Notice2025-20691
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the QOO and FOO Order Rebate in Section V. (Manual Transaction Fees) of the Fee Schedule for Trading on the BOX Options Market LLC Facility
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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
November 24, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 224 (Monday, November 24, 2025)</title>
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[Federal Register Volume 90, Number 224 (Monday, November 24, 2025)]
[Notices]
[Pages 53035-53037]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-20691]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104222; File No. SR-BOX-2025-27]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the QOO
and FOO Order Rebate in Section V. (Manual Transaction Fees) of the Fee
Schedule for Trading on the BOX Options Market LLC Facility
November 19, 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 September 30, 2025, BOX Exchange LLC (``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the 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 the QOO (Qualified Open Outcry) and FOO (FLEX Open
Outcry) Order Rebate in Section V. (Manual Transaction Fees) of the Fee
Schedule. Specifically, the Exchange proposes to add an enhanced
rebate. While changes to the Fee Schedule pursuant to this proposal
will be effective upon filing, the changes will become operative on
October 1, 2025. 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 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 QOO and FOO Order Rebate in
Section V. (Manual Transaction Fees) of the Fee Schedule. Specifically,
the Exchange proposes to add an enhanced rebate. The Exchange notes
that this is a competitive filing that is based on a proposal submitted
by MIAX Sapphire, LLC (``MIAX Sapphire''), as MIAX Sapphire submitted a
filing on September 11, 2025, to describe the fees and rebates that
will be applicable to transactions on its trading floor.\5\ In
particular, MIAX Sapphire is offering a Floor Broker Breakup Credit.
The MIAX Sapphire Floor Broker Breakup Credit will apply to the Floor
Broker that submits the QFO (Qualified Floor Order) or cQFO (Complex
Qualified Floor Order) instead of the Floor Broker rebate for
executions that trade with a Floor Market Maker. BOX is now proposing
to add a similar incentive to its Fee Schedule. The Exchange notes that
BOX refers to this incentive as an enhanced rebate while MIAX Sapphire
refers to it as a breakup credit. The Exchange believes that the term
enhanced rebate is consistent with Section V. (Manual Transaction Fees)
of the Fee Schedule and that referring to Floor Broker incentives in
this section as rebates promotes clarity and avoids confusion among
Floor Participants. Additionally, referring to the proposed incentive
as an enhanced rebate instead of a breakup credit is consistent with
how the rebate will be reported to Floor Participants.
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\5\ See SR-SAPPHIRE-2025-39, available at <a href="https://www.miaxglobal.com/sites/default/files/filing-files/SR_SAPPHIRE_2025_39_1.pdf">https://www.miaxglobal.com/sites/default/files/filing-files/SR_SAPPHIRE_2025_39_1.pdf</a>.
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Currently, Floor Brokers on BOX receive a $0.10 per contract rebate
for all Broker Dealer and Market Maker QOO and FOO Orders presented on
the Trading Floor and $0.05 per contract rebate for all Professional
Customer QOO and FOO Orders presented on the Trading Floor. The rebate
does not apply to Public Customer executions, executions subject to
Section V.D of the BOX Fee Schedule, or Broker Dealer executions where
the Broker Dealer is facilitating a Public Customer.\6\
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\6\ See BOX Exchange Fee Schedule Section V.C.
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The Exchange now proposes that Floor Brokers that submit QOO and
FOO Orders will receive $0.20 per contract enhanced rebate for
executions that trade with a Floor Market Maker, in lieu of the
existing $0.10 and $0.05 per contract rebates described in Section V.C.
Accordingly, under the proposal, Floor Brokers that submit QOO and FOO
Orders will now receive an enhanced rebate of $0.20 per contract,
instead of the existing rebates of $0.10 or $0.05 per contract, for
executions that trade with a Floor Market Maker. The enhanced rebate
will not apply to Public Customer executions, executions subject to
Section V.D (Strategy QOO Order Fee Cap and Rebate & Strategy FOO Order
Fee Cap and Rebate), or Broker Dealer executions where the Broker
Dealer is facilitating a Public Customer. The Exchange notes that
Section V.D contains separate fee caps and rebates for certain Strategy
QOO and FOO Orders and dividend strategies.
The proposed changes are designed to attract order flow to BOX. The
Exchange believes that offering the enhanced rebate provides an
additional incentive for Floor Brokers to bring orders to the BOX
Trading Floor.
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,\7\ 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
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does not unfairly discriminate between customers, issuers, brokers or
dealers.
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\7\ 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 June 2025, BOX had 6.79% market share of
options contracts traded, 6.22% in July 2025, and 6.39% in August
2025.\8\ 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.'' \9\ 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 change reflects a
competitive pricing structure designed to incentivize Floor Brokers to
bring orders to the BOX Trading Floor.
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\8\ See <a href="https://www.cboe.com/us/options/market_share/market/2025-06-30/">https://www.cboe.com/us/options/market_share/market/2025-06-30/</a>, <a href="https://www.cboe.com/us/options/market_share/market/2025-07-31/">https://www.cboe.com/us/options/market_share/market/2025-07-31/</a> and <a href="https://www.cboe.com/us/options/market_share/market/2025-08-29//">https://www.cboe.com/us/options/market_share/market/2025-08-29//</a> (Month-to-Date (``MTD'') % of Mkt as of September 12,
2025).
\9\ 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 its proposal to offer Floor Brokers an
enhanced rebate of $0.20 is reasonable, equitably allocated and not
unfairly discriminatory as this proposal applies equally to all Floor
Brokers. The Exchange believes that its proposal will encourage Floor
Broker liquidity in all classes. Additional liquidity benefits all
market participants by providing more trading opportunities.
Specifically, the Exchange believes that Floor Brokers serve an
important function in facilitating the execution of orders and price
discovery for all market participants.
The Exchange believes it is equitable and not unfairly
discriminatory to only apply the rebate to Floor Brokers and not to
Floor Market Makers. Floor Market Makers only represent their own
interest on the Trading Floor and therefore do not need a similar
incentive. Further, the Exchange believes it is equitable and not
unfairly discriminatory to not apply the enhanced rebate to Public
Customer executions or Broker Dealer executions where the Broker Dealer
is facilitating a Public Customer, as these executions are not assessed
a fee for their QOO or FOO Orders. Further, the Exchange believes it is
equitable and not unfairly discriminatory to not apply the enhanced
rebate to executions subject to the Strategy QOO Order Fee Cap and
Rebate & Strategy FOO Order Fee Cap and Rebate because additional
incentives for these orders are not necessary, as they are subject to
different rebates and fee caps.
The Exchange's proposal to pay Floor Brokers an enhanced rebate for
executions that trade with a Floor Market Maker is consistent with
Section 6(b)(4) of the Act because it will encourage market
participants to execute orders on the Trading Floor. The Exchange
believes that the enhanced rebate could improve liquidity on the
Exchange to the benefit of all market participants. Additionally, the
proposal is also consistent with Section 6(b)(5) of the Act because it
perfects the mechanisms of a free and open market and a national market
system and protects investors and the public interest because it
applies equally to all Floor Broker QOO Orders and FOO Orders which are
subject to an enhanced rebate and access to the Exchange is offered on
terms that are not unfairly discriminatory.
The Exchange notes that the proposed enhanced rebate is similar to
breakup credits used to encourage Participants to submit PIP, COPIP,
Facilitation and Solicitation orders.\10\ Specifically, the proposed
enhanced rebate is consistent with the PIP and COPIP Break-Up Credit
and the Facilitation and Solicitation Break-Up Credit. In these
mechanisms, break-up credits are provided to Participants representing
the agency order. Similarly, the Exchange proposes to provide an
enhanced rebate to Floor Brokers for executions that trade with a Floor
Market Maker. The Exchange believes that providing an enhanced rebate
will incentivize Floor Brokers to bring order flow to the BOX Trading
Floor which will result in increased trading opportunities for all
Floor Participants.
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\10\ See BOX Exchange Fee Schedule Sections IV.B (PIP and COPIP
Transactions) and IV.C (Facilitation and Solicitation Transactions).
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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 Floor Broker orders. The Exchange believes that the proposed
changes may incentivize Floor Brokers to bring 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. Specifically, the proposal does
not impose an undue burden on intra-market competition because all
Floor Brokers are eligible to transact QOO Orders and FOO Orders \11\
and receive a rebate, if applicable. The Exchange believes that its
proposal will encourage Floor Broker liquidity in all classes.
Additional liquidity benefits all market participants by providing more
trading opportunities. Further, additional liquidity will contribute to
a robust trading environment on the BOX Trading Floor.
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\11\ The Exchange notes that to be qualified to trade FOO
Orders, a Floor Broker must: (i) be registered as a Floor Broker
under Exchange Rules; (ii) have passed the FLEX Floor Exam; and
(iii) have submitted a Flex Equity Options Participant Clearing
Authorization (Non-Market Maker) to the Exchange.
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The Exchange notes that BOX will not collect additional fees on any
given transaction under the proposal but will provide Floor Brokers an
enhanced rebate for executions that trade with a Floor Market Maker.
The Exchange does not believe that Floor Market Makers will be
discouraged from transacting on the Trading Floor as Floor Market
Makers trade for their own accounts and benefit from having access to
interact with orders that are made available in open outcry on the
Trading Floor. The Exchange also believes that Floor Market Maker fees
relative to other market participants do not impose an undue burden on
competition because Floor Market Makers are not obligated to engage in
transactions on the Trading Floor. To the extent that there is an
additional competitive burden on Floor
[[Page 53037]]
Market Makers, the Exchange believes that any such burden would be
appropriate because Floor Brokers serve an important function in
facilitating the execution of orders and price discovery for all market
participants. Further, to the extent this proposal is successful, it
will increase trading opportunities for Floor Market Makers because
Floor Market Makers trade for their own accounts and benefit from
having the opportunity to interact with orders that are made available
in open outcry on the Trading Floor.
The Exchange does not believe that not applying the enhanced rebate
to Public Customer executions or Broker Dealer executions where the
Broker Dealer is facilitating a Public Customer, will impose any burden
on competition not necessary or appropriate in furtherance of the
purposes of the Act, as these executions are not assessed a fee for
their QOO or FOO Orders. Further, the Exchange does not believe that
not applying the enhanced rebate to executions subject to the Strategy
QOO Order Fee Cap and Rebate & Strategy FOO Order Fee Cap and Rebate
will impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act because these orders are subject
to different rebates and fee caps and additional incentives for these
orders are not necessary. The Exchange believes that the proposed
enhanced rebate will not impair these Participants from adding
liquidity and competing in open outcry on the Trading Floor and will
help promote competition by providing incentives for Floor Brokers to
submit customer order flow to the BOX Trading Floor and thus, create a
greater opportunity for customer executions.
The Exchange does not believe that offering Floor Brokers an
enhanced rebate will impose an undue burden on competition because all
qualified Floor Brokers are eligible to transact QOO and FOO Orders and
thus may improve intra-market competition.\12\ Accordingly, the
Exchange believes that providing an enhanced rebate to Floor Brokers
for executions that trade with a Floor Market Maker does not impose an
undue burden on intra-market competition.
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\12\ Id.
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The Exchange believes the proposal does not impose an undue burden
on intermarket competition because the proposed changes to the BOX Fee
Schedule remain competitive with other options markets and will offer
market participants with another choice of where to transact its
business. Further, the Exchange believes that the rebate will promote
competition by allowing Floor Brokers to competitively price their
services and for the Exchange to remain competitive with other
exchanges with open outcry trading floors. 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. The Exchange again notes that the
proposed changes are a competitive response to a proposal submitted by
MIAX Sapphire.\13\ For the reasons described above, the Exchange
believes that the proposed rule change will encourage intermarket
competition.
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\13\ See supra note 5.
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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 \14\ and Rule 19b-4(f)(2)
thereunder,\15\ because it establishes or changes a due, or fee.
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\14\ 15 U.S.C. 78s(b)(3)(A)(ii).
\15\ 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#3745425b521a54585a5a525943447744525419505841"><span class="__cf_email__" data-cfemail="c8babda4ade5aba7a5a5ada6bcbb88bbadabe6afa7be">[email protected]</span></a>. Please include
file number SR-BOX-2025-27 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-2025-27. 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-2025-27 and should be submitted on
or before December 15, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-20691 Filed 11-21-25; 8:45 am]
BILLING CODE 8011-01-P
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