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 (“BOX”), 35266-35269 [2024-09332]
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35266
Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
35181]
Deregistration Under Section 8(f) of the
Investment Company Act of 1940
April 26, 2024.
Securities and Exchange
Commission (‘‘Commission’’ or ‘‘SEC’’).
AGENCY:
Notice of Applications for
Deregistration under Section 8(f) of the
Investment Company Act of 1940.
ACTION:
The following is a notice of
applications for deregistration under
section 8(f) of the Investment Company
Act of 1940 for the month of April 2024.
A copy of each application may be
obtained via the Commission’s website
by searching for the applicable file
number listed below, or for an applicant
using the Company name search field,
on the SEC’s EDGAR system. The SEC’s
EDGAR system may be searched at
https://www.sec.gov/edgar/searchedgar/
legacy/companysearch.html. You may
also call the SEC’s Public Reference
Room at (202) 551–8090. An order
granting each application will be issued
unless the SEC orders a hearing.
Interested persons may request a
hearing on any application by emailing
the SEC’s Secretary at SecretarysOffice@sec.gov and serving the relevant
applicant with a copy of the request by
email, if an email address is listed for
the relevant applicant below, or
personally or by mail, if a physical
address is listed for the relevant
applicant below. Hearing requests
should be received by the SEC by 5:30
p.m. on May 21, 2024, and should be
accompanied by proof of service on
applicants, in the form of an affidavit or,
for lawyers, a certificate of service.
Pursuant to Rule 0–5 under the Act,
hearing requests should state the nature
of the writer’s interest, any facts bearing
upon the desirability of a hearing on the
matter, the reason for the request, and
the issues contested. Persons who wish
to be notified of a hearing may request
notification by writing to the
Commission’s Secretary at SecretarysOffice@sec.gov.
The Commission:
Secretarys-Office@sec.gov.
ddrumheller on DSK120RN23PROD with NOTICES1
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Shawn Davis, Assistant Director, at
(202) 551–6413 or Chief Counsel’s
Office at (202) 551–6821; SEC, Division
of Investment Management, Chief
Counsel’s Office, 100 F Street NE,
Washington, DC 20549–8010.
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ETF Managers Trust [File No. 811–
22310]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. The applicant has
transferred its assets to Amplify ETF
Trust, and on January 29, 2024, made a
final distribution to its shareholders
based on net asset value. Expenses of
$9,282,629.85 incurred in connection
with the reorganization were paid by the
applicant’s investment adviser and the
acquiring fund’s investment adviser.
Filing Date: The application was filed
on March 5, 2024.
Applicant’s Address: 350 Springfield
Avenue, Suite #200, Summit, New
Jersey 07901.
Greenspring Fund Inc [File No. 811–
03627]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. The applicant has
transferred its assets to Cromwell
Greenspring Mid Cap Fund, and on
August 14, 2023, made a final
distribution to its shareholders based on
net asset value. Expenses of $245,228
incurred in connection with the
reorganization were paid by the
applicant’s investment adviser and the
acquiring fund’s investment adviser.
Filing Dates: The application was
filed on August 30, 2023, and amended
on October 4, 2023, November 22, 2023,
February 20, 2024 and April 23, 2024.
Applicant’s Address: 2330 West Joppa
Road, Suite 110, Lutherville, Maryland
21093–4641.
Invesco Dynamic Credit Opportunities
Fund [File No. 811–22043]
Summary: Applicant, a closed-end
investment company, seeks an order
declaring that it has ceased to be an
investment company. The applicant has
transferred its assets to Invesco Dynamic
Credit Opportunity Fund, and on
October 29, 2021 made a final
distribution to its shareholders based on
net asset value. Expenses of $500,176.86
incurred in connection with the
reorganization were paid by the
applicant.
Filing Dates: The application was
filed on May 12, 2023 and amended on
March 15, 2024.
Applicant’s Address: 1331 Spring
Street Northwest, Suite 2500, Atlanta,
Georgia 30309.
Lee Financial Mutual Fund, Inc. [File
No. 811–05631]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. The applicant has
transferred its assets to Bishop Street
Funds, and on December 4, 2023, made
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a final distribution to its shareholders
based on net asset value. Expenses of
$71,612.13 incurred in connection with
the reorganization were paid by the
applicant’s investment adviser.
Filing Date: The application was filed
on March 29, 2024.
Applicant’s Address: 3113 Olu Street,
Honolulu, Hawaii 96816.
Savos Investments Trust [File No. 811–
08977]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. On September 27,
2022, applicant made a liquidating
distribution to its shareholders based on
net asset value. Expenses of $24,436.75
incurred in connection with the
liquidation were paid by the applicant’s
investment adviser.
Filing Date: The application was filed
on April 17, 2024.
Applicant’s Address: 1655 Grant
Street, 10th Floor, Concord, California
94520.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–09444 Filed 4–30–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100026; File No. SR–BOX–
2024–10]
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 (‘‘BOX’’)
April 25, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 11,
2024, BOX Exchange LLC (the
‘‘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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
2 17
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Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Notices
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of 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 Fee Schedule 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
Section VI.A, Complex Order
Transaction Fees, of the BOX Fee
Schedule, to establish a separate
category within the fee structure for fees
and rebates on Complex Order
transactions for options overlying the
Standard and Poor’s Depositary Receipts
Trust (‘‘SPY’’), the INVESCO QQQ
TrustSM, Series 1 (‘‘QQQ’’), and iShares
Russell 2000 Index Fund (‘‘IWM’’). The
Exchange notes that the fees for SPY,
QQQ, and IWM in Section VI.A will
remain the same as those currently
assessed. The Exchange also proposes to
amend the fees in Section VI.B to
change how certain Complex Orders are
assessed within the fee structure,
specifically each leg of Public Customer
Complex Orders in SPY, QQQ, and IWM
that executes against the BOX Book 5
instead of the Complex Order Book.6
Currently, in Section VI of the BOX
Fee Schedule, fees and credits for
Complex Order transactions in Penny
Interval Classes and Non-Penny Interval
Classes are assessed depending on three
factors: (i) the account type of the
Participant submitting the order; (ii)
whether the Participant is a liquidity
provider or liquidity taker; and (iii) the
account type of the contra party. The
Exchange proposes to assess separate
fees for SPY, QQQ, and IWM Complex
Order Transaction Fees in Section VI.A
of the Fee Schedule. The Exchange
notes that it is not changing the amount
of the fees currently assessed for these
transactions but is simply carving out
SPY, QQQ, and IWM into a separate
category within the fee structure.
As proposed, the SPY, QQQ, and
IWM fees will continue to be the same
as the current fees assessed to
transactions in Penny Interval Classes.
Specifically, when a Public Customer
SPY, QQQ, or IWM Complex Order
interacts with a Public Customer, the
Exchange will not assess a fee or offer
a rebate. When a Public Customer SPY,
QQQ, or IWM Complex Order interacts
with a non-Public Customer, the
Exchange will offer a rebate of $0.50.
Further, when a Professional Customer
or Broker Dealer SPY, QQQ, or IWM
Complex Order interacts with a Public
Customer Complex Order, the Exchange
proposes to assess a $0.50 fee when
making liquidity or a $0.50 fee when
taking liquidity. When a Professional
Customer or Broker Dealer SPY, QQQ,
or IWM Complex Order interacts with a
Professional Customer, Broker Dealer, or
Market Maker Complex Order, the
Exchange proposes to offer a rebate of
$0.30 for making liquidity or to assess
a fee of $0.50 for taking liquidity. When
a Market Maker SPY, QQQ, or IWM
Complex Order interacts with a Public
Customer Complex Order, the Exchange
proposes to assess $0.50 when making
liquidity or $0.50 when taking liquidity.
When a Market Maker SPY, QQQ, or
IWM Complex Order interacts with a
Professional Customer, Broker Dealer, or
Market Maker Complex Order, the
Exchange proposes to offer a rebate of
$0.30 when making liquidity or to
assess a fee of $0.50 when taking
liquidity. The Exchange again notes that
these fees are currently assessed to SPY,
QQQ, and IWM transactions today as
SPY, QQQ, and IWM are Penny Interval
Classes.7
The proposed fee structure for SPY,
QQQ, and IWM Complex Order
transactions will be as follows:
SPY, QQQ, and IWM
Account type
Contra party
Maker
Public Customer ...........................................................
Professional Customer or Broker Dealer .....................
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Market Maker ................................................................
Public Customer ...........................................................
Professional Customer/Broker Dealer ..........................
Market Maker ................................................................
Public Customer ...........................................................
Professional Customer/Broker Dealer ..........................
Market Maker ................................................................
Public Customer ...........................................................
Professional Customer/Broker Dealer ..........................
Market Maker ................................................................
$0.00
(0.50)
(0.50)
0.50
(0.30)
(0.30)
0.50
(0.30)
(0.30)
Taker
$0.00
(0.50)
(0.50)
0.50
0.50
0.50
0.50
0.50
0.50
For example, under the proposal, if a
Public Customer submitted a SPY order
to the Complex Order Book (making
liquidity), the Public Customer would
be provided a rebate of $0.50 if the order
interacted with a Market Maker’s SPY
order and the Market Maker (taking
liquidity) would be charged $0.50.
In addition to the above changes to
Section VI.A of the Fee Schedule, the
Exchange now proposes to amend the
fees in Section VI.B to change how
5 The term ‘‘Central Order Book’’ or ‘‘BOX Book’’
means the electronic book of orders on each single
option series maintained by the BOX Trading Host.
See BOX Rule 100(a)(10).
6 The term ‘‘Complex Order Book’’ means the
electronic book of Complex Orders maintained by
the BOX Trading Host. See BOX Rule 7240(a)(8).
7 See BOX Options Notice 2024–015 available at
Notice-2024-015-Penny-Program-ClassRemovals.pdf (boxexchange.com).
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Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Notices
certain Complex Orders are assessed
within the fee structure. By way of
background, a Participant may enter a
Complex Order with the intent of that
order executing against another
Complex Order on the Complex Order
Book, however, Complex Orders will
execute against Complex Orders only
after bids and offers at the same net
price on the BOX Book for the
individual legs have been executed.8
Currently, under the BOX Fee Schedule,
each leg of a Complex Order executed
against the BOX Book will be treated as
a standard order for purposes of the Fee
Schedule and is subject to Section IV
(Electronic Transaction Fees). The
Exchange now proposes to assess $0.00
for Public Customer Complex Orders in
SPY, QQQ, and IWM executed against
the BOX Book. Specifically, the
Exchange proposes to amend Section
VI.B as follows:
‘‘Each order on the BOX Book executed
against a Complex Order and each leg of a
Complex Order executed against the BOX
Book will be treated as a standard order for
purposes of the Fee Schedule and subject to
Section IV.A (Electronic Transaction Fees for
Non-Auction Transactions), except that each
leg of a Public Customer Complex Order in
SPY, QQQ, and IWM executed against the
BOX Book will be assessed $0.00.’’
For example, if a SPY, QQQ, or IWM
Public Customer Complex Order
interacts with the BOX Book, the legs
are currently assessed $0.10 for taking
liquidity against Professional
Customers, Broker Dealers, and Market
Makers.9 The proposed change would
effectively decrease the fee assessed in
this case from $0.10 to $0.00.
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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.
The Exchange’s proposal to establish
a separate category within the fee
structure for SPY, QQQ, and IWM
Complex Order transactions is
reasonable, equitable, and not unfairly
discriminatory because pricing by
symbol is a common practice on many
U.S. options exchanges as a means to
incentivize order flow to be sent to an
8 See
BOX Rule 7240(b)(3)(i).
BOX Fee Schedule, Section IV.A (NonAuction Transactions).
10 15 U.S.C. 78f(b)(4) and (5).
9 See
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exchange for execution in the most
actively traded options classes. The
Exchange notes that it currently assesses
separate fees and rebates for SPY, QQQ,
and IWM Non-Auction Transactions.11
The Exchange also notes that SPY,
QQQ, and IWM are among the most
actively traded options 12 and therefore
the Exchange believes that creating a
separate category within the fee
structure for these classes is appropriate
to more effectively attract order flow to
BOX. The Exchange again notes that it
is not changing the amount of the fees
currently assessed for SPY, QQQ, and
IWM Complex Order Transaction Fees
in Section VI.A of the Fee Schedule, but
is simply carving out SPY, QQQ, and
IWM into a separate category within the
fee structure. As proposed, the SPY,
QQQ, and IWM fees will continue to be
the same as the current fees assessed to
transactions in Penny Interval Classes.
Additionally, the Exchange believes
the proposed change to amend the fees
in Section VI.B to change how each leg
of a Public Customer Complex Order in
SPY, QQQ, and IWM that executes
against the BOX Book is assessed within
the fee structure is reasonable because it
is designed to incentivize Public
Customer Complex order flow.
Specifically, when a Complex Order
interacts with the BOX Book, the orders
in the BOX Book are assessed electronic
transaction fees for non-auction
transactions.13 Currently, in the case of
a Public Customer Complex Order
interacting with the BOX Book, the legs
are assessed $0.00 for making liquidity
against all account types, $0.00 for
taking liquidity against another Public
Customer, and $0.10 for taking liquidity
against Professional Customers, Broker
Dealers, and Market Makers. The
proposed change would effectively
decrease the fee assessed in the latter
case from $0.10 to $0.00. Further, the
Exchange believes it is equitable and not
unfairly discriminatory that Public
Customers be charged lower fees than
Professional Customers, Broker Dealers,
and Market Makers on BOX. The
Exchange believes it promotes the best
interests of investors to have lower
transaction costs for Public Customers
and will attract Public Customer order
flow. The Exchange believes further that
increased opportunities to interact with
Public Customer order flow benefits all
market participants. As such, the
industry in general and the Exchange in
11 See BOX Fee Schedule, Section IV.A (NonAuction Transactions).
12 See https://www.optionseducation.org/tools
optionquotes/today-s-most-active-options
(providing a daily list of the most active options by
type).
13 See BOX Fee Schedule Section VI.B.
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particular have historically created fee
structures to benefit Public Customers
because increased Public Customer
order flow benefits all market
participants.
The Exchange notes that the BOX Fee
Schedule, including Section VI
(Complex Order Transaction Fees),
assesses fees and credits according to
the account type of the Participant
originating the order and the contra
party.14 The result of this structure is
that a Participant does not know the fee
it will be charged when submitting
certain orders. Specifically, Participants
who submit a Complex Order to BOX
may not know ahead of time whether
their Complex Order will interact with
the Complex Order Book or the BOX
Book. As a result, Participants must
recognize when submitting a Complex
Order to BOX that they could be
assessed a range of fees or rebates and
must expect the highest applicable fee
or lowest applicable rebate such that
fees(rebates) may be higher(lower) than
their expectations. The Exchange notes
that under the proposal, SPY, QQQ, and
IWM Public Customer Complex Orders
will not be assessed a fee regardless of
whether the Complex Order executes in
the Complex Order Book or the BOX
Book. Further, the Exchange believes
the proposed changes are equitable and
not unfairly discriminatory as the
proposed fee structure will apply
uniformly to all Participants.
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 proposal does not impose an
undue burden on intermarket
competition. The Exchange believes its
proposal to decrease fees for SPY, QQQ,
and IWM Public Customer Complex
Orders that execute against the BOX
Book will allow BOX to compete with
other options markets. The Exchange
notes that it operates in a highly
competitive market in which market
participants can readily favor competing
venues if they deem fee levels at a
particular venue to be excessive, or
rebate opportunities available at other
venues to be more favorable. In such an
environment, the Exchange must
continually adjust its fees and rebates to
remain competitive with other
exchanges. Because competitors are free
to modify their own fees and rebates in
14 See BOX Fee Schedule Sections IV.A
(Electronic Non-Auction Transactions) and VI.A
(Complex Order Transaction Fees).
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Federal Register / Vol. 89, No. 85 / Wednesday, May 1, 2024 / Notices
response, and because market
participants may readily adjust their
order routing practices, the Exchange
believes that the degree to which fee
changes in this market may impose any
burden on competition is extremely
limited.
The Exchange believes that the
proposed changes do not impose an
undue burden on intra-market
competition because the proposal will
not place any category of market
participant at a competitive
disadvantage. Specifically, the Exchange
believes that assessing no fees to the
legs of SPY, IWM, or QQQ Public
Customer Complex Orders that trade
against the BOX Book does not impose
an undue burden on intra-market
competition because the proposed
change is designed to attract Public
Customer order flow which increases
the number of executions on BOX, thus
benefiting all market participants. The
Exchange believes further that
separating SPY, IWM, and QQQ
Complex Order transaction fees from
Penny Interval Classes does not impose
an undue burden on competition
because the proposal changes the
structure of the Fee Schedule but does
not change the fees assessed or rebates
offered.
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.
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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.
15 15
16 17
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
BOX–2024–10 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–2024–10. 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–2024–10 and should be
submitted on or before May 22, 2024.
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–09332 Filed 4–30–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100031; File No. SR–FICC–
2024–005]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Designation of Longer Period for
Commission Action on Proposed Rule
Change, as Modified by Partial
Amendment No. 1, To Modify the GSD
Rules To Facilitate Access to
Clearance and Settlement of All
Eligible Secondary Market
Transactions in U.S. Treasury
Securities
April 25, 2024.
On March 11, 2024, Fixed Income
Clearing Corporation (‘‘FICC’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change SR–FICC–2024–
005 pursuant to Section 19(b) of the
Securities Exchange Act of 1934
(‘‘Exchange Act’’) 1 and Rule 19b–4 2
thereunder to modify FICC’s
Government Securities Division
(‘‘GSD’’) Rulebook (‘‘GSD Rules’’) to
facilitate access to clearance and
settlement services of all eligible
secondary market transactions in U.S.
Treasury securities.3 On March 19,
2024, FICC filed Partial Amendment No.
1 to make clarifications and
corrections 4 to the proposed rule
change. The proposed rule change, as
modified by Partial Amendment No. 1,
is referred to herein as the ‘‘Proposed
Rule Change.’’ The Proposed Rule
Change was published for public
comment in the Federal Register on
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Notice of Filing infra note 5, at 89 FR 21363.
4 Partial Amendment No. 1 made clarifications
and corrections to the description of the proposed
rule change and Exhibit 5. Specifically, as originally
filed, the description of the proposed rule change
made a reference to an incorrect section of the GSD
Rules. Partial Amendment No. 1 corrects that
reference. Additionally, as originally filed, the
description of the proposed rule change and Exhibit
5 contained inconsistent references regarding
whether FICC or its Board would be responsible for
approving membership applications and related
membership matters. Partial Amendment No. 1
clarifies and corrects those references. These
clarifications and corrections have been
incorporated, as appropriate, into the description of
the proposed rule change.
1 15
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]]>Agencies
[Federal Register Volume 89, Number 85 (Wednesday, May 1, 2024)]
[Notices]
[Pages 35266-35269]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-09332]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100026; File No. SR-BOX-2024-10]
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 (``BOX'')
April 25, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on April 11, 2024, BOX Exchange LLC (the ``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
[[Page 35267]]
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 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 Fee Schedule 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 Section VI.A, Complex Order
Transaction Fees, of the BOX Fee Schedule, to establish a separate
category within the fee structure for fees and rebates on Complex Order
transactions for options overlying the Standard and Poor's Depositary
Receipts Trust (``SPY''), the INVESCO QQQ Trust\SM\, Series 1
(``QQQ''), and iShares Russell 2000 Index Fund (``IWM''). The Exchange
notes that the fees for SPY, QQQ, and IWM in Section VI.A will remain
the same as those currently assessed. The Exchange also proposes to
amend the fees in Section VI.B to change how certain Complex Orders are
assessed within the fee structure, specifically each leg of Public
Customer Complex Orders in SPY, QQQ, and IWM that executes against the
BOX Book \5\ instead of the Complex Order Book.\6\
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\5\ The term ``Central Order Book'' or ``BOX Book'' means the
electronic book of orders on each single option series maintained by
the BOX Trading Host. See BOX Rule 100(a)(10).
\6\ The term ``Complex Order Book'' means the electronic book of
Complex Orders maintained by the BOX Trading Host. See BOX Rule
7240(a)(8).
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Currently, in Section VI of the BOX Fee Schedule, fees and credits
for Complex Order transactions in Penny Interval Classes and Non-Penny
Interval Classes are assessed depending on three factors: (i) the
account type of the Participant submitting the order; (ii) whether the
Participant is a liquidity provider or liquidity taker; and (iii) the
account type of the contra party. The Exchange proposes to assess
separate fees for SPY, QQQ, and IWM Complex Order Transaction Fees in
Section VI.A of the Fee Schedule. The Exchange notes that it is not
changing the amount of the fees currently assessed for these
transactions but is simply carving out SPY, QQQ, and IWM into a
separate category within the fee structure.
As proposed, the SPY, QQQ, and IWM fees will continue to be the
same as the current fees assessed to transactions in Penny Interval
Classes. Specifically, when a Public Customer SPY, QQQ, or IWM Complex
Order interacts with a Public Customer, the Exchange will not assess a
fee or offer a rebate. When a Public Customer SPY, QQQ, or IWM Complex
Order interacts with a non-Public Customer, the Exchange will offer a
rebate of $0.50. Further, when a Professional Customer or Broker Dealer
SPY, QQQ, or IWM Complex Order interacts with a Public Customer Complex
Order, the Exchange proposes to assess a $0.50 fee when making
liquidity or a $0.50 fee when taking liquidity. When a Professional
Customer or Broker Dealer SPY, QQQ, or IWM Complex Order interacts with
a Professional Customer, Broker Dealer, or Market Maker Complex Order,
the Exchange proposes to offer a rebate of $0.30 for making liquidity
or to assess a fee of $0.50 for taking liquidity. When a Market Maker
SPY, QQQ, or IWM Complex Order interacts with a Public Customer Complex
Order, the Exchange proposes to assess $0.50 when making liquidity or
$0.50 when taking liquidity. When a Market Maker SPY, QQQ, or IWM
Complex Order interacts with a Professional Customer, Broker Dealer, or
Market Maker Complex Order, the Exchange proposes to offer a rebate of
$0.30 when making liquidity or to assess a fee of $0.50 when taking
liquidity. The Exchange again notes that these fees are currently
assessed to SPY, QQQ, and IWM transactions today as SPY, QQQ, and IWM
are Penny Interval Classes.\7\
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\7\ See BOX Options Notice 2024-015 available at Notice-2024-
015-Penny-Program-Class-Removals.pdf (boxexchange.com).
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The proposed fee structure for SPY, QQQ, and IWM Complex Order
transactions will be as follows:
----------------------------------------------------------------------------------------------------------------
SPY, QQQ, and IWM
Account type Contra party -------------------------------
Maker Taker
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Public Customer............................... Public Customer................. $0.00 $0.00
Professional Customer/Broker (0.50) (0.50)
Dealer.
Market Maker.................... (0.50) (0.50)
Professional Customer or Broker Dealer........ Public Customer................. 0.50 0.50
Professional Customer/Broker (0.30) 0.50
Dealer.
Market Maker.................... (0.30) 0.50
Market Maker.................................. Public Customer................. 0.50 0.50
Professional Customer/Broker (0.30) 0.50
Dealer.
Market Maker.................... (0.30) 0.50
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For example, under the proposal, if a Public Customer submitted a
SPY order to the Complex Order Book (making liquidity), the Public
Customer would be provided a rebate of $0.50 if the order interacted
with a Market Maker's SPY order and the Market Maker (taking liquidity)
would be charged $0.50.
In addition to the above changes to Section VI.A of the Fee
Schedule, the Exchange now proposes to amend the fees in Section VI.B
to change how
[[Page 35268]]
certain Complex Orders are assessed within the fee structure. By way of
background, a Participant may enter a Complex Order with the intent of
that order executing against another Complex Order on the Complex Order
Book, however, Complex Orders will execute against Complex Orders only
after bids and offers at the same net price on the BOX Book for the
individual legs have been executed.\8\ Currently, under the BOX Fee
Schedule, each leg of a Complex Order executed against the BOX Book
will be treated as a standard order for purposes of the Fee Schedule
and is subject to Section IV (Electronic Transaction Fees). The
Exchange now proposes to assess $0.00 for Public Customer Complex
Orders in SPY, QQQ, and IWM executed against the BOX Book.
Specifically, the Exchange proposes to amend Section VI.B as follows:
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\8\ See BOX Rule 7240(b)(3)(i).
``Each order on the BOX Book executed against a Complex Order
and each leg of a Complex Order executed against the BOX Book will
be treated as a standard order for purposes of the Fee Schedule and
subject to Section IV.A (Electronic Transaction Fees for Non-Auction
Transactions), except that each leg of a Public Customer Complex
Order in SPY, QQQ, and IWM executed against the BOX Book will be
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assessed $0.00.''
For example, if a SPY, QQQ, or IWM Public Customer Complex Order
interacts with the BOX Book, the legs are currently assessed $0.10 for
taking liquidity against Professional Customers, Broker Dealers, and
Market Makers.\9\ The proposed change would effectively decrease the
fee assessed in this case from $0.10 to $0.00.
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\9\ See BOX Fee Schedule, Section IV.A (Non-Auction
Transactions).
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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's proposal to establish a separate category within the
fee structure for SPY, QQQ, and IWM Complex Order transactions is
reasonable, equitable, and not unfairly discriminatory because pricing
by symbol is a common practice on many U.S. options exchanges as a
means to incentivize order flow to be sent to an exchange for execution
in the most actively traded options classes. The Exchange notes that it
currently assesses separate fees and rebates for SPY, QQQ, and IWM Non-
Auction Transactions.\11\ The Exchange also notes that SPY, QQQ, and
IWM are among the most actively traded options \12\ and therefore the
Exchange believes that creating a separate category within the fee
structure for these classes is appropriate to more effectively attract
order flow to BOX. The Exchange again notes that it is not changing the
amount of the fees currently assessed for SPY, QQQ, and IWM Complex
Order Transaction Fees in Section VI.A of the Fee Schedule, but is
simply carving out SPY, QQQ, and IWM into a separate category within
the fee structure. As proposed, the SPY, QQQ, and IWM fees will
continue to be the same as the current fees assessed to transactions in
Penny Interval Classes.
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\11\ See BOX Fee Schedule, Section IV.A (Non-Auction
Transactions).
\12\ See https://www.optionseducation.org/toolsoptionquotes/today-s-most-active-options (providing a daily list of the most
active options by type).
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Additionally, the Exchange believes the proposed change to amend
the fees in Section VI.B to change how each leg of a Public Customer
Complex Order in SPY, QQQ, and IWM that executes against the BOX Book
is assessed within the fee structure is reasonable because it is
designed to incentivize Public Customer Complex order flow.
Specifically, when a Complex Order interacts with the BOX Book, the
orders in the BOX Book are assessed electronic transaction fees for
non-auction transactions.\13\ Currently, in the case of a Public
Customer Complex Order interacting with the BOX Book, the legs are
assessed $0.00 for making liquidity against all account types, $0.00
for taking liquidity against another Public Customer, and $0.10 for
taking liquidity against Professional Customers, Broker Dealers, and
Market Makers. The proposed change would effectively decrease the fee
assessed in the latter case from $0.10 to $0.00. Further, the Exchange
believes it is equitable and not unfairly discriminatory that Public
Customers be charged lower fees than Professional Customers, Broker
Dealers, and Market Makers on BOX. The Exchange believes it promotes
the best interests of investors to have lower transaction costs for
Public Customers and will attract Public Customer order flow. The
Exchange believes further that increased opportunities to interact with
Public Customer order flow benefits all market participants. As such,
the industry in general and the Exchange in particular have
historically created fee structures to benefit Public Customers because
increased Public Customer order flow benefits all market participants.
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\13\ See BOX Fee Schedule Section VI.B.
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The Exchange notes that the BOX Fee Schedule, including Section VI
(Complex Order Transaction Fees), assesses fees and credits according
to the account type of the Participant originating the order and the
contra party.\14\ The result of this structure is that a Participant
does not know the fee it will be charged when submitting certain
orders. Specifically, Participants who submit a Complex Order to BOX
may not know ahead of time whether their Complex Order will interact
with the Complex Order Book or the BOX Book. As a result, Participants
must recognize when submitting a Complex Order to BOX that they could
be assessed a range of fees or rebates and must expect the highest
applicable fee or lowest applicable rebate such that fees(rebates) may
be higher(lower) than their expectations. The Exchange notes that under
the proposal, SPY, QQQ, and IWM Public Customer Complex Orders will not
be assessed a fee regardless of whether the Complex Order executes in
the Complex Order Book or the BOX Book. Further, the Exchange believes
the proposed changes are equitable and not unfairly discriminatory as
the proposed fee structure will apply uniformly to all Participants.
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\14\ See BOX Fee Schedule Sections IV.A (Electronic Non-Auction
Transactions) and VI.A (Complex Order Transaction Fees).
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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.
The proposal does not impose an undue burden on intermarket
competition. The Exchange believes its proposal to decrease fees for
SPY, QQQ, and IWM Public Customer Complex Orders that execute against
the BOX Book will allow BOX to compete with other options markets. The
Exchange notes that it operates in a highly competitive market in which
market participants can readily favor competing venues if they deem fee
levels at a particular venue to be excessive, or rebate opportunities
available at other venues to be more favorable. In such an environment,
the Exchange must continually adjust its fees and rebates to remain
competitive with other exchanges. Because competitors are free to
modify their own fees and rebates in
[[Page 35269]]
response, and because market participants may readily adjust their
order routing practices, the Exchange believes that the degree to which
fee changes in this market may impose any burden on competition is
extremely limited.
The Exchange believes that the proposed changes do not impose an
undue burden on intra-market competition because the proposal will not
place any category of market participant at a competitive disadvantage.
Specifically, the Exchange believes that assessing no fees to the legs
of SPY, IWM, or QQQ Public Customer Complex Orders that trade against
the BOX Book does not impose an undue burden on intra-market
competition because the proposed change is designed to attract Public
Customer order flow which increases the number of executions on BOX,
thus benefiting all market participants. The Exchange believes further
that separating SPY, IWM, and QQQ Complex Order transaction fees from
Penny Interval Classes does not impose an undue burden on competition
because the proposal changes the structure of the Fee Schedule but does
not change the fees assessed or rebates offered.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Exchange Act \15\ and Rule 19b-4(f)(2)
thereunder,\16\ because it establishes or changes a due, or fee.
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\15\ 15 U.S.C. 78s(b)(3)(A)(ii).
\16\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend the rule
change if it appears to the Commission that the action is necessary or
appropriate in the public interest, for the protection of investors, or
would otherwise further the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-BOX-2024-10 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-2024-10. 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-2024-10 and should be
submitted on or before May 22, 2024.
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).
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-09332 Filed 4-30-24; 8:45 am]
BILLING CODE 8011-01-P
