[Federal Register Volume 85, Number 99 (Thursday, May 21, 2020)]
[Notices]
[Pages 31010-31012]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10934]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88889; File No. SR-BOX-2020-15]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee
Schedule on the BOX Options Market LLC (``BOX'') Facility To Remove the
Pricing Changes That Were in Effect While the Trading Floor Was
Inoperable
May 15, 2020.
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 12, 2020, 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 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 on
the BOX Options Market LLC (``BOX'') 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
As a precautionary measure to prevent the potential spread of
coronavirus (COVID-19), BOX Exchange LLC (BOX) temporarily closed the
Trading Floor in Chicago after the close of business on Friday, March
20, 2020. As a result, BOX filed a fee change to govern certain pricing
changes to be in effect while the BOX Trading Floor was inoperable.\5\
On April 29, 2020, BOX announced that the BOX Trading Floor located in
Chicago, Illinois will reopen on Monday, May 4, 2020. As such, BOX now
proposes to remove the pricing changes that were in effect while the
Trading Floor was inoperable. Specifically, the Exchange will remove
the following language and corresponding chart from Section 1.C from
Fee Schedule:
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\5\ See Securities Exchange Act Release No. 88559 (April 3,
2020), 85 FR 19968 (April 9, 2020) (SR-BOX-2020-08).
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``Participants will be assessed the following fees for
Facilitation and Solicitation Transactions in lieu of those described
in the preceding table when the BOX Trading Floor is inoperable. The
Facilitation and Solicitation Transaction Rebate identified in Section
I.C.1 will not apply when the BOX Trading Floor is inoperable.''
[[Page 31011]]
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Agency Order Facilitation Order or Responses in the Solicitation
-------------------------------- Solicitation Order or Facilitation Auction
-------------------------------- Mechanisms
Account type Penny Pilot Non-Penny -------------------------------
classes Pilot classes Penny Pilot Non-Penny Penny Pilot Non-Penny
classes Pilot classes classes Pilot classes
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Public Customer......................................... $0.00 $0.00 $0.00 $0.00 $0.50 $1.15
Professional Customer or Broker Dealer.................. 0.00 0.00 0.00 0.00 0.50 1.15
Market Maker............................................ 0.00 0.00 0.00 0.00 0.50 1.15
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In addition, the Exchange will remove the following language from
Section III.B from the Fee Schedule:
``Participants will not be assessed Liquidity Fees and
Credits for Facilitation and Solicitation Transactions when the BOX
Trading Floor is inoperable.''
Lastly, the Exchange will remove the following language from
Section IX. From the Fee Schedule:
``BOX Participant Fees will not be assessed for Trading
Floor-only Participants and Trading Floor Permit Fees will not be
assessed for any Participant while the BOX Trading Floor is
inoperable.''
The Exchange notes that the previously effective fees and rebates
that were in place prior to the Trading Floor closing will be in effect
beginning May 4, 2020. Specifically, the following fees and rebates
will be assessed for Facilitation and Solicitation Transactions:
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Agency Order Facilitation Order or Responses in the Solicitation
-------------------------------- Solicitation Order or Facilitation Auction
-------------------------------- Mechanisms
Account type Penny Pilot Non-Penny -------------------------------
classes Pilot classes Penny Pilot Non-Penny Penny Pilot Non-Penny
classes Pilot classes classes Pilot classes
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Public Customer......................................... $0.00 $0.00 $0.00 $0.00 $0.25 $0.40
Professional Customer or Broker Dealer.................. 0.00 0.00 0.15 0.15 0.25 0.40
Market Maker............................................ 0.00 0.00 0.15 0.15 0.25 0.40
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A $0.10 per contract rebate will be applied to Agency Orders
executed through the Facilitation and Solicitation Auction Mechanisms
where at least one party is a Non-Public Customer.
In addition, the Liquidity Fees and Credits for Facilitation and
Solicitation Transactions pursuant to Section III.B of the Fee Schedule
will be as follows \6\:
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\6\ The Exchange notes, liquidity fees and credits are applied
in addition to any applicable Electronic Transaction fees as
described in Section I of the Fee Schedule.
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Fee for adding Credit for removing
liquidity (all account liquidity (all account
types) types)
----------------------------------------------------------------------------------------------------------------
Non-Penny Pilot Classes....................................... $0.75 ($0.75)
Penny Pilot Classes........................................... 0.25 (0.25)
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The Exchange will continue to assess Trading Floor-only
Participants the following Participant fees under Section IX. of the
Fee Schedule:
Initiation Fee--$2,500 (one-time fee)
Participant Fee--$1,500 per month
Trading Floor Booth Space Fee--$1,500 per month
Lastly, the Exchange will continue to assess Trading Floor Permit
Fees for all Participants, specifically:
Floor Market Maker--$5,500 per month
Floor Broker--$500 per month
Badge Fee--$100 per month
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,\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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\7\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that the proposed changes to update the Fee
Schedule to remove obsolete fees and references that were effective
during the Trading Floor closure maintains clarity in the Fee Schedule
and will alleviate potential confusion, thereby removing impediments to
and perfecting the mechanism of a free and open market and a national
market system and protecting investors and the public interest. As
noted above, the proposed filing seeks to remove pricing changes that
were in effect while the Trading Floor was inoperable. Because the BOX
Trading Floor will reopen beginning on May 4, 2020, the Exchange
believes the proposed changes are appropriate and will reduce investor
confusion. Lastly, the Exchange believes that the proposed change is
reasonable, equitable and not unfairly discriminatory because BOX will
reassess the fees and rebates that were effective prior to the Trading
Floor closure.
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 proposed changes do not
address competitive issues, but rather, as
[[Page 31012]]
discussed above, are intended to amend the Fee Schedule to remove
obsolete text and references that were effective during the Trading
Floor closure due to the reopening of the BOX Trading Floor, which will
alleviate potential confusion. Lastly, the Exchange notes that BOX will
assess the fees and rebates that were effective prior to the Trading
Floor closure. The Exchange does not believe that assessing these
previously effective fees and rebates will impose any burden on
competition not necessary or appropriate in furtherance of the purposes
of the Act.
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 \8\ and Rule 19b-4(f)(2)
thereunder,\9\ because it establishes or changes a due, or fee.
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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 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-2020-15 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-2020-15. 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-2020-15, and should be submitted on
or before June 11, 2020.
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\10\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-10934 Filed 5-20-20; 8:45 am]
BILLING CODE 8011-01-P