Daily Rules, Proposed Rules, and Notices of the Federal Government
The Exchange proposes to amend its rules to amend Rule 7110 regarding Session Orders. 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 Web site at
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.
The purpose of this proposed rule change is to amend Rule 7110(e)(1)(iii)(C) to add a provision related to an exception to the manner in which certain Session Orders are handled when they have been routed to an away exchange. Specifically, the Exchange proposes to add a provision in Rule 7110(e)(1)(iii)(C)(3) to provide that any remaining quantity of a Session Order that has been routed away, if a Triggering Event occurs while the order is routed away and receives a partial execution, will be cancelled by BOX upon the return of the remainder to BOX from the away exchange.
Exchange Rule 7110(e)(1)(iii) provides that a Session Order will remain active in the BOX trading system until a "Triggering Event" occurs that causes a BOX Participant to lose its connection to the BOX system, or causes BOX to be unable to process the Session Order.
Currently, Rule 7110(e)(1)(iii)(C) provides certain exceptions to the cancellation of Session Orders. Specifically, the rule provides that a Session Order will not be cancelled and shall remain active in the BOX market if the order is in one of the following BOX system processes when a Triggering Event occurs:
(1) The order is being exposed to the BOX market pursuant to Rule 7130(b);
(2) The order is a Directed Order to which the Executing Participant has not yet responded pursuant to Rule 8040(d)(2);
(3) The order has been routed to an away exchange pursuant to Rule 15030.
Exchange Rule 15030 provides that certain orders that are specifically designated by Options Participants as eligible for routing will be routed to an Away Exchange ("Eligible Orders"). If BOX cannot execute or book an Eligible Order, then it will route the Eligible Order to an Away Exchange on behalf of the Options Participant who submitted the Eligible Order through a third-party broker dealer. The full quantity of an Eligible Order is routed to one or more Away Exchange(s) as Immediate or Cancel limit order(s) priced at the current NBBO. If the Eligible Order routed away is not executed in its entirety at the Away Exchange(s) and its limit price is reached, then it is returned to BOX.
A technology system upgrade will now allow BOX to cancel any remaining quantity of a Session Order if a Triggering Event occurs while the order has been routed away, received a partial execution, and is returned to BOX by the away exchange. As such, the Exchange is proposing to add a provision to Rule 7110(e)(1)(iii)(C)(3). Upon the effectiveness of this proposed rule change, BOX will inform Options Participants via Information Circular about the implementation date of this change in the manner in which certain Session Orders are handled when they have been routed to an away exchange.
The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act,
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 has neither solicited nor received comments on the proposed rule change.
This proposed rule change is filed pursuant to paragraph (A) of section 19(b)(3) of the Exchange Act
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.
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:
* Use the Commission's Internet comment form (
* Send an email to
* Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.