[Federal Register Volume 85, Number 47 (Tuesday, March 10, 2020)]
[Notices]
[Pages 13954-13957]
[FR Doc No: 2020-04790]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88315; File No. SR-NASDAQ-2019-091]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove a
Proposed Rule Change To Adopt a New Rule Concerning Nasdaq's Ability To
Request Information From a Listed Company Regarding the Number of
Unrestricted Publicly Held Shares in Certain Circumstances and Halt
Trading in the Company's Security Upon the Request, and in Certain
Circumstances Request a Plan To Increase the Number of Unrestricted
Publicly Held Shares to an Amount That Is Higher Than the Applicable
Publicly Held Shares Requirement

March 4, 2020.

I. Introduction

    On November 22, 2019, The Nasdaq Stock Market LLC (``Nasdaq'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to adopt a rule specifying Nasdaq's ability to
request information from a listed company regarding the number of
unrestricted publicly held shares when Nasdaq observes unusual trading
characteristics in a security or a company announces an event that may
cause a contracting in the number of unrestricted publicly held shares,
halt trading in such company's securities upon such a request, and
potentially request a listed company to increase its number of
unrestricted publicly held shares. The proposed rule change was
published for comment in the Federal Register on December 12, 2019.\3\
On January 24, 2020, pursuant to Section 19(b(2) of the Act,\4\ the
Commission designated a longer period within which to either approve
the proposed rule change, disapprove the proposed rule change, or
institute proceedings to determine whether to disapprove the proposed
rule change.\5\ The Commission

received no comment letters on the proposed rule change. This order
institutes proceedings under Section 19(b)(2)(B) of the Act \6\ to
determine whether to approve or disapprove the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 87677 (December 6,
2019), 84 FR 67974 (December 12, 2019) (``Notice'').
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 88028 (January 24,
2020), 85 FR 5500 (January 30, 2020). The Commission designated
March 11, 2020, as the date by which it should approve, disapprove,
or institute proceedings to determine whether to disapprove the
proposed rule change.
    \6\ 15 U.S.C. 78s(b)(2)(B).
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II. Description of the Proposal

    Nasdaq's current continued listing standards require a listed
company to maintain a minimum number of Publicly Held Shares,\7\
without excluding Restricted Securities \8\ from such calculation.\9\
In contrast, for initial listing, Nasdaq's current rules, as amended in
2019,\10\ require that a company seeking to be listed on Nasdaq have,
among other things, a minimum number of Unrestricted Publicly Held
Shares.\11\
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    \7\ ``Publicly Held Shares'' is defined as ``shares not held
directly or indirectly by an officer, director or any person who is
the beneficial owner of more than 10 percent of the total shares
outstanding.'' See Rule 5005(a)(35).
    \8\ ``Restricted Securities'' is defined as ``securities that
are subject to resale restrictions for any reason, including but not
limited to, securities: (1) Acquired directly or indirectly from the
issuer or an affiliate of the issuer in unregistered offerings such
as private placements or Regulation D offerings; (2) acquired
through an employee stock benefit plan or as compensation for
professional services; (3) acquired in reliance on Regulation S,
which cannot be resold within the United States; (4) subject to a
lockup agreement or a similar contractual restriction; or (5)
considered `restricted securities' under Rule 144.'' See Rule
5005(a)(37).
    \9\ See proposed Rule 5120. See also Notice, supra note 3, 84 FR
at 67974. For the continued listing requirements relating to
Publicly Held Shares, see Rules 5450(b)(1)(B), (2)(B), and (3)(B),
5460(a)(1), 5550(a)(4), 5555(a)(3), and 5565(a).
    \10\ See Securities Exchange Act Release No. 86314 (July 5,
2019), 84 FR 33102 (July 11, 2019) (SR-NASDAQ-2019-009) (approving
Nasdaq's proposal to, among other things, require that Restricted
Securities be excluded from Nasdaq's calculation of Publicly Held
Shares for purposes of meeting initial listing requirements).
    \11\ ``Unrestricted Publicly Held Shares'' is defined as
``Publicly Held Shares that are Unrestricted Securities.'' See Rule
5005(a)(45). ``Unrestricted Securities'' is defined as ``securities
that are not Restricted Securities.'' See Rule 5005(a)(46). For the
initial listing requirements relating to Unrestricted Publicly Held
Shares, see Rules 5315(e)(2), 5405(a)(2), 5415(a)(1), 5505(a)(2),
5510(a)(3), and 5520(g)(3).
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    Nasdaq has proposed to adopt new Rule 5120, which would provide
that, while Nasdaq would not ordinarily consider the number of
Unrestricted Publicly Held Shares of a listed company's security,
Nasdaq may request information from a company regarding the number of
Unrestricted Publicly Held Shares if (1) Nasdaq observes unusual
trading characteristics in the security; or (2) the company has
announced an event that may cause a contraction in the number of
Unrestricted Publicly Held Shares.\12\ Proposed Rule 5120 also sets
forth that pursuant to Nasdaq's authority under Rule 4120(a)(5),\13\
Nasdaq may halt trading in the security in connection with such a
request.\14\ When considering whether a security has unusual trading
characteristics, the proposed rule provides that Nasdaq may review
volume, price movements, spread, and the presence or absence of any
news.\15\ Furthermore, the proposed rule specifies the events that may
cause a contraction in the number of Unrestricted Publicly Held Shares,
thereby possibly triggering a request for additional information, to
include reverse stock splits, tender offers, stock buybacks, or
entering into contractual agreements such as standstills or
lockups.\16\
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    \12\ See proposed Rule 5120.
    \13\ Rule 4120(a)(5) provides that Nasdaq ``may halt trading in
a security listed on Nasdaq when Nasdaq requests from the issuer
information relating to: (A) Material news; (B) the issuer's ability
to meet Nasdaq listing qualification requirements, as set forth in
the Listing Rule 5000 Series; or (C) any other information which is
necessary to protect investors and the public interest.''
    \14\ See proposed Rule 5120.
    \15\ See proposed Rule 5120.
    \16\ See proposed Rule 5120.
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    Further, proposed Rule 5120 provides that if information provided
by the company or otherwise obtained by Nasdaq indicates that the
number of Unrestricted Publicly Held Shares for the security is below
the applicable Publicly Held Shares requirement for continued listing
of the security, Nasdaq generally would use its authority under Rule
5101 \17\ to apply more stringent criteria and request a plan to
increase the number of Unrestricted Publicly Held Shares to an amount
that is higher than the applicable Publicly Held Shares
requirement.\18\ Such a plan would generally be required to be provided
within 45 calendar days of the request, as provided in the Rule 5800
Series.\19\
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    \17\ Rule 5101 states, in part, that Nasdaq ``has broad
discretionary authority over the initial and continued listing of
securities in Nasdaq . . . . [and] may use such discretion to . . .
apply additional or more stringent criteria for the initial or
continued listing of particular securities, or suspend or delist
particular securities based on any event, condition, or circumstance
that exists or occurs that makes initial or continued listing of the
securities on Nasdaq inadvisable or unwarranted in the opinion of
Nasdaq, even though the securities meet all enumerated criteria for
initial or continued listing on Nasdaq.''
    \18\ See proposed Rule 5120.
    \19\ See proposed Rule 5120. Nasdaq has proposed to make
conforming changes to Rule 5810(c)(2)(A) to add a deficiency under
proposed Rule 5120 to the list of deficiencies for which a company
may submit to the Exchange's Listing Qualifications Department a
plan to regain compliance. Nasdaq has also proposed to make other
conforming and non-substantive changes to Rule 5810(c)(2). See
proposed Rule 5810(c)(2). In addition, Nasdaq has proposed non-
substantive changes to Rule 5810(c)(3)(A) (which deals with a
company's failure to meet the continued listing requirement for
minimum bid price) to revise the phrase ``market value of publicly
held shares'' to utilize the terms ``Market Value'' and ``Publicly
Held Shares,'' which are defined in Rule 5005(a). See proposed Rule
5810(c)(3)(A)(i) and (ii).
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    In support of its proposal, Nasdaq stated that it believes that its
previously revised initial listing standards do not sufficiently
address listed companies that may have Restricted Securities, which
could potentially result in a security that is illiquid.\20\ Nasdaq
noted that illiquid securities may trade infrequently and in a more
volatile manner, change hands at a price that may not reflect their
true market value, and may be more susceptible to price
manipulation.\21\ According to Nasdaq, the proposal would enhance
transparency \22\ and ensure that securities listed on Nasdaq are
liquid and have sufficient freely tradeable shares to meet investor
demand, thereby reducing trading volatility and price manipulation.\23\
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    \20\ See Notice, supra note 3, 84 FR at 67974. For example,
Nasdaq stated that companies that were not required to meet the
newer initial listing requirements may still have Restricted
Securities that are not freely tradeable, and a listed company may
conduct a transaction that decreases its number of Unrestricted
Publicly Held Shares. See id.
    \21\ See Notice, supra note 3, 84 FR at 67974. Nasdaq stated
that it has observed problems with a small number of listed
companies that have a large number of Restricted Securities, and
that such companies may not have sufficient liquidity to meet
investor demand, particularly upon announcement of material news,
which may result in unusual trading characteristics, such as extreme
price movements and unusually large bid-ask spreads. See id.
    \22\ According to Nasdaq, its existing rules would currently
allow it to apply additional criteria to a listed company that
satisfies all of the continued listing requirements where there are
indications that there is insufficient liquidity in the security to
support fair and orderly trading. See Notice, supra note 3, 84 FR at
67974, n.7 (citing Rule 5101).
    \23\ See Notice, supra note 3, 84 FR at 67975.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-
NASDAQ-2019-091 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act to determine whether the proposal should be
approved or disapproved.\24\ Institution of such proceedings is
appropriate at this time in view of the legal and policy issues raised
by the proposed rule change, as discussed below. Institution of
disapproval proceedings does not indicate that the Commission has
reached any conclusions with respect to any of the issues involved.
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    \24\ 15 U.S.C. 78s(b)(2)(B).
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    Pursuant to Section 19(b)(2)(B) of the Act, the Commission is
providing notice

of the grounds for disapproval under consideration. The Commission is
instituting proceedings to allow for additional analysis and input
concerning the proposed rule change's consistency with the Act \25\
and, in particular, with Section 6(b)(5) of the Act, which requires,
among other things, that the rules of a national securities exchange
not be designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.\26\
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    \25\ 15 U.S.C. 78f(b)(5).
    \26\ Id.
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    Nasdaq is proposing to adopt a new rule to specifically permit it
to request additional information from a listed company regarding its
number of Unrestricted Publicly Held Shares if Nasdaq observes unusual
trading characteristics in a listed company's security or if the listed
company has announced an event that may cause a contraction in the
number of Unrestricted Publicly Held Shares. Nasdaq acknowledges that
its continued listing standards currently require a minimum number of
Publicly Held Shares, but not a minimum number of Unrestricted Publicly
Held Shares. Nasdaq specifies, in the proposed rule, that in
considering whether there are unusual trading characteristics in a
security for purposes of requesting additional information on the
number of Unrestricted Publicly Held Shares, Nasdaq may review volume,
price movements, spread, and the presence or absence of any news.
However, Nasdaq does not state how these broad factors would be
considered in its determination of whether there are unusual trading
characteristics to trigger a request for additional information, other
than to note that the ``unusual trading characteristics'' it has
observed in the past include ``extreme price movements'' and
``unusually large bid ask spreads.'' \27\ In any case, whether unusual
trading characteristics, however determined, would cause Nasdaq to
request additional information from a listed company on the number of
Unrestricted Publicly Held Shares appears to be subject to wide
discretion under the proposed rule.
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    \27\ See Notice, supra note 3, 84 FR at 67974.
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    Similarly, under the proposed rule, Nasdaq may also request
information on the number of Unrestricted Publicly Held Shares if the
listed company has announced an event that may cause a contraction in
the number of such unrestricted shares, such as a reverse stock split,
tender offer, or stock buyback. The Exchange has not provided any
specific explanation of when such events would or would not trigger a
request for the number of Unrestricted Publicly Held Shares, but rather
just provided that such events ``may'' trigger such a request, with the
result that this provision also appears to be subject to wide
discretion by Nasdaq.
    Upon Nasdaq requesting additional information on the number of
Unrestricted Publicly Held Shares, the proposed rule then states that
if the information indicates the number of such unrestricted shares are
below the applicable minimum number of Publicly Held Shares continued
listing standard, Nasdaq generally will use its authority under Rule
5101 to apply more stringent criteria and request a plan to increase
the number of Unrestricted Publicly Held Shares to an amount that is
higher than the applicable minimum number of Publicly Held Shares
continued listing standard. Nasdaq does not provide any information in
its filing regarding when it generally will or will not use its
authority to request such a plan. Moreover, should Nasdaq ask the
listed company to provide a plan to increase the minimum number of
Unrestricted Publicly Held Shares, Nasdaq provides no guidance on how
it would determine such minimum number, with the result that this
provision appears to be subject to wide discretion by Nasdaq as well.
    Nasdaq stated that its proposal is not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers because,
while the proposed changes will only apply to securities exhibiting
unusual trading characteristics and companies that announce an event
that may cause a contraction in the number of Unrestricted Publicly
Held Shares, Nasdaq will apply this standard to all such securities
listed on Nasdaq.\28\ As discussed above, however, the Exchange's
proposal provides it wide discretion both (1) to determine whether to
request additional information from a listed company on the number of
Unrestricted Publicly Held Shares; and (2) if it does so, and that
number is less than the minimum number of Publicly Held Shares, to
establish the more stringent requirements with respect to the minimum
number of Unrestricted Publicly Held Shares. Accordingly, the
Commission believes there are questions as to whether the proposal is
consistent with Section 6(b)(5) of the Act and its requirement, among
other things, that the rules of a national securities exchange not be
designed to permit unfair discrimination.
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    \28\ See Notice, supra note 3, 84 FR at 67975-76.
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    The Commission notes that under the Commission's Rules of Practice,
the ``burden to demonstrate that a proposed rule change is consistent
with the Exchange Act and the rules and regulations issued thereunder .
. . is on the self-regulatory organization [`SRO'] that proposed the
rule change.'' \29\ The description of a proposed rule change, its
purpose and operation, its effect, and a legal analysis of its
consistency with applicable requirements must all be sufficiently
detailed and specific to support an affirmative Commission finding,\30\
and any failure of an SRO to provide this information may result in the
Commission not having a sufficient basis to make an affirmative finding
that a proposed rule change is consistent with the Exchange Act and the
applicable rules and regulations.\31\
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    \29\ Rule 700(b)(3), Commission Rules of Practice, 17 CFR
201.700(b)(3).
    \30\ See id.
    \31\ See id.
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    For these reasons, the Commission believes it is appropriate to
institute proceedings pursuant to Section 19(b)(2)(B) of the Act to
determine whether the proposal should be approved or disapproved.

IV. Commission's Solicitation of Comments

    The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
view of interested persons concerning whether the proposal is
consistent with Section 6(b)(5) or any other provision of the Act, or
the rules and regulations thereunder. Although there do not appear to
be any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4, any request for an
opportunity to make an oral presentation.\32\
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    \32\ Section 19(b)(2) of the Exchange Act, as amended by the
Securities Act Amendments of 1975, Public Law 94-29 (June 4, 1975),
grants the Commission flexibility to determine what type of
proceeding--either oral or notice and opportunity for written
comments--is appropriate for consideration of a particular proposal
by a self-regulatory organization. See Securities Act Amendments of
1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No.
75, 94th Cong., 1st Sess. 30 (1975).
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    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposal should be approved or
disapproved by March 31, 2020. Any person who wishes to file a rebuttal
to any other person's submission must file

that rebuttal by April 14, 2020. The Commission asks that commenters
address the sufficiency of the Exchange's statements in support of the
proposal which are set forth in the Notice,\33\ in addition to any
other comments they may wish to submit about the proposed rule change.
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    \33\ See Notice, supra note 3.
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    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2019-091 on the subject line.

Paper Comments

     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-NASDAQ-2019-091. 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 (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NASDAQ-2019-091 and should be submitted
on or before March 31, 2020. Rebuttal comments should be submitted by
April 14, 2020.
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    \34\ 17 CFR 200.30-3(a)(57).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\34\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-04790 Filed 3-9-20; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 85, Number 201 (Friday, October 16, 2020)]
[Notices]
[Pages 65799-65800]
[FR Doc No: 2020-22933]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. IC20-21-000]

Commission Information Collection Activities (FERC-583); Comment
Request; Extension With Revisions

AGENCY: Federal Energy Regulatory Commission, Department of Energy.

ACTION: Notice of information collection and request for comments.

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SUMMARY: In compliance with the requirements of the Paperwork Reduction
Act of 1995, the Federal Energy Regulatory Commission (Commission or
FERC) is soliciting public comment on the currently approved
information collection FERC-583 (Annual Kilowatt Generating Report
(Annual Charges)) and is submitting the information collection to the
Office of Management and Budget (OMB) for review. Any interested person
may file comments directly with OMB and should address a copy of those
comments to the Commission as explained below.

DATES: Comments on the collection of information are due November 16,
2020.

ADDRESSES: Send written comments on FERC-583 to OMB through
www.reginfo.gov/public/do/PRAMain, Attention: Federal Energy Regulatory
Commission Desk Officer. Please identify the OMB control number (1902-
0136) in the subject line. Your comments should be sent within 30 days
of publication of this notice in the Federal Register.
    Please submit copies of your comments to the Commission (identified
by Docket No. IC20-21-000) by any of the following methods:
     eFiling at Commission's Website: http://www.ferc.gov/docs-filing/efiling.asp.
     Mail/Express Services: Persons unable to file
electronically may mail similar pleadings to the Federal Energy
Regulatory Commission, 888 First Street NE, Washington, DC 20426.
     Hand delivered submissions in docketed proceedings should
be delivered to Health and Human Services, 12225 Wilkins Avenue,
Rockville, Maryland 20852.
    Instructions:
    OMB submissions must be formatted and filed in accordance with
submission guidelines at www.reginfo.gov/public/do/PRAMain; Using the
search function under the ``Currently Under Review field,'' select
Federal Energy Regulatory Commission; click ``submit'' and select
``comment'' to the right of the subject collection.
    FERC submissions must be formatted and filed in accordance with
submission guidelines at: http://www.ferc.gov/help/submission-guide.asp. For user assistance, contact FERC Online Support by email at
<EMAIL_ADDRESS>or by phone at:<PHONE_NUMBER> (toll-free).
    Docket: Users interested in receiving automatic notification of
activity in this docket or in viewing/downloading comments and
issuances in this docket may do so at http://www.ferc.gov/docs-filing/docs-filing.asp.

FOR FURTHER INFORMATION: Ellen Brown may be reached by email at
<EMAIL_ADDRESS>and telephone at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:
    Title: FERC-583, Annual Kilowatt Generating Report (Annual
Charges).
    OMB Control No.: 1902-0136.
    Type of Request: Three-year extension of the FERC-583 information
collection requirements, with the addition of two activities that are
in use without a control number: (1) Application of a State or
municipal licensee or exemptee for total or partial exemption from the
assessment of annual charges; and (2) Appeals and requests for
rehearing of billing for annual charges.
    Abstract: FERC-583 is an existing information collection that
enables the Commission to determine amounts of annual charges in
accordance with section 10(e)(1) of the Federal Power Act (FPA),\1\
section 3401 of the Omnibus Budget Reconciliation Act of 1986 (OBRA
1986),\2\ and 18 CFR part 11. On June 16, 2020, the Commission
published a Notice in the Federal Register in Docket No. IC20-21-000
inviting public comments.\3\ Public comments were due on August 17,
2020. No comments were filed in response to this Notice.
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    \1\ 16 U.S.C. 803(e)(1).
    \2\ Public Law 99-5089, Title III, Sec.  3401 (Oct. 21, 1986),
100 Stat. 1890 (codified at 42 U.S.C. 7178).
    \3\ 85 FR 36396.
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    Types of Respondents: (1) Hydropower licensees of projects more
than 1.5 megawatts of installed capacity; (2) Holders of exemptions
under section 30 of the FPA \4\; and (3) exemptees under sections 405
and 408 of the Public Utility Regulatory Policy Act.\5\
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    \4\ 16 U.S.C. 823a.
    \5\ 16 U.S.C. 2705 and 2708.
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    Estimate of Annual Burden: The following table shows the estimated
annual burdens:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                 A                       B            C               D                     E                           F                       G
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Annual
                                                  number of
         Type of response            Number of    responses   Total  number of    Average hours  & cost    Total annual  burden hours       Cost per
                                    respondents      per          responses           per  response           and total annual cost        respondent
                                                  respondent
                                                                (col. B x col.                            (col. D x col. E)...........    (col. F / col.
                                                                            C)                                                                        B)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Annual kilowatt generating report.          520            1               520  2 hrs.; $166............  1,040 hrs.; $86,320.........              $166
Application of a State or                    48            1                48  2 hrs.; $166............  96 hrs.; $7,968.............               166
 municipal licensee or exemptee
 for total or partial exemption
 from the assessment of annual
 charges.
Appeals and requests for rehearing            3            1                 3  40 hrs.; $3,320.........  120 hrs.; $9,960............             3,320
 of billing for annual charges.
                                   ---------------------------------------------------------------------------------------------------------------------
    Totals........................          571  ...........               571  ........................  1,256 hrs,; $104,248........  ................
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Comments: Comments are invited on: (1) Whether the collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information will have practical
utility; (2) the accuracy of estimate of the burden and cost of the
collection of information, including the validity of the methodology
and assumptions used; (3) ways to enhance the quality, utility and
clarity of the information collection; and (4) ways to minimize the
burden of the collection of information on those who are to respond,
including the use of automated collection techniques or other forms of
information technology.

    Dated: October 9, 2020.
Kimberly D. Bose,
Secretary.
[FR Doc. 2020-22933 Filed 10-15-20; 8:45 am]
BILLING CODE 6717-01-P


[Federal Register Volume 86, Number 15 (Tuesday, January 26, 2021)]
[Notices]
[Pages 7130-7135]
[FR Doc No: 2021-01585]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90946; File No. SR-BOX-2021-01]

Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee
Schedule on the BOX Options Market LLC Facility

January 19, 2021.
    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 January 4, 2021, BOX Exchange LLC (``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II, and III 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'') facility. The text of the proposed
rule change is available from the principal office of the Exchange, at
the Commission's Public Reference Room and also on the Exchange's
internet website at http://boxexchange.com.

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

    In its filing with the Commission, the Exchange included statements

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

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

1. Purpose
    The Exchange proposes to amend the Fee Schedule for trading on BOX.
First, the Exchange proposes to revise certain qualification thresholds
and fees in Section I.B. of the BOX Fee Schedule. Specifically, the
Exchange proposes to eliminate Tiers 2 and 3 of the Primary Improvement
Order fee structure. The Exchange then proposes to amend the percentage
threshold for Tier 1 from 0.000%-0.049% to 0.000% to 0.449%. The
Exchange also proposes to decrease the fee for Tier 1 from $0.25 to
$0.05. The Exchange next proposes to change current Tier 4 to new Tier
2. The percentage threshold and fee for proposed Tier 2 will remain
unchanged.
    Next, the Exchange proposes to eliminate Section III \5\ (Liquidity
Fees and Credits) from the Fee Schedule and establish Break-Up Credits
in (1) Section I.B (PIP and COPIP Transactions); (2) Section I.C
(Facilitation and Solicitation Transactions); and (3) Section I.C.2
(Strategy Order Facilitation and Solicitation Transactions). The
Exchange is redistributing the fees and rebates outlined in Section III
to the appropriate places within the respective fee structures in the
BOX Fee Schedule. The Exchange believes the proposed changes will make
the Fee Schedule easier to navigate and will reduce investor confusion.
---------------------------------------------------------------------------

    \5\ The Exchange notes Section III.C.1 is being relocated as
discussed in further detail below.
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PIP and COPIP Transactions
    Currently, under Section III.A, a Public Customer PIP or COPIP
Order receives the ``removal'' credit ($0.34 for Penny Interval Classes
and $0.81 for Non-Penny Interval Classes), while the corresponding
Primary Improvement Order and any Improvement Orders are charged the
``add'' fee ($0.34 for Penny Interval Classes and $0.81 for Non-Penny
Interval Classes). First, the Exchange proposes to amend PIP and COPIP
Improvement Order fees within Section 1.B to include the liquidity
``add'' fees that are being deleted in Section III. As such, the
Exchange proposes to increase Public Customer Improvement Orders fees
in Penny Interval Classes to $0.49 from $0.15 and in Non-Penny Interval
Classes to $0.96 from $015.\6\ Next, the Exchange proposes to no longer
assess the corresponding Primary Improvement Order to PIP and COPIP
Orders the ``add'' fee of $0.34 for Penny Interval Classes or $0.81 for
Non-Penny Interval Classes. The Exchange notes that this is similar to
how the Exchange currently assesses SPY PIP and COPIP fees and credits
on BOX.\7\ The Exchange believes this proposed change will result in
increased order flow to BOX's PIP and COPIP mechanisms. Further, the
Exchange proposes to increase Public Customer SPY Improvement Order
fees to $0.50 from $0.05.\8\
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    \6\ The Exchange is including the $0.34 ``add'' fee into the
Improvement Order fee detailed in the PIP and COPIP fee structure.
The Exchange notes that under this proposal, there is no change to
the fees currently assessed for this transaction
    \7\ See Securities Exchange Act Release No. 89622 (August 20,
2020), 85 FR 52654 (August 26, 2020) (SR-BOX-2020-34).
    \8\ Currently, under Section III, Improvement Orders to the SPY
PIP and COPIP Orders are charged the ``add'' fee of $0.45. The
Exchange is including this ``add'' fee into the Improvement Order
fee detailed in the PIP and COPIP Fee Structure.
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    The Exchange next proposes to increase Professional Customer,
Broker Dealer and Market Maker Improvement Order fees. Currently, if a
Non-Public Customer PIP or COPIP Order does not trade with its Primary
Improvement Order, the Primary Improvement Order shall receive the
``removal'' credit ($0.34 for Penny Interval Classes or $0.81 for Non-
Penny Interval Classes) and any corresponding Improvement Order
responses will be charged the ``add'' fee ($0.34 for Penny Interval
Classes or $0.81 for Non-Penny Interval Classes). Similar to the
changes discussed above, the Exchange now proposes to increase Non-
Public Customer Improvement Order fees in Penny Interval Classes to
$0.50 from $0.16 and to $1.15 from $0.34 in Non-Penny Interval Classes.
Further, the Exchange proposes to increase non-Public Customer SPY
Improvement Orders to $0.50 from $0.05.\9\
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    \9\ Currently, under Section III, Improvement Orders to the SPY
PIP and COPIP Orders are charged the ``add'' fee of $0.45. The
Exchange is including this ``add'' fee into the Improvement Order
fee detailed in the PIP and COPIP Fee Structure.
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    Next, the Exchange proposes to establish PIP and COPIP Break-Up
Credits in Section I.B. First, the Exchange proposes to establish PIP
and COPIP Break-Up Credits of $0.34 for Penny Interval Classes and
$0.81 for Non-Penny Interval Classes for Public Customer PIP and COPIP
Transactions. The Exchange notes that this is how the Exchange
currently assesses the $0.34 or $0.81 ``removal'' credits for Public
Customer PIP and COPIP Orders executed through the PIP and COPIP
mechanisms detailed in BOX's current Fee Schedule. The Exchange is
simply seeking to relocate the credits into the PIP and COPIP fee
structure. Next, the Exchange proposes to establish a SPY Break-Up
Credit of $0.45 for Public Customer SPY PIP and COPIP Orders submitted
to the PIP or COPIP mechanisms. As discussed herein, the same $0.45
``removal'' credit is assessed for these Public Customer SPY PIP and
COPIP transactions under Section III in BOX's current Fee Schedule.
Further, the Exchange proposes to add text which details that the
Public Customer SPY PIP or COPIP Order submitted to the PIP and COPIP
mechanisms that do not trade with their Primary Improvement Order shall
receive the Break-Up Credit. The Exchange again notes that this is how
the ``removal'' credit is currently assessed for these transactions
under Section III.A in BOX's current Fee Schedule.
    Next, the Exchange proposes to establish PIP and COPIP Break-Up
Credits of $0.34 for Penny Interval Classes and $0.81 for Non-Penny
Interval Classes for Professional Customer, Broker Dealer, and Market
Maker PIP and COPIP Transactions. The Exchange also proposes to add
text which details who receives the Break-Up Credit for these orders.
Specifically, if a Non-Public Customer PIP or COPIP Order does not
trade with its Primary Improvement Order, the Primary Improvement Order
shall receive the Break-Up Credit of $0.34 for Penny Interval Classes
or $0.81 for Non-Penny Interval Classes. The Exchange notes that this
is how the ``removal'' credit is assessed for these transactions in
BOX's current Fee Schedule. The Exchange simply seeks to relocate the
credit for these transactions into the PIP and COPIP fee structure.
    Next, the Exchange proposes to establish a SPY Break-Up Credit of
$0.45 for Non-Public Customer SPY PIP and COPIP Orders submitted to the
PIP or COPIP mechanisms. The Exchange also proposes to add text which
details who receives the Break-Up Credit for these orders.
Specifically, SPY PIP and COPIP Orders submitted to the PIP and COPIP
mechanisms that do not trade with their Primary Improvement Order shall
receive the $0.45 Break-Up Credit. The Exchange notes that this is how
the ``removal'' credit is assessed for these transactions in BOX's
current Fee

Schedule. The Exchange simply seeks to relocate the credit for these
transactions into the PIP and COPIP fee structure.
    Lastly, the Exchange proposes to relocate and revise the Fee
Schedule language regarding PIP and COPIP Orders executing against
Unrelated Orders.\10\ Specifically, the Exchange proposes to clarify
that each PIP Order or COPIP Order that executes against an Unrelated
Order on the BOX Book shall be treated as a Non-Auction Transaction.
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    \10\ For the PIP, an Unrelated Order is a non-Improvement Order
entered into the BOX market during a PIP. For the COPIP, an
Unrelated Order is a non-Improvement Order entered on BOX during a
COPIP or BOX Book Interest during a COPIP.
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Facilitation and Solicitation Transactions
    Currently, under Section III.B of the BOX Fee Schedule, Agency
Orders submitted to the Facilitation and Solicitation mechanisms that
do not trade with their contra order receive the ``removal'' credit
($0.25 for Penny Interval Classes and $0.75 for Non-Penny Interval
Classes). Responses to Facilitation and Solicitation Orders executed in
these mechanisms are charged the ``add'' fee ($0.25 for Penny Interval
Classes and $0.75 for Non-Penny Interval Classes). First, the Exchange
proposes to increase the Response Fees (within Section 1.C) in the
Facilitation and Solicitation mechanisms for all account types to $0.50
from $0.25 for Penny Interval Classes and to $1.15 from $0.40 for Non-
Penny Interval Classes.\11\ Next, the Exchange proposes to establish
Facilitation and Solicitation Break-Up Credits in the Facilitation and
Solicitation Transaction fee structure. Next, the Exchange proposes to
establish a $0.25 Break-Up Credit for Penny Interval Classes and $0.75
Break-Up Credit for Non-Penny Interval Classes for all account types.
The Exchange also proposes to add text which details who receives the
Break-Up Credit for these orders. Specifically, Agency Orders submitted
to the Facilitation and Solicitation mechanisms that do not trade with
their contra order shall receive the Break-Up Credit. The Exchange
notes that this is how the ``removal'' credit is currently assessed for
these transactions in Section III of BOX's current Fee Schedule. The
Exchange simply seeks to relocate the credit for these transactions
into the Facilitation and Solicitation fee structure.
---------------------------------------------------------------------------

    \11\ Similar to the proposed changes in the PIP and COPIP
section, the Exchange is including the $0.25 and $0.75 ``add'' fees
into the Responses Order fees detailed in the Facilitation and
Solicitation Transaction fee structure in Section I.C. The Exchange
notes that under this proposal, there is no change to the fees
currently assessed for these transactions.
---------------------------------------------------------------------------

    Next, the Exchange proposes to amend Section I.C.2 (Strategy Order
Facilitation and Solicitation Transactions). Currently, Strategy Order
Facilitation and Solicitation Transactions in Section I.C.2 are exempt
from the liquidity fees and credits detailed Section III.B of the Fee
Schedule. The Exchange now proposes to remove the exemption and assess
these transactions fees and credits similar to those detailed in
current Section III.B. Specifically, the Exchange proposes to increase
Response fees in the Facilitation and Solicitation mechanisms to $0.50
from $0.25 for Penny Interval Classes and to $1.15 from $0.40 for Non-
Penny Interval Classes. The Exchange believes the proposed change is
reasonable as identical fees exist for regular Facilitation or
Solicitation transactions on BOX.
    Next, the Exchange proposes to establish Strategy Order
Facilitation and Solicitation Break-Up Credits in the fee structure
detailed in Section I.C.2 of the BOX Fee Schedule. Specifically, the
Exchange proposes to establish a $0.25 Break-Up Credit for Penny
Interval Classes and $0.75 Break-Up Credit for Non-Penny Interval
Classes for all account types. The Exchange also proposes to add text
which details who receives the Break-Up Credit for these orders.
Specifically, Agency Orders submitted to the Facilitation and
Solicitation mechanisms that do not trade with their contra order shall
receive the Break-Up Credit. The Exchange notes that this is how the
``removal'' credit is currently assessed for regular Facilitation and
Solicitation transactions in Section III of BOX's current Fee Schedule.
The Exchange believes that mirroring the fees and credits in place for
regular Facilitation and Solicitation transactions is reasonable and
appropriate.
    Finally, the Exchange proposes to relocate Section III.C.1., which
details transactions which occur on the opening or re-opening, to
Section I.A.2. of the Fee Schedule. The Exchange also proposes to make
a number of non-substantive changes to the Fee Schedule which include
renumbering Sections and eliminating obsolete text due to the proposed
changes discussed herein.
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,\12\ 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.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    First, the Exchange believes that the proposed changes in Section
I.B.1 (Primary Improvement Orders) of the BOX Fee Schedule are
reasonable, equitable and non-discriminatory. The proposed changes to
the thresholds are equitable and not unfairly discriminatory as they
are available to all BOX Participants that initiate Auction
Transactions, and Participants may choose whether or not to take
advantage of the percentage thresholds and their applicable discounted
fees. Further, the Exchange believes that the change to the threshold
in proposed Tier 1 is reasonable and competitive as it is intended to
allow more Participants to qualify for the discounted fee, which the
Exchange believes will incentivize Participants to direct order flow to
the Exchange, in turn benefiting all market participants on the
Exchange. Further, the Exchange believes that the proposed change to
decrease the fee assessed in Tier 1 from $0.25 to $0.05 is reasonable
and appropriate, as this tiered fee schedule is in place to provide
incentives to BOX Participants to submit their Public Customer Orders
into the PIP for potential price improvement. This reduced fee,
combined with the amended percentage thresholds discussed above, are
meant to incentivize more Participant to submit Price Improvement
Orders to the Exchange, which the Exchange believes will further
incentivize Participants to direct order flow to the Exchange, in turn
benefiting all market participants on the Exchange.
PIP and COPIP Transactions
    The Exchange believes the proposed changes to the fee structure
detailed in Section I.B. are reasonable, equitable and not unfairly
discriminatory. The Exchange believes the proposed fee changes to
Improvement Orders in the PIP and COPIP Transaction fee structure are
reasonable as they reflect the current fees charged for these
transactions on the Exchange. As noted herein, the Exchange simply
seeks to relocate the liquidity fees detailed in Section III to be
included in the PIP and COPIP Improvement Order fees in the PIP and
COPIP Transaction fee structure. The Exchange believes that the
proposed change will increase overall readability of the BOX Fee
Schedule and reduce

investor confusion. Further, the Exchange believes it is reasonable to
no longer assess the ``add'' fee of $0.34 for Penny Interval Classes or
$0.81 for Non-Penny Interval Classes for corresponding Primary
Improvement Order to Public Customer PIP and COPIP Orders. The Exchange
notes that this is similar to how the Exchange currently assesses SPY
PIP and COPIP fees and credits on BOX.\13\ The Exchange believes that
mirroring the current structure in place for SPY PIP and COPIP fees and
credits is reasonable as the Exchange believes that the proposed change
will incentivize Participants to submit Public Customer order flow
through the PIP and COPIP auction mechanisms thereby benefitting all
market participants through promoting market depth, facilitating
tighter spreads and enhancing price discovery. Further, the Exchange
believes that the proposed change is equitable and not unfairly
discriminatory as the change applies to all Participants, regardless of
account type.
---------------------------------------------------------------------------

    \13\ See supra note 7.
---------------------------------------------------------------------------

    Under this proposal and as discussed above, the corresponding
Primary Improvement Orders to Public Customer PIP and COPIP Orders will
no longer be assessed the $0.34 ``add'' fee for Penny Interval Classes
and $0.81 for Non-Penny Interval Classes; however, Improvement Orders
will continue to be charged the $0.34 ``add'' fee for Penny Interval
Classes and $0.81 ``add'' fee for Non-Penny Interval Classes. The
Exchange believes it is reasonable, equitable and not unfairly
discriminatory to charge higher exchange fees for responders in the PIP
and COPIP mechanisms than for initiators of these orders and the contra
orders. The Exchange believes it is reasonable when compared to a
similar practice for fees at a competing venue.\14\ For example, at
Nasdaq ISE the fee for both the initiating and contra order for PIM
Orders \15\ is $0.10 for Select Symbols \16\ for all account types
except Priority Customers who are charged no fees. Responses to these
orders are charged $0.50 for Select Symbols regardless of account type.
The Exchange also notes that a differential of fees between initiators
and responders currently exists in the Facilitation and Solicitation
auction mechanisms and for SPY PIP and COPIP Orders on BOX. Further,
the Exchange continues to believe that the proposed differential is
reasonable because responders to PIP and COPIP Orders are willing to
pay a higher fee for liquidity discovery. Responders to PIP and COPIP
Orders are given the opportunity to interact with customer order flow
which, in turn, allows for the opportunity for increased executions on
the Exchange thus benefitting all market participants. The Exchange
also believes it is reasonable and appropriate to charge initiators of
PIP and COPIP Orders less than responders because initiators bring
liquidity to the Exchange which, in turn, results in increased
opportunity for more executions on BOX. As such, the Exchange believes
the differential is reasonable and appropriate.
---------------------------------------------------------------------------

    \14\ See Nasdaq ISE LLC (``Nasdaq ISE'') Pricing Schedule
Section 3. (Regular Order Fees and Rebates).
    \15\ On Nasdaq ISE, a PIM Order is an order entered into the
Price Improvement Mechanism (``PIM''). This is similar to BOX's PIP
and COPIP mechanism.
    \16\ ``Select Symbols'' and ``Non-Select Symbols'' referred to
in the Nasdaq ISE Fee Schedule are identical to ``Penny Interval
Classes'' and ``Non-Penny Interval Classes'' on BOX.
---------------------------------------------------------------------------

    The Exchange also believes the proposed change to establish PIP and
COPIP Break-Up Credits is reasonable, equitable, and not unfairly
discriminatory. The Exchange again notes that these credits are already
assessed in current Section III of the BOX Fee Schedule. The Exchange
simply seeks to relocate the credits to the appropriate fee structure
in order to increase overall readability and reduce investor confusion.
As such, the Exchange believes the proposed change is reasonable,
equitable and not unfairly discriminatory.
Facilitation and Solicitation Transactions
    The Exchange believes the proposed changes to the fee structure
detailed in Section I.C. are reasonable, equitable and not unfairly
discriminatory. The Exchange believes the proposed fee changes to
Responses in the Facilitation and Solicitation Mechanisms are
reasonable as they reflect the current fees charged for these
transactions on the Exchange. As noted herein, the Exchange seeks to
relocate the liquidity fees detailed in Section III to be included in
the Facilitation and Solicitation Transaction fee structure. The
Exchange believes that the proposed change will increase overall
readability of the BOX Fee Schedule and reduce investor confusion.
    The Exchange also believes the proposed change to establish
Facilitation and Solicitation Break-Up Credits is reasonable,
equitable, and not unfairly discriminatory. The Exchange again notes
that these credits are already assessed in current Section III of the
BOX Fee Schedule. The Exchange seeks to relocate the credits to the
appropriate fee structure in order to increase overall readability and
reduce investor confusion. As such, the Exchange believes the proposed
change is reasonable, equitable and not unfairly discriminatory.
    The Exchange believes the proposed changes to the fee structure
detailed in Section I.C.2 are reasonable, equitable and not unfairly
discriminatory. First, the Exchange believes that increasing the
Response fees for Strategy Facilitation and Solicitation Orders in
Penny and Non-Penny Interval Classes is reasonable as, under this
proposal, identical fees will exist for regular order Responses in the
Facilitation and Solicitation auction mechanisms as detailed in
proposed Section I.C. The Exchange believes that mirroring these fees
is appropriate as both regular orders and Strategy Orders are submitted
through the same Facilitation or Solicitation mechanism. As such, the
Exchange believes the proposed change is reasonable and appropriate as
it will streamline the fees assessed for all Responses submitted
through the Facilitation and Solicitation auction mechanisms and
thereby reduce investor confusion with respect to how much Responses
are charged in these mechanisms. Further, the Exchange believes that
the fees are reasonable and competitive when compared to similar fees
at competing venues.\17\ Lastly, the Exchange believes that the
proposed change is equitable and not-unfairly discriminatory as it
applies to all categories of Participants and across all account types.
---------------------------------------------------------------------------

    \17\ See Nasdaq ISE LLC (``Nasdaq ISE'') Pricing Schedule
Section 3. (Regular Order Fees and Rebates). Under the ISE Fee
Schedule, a Responder to a Facilitation or Solicitation Order will
pay $0.50 in Penny Interval Classes and $1.10 for Non-Penny Interval
Classes. The Exchange notes that Nasdaq ISE does not offer Strategy
Order Facilitation and Solicitation transactions on their exchange.
---------------------------------------------------------------------------

    The Exchange believes it is reasonable, equitable and not unfairly
discriminatory to charge higher exchange fees for responders in the
Strategy Order Facilitation and Solicitation mechanisms than for
initiators of these orders and the contra orders. The Exchange believes
it is reasonable when compared to a similar practice for fees at a
competing venue.\18\ For example, at Nasdaq ISE the fee for both the
initiating and contra order for Crossing Orders \19\ (except PIM Orders
which are assessed different fees under Nasdaq ISE's fee schedule) is
$0.20 for Select and Non-Select Symbols for all

account types except Priority Customers who are charged no fees.
Responses to these orders are charged $0.50 for Select Symbols and
$1.10 for Non-Select Symbols regardless of account type. The Exchange
notes that a differential of fees between initiators and responders
currently exists in the Facilitation and Solicitation auction
mechanisms which, as discussed above, are the same mechanisms that the
Strategy Order Facilitation and Solicitation transactions are
submitted. Further, the Exchange continues to believe that the proposed
differential is reasonable because responders to Strategy Order
Facilitation and Solicitation orders are willing to pay a higher fee
for liquidity discovery. Responders to these orders are given the
opportunity to interact with customer order flow which, in turn, allows
for the opportunity for increased executions on the Exchange thus
benefitting all market participants. The Exchange also believes it is
reasonable and appropriate to charge initiators of Strategy Order
Facilitation and Solicitation Orders less than responders because
initiators bring liquidity to the Exchange which, in turn, results in
increased opportunity for more executions on BOX. As such, the Exchange
believes the differential is reasonable and appropriate.
---------------------------------------------------------------------------

    \18\ Id.
    \19\ On Nasdaq ISE, a Crossing Order is an order executed in the
Exchange's Facilitation Mechanism, Solicited Order Mechanism, Price
Improvement Mechanism or submitted as a Qualified Contingent Cross
order.
---------------------------------------------------------------------------

    The Exchange believes the proposed Strategy Order Facilitation and
Solicitation Break-Up Credits are reasonable, equitable, and not
unfairly discriminatory. Currently, in the Facilitation and
Solicitation auction mechanisms, the Agency Order is a block sized
order typically composed of Public Customer orders and represented by
an Order Flow Provider who then guarantees the execution by submitting
a matching Facilitation and Solicitation Order. Responders in the
Facilitation and Solicitation auction mechanisms are always non-Public
Customers and more typically are Market Makers. The Exchange believes
that it is reasonable, equitable and not unfairly discriminatory to
give the Agency Orders the proposed Break-Up Credit when their orders
execute against a non-Public Customer because the Exchange seeks to
attract additional Public Customer order flow which may ultimately
benefit all Participants trading on the Exchange. Further, the Exchange
notes that the same behavior currently exists for regular orders
submitted through the Facilitation and Solicitation auction mechanisms.
As such, the Exchange believes the proposed Break-Up Credits for
Strategy Order Facilitation and Solicitation Orders is reasonable and
appropriate. Further, the Exchange believes the proposed change is
equitable and not unfairly discriminatory as it will apply to all
Participants, regardless of account type.
    Finally, the Exchange believes that the proposed non-substantive
changes to the Fee Schedule to reflect the changes discussed herein are
reasonable, equitable, and not unfairly discriminatory as the changes
will increase readability and reduce investor confusion.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
    The Exchange believes the proposed changes to the Primary
Improvement Order fees will not impose a burden on competition among
various Exchange Participants. The Exchange is simply proposing to
amend certain percentage thresholds and fees for Primary Improvement
Orders in the BOX Fee Schedule. The Exchange believes that the proposed
changes increase intermarket and intramarket competition by incenting
Participants to direct their order flow to the Exchange, which benefits
all Participants by providing more trading opportunities and improves
competition on the Exchange.
    The Exchange does not believe the proposed changes to the PIP and
COPIP Transactions fee structure will burden competition by creating
such a disparity between the fees an initiating Participant in the PIP
and COPIP auction pay and the fees a competitive responder pays that
would result in certain Participants being unable to compete with
initiators. In fact, the Exchange believes that these changes will not
impair these Participants from adding liquidity and competing in PIP
and COPIP auction transactions. The Exchange believes it will help
promote competition by providing incentives for market participants to
submit customer order flow to BOX and thus, create a greater
opportunity for customers to receive additional price improvement and
access greater liquidity. Further, as discussed above, the Exchange is
simply seeking to relocate certain fees and credits already applied to
these transactions on BOX. As such, the Exchange does not believe the
proposed changes to Section I.B. of the BOX Fee Schedule will impose
any burden on competition not necessary or appropriate in furtherance
of the purposes of the Act.
    Similarly, the Exchange does not believe the proposed changes to
the Facilitation and Solicitation Transactions fee structure will
burden competition by creating such a disparity between the fees an
initiating Participant in the Facilitation and Solicitation auction pay
and the fees a competitive responder pays that would result in certain
Participants being unable to compete with initiators. In fact, the
Exchange believes that these changes will not impair these Participants
from adding liquidity and competing in Facilitation and Solicitation
auction transactions and will help promote competition by providing
incentives for market participants to submit customer order flow to BOX
and thus, create a greater opportunity for customers to receive
additional price improvement. Further, as discussed above, the Exchange
is simply seeking to relocate certain fees and credits already applied
to these transactions on BOX. As such, the Exchange does not believe
the proposed changes to Section I.C. and Section I.C.2. of the BOX Fee
Schedule will impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act.
    Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues. In such an environment, the Exchange must continually
review, and consider adjusting, its fees and credits to remain
competitive with other exchanges. For the reasons described above, the
Exchange believes that the proposed rule change reflects this
competitive environment.

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 \20\ and Rule 19b-4(f)(2)
thereunder,\21\ because it establishes or changes a due, or fee.
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \21\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-BOX-2021-01 on the subject line.

Paper Comments

     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-2021-01. 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 (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549 on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-BOX-2021-01, and should be submitted on
or before February 16, 2021.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
---------------------------------------------------------------------------

    \22\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-01585 Filed 1-25-21; 8:45 am]
BILLING CODE 8011-01-P