[Federal Register Volume 78, Number 131 (Tuesday, July 9, 2013)]
[Notices]
[Pages 41174-41176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-16381]
[[Page 41174]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69909; File No. SR-BOX-2013-35]
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the Exchange Fee Schedule To Update and Clarify Certain Fees
Assessed Under Section V (Technology Fees)
July 2, 2013.
Pursuant to Section 19(b)(1) under the Securities Exchange Act of
1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby
given that on July 1, 2013, BOX Options Exchange LLC (the ``Exchange'')
filed with the Securities and Exchange Commission (the ``Commission'')
the proposed rule change as described in Items I, II, and III below,
which Items have been prepared by the Exchange. The Exchange filed the
proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,\3\
and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend the Exchange Fee
Schedule to update and clarify certain fees assessed under Section V
(Technology Fees) on the BOX Market LLC (``BOX'') options facility.
Changes to the fee schedule pursuant to this proposal will be effective
upon filing. 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 Web site at http://boxexchange.com.
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, Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Fee Schedule for trading on BOX
to update and clarify the technology fees that are assessed on market
participants. The Exchange currently organizes Section V (Technology
Fees) into two sections; a Point of Presence (``PoP'') Connection Fee
under Section V.A., and a Back Office Trade Management Software
(``TMS'') Fee under Section V.B. The Exchange proposes to rename
Section V.A. ``Connectivity Fees'' and replace the text in Section V.A.
with text that clarifies how these fees are assessed. Further, the
Exchange proposes to remove Section V.B. from the BOX Fee Schedule.
Section V.A, currently titled ``PoP Connection Fee'', was created
to detail the fees applicable to Participants who connected to the BOX
market network at PoP sites. These sites are owned and operated by
third-party external vendors, and the fees listed in this section were
meant to encompass what fees could be charged based on each
Participant's particular configuration. These fees could either be
billed directly to the Participant by the vendor, or passed through to
the Participant by BOX. Currently, in practice, a vast majority of
Participants are billed directly by the vendor.
The Exchange is proposing to rename Section V.A. ``Connectivity
Fees'' and replace the text in Section V.A. with text that clarifies
the fees applicable to all market participants that connect to the BOX
network. Specifically, the Exchange proposes to state that market
participants are required to connect to the BOX network (including
cross-connects),\5\ through datacenters owned and operated by third-
party vendors. The Exchange also proposes to state that while BOX does
not assess Connectivity Fees; these fees are assessed by the
datacenters and will be billed directly to the market participant. BOX
will no longer be responsible for passing through any of these fees.
Connectivity fees can include one-time set-up fees, monthly charges,
and other fees charged by the third-party vendor in exchange for the
services provided to the market participant. The Exchange notes that
this proposal does not change any of the fees currently assessed by
third party vendors on market participants connecting to BOX, but
rather clarifies how they will be billed.
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\5\ A ``cross connect'' occurs when the affected third-party
system is located at the same datacenter site where BOX systems are
located, and the third-party connects to BOX through the datacenter.
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The Exchange then proposes to detail the two datacenters where
market participants may connect to the BOX network: NY4, owned and
operated by Equinix; and 65 Broadway, owned and operated by 365 Main;
and the connectivity fees applicable, depending upon connection type,
in the table set forth below (and included in the proposed Section
V.A.).
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NY4 65 Broadway
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Connection Type One-time set- One-time set-
up Monthly up Monthly
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POTS............................................ $100 $25 $50 $25
Ethernet........................................ N/A N/A 250 225
T1.............................................. 500 100 N/A N/A
Cat 5/6......................................... 500 245 250 225
COAX............................................ 500 245 250 200
Single & Multi Mode Fiber....................... 500 350 325 500
Extended Cross Connect.......................... 850 1000 N/A N/A
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The Exchange believes the proposed changes to Section V.A. will
more accurately explain the costs of connecting to the Exchange.
Further, the Exchange is proposing to remove Section V.B. ``Back
Office Trade Management Software (``TMS'')'' from the Fee Schedule. The
TMS Software is optional software to which BOX Participants may
subscribe in order to manage their post trade data. The Exchange
currently charges a monthly per user fee, depending upon the number of
users per Participant.
The Exchange proposes to remove Section V.B. and offer TMS Software
to all BOX Participants at no cost. The Exchange believes that offering
TMS Software at no cost will allow more Participants to subscribe to
the service and therefore will give them the opportunity to better
manage their trading on the Exchange.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\6\ in general, and Sections
6(b)(4) and 6(b)(5) of the Act,\7\ 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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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to clarify that connectivity fees are assessed on all
market participants that establish connections to BOX through a third-
party and that these fees will be billed directly to the market
participant. Specifically, the Exchange is proposing to amend the
connectivity fee section of the Fee Schedule in a way that is similar
to a comparable section of the Miami International Securities Exchange,
LLC (``MIAX'').\8\
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\8\ See MIAX Options Fee Schedule as of June 1, 2013, available
at http://www.miaxoptions.com/sites/default/files/MIAX_Options_Fee_Schedule_06032013.pdf
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The Exchange believes that the proposed amendments to Section V.A.
of the Fee Schedule are reasonable as they do not change any of the
fees currently assessed by third party vendors on market participants
connecting to BOX, but rather clarify how these fees will be billed.
Further, the Exchange believes that the proposed Connectivity Fees
constitute an equitable allocation of fees, and are not unfairly
discriminatory, as all similarly situated market participants are
charged the same amount depending on the services they receive.
The Exchange believes that the proposed removal of TMS Software
fees is non-discriminatory because it applies equally to all
Participants on the Exchange. Further, the Exchange believes that
offering the TMS Software at no cost will remove impediments to and
better provide for a free and open market. Moreover, the removal of the
TMS Software fees is reasonable because it will allow all Participants
to access the software at no cost.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes that the
proposed amendments to the Fee Schedule will not impose a burden on
competition among various Exchange Participants. The proposed change is
designed to provide greater specificity and clarity within the Fee
Schedule and does not place any Participants at a disadvantage compared
to other Participants. Further, the Exchange does not believe this rule
change will have an impact on intermarket competition.
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 \9\ and Rule 19b-4(f)(2)
thereunder,\10\ because it establishes or changes a due, or fee.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 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 (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-BOX-2013-35 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BOX-2013-35. 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 Web site (http://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 Web site 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
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-BOX-2013-35 and should be
submitted on or before July 30, 2013.
[[Page 41176]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-16381 Filed 7-8-13; 8:45 am]
BILLING CODE 8011-01-P