from the date on which
it was filed, 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 Section 19(b)(3)(A)
of the Act 19 and Rule 19b–4(f)(6)(iii)
thereunder.20
A proposed rule change filed under
Rule 19b–4(f)(6) 21 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),22 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
14 See
supra note 5.
supra note 7.
16 See supra note 8.
17 15 U.S.C. 78s(b)(3)(A)(iii).
18 17 CFR 240.19b–4(f)(6).
19 15 U.S.C. 78s(b)(3)(A).
20 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change, along with a brief
description and text of 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.
21 17 CFR 240.19b–4(f)(6).
22 17 CFR 240.19b–4(f)(6)(iii).
15 See
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42125
operative delay so that the proposal may
become operative immediately upon
filing. As discussed above, the Exchange
states that this proposed update to
7660(f) to codify the existing
requirement to register all
communication devices to be used for a
business purpose on the Trading Floor
will help provide greater clarity into
existing practices on the Trading Floor
and may reduce the potential for
confusion regarding the requirements
relating to communication devices on
the Trading Floor. The Exchange
believes that the waiver of the operative
delay will protect investors by allowing
the Exchange to quickly codify existing
practices and to modernize and clarify
the scope of the recordkeeping
requirements under Rule 7660(k). The
Commission believes that waiver of the
operative delay is consistent with the
protection of investors and the public
interest because it will allow the
Exchange to immediately codify an
existing practice within Rule 7660(f)
and amend Rule 7660(k) to modernize
the requirements applicable to
communication devices. Accordingly,
the Commission hereby waives the 30day operative delay and designates the
proposal operative upon filing.23
At any time within 60 days of the
filing of this 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
under Section 19(b)(2)(B) 24 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• 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–2023–17 on the subject line.
23 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
24 15 U.S.C. 78s(b)(2)(B).
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Federal Register / Vol. 88, No. 124 / Thursday, June 29, 2023 / 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–2023–17. 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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–BOX–2023–17 and should be
submitted on or before July 20, 2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.25
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 2023–13795 Filed 6–28–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–97792; File No. SR–ICC–
2023–008]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Order Approving
Proposed Rule Change Relating to the
ICC Clearing Participant Default
Management Procedures
June 26, 2023.
I. Introduction
On May 2, 2023, ICE Clear Credit LLC
(‘‘ICC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(2) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to amend the ICC
Clearing Participant Default
Management Procedures. The proposed
rule change was published for comment
in the Federal Register on May 12,
2023.3 The Commission did not receive
comments regarding the proposed rule
change. For the reasons discussed
below, the Commission is approving the
proposed rule change.
II. Description of the Proposed Rule
Change
ICC is registered with the Commission
as a clearing agency for the purpose of
clearing CDS contracts. ICC clears CDS
contracts for its members, which it
refers to as Clearing Participants.4
Clearing CDS contracts for Clearing
Participants presents certain risks to
ICC, such as the risk that a Clearing
Participant may default on payments or
other obligations it owes to ICC.
Accordingly, ICC has developed a
comprehensive set of tools to manage
and mitigate such risks. These tools
include, among other things, collecting
margin from Clearing Participants,
maintaining a Guaranty Fund, and
establishing procedures to manage a
Clearing Participant’s default.
The proposed rule change relates to
the third set of risk management tools—
procedures that explain what happens
when a Clearing Participant is in default
and how ICC responds to the default,
which ICC refers to as its Clearing
Participant Default Management
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Self-Regulatory Organizations; ICE Clear Credit
LLC; Notice of Filing of Proposed Rule Change
Relating to the ICC Clearing Participant Default
Management Procedures; Exchange Act Release No.
97455 (May 8, 2023), 88 FR 30812 (May 12, 2023)
(File No. SR–ICC–2023–008) (‘‘Notice’’).
4 Capitalized terms not otherwise defined herein
have the meanings assigned to them in the ICC
Clearing Participant Default Management
Procedures or the ICC Clearing Rules.
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2 17
25 17
CFR 200.30–3(a)(12).
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Procedures (the ‘‘Procedures’’). The
proposed rule change would amend the
Procedures.
The proposed rule change would add
Section 4.6 to the Procedures, which
would explain how ICC tests both its
Recovery Plan and its Wind-Down Plan
(together the ‘‘Plans’’). ICC would test
the Plans at least once every twelve
months, and the purpose of these
annual tests would be to demonstrate
that ICC is ready to execute the Plans
when needed. ICC would need to
execute the plans, for example, in the
following circumstances: (i) to address
uncovered credit losses, liquidity
shortfalls and general business risk,
operational risk, or any other risk that
threatens ICC’s viability as a going
concern and (ii) to wind-down ICC in an
orderly manner.
Section 4.6 would detail (i) the ICC
personnel responsible for planning and
conducting the tests and (ii) the overall
scope of the tests. With respect to
responsible personnel, the ICC Risk
Oversight Officer (‘‘ROO’’) would have
overall responsibility for planning and
coordinating the execution of each test.
In doing so, the ROO would work with
other members of the Close-Out Team 5
to determine the scope of the test. The
proposed scope and format of the test
would be presented to the ICC Board of
Managers for review prior to execution
of the test. After Board review, the
Close-Out Team would then be
responsible for executing the tests,
capturing the results of the tests, and
providing the results to the ROO.
Once provided with the results, the
ROO would collate the information,
summarize any lessons learned, and
identify possible revisions that should
be made to the Plans. The ROO would
then develop a presentation to
summarize the tests. The Close-Out
Team, ICC Risk Committee, and Board
would review this presentation. Going
forward, the ROO would maintain a list
of work items for the future
development and/or enhancement of the
business processes and capabilities
necessary to execute the Plans.
With respect to the overall scope of
each test, this would include choosing
the recovery and wind-down scenarios
and the recovery tools to test. In
choosing the scenarios and tools, ICC
would give consideration to scenarios,
business processes, and tools which
have not been recently tested. In
addition, ICC would consider the
applicability of new Rules, procedures,
or newly implemented ICC capabilities
5 The ICC Close-Out Team is comprised of ICC
management, the ROO, and the most senior member
of the ICC Treasury Department.
E:\FR\FM\29JNN1.SGM
29JNN1
]]>Agencies
[Federal Register Volume 88, Number 124 (Thursday, June 29, 2023)]
[Notices]
[Pages 42123-42126]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-13795]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97794; File No. SR-BOX-2023-17]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend Rule
7660 (Communications and Equipment)
June 23, 2023.
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 June 12, 2023, 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 Exchange. The Commission is publishing this notice to
solicit comments on the proposed rule from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 7660 (Communications and
Equipment). 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://rules.boxexchange.com/rulefilings.
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 purpose of the proposed rule change is to amend Rule 7660 to
modernize and clarify the scope of the recordkeeping obligations for
Floor Participants \3\ relating to communication devices. Specifically,
the Exchange is proposing to amend Rule 7660 to: (1) codify that the
registration requirement is only applicable to any communication device
to be used for business purposes; and (2) explicitly provide that Floor
Participants must maintain records of the use of any communication
devices on the Trading Floor.\4\
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\3\ The term ``Floor Participant'' means Floor Brokers as
defined in Rule 7540 and Floor Market Makers as defined in Rule
8510(b). See BOX Rule 100(a)(26).
\4\ The term ``Trading Floor'' or ``Options Floor'' means the
physical trading floor of the Exchange located in Chicago. The
Trading Floor shall consist of one ``Crowd Area'' or ``Pit'' where
all option classes will be located. The Crowd Area or Pit shall be
marked with specific visible boundaries on the Trading Floor, as
determined by the Exchange. A Floor Broker must open outcry an order
in the Crowd Area. See BOX Rule 100(a)(68).
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Rule 7660, which applies to the use of electronic communication
devices on the Trading Floor, was adopted in 2017
[[Page 42124]]
with the establishment of the BOX Trading Floor. The Exchange is now
proposing to update and modernize Rule 7660(k).
Currently Rule 7660(f) provides that Floor Participants must
register, prior to use, any new communication device to be used on the
Trading Floor. Each device registered with the Exchange must be
registered by category of user. If there is a change in the category of
any user, the device must be re-registered with the Exchange. At the
time of registration, Floor Participant representatives must sign a
statement that they are aware of and understand the rules and
procedures governing the use of communication devices on the Options
Floor. The Exchange is proposing to update Rule 7660(f) to codify that
the registration requirement is only applicable to communication
devices to be used for business purposes. Specifically, the Exchange is
proposing to amend Rule 7660(f) to state: ``Floor Participants must
register, prior to use, any new communication device to be used for
business purposes on the Trading Floor. Each device registered with the
Exchange must be registered by category of user. If there is a change
in the category of any user, the device must be re-registered with the
Exchange. At the time of registration, Floor Participant
representatives must sign a statement that they are aware of and
understand the rules and procedures governing the use of communication
devices on the Options Floor.''
The proposed updates to Rule 7660(f) are intended to codify an
existing requirement that Floor Participants must register, prior to
use, any new communication device to be used for business purposes on
the Trading Floor. The Exchange is proposing this additional language
to clarify that the registration requirement is only applicable to
communication devices to be used for business purposes. This
requirement is already reflected on the BOX Communication Device
Registration Form and the Exchange is not proposing to change the
existing practice. The Exchange is looking to codify this existing
requirement into the Rulebook to provide additional clarity to Floor
Participants. The Exchange believes that this proposed change will help
provide greater clarity to the existing practices on the Trading Floor
and may reduce the potential for confusion regarding the requirements
relating to communication devices on the Trading Floor.
The Exchange notes that proposed Rule 7660(f) is similar in
relevant part to an existing rule governing recordkeeping on the
trading floor at another exchange.\5\
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\5\ See Cboe Exchange, Inc. (``Cboe'') Rule 5.81(a). The
registration requirements relating to communication devices and
equipment on the trading floor at Cboe explicitly provides that
prior to use, all communication devices for business purposes must
be registered with the exchange. Proposed Rule 7660(f) states: Floor
Participants must register, prior to use, any new communication
device to be used for business purposes on the Trading Floor. Each
device registered with the Exchange must be registered by category
of user. If there is a change in the category of any user, the
device must be re-registered with the Exchange. At the time of
registration, Floor Participant representatives must sign a
statement that they are aware of and understand the rules and
procedures governing the use of communication devices on the Options
Floor. Cboe Rule 5.81(a) states: (a) Subject to the requirements of
this Rule, Trading Permit Holders may use any communication device
(e.g., any hardware or software related to a phone, system, or other
device, including an instant messaging system, email system, or
similar device) on the trading floor and in any trading crowd of the
Exchange. Prior to using a communications device for business
purposes on the trading floor of the Exchange, Trading Permit
Holders must register the communications device by identifying (in a
form and manner prescribed by the Exchange) the hardware (i.e.,
headset, cellular telephone, tablet, or other similar hardware).
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Currently, Rule 7660(k) provides that Floor Participants must
maintain their cellular or cordless telephone records, including logs
of calls placed, for a period of not less than three years, the first
two in an easily accessible place. The Exchange reserves the right to
inspect and/or examine such telephone records. The Exchange is
proposing to modernize Rule 7660(k) to make it clear that the
recordkeeping obligations are applicable to any registered
communication devices and not limited to telephone records.
Specifically, the Exchange is proposing to update Rule 7660(k) to
state: ``Floor Participants must maintain records of the use of
telephones and all other registered communication devices, including,
but not limited to, logs of calls, emails, and chats, for a period of
not less than three years, the first two in an easily accessible place.
The Exchange reserves the right to inspect and/or examine such
records.''
The proposed updates to Rule 7660(k) are intended to modernize and
clarify that the recordkeeping obligations are applicable to all
registered communication devices and that records of Floor
Participant's use of any communication devices, including, but not
limited to, emails and chats, are also required to be maintained. The
Exchange believes that this proposed change will help with the
Exchange's surveillance function. Additionally, the Exchange has
notified all Participants that their record keeping obligations apply
to all communication devices and extend to chats and emails by
Regulatory Notice.\6\
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\6\ See Exchange Notice 2023-11. Available at: https://boxexchange.com/assets/Communications-and-Equipment-Notice_2.28.2023.pdf.
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The Exchange notes that proposed Rule 7660(k) is similar in
relevant part to an existing rule governing recordkeeping on the
trading floor at another exchange \7\ and to an existing Exchange
recordkeeping rule.\8\
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\7\ See Cboe Rule 5.81(g). The recordkeeping obligations
relating to communication devices and equipment on the trading floor
at Cboe explicitly covers all communication devices and includes
emails and chats as well. Proposed Rule 7660(k) states: Floor
Participants must maintain records of the use of telephones and all
other registered communication devices, including, but not limited
to, logs of calls, emails, and chats, for a period of not less than
three years, the first two in an easily accessible place. The
Exchange reserves the right to inspect and/or examine such records.
Cboe Rule 5.81(g) states: Trading Permit Holders must maintain
records of the use of communication devices, including, but not
limited to, (1) logs of calls placed, (2) emails, and (3) chats, for
a period of not less than three years, the first two years in an
easily accessible place. The Exchange reserves the right to inspect
such records pursuant to Rule 13.2.
\8\ See BOX Rule 7670(a)(1)(G).
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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,\9\ in general, and Section
6(b)(5) of the Act,\10\ in particular, in that it is designed to
promote just and equitable principles of trade and to protect investors
and the public interest.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the rule change will promote just and
equitable principles of trade by making the rules clearer and easier to
use. The Exchange is proposing to update Rule 7660(f) to codify the
requirement that Floor Participants must register, prior to use, any
new communication device to be used for business purposes on the
Trading Floor. The Exchange is proposing this additional language to
clarify that the registration requirement is only applicable to
communication devices to be used for business purposes. As noted above,
the proposed amendment to 7660(f) is an effort to codify an existing
Exchange practice that is detailed in the BOX Communication Device
Policy and is similar in relevant part to a provision governing the
registration of devices in the communications and equipment rules at
another exchange.\11\ The Exchange believes that this proposed update
to codify the requirement to register all communication devices that to
be used for a business purpose on the Trading Floor will help provide
greater
[[Page 42125]]
clarity into existing practices on the Trading Floor and may reduce the
potential for confusion regarding the requirements relating to
communication devices on the Trading Floor. As such, the Exchange
believes that the proposed changes to codify this existing registration
requirement in Rule 7660(f) is in the public interest, and therefore,
consistent with the Act.
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\11\ See supra note 5.
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The Exchange is also proposing to modernize Rule 7660(k) to amend
the records retention requirement for telephone records to explicitly
provide that, the recordkeeping obligations are applicable to all
registered communication devices and that records of Floor
Participant's use of any communication devices, including, but not
limited to, emails and chats are also required to be maintained for a
period of not less than three years, the first two in an easily
accessible place. As noted above, these proposed amendments are similar
in relevant part to a provision governing recordkeeping in the
communications and equipment rules at another exchange \12\ and to an
existing Exchange recordkeeping rule.\13\ The Exchange believes that
this modernization and clarification of the scope of the recordkeeping
requirements under Rule 7660(k), will help with the Exchange's
surveillance function and make the Rule clearer for Participants. As
such, the Exchange believes that the proposed changes to modernize and
clarify Rule 7660(k) is in the public interest, and therefore,
consistent with the Act.
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\12\ See supra note 7.
\13\ See supra note 8.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended. The
Exchange believes that the proposed change will not impose a burden on
intermarket or intramarket competition, as the proposed change applies
equally to all market participants. While the Exchange does not believe
that the proposed non-controversial change is a burden on competition,
or is competitive in nature, the Exchange believes that proposed
updates to codify an existing practice and provide for clearer,
modernized recordkeeping obligations will benefit market participants.
The Exchange also notes that the proposed updates to 7660(f) are
similar in relevant part to an existing provision governing
communication device registration in the communications and equipment
rules at another options exchange \14\ and that the proposed updates to
7660(k) are similar in relevant part to an existing provision governing
recordkeeping in the communications and equipment rules at another
options exchange \15\ and to an existing Exchange recordkeeping
rule.\16\ 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.
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\14\ See supra note 5.
\15\ See supra note 7.
\16\ See supra note 8.
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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)(iii) of the Act \17\ and Rule 19b-4(f)(6) thereunder.\18\
Because the 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 prior to
30 days from the date on which it was filed, 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 Section 19(b)(3)(A) of the Act \19\ and Rule 19b-
4(f)(6)(iii) thereunder.\20\
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\17\ 15 U.S.C. 78s(b)(3)(A)(iii).
\18\ 17 CFR 240.19b-4(f)(6).
\19\ 15 U.S.C. 78s(b)(3)(A).
\20\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of 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.
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A proposed rule change filed under Rule 19b-4(f)(6) \21\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\22\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. As discussed above, the
Exchange states that this proposed update to 7660(f) to codify the
existing requirement to register all communication devices to be used
for a business purpose on the Trading Floor will help provide greater
clarity into existing practices on the Trading Floor and may reduce the
potential for confusion regarding the requirements relating to
communication devices on the Trading Floor. The Exchange believes that
the waiver of the operative delay will protect investors by allowing
the Exchange to quickly codify existing practices and to modernize and
clarify the scope of the recordkeeping requirements under Rule 7660(k).
The Commission believes that waiver of the operative delay is
consistent with the protection of investors and the public interest
because it will allow the Exchange to immediately codify an existing
practice within Rule 7660(f) and amend Rule 7660(k) to modernize the
requirements applicable to communication devices. Accordingly, the
Commission hereby waives the 30-day operative delay and designates the
proposal operative upon filing.\23\
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\21\ 17 CFR 240.19b-4(f)(6).
\22\ 17 CFR 240.19b-4(f)(6)(iii).
\23\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of this 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 under
Section 19(b)(2)(B) \24\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\24\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
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-2023-17 on the subject line.
[[Page 42126]]
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-2023-17. 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-BOX-2023-17 and should be
submitted on or before July 20, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\25\
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\25\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 2023-13795 Filed 6-28-23; 8:45 am]
BILLING CODE 8011-01-P
