[Federal Register Volume 85, Number 91 (Monday, May 11, 2020)]
[Notices]
[Pages 27782-27787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09954]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88810; File No. SR-BOX-2020-09]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
of Proposed Rule Change To Adopt New Rule Regarding Transfer of
Positions
May 5, 2020.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 28, 2020, 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 establish BOX Rule 7160 (``Transfer of
Positions'') to provide a process by which Participants may transfer
option positions in limited circumstances off the floor. 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://boxoptions.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 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
[[Page 27783]]
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 purpose of the proposed rule change is to establish Rule 7160
(``Transfer of Positions'') to provide a process by which Participants
may transfer option positions in limited circumstances off the floor.
Rule 7160 will specify the circumstances under which a Participant may
effect transfers of positions to permit market participants to move
positions from one account to another without exposure to the BOX
Trading Floor and to permit transfers upon the occurrence of
significant, non-recurring events. The proposed rule change is similar
to Cboe Rule 6.7.\3\
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\3\ The Exchange notes the proposed rule change is also similar
to NASDAQ PHLX Options 6; Section 5 Transfer of Positions.
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Currently, Exchange Rules do not specifically address transfers of
option positions between accounts, individuals or entities. The
Exchange, however, plans on aligning its Rules with its competitors by
allowing off the floor transfers in situations similar to those
permitted on other exchanges. The proposed rule will establish Exchange
policy with respect to off the floor transfers of options positions in
certain limited circumstances.
Specifically, the Exchange proposes to state, ``existing positions
in options listed on the Exchange, of a Participant or person
associated with the Participant, or non-Participant, or person
associated with a non-Participant that are to be transferred on, from,
or to the books of a Clearing Participant may be transferred off the
Exchange if the transfer involves one or more of the flooring events: .
. . .'' The proposed rule language makes clear that the Rule will not
apply to products other than options listed on the Exchange.\4\ The
proposed rule text also mandates that a Participant or person
associated with the Participant must be on at least one side of the
transfer. The proposed rule change also states that transferred
positions must be on, from, or to the books of a Clearing
Participant.\5\ The proposed rule change also states that existing
positions of a Participant or person associated with a Participant, or
non-Participant, or person associated with a non-Participant may be
subject to a transfer, except under specified circumstances in which a
transfer may only be effected for positions of a Participant or person
associated with the Participant.\6\
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\4\ Proposed paragraph (h) also states that the transfer
procedure only applies to positions in options listed on the
Exchange, and that transfers of non-Exchange-listed options and
other financial instruments are not governed by Rule 7160.
\5\ The Exchange understands that this is consistent with how
transfers are currently effected on competitor exchanges. See Nasdaq
Phlx LLC (``Phlx'') Options 6, Section 5; See also Cboe Exchange,
Inc. (``Cboe'') Rule 6.7.
\6\ See proposed subparagraphs (a)(5) and (7).
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The Exchange notes transfers of positions in Exchange-listed
options may also be subject to applicable laws, rules, and regulations,
including rules of other self-regulatory organizations.\7\ Except as
explicitly provided in the proposed rule text, the proposed rule change
is not intended to exempt position transfers from any other applicable
rules or regulations, and proposed paragraph (g) makes this clear in
the rule.
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\7\ See proposed paragraph (h).
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The proposed rule change adds ten events where a transfer would be
permitted to occur.
Proposed subparagraph (a)(1) permits a transfer to occur
if it, pursuant to Rule 3000, is an adjustment or transfer in
connection with the correction of a bona fide error in the recording of
a transaction or the transferring of a position to another account,
provided that the original trade documentation confirms the error.
Proposed subparagraph (a)(2) permits a transfer if it is a
transfer of positions from one account to another account where there
is no change in ownership involved (i.e., the accounts are for the same
Person),\8\ provided the accounts are not in separate aggregation units
or otherwise subject to information barrier or account segregation
requirements. The proposed rule change provides market participants
with flexibility to maintain positions in accounts used for the same
trading purpose in a manner consistent with their businesses. Such
transfers are not intended to be transactions among different market
participants, as there would be no change in ownership permitted under
the provision, and would also not permit transfers among different
trading units for which accounts are otherwise required to be
maintained separately.\9\
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\8\ The Exchange proposes to define the term ``Person'' within
this proposed Rule 7160 as ``For purposes of this rule, the term
``Person'' shall be defined as an individual, partnership (general
or limited), joint stock company, corporation, limited liability
company, trust or unincorporated organization, or any governmental
entity or agency or political subdivision thereof.'' This definition
is identical to Cboe Rule 1.1.
\9\ Various rules (for example, Regulation SHO in certain
circumstances) require accounts to be maintained separately, and the
proposed rule change is consistent with those rules.
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Proposed subparagraph (a)(3) similarly permits a transfer
if it is a consolidation of accounts \10\ where no change in ownership
is involved.
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\10\ This refers to the consolidation of entire accounts (e.g.,
combining two separate accounts (including the positions in each
account into a single account)).
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Proposed subparagraph (a)(4) permits a transfer if it is a
merger, acquisition, consolidation, or similar non-recurring
transaction for a Person. For example, a Participant that is undergoing
a structural change and a one-time movement of positions may require a
transfer of positions.
Proposed subparagraph (a)(5) permits a transfer involving
the dissolution of a joint account in which the remaining Participant
or person associated with the Participant assumes the positions of the
joint account. For example, a person associated with a Participant is
leaving a firm that will no longer be in business may require a
transfer of positions to another firm.
Proposed subparagraph (a)(6) permits a transfer involving
the dissolution of a corporation or partnership in which a former
nominee of the corporation or partnership assumes the positions.
Proposed subparagraph (a)(7) permits a position transfer
as part of a Participant's or associated person's capital contribution
to a new joint account, partnership, or corporations.
Proposed subparagraph (a)(8) permits a transfer regarding
the donation of positions to a not-for-profit corporation. The Exchange
believes that permitting such a transfer in very limited circumstances
is reasonable, as it allows organizations to accomplish certain goals
more efficiently.
Proposed subparagraph (a)(9) permits the transfer of
positions to a minor under the Uniform Gifts to Minors Act.
Proposed subparagraph (a)(10) permits the transfer of
positions through operation of law from death, bankruptcy, or
otherwise. This provision is consistent with applicable laws, rules,
and regulations that legally require transfers in certain
circumstances. This proposed rule change is consistent with the
purposes of other circumstances in the current rule, such as the
transfer of positions to a minor or dissolution of a corporation.
The Exchange believes these proposed events all have similar
purposes in that
[[Page 27784]]
they will enable market participants to move positions from one account
to another and to permit transfers upon the occurrence of significant,
non-recurring events.\11\ As noted above, the proposed rule change is
consistent with current rules of other self-regulatory organizations.
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\11\ See proposed paragraph (g).
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The proposed Exchange Rule 7160(b) provides that unless otherwise
permitted by paragraph (f), no position may net against another
position (``netting''), and no position transfer may result in
preferential margin or haircut treatment.\12\ Netting occurs when long
positions and short positions in the same series ``offset'' against
each other, leaving no or a reduced position. For example, if a
Participant or associated person wanted to transfer 100 long calls to
another account that contained short calls of the same options series
as well as other positions, even if the transfer is permitted pursuant
to one of the 10 permissible events listed in the Proposed Rule, the
Participant or associated person could not transfer the offsetting
series, as they would net against each other and close the positions.
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\12\ For example, positions may not transfer from a customer,
joint back office, or firm account to a Market Maker account.
However, positions may transfer from a Market Maker account to a
customer, joint back office, or firm account (assuming no netting of
positions occurs).
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However, netting is permitted for transfers on behalf of a Market
Maker account for transactions in multiply listed options series on
different options exchanges, but only if the Market Maker nominees are
trading for the same Participant or associated person, and the options
transactions on the different options exchanges clear into separate
exchange-specific accounts because they cannot easily clear into the
same Market Maker account at the Clearing Corporation. In such
instances, all Market Maker positions in the exchange-specific accounts
for the multiply listed class would be automatically transferred on
their trade date into one central Market Maker account (commonly
referred to as a ``universal account'') at the Clearing Corporation.
Positions cleared into a universal account would automatically net
against each other. Options exchanges permit different naming
conventions with respect to Market Maker account acronyms (for example,
lettering versus numbering and number of characters), which are used
for accounts at the Clearing Corporation. A Market Maker may have a
nominee with an appointment in class XYZ on BOX, and have another
nominee with an appointment in class XYZ on Phlx, but due to account
acronym naming conventions, those nominees may need to clear their
transactions into separate accounts (one for BOX transactions and
another for Phlx transactions) at the Clearing Corporation rather into
a universal account (in which account the positions may net). The
proposed rule change permits transfers from these separate exchange-
specific accounts into the Market Maker's universal account in this
circumstance to achieve this purpose.
Transfer Price
The Exchange proposes to state that the transfer price, to the
extent it is consistent with applicable laws, rules, and regulations,
including rules of other self-regulatory organizations, and tax and
accounting rules and regulations, at which a transfer is effected may
be: (1) The original trade prices of the positions that appear on the
books of the trading Clearing Participant, in which case the records of
the transfer must indicate the original trade dates for the positions;
provided, transfers to correct bona fide errors pursuant to proposed
subparagraph (a)(1) must be transferred at the correct original trade
prices; (2) mark-to-market prices of the positions at the close of
trading on the transfer date; (3) mark-to-market prices of the
positions at the close of trading on the trade date prior to the
transfer date; \13\ or (4) the then-current market price of the
positions at the time the transfer is effected.\14\ The proposed rule
text regarding permissible transfer prices provides market participants
with flexibility to determine the transfer price at which the transfer
may be effected. The Exchange proposes the four options noted above
with respect to the transfer price.
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\13\ For example, for a transfer that occurs on a Tuesday, the
transfer price may be based on the closing market price on Monday.
\14\ See proposed paragraph (c).
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This proposed rule change provides market participants that effect
transactions with flexibility to select a transfer price based on
circumstances of the transfer and their business. However, for
corrections of bona fide errors, because those transfers are necessary
to correct processing errors that occurred at the time of transaction,
those transfers would occur at the original transaction price, as the
purpose of the transfer is to create the originally intended result of
the transaction.
Prior Written Notice
Proposed Exchange Rule 7160(b) requires a Participant or person(s)
associated with the Participant and its Clearing Participant(s) (to the
extent the Participant or associated person are not self-clearing) to
submit to the Exchange, in a manner determined by the Exchange, written
notice prior to effecting a transfer from or to the account of a
Participant(s) or associated person(s).\15\ The notice must indicate:
The Exchange-listed options positions to be transferred; the nature of
the transaction; the enumerated provision(s) under proposed paragraph
(a) pursuant to which the positions are being transferred; the name of
the counterparty(ies); the anticipated transfer date; the method for
determining the transfer price; and any other information requested by
the Exchange.\16\ The proposed notice will ensure the Exchange is aware
of all transfers so that it can monitor and review them (including the
records that must be retained pursuant to proposed paragraph (e)) to
determine whether they are effected in accordance with the Rules. The
proposed rule text requires additional information with respect to the
prior written notification that is required to effect a transfer.
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\15\ This notice provision applies only to transfers involving a
Participant's or associated persons' positions and not to positions
of non-Participants and non-Participant associated persons, as they
are not subject to the Rules. In addition, no notice would be
required to effect transfers to correct bona fide errors pursuant to
proposed subparagraph (a)(1).
\16\ See proposed paragraph (d).
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Additionally, requiring notice from the Participant or person(s)
associated with the Participant and its Clearing Participant will
ensure both parties are in agreement with respect to the terms of the
transfer. As noted in proposed subparagraph (d)(2), receipt of notice
of an transfer does not constitute a determination by the Exchange that
the transfer was effected or reported in conformity with the
requirements of the proposed Rule 7160. Notwithstanding submission of
written notice to the Exchange, Participants or person(s) associated
with the Participant and Clearing Participant(s) that effect transfers
that do not conform to the requirements of the proposed Rule will be
subject to appropriate disciplinary action in accordance with the
Rules.
Records
The proposed Exchange Rule 7160(e) requires each Participant or
person(s) associated with the Participant and each Clearing Participant
that is a party to a transfer must make and retain records of
[[Page 27785]]
the information provided in the written notice to the Exchange pursuant
to proposed subparagraph (e)(1), as well as information on the actual
Exchange-listed options that are ultimately transferred, the actual
transfer date, and the actual transfer price (and the original trade
dates, if applicable), and any other information the Exchange may
request the Participant or associated persons, or Clearing Participant
to provide.\17\
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\17\ See proposed paragraph (e).
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Presidential Exemption
Proposed paragraph (f) provides exemptions approved by the
Exchange's Chief Executive Officer or President (or senior-level
designee). Specifically, this provision is in addition to the
exemptions set forth in proposed paragraph (a). The Exchange proposes
that the Exchange Chief Executive Officer or President (or senior-level
designee) may grant an exemption from the requirement of this proposed
Rule, on his or her own motion or upon application of the Participant
or person(s) associated with the Participant (with respect to the
Participant or person(s) associated with the Participant's positions)
or a Clearing Participant (with respect to positions carried and
cleared by the Clearing Participants). The Chief Executive Officer, the
President, or his or her designee, may permit a transfer if necessary
or appropriate for the maintenance of a fair and orderly market and the
protection of investors and is in the public interest, including due to
unusual or extraordinary circumstances. For example, an exemption may
be granted if the market value of the Person's positions would be
compromised by having to comply with the requirement to trade on the
Exchange pursuant to the normal auction process or when, in the
judgment of the Chief Executive Officer, President, or his or her
designee, market conditions make trading on the Exchange
impractical.\18\
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\18\ See proposed Rule (f).
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Routine, Recurring Transfers
The Exchange proposes to state that the transfer procedure set
forth in Rule 7160 is intended to facilitate non-routine, nonrecurring
movements of positions.\19\ The transfer procedure is not to be used
repeatedly or routinely in circumvention of the normal auction market
process.
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\19\ See proposed Rule (g).
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Exchange-Listed Options
Lastly, the Exchange proposes paragraph (h) which notes that the
transfer procedure set forth in the proposed rule is only applicable to
positions in options listed on the Exchange. Transfers of positions in
Exchange-listed options may also be subject to applicable laws, rules,
and regulations, including rules of other self-regulatory
organizations. Transfers of non-Exchange listed options and other
financial instruments are not governed by the proposed rule.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\20\ in general, and Section
6(b)(5) of the Act,\21\ 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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\20\ 15 U.S.C. 78f(b).
\21\ 15 U.S.C. 78f(b)(5).
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Specifically, the Exchange believes the proposed transfer rule is
consistent with the Section 6(b)(5) \22\ requirements that the rules of
an exchange be 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 regulating,
clearing, settling, processing information with respect to, and
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.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \23\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\22\ 15 U.S.C. 78f(b)(5).
\23\ Id.
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The Exchange believes that permitting the transfers in very limited
circumstances, such as where there is no change in beneficial
ownership, a transfer by operation of law or an adjustment or transfer
in connection with the correction of a bona fide error, is reasonable
to allow a Participant or associated person(s) to accomplish certain
goals efficiently. As noted above for example, a Participant or
associated person that is undergoing a structural change and a one-time
movement of positions may require a transfer of positions, or a
Participant or associated person that is leaving a firm that will no
longer be in business may require a transfer of positions to another
firm. Also, a Participant or associated person may require a transfer
of positions to make a capital contribution. The above-referenced
circumstances are non-recurring situations where the transferor
continues to maintain some ownership interest or manage the positions
transferred. By contrast, repeated or routine transfers between
entities or accounts--even if there is no change in beneficial
ownership as a result of the transfer--is inconsistent with the
purposes for which the proposed rule will be adopted. Accordingly, the
Exchange believes that such activity should not be permitted under the
rules and thus, seeks to adopt language in proposed paragraph (f) that
dictates the transfer of positions procedures set forth in the proposed
rule are intended to facilitate non-recurring movements of positions.
The Exchange believes the proposed rule change would benefit
investors, as it adds transparency and consistency between BOX's
rulebook and other exchange rulebooks.\24\ The purpose of the proposed
rule allowing for limited circumstances in which market participants
may conduct transfers is consistent with the purpose of the
circumstances currently permitted on another exchange.\25\ The proposed
rule change will provide market participants that experience these
limited, non-recurring events with an efficient and effective means to
transfer positions in these situations. The Exchange believes the
proposed rule change regarding permissible transfer prices provides
market participants with flexibility to determine the price appropriate
for their business, which maintain cost bases in accordance with normal
accounting practices and removes impediments to a free and open market.
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\24\ See Phlx Options 6, Section 5; See also Cboe Rule 6.7.
\25\ See Securities Exchange Act Release No. 34-88424 (March 19,
2020), 85 FR 16981 (March 25, 2020) (Notice of Filing of Amendment
Nos. 1 and 2 and Order Granting Accelerated Approval of a Proposed
Rule Change, as Modified by Amendment Nos. 1 and 2, Regarding Off-
Floor Position Transfers).
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The proposed rule change which requires notice and maintenance of
records will ensure the Exchange is able to review transfers for
compliance with the Rules, which prevents fraudulent and manipulative
acts and practices. The requirement to retain records is consistent
with the requirements of Rule 17a-3 and 17a-4 under the Act.
[[Page 27786]]
Similar to Cboe and Phlx rules, the Exchange would permit a
presidential exemption. The Exchange believes that this exemption is
consistent with the Act because the Exchange's Chief Executive Officer
or President (or senior-level designee) would consider an exemption in
very limited circumstances. The transfer process is intended to
facilitate non-routine, nonrecurring movements of positions and,
therefore, is not to be used repeatedly or routinely in circumvention
of the normal auction market process. The proposed rule text
specifically provides within the rule text that the Exchange's Chief
Executive Officer or President (or senior-level designee) may in his or
her judgment allow a transfer if it is necessary or appropriate for the
maintenance of a fair and orderly market and the protection of
investors and is in the public interest, including due to unusual or
extraordinary circumstances such as the market value of the Person's
positions will be comprised by having to comply with the requirement to
trade on the Exchange pursuant to the normal auction process or, when
in the judgment of President or his or her designee, market conditions
make trading on the Exchange impractical. These standards within the
proposed rule paragraph (f) are intended to provide guidance concerning
the use of this exemption which is intended to provide the Exchange
with the ability to utilize the exemption for the maintenance of a fair
and orderly market and the protection of investors and is in the public
interest. The Exchange believes that the exemption is consistent with
the Act because it would allow the Exchange's Chief Executive Officer
or President (or senior-level designee) to act in certain situations
which comply with the guidance within paragraph (f) which is intended
to protect investors and the general public. Although Cboe's rule
grants an exemption to the President (or senior-level designee),\26\
the Exchange has elected to parallel Phlx and grant an exemption to the
Exchange's Chief Executive Officer or President (or senior-level
designee), who are similarly situated within BOX's organization as
senior-level individuals.\27\
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\26\ See Cboe Rule 6.7(f).
\27\ See Phlx Section 5(f).
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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.
The Exchange does not believe the proposed rule change will impose
an undue burden on intra-market competition as the transfer procedure
may be utilized by any Participant or person associated with the
Participant and the rule will apply uniformly to all Participants and
associated persons. Use of the transfer procedure is voluntary, and all
Participants or associated persons may use the procedure to transfer
positions as long as the criteria in the proposed rule are satisfied.
With the establishment of the proposed rule, a Participant or person(s)
associated with a Participant that experiences limited permissible,
non-recurring events would have an efficient and effective means to
transfer positions in these situations. The Exchange believes the
proposed rule change regarding permissible transfer prices provides
market participants with flexibility to determine the price appropriate
for their business, which determine prices in accordance with normal
accounting practices and removes impediments to a free and open market.
The Exchange does not believe the proposed notice and record
requirements are unduly burdensome to market participants. The Exchange
believes the proposed requirements are reasonable and will ensure the
Exchange is aware of transfers and would be able to monitor and review
the transfers to ensure the transfer falls within the proposed rule.
Adopting an exemption, similar to Phlx Section 5(f), to permit the
Exchange's Chief Executive Officer or President (or senior-level
designee) to grant an exemption, in addition to the limited
circumstances of the proposed rule, in his or her judgment, does not
impose an undue burden on competition. Such an exemption would only be
applied when in the judgment of the Chief Executive Officer, or
President or his or her designee, the off-floor transfer is necessary
or appropriate for the maintenance of a fair and orderly market and the
protection of investors and is in the public interest, including due to
unusual or extraordinary circumstances, such as the possibility that
the market value of a Person's positions would be compromised by having
to comply with the requirement to trade on the Exchange pursuant to the
normal auction process or when market conditions make trading on the
Exchange impractical.
The Exchange does not believe the proposed rule change will impose
an undue burden on inter-market competition. The proposed position
transfer procedure is not intended to be a competitive trading tool.
The proposed rule change is an accommodative trading tool because it
permits, in limited circumstances, a transfer to facilitate non-
routine, nonrecurring movements of positions. As provided for in
proposed paragraph (g), it would not be used repeatedly or routinely in
circumvention of the normal auction market process. In addition,
proposed paragraph (f) provides within the rule text that the
Exchange's Chief Executive Officer or President (or senior-level
designee) may in his or her judgment allow a transfer for the
maintenance of a fair and orderly market and the protection of
investors and is in the public interest. The Exchange believes that the
exemption does not impose an undue burden on competition as the
Exchange's Chief Executive Officer or President (or senior-level
designee) would apply the exemption consistent with the guidance laid
out in the proposed rule text. Additionally, as discussed above, the
proposed rule change is similar to Cboe Rule 6.7 and Phlx Options 6,
Section 5 rule text, therefore, the Exchange believes having similar
rules related to transfer positions to those of other options exchanges
will reduce the administrative burden on market participants of
determining whether their transfers complies with multiple sets of
rules.
As such, 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.
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
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 \28\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\29\
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\28\ 15 U.S.C. 78s(b)(3)(A)(iii).
\29\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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 27787]]
A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days from the date of filing. However, Rule
19b-4(f)(6)(iii) \30\ permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange has asked the Commission to waive the
30-day operative delay. The Commission notes that the proposal is
substantively similar to rules of Cboe and Phlx and raises no new or
novel issues.\31\ The Commission therefore believes that waiver of the
30-day operative delay is consistent with the protection of investors
and the public interest and hereby waives the 30-day operative delay
and designates the proposed rule change operative upon filing.\32\
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\30\ 17 CFR 240.19b-4(f)(6)(iii).
\31\ See CBOE Rule 6.7 and NASDAQ PHLX Options 6; Section 5.
\32\ 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 (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-BOX-2020-09 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-2020-09. 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 the 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-2020-09 and should be submitted on
or before June 1, 2020.
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\33\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-09954 Filed 5-8-20; 8:45 am]
BILLING CODE 8011-01-P