80 FR 10735 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc.
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 39 (February 27, 2015)
Federal Register Volume 80, Issue 39 (February 27, 2015)
| Page Range | 10735-10738 | |
| FR Document | 2015-04068 |
[Federal Register Volume 80, Number 39 (Friday, February 27, 2015)] [Notices] [Pages 10735-10738] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-04068] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74352; File No. SR-BATS-2015-13] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc. February 23, 2015. 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 February 10, 2015, BATS Exchange, Inc. (the ``Exchange'' or ``BATS'') 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 has designated the proposed rule change as one establishing or changing a member due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \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). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange filed a proposal to amend the fee schedule applicable to Members \5\ and non-members of the Exchange pursuant to BATS Rules 15.1(a) and (c). Changes to the fee schedule pursuant to this proposal are effective upon filing. --------------------------------------------------------------------------- \5\ The term ``Member'' is defined as ``any registered broker or dealer that has been admitted to membership in the Exchange.'' See Exchange Rule 1.5(n). --------------------------------------------------------------------------- The text of the proposed rule change is available at the Exchange's Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. 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 parts 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 modify its fee schedule in order to: (1) remove the reference to ROLF from fee code BO; (2) make certain changes to Cross-Asset Step-Up Tier 3; and (3) make certain non-substantive clean-up changes to the fee schedule. Deleting Reference to ROLF The Exchange proposes to amend its fee schedule to remove the reference to [[Page 10736]] ROLF from fee code BO. Fee code BO currently provides that the Exchange will charge $0.0030 per share for any order routed using ROLF or Destination Specific routing strategy unless otherwise specified. Under the ROLF routing strategy, an order will check the Exchange for available shares and then will be sent to LavaFlow ECN (``LavaFlow''). This change is being proposed in response to LavaFlow's announcement that it will cease market operations and its last day of trading will be Friday, January 30, 2015. As such, beginning on February 2, 2015, the Exchange will no longer route orders to LavaFlow. As proposed, the Exchange would continue to charge $0.0030 per share for orders routed using a Destination Specific routing strategy. Step-Up Add TCV Definition The Exchange is also proposing to make a non-substantive change to the definition of ``Step-Up Add TCV'' in its fee schedule. Currently, Step-Up Add TCV means ADAV \6\ as a percentage of TCV \7\ in January 2014 subtracted from current ADAV as a percentage of TCV. In order to add an additional month to use as a baseline for calculating Step-Up Add TCV, as further described below, the Exchange is proposing to amend the fee schedule such that Step-Up Add TCV means ADAV as a percentage of TCV in the relevant baseline month subtracted from current ADAV as a percentage of TCV. The Exchange is also proposing to make a corresponding non-substantive change to footnote 2, titled ``Step-Up Tiers,'' such that the criteria to qualify for the tiers is described as the ``Member's Step-Up TCV from January 2014 is equal to or greater than'' instead of ``Member's Step-Up TCV is equal to or greater than.'' This change is non-substantive because the Exchange is not proposing to amend any fees, rebates, or the calculation thereof, but rather making the requisite change in order for the rebate and the criteria associated with meeting the tiers to remain the same in conjunction with the proposed changes to the definition of Step-Up Add TCV outlined above. --------------------------------------------------------------------------- \6\ ``ADAV'' means average daily volume calculated as the number of shares added per day on a monthly basis. \7\ ``TCV'' means total consolidated volume calculated as the volume reported by all exchanges and trade reporting facilities to a consolidated transaction reporting plan for the month for which the fees apply. --------------------------------------------------------------------------- Cross-Asset Step-Up Tiers The Exchange is also proposing to amend the criteria for meeting Tier 3 in the Cross-Asset Step-Up Tiers. Specifically, the Exchange is proposing to make two changes: to base the tier calculation on a Member's Step-Up Add TCV from December 2014; and to lower the threshold required to meet Tier 3 from 0.20% to 0.15%. Currently, in order to meet Tier 3 of the Cross-Asset Step-Up Tier and receive a $0.0032 rebate per share that adds liquidity: (i) a Member's ADAV as a percentage of TCV must be equal to or greater than 0.20%; and (ii) the Member's Options Step-Up Add TCV \8\ must be equal to or greater than 0.60%. The Exchange is not proposing to amend requirement (ii). The Exchange is proposing to amend requirement (i) such that a Member must have a Step-Up Add TCV from December 2014 of at least 0.15% instead of an ADAV as a percentage of TCV of at least 0.20%, which will encourage increased participation on the Exchange by requiring that a Member increases its participation on the Exchange as compared to December 2014, rather than maintaining a static ADAV as a percentage of TCV. --------------------------------------------------------------------------- \8\ ``Options Step-Up Add TCV'' means ADAV as a percentage of TCV in January 2014 subtracted from current ADAV as a percentage of TCV, using the definitions of ADAV and TCV as provided under the Exchange's fee schedule for BATS Options. --------------------------------------------------------------------------- The Exchange proposes to implement the amendments to its fee schedule effective February 10, 2015. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6 of the Act.\9\ Specifically, the Exchange believes that the proposed rule change is consistent with Sections 6(b)(4) of the Act and 6(b)(5) of the Act,\10\ in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and other persons using any facility or system which the Exchange operates or controls. The Exchange notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f. \10\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- The Exchange believes that its proposal to eliminate ROLF from fee code BO represents an equitable allocation of reasonable dues, fees, and other charges among Members and other persons using its facilities. The proposed change is in response to LavaFlow's announcement that it will cease market operations and its last day of trading will be Friday, January 30, 2015. The Exchange notes that the proposed change is not designed to amend any fee or rebate, nor alter the manner in which the Exchange assesses fees and rebates. As of February 2, 2015, the Exchange will no longer route orders to LavaFlow and, therefore, proposes to remove ROLF from the fee schedule, which will make the fee schedule clearer and less confusing for investors as well as help to eliminate potential investor confusion, thereby removing impediments to and perfecting the mechanism of a free and open market and a national market system, and, in general, protecting investors and the public interest. The Exchange also believes that the proposed non-substantive change to the definition of Step-Up Add TCV and the corresponding non- substantive change to the Step-Up Tiers are reasonable, fair, and equitable because they are designed to make the fee schedule easier to comprehend in light of the decision to add an additional baseline month, as described above. The Exchange notes that neither of the proposed changes are designed to amend any fee or rebate, nor alter the manner in which the Exchange assesses fees and rebates. These non- substantive changes to the fee schedule are intended to make the fee schedule clearer and less confusing for investors and eliminate potential investor confusion, thereby removing impediments to and perfecting the mechanism of a free and open market and a national market system, and, in general, protecting investors and the public interest. The Exchange also believes that the proposed change to measure the Member's Step-Up Add TCV from December 2014 instead of ADAV as a percentage of TCV is reasonable, fair, and equitable because it will incentive Members to increase their participation on the Exchange as compared to December 2014, rather than maintaining a static ADAV as a percentage of TCV. The Exchange further believes that the proposal is reasonable, fair, and equitable because the increased liquidity from incentivizing Members to increase their participation on the Exchange will benefit all investors by deepening the liquidity pool on the Exchange, supporting the quality of price discovery, promoting market transparency, and improving investor protection. The Exchange also believes that lowering the threshold to meet the requirement from 0.20% to 0.15% is reasonable, fair, and equitable because the measurement is changing from a measure of total added volume (ADAV [[Page 10737]] as a percentage of TCV) into a measure of the increase of added volume as compared to December 2014 (Step-Up Add TCV from December 2014) and the reduction will make it easier for Members to achieve Cross-Asset Step-Up Tier 3. The Exchange believes that step-up pricing programs such as that proposed herein reward a Member's growth pattern and that such increased volume increases the potential revenue to the Exchange, which will allow the Exchange to continue to provide and potentially expand the incentive programs operated by the Exchange. Such pricing programs are also fair and equitable in that they are available to all Members. Further, volume-based rebates and fees such as the ones maintained by the Exchange, including those amendments proposed herein, have been widely adopted by equities and options exchanges and are equitable because they are open to all Members on an equal basis and provide additional benefits or discounts that are reasonably related to the value to an exchange's market quality associated with higher levels of market activity, such as higher levels of liquidity provision and/or growth patterns, and introduction of higher volumes of orders into the price and volume discovery processes. Further, the Exchange believes that the Cross-Asset Step-Up Tiers will provide such enhancements in market quality on the Exchange by incentivizing increased participation by Members attempting to meet Tier 3. Accordingly, the Exchange believes that the proposed amendments to the Cross-Asset Step-Up Tiers and the incentives associated therewith are not unfairly discriminatory because they will apply uniformly to all Members and are consistent with the overall goals of enhancing market quality on the Exchange. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. To the contrary, the Exchange believes that the proposed changes to the Cross-Asset Step-Up Tiers will allow the Exchange to compete more ably with other execution venues by drawing additional volume to the Exchange, thereby making it a more desirable destination venue for its customers. Further, the Exchange does not believe that these proposed changes represent a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange's competitors. Additionally, Members may opt to disfavor the Exchange's pricing if they believe that alternatives offer them better value. Accordingly, the Exchange does not believe that the proposed change will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. The Exchange also believes that its proposal to remove ROLF from fee code BO would not affect intermarket nor intramarket competition because the change is not designed to amend any fee or rebate or to alter the manner in which the Exchange assesses fees or calculates rebates. It is simply proposed in response to LavaFlow's announcement that it will cease market operations following the close of business on Friday, January 30, 2015. The Exchange believes that the non-substantive and organizational changes to the fee schedule would not affect intermarket nor intramarket competition because none of the proposed changes are designed to amend any fee or rebate or to alter the manner in which the Exchange asses fees or rebates. The changes are intended to make the fee schedule as clear and concise as possible. As stated above, the Exchange notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee structures to be unreasonable or excessive. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties. 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) of the Act \11\ and paragraph (f)(2) of Rule 19b-4 thereunder.\12\ 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. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78s(b)(3)(A). \12\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-BATS-2015-13 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-BATS-2015-13. 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 Web site (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 Web site 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; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-BATS-2015-13 and should be submitted on or before March 20, 2015. [[Page 10738]] For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\13\ --------------------------------------------------------------------------- \13\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Jill M. Peterson, Assistant Secretary. [FR Doc. 2015-04068 Filed 2-26-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 39 / Friday, February 27, 2015 / Notices 10735
NASD Rule 3170 (Mandatory Electronic please use only one method. The Exchange has designated the proposed
Filing Requirements), NASD Rule 1150 Commission will post all comments on rule change as one establishing or
(Executive Representative), and NASD the Commission’s Internet Web site changing a member due, fee, or other
Rule 1160 (Contact Information (http://www.sec.gov/rules/sro.shtml). charge imposed by the Exchange under
Requirements) into the Consolidated Copies of the submission, all subsequent Section 19(b)(3)(A)(ii) of the Act 3 and
FINRA rulebook as FINRA Rule 4517 amendments, all written statements Rule 19b–4(f)(2) thereunder,4 which
(Member Filing and Contact Information with respect to the proposed rule renders the proposed rule change
Requirements) without any substantive change that are filed with the effective upon filing with the
changes, to update cross-references Commission, and all written Commission. The Commission is
accordingly and reflect current communications relating to the publishing this notice to solicit
nomenclature, and to thereby clarify proposed rule change between the comments on the proposed rule change
FINRA’s rules, and because the rulebook Commission and any person, other than from interested persons.
consolidation process is designed to those that may be withheld from the
I. Self-Regulatory Organization’s
provide additional clarity and public in accordance with the
Statement of the Terms of the Substance
regulatory efficiency to members, the provisions of 5 U.S.C. 552, will be
of the Proposed Rule Change
Commission believes that a waiver of available for Web site viewing and
the requirement is appropriate so that printing in the Commission’s Public The Exchange filed a proposal to
the rule change may become operative Reference Room, 100 F Street NE., amend the fee schedule applicable to
immediately. Therefore, the Washington, DC 20549, on official Members 5 and non-members of the
Commission hereby waives the 30-day business days between the hours of Exchange pursuant to BATS Rules
operative delay and designates the 10:00 a.m. and 3:00 p.m. Copies of such 15.1(a) and (c). Changes to the fee
proposal effective upon filing.14 filing also will be available for schedule pursuant to this proposal are
At any time within 60 days of the inspection and copying at the principal effective upon filing.
office of FINRA. All comments received The text of the proposed rule change
filing of the proposed rule change, the
will be posted without change; the is available at the Exchange’s Web site
Commission summarily may
Commission does not edit personal at www.batstrading.com, at the
temporarily suspend such rule change if
identifying information from principal office of the Exchange, and at
it appears to the Commission that such
submissions. You should submit only the Commission’s Public Reference
action is necessary or appropriate in the
information that you wish to make Room.
public interest, for the protection of
investors, or otherwise in furtherance of available publicly. All submissions II. Self-Regulatory Organization’s
the purposes of the Act. If the should refer to File Number SR–FINRA– Statement of the Purpose of, and
Commission takes such action, the 2015–004, and should be submitted on Statutory Basis for, the Proposed Rule
Commission shall institute proceedings or before March 20, 2015. Change
to determine whether the proposed rule For the Commission, by the Division of In its filing with the Commission, the
should be approved or disapproved. Trading and Markets, pursuant to delegated Exchange included statements
authority.15
IV. Solicitation of Comments concerning the purpose of and basis for
Jill M. Peterson,
the proposed rule change and discussed
Interested persons are invited to Assistant Secretary. any comments it received on the
submit written data, views, and [FR Doc. 2015–04084 Filed 2–26–15; 8:45 am] proposed rule change. The text of these
arguments concerning the foregoing, BILLING CODE 8011–01–P statements may be examined at the
including whether the proposed rule places specified in Item IV below. The
change is consistent with the Act. Exchange has prepared summaries, set
Comments may be submitted by any of SECURITIES AND EXCHANGE forth in Sections A, B, and C below, of
the following methods: COMMISSION the most significant parts of such
Electronic Comments [Release No. 34–74352; File No. SR–BATS– statements.
2015–13]
• Use the Commission’s Internet A. Self-Regulatory Organization’s
comment form (http://www.sec.gov/ Self-Regulatory Organizations; BATS Statement of the Purpose of, and
rules/sro.shtml); or Exchange, Inc.; Notice of Filing and Statutory Basis for, the Proposed Rule
• Send an email to rule-comments@ Immediate Effectiveness of a Proposed Change
sec.gov. Please include File Number SR– Rule Change Related to Fees for Use 1. Purpose
FINRA–2015–004 on the subject line. of BATS Exchange, Inc.
The Exchange proposes to modify its
Paper Comments February 23, 2015. fee schedule in order to: (1) remove the
• Send paper comments in triplicate Pursuant to Section 19(b)(1) of the reference to ROLF from fee code BO; (2)
to Brent J. Fields, Secretary, Securities Securities Exchange Act of 1934 (the make certain changes to Cross-Asset
and Exchange Commission, 100 F Street ‘‘Act’’),1 and Rule 19b–4 thereunder,2 Step-Up Tier 3; and (3) make certain
NE., Washington, DC 20549–1090. notice is hereby given that on February non-substantive clean-up changes to the
10, 2015, BATS Exchange, Inc. (the fee schedule.
All submissions should refer to File
Number SR–FINRA–2015–004. This file ‘‘Exchange’’ or ‘‘BATS’’) filed with the Deleting Reference to ROLF
number should be included on the Securities and Exchange Commission
The Exchange proposes to amend its
mstockstill on DSK4VPTVN1PROD with NOTICES
subject line if email is used. (‘‘Commission’’) the proposed rule
change as described in Items I, II, and fee schedule to remove the reference to
To help the Commission process and
review your comments more efficiently, III below, which Items have been 3 15 U.S.C. 78s(b)(3)(A)(ii).
prepared by the Exchange. The 4 17 CFR 240.19b–4(f)(2).
14 For purposes of waiving the 30-day operative 5 The term ‘‘Member’’ is defined as ‘‘any
15 17 CFR 200.30–3(a)(12).
delay, the Commission has considered the proposed registered broker or dealer that has been admitted
1 15 U.S.C. 78s(b)(1).
rule’s impact on efficiency, competition, and capital to membership in the Exchange.’’ See Exchange
formation. See 15 U.S.C. 78c(f). 2 17 CFR 240.19b–4. Rule 1.5(n).
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![10738 Federal Register / Vol. 80, No. 39 / Friday, February 27, 2015 / Notices
For the Commission, by the Division of and at the Commission’s Public crowds for open outcry and other
Trading and Markets, pursuant to delegated Reference Room. manual handling by TPHs and Exchange
authority.13 PAR Officials, and/or to other order
Jill M. Peterson, II. Self-Regulatory Organization’s
management terminals generally located
Statement of the Purpose of, and
Assistant Secretary. in booths on the trading floor for
Statutory Basis for, the Proposed Rule
[FR Doc. 2015–04068 Filed 2–26–15; 8:45 am] manual handling. Where an order is
Change
BILLING CODE 8011–01–P routed for processing by the Exchange
In its filing with the Commission, the order handling system depends on
Exchange included statements various parameters configured by the
SECURITIES AND EXCHANGE concerning the purpose of and basis for Exchange and the order entry firm itself.
COMMISSION the proposed rule change and discussed Thus, the OHS provides TPHs with
any comments it received on the some flexibility to determine how to
proposed rule change. The text of these process their orders in the CBOE Hybrid
[Release No. 34–74351; File No. SR–CBOE–
2015–021] statements may be examined at the System.
places specified in Item IV below. The The Exchange believes these routing
Self-Regulatory Organizations; Exchange has prepared summaries, set parameters assist with the maintenance
Chicago Board Options Exchange, forth in sections A, B, and C below, of of a fair and orderly market and help to
Incorporated; Notice of Filing and the most significant aspects of such mitigate potential risks associated with
Immediate Effectiveness of a Proposed statements. orders executing at potentially
Rule Change Relating to Chicago A. Self-Regulatory Organization’s erroneous prices or inconsistent with a
Board Options Exchange, Statement of the Purpose of, and particular investment strategy by
Incorporated’s Order Handling System Statutory Basis for, the Proposed Rule routing certain orders to a PAR
and Order Management Terminal Change workstation or a booth order
management terminal for manual
February 23, 2015. 1. Purpose handling based on parameters
Pursuant to Section 19(b)(1) of the The Exchange is proposing to adopt determined by the Exchange under Rule
Securities Exchange Act of 1934 (the new Rule 6.12 to further describe its 6.2B, 6.13 or 6.53C, by routing certain
‘‘Act’’),1 and Rule 19b–4 thereunder,2 existing OHS and OMT operations, and orders to an order management terminal
notice is hereby given that, on February to make corresponding amendments to based on parameters prescribed by the
19, 2015, Chicago Board Options its opening, automatic execution and Exchange, by routing certain orders to
Exchange, Incorporated (the ‘‘Exchange’’ complex order processing rules (Rules an order management terminal or a PAR
or ‘‘CBOE’’) filed with the Securities 6.2B, 6.13, and 6.53C, respectively). The workstation or for electronic process,
and Exchange Commission (the Exchange notes that these OHS and based on parameters prescribed by the
‘‘Commission’’) the proposed rule OMT operations are currently in use order entry firm itself, and by routing
change as described in Items I, II, and and referenced in the Exchange Rules. certain orders to an order management
III below, which Items have been The purpose of this rule change is terminal in the event of certain
prepared by the Exchange. The simply to codify further details of the Exchange system disruptions or
Exchange filed the proposal as a ‘‘non- existing operations within the Exchange malfunctions. The order handling
controversial’’ proposed rule change Rules. system also permits orders to be routed
pursuant to Section 19(b)(3)(A)(iii) of from a PAR workstation to an order
the Act 3 and Rule 19b–4(f)(6) Background management terminal (and vice versa)
thereunder.4 The Commission is The CBOE Hybrid System 5 is a and from a PAR workstation or an order
publishing this notice to solicit trading platform that allows automatic management terminal to the Hybrid
comments on the proposed rule change executions to occur electronically and System for automatic execution or book
from interested persons. open outcry trades to occur on the floor entry. The Exchange also views the
of the Exchange. To operate in this order handling system as an important
I. Self-Regulatory Organization’s ‘‘hybrid’’ environment, the Exchange tool to assist order entry firms in their
Statement of the Terms of Substance of has made available to Trading Permit ability to efficiently manage, process
the Proposed Rule Change Holders (‘‘TPHs’’) a dynamic order and execute orders in a ‘‘hybrid’’ trading
The Exchange is proposing to adopt a handling system, also referred herein as environment. The Exchange believes
rule that further describes its existing OHS, that has the capability to route this, again, promotes fair and orderly
order handling system (also referred to orders to the Hybrid System for markets, as well as assists the Exchange
below as ‘‘OHS’’) and order automatic execution and book entry, to in its ability to effectively attract order
management terminal (also referred to PAR workstations located in the trading flow and liquidity to its market, and
below as ‘‘OMT’’) operations, and to ultimately benefits all CBOE TPHs and
make corresponding amendments to its 5 The CBOE ‘‘Hybrid System’’ or ‘‘Hybrid Trading all investors.
opening, automatic execution and System’’ refers to the Exchange’s trading platform Regarding booth routing parameters in
that allows Market-Makers to submit electronic particular, an order may route to an
complex order processing rules. The quotes in their appointed classes. The ‘‘Hybrid 3.0
text of the proposed rule change is Platform’’ is an electronic trading platform on the order management terminal generally
available on the Exchange’s Web site Hybrid Trading System that allows one or more located in a booth depending on various
(http://www.cboe.com/AboutCBOE/ quoters to submit electronic quotes which represent circumstances. One such set of
the aggregate Market-Maker quoting interest in a
mstockstill on DSK4VPTVN1PROD with NOTICES
CBOELegalRegulatoryHome.aspx), at circumstances pertains to automatic
series for the trading crowd. Classes authorized by
the Exchange’s Office of the Secretary, the Exchange for trading on the Hybrid Trading
execution/book ‘‘kick-outs.’’ In that
System shall be referred to as Hybrid classes. regard, the electronic processes under
13 17 CFR 200.30–3(a)(12).
Classes authorized by the Exchange for trading on Rules 6.2B (pertaining to opening
1 15
the Hybrid 3.0 Platform shall be referred to as transactions), 6.13 (pertaining to simple
U.S.C. 78s(b)(1). Hybrid 3.0 classes. References to ‘‘Hybrid,’’ ‘‘Hybrid
2 17 CFR 240.19b–4.
System,’’ or ‘‘Hybrid Trading System’’ in the
orders) and 6.53C (pertaining to
3 15 U.S.C. 78s(b)(3)(A)(iii).
Exchange’s Rules shall include all platforms unless complex orders), provide that an order
4 17 CFR 240.19b–4(f)(6). otherwise provided by rule. See, e.g., Rule 1.1(aaa). that is not eligible for automatic
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Document Created: 2015-12-18 13:14:44
Document Modified: 2015-12-18 13:14:44
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 10735 |
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