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 the Language and Process Related to the Options Regulatory Fee, 66100-66103 [2023-20805]
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66100
Federal Register / Vol. 88, No. 185 / Tuesday, September 26, 2023 / Notices
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in the aggregate, staff estimates that
compliance with rule 30b1–10 and
Form N–RN will result in a total annual
burden of approximately 264 burden
hours and total annual time costs of
approximately $109,626.3
Compliance with rule 30b1–10 is
mandatory for all funds. Responses to
the disclosure requirements will be kept
confidential. The estimate of average
burden hours is made solely for the
purposes of the PRA. The estimate is not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules. Complying
with this collection of information
requirement is necessary to enable the
Commission to receive information on
fund liquidity events more uniformly
and efficiently, and to enhance the
Commission’s oversight of funds when
significant liquidity events occur and its
ability to respond to market events. An
agency may not conduct or sponsor, and
a person is not required to respond to
a collection of information unless it
displays a currently valid control
number.
Written comments are invited on: (a)
whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
(b) the accuracy of the Commission’s
estimate of the burden of the collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information collected; and (d) ways to
minimize the burden of the collection of
information on respondents, including
through the use of automated collection
techniques or other forms of information
technology. Consideration will be given
to comments and suggestions submitted
by November 27, 2023,
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
Please direct your written comments
to: David Bottom, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, c/o John
Pezzullo, 100 F Street NE, Washington,
DC 20549 or send an email to: PRA_
Mailbox@sec.gov.
size, employee benefits, and overhead. See
Securities Industry and Financial Markets
Association, Report on Management & Professional
Earnings in the Securities Industry 2013.
3 This estimate is based on the following
calculations: 66 reports filed per year × 4 hours per
report = approximately 264 total annual burden
hours. 66 reports filed per year × $1,661 in costs
per report = $109,626 total annual costs.
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18:18 Sep 25, 2023
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Dated: September 21, 2023.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–20907 Filed 9–25–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98458; File Nos. SR–NYSE–
2023–29, SR–NYSEAMER–2023–39, SR–
NYSEArca-2023–53, SR–NYSECHX–2023–
16]
Self-Regulatory Organizations; New
York Stock Exchange LLC; NYSE
American LLC; NYSE Arca, Inc.; NYSE
Chicago, Inc.; Notice of Designation of
a Longer Period for Commission
Action on Proposed Rule Change To
Amend the Connectivity Fee Schedule
Regarding Power Allocation
September 20, 2023.
On August 3, 2023, New York Stock
Exchange LLC, NYSE American LLC,
NYSE Arca, Inc., and NYSE Chicago,
Inc. each filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b-4 thereunder,2 a
proposed rule change to amend the
connectivity fee schedule to include an
alternative procedure to allocate power
in the Mahwah Data Center. The
proposed rule changes were published
for comment in the Federal Register on
August 22, 2023.3 The Commission has
received no comments on the proposed
rule change.
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 notices for these
proposed rule changes is October 6,
1 15
U.S.C. 78s(b)(1).
CFR 240.19b-4.
3 See Securities Exchange Act Release Nos. 98148
(August 16, 2023), 88 FR 57150 (SR–NYSE–2023–
29); 98149 (August 16, 2023), 88 FR 57154 (SR–
NYSEAMER–2023–39); 98150 (August 16, 2023), 88
FR 57142 (SR–NYSEArca-2023–53); 98151 (August
16, 2023), 88 FR 57159 (SR–NYSECHX–2023–16).
4 15 U.S.C. 78s(b)(2).
2023. The Commission is extending this
45-day time period.
The Commission finds it 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
and the comments received.
Accordingly, the Commission, pursuant
to section 19(b)(2) of the Act,5
designates November 20, 2023 as the
date by which the Commission shall
either approve or disapprove, or
institute proceedings to determine
whether to disapprove, the proposed
rule changes (File Nos. SR–NYSE–2023–
29, SR–NYSEAMER–2023–39, SR–
NYSEArca-2023–53, SR–NYSECHX–
2023–16).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023–20814 Filed 9–25–23; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–98446; File No. SR–BOX–
2023–24]
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
the Language and Process Related to
the Options Regulatory Fee
September 20, 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 13, 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 Exchange filed the
proposed rule change pursuant to
section 19(b)(3)(A)(ii) of the Act,3 and
Rule 19b–4(f)(6) thereunder,4 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
2 17
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Fmt 4703
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5 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(31).
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)(6).
6 17
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Federal Register / Vol. 88, No. 185 / Tuesday, September 26, 2023 / Notices
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
The Exchange is filing with the
Securities and Exchange Commission
(‘‘Commission’’) a proposed rule change
to amend the language and processes
relating to the Options Regulatory Fee
(‘‘ORF’’) 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://
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
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
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1. Purpose
The Exchange proposes to amend the
Fee Schedule, to harmonize the
language and processes relating to the
Options Regulatory Fee (‘‘ORF’’) with
the language and processes used by
other options exchanges.5 By way of
background, the ORF is designed to
recover a material portion of the costs to
the Exchange of the supervision and
regulation of Participant customer
options business, including performing
routine surveillances, investigations,
examinations, financial monitoring, as
well as policy, rulemaking, interpretive
and enforcement activities.
The revenue generated from the ORF,
when combined with all of the
Exchange’s other regulatory fees and
fines, covers a material portion, but not
all, of the Exchange’s regulatory costs.
5 See Securities and Exchange Act Release No.
34–98108 (August 10, 2023), 88 FR 55809 (August
16, 2023) (SR–CboeEDGX–2023–054) (Notice of
Filing and Immediate Effectiveness of a Proposed
Rule Change to Amend its Fee Schedule Related to
the Options Regulatory Fee).
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The Exchange monitors the amount of
revenue collected from the ORF to
ensure that it, in combination with its
other regulatory fees and fines, does not
exceed the Exchange’s total regulatory
costs. The Exchange monitors its
regulatory costs and revenues at a
minimum on a semi-annual basis. If the
Exchange determines regulatory
revenues exceed or are insufficient to
cover a material portion of its regulatory
costs, the Exchange will adjust the ORF
by submitting a fee change filing to the
Securities and Exchange Commission
(the ‘‘Commission’’). The Exchange
notifies Participants of adjustments to
the ORF via an Informational Circular.
Currently, the Exchange provides
Participants with such notice at least 30
calendar days prior to the effective date
of the change. The Options Regulatory
Fee section of the Fee Schedule sets
forth the details and description of how
and when the ORF is assessed. For
example, the Fee Schedule explicitly
specifies that the Exchange may only
increase or decrease the ORF semiannually, and any such fee change will
be effective on the first business day of
February or August. The Fee Schedule
further states that the Exchange will
notify Participants of any change in the
amount of the fee at least 30 calendar
days prior to the effective date of the
change.
The Exchange proposes to update the
Fee Schedule language relating to the
timing of ORF changes. Particularly, the
Exchange proposes to eliminate the
strict requirement that the ORF may
only be modified on the first business
day of February or August, and also the
explicit requirement that it must
provide at least 30 calendar days prior
to the effective date. The Exchange first
proposes to eliminate the requirement
that ORF may only be modified on the
first business day of February or August
to afford the Exchange increased
flexibility in amending the ORF. As
noted above, the ORF is based in part on
options transactions volume, and as
such the amount of ORF collected is
variable. If options transactions reported
to OCC in a given month increase, the
ORF collected from Participants may
increase as well. Similarly, if options
transactions reported to OCC in a given
month decrease, the ORF collected from
Participants may decrease as well.
Accordingly, the Exchange monitors the
amount of ORF collected to ensure that
it does not exceed the Exchange’s total
regulatory costs. If the Exchange
determines the amount of ORF collected
exceeds costs over an extended period,
the proposed rule change allows the
Exchange to adjust the ORF by
PO 00000
Frm 00156
Fmt 4703
Sfmt 4703
66101
submitting a fee change filing to the
Commission in a month other than just
February or August. Although the
Exchange proposes to eliminate the
explicit language in the Fee Schedule
that provides the Exchange will adjust
the ORF only semi-annually, and only
on the first business day of February or
August, it would continue to monitor its
regulatory costs and revenues at a
minimum on a semi-annual basis and
submit a proposed rule change for each
modification of the ORF as needed. The
Exchange also proposes to eliminate the
explicit language in the Fee Schedule
that it will notify participants of any
change in the amount of the fee at least
30 calendar days prior to the effective
date of the change. Although the
Exchange proposes to eliminate this
language from the Fee Schedule, it notes
that it will endeavor to notify
Participants of any planned change to
the ORF by Exchange Informational
Circular at least 30 calendar days prior
to the effective date of such change. The
Exchange believes this proposed change
also provides the Exchange additional
flexibility. For example, the Exchange
often provides fee change notices on the
first business day of the month. It may
be the case that such date is less than
30 days from the effective date of
proposed change (e.g., if the Exchange
wished to amend the ORF, effective,
August 1, 2023, the Exchange would not
have met the 30-day notice requirement
if it had announced on the first business
day of July, as it has been historic
practice, since the first business day
falls on July 3, 2023). As such, the
proposed rule changes provides added
flexibility while still committing to
provide notice on the timing of any
changes to the ORF and ensuring that
Participants are prepared to configure
their systems to properly account for the
ORF.
The Exchange notes that the proposed
changes result in ORF processes and Fee
Schedule language that aligns with
other options exchanges.6 Particularly,
although typically the practice, other
options exchanges are not limited to
only adjusting ORF to only the first
business day of August or February.7
Moreover, another options exchange
recently amended their fees to allow for
flexibility to adjust ORF during months
other than February or August.8 The
Exchange notes that other options
exchanges do not explicitly provide in
6 See Cboe Exchange, Inc. Fees Schedule and
Cboe C2 Exchange, Inc. Options Fees Schedule.
7 Id.
8 See e.g., Securities Exchange Act Release No.
96373 (October 13, 2022), 87 FR 73376 (November
29, 2022) (SR–NYSEAMER–2022–52).
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Federal Register / Vol. 88, No. 185 / Tuesday, September 26, 2023 / Notices
their fees schedules that it will provide
notice at least 30 calendar days in
advance of any ORF change.9 Other
exchanges have represented in various
ORF fee filings that they endeavor to
notify members of any planned change
to the ORF by Exchange notice at least
30 calendar days prior to the effective
date of such change, just as the
Exchange represents here.10 The
Exchange believes the proposed change
provides uniformity across options
exchanges and reduces potential
confusion. It also provides the Exchange
added flexibility as to when
modifications to the ORF may occur.
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2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of section 6(b) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),11 in general, and section 6(b)(5)
of the Act,12 in particular, in that it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general to protect investors and the
public interest. In particular, the
Exchange believes the proposed changes
to the Fee Schedule with respect to how
ORF is assessed and collected are
appropriate as it provides the Exchange
more flexibility in its assessment of ORF
based on its periodic monitoring of ORF
rates. The Exchange also represents that
it will continue to monitor its regulatory
costs and revenues at a minimum on a
semi-annual basis, just as it, and other
options exchanges do today. The
Exchange believes that the proposed
elimination of language specifying that
the Exchange may only increase or
decrease the ORF on the first business
day February or August is reasonable
because it is designed to afford the
Exchange increased flexibility in
making necessary adjustments to the
ORF, as the Exchange is required to
monitor the amount collected from the
ORF to ensure that it, in combination
with its other regulatory fees and fines,
does not exceed total regulatory costs.
The Exchange also represents that it will
9 See Cboe Exchange, Inc. Fees Schedule and
Cboe C2 Exchange, Inc. Options Fees Schedule.
10 See e.g., Securities Exchange Act Release No.
92597 (August 6, 2021), 86 FR 44451 (August 12,
2021 (SR–CBOE–2021–044). See also Securities
Exchange Act Release No. 92596 (August 6, 2021),
86 FR 44461 (August 12, 2021 (SR–C2–2021–012).
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
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endeavor to provide notice of any
changes at least 30 days in advance of
the effective date of such change,
thereby providing Participants with
adequate time to make any necessary
adjustments to accommodate any
proposed changes. Taking out the strict
requirements from the Fee Schedule,
however, will provide the Exchange
flexibility in modifying ORF and being
able to adjust ORF even if it doesn’t
meet the strict 30-day deadline in event
extenuating circumstances prevent the
Exchange from meeting this deadline or
in the event such notice is a day or two
less than 30 days due to when the first
business days of the month fall. For
example, as noted above, the Exchange
often provides fee change notices on the
first business day of the month. It may
be the case that such date is less than
30 days from the effective date of
proposed change (e.g., if the Exchange
wished to amend the ORF, effective,
August 1, 2023, the Exchange would not
have met the 30-day notice requirement
if it had announced on the first business
day of July, as it has been historic
practice, since the first business day
falls on July 3, 2023).
The Exchange believes the proposed
rule changes are reasonable, equitable
and not unfairly discriminatory because
they conform to the process and Fee
Schedule language used by other
options exchanges, thereby providing
consistency across the options
exchanges and reducing potential
confusion. The proposed changes also
apply uniformly to all Participants
subject to ORF. As noted above, another
options exchange is also not confined to
making ORF changes on the first
business day of February or August.13
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. In this regard
and as indicated above, the Exchange
notes that the rule change is
substantially similar in all material
respects to a proposal recently
submitted by Cboe EDGX Exchange, Inc.
(‘‘EDGX’’).14 This proposal does not
create an unnecessary or inappropriate
inter-market burden on competition
because it merely amends the Fee
Schedule to modify the timing and
notice requirements relating to the
modification of the ORF and conforms
to the timing and notice requirements
used by other options exchanges within
13 See
14 See
PO 00000
supra note 8.
supra note 5.
Frm 00157
Fmt 4703
Sfmt 4703
their fee schedules.15 Further, ORF is a
regulatory fee that supports regulation
in furtherance of the purposes of the
Act. The Exchange is obligated to ensure
that the amount of regulatory revenue
collected from the ORF, in combination
with its other regulatory fees and fines,
does not exceed regulatory costs and the
proposed rule change does not seek to
change that.
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
Because the foregoing proposed rule
change does not: (i) significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, it has become effective
pursuant to section 19(b)(3)(A) of the
Act 16 and Rule 19b–4(f)(6) 17
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 18 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),19 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 proposed
rule change may become operative upon
filing. The Exchange is requesting the
waiver because it will allow the
Exchange more flexibility with respect
to the timing of changes to its ORF and
allow the Exchange to mirror similar
provisions already in place on other
exchanges. Finally, the Exchange states
that the proposed change would not
introduce any novel regulatory issues.
For these reasons, and because the
proposed rule change does not raise any
15 Id.
16 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change, 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.
18 17 CFR 240.19b–4(f)(6).
19 17 CFR 240.19b–4(f)(6)(iii).
17 17
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Federal Register / Vol. 88, No. 185 / Tuesday, September 26, 2023 / Notices
novel legal or regulatory issues, the
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest. Therefore, the
Commission hereby waives the 30-day
operative delay and designates the
proposal operative upon filing.20
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
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–2023–24 and should be
submitted on or before October 17,
2023.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Sherry R. Haywood,
Assistant Secretary.
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–2023–24 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
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–2023–24. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
20 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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[FR Doc. 2023–20805 Filed 9–25–23; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–98454; File No. SR–CBOE–
2023–005]
Self-Regulatory Organizations; Cboe
Exchange, Inc.; Order Granting
Approval of a Proposed Rule Change,
as Modified by Amendment No. 1, To
Make Permanent The Operation of the
Program That Allows the Exchange To
List P.M.-Settled Third Friday-of-theMonth S&P 500 Stock Index Options
(‘‘SPX’’) Series
September 20, 2023.
I. Introduction
On January 6, 2023, Cboe Exchange,
Inc. (‘‘Exchange’’ or ‘‘Cboe Options’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to make permanent the
operation of its pilot program
(‘‘Program’’) that permits the Exchange
to list p.m.-settled third Friday-of-themonth SPX options (‘‘SPXPM’’). The
proposed rule change was published for
comment in the Federal Register on
January 24, 2023.3 On March 7, 2023,
21 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 96703
(January 18, 2023), 88 FR 4265 (‘‘Notice’’).
1 15
PO 00000
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66103
pursuant to section 19(b)(2) of the Act,4
the Commission designated a longer
period within which to approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether to
disapprove the proposed rule change.5
On March 17, 2023, the Exchange filed
Amendment No. 1 to the proposed rule
change (‘‘Amendment No. 1’’).6 On
April 24, 2023, the Commission
instituted proceedings to determine
whether to approve or disapprove the
proposed rule change and published
Amendment No. 1 for notice and
comment.7 On July 20, 2023, the
Commission designated a longer period
for Commission action on proceedings
to determine whether to approve or
disapprove the proposed rule change, as
modified by Amendment No. 1.8 The
Commission did not receive any
comment letters and is approving the
proposed rule change, as modified by
Amendment No. 1.
II. Background
When cash-settled 9 index options
were first introduced in the 1980s, they
generally utilized closing-price
settlement procedures (i.e., p.m.
settlement).10 The Commission became
4 15
U.S.C. 78s(b)(2).
Securities Exchange Act Release No. 97063,
88 FR 15476 (March 13, 2023). The Commission
designated April 24, 2023, as the date by which the
Commission shall approve or disapprove, or
institute proceedings to determine whether to
approve or disapprove, the proposed rule change.
6 In Amendment No. 1, the Exchange filed Exhibit
3, which provides additional detail regarding the
Exchange’s analysis of the market quality impact of
p.m.-settled index options. Amendment No. 1 is
available at: https://www.sec.gov/comments/srcboe-2023-005/srcboe2023005.htm.
7 Amendment No. 1 was published for comment
in the Federal Register on April 28, 2023. See
Securities Exchange Act Release No. 97367 (April
24, 2023), 88 FR 26366 (April 28, 2023) (order
instituting proceedings and noticing Amendment
No. 1).
8 See Securities Exchange Act Release No. 97956,
88 FR 48278 (July 26, 2023). The Commission
designated September 21, 2023, as the date by
which the Commission shall either approve or
disapprove the proposed rule change.
9 The seller of a ‘‘cash-settled’’ index option pays
out the cash value of the applicable index on
expiration or exercise. A ‘‘physical delivery’’
option, like equity and ETF options, involves the
transfer of the underlying asset rather than cash.
See Characteristics and Risks of Standardized
Options, available at: https://www.theocc.com/
Company-Information/Documents-and-Archives/
Options-Disclosure-Document.
10 See Securities Exchange Act Release No. 65256
(September 2, 2011), 76 FR 55969, at 55972
(September 9, 2011) (SR–C2–2011–008) (Order
approving proposed rule change to establish a pilot
program to list and trade SPXPM options on the C2
Options Exchange, Incorporated (‘‘C2’’)) (‘‘C2
SPXPM Approval’’). SPXPM was traded on a pilot
basis on C2 until the introduction of SPXPM trading
on Cboe Options. See Securities Exchange Act
Release No. 68888 (February 8, 2013), 78 FR 10668,
5 See
E:\FR\FM\26SEN1.SGM
Continued
26SEN1
]]>Agencies
[Federal Register Volume 88, Number 185 (Tuesday, September 26, 2023)]
[Notices]
[Pages 66100-66103]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-20805]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-98446; File No. SR-BOX-2023-24]
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
the Language and Process Related to the Options Regulatory Fee
September 20, 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 13, 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 Exchange filed the proposed rule change
pursuant to section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-4(f)(6)
thereunder,\4\ which renders the proposal effective upon filing with
the Commission. The Commission is publishing this notice to
[[Page 66101]]
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)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend the language and
processes relating to the Options Regulatory Fee (``ORF'') 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://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 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, to harmonize the
language and processes relating to the Options Regulatory Fee (``ORF'')
with the language and processes used by other options exchanges.\5\ By
way of background, the ORF is designed to recover a material portion of
the costs to the Exchange of the supervision and regulation of
Participant customer options business, including performing routine
surveillances, investigations, examinations, financial monitoring, as
well as policy, rulemaking, interpretive and enforcement activities.
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\5\ See Securities and Exchange Act Release No. 34-98108 (August
10, 2023), 88 FR 55809 (August 16, 2023) (SR-CboeEDGX-2023-054)
(Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change to Amend its Fee Schedule Related to the Options Regulatory
Fee).
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The revenue generated from the ORF, when combined with all of the
Exchange's other regulatory fees and fines, covers a material portion,
but not all, of the Exchange's regulatory costs.
The Exchange monitors the amount of revenue collected from the ORF
to ensure that it, in combination with its other regulatory fees and
fines, does not exceed the Exchange's total regulatory costs. The
Exchange monitors its regulatory costs and revenues at a minimum on a
semi-annual basis. If the Exchange determines regulatory revenues
exceed or are insufficient to cover a material portion of its
regulatory costs, the Exchange will adjust the ORF by submitting a fee
change filing to the Securities and Exchange Commission (the
``Commission''). The Exchange notifies Participants of adjustments to
the ORF via an Informational Circular. Currently, the Exchange provides
Participants with such notice at least 30 calendar days prior to the
effective date of the change. The Options Regulatory Fee section of the
Fee Schedule sets forth the details and description of how and when the
ORF is assessed. For example, the Fee Schedule explicitly specifies
that the Exchange may only increase or decrease the ORF semi-annually,
and any such fee change will be effective on the first business day of
February or August. The Fee Schedule further states that the Exchange
will notify Participants of any change in the amount of the fee at
least 30 calendar days prior to the effective date of the change.
The Exchange proposes to update the Fee Schedule language relating
to the timing of ORF changes. Particularly, the Exchange proposes to
eliminate the strict requirement that the ORF may only be modified on
the first business day of February or August, and also the explicit
requirement that it must provide at least 30 calendar days prior to the
effective date. The Exchange first proposes to eliminate the
requirement that ORF may only be modified on the first business day of
February or August to afford the Exchange increased flexibility in
amending the ORF. As noted above, the ORF is based in part on options
transactions volume, and as such the amount of ORF collected is
variable. If options transactions reported to OCC in a given month
increase, the ORF collected from Participants may increase as well.
Similarly, if options transactions reported to OCC in a given month
decrease, the ORF collected from Participants may decrease as well.
Accordingly, the Exchange monitors the amount of ORF collected to
ensure that it does not exceed the Exchange's total regulatory costs.
If the Exchange determines the amount of ORF collected exceeds costs
over an extended period, the proposed rule change allows the Exchange
to adjust the ORF by submitting a fee change filing to the Commission
in a month other than just February or August. Although the Exchange
proposes to eliminate the explicit language in the Fee Schedule that
provides the Exchange will adjust the ORF only semi-annually, and only
on the first business day of February or August, it would continue to
monitor its regulatory costs and revenues at a minimum on a semi-annual
basis and submit a proposed rule change for each modification of the
ORF as needed. The Exchange also proposes to eliminate the explicit
language in the Fee Schedule that it will notify participants of any
change in the amount of the fee at least 30 calendar days prior to the
effective date of the change. Although the Exchange proposes to
eliminate this language from the Fee Schedule, it notes that it will
endeavor to notify Participants of any planned change to the ORF by
Exchange Informational Circular at least 30 calendar days prior to the
effective date of such change. The Exchange believes this proposed
change also provides the Exchange additional flexibility. For example,
the Exchange often provides fee change notices on the first business
day of the month. It may be the case that such date is less than 30
days from the effective date of proposed change (e.g., if the Exchange
wished to amend the ORF, effective, August 1, 2023, the Exchange would
not have met the 30-day notice requirement if it had announced on the
first business day of July, as it has been historic practice, since the
first business day falls on July 3, 2023). As such, the proposed rule
changes provides added flexibility while still committing to provide
notice on the timing of any changes to the ORF and ensuring that
Participants are prepared to configure their systems to properly
account for the ORF.
The Exchange notes that the proposed changes result in ORF
processes and Fee Schedule language that aligns with other options
exchanges.\6\ Particularly, although typically the practice, other
options exchanges are not limited to only adjusting ORF to only the
first business day of August or February.\7\ Moreover, another options
exchange recently amended their fees to allow for flexibility to adjust
ORF during months other than February or August.\8\ The Exchange notes
that other options exchanges do not explicitly provide in
[[Page 66102]]
their fees schedules that it will provide notice at least 30 calendar
days in advance of any ORF change.\9\ Other exchanges have represented
in various ORF fee filings that they endeavor to notify members of any
planned change to the ORF by Exchange notice at least 30 calendar days
prior to the effective date of such change, just as the Exchange
represents here.\10\ The Exchange believes the proposed change provides
uniformity across options exchanges and reduces potential confusion. It
also provides the Exchange added flexibility as to when modifications
to the ORF may occur.
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\6\ See Cboe Exchange, Inc. Fees Schedule and Cboe C2 Exchange,
Inc. Options Fees Schedule.
\7\ Id.
\8\ See e.g., Securities Exchange Act Release No. 96373 (October
13, 2022), 87 FR 73376 (November 29, 2022) (SR-NYSEAMER-2022-52).
\9\ See Cboe Exchange, Inc. Fees Schedule and Cboe C2 Exchange,
Inc. Options Fees Schedule.
\10\ See e.g., Securities Exchange Act Release No. 92597 (August
6, 2021), 86 FR 44451 (August 12, 2021 (SR-CBOE-2021-044). See also
Securities Exchange Act Release No. 92596 (August 6, 2021), 86 FR
44461 (August 12, 2021 (SR-C2-2021-012).
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2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of section 6(b) of the Securities Exchange Act of 1934
(the ``Act''),\11\ in general, and section 6(b)(5) of the Act,\12\ in
particular, in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and, in general to protect investors and the
public interest. In particular, the Exchange believes the proposed
changes to the Fee Schedule with respect to how ORF is assessed and
collected are appropriate as it provides the Exchange more flexibility
in its assessment of ORF based on its periodic monitoring of ORF rates.
The Exchange also represents that it will continue to monitor its
regulatory costs and revenues at a minimum on a semi-annual basis, just
as it, and other options exchanges do today. The Exchange believes that
the proposed elimination of language specifying that the Exchange may
only increase or decrease the ORF on the first business day February or
August is reasonable because it is designed to afford the Exchange
increased flexibility in making necessary adjustments to the ORF, as
the Exchange is required to monitor the amount collected from the ORF
to ensure that it, in combination with its other regulatory fees and
fines, does not exceed total regulatory costs. The Exchange also
represents that it will endeavor to provide notice of any changes at
least 30 days in advance of the effective date of such change, thereby
providing Participants with adequate time to make any necessary
adjustments to accommodate any proposed changes. Taking out the strict
requirements from the Fee Schedule, however, will provide the Exchange
flexibility in modifying ORF and being able to adjust ORF even if it
doesn't meet the strict 30-day deadline in event extenuating
circumstances prevent the Exchange from meeting this deadline or in the
event such notice is a day or two less than 30 days due to when the
first business days of the month fall. For example, as noted above, the
Exchange often provides fee change notices on the first business day of
the month. It may be the case that such date is less than 30 days from
the effective date of proposed change (e.g., if the Exchange wished to
amend the ORF, effective, August 1, 2023, the Exchange would not have
met the 30-day notice requirement if it had announced on the first
business day of July, as it has been historic practice, since the first
business day falls on July 3, 2023).
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed rule changes are reasonable,
equitable and not unfairly discriminatory because they conform to the
process and Fee Schedule language used by other options exchanges,
thereby providing consistency across the options exchanges and reducing
potential confusion. The proposed changes also apply uniformly to all
Participants subject to ORF. As noted above, another options exchange
is also not confined to making ORF changes on the first business day of
February or August.\13\
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\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
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. In this regard and as indicated
above, the Exchange notes that the rule change is substantially similar
in all material respects to a proposal recently submitted by Cboe EDGX
Exchange, Inc. (``EDGX'').\14\ This proposal does not create an
unnecessary or inappropriate inter-market burden on competition because
it merely amends the Fee Schedule to modify the timing and notice
requirements relating to the modification of the ORF and conforms to
the timing and notice requirements used by other options exchanges
within their fee schedules.\15\ Further, ORF is a regulatory fee that
supports regulation in furtherance of the purposes of the Act. The
Exchange is obligated to ensure that the amount of regulatory revenue
collected from the ORF, in combination with its other regulatory fees
and fines, does not exceed regulatory costs and the proposed rule
change does not seek to change that.
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\14\ See supra note 5.
\15\ Id.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest, it has become
effective pursuant to section 19(b)(3)(A) of the Act \16\ and Rule 19b-
4(f)(6) \17\ thereunder.
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, 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) \18\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\19\ 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 proposed
rule change may become operative upon filing. The Exchange is
requesting the waiver because it will allow the Exchange more
flexibility with respect to the timing of changes to its ORF and allow
the Exchange to mirror similar provisions already in place on other
exchanges. Finally, the Exchange states that the proposed change would
not introduce any novel regulatory issues. For these reasons, and
because the proposed rule change does not raise any
[[Page 66103]]
novel legal or regulatory issues, the Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest. Therefore, the Commission hereby
waives the 30-day operative delay and designates the proposal operative
upon filing.\20\
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\18\ 17 CFR 240.19b-4(f)(6).
\19\ 17 CFR 240.19b-4(f)(6)(iii).
\20\ For purposes only of waiving the 30-day operative delay,
the Commission has also 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 the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-BOX-2023-24 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-BOX-2023-24. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of 10
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-2023-24 and should be
submitted on or before October 17, 2023.
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\21\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-20805 Filed 9-25-23; 8:45 am]
BILLING CODE 8011-01-P
