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Notice2025-13373

Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Tier 4 and Tier 5 Percentage Thresholds of National Customer Volume in Multiply-Listed Options Classes in Section IV.A.1 (Tiered Volume Rebate for Non-Auction Transactions) of the Fee Schedule for Trading on the BOX Options Market LLC Facility

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Published

July 17, 2025

Issuing agencies

Securities and Exchange Commission

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<title>Federal Register, Volume 90 Issue 135 (Thursday, July 17, 2025)</title>
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[Federal Register Volume 90, Number 135 (Thursday, July 17, 2025)]
[Notices]
[Pages 33446-33449]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-13373]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-103450; File No. SR-BOX-2025-19]

Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the Tier
4 and Tier 5 Percentage Thresholds of National Customer Volume in
Multiply-Listed Options Classes in Section IV.A.1 (Tiered Volume Rebate
for Non-Auction Transactions) of the Fee Schedule for Trading on the
BOX Options Market LLC Facility

July 14, 2025.
Pursuant to Section 19(b)(1) under the Securities Exchange Act of
1934 (the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby
given that on July 1, 2025, BOX Exchange LLC (the ``Exchange'') filed
with the Securities and Exchange Commission (the ``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Exchange filed the proposed
rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,\3\ and Rule
19b-4(f)(2) thereunder,\4\ which renders the proposal effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

The Exchange is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend the Fee Schedule on
the BOX Options Market LLC (``BOX'') options facility. The Exchange
proposes to amend Tier 4 and Tier 5 Percentage Thresholds of National
Customer Volume in Multiply-Listed Options Classes \5\ in Section
IV.A.1 (Tiered Volume Rebate for Non-Auction Transactions) of the Fee
Schedule. Specifically, the Exchange proposes to narrow Tier 4 from
0.750%-0.999% to 0.750%-0.899% and to lower Tier 5 from 1.000% and
Above to 0.900% and Above. 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="https://rules.boxexchange.com/rulefilings">https://rules.boxexchange.com/rulefilings</a>.
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\5\ National Customer volume in multiply-listed options is
obtained directly from The Options Clearing Corporation (``OCC'')
and includes transactions that are cleared by the OCC in the
``customer'' range. Stated differently, Customer volume is volume
obtained from the OCC that is neither Firm nor Market Maker volume.
See, e.g., <a href="https://www.theocc.com/market-data/market-data-reports/volume-and-openinterest/volume-by-account-type">https://www.theocc.com/market-data/market-data-reports/volume-and-openinterest/volume-by-account-type</a>. The Exchange
believes generally that volume designated as Public Customer and
Professional Customer on BOX is included in Customer volume by the
OCC. The Exchange also believes generally that volume designated as
Broker Dealer volume on BOX may be included in either Customer or
Firm volume by the OCC.
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II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
The Exchange proposes to amend the Tier 4 and Tier 5 Percentage
Thresholds for Percentage National Customer Volume in Multiply-Listed
Options Classes in Section IV.A.1 (Tiered Volume Rebate for Non-Auction
Transactions) of the Fee Schedule. Specifically, the Exchange proposes
to narrow Tier 4 from 0.750%-0.999% to 0.750%-0.899% and to lower Tier
5 from 1.000% and Above to 0.900% and Above. Currently, Participants
receive a per contract rebate for Public Customer \6\ electronic Non-
Auction Transactions according to the Tier achieved by the Participant
as provided in the Percentage Thresholds of National Customer Volume in
Multiply-Listed Options Classes table in Section IV.A.1 of the BOX Fee
Schedule.\7\ Percentage thresholds are calculated on a monthly basis by
totaling the Participant's Public Customer executed Auction and Non-
Auction transaction volume on BOX, relative to the total national
customer volume in multiply-listed options classes.\8\
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\6\ ``Public Customer'' means a person that is not a broker or
dealer in securities and ``Public Customer Order'' means an order
for the account of a Public Customer. See Rules 100(a)(53) and (54).
\7\ The Exchange notes that Public Customers do not initiate
transactions on BOX directly. BOX Participants initiate Electronic
Non-Auction Transactions on the behalf of Public Customers and are
assessed fees or provided rebates by the Exchange.
\8\ The Exchange notes that the percentage thresholds of
national Customer volume in multiply listed options are based on the
percentage of the Participant's Public Customer volume on BOX
relative to the account type's overall total industry equity and ETF
option volume. The OCC provides volume information in two product
categories: equity and ETF volume and index volume, and the
information can be filtered to show only Customer, Firm, or Market
Maker account type. Equity and ETF Customer volume numbers are
available directly from the OCC each morning, or may be transmitted,
upon request, free of charge from the Exchange. Equity and ETF
Customer volume is a widely followed benchmark of industry volume
and is indicative of industry market share. Total Industry equity
and ETF option volume is comprised of those equity and ETF option
contracts that clear in a respective account type at the OCC
(Customer, Market Maker and Firm), including Exchange-Traded Fund
Shares, Trust Issued Receipts, Partnership Units, and Index-Linked
Securities such as Exchange-Traded Notes, and does not include
contracts overlying a security other than an equity or ETF security.
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The Exchange notes that Non-Auction Transactions where a Public
Customer order interacts with another Public Customer order are exempt
from a per contract rebate. However, these transactions still count
toward the Participant's monthly Public Customer volume on BOX. The
current thresholds and rebates are as follows:

[[Page 33447]]

3.............. 0.500%-0.749%.... (0.10) (0.20) (0.30) (0.32) (0.10) 0.00
4.............. 0.750%-0.999%.... (0.20) (0.22) (0.45) (0.35) (0.20) 0.00
5.............. 1.000% and Above. (0.27) (0.27) (0.60) (0.40) (0.27) (0.11)
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The Exchange proposes to narrow Tier 4 from 0.750%-0.999% to
0.750%-0.899% and to lower Tier 5 from 1.000% and Above to 0.900% and
Above. The proposed thresholds and rebates will be as follows:

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Percentage Per contract rebate
thresholds of -----------------------------------------------------------------------------
national customer Penny interval classes Non-penny interval SPY, QQQ, and IWM
Tier volume in -------------------------- classes -------------------------
multiply-listed --------------------------
options classes Maker Taker Maker Taker
(monthly) Maker Taker
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1.............. 0.000%-0.249%.... $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
2.............. 0.250%-0.499%.... (0.05) (0.15) (0.15) (0.27) (0.05) 0.00
3.............. 0.500%-0.749%.... (0.10) (0.20) (0.30) (0.32) (0.10) 0.00
4.............. 0.750%-0.899%.... (0.20) (0.22) (0.45) (0.35) (0.20) 0.00
5.............. 0.900% and Above. (0.27) (0.27) (0.60) (0.40) (0.27) (0.11)
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The proposed changes to Tier 4 and Tier 5 are designed to make Tier
5 easier to reach by lowering the volume-based criteria. The Exchange
believes that by lowering the percentage threshold for Tier 5, it will
encourage Participants to increase their Public Customer order flow as
a means to achieve the higher rebates in Tier 5. The Exchange notes
that it is not proposing any changes to the corresponding rebates in
Tiers 4 and 5 and notes that it believes the current rates remain
commensurate with each tier's criteria, even as amended. The Exchange
also notes that it is not proposing any changes to existing Tiers 1, 2,
or 3. The Exchange believes that the Public Customer Tiered Volume
Rebate for Non-Auction Transactions, as amended, continues to provide
Participants on the Exchange with additional opportunities to receive
rebates for Public Customer electronic Non-Auction Transactions.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act, in general, and Section
6(b)(4) and 6(b)(5) of the Act,\9\ 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)(4) and (5).
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The Exchange notes that it operates in a highly competitive
environment. Indeed, there are currently 18 registered options
exchanges that trade options. Based on publicly available information,
no single options exchange has more than 17% of the U.S. options market
share. More specifically, in February 2025, BOX had 7.18% market share
of options contracts traded, 7.46% in March 2025, and 7.06% in April
2025.\10\ 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.'' \11\ As stated
above, the Exchange operates in a highly competitive market in which
market participants can readily direct order flow to competing venues
if they deem fee levels at a particular venue to be excessive or
incentives to be insufficient. The proposed fee changes reflect a
competitive pricing structure designed to incentivize Participants to
send Public Customer Auction and Non-Auction order flow to BOX.
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\10\ See <a href="https://www.cboe.com/us/options/market_share/market/2025-02-28/">https://www.cboe.com/us/options/market_share/market/2025-02-28/</a>, <a href="https://www.cboe.com/us/options/market_share/market/2025-03-31/">https://www.cboe.com/us/options/market_share/market/2025-03-31/</a> and <a href="https://www.cboe.com/us/options/market_share/market/2025-04-30/">https://www.cboe.com/us/options/market_share/market/2025-04-30/</a> (Month-to-Date (``MTD'') % of Mkt as of May 28, 2025).
\11\ 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 it is reasonable, equitable and not unfairly
discriminatory to adjust certain Percentage Thresholds of National
Customer Volume in Multiply-Listed Options Classes. These volume-based
thresholds and applicable rebates are designed to incentivize
Participants to direct Public Customer order flow to BOX to obtain the
benefit of the rebate, which may in turn benefit all market
participants by increasing liquidity on BOX. The Exchange is proposing
to narrow Tier 4 from 0.750%-0.999% to 0.750%-0.899% and to lower Tier
5 from 1.000% and Above to 0.900% and Above. The Exchange believes that
this change is reasonable as it is designed to make Tier 5 easier to
reach by lowering the volume-based criteria. The Exchange believes that
by lowering the percentage threshold for Tier 5, it will encourage
Participants to increase their Public Customer order flow as a means to
achieve the higher rebates in Tier 5. Further, the Exchange notes that
the proposed change is not designed to benefit one firm in particular,
but, as discussed herein, is designed to further incentivize order flow
to BOX. The Exchange believes these Tiers, as amended, will continue to
incentivize Participants to send their Public Customer order flow to
BOX, which may result in increased trading opportunities and executions
on BOX to the benefit of all market participants.\12\
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\12\ The Exchange notes that BOX Participants collect rebates on
behalf of Public Customers and have independent fee arrangements
with such Public Customers.
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The Exchange believes that the proposed changes to the thresholds
in Tiers 4 and 5 are equitable and not unfairly discriminatory as they
are available to all Participants submitting Public Customer Orders and
Participants may choose whether or not to take advantage of the
percentage thresholds and their applicable rebates. The securities
markets generally, and BOX in particular, have historically aimed to
improve markets for investors

[[Page 33448]]

and develop various features within the market structure for Public
Customer benefit. Accordingly, the Exchange believes that providing a
rebate structure for Public Customers is appropriate and not unfairly
discriminatory. The Exchange believes that the proposed percentage
thresholds and their applicable rebates will continue to help attract a
high level of Public Customer order flow to BOX, which will ultimately
benefit all Participants trading on BOX.
Additionally, the Exchange believes it promotes the best interests
of investors to have lower transaction costs for Public Customer
orders, and offering additional incentives for Public Customer Auction
and Non-Auction transactions will attract Public Customer order flow to
BOX. The Exchange believes further that Public Customer order flow is
attractive to other Participants and that greater opportunities to
interact with Public Customer order flow will benefit other
Participants. If the proposal succeeds in attracting both Auction and
Non-Auction Public Customer order flow, all market participants benefit
from the increased trading opportunities. Additional order flow also
facilitates tighter spreads, thus compounding the potential benefits.
As such, the industry in general and the Exchange in particular have
historically created fee structures to benefit Public Customers because
increased Public Customer order flow benefits all market participants.
Accordingly, the Exchange believes that providing additional incentives
for Public Customers orders is appropriate and not unfairly
discriminatory.
The Exchange believes that the ever-shifting market share among the
exchanges from month to month demonstrates that market participants can
shift order flow and discontinue or reduce use of certain categories of
products in response to fee changes. Accordingly, competitive forces
constrain options exchange transaction fees. Stated differently,
changes to exchange transaction fees can have a direct effect on the
ability of an exchange to compete for order flow. The Exchange believes
the proposed changes are a reasonable attempt to effectively compete
for Participant's Public Customer orders. The Exchange believes that
the proposed changes may incentivize Participants to send Public
Customer order flow and, in turn, may make BOX a more competitive venue
for order execution to the benefit of all market participants. As such,
the Exchange believes the proposed changes are consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange believes the proposed changes to Tiers 4 and 5 in
Section IV.A.1 of the BOX Fee Schedule will not impose an undue burden
on intramarket competition among various BOX Participants because the
Exchange believes that its proposal will not place any category of
market participant at a competitive disadvantage. The Exchange believes
that the proposed changes will encourage Participants to send
additional Public Customer Auction and Non-Auction order flow to BOX
for execution in order to lower their costs. The Exchange believes it
promotes the best interests of investors to have lower transaction
costs for Public Customer orders, and offering additional incentives
for Public Customer Auction and Non-Auction transactions will attract
Public Customer order flow to BOX. The Exchange believes further that
Public Customer order flow is attractive to other Participants and that
greater opportunities to interact with Public Customer order flow will
benefit other Participants. If the proposal succeeds in attracting both
Auction and Non-Auction Public Customer order flow, all market
participants benefit from the increased trading opportunities.
Additional order flow also facilitates tighter spreads, thus
compounding the potential benefits. As such, the industry in general
and the Exchange in particular have historically created fee structures
to benefit Public Customers because increased Public Customer order
flow benefits all market participants. Accordingly, the Exchange
believes that providing additional incentives for Public Customers
orders does not impose an undue burden on intramarket competition.
The Exchange believes the proposal does not impose an undue burden
on intermarket competition because the proposed changes to Tiers 4 and
5 in Section IV.A.1 of the BOX Fee Schedule remain competitive with
other options markets and will offer market participants with another
choice of where to transact its business. The Exchange notes that it
operates in a highly competitive market in which market participants
can readily favor competing venues if they deem fee levels at a
particular venue to be excessive, or rebate opportunities available at
other venues to be more favorable. In such an environment, the Exchange
must continually adjust its fees and rebates to remain competitive with
other exchanges. Because competitors are free to modify their own fees
and rebates in response, and because market participants may readily
adjust their order routing practices, the Exchange believes that the
degree to which fee changes in this market may impose any burden on
competition is extremely limited. For the reasons described above, the
Exchange believes that the proposed rule change will encourage
intermarket competition.

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 \13\ and Rule 19b-4(f)(2)
thereunder,\14\ because it establishes or changes a due, or fee.
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\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
\14\ 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#0775726b622a64686a6a626973744774626429606871"><span class="__cf_email__" data-cfemail="9defe8f1f8b0fef2f0f0f8f3e9eeddeef8feb3faf2eb">[email&#160;protected]</span></a>. Please include
file number SR-BOX-2025-19 on the subject line.

Paper Comments

<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange

[[Page 33449]]

Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-BOX-2025-19. 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-2025-19 and should be
submitted on or before August 7, 2025.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-13373 Filed 7-16-25; 8:45 am]
BILLING CODE 8011-01-P

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