Notice2022-07183
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt BOX Rule 7350 (Reports and Market Data Products), Move Rule 7130(a)(2) Detailing the High Speed Vendor Feed to Proposed Rule 7350, and Adopt Rule 7350(b) (Liquidity Taker Event Report)
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
April 6, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 66 (Wednesday, April 6, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 66 (Wednesday, April 6, 2022)]
[Notices]
[Pages 19985-19990]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-07183]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-94563; File No. SR-BOX-2022-10]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Adopt BOX Rule
7350 (Reports and Market Data Products), Move Rule 7130(a)(2) Detailing
the High Speed Vendor Feed to Proposed Rule 7350, and Adopt Rule
7350(b) (Liquidity Taker Event Report)
March 31, 2022.
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 March 18, 2022, BOX Exchange LLC (``BOX'' or ``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 Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
[[Page 19986]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to proposes to adopt BOX Rule 7350 (Reports
and Market Data Products), move Rule 7130(a)(2) which details High
Speed Vendor Feed (``HSVF'') to proposed Rule 7350, and adopt Rule
7350(b) (Liquidity Taker Event Report). 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 <a href="http://boxoptions.com">http://boxoptions.com</a>.
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 adopt BOX Rule 7350 (Reports and Market
Data Products) to provide for the new ``Liquidity Taker Event Report''
(the ``Report''). This is a competitive filing that is based on a
proposal recently submitted by MIAX Emerald, LLC (``MIAX Emerald'') and
approved by the Commission.\3\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 91787 (May 6, 2021),
86 FR 26111 (May 12, 2021) (SR-EMERALD-2021-09) (Order Approving
Proposed Rule Change to Adopt Exchange Rule 531(a), Reports, to
Provide for a New ``Liquidity Taker Event Report''). See also
Securities Exchange Act Release Nos. 92081 (June 1, 2021), 86 FR
30344 (June 7, 2021) (SR-MIAX-2021-21) and 92082 (June 1, 2021), 86
FR 30337 (June 7, 2021) (SR-PEARL-2021-25).
---------------------------------------------------------------------------
The Report is an optional product \4\ available to Participants.\5\
Currently, the Exchange provides real-time prices and analytics in the
marketplace.\6\ The Exchange believes the additional data points
outlined below may help Participants gain a better understanding about
their interactions with the Exchange. The Exchange believes the Report
will provide Participants with a chance to learn more about better
opportunities to access liquidity and receive better execution rates.
The proposed Report will increase transparency and democratize
information so that all firms that subscribe to the Report have access
to the same information on an equal basis, even for firms that do not
have the appropriate resources to generate a similar report regarding
interactions with the Exchange. None of the components of the proposed
Report include real-time market data.
---------------------------------------------------------------------------
\4\ The Exchange intends to submit a separate filing with the
Commission pursuant to Section 19(b)(1) to propose fees for the
Liquidity Taker Event Report.
\5\ The term ``Participant'' means a firm, or organization that
is registered with the Exchange pursuant to the Rule 2000 Series for
purposes of participating in trading on a facility of the Exchange.
See BOX Rule 100(a)(41).
\6\ See current BOX Rule 7130(a)(2).
---------------------------------------------------------------------------
Participants generally use a liquidity accessing order if there is
a high probability that it will execute against an order resting on the
BOX Book.\7\ The proposed Report would identify by how much time an
order that may have been marketable missed an execution. The proposed
Report will provide greater visibility into the missed trading
execution, which will allow Participants to optimize their models and
trading patterns to yield better execution results.
---------------------------------------------------------------------------
\7\ The term ``BOX Book'' means the electronic book of orders on
each single option series maintained by the BOX Trading Host. See
BOX Rule 100(a)(10).
---------------------------------------------------------------------------
The proposed Report will be a Participant-specific report and will
help Participants to better understand by how much time a particular
order missed executing against a specific resting order, thus allowing
that Participant to determine whether it wants to invest in the
necessary resources and technology to mitigate missed executions
against certain resting orders on the BOX Book. For example,
Participant A submits an order that is posted to the BOX Book and then
Participant B enters a marketable order to execute against Participant
A's resting order. Immediately thereafter, Participant C sends a
marketable order to execute against Participant A's resting order.
Because Participant B's order is received by the Exchange before
Participant C's order, Participant B's order executes against
Participant A's resting order. The proposed Report would provide
Participant C the data points necessary for that firm to calculate by
how much time they missed executing against Participant A's resting
order. The Exchange proposes to provide the Report on a T+1 basis. As
further described below, the Report will be specific and tailored to
the Participant that is subscribed to the Report and any data included
in the Report that relates to a Participant other than the Participant
receiving the Report will be anonymized.
The Exchange proposes to provide the Report in response to
Participant demand for data concerning the timeliness of their incoming
orders and executions against resting orders. The purpose of the Report
is to provide Participants the necessary data in a standardized format
on a T+1 basis to those that subscribe to the Report on an equal basis.
Proposed Rule 7350(b) would provide that the Report is a daily
report that provides a Participant (``Recipient Participant'') with its
liquidity response time details for executions of an order resting on
the BOX Book, where that Recipient Participant attempted to execute
against such resting order within a certain timeframe.
Report Content
Paragraph (b)(1) of Rule 7350 would describe the content of the
Report and delineate which information would be provided regarding the
resting order,\8\ the response that successfully executed against the
resting order, and the response submitted by the Recipient Participant
that missed executing against the resting order. It is important to
note that the content of the Report will be specific to the Recipient
Participant and the Report will not include any information related to
any Participant other than the Recipient Participant. The Exchange will
restrict all other market participants, including the Recipient
Participant, from receiving another market participant's data.
---------------------------------------------------------------------------
\8\ Only displayed orders will be included in the Report. The
Exchange notes that it does not currently offer any non-displayed
orders types on its options trading platform.
---------------------------------------------------------------------------
Resting Order Information. Rule 7350(b)(1)(i) would provide that
the following information would be included in the Report regarding the
resting order: (A) The time the resting order was received by the
Exchange; \9\ (B) symbol; (C) order ID, which is a unique reference
number assigned to a new order at the time of receipt; (D) whether the
Recipient Participant is an Affiliate \10\ of the Participant that
[[Page 19987]]
entered the resting order; \11\ (E) whether the resting order is from a
Public Customer \12\ or non-Public Customer; \13\ (F) side (buy or
sell); and (G) displayed price and size of the resting order.\14\
---------------------------------------------------------------------------
\9\ The time the Exchange received the resting order would be in
nanoseconds and is the time the resting order was received by the
Exchange's System.
\10\ The term ``affiliate'' of or person ``affiliated with''
another person means a person who, directly, or indirectly,
controls, is controlled by, or is under common control with, such
other person. See BOX Rule 100(a)(1).
\11\ The Report will simply indicate whether the Recipient
Participant is an Affiliate of the Participant that entered the
resting order and not include any other information that may
indicate the identity of the Participant that entered the resting
order.
\12\ ``Public Customer'' means a person that is not a broker or
dealer in securities. See BOX Rule 100(a)(52).
\13\ A non-Public Customer is a Professional Customer, broker
dealer or Market Maker on BOX. The Exchange notes that the
information in proposed BOX Rule 7350(b)(1)(i)(E) differs slightly
from the information provided in MIAX Emerald's Liquidity Taker
Event Report due to the information already provided in the HSVF.
The MIAX Emerald Liquidity Taker Event Report provides the origin
type (e.g., Public Customer, Market Maker, etc.) of the resting
order, information that is also available through MIAX Emerald's
proprietary data feeds. See e.g., MIAX Order Feed Interface
Specification available at <a href="https://www.miaxoptions.com/sites/default/files/pagefiles/MIAX_Emerald_MIAX_Options_Order_Feed_MOR_v1.0a_re.pdf">https://www.miaxoptions.com/sites/default/files/pagefiles/MIAX_Emerald_MIAX_Options_Order_Feed_MOR_v1.0a_re.pdf</a>. In
comparison, the BOX HSVF only provides Public Customer bid/ask
volume at the best limit. While the HSVF does not provide
information on non-Public Customer origin types, if an order from a
Public Customer is not present, then the volume reported on the HSVF
will be 0 (zero), which in turn allows market participants to deduce
that the other volume executed was from non-Public Customers.
Further, the Exchange notes that the HSVF disseminates all resting
orders executable on BOX and thus the information to be provided in
the proposed Report can be inferred from information already
provided in the BOX HSVF. As such, the proposed Liquidity Taker
Event Report will conform to the information already available in
the BOX HSVF.
\14\ The Exchange notes that the displayed price and size are
also disseminated via the Exchange's proprietary data feed and the
Options Price Reporting Authority (``OPRA''). The Exchange also
notes that the displayed price of the resting order may be different
than the ultimate execution price. This may occur when a resting
order is displayed and ranked at different prices upon entry to
avoid a locked or crossed market.
---------------------------------------------------------------------------
Execution Information. Rule 7350(b)(1)(ii) would provide that the
following information would be included in the Report regarding the
execution of the resting order: (A) The BBO \15\ at the time of
execution; \16\ (B) the NBBO \17\ at the time of execution; \18\ (C)
the time first response that executes against the resting order was
received by the Exchange and the size of the execution and type of the
response; \19\ (D) the time difference between the time the resting
order was received by the Exchange and the time the first response that
executes against the resting order was received by the Exchange; \20\
and (E) whether the response was entered by the Recipient Participant.
If the resting order executes against multiple contra-side responses,
only the BBO and NBBO at the time of the execution against the first
response will be included.
---------------------------------------------------------------------------
\15\ The term ``BBO'' means the best bid or offer on the
Exchange.
\16\ Exchange Rule 7350(b)(1)(ii)(A) would further provide that
if the resting order executes against multiple contra-side
responses, only the BBO at the time of the execution against the
first response will be included.
\17\ The term ``NBBO'' means the national best bid or offer,
each as calculated by BOX based on market information received by
BOX from OPRA. See BOX Rule 100(a)(34).
\18\ Exchange Rule 7350(b)(1)(ii)(B) would further provide that
if the resting order executes against multiple contra-side
responses, only the NBBO at the time of the execution against the
first response will be included.
\19\ The time the Exchange received the response order would be
in nanoseconds and would be the time the response was received by
the Exchange's network, which is before the time the response would
be received by the System.
\20\ The time difference would be provided in nanoseconds.
---------------------------------------------------------------------------
Recipient Participant's Response Information. Rule 7350(b)(1)(iii)
would provide that the following information would be included in the
Report regarding response(s) sent by the Recipient Participant: (A)
Recipient Participant ID; (B) the time difference between the time the
first response that executes against the resting order was received by
the Exchange and the time each response sent by the Recipient
Participant was received by the Exchange, regardless of whether it
executed or not; \21\ (C) time difference between the time the resting
order was received by the Exchange and the time the response submitted
by the Recipient Participant was received by the Exchange, regardless
of whether it executed or not; \22\ (D) size and type of each response
submitted by Recipient Participant; and (E) Response ID, which is a
unique reference number attached to the response by the Recipient
Participant.
---------------------------------------------------------------------------
\21\ For purposes of calculating this duration of time, the
Exchange will use the time the resting order and the Recipient
Participant's response(s) is received by the Exchange's network,
both of which would be before the order and response(s) would be
received by the System. This time difference would be provided in
nanoseconds.
\22\ The Exchange notes that this information is not provided in
MIAX Emerald's Liquidity Taker Event Report. However, as discussed
below, Participants can derive this information from information
provided in the Report that is identical to information already
provided in MIAX Emerald's Report. Specifically, Participants can
take the sum of the time difference between the time the resting
order was received by the Exchange and the time the first response
that executes against the resting order was received by the
Exchange, see proposed Rule 7350(b)(1)(ii)(D), and the time
difference between the first response that executes against the
resting order was received by the Exchange and the time of each
response sent by the Recipient Participant, regardless of whether it
executed or not, see proposed Rules 7350(b)(1)(ii)(D) and
7350(b)(1)(iii)(B). By summing these values, the Participant could
derive the time difference between the time the resting order was
received by the Exchange and the time the response submitted by the
Recipient Participant was received by the Exchange, regardless of
whether it executed or not. This time difference would be provided
in nanoseconds. As discussed above, the Exchange believes that
providing this information is reasonable and appropriate as this
data point is being derived from information already provided in the
Report. Further, the Exchange believes providing this additional
information in the Report is reasonable and appropriate as it will
provide greater visibility into the missed trading execution, which
will allow Participants to optimize their models and trading
patterns to yield better execution results.
---------------------------------------------------------------------------
Timeframe for Data Included in Report
Paragraph (a)(2) would provide that the Report would include the
data set forth under Rule 7350(b)(1) described above for executions and
contra-side responses that occurred within 200 microseconds of the time
the resting order was received by the Exchange.
Scope of Data Included in the Report
Paragraph (b)(3) of Rule 7350 would provide that the Report will
only include trading data related to the Recipient Participant and,
subject to the proposed paragraph (4) of Rule 7350(b) described below,
will not include any other Participant's trading data other than that
listed in paragraphs (1)(i) and (ii) of Exchange Rule 7350(b) described
above.
Historical Data
Paragraph (b)(4) of Rule 7350 would specify that the Report will
contain historical data from the prior trading day and will be
available after the end of the trading day, generally on a T+1 basis.
The Exchange also proposes to move Rule 7130(a)(2) to proposed Rule
7350(a). The Exchange believes that moving the details regarding the
High Speed Vendor Feed (``HSVF'') to the proposed Reports and Market
Data Products rule (Rule 7350) will improve the overall readability of
the BOX rules and help prevent investor confusion because all such
market data information will reside in one place in the BOX Rulebook.
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''),\23\ in general, and Section 6(b)(5) of the Act,\24\ 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
[[Page 19988]]
and a national market system, and, in general to protect investors and
the public interest. This proposal is in keeping with those principles
in that it promotes increased transparency through the dissemination of
the optional Report to those interested in subscribing to receive the
data. Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \25\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The proposed Report is similar
to a report previously adopted by MIAX Emerald.\26\
---------------------------------------------------------------------------
\23\ 15 U.S.C. 78f(b).
\24\ 15 U.S.C. 78f(b)(5).
\25\ 15 U.S.C. 78f(b)(5).
\26\ See supra, note 3.
---------------------------------------------------------------------------
The Exchange believes the proposed Report will serve to promote
just and equitable principles of trade, remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general protect investors and the public interest
because it will benefit investors by facilitating their prompt access
to the value-added information that is included in the proposed Report.
The Report will allow Participants to access information regarding
their trading activity that they may utilize to evaluate their own
trading behavior and order interactions.
The proposed Report is designed for Participants that are
interested in gaining insight into latency in connection with orders
that failed to execute against an order resting on the Exchange's Book
by providing those Participants data to analyze by how much time their
order may have missed an execution against a contra-side order resting
on the Book. The Exchange believes that providing this optional latency
data to interested Participants is consistent with facilitating
transactions in securities, removing impediments to and perfecting the
mechanism of a free and open market and a national market system, and,
in general, protecting investors and the public interest because it
provides greater visibility into the latency of Participants' incoming
orders. Participants may use this data to optimize their models and
trading patterns in an effort to yield better execution results by
calculating by how much time their order may have missed an execution.
The proposal is designed to offer latency information in a
systematized way and standardized format to any Participant that
chooses to subscribe to the Report. As a result, the proposal will make
latency information for liquidity-seeking orders available in a more
equalized manner and will increase transparency, particularly for
Recipient Participants that may not have the expertise to generate the
same information on their own. The proposed Report may better enable
Recipient Participants to increase the fill rates for their liquidity-
seeking orders. At the same time, as is also discussed above, the
Report is designed to prevent a Recipient Participant from learning
other Participants' sensitive trading information. The Report would not
be a real-time market data product, as it would provide only historical
trading data for the previous trading day, generally on a T+1 basis. In
addition, the data in the Report regarding incoming orders that failed
to execute would be specific to the Recipient Participant's orders, and
other information in the proposed Report regarding resting orders and
executions would be anonymized if it relates to a Participant other
than the Recipient Participant.
The Report generally contains three buckets of information. The
first two buckets include information about the resting order and the
execution of the resting order. Some of this information is available
from other public sources, such as OPRA and the Exchange's proprietary
data feed, or is similar to information included in a report offered by
another exchange. For example, OPRA provides bids, offers, and
consolidated last sale and quotation information for options trading on
all national securities exchanges, including the Exchange. In addition,
the Exchange offers the High-Speed Vendor Feed (``HSVF'') which
broadcasts BOX's real-time trading and statistical information
(comprised of trades, quotes, market depth, strategies, bulletins,
summaries, auctions, and other statistics).\27\
---------------------------------------------------------------------------
\27\ See current BOX Rule 7130(a)(2).
---------------------------------------------------------------------------
The first bucket of information contained in the Report for the
resting order includes the time the resting order was received by the
Exchange, the symbol, unique reference number assigned at the time of
receipt, side (buy or sell), and the displayed price and size of the
resting order. Further, the symbol, whether the resting order is from a
Public Customer or non-Public Customer,\28\ side (buy or sell), and
displayed price and size are also available either via OPRA or the
Exchange's HSVF.\29\ The first bucket of information also indicates
whether the Recipient Participant is an Affiliate of the Participant
that entered the resting order. This data field will not indicate the
identity of the Participant that entered the resting order and would
simply allow the Recipient Participant to better understand the
scenarios in which it may execute against the orders of its
Affiliates.\30\
---------------------------------------------------------------------------
\28\ See supra note 13. As discussed above, the Exchange notes
that one piece of data in the first bucket of information differs
slightly from the information provided in MIAX Emerald's Liquidity
Taker Event Report due to the information already provided in the
HSVF. Specifically, the MIAX Emerald Liquidity Taker Event Report
provides the origin type (e.g., Public Customer, Market Maker, etc.)
of the resting order, information that is already available through
MIAX Emerald's proprietary data feeds. See e.g., MIAX Order Feed
Interface Specification available at <a href="https://www.miaxoptions.com/sites/default/files/page-files/MIAX_Emerald_MIAX_Options_Order_Feed_MOR_v1.0a_re.pdf">https://www.miaxoptions.com/sites/default/files/page-files/MIAX_Emerald_MIAX_Options_Order_Feed_MOR_v1.0a_re.pdf</a>. In
comparison, the BOX HSVF only provides Public Customer bid/ask
volume at the best limit. While the HSVF does not provide
information on non-Public Customer origin types, if an order from a
Public Customer is not present, then the volume reported on the HSVF
will be 0 (zero), which in turn allows market participants to deduce
that the other volume executed was from non-Public Customers.
Further, the Exchange notes that the HSVF disseminates all resting
orders executable on BOX and thus the information to be provided in
the proposed Report can be inferred from information already
provided in the BOX HSVF. As such, the proposed Liquidity Taker
Event Report will conform to the information already available in
the BOX HSVF.
\29\ See current BOX Rule 7130(a)(2).
\30\ The Exchange surveils to monitor for aberrant behavior
related to internalized trades and identify potential wash sales.
---------------------------------------------------------------------------
The second bucket of information contained in the Report regards
the execution of the resting order and includes the BBO and NBBO at the
time of execution. These data points are also available either via OPRA
or the Exchange's HSVF. The second bucket of information will also
indicate whether the response was entered by the Recipient Participant.
This data point is simply provided as a convenience. If not entered by
the Recipient Participant, this data point will be left blank so as not
to include any identifying information about other Participant
activity. The second bucket of information also includes the size, time
and type of first response that executes against the resting order; as
well as the time difference between the time the resting order and
first response that executes against the resting order are received by
the Exchange. These data points would assist the Recipient Participant
in analyzing by how much time their order may have missed an execution
against a contra-side order resting on the Book.
The third bucket of information is about the Recipient
Participant's response(s) and the time their response(s) is received by
the Exchange. This includes the time difference between the time the
first response that executes against the resting order was received by
the Exchange and the time
[[Page 19989]]
of each response sent by the Recipient Participant, regardless of
whether it executed or not. Also included is the time difference
between the time the resting order was received by the Exchange and the
time the response submitted by the Recipient Participant was received
by the Exchange. As stated above, these data points would assist the
Recipient Participant in analyzing by how much time their order may
have missed an execution against a contra-side order resting on the
Book. This bucket would also include the size and type of each response
submitted by the Recipient Participant, the Recipient Participant
identifier, and a response reference number which is selected by the
Recipient Participant. Each of these data points are unique to the
Recipient Participant and should already be known by Recipient
Participant even if not included in the Report. The Exchange notes one
additional data point included in the third bucket of information that
is not included in the information provided in MIAX Emerald's Report.
Specifically, the Exchange proposes to include the time difference
between the time the resting order was received by the Exchange and the
time the response submitted by the Recipient Participant was received
by the Exchange.\31\ As discussed herein, the Exchange believes that
providing this information is reasonable and appropriate as this data
point is being derived from information already provided in the Report
that is identical to information already provided in the MIAX Emerald
Report. Specifically, Participants can take the sum of the time
difference between the time the resting order was received by the
Exchange and the time the first response that executes against the
resting order was received by the Exchange \32\ and the time difference
between the first response that executes against the resting order was
received by the Exchange and the time of each response sent by the
Recipient Participant, regardless of whether it executed or not.\33\ By
summing these values, the Participant could derive the time difference
between the time the resting order was received by the Exchange and the
time the response submitted by the Recipient Participant was received
by the Exchange, regardless of whether it executed or not. This time
difference would be provided in nanoseconds. Further, the Exchange
believes providing this additional information in the Report is
reasonable and appropriate as it will provide greater visibility into
the missed trading execution, which will allow Participants to optimize
their models and trading patterns to yield better execution results.
---------------------------------------------------------------------------
\31\ See Proposed Rule 7350(b)(1)(iii)(C).
\32\ See proposed Rule 7350(b)(1)(ii)(D).
\33\ See proposed Rule7350(b)(1)(iii)(B).
---------------------------------------------------------------------------
The Exchange proposes to provide the Report on a voluntary basis
and no Participant will be required to subscribe to the Report. The
Exchange notes that there is no rule or regulation that requires the
Exchange to produce, or that a Participant elect to receive, the
Report. It is entirely a business decision of each Participant to
subscribe to the Report. The Exchange proposes to offer the Report as a
convenience to Participants to provide them with additional information
regarding trading activity on the Exchange on a delayed basis after the
close of regular trading hours. A Participant that chooses to subscribe
to the Report may discontinue receiving the Report at any time if that
Participant determines that the information contained in the Report is
no longer useful.
In summary, the proposed Report will help to protect a free and
open market by providing additional data (offered on an optional basis)
to the marketplace and by providing investors with greater choices.\34\
Additionally, the proposal would not permit unfair discrimination
because the proposed Report will be available to all Exchange
Participants.
---------------------------------------------------------------------------
\34\ See Sec. Indus. Fin. Mkts. Ass'n (SIFMA), Initial Decision
Release No. 1015, 2016 SEC LEXIS 2278 (ALJ June 1, 2016) (finding
the existence of vigorous competition with respect to non-core
market data).
---------------------------------------------------------------------------
The Exchange also proposes to move Rule 7130(a)(2) to proposed Rule
7350(a). The Exchange believes that moving the details regarding the
High Speed Vendor Feed (``HSVF'') to the proposed Reports and Market
Data Products rule (Rule 7350) will benefit investors by improving the
overall readability of the BOX rules and help prevent investor
confusion by providing all such market data information in one place
within the BOX Rulebook.
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. In this regard and as indicated
above, the Exchange notes that the rule change is being proposed as a
competitive response to a filing submitted by MIAX Emerald that was
recently approved by the Commission.\35\
---------------------------------------------------------------------------
\35\ See supra, note 3.
---------------------------------------------------------------------------
In this instance, the proposed rule change to offer the optional
Report is in response to Participant interest. The Exchange does not
believe the proposed Report will have an inappropriate burden on intra-
market competition between Recipient Participants and other
Participants who do not receive the Report. As discussed above, the
first two buckets of information included in the Report contain
information about the resting order and the execution of the resting
order, both of which are generally available to Participants that
choose not to receive the Report from other public sources, such as
OPRA and the Exchange's HSVF. The third bucket of information is about
the Recipient Participant's response and the time their response is
received by the Exchange, information which the Recipient Participant
would be able to obtain without receiving the Report.\36\ Additionally,
some Participants may already be able to derive a substantial amount of
the same data that is provided by some of the components based on their
own executions and algorithms.
---------------------------------------------------------------------------
\36\ The Exchange notes that the following two points will also
be included in the Report: (1) Whether the resting order is from a
Public Customer or a non-Public Customer and (2) the time difference
between the time the resting order was received by the Exchange and
the time the response submitted by the Recipient Participant was
received by the Exchange. The Exchange believes providing these data
points will not impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act as this
information may be derived from information already provided in the
Report or information already provided in the Exchange's HSVF. See
supra, notes 13 and 22.
---------------------------------------------------------------------------
In sum, if the proposed Report is unattractive to Participants,
Participants will opt not to receive it. Accordingly, the Exchange does
not believe that the proposed change will impair the ability of
Participants or competing order execution venues to maintain their
competitive standing in the financial markets.
Lastly, the Exchange does not believe that the proposed change to
move the current HSVF rule to the proposed Rule 7350 will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act. This proposed clarifying change has no
competitive purpose and is only intended to improve the overall
readability of the BOX rules and help prevent investor confusion by
relocating market data information to reside in one place in the BOX
Rulebook.
[[Page 19990]]
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
Pursuant to Section 19(b)(3)(A) of the Act \37\ and Rule 19b-
4(f)(6) \38\ thereunder, the Exchange has designated this proposal as
one that effects a change that: (i) Does not significantly affect the
protection of investors or the public interest; (ii) does not impose
any significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.
---------------------------------------------------------------------------
\37\ 15 U.S.C. 78s(b)(3)(A).
\38\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#1c6e697079317f7371717972686f5c6f797f327b736a"><span class="__cf_email__" data-cfemail="2250574e470f414d4f4f474c5651625147410c454d54">[email protected]</span></a>. Please include
File Number SR-BOX-2022-10 on the subject line.
Paper Comments
<bullet> 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-2022-10. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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-2022-10, and should be submitted on
or before April 27, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\39\
---------------------------------------------------------------------------
\39\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-07183 Filed 4-5-22; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on April 6, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.