Notice2025-19016
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Exchange's Bylaws
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
September 30, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 187 (Tuesday, September 30, 2025)</title>
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[Federal Register Volume 90, Number 187 (Tuesday, September 30, 2025)]
[Notices]
[Pages 47012-47017]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-19016]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104087; File No. SR-BOX-2025-25]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the
Exchange's Bylaws
DATES: September 26, 2025.
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 September 23, 2025, BOX Exchange LLC (the ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'' or ``SEC'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to
[[Page 47013]]
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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's Bylaws to: (i) add
the Risk Committee as a required committee, (ii) update the Audit
Committee's responsibilities, (iii) allow the Compensation Committee
flexibility when determining compensation of Directors, and (iv)
clarify the composition of the Compensation and Regulatory Oversight
Committees. The Exchange is also proposing to make non-substantive
clarifying and conforming changes to the Bylaws. The text of the
proposed rule change is available from the principal office of the
Exchange and also on the Exchange's internet website at <a href="https://rules.boxexchange.com/rulefilings">https://rules.boxexchange.com/rulefilings</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 amend the Bylaws to make several changes.
Specifically, the Exchange proposes to: (i) add the Risk Committee as a
required committee, (ii) update the Audit Committee's responsibilities,
(iii) allow the Compensation Committee flexibility when determining
compensation of Directors, and (iv), clarify the composition of the
Compensation and Regulatory Oversight Committees. The Exchange is also
proposing to make non-substantive clarifying and conforming changes to
the Bylaws, as described below. The Board of Directors of the Exchange
determined these amendments to its Bylaws are appropriate and in the
best interest of the Exchange after a regular review, by the Exchange,
of documents governing the operation of the Board of Directors of the
Exchange and its committees.
Risk Committee
Under the Bylaws, the Board may appoint one or more additional
Board Committees for such time as determined by the Board.\3\ Pursuant
to such, the Board established the Risk Committee as a committee of the
Board in 2014.\4\ The Risk Committee assists the Board in fulfilling
its responsibilities with respect to the Exchange's oversight of risk
assessment and risk management processes of the Exchange. This includes
the Exchange's risk structure and governance in the following areas:
(1) identification of risks inherent in the Exchange's business,
strategy, capital structure, and operating plans; (2) processes,
guidelines, policies, and reports for monitoring risks; and (3)
organization and performance of the Exchange's risk management
function. As described below, this also includes oversight of the
Exchange's legal and compliance process. The Risk Committee is
responsible for overseeing all matters of risk as they may arise.
Generally, for example, this could range from cyber and emerging risk
to operational risk. The Risk Committee is composed of a majority of
Non-Industry Directors \5\ and includes one Facility Director.\6\
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\3\ See Bylaws, Article 6, Section 6.01.
\4\ The Risk Committee has been operational since 2014.
\5\ A ``Non-Industry Director'' means a Director who (i) is a
Public Director or (ii) is a Non-Industry Representative. See
Bylaws, Article 1, Section 1.01, subparagraph (r).
\6\ A ``Facility Director'' means a Director who is a director
or senior executive officer of an Exchange Facility. See Bylaws,
Article 1, Section 1.01, subparagraph (j).
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The Exchange is now proposing to update the Bylaws to include the
specific requirement to have a Risk Committee. Specifically, the
Exchange is adding new Section 6.08 to the Bylaws to codify the Risk
Committee including the committee's responsibilities and
composition.\7\ The Exchange proposes to amend the Bylaws as follows:
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\7\ The Exchange notes that, unlike other Committees in the
Bylaws, the Risk Committee is not limited to five Directors as
historically the Risk Committee has had more than five Directors.
Specifically, providing for the Risk Committee to consist of no more
than eleven Directors preserves the opportunity for any or all
Directors to serve on the Committee if they choose, because the
maximum number of Directors authorized for the Board is no more than
eleven. See Bylaws, Article 4, Section 4.02.
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<bullet> Add new Section 6.08 which would read in full: ``Section
6.08 Risk Committee. The Board shall appoint a Risk Committee, which
shall consist of not less than three (3), and no more than eleven (11)
Directors, each of whom shall meet the requirements established in the
Risk Committee charter. A majority of the Directors serving on the Risk
Committee shall be Non-Industry Directors. The Risk Committee shall
include one (1) Facility Director. The Risk Committee shall assist the
Board in fulfilling its responsibilities with respect to the Exchange's
oversight of risk assessment and risk management processes of the
Exchange, as well as such other functions as may be specified in the
charter of the Risk Committee.''
<bullet> Add the Risk Committee to the list of required committees
under Section 6.01 (Board Committees).
The Exchange is adding the Risk Committee as a required committee
of the Board in the Bylaws as the Risk Committee is a long-established
committee and has been an integral part of the Exchange's oversight.
The Exchange notes the authority to establish additional Board
committees is already provided in the Bylaws.\8\ Additionally, the
Exchange believes it is appropriate to add the Risk Committee to the
Bylaws given the scope of the Committee's responsibilities. The
Exchange believes further that it is necessary to outline the scope of
the responsibilities of the Committee given the existing overlap with
the current description of the Audit Committee, as described below. The
Exchange does not believe that the proposal to codify the Risk
Committee in the Bylaws is novel because, as mentioned above, the Board
has the authority to appoint additional committees and now is merely
codifying the Risk Committee in the Bylaws. Additionally, it is common
for an exchange to have a risk committee of the Board.\9\
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\8\ See Bylaws, Article 6, Section 6.01 (providing that ``[t]he
Board may appoint one or more additional Board Committees and
delegate such responsibility and authority to such Board Committee
for such time as determined by the Board.'') After these proposed
changes are made, if the Board determines that a change to the Risk
Committee responsibilities as outlined in proposed Section 6.08 is
required or the Board determines that having the Risk Committee as a
required Committee under the Bylaws is no longer necessary, then a
change to the Bylaws would be required.
\9\ For example, Cboe Global Markets, Inc. (``CBOE'')
established a Risk Committee as a Committee of the Board of
Directors, charter available at, <a href="https://s202.q4cdn.com/174824971/files/doc_governance/2024/Aug/cboe-global-markets-risk-committee-charter.pdf">https://s202.q4cdn.com/174824971/files/doc_governance/2024/Aug/cboe-global-markets-risk-committee-charter.pdf</a>.
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Section 6.05, Audit Committee
The Exchange proposes to make certain edits to the Bylaws to narrow
the scope of responsibilities of the Audit Committee. Currently, the
Bylaws provide that the Audit Committee shall perform the specified
primary functions,
[[Page 47014]]
as well as such other functions as may be specified in the charter of
the Audit Committee.\10\ Those primary functions include providing
oversight over the Exchange's financial reporting process and the
financial information that is provided to the Members and others;
oversight over the systems of internal controls established by
management and the Board and the Exchange's legal and compliance
process; selecting (or nominating), evaluating and, where appropriate,
replacing the Exchange's independent auditors; and directing and
overseeing all the activities of the Exchange's internal audit
function.
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\10\ See Bylaws, Article 6, Section 6.05.
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The Exchange now proposes to amend Section 6.05 of the Bylaws to
narrow the scope of the Audit Committee to provide that its oversight
is limited to financial matters. Specifically, the Exchange is
proposing to remove references to oversight of the Exchange's legal and
compliance process from the description of the Audit Committee's
duties, which is now overseen by the Risk Committee. Additionally, the
Exchange is updating the Audit Committee's responsibilities to provide
that internal controls, auditors, and internal audits are referring to
internal financial controls, financial auditors, and internal financial
audits. With the proposed changes, Section 6.05 will read as follows:
<bullet> Audit Committee. The Board shall appoint an Audit
Committee, which shall consist of not less than three (3), and no more
than five (5), Directors, none of whom shall be Officers or employees
of the Exchange, and each of whom shall meet the requirements
established in the Audit Committee charter. A majority of the Directors
serving on the Audit Committee shall be Non-Industry Directors. The
Audit Committee shall include one (1) Facility Director. The Audit
Committee shall perform the following primary functions, as well as
such other functions as may be specified in the charter of the Audit
Committee: (A) provide oversight over the Exchange's financial
reporting process and the financial information that is provided to the
Members and others; (B) provide oversight over the systems of internal
financial controls established by management and the Board; (C) select,
evaluate and, where appropriate, replace the Exchange's independent
financial auditors (or nominate the independent financial auditors to
be proposed for ratification by the Members); and (D) direct and
oversee all the activities of the Exchange's internal financial audit
function, including but not limited to management's responsiveness to
internal financial audit recommendations.
The Exchange believes these changes are consistent with the
delegation of responsibilities between the various Board committees and
is designed to align the Bylaws with the Board practices. The Exchange
notes that this proposed change is consistent with the proposal to
codify the Risk Committee in its Bylaws and to reduce overlap between
the Risk Committee's responsibilities and the current description of
the Audit Committee as the Risk Committee is responsible for oversight
of risk assessment and risk management processes of the Exchange, which
includes oversight of certain internal non-financial assessments and
audits, for example. Additionally, oversight of the Exchange's legal
and compliance process, which is currently listed under the Audit
Committee responsibilities, will now solely fall under the purview of
the Risk Committee. Therefore, the proposed changes to Section 6.05 are
merely designed to provide clarity and consistency within the Bylaws.
Section 4.12, Compensation
The Exchange proposes allowing the Compensation Committee
flexibility when determining compensation of Directors. The
Compensation Committee is responsible for setting compensation,
including compensation policies, programs, and practices for Directors,
Officers and employees of the Exchange.\11\ With respect to Director
compensation, currently each Director shall receive the same
compensation as each other Director, other than the Chairman. The
Exchange now proposes to remove the requirement that ``each Director
shall receive the same compensation as each other Director, other than
the Chairman[, and] the Chairman shall be eligible to receive higher
compensation than the other Directors'' from Section 4.12 of the
Bylaws. Additionally, the Exchange is clarifying that the Compensation
Committee may provide reasonable compensation terms, which are outlined
in Section 6.06,\12\ for the Directors and that the Compensation
Committee sets the compensation for the Vice Chairman, which is
currently the case under Section 6.06, but is not explicitly stated, by
amending Section 4.12 as follows:
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\11\ See Bylaws, Article 4, Section 4.12. See also Bylaws,
Article 6, Section 6.06, (providing that ``[t]he Compensation
Committee shall set compensation, including compensation policies,
programs, and practices for Directors, Officers and employees of the
Exchange'').
\12\ Section 6.06 currently provides that the Compensation
Committee shall set compensation, including compensation policies,
programs, and practices for Directors. See Bylaws, Article 6,
Section 6.06.
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<bullet> Add ``terms'' to the first sentence of Section 4.12.
<bullet> Add ``the Vice Chair'' to the first sentence of Section
4.12.
With the proposed changes, Section 4.12 will read as follows:
<bullet> Section 4.12 Compensation. The Compensation Committee may
provide for reasonable compensation terms of the Chair, the Vice Chair,
the Directors, the members of any Board Committee and the members of
any committee of the Exchange. The Compensation Committee may also
provide for reimbursement of reasonable expenses incurred by such
persons in connection with the business of the Exchange.
The Exchange is making these changes to provide flexibility when
setting appropriate compensation for Directors and aligning with
industry norms. The Exchange believes these changes are reasonable as
they provide the Board with the appropriate latitude needed for setting
compensation by removing unnecessary constraints. Additionally, the
Exchange notes that it is not novel to have such flexibility when
determining appropriate compensation.\13\
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\13\ See Eighth Amended and Restated Bylaw of CBOE, Article 3,
Section 3.14, (providing that ``directors may be paid such
compensation for their services and such reimbursement for expenses
of attendance at meetings as the Board of Directors may from time to
time determine''), available at <a href="https://s202.q4cdn.com/174824971/files/doc_governance/2024/Dec/04/Cboe-Global-Markets-Eighth-AR-Bylaws-2ffa4c.pdf">https://s202.q4cdn.com/174824971/files/doc_governance/2024/Dec/04/Cboe-Global-Markets-Eighth-AR-Bylaws-2ffa4c.pdf</a>.
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Compensation and Regulatory Oversight Committees
Lastly, the Exchange is proposing to clarify the composition of the
Compensation and Regulatory Oversight Committees. The Compensation
Committee is responsible for setting compensation, including
compensation policies, programs, and practices for Directors, Officers
and employees of the Exchange.\14\ Among other responsibilities, the
Regulatory Oversight Committee is responsible for overseeing the
adequacy and effectiveness of the Exchange's regulatory and self-
regulatory organization responsibilities, assessing the Exchange's
regulatory performance, and assisting the Board and committees of the
Board in reviewing the regulatory plan and the overall effectiveness of
the Exchange's regulatory functions.\15\ Currently, the Bylaws state
that both Committees shall consist of not less
[[Page 47015]]
than three (3), and no more than five (5), Directors, each of whom
shall be Non-Industry Directors, and that each Committee shall not
include any Facility Directors.
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\14\ See Bylaws, Article 6, Section 6.06.
\15\ See Bylaws, Article 6, Section 6.07.
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The Exchange is proposing the below changes to codify that these
committees shall also not include any Participant Directors.\16\
Specifically, the Exchange proposes to amend the Bylaws as follows:
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\16\ A ``Participant Director'' means a Director who is a
Participant Representative. See Bylaws, Article 1, Section 1.01,
subparagraph (u). A ``Participant Representative'' means an officer,
director or employee of an Exchange Facility Participant. See
Bylaws, Article 1, Section 1.01, subparagraph (v). ``Exchange
Facility Participant'' means a firm or organization that is
registered with the Exchange pursuant to the Exchange Rules for
purposes of participating in trading on any Exchange Facility. See
Second Amended and Restated LLC Agreement of BOX Exchange, Article
1, Section 1.1, available at <a href="https://boxexchange.com/assets/BOX-Exchange-Second-Amended-and-Restated-LLC-Agreement-as-amended-through-Amendment-No-2-230227.pdf">https://boxexchange.com/assets/BOX-Exchange-Second-Amended-and-Restated-LLC-Agreement-as-amended-through-Amendment-No-2-230227.pdf</a> (referred to herein as the ``LLC
Agreement'').
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<bullet> Amend Article 6, Section 6.06 by adding the following:
``The Compensation Committee shall not include any Participant
Directors.''
<bullet> Amend Article 6, Section 6.07 by adding the following:
``The Regulatory Oversight Committee shall not include any Participant
Directors.''
The Exchange notes that it is currently the requirement of the
Board not to permit Participant Directors on the Compensation or
Regulatory Oversight Committee in addition to Facility Directors,
because the Bylaws currently require that the Committees be made up of
Non-Industry Directors.\17\ Under the current terms of the Bylaws, Non-
Industry Directors excludes Participant Directors since a Participant
Director is considered an Industry Representative. Because, pursuant to
the definitions, a Participant Director is an officer, director or
employee of a firm or organization (such firm or organization would be
a broker or dealer) registered with the Exchange for the purpose of
participating in trading on an Exchange Facility.\18\ Therefore, a
Participant Director falls under the definition of Industry
Representative, which makes a Participant Director ineligible to serve
on the Compensation or Regulatory Oversight Committee. As such, the
Exchange is not proposing any new requirement or restriction on the
composition of the Compensation or Regulatory Oversight Committees, but
merely adding additional clarity on the current description. The
Exchange is making these changes solely for ease of reading and
interpreting the Bylaws. Therefore, the proposed changes to Section
6.06 and 6.07 are designed to provide clarity and transparency within
the Bylaws. Additionally, the Exchange notes that it is not novel to
have restrictions on the composition of the Compensation and Regulatory
Oversight Committees.\19\
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\17\ ``Non-Industry Director'' means a Director who (i) is a
Public Director or (ii) is a Non-Industry Representative. See
Bylaws, Article 1, Section 1.01, subparagraph (r). A ``Non-Industry
Representative'' means an individual who is not an Industry
Representative. See Bylaws, Article 1, Section 1.01, subparagraph
(s). A ``Public Director'' means a Director who (i) has no material
business relationship with the Exchange or any Affiliate of the
Exchange, or any Exchange Facility Participant or any Affiliate of
any Exchange Facility Participant and (ii) is not associated with
any broker or dealer as required pursuant to Section 6(b)(3) of the
Securities Exchange Act of 1934, as amended; provided, however, that
an individual who otherwise qualifies as a Public Director shall not
be disqualified from serving in such capacity solely because such
individual is a Director of the Exchange and/or the Chairman or Vice
Chairman. See Bylaws, Article 1, Section 1.01, subparagraph (w). An
``Industry Representative'' means an individual who is an officer,
director or employee of a broker or dealer or who has been employed
in any such capacity at any time within the prior three (3) years,
as well as an individual who has, or has had, a consulting or
employment relationship with the Exchange, or any Affiliate of the
Exchange, at any time within the prior three (3) years. See Bylaws,
Article 1, Section 1.01, subparagraph (n).
\18\ ``Exchange Facility'' means any facility of the Exchange as
the term ``facility'' is defined in Section 3 of the Exchange Act.
See LLC Agreement, Article 1, Section 1.1.
\19\ See First Amended and Restated Bylaws of Long-Term Stock
Exchange, Inc., Article 5, Section 5.06(c) (stating that each member
of the Regulatory Oversight Committee shall be an Independent
Director), available at <a href="https://cdn.prod.website-files.com/6462417e8db99f8baa06952c/6462417e8db99f8baa06a3d8_Long-Term_Stock_Exchange_A_R_Bylaws_Adopted_5-3-19.pdf">https://cdn.prod.website-files.com/6462417e8db99f8baa06952c/6462417e8db99f8baa06a3d8_Long-Term_Stock_Exchange_A_R_Bylaws_Adopted_5-3-19.pdf</a> and Eighth Amended
and Restated Bylaws of CBOE, Article 4, Section 4.4 (stating that
all directors on the Compensation Committee must be independent).
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Non-Substantive Changes
The Exchange is also proposing to make non-substantive conforming
changes to the Bylaws to accommodate renumbering as a result of the
changes to Section 6.08.\20\ In addition, the Exchange is amending the
definition of ``Exchange Violation'' to update the cross reference from
current Section 6.08(a) to proposed Section 6.09(a) under the
definition.\21\ Additionally, the Exchange is proposing to replace the
term ``Chairman'' throughout the Bylaws with ``Chair'' or
``chairperson.'' This proposed change applies to both usages of
``Chairman'' and ``Vice Chairman.'' The Exchange is making this non-
substantive change as it believes it is appropriate to use the neutral
term throughout the Bylaws.
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\20\ Under the proposal, current Section 6.08 (Hearing
Committee) is being updated to Section 6.09 and Section 6.09
(Committee Expenses) is being updated to Section 6.10.
\21\ See proposed changes to Bylaws, Article 1, Section 1.01,
subparagraph (i).
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2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act,\22\ in general, and furthers
the objectives of Section 6(b)(1) of the Act in particular,\23\ in that
it continues to assure that the Exchange is so organized as to have the
capacity to be able to carry out the purposes of the Act and to comply,
and to enforce compliance by its Exchange members and persons
associated with its Exchange members, with the provisions of the
Exchange Act, the rules and regulations thereunder, and the rules of
the Exchange. The Exchange also believes that the proposed Bylaw
amendments further the objectives of Section 6(b)(3) \24\ of the Act in
particular, in that they are designed to assure the fair administration
of the Exchange's affairs by updating its corporate governance
documents dealing with the administration of the Exchange.
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\22\ 15 U.S.C. 78f(b).
\23\ 15 U.S.C. 78f(b)(1).
\24\ 15 U.S.C. 78f(b)(3).
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The Exchange also believes that the proposed rule change is
consistent with Section 6(b)(5) of the Act,\25\ in that they are
intended to, inter alia, promote just and equitable principles of
trade, foster cooperate and coordination with person engaged in
regulating, clearing, settling, processing information with respect to,
and facilitating transactions in securities, 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.
Additionally, the proposed amendment is not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers as the
proposed changes deal with the administration of the Exchange's
governance.
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\25\ 15 U.S.C. 78f(b)(5).
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Risk Committee
The Exchange believes that the proposed change to add the
requirement to have a Risk Committee to the Bylaws continues to assure
that the Exchange is so organized as to have the capacity to be able to
carry out the purposes of the Act and to comply, and to enforce
compliance by its Exchange members and persons associated with its
Exchange members, with the provisions of the Exchange Act, the rules
and regulations thereunder, and the rules of the Exchange because the
Risk
[[Page 47016]]
Committee is a long-established committee of the Board that assists the
Board in fulfilling its responsibilities with respect to the Exchange's
oversight of risk assessment and risk management processes of the
Exchange. The Exchange believes it is appropriate to add the Risk
Committee to the Bylaws now given its importance and overall breadth of
oversight over the Exchange. The Exchange further believes that it is
consistent with the Act to add the Risk Committee to the Bylaws to
codify the scope of the Committee's responsibilities in the Bylaws to
reduce overlap with the current description of the Audit Committee, as
detailed above. The Exchange believes the composition of the Risk
Committee, including a maximum of eleven Directors, which is unlike
other Committees in the Bylaws, is consistent with the Act as it
preserves the flexibility of the Exchange to continue to allow all
Directors to serve on the Risk Committee. The Exchange believes that it
is in the public interest for the Exchange's corporate governance to be
clear, consistent and administered fairly. The Exchange also does not
believe that the proposal to codify the Risk Committee in the Bylaws is
novel as it is common for an exchange to have a risk committee of the
Board and the Exchange believes that the distinction between
memorializing the requirement in its Bylaws and not is minor.\26\
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\26\ See supra note 9.
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Section 6.05, Audit Committee
The Exchange believes the edits to the Bylaws to update the
oversight responsibilities of the Audit Committee to provide that they
are limited to financial matters, including removing references to
oversight of the Exchange's legal and compliance process, which is
covered by the Risk Committee, is consistent with the Act, in that it
will narrow the scope of the Audit Committee's responsibilities and
reduce the potential for confusion given the existing overlap between
the current description of the Audit Committee's responsibilities and
the role of the Risk Committee, as detailed above. The Exchange
believes further that it is in the public interest for the Exchange's
corporate governance to be clear, consistent and administered fairly.
Accordingly, the Exchange believes that these proposed changes to
Section 6.05 are consistent with the Act, as such amendments update and
clarify the Bylaws, thereby increasing transparency and helping to
avoid any potential confusion by clarifying the scope of the
committee's responsibilities. For these reasons, the Exchange believes
such amendments enable the Exchange to be so organized as to have the
capacity to carry out the purposes of the Act and the comply with the
provisions of the Act, the rules and regulations thereunder, and the
rules of the Exchange, promote just and just and equitable principles
of trade, remove impediments to and perfect the mechanism of a free and
open market, and protect investors and the public interest.
Section 4.12, Compensation
The Exchange believes the proposed changes to Section 4.12 of the
Bylaws will allow the Exchange to continue to be so organized as to
have the capacity to carry out the purposes of the Exchange Act and
provide for the fair administration of the Exchange's affairs because
the proposed changes will provide flexibility when setting appropriate
compensation for Directors. It is in the public interest for the
Exchange's corporate governance to be clear, consistent, and
administered fairly. The Exchange believes that the proposed changes
Section 4.12 of the Bylaws promote greater flexibility and remove
unnecessary constraining language thereby promoting the fair
administration of the Exchange. The Exchange believes further that the
proposed change to codify, the existing practice,\27\ that the
Compensation Committee sets the compensation for the Vice Chairman will
clarify the process and provide added transparency regarding how the
Exchange determines compensation. The Exchange notes that it is not
novel to have such flexibility when determining appropriate
compensation, as another Exchange provides for similar flexibility for
Directors in its Bylaws.\28\
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\27\ See Bylaws, Article 6, Section 6.06.
\28\ See supra note 13.
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Compensation and Regulatory Oversight Committees
The Exchange believes the proposed changes to the Bylaws to codify
that both the Compensation and Regulatory Oversight Committees shall
not include any Participant Directors continues to contribute to the
orderly operation of the Exchange and provide for the fair
administration of the Exchange's affairs as the Committees will
continue to be made up of Non-Industry Directors. The Exchange believes
further that the proposed change would be consistent with the existing
composition requirements of the Committees, which would enable the
Exchange to continue to be so organized as to have the capacity to
carry out the purposes of the Act and comply with the provisions of the
Act by its members and persons associated with members, thereby
furthering the objectives of the Act. The proposed change is intended
to provide added transparency regarding the composition of the
Compensation and Regulatory Oversight Committees. Moreover, the
Exchange believes that as a practical matter the proposed change is
consistent with current requirements, as it is an existing requirement
of the Exchange not to permit a Participant Director on the
Compensation or Regulatory Oversight Committee,\29\ thereby increasing
transparency and helping to avoid any potential confusion by adding
clarifying language to the Bylaws.\30\ The Exchange is proposing this
change to codify such requirement and, since no new requirement or
restriction is being proposed, the Exchange does not believe the
proposal raises any questions of fair representation under the Act. The
Exchange notes that it is not novel to have restrictions on the
composition of the Compensation and Regulatory Oversight
Committees.\31\
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\29\ See supra note 17.
\30\ See Bylaws Article 6, Sections 6.06 and 6.07 (providing
that all of the Directors serving on each Committee shall be Non-
Industry Directors). See also supra note 16.
\31\ See supra note 19.
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Non-Substantive Changes
Finally, the Exchange believes that the proposed non-substantive
conforming changes to the Bylaws to accommodate renumbering, including
an update to the cross reference in the definition of ``Exchange
Violation,'' as a result of the changes to Section 6.08 further the
purposes of the Act because they provide greater clarity and
consistency to the Bylaws thereby reducing the potential for confusion
by market participants. Additionally, the Exchange believes the
proposed change replace the term Chairman throughout the Bylaws is
reasonable because it is not proposing to make any changes to the
existing duties or obligations of the Chairman and Vice Chairman and is
merely proposing to update the term to use neutral terminology
throughout the Bylaws. The Exchange believes the proposed changes are
non-substantive, in that they will not amend or implicate the
Exchange's governance as an ``exchange'' within the meaning of the Act.
The Exchange believes that these proposed non-substantive changes are
consistent with the Act, as such amendments update and clarify the
Bylaws, thereby increasing transparency and helping to avoid any
potential confusion from unclear provisions.
[[Page 47017]]
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 proposed rule change
relates to the corporate governance of the Exchange and not the
operations of the Exchange. Therefore, the proposed rule change is not
intended to address competitive issues but rather is concerned with the
administration and governance of the Exchange and its Board Committees.
The proposed changes are concerned solely with the corporate governance
of the Exchange and do not present any issues that impact competition.
This is not a competitive filing and, therefore, imposes no burden on
competition. 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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \32\ and Rule 19b-4(f)(6) \33\ thereunder.
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 after 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) of the Act \34\ and Rule 19b-4(f)(6) \35\
thereunder.
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\32\ 15 U.S.C. 78s(b)(3)(A).
\33\ 17 CFR 240.19b-4(f)(6).
\34\ 15 U.S.C. 78s(b)(3)(A).
\35\ 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, along
with a brief description and text of 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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A proposed rule change filed under Rule 19b-4(f)(6) \36\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\37\ the Commission
may 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 so that the proposed
rule change may become operative immediately upon filing. The Exchange
states that the proposed rule change adds transparency, clarity, and
flexibility to the Bylaws, and that it is in the public interest for
the Exchange's corporate governance to be clear, consistent and
administered fairly. For these reasons, the Commission believes that
waiver of the 30-day operative delay is consistent with the protection
of investors and the public interest. Accordingly, the Commission
hereby waives the 30-day operative delay and designates the proposed
rule change as operative upon filing.\38\
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\36\ 17 CFR 240.19b-4(f)(6).
\37\ 17 CFR 240.19b-4(f)(6)(iii).
\38\ 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 under
Section 19(b)(2)(B) \39\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\39\ 15 U.S.C. 78s(b)(2)(B).
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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#6f1d1a030a420c0002020a011b1c2f1c0a0c41080019"><span class="__cf_email__" data-cfemail="9ae8eff6ffb7f9f5f7f7fff4eee9dae9fff9b4fdf5ec">[email protected]</span></a>. Please include
file number SR-BOX-2025-25 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-2025-25. 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 filing 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-2025-25 and should be submitted on
or before October 21, 2025.
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\40\ 17 CFR 200.30-3(a)(12) and (59).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\40\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-19016 Filed 9-29-25; 8:45 am]
BILLING CODE 8011-01-P
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