8011-010p
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100505; File No. SR-BOX-2024-17]
Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change to Amend the Fee Schedule for Trading on the
BOX Options Market LLC Facility (“BOX”)
July 11, 2024.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),1 and
Rule 19b-4 thereunder,2 notice is hereby given that on July 1, 2024, BOX Exchange LLC (the
“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.
I.

Self-Regulatory Organization’s Statement of Terms of Substance of the Proposed Rule
Change
The Exchange is filing with the Securities and Exchange Commission (“Commission”) a

proposed rule change to amend the Fee Schedule on the BOX Options Market LLC (“BOX”)
options facility. The 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 https://rules.boxexchange.com/rulefilings.

15 U.S.C. 78s(b)(1).

17 CFR 240.19b-4.

15 U.S.C. 78s(b)(3)(A)(ii).

17 CFR 240.19b-4(f)(2).

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 to include FLEX
Open Outcry (“FOO”) volume toward the Qualified Contingent Cross (“QCC”) Growth Rebate.5
Currently, BOX offers a QCC Rebate and a QCC Growth Rebate.6 Specifically, a QCC
Rebate is paid to the Participant that entered the order into the BOX system when at least one
party to the QCC transaction is a Broker Dealer or Market Maker. The Participant receives a
per contract rebate on QCC transactions according to the tier achieved. Volume thresholds are
calculated on a monthly basis by totaling the Participant’s QCC Agency Order volume on
BOX. When only one side of the QCC transaction is a Broker Dealer or Market Maker, Rebate
1 applies. When both parties to the QCC transaction are a Broker Dealer or Market Maker,
Rebate 2 applies. The Exchange notes that the QCC Rebate is intended to incentivize the
sending of QCC Orders to BOX.
The QCC Rebate tier structure is as follows:
Tier
QCC Agency Order Volume
on BOX
(per month)
0 to 749,999 contracts

Rebate 1
(per contract)

Rebate 2
(per contract)

($0.14)

($0.22)

The Exchange recently established transaction fees and rebates applicable to the FOO Order type on the
BOX Trading Floor. See Securities Exchange Act Release No. 100396 (June 21, 2024), 89 FR 53693 (June
27, 2024) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend the Fee
Schedule for Trading on the BOX Options Market LLC Facility).

See BOX Fee Schedule Section IV.D.1.

2
1,000,000[sic] to 1,499,999
contracts
1,500,000+ contracts

($0.16)

($0.25)

($0.17)

($0.27)

Additionally, the QCC Growth Rebate allows Participant’s to qualify for the rebates
listed in Tier 3 of the QCC Rebate if a Participant’s QCC Agency Order volume on BOX
achieves Tier 2 of the QCC Rebate in the month AND the Participant’s total QCC volume
combined with total Qualified Open Outcry (“QOO”) volume exceeds 5 million contracts per
month. Strategy QOO Orders and Strategy QCC Orders are not counted toward the QCC
Growth Rebate volume.7
The Exchange now proposes that FOO volume be counted toward the QCC Growth
Rebate. Specifically, the Exchange proposes that if a Participant’s QCC Agency Order volume
on BOX achieves Tier 2 of the QCC Rebate in the month AND the Participant’s total QCC
volume combined with total QOO and FOO volume exceeds 5 million contracts per month,
then the Participant will qualify for the rebates listed in Tier 3 of the QCC Rebate (“QCC
Growth Rebate qualifications”). Strategy QOO Orders, Strategy FOO Orders, and Strategy
QCC Orders will not be counted toward the QCC Growth Rebate volume. Further, Participants
are entitled to one QCC Rebate in a given month, which would be the greater of the QCC
Rebate in Section IV.D.1.a, or the QCC Growth Rebate detailed in Section IV.D.1.b, but not
both.
The Exchange notes that a similar rebate currently exists at another options exchange.8
Further, the Exchange believes that the proposal will encourage Participants to send increased
QCC, FOO, and QOO order flow to BOX in order to achieve a higher rebate.
2.

Statutory Basis

See BOX Fee Schedule Section IV.D.1.b.

See NYSE American LLC (“NYSE American”) Fee Schedule (Section I.F.QCC Fees & Credits).
Although the NYSE American Fee Schedule does not reference FLEX options, the Exchange believes that
FLEX options are included in the Section I.F.QCC Fees & Credits calculation of manual billable sides,
which provides a QCC Billable Bonus Rebate. The Exchange notes that the structure and rebates differ,
however, the concept of combining manual billable (including FLEX options) and QCC billable volume to
determine rebates is similar to the proposal.

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,9 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.
The Exchange’s proposal to include FOO volume toward the QCC Growth Rebate is
reasonable because this rebate will provide additional incentives for BOX Participants to engage
in substantial amounts of trading activity which would serve to bring additional open outcry
liquidity to the Trading Floor and QCC order flow to BOX’s electronic market.
As discussed above, the Exchange notes that a similar QCC rebate currently exists at
another exchange.10 The Exchange believes that the proposed QCC Growth Rebate
qualifications are reasonable because they offer Participants an additional opportunity to
achieve a higher QCC rebate. Additionally, the Exchange’s proposal to include FOO volume
toward the QCC Growth Rebate is equitable and not unfairly discriminatory because any
Participant may qualify for this rebate.11 All BOX Participants may enter order flow to obtain a
QCC Growth Rebate.
The Exchange believes the proposal will create an incentive for Participants to bring
liquidity to BOX – both electronically and on the Trading Floor. The Exchange believes that if
the proposed incentive is effective, then an ensuing increase in trading activity on BOX will
improve the quality of the market to the benefit of all market participants. Further, to the extent
this proposal attracts new Participant volume to BOX, all market participants should benefit
through increased liquidity and more trading opportunities. The Exchange believes this proposal

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

See supra note 8.

The Exchange notes that all BOX Participants may transact options business electronically or on the BOX
Trading Floor with a registered Trading Permit. The Exchange notes further that any market participant may
send an order to a BOX Floor Broker for execution on BOX’s Trading Floor.

is designed to increase participation on BOX and reward those Participants for the unique role
they play in ensuring a robust market.
The Exchange’s exclusion of QCC, FOO, and QOO strategy transactions is reasonable as
Strategy QCC transactions are not currently assessed a fee and Strategy QOO and Strategy FOO
transactions are subject to the fee caps and rebates detailed in Section V.D of the BOX Fee
Schedule. The Exchange also notes that other exchanges exclude strategy transactions from
certain rebates.12 Further, the exclusion of strategy transactions from the QCC Growth Rebate is
equitable and not unfairly discriminatory as this exclusion will be uniformly applied to all
Participant types.
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 proposal does not impose an undue burden on intermarket competition. The Exchange
believes its proposal remains competitive with other options markets and will offer market
participants with another choice of where to transact its business. The Exchange notes that it
operates in a highly competitive market in which market participants can readily favor competing
venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available
at other venues to be more favorable. In such an environment, the Exchange must continually adjust
its fees and rebates to remain competitive with other exchanges. Because competitors are free to
modify their own fees and rebates in response, and because market participants may readily adjust
their order routing practices, the Exchange believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited.

See Nasdaq PHLX LLC (“Nasdaq PHLX”) Rules, Section 6.B. FLEX Transaction Fees (providing that the
Monthly Firm Fee Cap, Monthly Market Maker Cap, Strategy Caps and the Options Surcharge in BKX,
described in Options 7, Section 4 will apply to this Section 6.B. No other fees described in Options 7,
Section 4 will apply to this Section 6.B.). The Exchange notes that Nasdaq PHLX Options 7, Section 4
includes QCC Rebates which are inapplicable to Section 6.B FLEX Transaction Fees by its terms. See also
NYSE American Fee Schedule (Section III.E.1.Floor Broker Incentive and Rebate Programs). The
Exchange notes that NYSE American’s Manual Billable Rebate Program does not include volume
calculated to achieve the Strategy Execution Fee Cap, regardless of whether the cap is achieved.

The Exchange believes that the QCC Growth Rebate as amended will encourage market
participants to send greater amounts of QCC orders, FOO Orders, and QOO Orders to BOX for
execution in order to obtain greater rebates and lower their costs. Further, the proposed QCC
Growth Rebate should incentivize a greater amount of floor transactions on BOX, thereby allowing
BOX to compete more effectively with other options floor models. The Exchange believes that the
additional liquidity will enhance the quality of BOX’s market and increase certain trading
opportunities on BOX’s Trading Floor.
The Exchange believes that its proposal will not place any category of market participant at
a competitive disadvantage and therefore does not impose an undue burden on intra-market
competition. The Exchange notes that any market participant may send an order to a BOX Floor
Broker for execution on BOX’s Trading Floor.
The Exchange’s exclusion of FOO strategy transactions from the volume counted toward
the QCC Growth Rebate does not impose an undue burden on competition as the exclusion will
be uniformly applied to all Participant types.
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 Act13 and Rule 19b-4(f)(2) thereunder,14 because it establishes or changes a due, or
fee.
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

15 U.S.C. 78s(b)(3)(A)(ii).

17 CFR 240.19b-4(f)(2).

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
(https://www.sec.gov/rules/sro.shtml); or

•

Send an email to rule-comments@sec.gov. Please include file number
SR-BOX-2024-17 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-2024-17. 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 (https://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 a.m. and 3
p.m. Copies of the filing also 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-2024-17 and should be
submitted on or before [INSERT DATE 21 DAYS AFTER DATE OF PUBLICATION IN THE
FEDERAL REGISTER].
For the Commission, by the Division of Trading and Markets, pursuant to delegated
authority.15
J. Matthew DeLesDernier,
Deputy Secretary.

[FR Doc. 2024-15675 Filed: 7/16/2024 8:45 am; Publication Date: 7/17/2024]

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