Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Strike Interval for Options on SPDR® Gold Shares, 59945-59948 [2024-16219]
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Federal Register / Vol. 89, No. 142 / Wednesday, July 24, 2024 / Notices
the transfer agent. In addition, Rule
17Ad–13 requires that transfer agents
maintain the independent accountant’s
report and any other documents
required by the rule for at least three
years, the first year in an easily
accessible place. These recordkeeping
requirements assist the Commission and
other regulatory agencies with
monitoring transfer agents and ensuring
compliance with the rule. Small transfer
agents and transfer agents that service
only their own companies’ securities are
exempt from Rule 17Ad–13.
Approximately 100 professional
independent transfer agents must file
with the Commission one report
prepared by an independent accountant
pursuant to Rule 17Ad–13 each year.
Commission staff estimates that, on
average, the annual internal time burden
for each transfer agent to submit the
independent accountant’s report to the
Commission is minimal or zero. The
time required for an independent
accountant to conduct the study and
evaluation of a transfer agent’s system of
internal accounting controls and
complete the report varies depending on
the size and nature of the transfer
agent’s operations. Commission staff
estimates that, on average, each Rule
17Ad–13 report can be completed by the
independent accountant in 120 hours.
In light of Commission staff’s review of
previously filed Rule 17Ad–13 reports
and Commission staff’s conversations
with transfer agents and accountants,
Commission staff estimates that 120
hours are needed to perform the study
and prepare the report on an annual
basis. Commission staff estimates that
the average hourly rate of an
independent accountant is $291,
resulting in an annual external cost
burden of $34,920 for each of the
approximately 100 professional
independent transfer agents. The
aggregate total annual external cost for
the 100 respondents is approximately
$3,492,000.
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 any practical
utility; (b) the accuracy of the
Commission’s estimates of the burden of
the proposed 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
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comments and suggestions submitted by
September 23, 2024.
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: Austin Gerig, Director/Chief Data
Officer, Securities and Exchange
Commission, c/o Oluwaseun Ajayi, 100
F Street NE, Washington, DC 20549, or
send an email to: PRA_Mailbox@
sec.gov.
Dated: July 18, 2024.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–16230 Filed 7–23–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[SEC File No. 270–442, OMB Control No.
3235–0498]
Proposed Collection; Comment
Request; Extension: Rule 17a–12
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE, Washington, DC
20549–2736
Notice is hereby given that pursuant
to the Paperwork Reduction Act of 1995
(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the
Securities and Exchange Commission
(‘‘Commission’’) is soliciting comments
on the existing collection of information
provided for in Rule 17a–12 (17 CFR
240.17a–12) and Part II of Form X–17A–
5 (17 CFR 249.617) under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et
seq.). The Commission plans to submit
this existing collection of information to
the Office of Management and Budget
(‘‘OMB’’) for extension and approval.
Rule 17a–12 is the reporting rule
tailored specifically for over-the-counter
(‘‘OTC’’) derivatives dealers registered
with the Commission, and Part II of
Form X–17A–5, the Financial and
Operational Combined Uniform Single
(‘‘FOCUS’’) Report, is the basic
document for reporting the financial
and operational condition of OTC
derivatives dealers. Rule 17a–12
requires registered OTC derivatives
dealers to file Part II of the FOCUS
Report quarterly. Rule 17a–12 also
requires that OTC derivatives dealers
file audited reports annually.
The reports required under Rule 17a–
12 provide the Commission with
information used to monitor the
operations of OTC derivatives dealers
and to enforce their compliance with
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59945
the Commission’s rules. These reports
also enable the Commission to review
the business activities of OTC
derivatives dealers and to anticipate,
where possible, how these dealers may
be affected by significant economic
events.
The Commission estimates that the
total hour burden under Rule 17a–12 is
approximately 540 hours per year, and
the total cost burden is approximately
$138,900 per year.
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 proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information to be 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
September 23, 2024.
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 OMB
control number.
Please direct your written comments
to: Austin Gerig, Director/Chief Data
Officer, Securities and Exchange
Commission, c/o Oluwaseun Ajayi, 100
F Street NE, Washington, DC 20549, or
send an email to: PRA_Mailbox@
sec.gov.
Dated: July 18, 2024.
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–16226 Filed 7–23–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100560; File No. SR–BOX–
2024–18]
Self-Regulatory Organizations; BOX
Exchange LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the Strike
Interval for Options on SPDR® Gold
Shares
July 18, 2024.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
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Federal Register / Vol. 89, No. 142 / Wednesday, July 24, 2024 / Notices
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 17,
2024, 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 self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
BOX Rule 5050 (Series of Options
Contracts Open for Trading) to amend
the strike interval for options on SPDR®
Gold Shares (‘‘GLD’’). The text of the
proposed rule change is available from
the principal office of the Exchange, at
the Commission’s Public Reference
Room and also on the Exchange’s
internet website at https://
rules.boxexchange.com/rulefilings.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization has
prepared summaries, set forth in
Sections A, B, and C below, of the most
significant aspects of such statements.
ddrumheller on DSK120RN23PROD with NOTICES1
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
BOX Rule 5050 (Series of Options
Contracts Open for Trading) to amend
the strike interval for options on SPDR®
Gold Shares (‘‘GLD’’).
Specifically, the Exchange proposes to
amend IM–5050–1(b) to allow for the
interval between strike prices of series
of options on Exchange-Traded Fund
Shares (‘‘ETFs’’ or ‘‘Units’’) 3 of SPDR®
Gold Shares or ‘‘GLD’’ to be $1 or
greater, including where the strike price
is greater than $200.
Currently, IM–5050–1(b) provides
that,
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See BOX Rule 5020(h).
2 17
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For series of options on Exchange Traded
Fund Shares that satisfy the criteria set forth
in Rule 5020(h), the interval of strike prices
may be $1 or greater where the strike price
is $200 or less or $5 or greater where the
strike price is over $200. Notwithstanding
any other provision regarding the interval of
strike prices of series of options on ExchangeTraded Fund Shares in this rule, the interval
of strike prices on SPDR® S&P 500® ETF
(‘‘SPY’’), iShares S&P 500 Index ETF (‘‘IVV’’),
PowerShares QQQ Trust (‘‘QQQ’’), iShares
Russell 2000 Index Fund (‘‘IWM’’), and the
SPDR® Dow Jones® Industrial Average ETF
(‘‘DIA’’) options will be $1 or greater.
At this time, the Exchange proposes to
modify the interval setting regime to be
$1 or greater where the strike price is
greater than $200 for GLD options,
similar to SPY, IVV, QQQ, IWM and
DIA. The Exchange believes that the
proposed rule change would make GLD
options easier for investors and traders
to use and more tailored to their
investment needs.
GLD is an Exchange-Traded Fund
Share designed to closely track the price
and performance of the price of gold
bullion. GLD is widely quoted as an
indicator of gold stock prices and is a
significant indicator of overall economic
health. Investors use GLD to diversify
their portfolios and benefit from market
trends. Additionally, GLD is a leading
product in its asset class that trades
within a ‘‘complex’’ where, in addition
to the underlying security, there are
multiple instruments available for
hedging such as, COMEX Gold Futures;
Gold Daily Futures; iShares GOLD
Trust; SPDR GOLD Minishares Trust;
Aberdeen Physical Gold Trust; and
GraniteShares Gold Shares.
Accordingly, the Exchange believes that
offering a wider base of GLD options
affords traders and investors important
hedging and trading opportunities,
particularly in the midst of current price
trends. The Exchange believes that not
having the proposed $1 strike price
intervals above $200 in GLD
significantly constricts investors’
hedging and trading possibilities. The
Exchange therefore believes that by
having smaller strike intervals in GLD,
investors would have more efficient
hedging and trading opportunities due
to the lower $1 interval ascension. The
proposed $1 interval above the $200
strike price, will result in having at-themoney series based upon the underlying
ETF moving less than 1%. The
Exchange believes that the proposed
strike setting regime is in line with the
slower movements of broad-based
indices. Considering the fact that $1
intervals already exist below the $200
price point and that GLD have
consistently inclined in price toward
the $200 level, the Exchange believes
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that continuing to maintain the current
$200 level (above which intervals
increase 500% to $5), may have a
negative effect on investing, trading and
hedging opportunities, and volume. The
Exchange believes that the investing,
trading, and hedging opportunities
available with GLD options far
outweighs any potential negative impact
of allowing GLD options to trade in
more finely tailored intervals above the
$200 price point. The proposed strike
setting regime would permit strikes to
be set to more closely reflect the
increasing value in the underlying and
allows investors and traders to roll open
positions from a lower strike to a higher
strike in conjunction with the price
movements of the underlying ETF.
Under the current rule, where the next
higher available series would be $5
away above a $200 strike price, the
ability to roll such positions would be
impaired. Accordingly, to move a
position from a $200 strike to a $205
strike under the current rule, an investor
would need for the underlying product
to move 2.5%, and would not be able to
execute a roll up until such a large
movement occurred. The Exchange
believes that with the proposed rule
change, the investor would be in a
significantly safer position of being able
to roll his open options position from a
$200 to a $201 strike price, which is
only a 0.5% move for the underlying. As
a result, the proposed rule change will
allow the Exchange to better respond to
customer demand for GLD strike price
more precisely aligned with the smaller,
longer-term incremental increases in the
underlying ETF. The Exchange believes
that the proposed rule change, like the
other strike price programs currently
offered by the Exchange, will benefit
investors by providing investors the
flexibility to more closely tailor their
investment and hedging decisions using
GLD options. Moreover, by allowing
series of GLD options to be listed in $1
intervals between strike prices over
$200, the proposal will moderately
augment the potential total number of
options series available on the
Exchange. However, the Exchange
believes it and the Options Price
Reporting Authority (‘‘OPRA’’) have the
necessary systems capacity to handle
any potential additional traffic
associated with this proposed rule
change. The Exchange also believes that
Participants will not have a capacity
issue due to the proposed rule change.
In addition, the Exchange represents
that it does not believe that this
expansion will cause fragmentation of
liquidity, but rather, believes that finer
strike intervals will serve to increase
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ddrumheller on DSK120RN23PROD with NOTICES1
liquidity available as well as price
efficiency by providing more trading
opportunities for all market
participants.
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’’),4 in general, and Section 6(b)(5)
of the Act,5 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, in that it
is designed to promote just and
equitable principles of trade, 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 proposed rule
change will allow investors to more
easily use GLD options. Moreover, the
proposed rule change would allow
investors to better trade and hedge
positions in GLD options where the
strike price is greater than $200, and
ensure that investors in both options are
not at a disadvantage simply because of
the strike price. The Exchange believes
the proposed rule change is consistent
with Section 6(b)(1) of the Act, which
provides that the Exchange be organized
and have the capacity to be able to carry
out the purposes of the Act and the
rules and regulations thereunder, and
the rules of the Exchange. The proposal
allows the Exchange to respond to
customer demand to allow GLD options
to trade in $1 intervals above a $200
strike price. The Exchange does not
believe that the proposed rule would
create additional capacity issues or
affect market functionality. As noted
above, ETF options trade in wider $5
intervals above a $200 strike price,
whereby options at or below a $200
strike price trade in $1 intervals. This
creates a situation where contracts on
the same option class effectively may
not be able to execute certain strategies
such as, for example, rolling to a higher
strike price, simply because of the $200
strike price above which options
intervals increase by 500%. This
proposal remedies the situation by
U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
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17:57 Jul 23, 2024
establishing an exception to the current
ETF interval regime for GLD options to
allow such options to trade in $1 or
greater intervals at all strike prices.
The Exchange believes that the
proposed rule change, like other strike
price programs currently offered by the
Exchange, will benefit investors by
giving them increased flexibility to more
closely tailor their investment and
hedging decisions. By way of example,
GLD is a leading product in its asset
class and it trades within a ‘‘complex’’
where, in addition to the underlying
security, there are multiple instruments
available for hedging such as, COMEX
Gold Futures; Gold Daily Futures;
iShares GOLD Trust; SPDR GOLD
Minishares Trust; Aberdeen Physical
Gold Trust; and GraniteShares Gold
Shares.
With regard to the impact of this
proposal on system capacity, the
Exchange believes it and OPRA have the
necessary systems capacity to handle
any potential additional traffic
associated with this proposed rule
change. The Exchange believes that its
Participants will not have a capacity
issue as a result of this proposal.
Further, the Exchange believes the
proposal does not unfairly discriminate
among market participants, as all market
participants will be treated in the same
manner under this proposal.
Finally, the Exchange notes the
proposed rule change is substantively
the same as a rule change proposed by
Nasdaq ISE, LLC (‘‘ISE’’) which the
Commission recently approved.6
which are similarly popular and widely
traded ETF products and track indexes
at similarly high price levels. Thus, the
proposed strike setting regime for GLD
options will allow options on this
actively traded ETF with index levels at
corresponding price levels to trade
pursuant to the same strike setting
regime. This will permit investors to
employ similar investment and hedging
strategies for each of these options.
The Exchange does not believe the
proposal will impose any burden on
inter-market competition, as nothing
prevents other options exchanges from
proposing similar rules to make a finer
strike price intervals above a $200 price
point available for GLD options. The
Exchange notes that the proposed rule
change is not a novel proposal, as the
Commission recently approved a
substantively identical proposal of
another exchange.7 Further, the
Exchange does not believe the proposal
will impose any burden on intramarket
competition, as all market participants
will be treated in the same manner
under this proposal.
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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. Rather, the
Exchange believes that the proposed
rule change will result in additional
investment options and opportunities to
achieve the investment and trading
objectives of market participants seeking
efficient trading and hedging vehicles,
to the benefit of investors, market
participants, and the marketplace in
general. Specifically, the Exchange
believes that GLD options investors and
traders will significantly benefit from
the availability of finer strike price
intervals above a $200 price point. In
addition, the interval setting regime the
Exchange proposes to apply to GLD
options is currently applied to SPY,
IVV, QQQ, IWM and DIA options,
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 8 and Rule
19b–4(f)(6) thereunder.9 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 from the date on which it
was filed, or such shorter time as the
Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 10 and
subparagraph (f)(6) of Rule 19b–4
thereunder.11
6 See Securities Exchange Act Release No. 100447
(June 28, 2024), 89 FR 55293 (July 3, 2024) (SR–
ISE–2024–17).
4 15
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C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
7 Id.
8 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
10 15 U.S.C. 78s(b)(3)(A)(iii).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) 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.
9 17
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Federal Register / Vol. 89, No. 142 / Wednesday, July 24, 2024 / Notices
A proposed rule change filed under
Rule 19b–4(f)(6) 12 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),13 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has requested
that the Commission waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. According to the Exchange, the
proposed rule change is a competitive
response to a filing submitted by ISE
that recently was approved by the
Commission.14 The Exchange has stated
that waiver of the 30-day operative
delay would allow the Exchange to
implement the proposal at the same
time as its competitor exchanges, thus
creating competition among GLD
options. The Commission believes that
the proposed rule change presents no
novel issues and that waiver of the 30day operative delay is consistent with
the protection of investors and the
public interest. Accordingly, the
Commission hereby waives the 30-day
operative delay and designates the
proposed rule change as operative upon
filing.15
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:
ddrumheller on DSK120RN23PROD with NOTICES1
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–2024–18 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–2024–18. 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–2024–18 and should be
submitted on or before August 14, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024–16219 Filed 7–23–24; 8:45 am]
BILLING CODE 8011–01–P
12 17
CFR 240.19b–4(f)(6).
CFR 240.19b–4(f)(6)(iii).
14 See supra note 6.
15 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).
13 17
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16 17
CFR 200.30–3(a)(12), (59).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100555; File No. SR–
FINRA–2024–004]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Designation
of Longer Period for Commission
Action on Proceedings To Determine
Whether To Approve or Disapprove a
Proposed Rule Change To Amend
FINRA Rule 6730 (Transaction
Reporting) To Reduce the 15-Minute
TRACE Reporting Timeframe to One
Minute
July 18, 2024.
On January 11, 2024, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) 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 FINRA
Rule 6730 to reduce the 15-minute
reporting timeframe for transactions
reported to FINRA’s Trade Reporting
and Compliance Engine (‘‘TRACE’’)
system to one minute, with exceptions
for FINRA member firms with de
minimis reporting activity and for
manual trades. The proposed rule
change was published for comment in
the Federal Register on January 25,
2024.3
On February 29, 2024, 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 April 22,
2024, the Commission instituted
proceedings under Section 19(b)(2)(B) of
the Act 6 to determine whether to
approve or disapprove the proposed
rule change.7
Section 19(b)(2) of the Act 8 provides
that, after initiating proceedings, the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 99825
(March 21, 2024), 89 FR 22294. Comments received
on the proposed rule change are available at:
https://www.sec.gov/comments/sr-finra-2024-004/
srfinra2024004.htm.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 99640
(Feb. 29, 2024), 89 FR 16042 (March 6, 2024). The
Commission designated April 24, 2024, as the date
by which the Commission shall approve or
disapprove, or institute proceedings to determine
whether to disapprove, the proposed rule change.
6 15 U.S.C. 78s(b)(2)(B).
7 See Securities Exchange Act Release No. 100006
(Apr. 22, 2024), 89 FR 32475 (Apr. 26, 2024).
8 15 U.S.C. 78s(b)(2).
2 17
E:\FR\FM\24JYN1.SGM
24JYN1
]]>Agencies
[Federal Register Volume 89, Number 142 (Wednesday, July 24, 2024)]
[Notices]
[Pages 59945-59948]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16219]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100560; File No. SR-BOX-2024-18]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the
Strike Interval for Options on SPDR[supreg] Gold Shares
July 18, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 59946]]
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 17, 2024, 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 self-regulatory organization. The Commission is
publishing this notice to solicit comments on the proposed rule from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend BOX Rule 5050 (Series of Options
Contracts Open for Trading) to amend the strike interval for options on
SPDR[supreg] Gold Shares (``GLD''). The text of the proposed rule
change is available from the principal office of the Exchange, at the
Commission's Public Reference Room and also on the Exchange's internet
website at https://rules.boxexchange.com/rulefilings.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in Sections A, B, and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend BOX Rule 5050 (Series of Options
Contracts Open for Trading) to amend the strike interval for options on
SPDR[supreg] Gold Shares (``GLD'').
Specifically, the Exchange proposes to amend IM-5050-1(b) to allow
for the interval between strike prices of series of options on
Exchange-Traded Fund Shares (``ETFs'' or ``Units'') \3\ of SPDR[supreg]
Gold Shares or ``GLD'' to be $1 or greater, including where the strike
price is greater than $200.
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\3\ See BOX Rule 5020(h).
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Currently, IM-5050-1(b) provides that,
For series of options on Exchange Traded Fund Shares that
satisfy the criteria set forth in Rule 5020(h), the interval of
strike prices may be $1 or greater where the strike price is $200 or
less or $5 or greater where the strike price is over $200.
Notwithstanding any other provision regarding the interval of strike
prices of series of options on Exchange-Traded Fund Shares in this
rule, the interval of strike prices on SPDR[supreg] S&P 500[supreg]
ETF (``SPY''), iShares S&P 500 Index ETF (``IVV''), PowerShares QQQ
Trust (``QQQ''), iShares Russell 2000 Index Fund (``IWM''), and the
SPDR[supreg] Dow Jones[supreg] Industrial Average ETF (``DIA'')
options will be $1 or greater.
At this time, the Exchange proposes to modify the interval setting
regime to be $1 or greater where the strike price is greater than $200
for GLD options, similar to SPY, IVV, QQQ, IWM and DIA. The Exchange
believes that the proposed rule change would make GLD options easier
for investors and traders to use and more tailored to their investment
needs.
GLD is an Exchange-Traded Fund Share designed to closely track the
price and performance of the price of gold bullion. GLD is widely
quoted as an indicator of gold stock prices and is a significant
indicator of overall economic health. Investors use GLD to diversify
their portfolios and benefit from market trends. Additionally, GLD is a
leading product in its asset class that trades within a ``complex''
where, in addition to the underlying security, there are multiple
instruments available for hedging such as, COMEX Gold Futures; Gold
Daily Futures; iShares GOLD Trust; SPDR GOLD Minishares Trust; Aberdeen
Physical Gold Trust; and GraniteShares Gold Shares. Accordingly, the
Exchange believes that offering a wider base of GLD options affords
traders and investors important hedging and trading opportunities,
particularly in the midst of current price trends. The Exchange
believes that not having the proposed $1 strike price intervals above
$200 in GLD significantly constricts investors' hedging and trading
possibilities. The Exchange therefore believes that by having smaller
strike intervals in GLD, investors would have more efficient hedging
and trading opportunities due to the lower $1 interval ascension. The
proposed $1 interval above the $200 strike price, will result in having
at-the-money series based upon the underlying ETF moving less than 1%.
The Exchange believes that the proposed strike setting regime is in
line with the slower movements of broad-based indices. Considering the
fact that $1 intervals already exist below the $200 price point and
that GLD have consistently inclined in price toward the $200 level, the
Exchange believes that continuing to maintain the current $200 level
(above which intervals increase 500% to $5), may have a negative effect
on investing, trading and hedging opportunities, and volume. The
Exchange believes that the investing, trading, and hedging
opportunities available with GLD options far outweighs any potential
negative impact of allowing GLD options to trade in more finely
tailored intervals above the $200 price point. The proposed strike
setting regime would permit strikes to be set to more closely reflect
the increasing value in the underlying and allows investors and traders
to roll open positions from a lower strike to a higher strike in
conjunction with the price movements of the underlying ETF. Under the
current rule, where the next higher available series would be $5 away
above a $200 strike price, the ability to roll such positions would be
impaired. Accordingly, to move a position from a $200 strike to a $205
strike under the current rule, an investor would need for the
underlying product to move 2.5%, and would not be able to execute a
roll up until such a large movement occurred. The Exchange believes
that with the proposed rule change, the investor would be in a
significantly safer position of being able to roll his open options
position from a $200 to a $201 strike price, which is only a 0.5% move
for the underlying. As a result, the proposed rule change will allow
the Exchange to better respond to customer demand for GLD strike price
more precisely aligned with the smaller, longer-term incremental
increases in the underlying ETF. The Exchange believes that the
proposed rule change, like the other strike price programs currently
offered by the Exchange, will benefit investors by providing investors
the flexibility to more closely tailor their investment and hedging
decisions using GLD options. Moreover, by allowing series of GLD
options to be listed in $1 intervals between strike prices over $200,
the proposal will moderately augment the potential total number of
options series available on the Exchange. However, the Exchange
believes it and the Options Price Reporting Authority (``OPRA'') have
the necessary systems capacity to handle any potential additional
traffic associated with this proposed rule change. The Exchange also
believes that Participants will not have a capacity issue due to the
proposed rule change. In addition, the Exchange represents that it does
not believe that this expansion will cause fragmentation of liquidity,
but rather, believes that finer strike intervals will serve to increase
[[Page 59947]]
liquidity available as well as price efficiency by providing more
trading opportunities for all market participants.
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''),\4\ in general, and Section 6(b)(5) of the Act,\5\ 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, in that it is designed to promote just
and equitable principles of trade, 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.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
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In particular, the proposed rule change will allow investors to
more easily use GLD options. Moreover, the proposed rule change would
allow investors to better trade and hedge positions in GLD options
where the strike price is greater than $200, and ensure that investors
in both options are not at a disadvantage simply because of the strike
price. The Exchange believes the proposed rule change is consistent
with Section 6(b)(1) of the Act, which provides that the Exchange be
organized and have the capacity to be able to carry out the purposes of
the Act and the rules and regulations thereunder, and the rules of the
Exchange. The proposal allows the Exchange to respond to customer
demand to allow GLD options to trade in $1 intervals above a $200
strike price. The Exchange does not believe that the proposed rule
would create additional capacity issues or affect market functionality.
As noted above, ETF options trade in wider $5 intervals above a $200
strike price, whereby options at or below a $200 strike price trade in
$1 intervals. This creates a situation where contracts on the same
option class effectively may not be able to execute certain strategies
such as, for example, rolling to a higher strike price, simply because
of the $200 strike price above which options intervals increase by
500%. This proposal remedies the situation by establishing an exception
to the current ETF interval regime for GLD options to allow such
options to trade in $1 or greater intervals at all strike prices.
The Exchange believes that the proposed rule change, like other
strike price programs currently offered by the Exchange, will benefit
investors by giving them increased flexibility to more closely tailor
their investment and hedging decisions. By way of example, GLD is a
leading product in its asset class and it trades within a ``complex''
where, in addition to the underlying security, there are multiple
instruments available for hedging such as, COMEX Gold Futures; Gold
Daily Futures; iShares GOLD Trust; SPDR GOLD Minishares Trust; Aberdeen
Physical Gold Trust; and GraniteShares Gold Shares.
With regard to the impact of this proposal on system capacity, the
Exchange believes it and OPRA have the necessary systems capacity to
handle any potential additional traffic associated with this proposed
rule change. The Exchange believes that its Participants will not have
a capacity issue as a result of this proposal. Further, the Exchange
believes the proposal does not unfairly discriminate among market
participants, as all market participants will be treated in the same
manner under this proposal.
Finally, the Exchange notes the proposed rule change is
substantively the same as a rule change proposed by Nasdaq ISE, LLC
(``ISE'') which the Commission recently approved.\6\
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\6\ See Securities Exchange Act Release No. 100447 (June 28,
2024), 89 FR 55293 (July 3, 2024) (SR-ISE-2024-17).
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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 that is not necessary or appropriate
in furtherance of the purposes of the Act. Rather, the Exchange
believes that the proposed rule change will result in additional
investment options and opportunities to achieve the investment and
trading objectives of market participants seeking efficient trading and
hedging vehicles, to the benefit of investors, market participants, and
the marketplace in general. Specifically, the Exchange believes that
GLD options investors and traders will significantly benefit from the
availability of finer strike price intervals above a $200 price point.
In addition, the interval setting regime the Exchange proposes to apply
to GLD options is currently applied to SPY, IVV, QQQ, IWM and DIA
options, which are similarly popular and widely traded ETF products and
track indexes at similarly high price levels. Thus, the proposed strike
setting regime for GLD options will allow options on this actively
traded ETF with index levels at corresponding price levels to trade
pursuant to the same strike setting regime. This will permit investors
to employ similar investment and hedging strategies for each of these
options.
The Exchange does not believe the proposal will impose any burden
on inter-market competition, as nothing prevents other options
exchanges from proposing similar rules to make a finer strike price
intervals above a $200 price point available for GLD options. The
Exchange notes that the proposed rule change is not a novel proposal,
as the Commission recently approved a substantively identical proposal
of another exchange.\7\ Further, the Exchange does not believe the
proposal will impose any burden on intramarket competition, as all
market participants will be treated in the same manner under this
proposal.
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\7\ Id.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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 from the date on which it was filed, or such shorter time as
the Commission may designate, it has become effective pursuant to
Section 19(b)(3)(A)(iii) of the Act \10\ and subparagraph (f)(6) of
Rule 19b-4 thereunder.\11\
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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
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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[[Page 59948]]
A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. According to
the Exchange, the proposed rule change is a competitive response to a
filing submitted by ISE that recently was approved by the
Commission.\14\ The Exchange has stated that waiver of the 30-day
operative delay would allow the Exchange to implement the proposal at
the same time as its competitor exchanges, thus creating competition
among GLD options. The Commission believes that the proposed rule
change presents no novel issues and that waiver of the 30-day operative
delay is consistent with the protection of investors and the public
interest. Accordingly, the Commission hereby waives the 30-day
operative delay and designates the proposed rule change as operative
upon filing.\15\
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
\14\ See supra note 6.
\15\ 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-2024-18 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-2024-18. 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-2024-18 and should be
submitted on or before August 14, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12), (59).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-16219 Filed 7-23-24; 8:45 am]
BILLING CODE 8011-01-P
