Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule for Trading on the BOX Options Market LLC Facility To Amend Certain Qualification Thresholds of Section IV.A.1 (Tiered Volume Rebate for Non-Auction Transactions), 64936-64939 [2023-20304]
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Federal Register / Vol. 88, No. 181 / Wednesday, September 20, 2023 / Notices
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeBYX–2023–013 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
[Release No. 34–98386; File No. SR–
NASDAQ–2023–025]
• 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–CboeBYX–2023–013. 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–CboeBYX–2023–013 and should be
submitted on or before October 11,
2023.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–20305 Filed 9–19–23; 8:45 am]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Designation of a Longer Period for
Commission Action on a Proposed
Rule Change Related to Notification
and Disclosure of Reverse Stock Splits
September 14, 2023.
On July 21, 2023, The Nasdaq Stock
Market LLC (‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change
related to notification and disclosure of
reverse stock splits. The proposed rule
change was published for comment in
the Federal Register on August 3, 2023.3
Section 19(b)(2) of the Act 4 provides
that, within 45 days of the publication
of notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding, or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The 45th day after
publication of the notice for this
proposed rule change is September 17,
2023. The Commission is extending this
45-day time period.
The Commission finds that it is
appropriate to designate a longer period
within which to take action on the
proposed rule change so that it has
sufficient time to consider the proposed
rule change. Accordingly, the
Commission, pursuant to Section
19(b)(2) of the Act,5 designates
November 1, 2023, as the date by which
the Commission shall either approve or
disapprove, or institute proceedings to
determine whether to disapprove, the
proposed rule change (File No. SR–
NASDAQ–2023–025).
[FR Doc. 2023–20310 Filed 9–19–23; 8:45 am]
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 98014
(July 28, 2023), 88 FR 51376. Comment received by
the Commission on the proposed rule change is
available on the Commission’s website at: https://
www.sec.gov/comments/sr-nasdaq-2023-025/
srnasdaq2023025.htm.
4 15 U.S.C. 78s(b)(2).
5 Id.
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BILLING CODE 8011–01–P
2 17
21 17
CFR 200.30–3(a)(12).
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Sherry R. Haywood,
Assistant Secretary.
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BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98385; File No. SR–BOX–
2023–23]
Self-Regulatory Organizations; BOX
Exchange LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Fee
Schedule for Trading on the BOX
Options Market LLC Facility To Amend
Certain Qualification Thresholds of
Section IV.A.1 (Tiered Volume Rebate
for Non-Auction Transactions)
September 14, 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
September 1, 2023, 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
certain qualification thresholds of
Section IV.A.1, (Tiered Volume Rebate
for Non-Auction Transactions) on the
BOX Options Market LLC (‘‘BOX’’)
options facility. The text of the
proposed rule change is available from
the principal office of the Exchange, at
the Commission’s Public Reference
Room and also on the Exchange’s
internet website at https://
boxexchange.com.
6 17
CFR 200.30–3(a)(31).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
1 15
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Federal Register / Vol. 88, No. 181 / Wednesday, September 20, 2023 / Notices
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
1. Purpose
The Exchange proposes to amend the
Fee Schedule for trading on BOX to
amend certain qualification thresholds
of Section IV.A.1, (Tiered Volume
Rebate for Non-Auction Transactions).
Currently, Public Customers 5 receive
a per contract rebate for Electronic NonAuction Transactions according to the
Tier achieved by the Public Customer as
provided in the Percentage Thresholds
of National Customer Volume in
Multiply-Listed Options Classes table in
Section IV.A.1 of the BOX Fee
Schedule. Percentage thresholds are
calculated on a monthly basis by
totaling the Public Customer’s executed
Auction and Non-Auction transaction
volume on BOX, relative to the total
national Customer volume in multiplylisted options classes.
The Exchange notes that Non-Auction
Transactions where a Public Customer
order interacts with another Public
Customer order are exempt from a per
contract rebate. However, these
transactions still count toward the
Public Customer’s monthly volume on
BOX. The current thresholds and
rebates are as follows:
Per contract rebate
Percentage thresholds of national
customer volume in multiply-listed
options classes
(monthly)
Tier
Penny
Interval
Classes
Maker
1
2
3
4
.....................
.....................
.....................
.....................
0.000%–0.129% ..................................
0.130%–0.339% ..................................
0.340%–0.549% ..................................
0.550% and Above ..............................
The Exchange now proposes to raise
the percentage thresholds within the
Non-Penny
Interval
Classes
Taker
$0.00
(0.05)
(0.10)
(0.27)
Maker
$0.00
(0.15)
(0.20)
(0.27)
Taker
$0.00
(0.15)
(0.30)
(0.60)
Percentage Thresholds of National
Customer Volume in Multiply-Listed
SPY
$0.00
(0.27)
(0.32)
(0.40)
Maker
Taker
$0.00
(0.05)
(0.10)
(0.27)
$0.00
0.00
0.00
0.00
Options Classes table. The proposed
rebate structure is as follows:
Per contract rebate
Percentage thresholds of national
customer volume in multiply-listed
options classes
(monthly)
Tier
Penny
Interval
Classes
Maker
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1
2
3
4
.....................
.....................
.....................
.....................
0.000%–0.249% ..................................
0.250%–0.499% ..................................
0.500%–0.749% ..................................
0.750% and Above ..............................
$0.00
(0.05)
(0.10)
(0.27)
Non-Penny
Interval
Classes
Taker
Maker
$0.00
(0.15)
(0.20)
(0.27)
SPY
Taker
$0.00
(0.15)
(0.30)
(0.60)
$0.00
(0.27)
(0.32)
(0.40)
Maker
$0.00
(0.05)
(0.10)
(0.27)
Taker
$0.00
0.00
0.00
0.00
The Exchange notes that the
percentage thresholds in Tiers 1 through
4 will be adjusted, however the rebate
amounts will not change. For example,
the Tier 2 rebates remain at $0.05 for
Makers in Penny Interval Classes and
$0.15 for Takers in Penny Interval
Classes, but will require 0.250%–
0.499% of national customer volume in
multiply-listed options classes for
Public Customers to qualify for the
rebate. Similarly, the Tier 3 rebates
remain at $0.10 for Makers in Penny
Interval Classes and $0.20 for Takers in
Penny Interval Classes, and the Tier 4
rebates in Penny Interval Classes remain
at $0.27 but the thresholds required to
qualify for those rebates will be
0.500%–0.749% and 0.750% and above
of national customer volume in
multiply-listed options classes,
respectively.
Although, the new volume thresholds
will require greater volumes to qualify
for such rebates, the Exchange believes
that Public Customers will still benefit
from the opportunity to obtain a rebate
for their transactions.6 The Exchange
recently reviewed its Tiered Volume
Rebate structure for Non-Auction
Transactions and determined that
raising the percentage thresholds is
appropriate at this time. The Exchange
has not modified these volume
thresholds since November of 2015 7
and the current rebate amounts have
been in place since June of 2018.8
Further, the Exchange believes that the
proposed volume tiers remain
competitive with other exchanges 9 and
notes that Public Customers may receive
a rebate and will continue to pay no fees
5 The Exchange notes that Public Customers do
not initiate transactions on BOX directly. BOX
Participants initiate electronic Non-Auction
Transactions on behalf of Public Customers and
these BOX Participants are assessed fees or
provided rebates by the Exchange for such
transactions.
6 The Exchange notes that BOX Participants
collect rebates on behalf of Public Customers and
have independent fee arrangements with such
Public Customers by which rebates provided by
BOX would be taken into account.
7 See Securities Exchange Act Release No. 76447
(November 16, 2015), 80 FR 72758 (November 20,
2015) (SR–BOX–2015–36).
8 See Securities Exchange Act Release No. 83396
(June 8, 2018), 83 FR 27807 (June 14, 2018) (SR–
BOX–2018–21).
9 See infra note 11.
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Federal Register / Vol. 88, No. 181 / Wednesday, September 20, 2023 / Notices
for Electronic Non-Auction transactions
on BOX.
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
charges among BOX Participants and
other persons using its facilities and
does not unfairly discriminate between
customers, issuers, brokers or dealers.
The Exchange believes it is
reasonable, equitable and not unfairly
discriminatory to adjust certain
percentage thresholds in the volumebased thresholds for Public Customers
in Electronic Non-Auction Transactions.
The volume-based thresholds and
applicable rebates are designed to
incentivize Public Customers to direct
order flow to the Exchange to obtain the
benefit of the rebate, which will in turn
benefit all market participants by
increasing liquidity on the Exchange.
While the Exchange proposes to
increase the volume thresholds, thus
requiring greater volumes to qualify for
rebates, the Exchange believes that
Public Customers will still benefit from
the opportunity to obtain a rebate. The
Exchange notes that other exchanges
employ similar incentive programs; and
the Exchange believes that the proposed
changes to the volume based rebate
thresholds are reasonable and
competitive when compared to
incentive structures at other
exchanges.11 In particular, Nasdaq
PHLX’s Customer Rebate Program has
five tiers where Tier 1 is 0.00%–0.60%
and Tier 5 is above 2.50% of national
customer volume in multiply-listed
equity and Exchange-Traded Fund
(‘‘ETF’’) options with rebates that range
from $0.00 to $0.21.12 Additionally,
CBOE’s Volume Incentive Program has
five tiers where Tier 1 is 0%–0.75% and
Tier 5 is above 4.00% of national
10 15
U.S.C. 78f(b)(4) and (5).
Nasdaq PHLX LLC (‘‘Nasdaq PHLX’’)
Options 7, Section 2 (Customer Rebate Program)
and Cboe Exchange, Inc. (‘‘CBOE’’) Fee Schedule
(Volume Incentive Program). The Exchange notes
that these programs use different tier structures,
volume calculations, and rebate amounts, however,
their rebate programs operate similarly to BOX’s.
12 These rebates are referred to in Nasdaq PHLX
Options 7, Section 2 as Category A rebates. The
Exchange believes that Category A rebates and the
volume used to determine which tiers are attained
are comparable to BOX’s Tiered Volume Rebate for
Non-Auction Transactions (Percentage Thresholds
of National Customer Volume in Multiply-Listed
Options Classes) with the exception that Nasdaq
PHLX excludes volume associated with electronic
QCC Orders. The Exchange also notes that SPY is
rebated under Nasdaq PHLX Options 7, Section 3.
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11 See
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16:38 Sep 19, 2023
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customer volume in all underlying
symbols excluding certain index
symbols, Nanos, and FLEX Micros with
rebates that range from $0.00 to $0.15.13
The Exchange is proposing four tiers
where Tier 1 is 0.000%–0.249% and
Tier 4 is 0.750% and above with rebates
that range from $0.00 to $0.27 for Penny
Interval Classes. Thus, the Exchange
believes that comparable rebates can
still be attained on BOX, under the
Exchange’s proposed thresholds, at
lower volumes than on CBOE or Nasdaq
PHLX.
The proposed changes to the
thresholds in Tiers 1 through 4 are
equitable and not unfairly
discriminatory as they are available to
all BOX Participants that initiate
electronic Non-Auction Transactions on
the behalf of Public Customers, and
Participants may choose whether or not
to take advantage of the percentage
thresholds and their applicable rebates
on BOX.
The Exchange continues to believe it
is equitable and not unfairly
discriminatory to have these rebate
structures for Public Customers in
Electronic Non-Auction Transactions.
The securities markets generally, and
BOX in particular, have historically
aimed to improve markets for investors
and develop various features within the
market structure for Public Customer
benefit. Accordingly, the Exchange
believes that providing a rebate
structure for Public Customers is
appropriate and not unfairly
discriminatory. Based on its review of
competitor exchanges, the Exchange
believes that the proposed rebate
thresholds, although more difficult to
obtain, will not disincentivize BOX
Participants from sending Public
Customer order flow to BOX. Rather, the
Exchange believes that the proposed
rebates will continue to help attract a
high level of Public Customer order flow
to the BOX Book and create liquidity,
which the Exchange believes will
ultimately benefit all Participants
trading on BOX.
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.
13 These rebates are for simple, Non-AIM
transactions in the CBOE Fee Schedule, VIP. The
Exchange believes that simple, Non-AIM
transactions and the volume used to determine
which tiers are attained are comparable to BOX’s
Tiered Volume Rebate for Non-Auction
Transactions (Percentage Thresholds of National
Customer Volume in Multiply-Listed Options
Classes).
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The Exchange believes that amending
the proposed rebate structure for Public
Customer Electronic Non-Auction
Transactions will not impose a burden
on competition among various
Participants. The Exchange believes that
the proposed changes will result in
Public Customers being rebated
appropriately for these transactions. The
Exchange notes that it operates in a
highly competitive market in which
market participants can readily favor
competing exchanges. In such an
environment, the Exchange must
continually review, and consider
adjusting, its fees and credits to remain
competitive with other exchanges.
Because competitors are free to modify
their own fees and rebates in response,
and because market participants may
readily adjust their order routing
practices, the Exchange believes that the
degree to which fee or rebate changes in
this market may impose any burden on
competition is extremely limited. The
Exchange notes that other exchanges
provide programs to incentivize
customer order flow and that the
proposed changes to the volume
thresholds remain competitive when
compared to incentive structures at
other exchanges.14 For the reasons
described above, the Exchange believes
that the proposed rule change reflects
this competitive environment.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Exchange Act 15
and Rule 19b–4(f)(2) thereunder,16
because it establishes or changes a due,
or fee.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend the rule change if
it appears to the Commission that the
action is necessary or appropriate in the
public interest, for the protection of
investors, or would otherwise further
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
14 See
supra note 11.
U.S.C. 78s(b)(3)(A)(ii).
16 17 CFR 240.19b–4(f)(2).
15 15
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IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
• 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–2023–23 on the subject line.
Paper Comments
lotter on DSK11XQN23PROD with NOTICES1
• 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–2023–23. 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–2023–23 and should be
submitted on or before October 11,
2023.
VerDate Sep<11>2014
16:38 Sep 19, 2023
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Sherry R. Haywood,
Assistant Secretary.
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.
[FR Doc. 2023–20304 Filed 9–19–23; 8:45 am]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
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[Release No. 34–98397; File No. SR–C2–
2023–020]
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Its Fees
Schedule Related to Physical Port
Fees
September 14, 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
September 1, 2023, Cboe C2 Exchange,
Inc. (the ‘‘Exchange’’ or ‘‘C2’’) 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 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 Substance of
the Proposed Rule Change
Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2 Options’’) proposes
to amend its Fees Schedule. The text of
the proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
options/regulation/rule_filings/ctwo/),
at the Exchange’s Office of the
Secretary, and at the Commission’s
Public Reference Room.
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
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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1. Purpose
The Exchange proposes to amend its
fee schedule relating to physical
connectivity fees.3
By way of background, a physical port
is utilized by a Member or non-Member
to connect to the Exchange at the data
centers where the Exchange’s servers are
located. The Exchange currently
assesses the following physical
connectivity fees for Trading Permit
Holders (‘‘TPHs’’) and non-TPHs on a
monthly basis: $2,500 per physical port
for a 1 gigabit (‘‘Gbps’’) circuit and
$7,500 per physical port for a 10 Gbps
circuit. The Exchange proposes to
increase the monthly fee for 10 Gbps
physical ports from $7,500 to $8,500 per
port. The Exchange notes the proposed
fee change better enables it to continue
to maintain and improve its market
technology and services and also notes
that the proposed fee amount, even as
amended, continues to be in line with,
or even lower than, amounts assessed by
other exchanges for similar
connections.4 The physical ports may
also be used to access the Systems for
the following affiliate exchanges and
only one monthly fee currently (and
will continue) to apply per port: Cboe
BZX Exchange, Inc. (options and
equities platforms), Cboe EDGX
Exchange, Inc. (options and equities
platforms), Cboe BYX Exchange, Inc.,
and Cboe EDGA Exchange, Inc.
(‘‘Affiliate Exchanges’’).5
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
3 The Exchange initially filed the proposed fee
changes on July 3, 2023 (SR–C2–2023–014). On
September 1, 2023, the Exchange withdrew that
filing and submitted this proposal.
4 See e.g., The Nasdaq Stock Market LLC
(‘‘Nasdaq’’), General 8, Connectivity to the
Exchange. Nasdaq and its affiliated exchanges
charge a monthly fee of $15,000 for each 10Gbps
Ultra fiber connection to the respective exchange,
which is analogous to the Exchange’s 10Gbps
physical port. See also New York Stock Exchange
LLC, NYSE American LLC, NYSE Arca, Inc., NYSE
Chicago Inc., NYSE National, Inc. Connectivity Fee
Schedule, which provides that 10 Gbps LX LCN
Circuits (which are analogous to the Exchange’s 10
Gbps physical port) are assessed $22,000 per
month, per port.
5 The Affiliate Exchanges are also submitting
contemporaneous identical rule filings.
E:\FR\FM\20SEN1.SGM
20SEN1
]]>Agencies
[Federal Register Volume 88, Number 181 (Wednesday, September 20, 2023)]
[Notices]
[Pages 64936-64939]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20304]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98385; File No. SR-BOX-2023-23]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee
Schedule for Trading on the BOX Options Market LLC Facility To Amend
Certain Qualification Thresholds of Section IV.A.1 (Tiered Volume
Rebate for Non-Auction Transactions)
September 14, 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 September 1, 2023, 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.
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\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 certain qualification thresholds of Section IV.A.1, (Tiered
Volume Rebate for Non-Auction Transactions) on the BOX Options Market
LLC (``BOX'') options facility. The text of the proposed rule change is
available from the principal office of the Exchange, at the
Commission's Public Reference Room and also on the Exchange's internet
website at https://boxexchange.com.
[[Page 64937]]
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 amend certain qualification thresholds of Section IV.A.1, (Tiered
Volume Rebate for Non-Auction Transactions).
Currently, Public Customers \5\ receive a per contract rebate for
Electronic Non-Auction Transactions according to the Tier achieved by
the Public Customer as provided in the Percentage Thresholds of
National Customer Volume in Multiply-Listed Options Classes table in
Section IV.A.1 of the BOX Fee Schedule. Percentage thresholds are
calculated on a monthly basis by totaling the Public Customer's
executed Auction and Non-Auction transaction volume on BOX, relative to
the total national Customer volume in multiply-listed options classes.
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\5\ The Exchange notes that Public Customers do not initiate
transactions on BOX directly. BOX Participants initiate electronic
Non-Auction Transactions on behalf of Public Customers and these BOX
Participants are assessed fees or provided rebates by the Exchange
for such transactions.
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The Exchange notes that Non-Auction Transactions where a Public
Customer order interacts with another Public Customer order are exempt
from a per contract rebate. However, these transactions still count
toward the Public Customer's monthly volume on BOX. The current
thresholds and rebates are as follows:
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Per contract rebate
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Percentage thresholds of national Penny Interval Classes Non-Penny Interval SPY
Tier customer volume in multiply-listed -------------------------- Classes -------------------------
options classes (monthly) --------------------------
Maker Taker Maker Taker Maker Taker
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1..................................... 0.000%-0.129%..................... $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
2..................................... 0.130%-0.339%..................... (0.05) (0.15) (0.15) (0.27) (0.05) 0.00
3..................................... 0.340%-0.549%..................... (0.10) (0.20) (0.30) (0.32) (0.10) 0.00
4..................................... 0.550% and Above.................. (0.27) (0.27) (0.60) (0.40) (0.27) 0.00
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The Exchange now proposes to raise the percentage thresholds within
the Percentage Thresholds of National Customer Volume in Multiply-
Listed Options Classes table. The proposed rebate structure is as
follows:
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Per contract rebate
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Percentage thresholds of national Penny Interval Classes Non-Penny Interval SPY
Tier customer volume in multiply-listed -------------------------- Classes -------------------------
options classes (monthly) --------------------------
Maker Taker Maker Taker Maker Taker
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..................................... 0.000%-0.249%..................... $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
2..................................... 0.250%-0.499%..................... (0.05) (0.15) (0.15) (0.27) (0.05) 0.00
3..................................... 0.500%-0.749%..................... (0.10) (0.20) (0.30) (0.32) (0.10) 0.00
4..................................... 0.750% and Above.................. (0.27) (0.27) (0.60) (0.40) (0.27) 0.00
--------------------------------------------------------------------------------------------------------------------------------------------------------
The Exchange notes that the percentage thresholds in Tiers 1
through 4 will be adjusted, however the rebate amounts will not change.
For example, the Tier 2 rebates remain at $0.05 for Makers in Penny
Interval Classes and $0.15 for Takers in Penny Interval Classes, but
will require 0.250%-0.499% of national customer volume in multiply-
listed options classes for Public Customers to qualify for the rebate.
Similarly, the Tier 3 rebates remain at $0.10 for Makers in Penny
Interval Classes and $0.20 for Takers in Penny Interval Classes, and
the Tier 4 rebates in Penny Interval Classes remain at $0.27 but the
thresholds required to qualify for those rebates will be 0.500%-0.749%
and 0.750% and above of national customer volume in multiply-listed
options classes, respectively.
Although, the new volume thresholds will require greater volumes to
qualify for such rebates, the Exchange believes that Public Customers
will still benefit from the opportunity to obtain a rebate for their
transactions.\6\ The Exchange recently reviewed its Tiered Volume
Rebate structure for Non-Auction Transactions and determined that
raising the percentage thresholds is appropriate at this time. The
Exchange has not modified these volume thresholds since November of
2015 \7\ and the current rebate amounts have been in place since June
of 2018.\8\ Further, the Exchange believes that the proposed volume
tiers remain competitive with other exchanges \9\ and notes that Public
Customers may receive a rebate and will continue to pay no fees
[[Page 64938]]
for Electronic Non-Auction transactions on BOX.
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\6\ The Exchange notes that BOX Participants collect rebates on
behalf of Public Customers and have independent fee arrangements
with such Public Customers by which rebates provided by BOX would be
taken into account.
\7\ See Securities Exchange Act Release No. 76447 (November 16,
2015), 80 FR 72758 (November 20, 2015) (SR-BOX-2015-36).
\8\ See Securities Exchange Act Release No. 83396 (June 8,
2018), 83 FR 27807 (June 14, 2018) (SR-BOX-2018-21).
\9\ See infra note 11.
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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
charges among BOX Participants and other persons using its facilities
and does not unfairly discriminate between customers, issuers, brokers
or dealers.
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\10\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to adjust certain percentage thresholds in the volume-
based thresholds for Public Customers in Electronic Non-Auction
Transactions. The volume-based thresholds and applicable rebates are
designed to incentivize Public Customers to direct order flow to the
Exchange to obtain the benefit of the rebate, which will in turn
benefit all market participants by increasing liquidity on the
Exchange. While the Exchange proposes to increase the volume
thresholds, thus requiring greater volumes to qualify for rebates, the
Exchange believes that Public Customers will still benefit from the
opportunity to obtain a rebate. The Exchange notes that other exchanges
employ similar incentive programs; and the Exchange believes that the
proposed changes to the volume based rebate thresholds are reasonable
and competitive when compared to incentive structures at other
exchanges.\11\ In particular, Nasdaq PHLX's Customer Rebate Program has
five tiers where Tier 1 is 0.00%-0.60% and Tier 5 is above 2.50% of
national customer volume in multiply-listed equity and Exchange-Traded
Fund (``ETF'') options with rebates that range from $0.00 to $0.21.\12\
Additionally, CBOE's Volume Incentive Program has five tiers where Tier
1 is 0%-0.75% and Tier 5 is above 4.00% of national customer volume in
all underlying symbols excluding certain index symbols, Nanos, and FLEX
Micros with rebates that range from $0.00 to $0.15.\13\ The Exchange is
proposing four tiers where Tier 1 is 0.000%-0.249% and Tier 4 is 0.750%
and above with rebates that range from $0.00 to $0.27 for Penny
Interval Classes. Thus, the Exchange believes that comparable rebates
can still be attained on BOX, under the Exchange's proposed thresholds,
at lower volumes than on CBOE or Nasdaq PHLX.
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\11\ See Nasdaq PHLX LLC (``Nasdaq PHLX'') Options 7, Section 2
(Customer Rebate Program) and Cboe Exchange, Inc. (``CBOE'') Fee
Schedule (Volume Incentive Program). The Exchange notes that these
programs use different tier structures, volume calculations, and
rebate amounts, however, their rebate programs operate similarly to
BOX's.
\12\ These rebates are referred to in Nasdaq PHLX Options 7,
Section 2 as Category A rebates. The Exchange believes that Category
A rebates and the volume used to determine which tiers are attained
are comparable to BOX's Tiered Volume Rebate for Non-Auction
Transactions (Percentage Thresholds of National Customer Volume in
Multiply-Listed Options Classes) with the exception that Nasdaq PHLX
excludes volume associated with electronic QCC Orders. The Exchange
also notes that SPY is rebated under Nasdaq PHLX Options 7, Section
3.
\13\ These rebates are for simple, Non-AIM transactions in the
CBOE Fee Schedule, VIP. The Exchange believes that simple, Non-AIM
transactions and the volume used to determine which tiers are
attained are comparable to BOX's Tiered Volume Rebate for Non-
Auction Transactions (Percentage Thresholds of National Customer
Volume in Multiply-Listed Options Classes).
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The proposed changes to the thresholds in Tiers 1 through 4 are
equitable and not unfairly discriminatory as they are available to all
BOX Participants that initiate electronic Non-Auction Transactions on
the behalf of Public Customers, and Participants may choose whether or
not to take advantage of the percentage thresholds and their applicable
rebates on BOX.
The Exchange continues to believe it is equitable and not unfairly
discriminatory to have these rebate structures for Public Customers in
Electronic Non-Auction Transactions. The securities markets generally,
and BOX in particular, have historically aimed to improve markets for
investors and develop various features within the market structure for
Public Customer benefit. Accordingly, the Exchange believes that
providing a rebate structure for Public Customers is appropriate and
not unfairly discriminatory. Based on its review of competitor
exchanges, the Exchange believes that the proposed rebate thresholds,
although more difficult to obtain, will not disincentivize BOX
Participants from sending Public Customer order flow to BOX. Rather,
the Exchange believes that the proposed rebates will continue to help
attract a high level of Public Customer order flow to the BOX Book and
create liquidity, which the Exchange believes will ultimately benefit
all Participants trading on BOX.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange believes that amending the proposed rebate structure
for Public Customer Electronic Non-Auction Transactions will not impose
a burden on competition among various Participants. The Exchange
believes that the proposed changes will result in Public Customers
being rebated appropriately for these transactions. The Exchange notes
that it operates in a highly competitive market in which market
participants can readily favor competing exchanges. In such an
environment, the Exchange must continually review, and consider
adjusting, its fees and credits to remain competitive with other
exchanges. Because competitors are free to modify their own fees and
rebates in response, and because market participants may readily adjust
their order routing practices, the Exchange believes that the degree to
which fee or rebate changes in this market may impose any burden on
competition is extremely limited. The Exchange notes that other
exchanges provide programs to incentivize customer order flow and that
the proposed changes to the volume thresholds remain competitive when
compared to incentive structures at other exchanges.\14\ For the
reasons described above, the Exchange believes that the proposed rule
change reflects this competitive environment.
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\14\ See supra note 11.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Exchange Act \15\ and Rule 19b-4(f)(2)
thereunder,\16\ because it establishes or changes a due, or fee.
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\15\ 15 U.S.C. 78s(b)(3)(A)(ii).
\16\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend the rule
change if it appears to the Commission that the action is necessary or
appropriate in the public interest, for the protection of investors, or
would otherwise further the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
[[Page 64939]]
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-2023-23 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-2023-23. 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-2023-23 and should be
submitted on or before October 11, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-20304 Filed 9-19-23; 8:45 am]
BILLING CODE 8011-01-P
