Notice2026-22756
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Rules To Govern the Trading of FLEX Equity Options in Electronic Auctions
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
November 9, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 91 Issue 215 (Monday, November 9, 2026)</title>
</head>
<body><pre>
[Federal Register Volume 91, Number 215 (Monday, November 9, 2026)]
[Notices]
[Pages 70943-70952]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-22756]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-106819; File No. SR-BOX-2026-21]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Adopt Rules To
Govern the Trading of FLEX Equity Options in Electronic Auctions
November 4, 2026.
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 October 21, 2026, BOX Exchange LLC (the ``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 self-regulatory organization. The Commission is
publishing this notice to solicit comments on the proposed rule from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rules 5055 (FLEX Equity Options) and
7240 (Complex Orders), and to add Rules 7155 (FLEX Price Improvement
Period (``FLEX PIP'')) and 7275 (FLEX Solicitation Auction) to govern
the trading of FLEX Equity Options in electronic auctions. 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
FLEX Equity Options are customized options contracts that allow
investors to tailor contract terms for exchange-listed equity options.
FLEX Equity Options are designed to meet the needs of investors for
greater flexibility in selecting the terms of options within the
parameters of the Exchange's rules. FLEX Equity Options are not
preestablished for trading and are not listed individually for trading
on BOX. Rather, investors select FLEX Equity Option terms and are
limited by the parameters set forth in Rule 5055 in their selection of
those terms. As a result, FLEX Equity Options allow investors to
specify more specific, individualized investment objectives than may be
available to them in the standardized options market.
FLEX Equity Options and FLEX Open Outcry (``FOO'') Orders were
approved for trading on BOX on May 15, 2024.\3\ FOO Orders are limited
solely to the BOX Trading Floor.\4\ The Exchange now proposes to adopt
rules that will govern the listing and trading of FLEX Equity Options
on the Exchange's electronic market. The Exchange notes that FLEX
options trade electronically on Cboe Exchange, Inc. (``CBOE''), Nasdaq
PHLX LLC (``Nasdaq PHLX''), and Nasdaq ISE, LLC (``Nasdaq ISE'').\5\
The proposal allows for the trading of FLEX Equity Options in
electronic auctions in a substantially similar manner as both CBOE and
Nasdaq ISE's electronic markets, with certain intended differences
primarily to align to current System behavior (and especially current
auction behavior) to provide increased consistency for Participants
trading FLEX Equity Options and Non-FLEX Equity Options on BOX, as
discussed in detail below. The Exchange notes further that in Nasdaq
ISE's recently approved filing to adopt FLEX options and electronic
FLEX options trading, Nasdaq ISE compared its proposed rules to CBOE's
established rules.\6\ This proposal will also compare the Exchange's
proposed rules to CBOE's established rules. Accordingly, the Exchange
has omitted certain CBOE rules from the proposed rules due to
differences in scope and operation of FLEX trading at CBOE compared to
the proposed scope and operation of FLEX trading on BOX, each as noted
below. For example, the Exchange proposes only to add price improvement
and solicitation auctions and will not add Electronic FLEX Auctions as
defined in CBOE Rule 5.72(c). Further, BOX does not allow prices in
FLEX trading to be expressed as percentages.
---------------------------------------------------------------------------
\3\ See Securities and Exchange Act Release No. 100156 (May 15,
2024), 89 FR 44721 (May 21, 2024) (SR-BOX-2023-20) (Notice of Filing
of Amendment No. 3 and Order Granting Accelerated Approval of a
Proposed Rule Change, as Modified by Amendment No. 3, To Adopt Rules
To Govern FLEX Equity Options on the BOX Trading Floor).
\4\ See BOX Rule 7605(b).
\5\ See CBOE Rules 5.72-5.74, Nasdaq PHLX Rules, Options 3A, and
Nasdaq ISE Rules, Options 3A.
\6\ See Securities and Exchange Act Release No. 101720 (November
22, 2024), 89 FR 94986 (November 29, 2024) (SR-ISE-2024-12) (Notice
of Filing of Amendment No. 1 and Order Granting Accelerated Approval
of a Proposed Rule Change, as Modified by Amendment No. 1, to Adopt
Rules to List and Trade FLEX Options). The Exchange notes that
Nasdaq PHLX, a Nasdaq ISE affiliate, based its rules on Nasdaq ISE.
See Securities and Exchange Act Release No. 103759 (August 21, 2025)
(SR-PHLX-2025-38) (Notice of Filing and Immediate Effectiveness of
Proposed Rule Change to Adopt Electronic FLEX Options Rules).
---------------------------------------------------------------------------
The Exchange proposes amendments to Rule 5055 to accommodate FLEX
Equity Option trading in electronic auctions. Specifically, the
Exchange proposes to include Rules 7155 (FLEX PIP) and 7275 (FLEX
Solicitation Auction) as Rules that govern FLEX Equity Options trading,
in proposed Rule 5055(a), along with current Rule 7605 (FOO Orders).\7\
The Exchange also proposes to remove the language from Rule 5055(b)(3),
which provides that FLEX Equity Options may not be traded using any
other order type than FOO Orders or other trading mechanism offered by
the Exchange and add new subparagraph (3) to provide that FLEX Equity
Options may only be traded as provided in proposed rules 7155 (FLEX
PIP) and 7275 (FLEX Solicitation Auction), and current Rule 7605 (FOO
Orders).\8\
---------------------------------------------------------------------------
\7\ See proposed Rule 5055(a).
\8\ See proposed Rules 5055(a)(3) and (b)(3).
---------------------------------------------------------------------------
The Exchange also proposes to provide as new subparagraphs (4) and
(5) in Rule 5055(f) (Fungibility of FLEX Equity Options) that:
If a Non-FLEX Equity Option series is added intra-day for a
component leg(s) of a FLEX Complex Order or FLEX Multi-Leg Order, the
holder or writer of a FLEX Equity Option position in the component
leg(s) resulting from such FLEX Complex Order or FLEX Multi-Leg Order
would be permitted to close its position(s) under the FLEX trading
procedures against another closing only FLEX Equity Option position for
the balance of the trading day on which the
[[Page 70944]]
Non-FLEX Equity Option series is added, and;
If a Non-FLEX Equity Option series is added for a component leg(s)
of a FLEX Complex Order or FLEX Multi-Leg Order on a trading day after
the FLEX Complex Order or FLEX Multi-Leg Order position is established,
the holder or writer of a FLEX Equity Option position in the component
leg(s) resulting from such FLEX Complex Order or FLEX Multi-Leg Order
would be required to execute separate FLEX Equity Option and Non-FLEX
Equity Option transactions to close its position(s), such that FLEX
Equity Option component leg(s) would trade under the FLEX trading
procedures and Non-FLEX Equity Option component leg(s) would trade
subject to the non-FLEX trading procedures and rules.\9\
---------------------------------------------------------------------------
\9\ See proposed Rules 5055(f)(4) and (5). The Exchange notes
that these proposed rules align with current Rule 7605(d).
---------------------------------------------------------------------------
Lastly, the Exchange proposes to amend Rule 5055(l) to make the
Letter of Authorization requirement for transactions in FLEX Equity
Options applicable to Order Flow Providers in addition to Floor
Brokers. As proposed, Rule 5055(l) will provide:
Letter of Authorization. No Floor Broker or Order Flow Provider
shall effect any transaction in FLEX Equity Options unless a Letter of
Authorization has been issued by a clearing member organization and
filed with the Exchange specifically accepting responsibility for the
clearance of FLEX Equity Option transactions of the Floor Broker or
Order Flow Provider. The Letter of Authorization remains in effect
until a written revocation is received by the Exchange.
The Exchange proposes to add new defined terms for ``FLEX Complex
Order'' and ``FLEX Multi-Leg Order'' where the term ``FLEX Complex
Order'' means an electronic Complex Order as defined in Rule 7240(a)(7)
composed of FLEX Equity Options where each option leg must be for a
FLEX Equity Option series authorized for FLEX trading with the same
underlying security and each option leg must have the same exercise
style (American or European) and the term ``FLEX Multi-Leg Order''
means an electronic Multi-Leg Order as defined in Rule 7240(a)(10)
composed of FLEX Equity Options where each option leg must be for a
FLEX Equity Option series authorized for FLEX trading with the same
underlying security and each option leg must have the same exercise
style (American or European).\10\
---------------------------------------------------------------------------
\10\ See proposed Rules 7240(a)(11) and (12).
---------------------------------------------------------------------------
The Exchange proposes to establish PIP functionality for FLEX
Equity Options in Rule 7155. The proposed FLEX PIP auction will be
substantially similar to CBOE's FLEX AIM in CBOE Rule 5.73, except for
certain intended differences as further described below. Pursuant to
proposed Rule 7155, Options Participants, approved by the Exchange to
trade FLEX Equity Options (``Initiating FLEX Participants'') may
electronically submit for execution an order (which may be for a single
FLEX Equity Option series, FLEX Complex Order, or FLEX Multi-Leg Order)
it represents as agent (``FLEX PIP Order'') against principal interest
or a solicited order(s) (a ``FLEX Primary Improvement Order'') provided
it submits the FLEX PIP Order for electronic execution into a FLEX PIP
pursuant to this Rule.\11\
---------------------------------------------------------------------------
\11\ See proposed Rule 7155, which is based on CBOE Rule 5.73.
The Exchange notes the proposed rule will not incorporate the
reference to FLEX SPX as this is a CBOE-specific product.
---------------------------------------------------------------------------
Proposed Rule 7155(a) will set forth the FLEX PIP auction
eligibility requirements. Specifically, the Initiating Participant may
initiate a FLEX PIP auction if all of the following conditions are met:
<bullet> Class. A FLEX PIP Order must be in a FLEX Equity Option
class authorized for trading by the Exchange.\12\
---------------------------------------------------------------------------
\12\ Both physically settled FLEX Equity Options and those FLEX
Equity Options that are permitted to have cash settlement, as
provided by Rule 5050(e)(3)(i), will be permitted to trade via the
FLEX PIP auction.
---------------------------------------------------------------------------
<bullet> FLEX Equity Option Series. The FLEX PIP Order and FLEX
Primary Improvement Order must each be for a permissible FLEX Equity
Option series that complies with Rule 5055. For a FLEX Complex Order or
FLEX Multi-Leg Order, each leg must be in a permissible FLEX Equity
Option series that complies with Rule 5055.
<bullet> Marking. The Initiating Participant must mark a FLEX PIP
Order for FLEX PIP processing.
<bullet> Size. There will be no minimum size for FLEX PIP Orders.
The FLEX Primary Improvement Order must be for the same size as the
FLEX PIP Order.
<bullet> Minimum Increment. The price of the FLEX PIP Order and
FLEX Primary Improvement Order must be in increments of one cent
($0.01) for all series. If the FLEX PIP Order and FLEX Primary
Improvement Order are FLEX Complex Orders or FLEX Multi-Leg Orders, the
price must be a net price for the strategy.\13\
---------------------------------------------------------------------------
\13\ The Exchange notes that it is not proposing order prices or
minimum increments as a percentage. The Exchange notes further that
one cent ($0.01) is the minimum increment for FLEX Equity Options in
Rule 5055(g).
---------------------------------------------------------------------------
<bullet> Time. An Initiating FLEX Participant may only submit a
FLEX PIP Order to a FLEX PIP after the opening for trading of the
underlying security in the primary market.
The System will reject or cancel both a FLEX PIP Order and FLEX
Primary Improvement Order submitted to a FLEX PIP that do not meet the
conditions in proposed paragraph (a) as described above. The proposed
FLEX PIP eligibility requirements in proposed Rule 7155 are
substantially similar to CBOE's FLEX AIM eligibility requirements in
CBOE Rule 5.73(a), except with respect to the language related to the
percentage value, as noted above.
Pursuant to proposed Rule 7155(b), the FLEX Primary Improvement
Order must stop the entire FLEX PIP Order at a specified price. If the
FLEX PIP Order and FLEX Primary Improvement Order are FLEX Complex
Orders or FLEX Multi-Leg Orders, the price must be a net price for the
strategy.\14\ In particular, the Initiating Participant must specify
either of the below.
---------------------------------------------------------------------------
\14\ See CBOE Rule 5.73(b) for similar provisions, except the
Exchange will not allow prices to be entered as a percentage value,
and therefore will not incorporate the applicable language from
CBOE's rule into proposed Rule 7155(b).
---------------------------------------------------------------------------
<bullet> Pursuant to proposed subparagraph (b)(1), a single price
at which it seeks to execute the FLEX PIP Order against the FLEX
Primary Improvement Order (a ``single-price submission''), including
designation of a lower amount for which it retains certain priority and
trade allocation privileges upon the conclusion of the FLEX PIP (as
described in proposed Rule 7155(e)(4)). This is similar to CBOE Rule
5.73(b)(1), except the Exchange is not proposing to allow Initiating
Participants to elect for the FLEX Primary Improvement Order to have
last priority to trade against the FLEX PIP Order, and will instead
allow them to elect less than their guaranteed allocation.\15\ As
further discussed below, the proposed guaranteed allocation process
will be based on the guaranteed allocation process available in non-
FLEX PIP, and therefore the proposed rule change will provide
[[Page 70945]]
further consistency across BOX's auction mechanism processes.\16\
---------------------------------------------------------------------------
\15\ The Initiating FLEX Participant may designate a Surrender
Quantity or lower amount for which it retains certain priority and
trade allocation privileges upon the conclusion of the FLEX PIP
auction than it is entitled to pursuant to the provisions of
proposed Rule 7155(e)(1)(B). If the aggregate size of other FLEX
Participants' responses is not equal to or greater than the
Surrender Quantity, then the remaining Surrender Quantity shall be
left unfilled and the FLEX Primary Improvement Order shall be
allocated the remaining size of the FLEX PIP Order. CBOE's rule does
not allow for the Initiating Participant to designate a specific
surrender quantity rather last priority is designated. The Exchange
notes that non-FLEX rules on CBOE and BOX also specify last priority
and surrender quantity respectively. See CBOE Rule 5.37(e)(5) and
BOX Rule 7150(h)(5).
\16\ See infra note 34 for further discussion on the guaranteed
allocation process.
---------------------------------------------------------------------------
<bullet> Pursuant to subparagraph (b)(2), an initial stop price and
instruction to automatically match the price and size of all FLEX PIP
responses (``auto-match'') at each price, up to a designated limit
price, better than the price at which the balance of the FLEX PIP Order
can be fully executed (the ``final auction price''). This is
substantially similar to CBOE Rule 5.73(b)(2). The System rejects or
cancels both a FLEX PIP Order and FLEX Primary Improvement Order
submitted to a FLEX PIP that do not meet the conditions in this
paragraph (b).
Proposed Rule 7155(c) will govern the FLEX PIP process.
Specifically, upon receipt of a FLEX PIP Order that meets the
conditions in paragraphs (a) and (b) as described above, the FLEX PIP
process commences. Proposed subparagraph (c)(1) will provide that a
FLEX PIP will not run simultaneously with another FLEX PIP in the same
series, nor will FLEX PIPs interact, queue or overlap in any manner.
Any request to initiate a FLEX PIP while a FLEX PIP is already in
progress in the same series will be rejected.
The Exchange will accept, however, orders designated for the FLEX
PIP on a single option series where a FLEX PIP on a Complex or Multi-
Leg Order that includes such series may be in progress. The Exchange
will also accept Complex or Multi-Leg Orders designated for the FLEX
PIP where a FLEX PIP on either of the component series may be in
progress. Order execution at the conclusion of such FLEX PIPs shall
occur as set forth in proposed Rule 7155. The lack of concurrent FLEX
PIPs is designed to align to current System behavior (and especially
current auction behavior) to provide increased consistency for
Participants trading FLEX Equity Options and Non-FLEX Equity Options on
BOX.\17\ The Exchange notes that this proposed subsection (c) differs
from CBOE Rules 5.73(c)(1)(A) and (B), but again notes that the
proposed functionality is consistent with BOX's current non-FLEX
auction functionality.
---------------------------------------------------------------------------
\17\ See BOX IM-7150-2.
---------------------------------------------------------------------------
Pursuant to proposed Rule 7155(c)(2), the System initiates the FLEX
PIP process by sending a FLEX PIP notification message detailing the
series or strategy, size, stop price, side of market, and when the FLEX
PIP will conclude as applicable, of the FLEX PIP Order by broadcasting
a message via the Exchange's data feeds. FLEX PIP notification messages
are not disseminated to OPRA.\18\
---------------------------------------------------------------------------
\18\ See CBOE Rule 5.73(c)(2) for substantially similar
provisions except the Exchange will not incorporate the reference to
SPX as it does not list this symbol.
---------------------------------------------------------------------------
Proposed Rule 7155(c)(3) will describe the ``FLEX PIP Auction
period,'' and is based on CBOE Rule 5.73(c)(3). The ``FLEX PIP Auction
period'' is a period of time designated by the Initiating FLEX
Participant, which may be no less than three seconds and no more than
five minutes.\19\ The Initiating Participant will be required to
identify a length of time within the specified parameters for FLEX PIP.
If the Initiating Participant does not provide a length of time, the
system will utilize the system default, which shall be three seconds.
Further, if the designated length of the FLEX PIP Auction period
exceeds the market close, then the auction will end at the market close
without an execution. In doing so, the Exchange's proposal will prevent
executions from occurring after the market close. Proposed Rule
7155(c)(4) will provide that an Initiating Participant may not cancel a
FLEX PIP Order or FLEX Primary Improvement Order but may modify a FLEX
Primary Improvement Order to improve its price after submission to a
FLEX PIP. This will be similar to CBOE Rule 5.73(c)(4) except unlike
CBOE, the Exchange will allow a limited exception by allowing
Initiating Participants to improve the price of their FLEX Primary
Improvement Orders. The Exchange notes that this will align to current
non-FLEX PIP behavior, which allows entering Participants to improve
their Primary Improvement Orders.\20\ Similar to allowing the entering
Participant of a non-FLEX PIP to improve the price of its Primary
Improvement Order, the Exchange believes that it is appropriate to
allow the Initiating Participant of the FLEX PIP to improve the price
of its FLEX Primary Improvement Order (i.e., contra-side to the FLEX
PIP Order) because it would also improve the stop price of the FLEX PIP
Order that came in together with the FLEX Primary Improvement
Order.\21\
---------------------------------------------------------------------------
\19\ The Exchange notes that CBOE Rule 5.73(c)(3) specifies that
the designated length of the FLEX AIM Auction period may not be
longer than the amount of time remaining until the market close.
While this differs from BOX's proposal, BOX's System will cancel a
FLEX PIP that is not over by the market close without execution.
\20\ See BOX Rule 7150(f)(2) (providing that the Initiating
Participant is not permitted to cancel or to modify the size of its
Single-Priced Primary Improvement Order or the PIP Order at any time
during the PIP, and may modify only the price of its Single-Priced
Primary Improvement Order by improving it. The Initiating
Participant is not permitted to cancel or modify the Max Improvement
Primary Improvement Order, including the PIP Start Price, the
designated limit price or the size). Primary Improvement Orders
(i.e., contra-side to the PIP Order) for PIP are functionally
equivalent to FLEX Primary Improvement Orders (i.e., contra-side
order to the FLEX PIP Order) for FLEX PIP. See BOX Rule 7150(f) for
a description of Primary Improvement Orders.
\21\ As proposed, the Initiating Participant enters a FLEX PIP
consisting of a FLEX PIP Order and a FLEX Primary Improvement Order
(which is the contra-side of the FLEX PIP Order). This is identical
to how non-FLEX PIP works today in that the Initiating Participant
enters a paired order into non-FLEX PIP consisting of a PIP Order
and a Primary Improvement Order. The Exchange notes that a PIP
Improvement Order is the functional equivalent of a FLEX PIP
response.
---------------------------------------------------------------------------
Proposed Rule 7155(c)(5) will govern the requirements for FLEX PIP
responses.
Specifically:
<bullet> Any FLEX Participant (other than the Initiating
Participant) may submit responses to a FLEX PIP that are properly
marked specifying price, size, side for the FLEX PIP to which the
Participant is submitting the response.\22\
---------------------------------------------------------------------------
\22\ See proposed Rule 7155(c)(5), which is based on CBOE Rule
5.73(c)(5). The Exchange notes that this proposed subsection (c)(5)
differs from CBOE Rules 5.73(c)(5) because a FLEX PIP will not run
simultaneously with another FLEX PIP and, therefore need not specify
which response may participate in which auction. The Exchange notes
further that the proposed functionality is consistent with current
non-FLEX auction functionality. See BOX IM-7150-2.
---------------------------------------------------------------------------
<bullet> The minimum price increment for FLEX PIP responses is one-
cent ($0.01) for all series. A response to a FLEX PIP of a FLEX Complex
or FLEX Multi-Leg Order must have a net price. The System rejects a
FLEX PIP response that is not in the applicable minimum increment or
format.\23\
---------------------------------------------------------------------------
\23\ See proposed Rule(c)(5)(A), which is based on CBOE Rule
5.73(c)(5)(A) except the Exchange will not allow prices to be
expressed as a percentage value. Further, the Exchange will not
incorporate the CBOE rule portions on Index Combo Orders as the
Exchange does not offer this functionality. The Exchange notes that
it will not determine minimum increments on a class basis, which is
consistent with established FLEX Equity Option trading on the BOX
Trading Floor. See BOX Rule 5055(g).
---------------------------------------------------------------------------
<bullet> A FLEX Participant may continually submit competing FLEX
PIP responses for any price equal to or better than the FLEX Primary
Improvement Order, and may improve the price of their response(s) at
any point during the FLEX PIP. Subsequent FLEX PIP responses replace
the previous response, provided that it improved the price of the
previous response.\24\ Responses submitted by FLEX Participants are
processed by Trader
[[Page 70946]]
ID.\25\ If an additional FLEX PIP response is submitted for the same
FLEX PIP from the same Trader ID, then that FLEX PIP response will
replace the previous FLEX PIP response for that Trader ID.\26\
---------------------------------------------------------------------------
\24\ See proposed Rule 7155(c)(5)(B), which is based on CBOE
Rule 5.73(c)(5)(B). The Exchange notes that it will not aggregate
FLEX PIP responses from the same Participant, which aligns with
current non-FLEX PIP functionality. See BOX Rule 7150(f).
\25\ A Trader ID is a unique identifier created by BOX to
identify each BOX Options Participant. A BOX Options Participant may
be associated with multiple Trader IDs
\26\ This is similar to the electronic FLEX auction
functionality offered by another exchange and similar to the current
PIP functionality on the Exchange. See ISE Options 3A, Section
11(b)(2)(D) and BOX Rule 7150, respectively.
---------------------------------------------------------------------------
<bullet> Competing FLEX PIP responses may be for any size up to the
size of the FLEX Primary Improvement Order.\27\ The System rejects
responses in excess of the size of the FLEX PIP Order when processing
the FLEX PIP.
---------------------------------------------------------------------------
\27\ See proposed Rule 7155(c)(5)(C), which is based on CBOE
Rule 5.73(c)(5)(C).
---------------------------------------------------------------------------
<bullet> FLEX PIP responses must be on the opposite side of the
market as the FLEX PIP Order. The System rejects a FLEX PIP response on
the same side of the market as the FLEX PIP Order.\28\
---------------------------------------------------------------------------
\28\ See proposed Rule 7155(c)(5)(D), which is based on CBOE
Rule 5.73(c)(5)(D).
---------------------------------------------------------------------------
<bullet> FLEX PIP responses will not be visible to FLEX PIP
Participants or disseminated to OPRA.\29\
---------------------------------------------------------------------------
\29\ See proposed Rule 7155(c)(5)(E), which is based on CBOE
Rule 5.73(c)(5)(E).
---------------------------------------------------------------------------
<bullet> A FLEX Participant may modify or cancel its FLEX PIP
responses during the FLEX PIP auction.\30\
---------------------------------------------------------------------------
\30\ See proposed Rule 7155(c)(5)(F), which is based on CBOE
Rule 5.73(c)(5)(F).
---------------------------------------------------------------------------
Pursuant to proposed Rule 7155(d), a FLEX PIP concludes at the
earliest to occur of the following times: (1) the end of the FLEX PIP
Duration; and (2) any time the Exchange halts trading in the affected
underlying, provided, however, that in such instances the FLEX PIP
auction concludes without execution.\31\
---------------------------------------------------------------------------
\31\ See CBOE Rule 5.73(d) for similar provisions, except the
Exchange will make a minor clarification that this rule applies when
the Exchange halts trading in the affected underlying (and not
series, which is what CBOE currently has in its rule).
---------------------------------------------------------------------------
Proposed Rule 7155(e) will govern how executions will occur in FLEX
PIP. In particular, at the end of the FLEX PIP, the System allocates
the FLEX Primary Improvement Order or FLEX PIP responses against the
FLEX PIP Order at the best price(s), to the price at which the balance
of the FLEX PIP Order can be fully executed (the ``final auction
price''), as follows.\32\ Proposed subparagraphs (e)(1)--(4) detail the
FLEX PIP allocation methodology for the following scenarios:
---------------------------------------------------------------------------
\32\ See CBOE Rule 5.73(e) for similar provisions except the
Exchange will not allow prices to be expressed as a percentage
value.
---------------------------------------------------------------------------
<bullet> No Price Improvement: If the FLEX PIP results in no price
improvement, the System executes the FLEX PIP Order at the stop price
in the following order:
[cir] Public Customer responses (in time priority); \33\
---------------------------------------------------------------------------
\33\ See proposed Rule 7155(e)(1)(A), which is based on CBOE
Rule 5.73(e)(1)(A).
---------------------------------------------------------------------------
[cir] The FLEX Primary Improvement Order for up to 50% of the FLEX
PIP Order if there is a response(s) from one other Participant at the
same price or up to 40% of the FLEX PIP Order if there are responses
from two or more other Participants at the same price (which
percentages are based on the number of contracts remaining after
execution against Public Customer responses).\34\ Unless there are
remaining contracts after including all FLEX PIP responses, under no
circumstances does the Initiating Participant receive an allocation
percentage at the final auction price of more than 50% of the initial
FLEX PIP Order in the event there is a response(s) from one other
Participant or 40% of the initial FLEX PIP Order in the event there are
responses from two or more other Participants.\35\ For example, assume
an Initiating Participant submitted a FLEX PIP for 20 contracts and
there are 2 FLEX PIP responses (one for 3 contracts and one for 4
contracts). After the 7 FLEX PIP response contracts are allocated, the
Initiating Participant would then receive the remaining 13 contracts
(which is more than their 40% allocation percentage) because there are
remaining contracts after all FLEX PIP responses are included.
---------------------------------------------------------------------------
\34\ See proposed Rule 7155(e)(1)(B)(ii), which is based on CBOE
Rule 5.73(e)(1)(B)(ii). The Exchange notes that its proposed rules
do not guarantee at least one contract. The Exchange notes further
that the Initiating Participant may be allocated more than 50% of
the Agency Order if there are remaining contracts after including
all FLEX PIP responses.
\35\ See proposed Rule 7155(e)(1)(B), which is based on CBOE
Rule 5.73(e)(1)(B). The proposed functionality will align to current
non-FLEX PIP functionality. See BOX Rule 7150(h)(1)-(2).
---------------------------------------------------------------------------
[cir] All other FLEX PIP responses are allocated on a pro-rata
basis. The System allocates orders proportionally according to size
(i.e., on a pro-rata basis). The System allocates executable quantity
to the nearest whole number, with fractions rounded down. If there
remains any unallocated quantity of the FLEX PIP Order, the allocation
method will be to allocate one contract of the FLEX PIP Order per FLEX
PIP response in sequence until each remaining response has received one
contract or until the FLEX PIP Order is fully allocated. Allocation
sequence among responses in this step will be in order of size with the
largest remaining response allocated first. Where two or more such
responses are the same size, trade allocation sequence will be by time
priority; \36\ and
---------------------------------------------------------------------------
\36\ See proposed Rule 7155(e)(1)(C), which is based on CBOE
Rule 5.73(e)(1)(C).
---------------------------------------------------------------------------
[cir] The FLEX Primary Improvement Order to the extent there are
any remaining contracts.\37\
---------------------------------------------------------------------------
\37\ See proposed Rule 7155(e)(1)(D), which is based on CBOE
Rule 5.73(e)(1)(D).
---------------------------------------------------------------------------
<bullet> Price Improvement with Single-Price Submission: If the
FLEX PIP auction results in price improvement for the FLEX PIP Order
and the Initiating Participant selected a single-price submission, at
each price better than the final auction price, the System executes the
FLEX PIP Order in the following order:
[cir] Price-time priority such that responses with the lowest
(highest) offer (bid) are executed in the order they are received.\38\
---------------------------------------------------------------------------
\38\ See proposed Rule 7155(e)(2)(A). Unlike CBOE Rule
5.73(e)(2), which allocates contracts, at each price level better
than the final auction price, Priority Customer and then pro-rata,
the proposed rule allocates contracts, at each price better than the
final auction price, on a price-time basis. The Exchange believes,
although its proposal differs, the resulting allocations will be
similar because all orders at each price level better than the final
auction price will be filled. Specifically, ``at each price level
better than the final auction price up to the designated limit
price, the System executes the FLEX PIP Order against the FLEX
Primary Improvement Order for the number of contracts equal to the
aggregate size of all FLEX PIP responses and then executes the
Agency Order against those responses . . . .'' See proposed Rule
7155(e)(3) (emphasis added). Because all FLEX PIP responses, at each
price level better than the final auction price are executed, the
application of price-time or Priority Customer and then pro-rata
priority results in a similar allocation of contracts regardless of
which allocation methodology is applied.
---------------------------------------------------------------------------
For example, assume a FLEX PIP Order is sent to buy 100 contracts
with a price of $1.00 and the Initiating Participant selected a single-
price submission. There are two FLEX PIP responses for 5 contracts each
at $0.98, two FLEX PIP responses for 20 contracts each at $0.99, and
two FLEX PIP responses for 40 contracts each at $1.00. The FLEX PIP
responses at $0.98 and $0.99 will be executed in their entirety.\39\
Then, the FLEX PIP responses at $1.00 (final auction price) will be
executed on a pro-rata basis after Public Customers. At the final
auction price, the System executes any remaining contracts from the
FLEX PIP Order at that price in the order set forth in proposed Rule
7155(e)(1), as described above.\40\ Specifically, the
[[Page 70947]]
FLEX Primary Improvement Order is allocated 20 contracts (40% of the
remaining 50 contracts) and 15 contracts are allocated to each FLEX PIP
response at $1.00 (pro rata).
---------------------------------------------------------------------------
\39\ The Exchange notes that, although CBOE applies Priority
Customer and then pro rata priority at each price level better than
the final auction price, and BOX proposes to apply price-time
allocation at each price level better than the final auction price,
regardless of allocation methodology, all contracts at $0.98 and
$0.99 would be filled because there is sufficient FLEX PIP Order
quantity.
\40\ See id. The Exchange again notes the proposed operation of
FLEX PIP is consistent with the current operation of non-FLEX PIP.
See BOX Rule 7150(g). The Exchange notes further that the proposed
trade allocation at the final auction price is substantially similar
to CBOE.
---------------------------------------------------------------------------
<bullet> Price Improvement with Auto-Match: If the FLEX PIP results
in price improvement for the FLEX PIP Order and the Initiating
Participant selected auto-match, at each price better than the final
auction price up to the designated limit price, the System executes the
FLEX PIP Order against the FLEX Primary Improvement Order for the
number of contracts equal to the aggregate size of all FLEX PIP
responses and then executes the FLEX PIP Order against those responses
in the order set forth in proposed Rule 7155(e)(2) described above. At
the final auction price, the System executes contracts at that price in
the order set forth in proposed Rule 7155(e)(1) described above.\41\
---------------------------------------------------------------------------
\41\ See proposed Rule 7155(e)(3), which is based on CBOE Rule
5.73(e)(3).
---------------------------------------------------------------------------
<bullet> Surrender Quantity: At its option, the Initiating FLEX
Participant may designate a lower amount for which it retains certain
priority and trade allocation privileges upon the conclusion of the
FLEX PIP than it is entitled to pursuant to the provisions of
7155(e)(1) or 7155(e)(2), above. When starting a FLEX PIP, the
Initiating FLEX Participant may designate a lower amount for which it
retains certain priority and trade allocation privileges upon the
conclusion of the FLEX PIP than it is entitled to pursuant to the
provisions of proposed Rule 7155(e)(1)(B).\42\ Upon the conclusion of
the FLEX PIP, when the System determines the priority and trade
allocation amounts for the Initiating FLEX Participant pursuant to
proposed Rule 7155(e)(1)(B), the Trading Host will automatically adjust
the trade allocations to the other FLEX PIP Participants, according to
the priority set forth in proposed Rule 7155(e), up to the Surrender
Quantity. The FLEX Primary Improvement Order shall be allocated the
remaining size of the FLEX PIP Order above the Surrender Quantity, if
any, pursuant to proposed Rule 7155(e)(1)(D). Surrender Quantity
information is not available to other market participants and may not
be modified after it is submitted.\43\
---------------------------------------------------------------------------
\42\ See proposed Rule 7155(e)(4), which is based on CBOE Rule
5.73(e)(4) except CBOE's last priority feature differs from the
Exchange's surrender quantity feature that allows Participants to
request a lower amount for which it retains certain priority and
trade allocation privileges upon the conclusion of the FLEX PIP than
it will be entitled to pursuant to the provisions of proposed Rule
7155(e). As such, the difference between CBOE's rule and BOX's rule
will be that BOX Participants will be able to customize their
surrender quantities for FLEX PIP (which will follow the non-FLEX
PIP process in Rule 7150(h)(5)) while CBOE's rules do not appear to
allow this for FLEX AIM.
\43\ See id.
---------------------------------------------------------------------------
Pursuant to proposed Rule 7155(e)(5), the System cancels any
unexecuted FLEX PIP responses (or unexecuted portions) at the
conclusion of the FLEX PIP auction.\44\
---------------------------------------------------------------------------
\44\ See proposed Rule 7155(e)(5), which is based on CBOE Rule
5.73(e)(5).
---------------------------------------------------------------------------
The Exchange proposes a number of interpretive materials applicable
to FLEX PIP. Specifically, proposed IM-7155-1 will provide that a
Participant may only use a FLEX PIP where there is a genuine intention
to execute a bona fide transaction.\45\ Proposed IM-7155-2 will provide
that it will be deemed conduct inconsistent with just and equitable
principles of trade and a violation of Rule 3000 to engage in a pattern
of conduct where the Initiating FLEX Participant breaks up a FLEX PIP
Order into separate orders for the purpose of gaining a higher
allocation percentage than the Initiating FLEX Participant would have
otherwise received in accordance with the allocation procedures
contained in proposed paragraph (e) above.\46\ Lastly, proposed IM-
7155-3 will provide that an Exchange Official may nullify a transaction
following a FLEX PIP pursuant to Rule 7170.\47\
---------------------------------------------------------------------------
\45\ See proposed IM-7155-1, which is based on CBOE Rule 5.73
Interpretations and Policies .01.
\46\ See proposed IM-7155-2, which is based on CBOE Rule 5.73
Interpretations and Policies .02.
\47\ See proposed IM-7155-3, which is based on CBOE Rule 5.73
Interpretations and Policies .03.
---------------------------------------------------------------------------
FLEX Solicitation Auction
The Exchange proposes to establish FLEX Solicitation Auction
functionality for FLEX Equity Options in Rule 7275. The proposed FLEX
Solicitation Auction will be substantially similar to CBOE's FLEX SAM
in CBOE Rule 5.74, except for certain intended differences to align
with BOX's current System functionality for Non-FLEX Equity Options, as
further described below. Pursuant to proposed Rule 7275, Options
Participants, approved by the Exchange to trade FLEX Equity Options
(``Initiating FLEX Participants'') may electronically submit for
execution an order (which may be for a single FLEX Equity Option
series, FLEX Complex Order, or FLEX Multi-Leg Order) it represents as
agent (``Agency Order'') against a solicited order (a ``Solicited
Order'') provided it submits the Agency Order for electronic execution
into a FLEX Solicitation Auction pursuant to this Rule.\48\ Proposed
Rules 7275(a)(1)-(6) will set forth the FLEX Solicitation Auction
eligibility requirements, and will be substantially similar to CBOE
Rules 5.74(a)(1)-(6) except as noted below. Specifically, Initiating
FLEX Participants may initiate a FLEX Solicitation if all of the
following conditions are met:
---------------------------------------------------------------------------
\48\ See CBOE Rule 5.74 for similar provisions, except the
Exchange will not add CBOE's language that the Solicited Order
cannot have a Capacity F (i.e., Firm capacity) for the same
executing firm ID (``EFID'') as the Agency Order for the following
reasons. Facilitated orders cannot be entered into the FLEX
Solicitation Auction (just like they cannot be entered into the non-
FLEX Solicitation Auction today). Since an order with the capacity
of Firm can be valid for a solicitation order, BOX will not System
enforce the rejection of Firm capacity orders to avoid the rejection
of contra-side orders that are entered with a Firm capacity and are,
in fact, solicitations at the outset. Instead, it will monitor for
compliance with the requirement that the contra-side order be a
solicitation rather than a facilitation through surveillance, as it
does today for non-FLEX Solicitation Auctions. The applicable rule
for the foregoing requirement will be set forth in proposed IM-7275-
2.
---------------------------------------------------------------------------
<bullet> Class. An Agency Order must be in a FLEX Equity Option
class authorized for trading by the Exchange.\49\
---------------------------------------------------------------------------
\49\ Both physically settled FLEX Equity Options and those FLEX
Equity Options that are permitted to have cash settlement, as
provided by Rule 5050(e)(3)(i), will be permitted to trade via the
FLEX Solicitation auction.
---------------------------------------------------------------------------
<bullet> FLEX Option Series. The Agency Order and Solicited Order
must each be for a permissible FLEX Equity Option series that complies
with Rule 5055. For a FLEX Complex Order or FLEX Multi-Leg Order, each
leg must be in a permissible FLEX Equity Option series that complies
with Rule 5055.\50\
---------------------------------------------------------------------------
\50\ See CBOE Rule 5.74(a)(2) for similar provisions, except the
Exchange will add a provision to specify that each leg of a FLEX
Complex Order or FLEX Multi-Leg Order must be in a permissible FLEX
Equity Option series that complies with Rule 5055.
---------------------------------------------------------------------------
<bullet> Marking. The Initiating Participant must mark an Agency
Order for FLEX Solicitation Auction processing.
<bullet> Size. The Agency Order must be for at least the minimum
size designated by the Exchange (which may not be less than 500
contracts). The Solicited Order must be for the same size as the Agency
Order. For a FLEX Complex Order or FLEX Multi-Leg Order, each leg may
not be for less than 500 contracts. The System handles each of the
Agency Order and the Solicited Order as all-or-none.\51\
---------------------------------------------------------------------------
\51\ See CBOE Rule 5.74(a)(4) for similar provisions except
unlike CBOE, the Exchange will not allow the Solicited Order to be
comprised of multiple solicited orders in the FLEX Solicitation
Auction to be consistent with current non-FLEX Solicitation Auction
functionality in Rule 7270. In addition, the Exchange will not
incorporate CBOE's provisions relating to mini options or Micro FLEX
Index Options into proposed Rule 7275(a)(4) as the Exchange does not
list these products today. Further, the Exchange is adding a minor
clarification that the minimum size requirement will apply to each
leg of a FLEX Complex Order or FLEX Multi-Leg Order.
---------------------------------------------------------------------------
[[Page 70948]]
<bullet> Minimum Increment. The price of the Agency Order and
Solicited Order must be in increments of one cent ($0.01) for all
series. If the Agency Order and Solicited Order are FLEX Complex Orders
or FLEX Multi-Leg Orders, the price must be a net price for the
strategy.\52\
---------------------------------------------------------------------------
\52\ The Exchange notes that unlike CBOE, it will not allow
prices to be entered as a percentage value, and therefore will not
incorporate the applicable language from CBOE Rule 5.74(a)(5) into
proposed Rule 7275(a)(5). Additionally, the Exchange will not
specify minimum increments on a per class basis and will instead
specify one cent ($0.01) for all series. This is consistent with FOO
Orders on the BOX Trading Floor.
---------------------------------------------------------------------------
<bullet> Time. An Initiating FLEX Participant may only submit an
Agency Order to a FLEX Solicitation after the opening for trading of
the underlying security in the primary market.\53\ The System rejects
or cancels both an Agency Order and Solicited Order submitted to a FLEX
Solicitation Auction that do not meet the conditions in this paragraph
(a).
---------------------------------------------------------------------------
\53\ See proposed Rule 7275(a)(6), which is based on CBOE Rule
5.74(a)(6).
---------------------------------------------------------------------------
Pursuant to proposed Rule 7275(b), the Solicited Order must stop
the entire Agency Order. If the Agency Order and Solicited Order are
FLEX Complex or FLEX Multi-Leg Orders, the price must be a net price
for the strategy. The Initiating FLEX Participant must specify a single
price at which it seeks to execute the Agency Order against the
Solicited Order. The System rejects or cancels both an Agency Order and
Solicited Order submitted to a FLEX Solicitation Auction that does not
meet this condition.\54\
---------------------------------------------------------------------------
\54\ See CBOE Rule 5.74(b) for similar provisions, except the
Exchange will not allow prices to be entered as a percentage value,
and therefore will not incorporate the applicable language from
CBOE's rule into proposed Rule 7275(b).
---------------------------------------------------------------------------
Proposed Rule 7275(c) will govern the FLEX Solicitation process.
Specifically, upon receipt of an Agency Order that meets the conditions
in paragraphs (a) and (b) as described above, the FLEX Solicitation
process commences. Pursuant to proposed subparagraph (c)(1), a FLEX
Solicitation will not run simultaneously with another FLEX Solicitation
in the same series, nor will FLEX Solicitations interact, queue or
overlap in any manner.\55\ Any request to initiate a FLEX Solicitation
while a FLEX Solicitation is already in progress in the same series
will be rejected. This proposal differs from CBOE Rule 5.74(c)(1) which
allows concurrent auctions. The Exchange notes this is consistent with
current non-FLEX Solicitation Auction functionality.
---------------------------------------------------------------------------
\55\ This feature is consistent with current non-FLEX
Solicitation Auction functionality. The Exchange notes that it will
accept orders designated for the FLEX Solicitation on a single
option series where a FLEX Solicitation on a FLEX Complex or FLEX
Multi-Leg Order that includes such series may be in progress. BOX
will also accept FLEX Complex or FLEX Multi-Leg Orders designated
for the FLEX Solicitation Auction where a FLEX Solicitation Auction
on either of the component series may be in progress. Order
execution at the conclusion of such FLEX Solicitations shall occur
as set forth in proposed Rule 7275.
---------------------------------------------------------------------------
Pursuant to proposed Rule 7275(c)(2), the System initiates the FLEX
Solicitation process by sending a FLEX Solicitation notification
message detailing the series or strategy, size, stop price, side of
market, and when the FLEX Solicitation Auction will conclude as
applicable, by broadcasting a message via the Exchange's data feeds.
FLEX Solicitation Auction notification messages are not disseminated to
OPRA. These provisions are substantially similar to CBOE Rule
5.74(c)(2).
Proposed Rule 7275(c)(3) will describe the ``FLEX Solicitation
Auction Period,'' and is based on CBOE Rule 5.74(c)(3). The FLEX
Solicitation Auction Period will be defined as a period of time that
must be designated by the Initiating Participant, which may be no less
than three seconds and no more than five minutes, similar to the
exposure interval for FLEX PIP in proposed Rule 7155 and the FOO Order
announcement period in Rule 7605. The Initiating Participant will be
required to identify a length of time within the specified parameters
for FLEX Solicitation Auctions. If the Initiating Participant does not
provide a length of time, the system will utilize the system default,
which shall be three seconds. Further, if the designated length of the
FLEX Solicitation Auction Period exceeds the market close, then the
auction will end at the market close without an execution. The
Exchange's non-FLEX auctions do not allow executions in such scenarios,
so the Exchange proposes to be consistent with current System
functionality in this regard.\56\ In doing so, the Exchange's proposal
will prevent executions in FLEX Solicitation Auctions from occurring
after the market close. Proposed Rule 7275(c)(4) will provide that an
Initiating FLEX Participant may cancel an Agency Order or Solicited
Order after submission to a FLEX Solicitation Auction. The Initiating
FLEX Participant may not modify an Agency Order or Solicited Order
after submission to a FLEX Solicitation Auction. This will differ from
CBOE Rule 5.74(c)(4), which does not allow cancelation or modification
of the Initiating Order or Agency Order. The Exchange will allow
Initiating Participants to cancel their Agency Orders and Solicited
Orders upon submission into a FLEX Solicitation Auction, which will
align with current non-FLEX Solicitation Auction functionality.\57\
Proposed Rule 7275(c)(5) will govern the requirements for FLEX
Solicitation responses. Specifically:
---------------------------------------------------------------------------
\56\ The Exchange's proposal will be consistent with current
non-FLEX auction functionality, including current PIP and
Solicitation Auction functionality. See BOX Rules 7150 and 7270(b).
\57\ See proposed Rule 7275(c)(4). See generally BOX Rule
7270(b).
---------------------------------------------------------------------------
<bullet> Any FLEX Participant (other than the Initiating
Participant) may submit responses to a FLEX Solicitation Auction that
are properly marked specifying size, side, and price for the FLEX
Solicitation Auction to which the FLEX Participant is submitting the
response.\58\
---------------------------------------------------------------------------
\58\ See proposed Rule 7275(c)(5), which is based on CBOE Rule
5.74(c)(5).
---------------------------------------------------------------------------
<bullet> The minimum price increment for FLEX Solicitation Auction
responses is one-cent ($0.01) for all series. A response to a FLEX
Solicitation Auction of a FLEX Complex or FLEX Multi-Leg Order must
have a net price. The System rejects a FLEX Solicitation Auction
response that is not in the applicable minimum increment or format.\59\
---------------------------------------------------------------------------
\59\ See proposed Rule 7275(c)(5)(A), which is based on CBOE
Rule 5.74(c)(5)(A) except the Exchange will not allow prices to be
expressed as a percentage value.
---------------------------------------------------------------------------
<bullet> A FLEX Participant may submit FLEX Solicitation Auction
responses for any price equal to or better than the stop price in
paragraph (b) of proposed Rule 7275.\60\ Responses submitted by FLEX
Participants are processed by Trader ID. If an additional FLEX
Solicitation Auction response is submitted for the same FLEX
Solicitation Auction from the same Trader ID, then that FLEX
Solicitation Auction response will replace the previous FLEX
Solicitation Auction response for that Trader ID.\61\
---------------------------------------------------------------------------
\60\ See proposed Rule 7275(c)(5)(B), which is based on CBOE
Rule 5.74(c)(5)(B). The Exchange notes that it will not aggregate
FLEX Solicitation responses from the same Participant, which aligns
with current non-FLEX Solicitation Auction functionality and is
similar to the electronic FLEX auction functionality offered by
another exchange. See BOX Rule 7270(b) and ISE Options 3A, Section
13(c)(5)(B), respectively.
\61\ This is similar to the electronic FLEX auction
functionality offered by another exchange and similar to the current
Solicitation Auction functionality on the Exchange. See ISE Options
3A, Section 13(c)(5)(B), and BOX Rule 7270(b), respectively.
---------------------------------------------------------------------------
<bullet> The System will cap the size of a FLEX Solicitation
response at the size of
[[Page 70949]]
the Agency Order (i.e., the System will ignore size in excess of the
size of the Agency Order when processing the FLEX Solicitation
auction).\62\
---------------------------------------------------------------------------
\62\ See proposed Rule 7275(c)(5)(C), which is based on CBOE
Rule 5.74(c)(5)(C).
---------------------------------------------------------------------------
<bullet> FLEX Solicitation responses must be on the opposite side
of the market as the Agency Order. The System rejects a FLEX
Solicitation response on the same side of the market as the Agency
Order.\63\
---------------------------------------------------------------------------
\63\ See proposed Rule 7275(c)(5)(D), which is based on CBOE
Rule 5.74(c)(5)(D).
---------------------------------------------------------------------------
<bullet> FLEX Solicitation responses will not be visible to FLEX
Solicitation Auction participants or disseminated to OPRA.\64\
---------------------------------------------------------------------------
\64\ See proposed Rule 7275(c)(5)(E), which is based on CBOE
Rule 5.74(c)(5)(E).
---------------------------------------------------------------------------
<bullet> A FLEX Participant may modify, including decrementing the
price or size, or cancel its FLEX Solicitation responses during a FLEX
Solicitation Auction. Subsequent FLEX Solicitation Auction responses
replace the previous response.\65\
---------------------------------------------------------------------------
\65\ See proposed Rule 7275(c)(5)(F), which is based on CBOE
Rule 5.74(c)(5)(F).
---------------------------------------------------------------------------
Pursuant to proposed Rule 7275(d), a FLEX Solicitation Auction
concludes at the earliest to occur of the following times: (1) the end
of the FLEX Solicitation Auction Period; and (2) any time the Exchange
halts trading in the affected underlying, provided, however, that in
such instance the FLEX Solicitation Auction concludes without
execution.\66\ Proposed Rule 7275(e) will govern how executions will
occur in FLEX Solicitation Auctions. In particular, at the end of the
FLEX Solicitation Auction, the System will execute the Agency Order
against the Solicited Order or FLEX Solicitation responses at the best
price(s) as follows.\67\ Proposed subparagraphs (e)(1)-(3) detail the
FLEX Solicitation allocation methodology for the following scenarios:
---------------------------------------------------------------------------
\66\ See CBOE Rule 5.74(d) for similar provisions, except the
Exchange will make a minor clarification that this rule applies when
the Exchange halts trading in the affected underlying (and not
series, which is what CBOE currently has in its rule).
\67\ See CBOE Rule 5.74(e) for similar provisions except the
Exchange will not allow prices to be expressed as a percentage
value.
---------------------------------------------------------------------------
<bullet> Execution Against Solicited Order: The System executes the
Agency Order against the Solicited Order at the stop price if the
aggregate size of FLEX Solicitation responses at an improved price(s)
is insufficient to satisfy the Agency Order.\68\
---------------------------------------------------------------------------
\68\ See proposed Rule 7275(e)(1), which is based on CBOE Rule
5.74(e)(1).
---------------------------------------------------------------------------
<bullet> Execution Against FLEX Solicitation Responses: The System
executes the Agency Order against FLEX Solicitation Auction responses
if the aggregate size of FLEX Solicitation responses at an improved
price(s) is sufficient to satisfy the Agency Order. The Agency Order
executes against FLEX Solicitation responses at each price level. At
the price at which the balance of the Agency Order can be fully
executed, responses are executed in price and time priority.\69\
---------------------------------------------------------------------------
\69\ See proposed Rule 7275(e), which differs from CBOE Rule
5.74 because responses are executed in price time priority rather
than Priority Customer and then pro-rata. Additionally, CBOE cancels
the Agency Order and Solicited Order with no execution if there is a
Priority Customer FLEX SAM response and the aggregate size of that
response and other FLEX SAM responses is insufficient to satisfy the
Agency Order. BOX is not proposing a similar provision. The Exchange
notes that this FLEX Solicitation proposal is based on current non-
FLEX Solicitation Auction functionality. See BOX Rule 7270(b). The
Exchange believes that consistency between FLEX and non-FLEX
Solicitation Auction functionality, where applicable, will reduce
opportunities for confusion and increase efficiency.
---------------------------------------------------------------------------
Pursuant to proposed Rule 7275(e)(4), the System cancels any
unexecuted FLEX Solicitation responses (or unexecuted portions) at the
conclusion of a FLEX Solicitation Auction.\70\
---------------------------------------------------------------------------
\70\ See proposed Rule 7275(e)(4), which is based on CBOE Rule
5.74(e)(4).
---------------------------------------------------------------------------
Lastly, the Exchange proposes a number of policies applicable to
FLEX Solicitation as Interpretive Materials to Rule 7275. Specifically,
proposed IM-7275-1 will provide that prior to entering Agency Orders
into a FLEX Solicitation Auction on behalf of customers, Initiating
Participants must deliver to the customer a written notification
informing the customer that its order may be executed using the FLEX
Solicitation Auction. The written notification must disclose the terms
and conditions contained in this Rule 7275 and be in a form approved by
the Exchange.\71\ Proposed IM-7275-2 will provide that under this Rule
7275, Initiating Participants may enter contra-side orders that are
solicited. FLEX Solicitation provides a facility for Participants that
locate liquidity for their customer orders. Participants may not use
the FLEX Solicitation auction to circumvent Rule 7140 (Customer Orders
and Order Flow Providers). This may include, but is not limited to,
Participants entering contra-side orders that are solicited from (1)
affiliated broker-dealers, or (2) broker-dealers with which the
Participant has an arrangement that allows the Participant to realize
similar economic benefits from the solicited transaction as it would
achieve by executing the customer order in whole or in part as
principal. Lastly, proposed IM-7275-3 will provide that an Exchange
Official may nullify a transaction following a FLEX Solicitation
Auction pursuant to Rule 7170.\72\
---------------------------------------------------------------------------
\71\ See proposed IM-7275-1, which is based on CBOE Rule 5.74,
Interpretations and Policies .01.
\72\ See proposed IM-7275-3, which is based on CBOE Rule 5.74,
Interpretations and Policies .03.
---------------------------------------------------------------------------
Risk Protections
The Exchange proposes to amend IM-7240-1(a) Debit/Credit Check and
(b) Maximum Price risk protections to include FOO Orders, FLEX PIP and
FLEX Solicitation Auction.\73\ FOO Orders were inadvertently omitted
from these rules in a prior rule change. These risk protections are
mandatory for FLEX PIP and FLEX Solicitation Auction and voluntary on a
per order basis for FOO Orders. The Exchange believes that applying
Debit/Credit Check and Maximum Price to FLEX PIP, FLEX Solicitation
Auction, Complex and Multi-Leg FOO Orders and applying Maximum Price to
FLEX PIP, FLEX Solicitation Auction, and Complex FOO Orders will help
Participants manage risk and be beneficial for FLEX trading.
---------------------------------------------------------------------------
\73\ The Exchange will reject an eligible Complex Order or
Multi-Leg Order that is a Limit Complex Order or a Limit Multi-Leg
Order for a credit strategy with a net debit price, or a Limit
Complex Order or a Limit Multi-Leg Order for a debit strategy with a
net credit price. In addition to the debit/credit check, the system
will calculate a maximum price for true butterfly spreads, vertical
spreads, and box spreads. The system will reject a Complex Limit
Order that is a true butterfly spread, vertical spread, or a box
spread if the absolute value of the Complex Order's limit price is
greater than the maximum price. The system will reject a Complex
Market Order that is a true butterfly spread, vertical spread, or a
box spread if the absolute value of the execution price is greater
than the maximum price. The maximum price is calculated by adding a
price buffer to the absolute value of a true butterfly spread,
vertical spread, or box spread.
---------------------------------------------------------------------------
Additionally, the Exchange notes that Rules 7330 (Activity-Based
Protections) and 7340 (Global Counter) are applicable to FOO Orders and
will be applicable to FLEX PIP and FLEX Solicitation Auctions.\74\
---------------------------------------------------------------------------
\74\ For Activity-Based Protections, when the Traded Order
Protection counter (Rule 7330(a)) is triggered because it exceeds
the maximum permissible value, all orders for that Participant
identification number in options on that class are cancelled unless
such cancelation is not permitted under other rules. When the Trade
Activity Protection counter (Rule 7330(b)) is triggered because it
exceeds the maximum permissible value, all orders and quotes for
that Participant identification number in all classes are cancelled
unless such cancelation is not permitted under other rules. When the
Global Counter (Rule 7340) is triggered because it has reached or
exceeded the limit for the Global Counter, the system will cancel
all orders and/or quotes belonging to that Participant.
---------------------------------------------------------------------------
The Exchange notes that it will announce an implementation date for
the proposed changes to its Participants by Regulatory Notice.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b)
[[Page 70950]]
of the Act \75\ in general, and furthers the objectives of Section
6(b)(5) of the Act \76\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. Specifically, the Exchange believes that the FLEX PIP and
FLEX Solicitation Auctions as described in proposed Rules 7155 and
7275, respectively, will remove impediments to and perfect the
mechanism of a free and open market, and protect investors and the
public interest. The proposed FLEX PIP and FLEX Solicitation Auctions
will offer market participants with electronic auctions for the
execution of FLEX Equity Options at potentially improved prices that
are substantially similar to CBOE's FLEX AIM and FLEX SAM set forth in
CBOE Rules 5.73 and 5.74, respectively, except for certain intended
differences to align to the Exchange's current PIP and Solicitation
Auction functionality to allow the proposed FLEX PIP and FLEX
Solicitation Auctions to fit more seamlessly into BOX's market. For
instance, the Exchange will not allow prices to be expressed as
percentages in FLEX PIP or FLEX Solicitation Auctions as it does not
have this capability today. Furthermore, the Exchange proposes to allow
but not consider the quantity of FLEX Solicitation responses in excess
of the size of the Agency Order in order to align to current non-FLEX
PIP and Solicitation Auction functionality.\77\ The Exchange will also
align to current non-FLEX PIP functionality by allowing a limited
exception to the proposed restriction against modifying a FLEX Primary
Improvement Order by allowing Initiating Participants to improve their
FLEX Primary Improvement Orders.\78\ Additionally, the Exchange will
also align to current non-FLEX Solicitation Auction functionality by
allowing Initiating Participants to cancel their FLEX Solicitation
Agency Orders and Solicited Orders.\79\
---------------------------------------------------------------------------
\75\ 15 U.S.C. 78f(b).
\76\ 15 U.S.C. 78f(b)(5).
\77\ See proposed Rule 7275(c)(5)(B).
\78\ See proposed Rules 7155(c)(4) and (5) and proposed Rules
7275(c)(4) and (5).
\79\ See proposed Rule 7275(c)(4). See generally BOX Rule
7270(b).
---------------------------------------------------------------------------
The Exchange will further align certain aspects of the proposed
FLEX PIP and FLEX Solicitation Auction functionality with its current
non-FLEX PIP and non-FLEX Solicitation Auction functionality. First,
the Exchange will specify a scenario where the Initiating Participant
could receive an allocation percentage that is greater than the
Initiating Participant's guaranteed allocation (i.e., when there are
remaining contracts after including all PIP responses).\80\ As noted
above, while CBOE does not have this exception noted in CBOE Rule
5.73(e)(1)(B), this will be consistent with current non-FLEX PIP
behavior.\81\ Second, the Exchange's Surrender Quantity feature allows
Participants to request a lower amount than their guaranteed
allocation, while CBOE allows election of last priority allocation in
CBOE Rule 5.73(e)(4).\82\ Third, the proposal will prohibit FLEX PIP
and FLEX Solicitation Auctions from occurring concurrently with other
FLEX PIP and FLEX Solicitation Auctions, respectively. Although this
functionality differs from CBOE FLEX AIM and FLEX SAM behavior in CBOE
Rules 5.73(c)(1) and 5.74(c)(1), the Exchange is aligning FLEX PIP and
FLEX Solicitation Auction functionality with BOX's current non-FLEX PIP
and Solicitation Auction functionality.\83\ Fourth, unlike CBOE Rule
5.73(e)(2),\84\ the proposal provides that FLEX PIP responses at prices
better than the final auction price will be allocated on a price-time
basis.\85\ The Exchange believes, although its proposal for response
allocations differs from CBOE, the resulting allocations will be
similar, regardless of trade allocation methodology. Specifically, the
proposal differs only for response allocations at prices better than
the final auction price and all responses at prices better than the
final auction price will be allocated because if there is not enough
FLEX PIP Order quantity to allocate all responses at a given price
level then that price level becomes the final auction price. The
Exchange notes that FLEX PIP responses at the final auction price are
allocated in a substantially similar manner as CBOE.\86\ Fifth, the
FLEX Solicitation proposal provides that responses will be executed in
price-time priority, while CBOE Rule 5.74(e)(2) provides for Priority
Customer FLEX SAM responses to be executed first and then others on a
pro-rata basis.\87\ Sixth, CBOE Rule 5.74(e)(3) provides for
cancellation of a FLEX SAM Auction if there is a Priority Customer FLEX
SAM response and the aggregate size of that response and other FLEX SAM
responses is insufficient to satisfy the Agency Order.\88\ The Exchange
is not proposing a similar provision. The proposal will allow the
Agency Order to execute against the Solicited Order at the stop price
if the aggregate size of FLEX Solicitation Auction responses at an
improved price(s) is insufficient to satisfy the Agency Order. As noted
above, all of the foregoing features are consistent with BOX's current
PIP and Solicitation Auction functionality for non-FLEX orders, the
Exchange believes that this will promote consistency for Participants
across different auctions on BOX. The Exchange believes further that
the proposed priority and allocation rules for both FLEX PIP and FLEX
Solicitation will ensure a fair and orderly market by maintaining the
priority of orders, while still affording the opportunity for price
improvement during each FLEX PIP and FLEX Solicitation Auction
commenced on BOX.
---------------------------------------------------------------------------
\80\ See proposed Rule 7155(e)(1)(B).
\81\ See supra note 34.
\82\ See supra note 42.
\83\ See BOX IM-7150-2. The Exchange notes that simultaneous
Solicitation Auctions are not allowed by the System.
\84\ CBOE Rule 5.73(e)(2) provides at each price better than
final auction price, the System executes the Agency order first
against Priority Customer responses and on a pro-rata basis for
others.
\85\ The Exchange notes that PIP operates in a similar manner.
See BOX Rule 7150(g).
\86\ See proposed Rule 7155(e)(1).
\87\ The Exchange notes that Solicitation Auctions operate in a
similar manner. See BOX Rule 7270(b)(2)(v).
\88\ See CBOE Rule 5.74(e)(3).
---------------------------------------------------------------------------
Otherwise, the general frameworks of the proposed FLEX PIP and FLEX
Solicitation Auctions in proposed Rules 7155 and 7275 (such as the
eligibility requirements, stop price requirements, auction process and
conclusion, and execution provisions) are consistent with the
frameworks for CBOE's FLEX AIM and FLEX SAM in CBOE Rules 5.73 and
5.74. The clarity in how FLEX PIP and FLEX Solicitation will function
and their consistency with similar auctions at other exchanges will
help promote a fair and orderly national options market system. For
example, the proposed range for the length of each of the FLEX PIP and
FLEX Solicitation Auction periods is consistent with the range for the
auction periods of the CBOE's FLEX AIM and FLEX SAM Auctions in CBOE
Rules 5.73(c)(3) and 5.74(c)(3). Like CBOE, the Exchange believes it is
appropriate to provide a reasonable and sufficient amount of time in
which market participants may submit responses because of the unique
terms of FLEX Equity Options. Therefore, the Exchange proposes that the
minimum length of a FLEX PIP or FLEX Solicitation Auction be three
seconds. The Exchange also proposes a maximum length of an auction
period to be five minutes, as the Exchange also
[[Page 70951]]
believes it is appropriate to provide for efficient and timely
executions so that customers do not potentially miss a market. The
proposed rule change also requires the Initiating Participant to
establish the length of the auction period (which will be included in
the auction notification message), as the Participant is in the best
position to determine a reasonable period of time to provide other
Participants to respond based on the complexity of the FLEX Equity
Option series that is the subject of the auction, as well as based on
market conditions (for example, in a volatile market, the Participant
may believe it is in the best interests of a customer to have a shorter
auction period given quickly changing prices).
The Exchange believes that the defined terms added in Rule 7240
(Complex Orders) will provide increased clarity to Participants by
specifying definitions for ``FLEX Complex Order'' and ``FLEX Multi-Leg
Order.''
Risk Protections
The Exchange believes that specifying the risk protections in IM-
7240-1 apply to FLEX trading will benefit investors with additional
transparency regarding the Exchange's Debit/Credit Check and Maximum
Price risk protections. The Exchange also believes that applying the
foregoing risk protections to FLEX PIP and FLEX Solicitation will
protect investors and the public interest, and maintain fair and
orderly markets, by providing market participants with more tools to
manage their risk. In addition, providing Participants with more tools
for managing risk facilitates transactions in FLEX PIP and FLEX
Solicitation because Participants will have more confidence that risk
protections are in place. As a result, the foregoing risk protections
have the potential to promote just and equitable principles of trade.
The Exchange is also proposing to add references to Multi-Leg and
Complex FOO Orders to the risk protections in IM-7240-1, as these
references were inadvertently omitted when the Exchange initially
adopted FOO Orders. The Exchange believes that adding this language
will provide clarity with respect to the risk protections in IM-7240-1
and Multi-Leg and Complex FOO Orders on the Exchange.
The Exchange has analyzed its capacity and represents that it
believes the Exchange and the Options Price Reporting Authority
(``OPRA'') have the necessary systems capacity to handle the additional
message traffic associated with the addition of FLEX PIP and FLEX
Solicitation.\89\
---------------------------------------------------------------------------
\89\ The Exchange will report FLEX PIP and FLEX Solicitation
trades and, if necessary, trade cancellations to OPRA.
---------------------------------------------------------------------------
Additionally, the Exchange believes it has an adequate surveillance
program in place and intends to apply the same program procedures to
FLEX PIP and FLEX Solicitation that is applied to the Exchange's other
options trading, as applicable. FLEX PIP and FLEX Solicitation will be
integrated into the Exchange's existing surveillance system
architecture and will be subject to the relevant surveillance
processes. The Exchange believes that any potential risk of
manipulative activity is mitigated by these existing surveillance
technologies, procedures, and reporting requirements, which allow the
Exchange to properly identify disruptive and/or manipulative trading
activity. Additionally, taking into consideration that FLEX PIP and
FLEX Solicitation have unique characteristics, the Exchange has updated
its procedures to include these unique characteristics, as applicable.
The Exchange will periodically review its surveillance procedures and
make any changes that the Exchange believes are necessary for FLEX PIP
and FLEX Solicitation.
As a self-regulatory organization, the Exchange recognizes the
importance of surveillance, among other things, to detect and deter
fraudulent and manipulative trading activity as well as other
violations of Exchange Rules and the federal securities laws. As
discussed above, the Exchange has adequate surveillance procedures in
place to monitor FLEX PIP and FLEX Solicitation.\90\ The Exchange
further notes that under Section 19(g) of the Act, the Exchange, as a
self-regulatory organization, is required to enforce compliance by its
members and persons associated with its members with the Act, the rules
and regulations thereunder, and the rules of the Exchange.\91\ The
Exchange believes its surveillance is reasonably designed to mitigate
manipulation and market disruption concerns and will permit it to
enforce compliance with the proposed rules and other Exchange rules in
accordance with Section 19(g) of the Act. The Exchange performs ongoing
evaluations of its surveillance program to ensure its continued
effectiveness and will continue to review its surveillance procedures
on an ongoing basis and make any necessary enhancements and/or
modifications that may be needed for FLEX PIP and FLEX Solicitation
Auctions.
---------------------------------------------------------------------------
\90\ Among other things, the Exchange's regulatory program
includes cross-market surveillance designed to identify manipulative
and other improper trading, including spoofing, algorithm gaming,
marking the close and open, as well as more general abusive behavior
related to front running, wash sales, and quoting/routing, which may
occur on the Exchange and other markets.
\91\ 15 U.S.C. 78s(g).
---------------------------------------------------------------------------
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 does not believe that the proposed rule change will
impose any burden on intra-market competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as all
Participants who wish to utilize FLEX PIP and FLEX Solicitation will be
able to trade in the same manner. The Exchange also does not believe
that the proposed rule change will impose any burden on intermarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. As discussed above, other options exchanges
currently offer electronic FLEX auctions on their respective
markets.\92\ The Exchange believes that its proposal will allow BOX to
compete with these other exchanges and provide an additional execution
venue for these transactions for market participants. Thus, the
Exchange believes that its proposal will promote intermarket
competition by increasing the number of exchanges where electronic FLEX
auctions will be available.
---------------------------------------------------------------------------
\92\ See supra notes 5 and 6.
---------------------------------------------------------------------------
The Exchange further notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues who offer similar functionality.
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
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 of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to Section
[[Page 70952]]
19(b)(3)(A)(iii) of the Act \93\ and subparagraph (f)(6) of Rule 19b-4
thereunder.\94\
---------------------------------------------------------------------------
\93\ 15 U.S.C. 78s(b)(3)(A).
\94\ 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.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \95\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\96\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requested
that the Commission waive the 30-day operative delay so that the
proposal may become operative immediately upon filing. Other exchanges
have electronic FLEX auction rules, and providing another venue for
electronic FLEX auctions would help foster competition as well as the
protection of investors and the public interest. The proposed rule
change also raises no new or novel legal or regulatory issues. For
these reasons, the Commission finds that waiver of the operative delay
is consistent with the protection of investors and the public interest.
Accordingly, the Commission waives the 30-day operative delay and
designates the proposed rule change to be operative upon filing.\97\
---------------------------------------------------------------------------
\95\ 17 CFR 240.19b-4(f)(6).
\96\ 17 CFR 240.19b-4(f)(6)(iii).
\97\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
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 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="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#0c7e796069216f6361616962787f4c7f696f226b637a"><span class="__cf_email__" data-cfemail="99ebecf5fcb4faf6f4f4fcf7edead9eafcfab7fef6ef">[email protected]</span></a>. Please include
File Number SR-BOX-2026-21 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-2026-21. 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-2026-21 and should be submitted on
or before November 30, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\98\
---------------------------------------------------------------------------
\98\ 17 CFR 200.30-3(a)(12) and (59).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-22756 Filed 11-6-26; 8:45 am]
BILLING CODE 8011-01-P
</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>Indexed from Federal Register on November 9, 2026.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.