[Federal Register Volume 83, Number 104 (Wednesday, May 30, 2018)]
[Notices]
[Pages 24832-24834]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-11500]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83310; File No. SR-BOX-2018-16]
Self-Regulatory Organizations; BOX Options Exchange LLC; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend the Fee Schedule on the BOX Market LLC (``BOX'') Options Facility
To Amend SAIL Port Fees
May 23, 2018.
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 May 11, 2018, BOX Options Exchange LLC (the ``Exchange'') filed
with the Securities and Exchange Commission
[[Page 24833]]
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Exchange filed the proposed rule change pursuant to Section
19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-4(f)(2) thereunder,\4\
which renders the proposal effective upon filing with the Commission.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend the Fee Schedule to on
[sic] the BOX 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 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, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Section VI.B (Port Fees) of the BOX
Fee Schedule. Specifically, the Exchange proposes to amend the
SOLA[supreg] Access Information Language (``SAIL'') Port Fees on the
Exchange. Currently, Market Makers are assessed a monthly fee of $1,000
for all Ports. The Exchange proposes to rename the ``Market Maker''
Port to ``Market Making'' Port. The Exchange notes that the monthly
$1000 flat fee will remain for all Market Making Ports \5\ on the
Exchange. Additionally, the Exchange proposes to rename ``Other
Participants'' to ``Order Entry.'' With this change, all SAIL Ports
used solely for order entry purposes will be charged $500 per month per
Port for Ports 1-5 and $150 per month per additional Port, regardless
of account type.
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\5\ While Market Makers on BOX currently connect to at least 16
SAIL Market Making Ports to satisfy their quoting requirements, the
Exchange notes that the total number of SAIL Market Making Ports
used varies based on the Market Maker. The Exchange believes that
charging a flat fee for all market making Ports is reasonable and
appropriate as the Exchange does not want to disincentivize Market
Makers from quoting on BOX, regardless of how many Market Making
Ports the Market Makers use.
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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,\6\ 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)(4) and (5).
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The Exchange believes that the proposed changes are reasonable,
equitable and not unfairly discriminatory. The Exchange recently
established Port Fees for Participants. BOX Market Makers currently
connect to a minimum of sixteen (16) SAIL Ports and pay a flat monthly
fee for these connections.\7\ The Exchange now proposes to clarify that
the current flat fee of $1,000 per month is for Ports used for market
making purposes (i.e. quoting) only. As discussed above, the number of
SAIL Port connections for market making purposes vary based on the
Market Maker. The Exchange recognizes that the various BOX Market
Makers may not need the same number of SAIL Port connections due to
different technology architecture and trading systems. As such, the
Exchange proposes the current flat fee of $1,000 for all Marketing
Making SAIL Ports as to not disincentivize Market Makers from quoting
on BOX.
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\7\ See SR-BOX-2018-15.
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Further, the Exchange proposes to rename the ``Other Participants''
Port to ``Order Entry'' Port. The Exchange believes that this change
provides clarity with respect to the types of SAIL Ports in use. With
this change, all Participants will be charged $500 per month per Port
for Ports 1-5 and $150 per month per additional Port. The Exchange
believes that this proposed change is equitable and not unfairly
discriminatory as the Order Entry Port fees are assessed to all
Participants that use SAIL for order entry on BOX, regardless of
account type. Lastly, the Exchange believes that the proposed change is
reasonable and appropriate as other exchanges in the industry assess
market making port fees separate from order entry port fees.\8\
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\8\ See Miami International Securities Exchange LLC (``MIAX'')
Fee Schedule. MIAX charges its Market Makers monthly MEI Port Fees
based on Market Maker Class Assignment. Additionally, they assess
all Members (Market Makers included) FIX Port fees which allows such
Members to enter orders on the exchange. Members are assessed $550
per month for the 1st FIX Port, $350 per month per Port for FIX
Ports 2 through 5 and $150 per month per Port for additional FIX
Ports over 5. See also Nasdaq Options Market (``NOM'') Fee Schedule.
NOM also charges its Market Makers monthly Quote Port Fees based on
number of Ports. They also assess an Order Entry Port Fee of $650
per month per mnemonic that Market Makers may also use if entering
orders on the Exchange. BOX notes that the SAIL Port is slightly
different than the above ports, as both Market Makers and other BOX
Participants may connect through the SAIL Port to enter orders on
the Exchange.
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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. Unilateral action by BOX in
establishing fees for services provided to its Participants and others
using its facilities will not have an impact on competition. As a small
Exchange in the already highly competitive environment for options
trading, BOX does not have the market power necessary to set prices for
services that are unreasonable or unfairly discriminatory in violation
of the Exchange Act. BOX's proposed fees, as described herein, are
comparable to and generally lower than fees charged by other options
exchanges for the same or similar services. Lastly, the Exchange
believes the proposed change will not impose a burden on intramarket
competition as the proposed fees are applicable to all Participants who
connect to BOX.
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
[[Page 24834]]
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-2018-16 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-2018-16. 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 (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 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 10:00 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-BOX-2018-16, and should be submitted on
or before June 20, 2018.
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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Brent J. Fields,
Secretary.
[FR Doc. 2018-11500 Filed 5-29-18; 8:45 am]
BILLING CODE 8011-01-P