Notice2023-13105
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule for Trading on the BOX Options Market LLC Facility To Offer Ad-Hoc Historical Requests for the Intraday Open-Close Data Report and Adopt Fees for This Data
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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
June 21, 2023
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 88 Issue 118 (Wednesday, June 21, 2023)</title>
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[Federal Register Volume 88, Number 118 (Wednesday, June 21, 2023)]
[Notices]
[Pages 40358-40360]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-13105]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-97723; File No. SR-BOX-2023-16]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee
Schedule for Trading on the BOX Options Market LLC Facility To Offer
Ad-Hoc Historical Requests for the Intraday Open-Close Data Report and
Adopt Fees for This Data
June 14, 2023.
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 June 12, 2023, BOX Exchange LLC (``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 to
amend the Fee Schedule [sic] on the BOX Options Market LLC (``BOX'')
options facility to offer ad-hoc historical requests for the Intraday
Open-Close Data Report and adopt fees for this data. 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://boxexchange.com">http://boxexchange.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 Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange recently adopted a new data product on BOX known as
the Intraday Open-Close Data Report.\5\ When the Exchange established
the Intraday Open-Close Data Report data, it did not include ad-hoc
requests for the Intraday Open-Close historical data. Since
establishing the Intraday Open-Close Data Report, Participants and non-
Participants have expressed interest in ad-hoc historical requests for
the Intraday Open-Close Data Report. As such, the Exchange now proposes
to offer ad-hoc historical requests for the Intraday Open-Close Data
Report and adopt fees for this data. Specifically, the Exchange
proposes to assess a $1,000 fee per request per month for the
historical data.
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\5\ See Securities Exchange Act Release No. 97174 (March 21,
2023), 88 FR 18201 (March 27, 2023) (SR-BOX-2023-09).
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Similar to the ad-hoc requests for the End-of-Day Open Close Data
Report, ad-hoc requests for the Intraday Open-Close Data Report can be
for any number of months beginning with January 2018 for which the data
is available.\6\ The proposed fee will apply to both Participants and
non-Participants. The Exchange notes that another exchange provides
similar data that may be purchased on an ad-hoc basis and is similarly
priced.\7\
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\6\ For example, a Participant or non-Participant that requests
historical Intraday Open-Close Data for the months of January 2018
and February 2018, would be assessed a total of $2,000. Participants
and non-Participants are permitted to make ad-hoc requests for any
number of days within a month for the Intraday Open-Close Data
Report. For example, a Participant or non-Participant may make an
ad-hoc request for the Intraday Open-Close Data Report from May 1st
to May 20th. The accounting will be prorated based on the number of
trading days in the month versus the number of trading days
received. The Participant or non-Participant will be charged for the
request on a prorated basis. The Exchange is proposing to allow ad-
hoc requests for the Intraday Open-Close Data Report for any month
starting January 2018, as this is what is currently offered for End-
of-Day historical data requests. The Exchange notes that it may make
historical data prior to January 2018 available in the future and
that such historical data would be available to all Participants or
non-Participants.
\7\ See Miami International Securities Exchange, LLC (``MIAX'')
Fee Schedule. MIAX assesses $1,000 per request per month for the
Intra-Day Ad-Hoc Request for historical data.
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By way of background, the Exchange currently offers the Intraday
Open-Close Data Report to Participants and non-Participants, which is a
volume summary file for trading activity on BOX. The Exchange notes
that the file contains proprietary BOX trade data and does not include
trade data from any other exchanges. It is also a historical data
product and not a real time data feed. The Intraday Open-Close Data
Report is produced and updated every 10 minutes during the trading day.
Data is captured in ``snapshots'' taken every 10 minutes throughout the
trading day and available to subscribers within five minutes of the
conclusion of each 10-minute period. Each update will represent
combined data captured from the current ``snapshot'' and all previous
``snapshots'' and thus will provide open-close data on an aggregate
basis. The Intraday Open-Close Data Report aggregates the volume by
origin (Public Customer, Professional Customer, Broker Dealer, and
Market Maker), buying/selling, and opening/closing criteria. Public
Customer and Professional Customer volume is further broken down into
trade size buckets (less than 100 contracts, 100-199 contracts, greater
than 199 contracts). Ad-hoc requests for Intraday Open-Close Data
Report will provide the same information for a requested historical
time period for any number of months beginning with January 2018.\8\
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\8\ The historical monthly reports of the Intraday Open-Close
Data Report will contain all series in an underlying security if the
security had volume on BOX during that month. The Intraday Open-
Close Data Report file format specifications can be found at
<a href="http://www.boxoptions.com">www.boxoptions.com</a>.
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This product is offered to Participants on a completely voluntary
basis in that the Exchange is not required by any rule or regulation to
make this data available and potential subscribers may purchase the
Intraday Open-Close Data Report or
[[Page 40359]]
make ad-hoc requests for the Intraday Open-Close Data Report only if
they voluntarily choose to do so. It is a business decision of each
potential subscriber whether to subscribe to the Intraday Open-Close
Data Report and/or make ad-hoc requests for the Intraday Open-Close
Data Report.
The Exchange also proposes to make a clarifying change to the End-
of-Day Ad-hoc Request (historical data) section of the BOX Fee
Schedule. Specifically, the Exchange proposes to add that mid-month
requests for End-of Day historical data will be prorated based on the
number of trading days in the month versus the number of trading days
received. The Exchange notes that it is not proposing to change an
existing practice, as this is how mid-month requests for End-of-Day
historical data are currently processed. The Exchange believes this
will add transparency and clarity to the Fee Schedule with respect to
how fees are assessed for End-of-Day Ad-hoc Requests.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of section 6(b) of the Act,\9\ in general, and section
6(b)(4) and 6(b)(5) of the Act,\10\ 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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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange also believes that its proposed changes to its Fee
Schedule concerning fees for the Intraday Ad-hoc Open-Close Data Report
is consistent with section 6(b) of the Act,\11\ in general, and
furthers the objectives of section 6(b)(4) of the Act,\12\ in
particular, in that it is an equitable allocation of dues, fees and
other charges among its Participants and other recipients of Exchange
data.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4).
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In adopting Regulation NMS, the Commission granted self-regulatory
organizations (``SROs'') and broker-dealers increased authority and
flexibility to offer new and unique market data to the public. It was
believed that this authority would expand the amount of data available
to consumers, and also spur innovation and competition for the
provision of market data. Particularly, the Intraday Open-Close Data
Report further broadens the availability of U.S. option market data to
investors consistent with the principles of Regulation NMS. The data
product also promotes increased transparency through the dissemination
of the Intraday Ad-hoc Open-Close Data Report. Particularly,
information regarding opening and closing activity across different
option series during the trading day may indicate investor sentiment,
which may allow market participants to make better informed trading
decisions throughout the day. Subscribers to the data may also be able
to enhance their ability to analyze option trade and volume data and
create and test trading models and analytical strategies. The Exchange
believes the Intraday Open-Close Data Report provides a valuable tool
that subscribers can use to gain comprehensive insight into the trading
activity in a particular series, but also emphasizes such data is not
necessary for trading and completely optional. Moreover, another
exchange offers a similar data product.\13\ This proposal seeks to
respond to Participant requests for ad-hoc Intraday Open-Close data and
adopt a fee of $1,000 per request per month for such requests.
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\13\ See supra note 7.
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The Exchange operates in a highly competitive environment. Indeed,
there are currently 16 registered options exchanges that trade options.
Based on publicly available information, for the month of March 2023,
no single options exchange had more than approximately 16% of the
equity options market share and the Exchange represented only
approximately 6.19% of the equity options market share for the month of
May 2023.\14\ The Commission has repeatedly expressed its preference
for competition over regulatory intervention in determining prices,
products, and services in the securities markets. Particularly, in
Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \15\ Making
similar data products available to market participants fosters
competition in the marketplace, and constrains the ability of exchanges
to charge supra-competitive fees. In the event that a market
participant views one exchange's data product as more or less
attractive than the competition they can and do switch between similar
products.
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\14\ See Cboe Global Markets U.S. Options Market Month-to-Date
Volume Summary (May 5, 2023), available at <a href="https://markets.cboe.com/us/options/market_statistics/">https://markets.cboe.com/us/options/market_statistics/</a>.
\15\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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The Exchange believes the proposed fee is reasonable as the
proposed fee is similar to a fee currently assessed by another exchange
that provides a similar data product.\16\ Further, the Exchange notes
that an ad-hoc request for the Intraday Day Open-Close Data Report is
entirely optional and if a market participant views another exchange's
data as more attractive than the proposed Intraday Open-Close data
product, then such market participant can choose not to purchase BOX's
data and instead purchase another exchange's data product, which offer
similar data points, albeit based on that other market's trading
activity.
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\16\ See supra note 7.
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The Exchange also believes that its proposal to respond to market
participant requests and adopt fees for ad-hoc requests for the
Intraday Open-Close Data Report is reasonable as this would further
support the current offering of the Intraday Open-Close Data Report
that is designed to aid investors by providing insight into trading on
BOX. The proposed ad-hoc requests for Intraday Open-Close Data Report
would provide interested options market participants with valuable
information about opening and closing transactions executed on BOX,
similar to other historical trade data products offered by competing
options exchanges. In turn, this data would assist market participants
in gauging investor sentiment and trading activity, resulting in
potentially better-informed trading decisions. As noted above, users
may also use such data to create and test trading models and analytical
strategies.
Providing market data, such as the Intraday Open-Close Data Report,
is also a means by which exchanges compete to attract business.
Subscribers that receive the Intraday Open-Close Data Report in
response to an ad hoc request, may use such data to evaluate the
usefulness of BOX's Intraday Open-Close Data Report and decide, based
on that data, whether to subscribe to the Intraday Open-Close Data
Report on a monthly basis. To the extent that the Exchange is
successful in attracting subscribers for the Intraday Open-Close Data
Report through this proposal, it may earn trading revenues and further
enhance the value of its data products. If the market deems the
proposal to be unfair or inequitable, firms can diminish or discontinue
their use of the data and/or avail themselves
[[Page 40360]]
of similar products offered by other exchanges.\17\
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\17\ Id.
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The Exchange believes the proposed fee is equitable and not
unfairly discriminatory as the fee would apply equally to all users who
choose to purchase the historical data. The Exchange's proposed fee
would not differentiate between subscribers that purchase the ad-hoc
Intraday Open-Close Data Report and is set at a modest level that would
allow any interested Participant or non-Participant to purchase such
data based on their business needs.
The Exchange reiterates that the decision as to whether or not to
purchase the ad-hoc Intraday Open-Close Data Report is entirely
optional for all potential subscribers. Indeed, no market participant
is required to purchase the ad-hoc Intraday Open-Close Data Report, and
the Exchange is not required to make the ad-hoc Intraday Open-Close
Data Report available to all investors. Rather, the Exchange is
voluntarily making the ad-hoc Intraday Open-Close Data Report
available, as requested by customers, and market participants may
choose to receive (and pay for) this data based on their own business
needs. Potential purchasers may request the data at any time if they
believe it to be valuable or may decline to purchase such data.
Lastly, the Exchange believes that the proposed change to the End-
of-Day Ad-Hoc request is reasonable and appropriate as the added
language will provide clarity and transparency with respect to mid-
month requests for this End-of-Day Ad-hoc Requests.
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. Rather, the Exchange believes
that the proposal will promote competition by permitting the Exchange
to sell a data product similar to those offered by another competitor
options exchange.\18\ The Exchange also does not believe the proposed
fees would cause any unnecessary or in appropriate burden on
intermarket competition as other exchanges are free to introduce their
own comparable data product and lower their prices to better compete
with the Exchange's offering. The Exchange does not believe the
proposed rule change would cause any unnecessary or inappropriate
burden on intramarket competition. Particularly, the proposed fee
applies uniformly to any purchaser, in that it does not differentiate
between subscribers that purchase Intraday Open-Close Data Report. The
proposed fees are set at a modest level that would allow any interested
Participant or non-Participant to purchase such data based on their
business needs.
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\18\ Id.
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Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues. In such an environment, the Exchange must continually
review, and consider adjusting, its fees to remain competitive with
other exchanges. For the reasons described above, the Exchange believes
that the proposed rule change reflects this competitive environment.
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 \19\ and Rule 19b-4(f)(2)
thereunder,\20\ because it establishes or changes a due, or fee.
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\19\ 15 U.S.C. 78s(b)(3)(A)(ii).
\20\ 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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#aad8dfc6cf87c9c5c7c7cfc4ded9ead9cfc984cdc5dc"><span class="__cf_email__" data-cfemail="fe8c8b929bd39d9193939b908a8dbe8d9b9dd0999188">[email protected]</span></a>. Please include
file number SR-BOX-2023-16 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-2023-16. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-BOX-2023-16 and should be
submitted on or before July 12, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-13105 Filed 6-20-23; 8:45 am]
BILLING CODE 8011-01-P
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