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The Boston Options Exchange (BOX) has filed a proposal with the SEC to change its existing fee structure for the roughly 1,350 option classes which are not part of the Penny Pilot Program.
"BOX has historically been opposed to the practice of ‘payment for order flow’; however, the practice has persisted and it appears it will remain with us for the foreseeable future. Accordingly, BOX's competitive response is to modify its transaction fees on the non-penny pilot classes,” said Will Easley, Vice Chairman of BOX. “We believe it is an improvement on existing payment schemes as it is fully transparent and available to all.”
Upon SEC approval, BOX will implement a surcharge on all non-penny pilot classes whereby the remover of liquidity (the "taker") in a transaction will receive $0.30 per contract regardless of account type and the liquidity adder (the "maker") will pay $0.30. This is in addition to the present fees where orders executed for public customer accounts of a BOX Participant (OFPs) are not subject to a BOX trading fee and all other account types pay a trade execution fee of $0.20 per contract. The surcharge is not applicable to trades executed on the morning opening match nor for trades executed in the PIP at a price better than NBBO. Pending regulatory approval, the proposed rule filing will become applicable with the August 2009 billing cycle. After receiving regulatory approval, the new fee structure will be reflected in the BOX Fee Schedule at: http://www.bostonoptions.com.
