Notice2026-08473
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 Modify Certain Rebate Tiers for Qualified Contingent Cross Transactions
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
May 1, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 84 (Friday, May 1, 2026)</title>
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[Federal Register Volume 91, Number 84 (Friday, May 1, 2026)]
[Notices]
[Pages 23492-23494]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-08473]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105324; File No. SR-BOX-2026-09]
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 Modify
Certain Rebate Tiers for Qualified Contingent Cross Transactions
April 28, 2026.
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 April 14, 2026, 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. Specifically,
the Exchange proposes to amend Section IV. (Electronic Transaction
Fees) to modify certain rebate tiers for Qualified Contingent Cross
(``QCC'') transactions. 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
[[Page 23493]]
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 update the Fee Schedule for trading on BOX
to amend certain rebate tiers for Qualified Contingent Cross (``QCC'')
transactions.\5\ A QCC Order is defined as an originating order (Agency
Order) to buy or sell at least 1,000 standard option contracts, or
10,000 mini-option contracts, that is identified as being part of a
qualified contingent trade, coupled with a contra side order or orders
totaling an equal number of contracts.\6\
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\5\ The Exchange initially filed the proposed change on April 1,
2026 (SR-BOX-2026-07). On April 14, 2026, the Exchange withdrew SR-
BOX-2026-07 and replaced it with the instant filing.
\6\ See BOX Rule 7110(c)(6).
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Currently, BOX assesses $0.20 per contract to Broker Dealers and
Market Makers for both the Agency Order and contra order of a QCC
transaction. Public Customers and Professional Customers are not
assessed a QCC Transaction Fee. Further, rebates are applied to the
Agency Order on all qualifying orders pursuant to Section IV.D.1. of
the BOX Fee Schedule. Specifically, a QCC Rebate is paid to the
Participant that entered the order into the BOX System when at least
one party to the QCC transaction is a Broker Dealer or Market Maker.
The Participant receives a per contract rebate applied to the Agency
Order of a QCC Transaction according to the tier achieved, as provided
in the table below. Volume thresholds are calculated on a monthly basis
by totaling the Participant's QCC Agency Order volume on BOX. When only
one side of the QCC transaction is a Broker Dealer or Market Maker,
Rebate 1 applies. When both parties to the QCC transaction are a Broker
Dealer or Market Maker, Rebate 2 applies. The Exchange notes that the
QCC Rebate is intended to incentivize Participants to send QCC Orders
to BOX.
The current QCC Rebate tier structure is as follows:
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QCC agency order volume on BOX Rebate 1 (per Rebate 2 (per
Tier (per month) contract) contract)
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1......................................... 0 to 749,999 contracts.......... ($0.14) ($0.22)
2......................................... 750,000 to 1,499,999 contracts.. (0.16) (0.25)
3......................................... 1,500,000+ contracts............ (0.17) (0.27)
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The Exchange now proposes to amend the QCC Rebate tier structure in
Section IV.D.1. of the BOX Fee Schedule. Specifically, the Exchange
proposes to amend the volume thresholds in Tiers 1 and 2. For Tier 1,
the Exchange proposes to amend the volume threshold from 0 to 749,999
contracts to 0 to 499,999 contracts. For Tier 2, the Exchange proposes
to amend the volume threshold from 750,000 to 1,499,999 contracts to
500,000 to 1,499,999 contracts.
The proposed QCC Rebate tier structure will be as follows:
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QCC agency order volume on BOX Rebate 1 (per Rebate 2 (per
Tier (per month) contract) contract)
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1......................................... 0 to 499,999 contracts.......... ($0.14) ($0.22)
2......................................... 500,000 to 1,499,999 contracts.. (0.16) (0.25)
3......................................... 1,500,000+ contracts............ (0.17) (0.27)
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As a result of the proposed change, Tier 2 will be easier to
achieve thus affording Participants with additional rebate
opportunities. The Exchange notes that achieving Tier 2 of the QCC
Rebate is one of the qualifying criteria for the QCC Growth Rebate in
Section IV.D.1.b., thus the QCC Growth Rebate will also be easier to
achieve, assuming all criteria are met. The Exchange believes that the
proposed changes will encourage Participants to send increased QCC
order flow to BOX in order to achieve a higher rebate, which will
result in increased liquidity on BOX to the benefit of all market
participants.
The Exchange is also proposing to add language to Section IV.D.1.a.
to make it clear that the QCC Rebate is applied to the Agency Order on
qualifying QCC Transactions. Specifically, a Participant will receive a
per contract rebate that is applied to the Agency Order on QCC
Transactions according to the tier achieved, as provided in Section
IV.D.1.a. With this new language, the Exchange is not proposing to make
any changes to the way the QCC Rebate is currently applied, but merely
seeks to provide greater clarity within the Fee Schedule relating to
the application of the existing rebate.
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 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 believes the proposed changes to the QCC Rebate
structure are reasonable because the proposed changes provide
opportunities for Participants to receive higher rebates for their QCC
Order volume on BOX. Further, the Exchange believes the proposed
changes to the QCC rebate structure are equitable and not unfairly
discriminatory as the proposed rebates will apply uniformly to the
Participants that reach the applicable tiers.
The Exchange continues to believe that the proposed rebate
structure and rebate amounts are reasonable as it provides an
incremental incentive for Participants to strive for the higher tier
levels, which provide increasingly higher rebates for incrementally
more QCC volume achieved, which the
[[Page 23494]]
Exchange believes is a reasonably designed incentive for Participants
to grow their QCC order flow to receive rebates. The Exchange also
believes that continuing to have two alternative rebates (depending on
the capacity of the parties to the transaction) is reasonable and
appropriate as this is how the Exchange assesses the rebates for QCC
transactions today.\8\ The Exchange believes further that it is
equitable and not unfairly discriminatory to continue to only offer the
QCC Rebate to the Participant that entered the order into the BOX
System when at least one party to the QCC transaction is a Broker
Dealer or Market Maker and not when both Parties are Public Customers
or Professional Customers because only Broker Dealers and Market Makers
are assessed a fee for QCC transactions. Public Customers and
Professional Customers are not assessed a fee for QCC transactions.
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\8\ The Exchange notes that Rebate 1 provides lower rebates than
rebates in Rebate 2 because when only one side of the QCC
transaction is a Broker Dealer or Market Maker then only one side of
the QCC transaction is assessed a fee, therefore the total fees
assessed are lower and the corresponding rebate is also lower.
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The Exchange believes adding language to make it clear that the QCC
Rebate is applied to the Agency Order on qualifying QCC Transactions is
reasonable and not unfairly discriminatory because it is not proposing
to make any changes to the way the QCC Rebate is currently applied, but
merely seeks to provide greater clarity within the Fee Schedule
relating to the existing rebate.
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 proposal does not impose an undue burden
on inter-market competition because the proposed changes to the QCC
Rebate tier volume thresholds will promote competition for QCC
transactions. Specifically, the volume threshold required to qualify
for the Tier 2 rebates will be reduced, which may allow Participants
access to higher rebates. The Exchange believes further its proposal
remains 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.
The proposed changes do not impose an undue burden on intra-market
competition. The Exchange does not believe that its proposal will place
any category of market participant at a competitive disadvantage. The
Exchange believes that the proposed changes will encourage market
participants to send their QCC orders to BOX for execution in order to
obtain greater rebates and lower their costs. The Exchange believes
further that it is equitable and not unfairly discriminatory to
continue to only offer the QCC Rebate to the Participant that entered
the order into the BOX System when at least one party to the QCC
transaction is a Broker Dealer or Market Maker and not when both
Parties are Public Customers or Professional Customers because only
Broker Dealers and Market Makers are assessed a fee for QCC
transactions. Public Customers and Professional Customers are not
assessed a fee for QCC transactions.
Lastly, the proposed change to add language to make it clear that
the QCC Rebate is applied to the Agency Order on qualifying QCC
Transactions is not intended to address competitive issues and instead
is being proposed in an effort to reduce the potential for any investor
confusion relating to the existing QCC Rebate and add transparency to
the Fee Schedule.
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 \9\ and Rule 19b-4(f)(2)
thereunder,\10\ because it establishes or changes a due, or fee.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 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#a4d6d1c8c189c7cbc9c9c1cad0d7e4d7c1c78ac3cbd2"><span class="__cf_email__" data-cfemail="d6a4a3bab3fbb5b9bbbbb3b8a2a596a5b3b5f8b1b9a0">[email protected]</span></a>. Please include
file number
SR-BOX-2026-09 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-2026-09. 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-2026-09 and should be submitted on
or before May 22, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-08473 Filed 4-30-26; 8:45 am]
BILLING CODE 8011-01-P
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