80 FR 17797 - Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees for the BATS One Market Data Product
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 63 (April 2, 2015)
Federal Register Volume 80, Issue 63 (April 2, 2015)
| Page Range | 17797-17801 | |
| FR Document | 2015-07521 |
[Federal Register Volume 80, Number 63 (Thursday, April 2, 2015)] [Notices] [Pages 17797-17801] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-07521] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74600; File No. SR-EDGA-2015-14] Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees for the BATS One Market Data Product March 27, 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 March 17, 2015, EDGA Exchange, Inc. (the ``Exchange'' or ``EDGA'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II 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 Substance of the Proposed Rule Change The Exchange filed a proposal to amend the market data section of its fee schedule to: (i) Establish a Digital Media Enterprise Fee for the BATS One Feed; and (ii) make a non-substantive change to the description of the BATS One Feed Enterprise fee. 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 [[Page 17798]] 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 amend the market data section of its fee schedule to: (i) Establish a Digital Media Enterprise Fee for the BATS One Feed; and (ii) make a non-substantive change to the description of the BATS One Feed Enterprise fee. The Commission recently approved a proposed rule change by the Exchange to establish a new market data product called the BATS One Feed \5\ as well as published proposed rule changes to establish related fees.\6\ The BATS One Feed is a data feed that disseminates, on a real-time basis, the aggregate best bid and offer (``BBO'') of all displayed orders for securities traded on EDGA and its affiliated exchanges \7\ and for which the BATS Exchanges report quotes under the Consolidated Tape Association (``CTA'') Plan or the Nasdaq/UTP Plan.\8\ The BATS One Feed also contains the individual last sale information for the BATS Exchanges (collectively with the aggregate BBO, the ``BATS One Summary Feed''). In addition, the BATS One Feed contains optional functionality which enables recipients to receive aggregated two-sided quotations from the BATS Exchanges for up to five (5) price levels (``BATS One Premium Feed''). --------------------------------------------------------------------------- \5\ See Securities Exchange Act Release No. 73918 (December 23, 2014), 79 FR 78920 (December 31, 2014) (File Nos. SR-EDGX-2014-25; SR-EDGA-2014-25; SR-BATS-2014-055; SR-BYX-2014-030) (Notice of Amendments No. 2 and Order Granting Accelerated Approval to Proposed Rule Changes, as Modified by Amendments Nos. 1 and 2, to Establish a New Market Data Product called the BATS One Feed) (``BATS One Approval Order''). \6\ See Securities Exchange Act Release Nos. 74282 (February 17, 2015), 80 FR 9487 (February 23, 2015) (SR-EDGX-2015-09); 74283 (February 18, 2015), 80 FR 9809 (February 24, 2015) (SR-EDGA-2015- 09); 74284 (February 18, 2015), 80 FR 9792 (February 24, 2015) (SR- BYX-2015-09); and 74285 (February 18, 2015), 80 FR 9828 (February 24, 2015) (SR-BATS-2015-11) (``BATS One Fee Proposals''). \7\ EDGA's affiliated exchanges are BATS Exchange, Inc. (``BZX''), BATS Y-Exchange, Inc. (``BYX''), and EDGX Exchange, Inc. (``EDGX'', together with EDGA, BZX, and BYX, the ``BATS Exchanges''). On January 31, 2014, Direct Edge Holdings LLC (``DE Holdings''), the former parent company of the Exchange and EDGX, completed its business combination with BATS Global Markets, Inc., the parent company of BZX and BYX. See Securities Exchange Act Release No. 71449 (January 30, 2014), 79 FR 6961 (February 5, 2014) (SR-EDGX-2013-43, SR-EDGA-2014-34). Upon completion of the business combination, DE Holdings and BATS Global Markets, Inc. each became intermediate holding companies, held under a single new holding company. The new holding company, formerly named ``BATS Global Markets Holdings, Inc.,'' changed its name to ``BATS Global Markets, Inc.'' \8\ The Exchange understands that each of the BATS Exchanges will separately file substantially similar proposed rule changes with the Commission to implement fees for the BATS One Feed. --------------------------------------------------------------------------- BATS One Digital Media Enterprise Fee The Exchange proposes to amend its fee schedule to establish a Digital Media Enterprise Fee of $15,000 per month for the BATS One Summary Feed and $25,000 per month for the BATS One Premium Feed. As an alternative to User fees,\9\ a recipient firm may purchase a monthly Digital Media Enterprise license to receive the BATS One Feed from an External Distributor \10\ to distribute to an unlimited number of Professional and Non-Professional Users \11\ for viewing via television, Web sites, and mobile devices for informational and non- trading purposes only without having to account for the extent of access to the data or the report the number of Users to the Exchange. The Digital Media Enterprise Fee would be in addition to the Data Consolidation Fee.\12\ --------------------------------------------------------------------------- \9\ The Exchange assesses a monthly fee for Professional Users of $10.00 per User for receipt of the BATS One Summary Feed or $15.00 per User who elects to also receive the BATS One Premium Feed. Non-Professional Users are assessed a monthly fee of $0.25 per user for the BATS One Summary Feed or $0.50 per user for the BATS One Premium Feed. External Distributors must count every Professional User and Non-Professional User to which they provide BATS One Feed data. See BATS One Fee Proposals, supra note 6. \10\ As defined in the Exchange's fee schedule, an External Distributor of an Exchange Market Data product is a Distributor that receives the Exchange Market Data product and then distributes that data to a third party or one or more Users outside the Distributor's own entity. \11\ As defined in the Exchange's fee schedule, a User of an Exchange Market Data product is a natural person, a proprietorship, corporation, partnership, or entity, or device (computer or other automated service), that is entitled to receive Exchange data. A Non-Professional User of an Exchange Market Data product is a natural person who is not: (i) Registered or qualified in any capacity with the Commission, the Commodity Futures Trading Commission, any state securities agency, any securities exchange or association, or any commodities or futures contract market or association; (ii) engaged as an ``investment adviser'' as that term is defined in Section 201(11) of the Investment Advisers Act of 1940 (whether or not registered or qualified under that Act); or (iii) employed by a bank or other organization exempt from registration under federal or state securities laws to perform functions that would require registration or qualification if such functions were performed for an organization not so exempt. A Professional User of an Exchange Market Data product is any User other than a Non- Professional User. \12\ The Data Consolidation Fee is $1,000 per month and is designed to reflect the value of the aggregation and consolidation function the Exchange performs in creating the BATS One Feed. See BATS One Fee Proposals, supra note 6. --------------------------------------------------------------------------- Non-Substantive Change to the Description of the BATS One Enterprise Fee The Exchange proposes a non-substantive change to the description of the BATS One Enterprise fee. The fee schedule currently states that, ``[a]s an alternative to User fees, a recipient firm may purchase a monthly Enterprise Fee to receive the BATS One Feed from an External Distributor for an unlimited number of Professional and Non- Professional Users.'' The Exchange proposes to amend this sentence in two ways. The first amendment is to state that a recipient firm may purchase a monthly Enterprise license, rather than Enterprise fee, as the term ``license'' is a more accurate description. The second is to specify that the recipient firm purchasing a monthly enterprise license does so to distribute the BATS One Feed to an unlimited number of Professional and Non-Professional Users. 2. Statutory Basis BATS One Digital Media Enterprise Fee The Exchange believes that the proposed Digital Media Enterprise Fee for the BATS One Feed is consistent with Section 6(b) of the Act,\13\ in general, and Section 6(b)(4) of the Act,\14\ in particular, in that it provides for an equitable allocation of reasonable fees among recipients of the data and is not designed to permit unfair discrimination among customers, brokers, or dealers. The Exchange also believes that the proposed rule change is consistent with Section 11(A) of the Act \15\ in that it supports (i) fair competition among brokers and dealers, among exchange markets, and between exchange markets and markets other than exchange markets and (ii) the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. Furthermore, the proposed rule change is consistent with Rule 603 of Regulation NMS,\16\ which provides that any national securities exchange that distributes information with respect to quotations for or transactions in an NMS stock do so on terms that are not unreasonably discriminatory. In adopting Regulation NMS, the Commission granted self-regulatory organizations and broker-dealers increased authority and flexibility to offer new and unique market data products to the public. It was believed that this authority would expand the [[Page 17799]] amount of data available to consumers, and also spur innovation and competition for the provision of market data. --------------------------------------------------------------------------- \13\ 15 U.S.C. 78f. \14\ 15 U.S.C. 78f(b)(4). \15\ 15 U.S.C. 78k-1. \16\ See 17 CFR 242.603. --------------------------------------------------------------------------- In addition, the proposed fee is equitable and not unfairly discriminatory because it will apply uniformly to market data vendors, television broadcasters, Web site and mobile service providers. The Exchange believes it is reasonable to establish a lower cost fee structure that is designed to facilitate broader media distribution of the BATS One Data Feed for informational purposes because it will benefit investors generally. In establishing the Digital Media Enterprise Fee, the Exchange recognizes that there is demand for a more seamless and easier-to- administer data distribution mode that takes into account the expanded variety of media and communication devices that investors utilize today. The Exchange believes the Digital Media Enterprise Fee will be easy to administer because data recipients that purchase it would not be required to differentiate between Professional and Non-Professional Users, account for the extent of access to the data, or report the number of Users. This is a significant reduction on a recipient firm's administrative burdens and is a significant value to investors. For example, a television broadcaster could display the BATS One Feed data during market-related programming and on its Web site or allow viewers to view the data via their mobile devices, creating a more seamless distribution model that will allow investors more choice in how they receive and view market data, all without having to account for and/or measure who accesses the data and how often they do so. The proposed Digital Media Enterprise Fee is equitable and reasonable because it will also enable recipient firms to more widely distribute data from the BATS One Feed to investors for informational purposes at a lower cost than is available today. For example, a recipient firm may purchase an Enterprise license in the amount of $50,000 per month for the BATS One Summary Feed and $100,000 per month for the BATS One Premium Feed to receive the BATS One Feed from an External Distributor for an unlimited number of Professional and Non- Professional Users, which is greater than the Digital Media Enterprise fee proposed herein. The Exchange also believes the amount of the Digital Enterprise [sic] is reasonable as compared to the existing Enterprise fees discussed above because the distribution of BATS One Feed data is limited to television, Web sites, and mobile devices for informational purposes only, while distribution of the BATS One Feed data pursuant to an Enterprise license contains no such limitation. The Exchange also believes that the proposed Digital Media Enterprise fee is equitable and reasonable because it is less than similar fees charged by other exchanges.\17\ --------------------------------------------------------------------------- \17\ The Nasdaq Stock Market offers proprietary data products for distribution over the internet and television under alternative fee schedules that are subject to maximum fee of $50,000 per month. See Nasdaq Rule 7039(b). The NYSE charges a Digit Media Enterprise fee of $40,000 per month for the NYSE Trade Digital Media product. See Securities Exchange Act Release No. 69272 (April 2, 2013), 78 FR 20983 (April 8, 2013) (SR-NYSE-2013-23). --------------------------------------------------------------------------- The Exchange has taken into consideration its affiliated relationship with EDGX, BYX, and BZX in proposing the Digital Media Enterprise fee to assure that vendors would be able to offer a similar product on the same terms as the Exchange from a cost perspective. While the BATS Exchanges are the exclusive distributors of the individual data feeds from which certain data elements may be taken to create the BATS One Feed, they are not the exclusive distributors of the aggregated and consolidated information that comprises the BATS One Feed. As discussed in in [sic] the BATS One Fee Proposal,\18\ any entity may separately purchase the individual underlying products, and if they so choose, perform a similar aggregation and consolidation function that the Exchange performs in creating the BATS One Feed, and offer a data feed with the same information included in the BATS One Feed to sell and distribute it to its clients with no greater cost than the Exchange. --------------------------------------------------------------------------- \18\ See BATS One Fee Proposals, supra note 6. --------------------------------------------------------------------------- To enable such competition, the Exchange is offering the Digital Media Enterprise license for the BATS One Feed on terms that a subscriber of the underlying feeds could offer a competing product if it so chooses. The BATS One Feed is comprised of data included in EDGX Depth, EDGA Depth, BYX Depth, and BZX Depth.\19\ Currently, an External Distributor could create a competing product to the BATS One Premium Feed \20\ by purchasing each of these depth of book products from the individual BATS Exchanges and then performing its own aggregation and consolidation functions. The combined External Distributor fees for these individual data feeds of the BATS Exchanges is $12,500 per month.\21\ An External Distributor that seeks to create a competing product to the BATS One Summary Feed could instead subscribe to the following data feeds: EDGX Top, EDGX Last Sale, EDGA Top, EDGA Last Sale, BZX Top, BZX Last Sale, BYX Top, and BYX Last Sale,\22\ and then perform their own aggregation and consolidation function. The combined External Distributor fees for these individual data feeds of the BATS Exchanges is $5,000 per month.\23\ The Exchange proposes to charge a Digital Media Enterprise Fee ($15,000 per month for the BATS One Summary Feed and $25,000 per month for the BATS One Premium Feed, plus the $1,000 per month Data Consolidation fee) that exceeds the combined External Distributor fees for each of the individual feeds listed above to ensure that vendors could compete with the Exchange by creating the same product as the BATS One Feed to sell to their clients at no greater cost than the Exchange. --------------------------------------------------------------------------- \19\ See EDGA Rule 13.8, EDGX Rule 13.8, BZX Rule 11.22(a) and (c), and BYX Rule 11.22 (a) and (c) for a description of the depth of book feeds offered by each of the BATS Exchanges. \20\ Like the Exchange, an External Distributor would also be able to create a competing product to the BATS One Summary Feed from the data received via EDGX Depth, EDGA Depth, BYX Depth, and BZX Depth, without having to separately purchase the top and last sale feeds from each of the BATS Exchanges. \21\ The monthly External Distributor fee is $2,500 per month for EDGX Depth, $2,500 per month for EDGA Depth, $2,500 for BYX Depth, and $5,000 for BZX Depth. \22\ See supra note 5. See also BATS Rule 11.22(d) and (g). \23\ The monthly External Distributor fee is $1,250 per month for EDGX Top and EDGX Last Sale (as proposed herein), free for EDGA Top and EDGA Last Sale, $1,250 for BYX Top and BYX Last Sale, and $2,500 for BZX Top and BZX Last Sale. See BATS One Fee Proposals, supra note 7. --------------------------------------------------------------------------- The decision of the United States Court of Appeals for the District of Columbia Circuit in NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010), upheld the Commission's reliance upon the existence of competitive market mechanisms to set reasonable and equitably allocated fees for proprietary market data. In fact, the legislative history indicates that the Congress intended that the market system `evolve through the interplay of competitive forces as unnecessary regulatory restrictions are removed' and that the SEC wield its regulatory power `in those situations where competition may not be sufficient,' such as in the creation of a `consolidated transactional reporting system.' Id. at 535 (quoting H.R. Rep. No. 94-229 at 92 (1975), as reprinted in 1975 U.S.C.C.A.N. 323). The court agreed with the Commission's conclusion that ``Congress intended that `competitive forces should dictate the services and [[Page 17800]] practices that constitute the U.S. national market system for trading equity securities.' '' \24\ --------------------------------------------------------------------------- \24\ NetCoalition, 615 F.3d at 535. --------------------------------------------------------------------------- As explained below in the Exchange's Statement on Burden on Competition, the Exchange believes that there is substantial evidence of competition in the marketplace for data and that the Commission can rely upon such evidence in concluding that the fees established in this filing are the product of competition and therefore satisfy the relevant statutory standards.\25\ In addition, the existence of alternatives to the BATS One Feed, including real-time consolidated data, free delayed consolidated data, and proprietary last sale data from other sources, as described below, further ensures that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and users can elect such alternatives. --------------------------------------------------------------------------- \25\ Section 916 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the ``Dodd-Frank Act'') amended paragraph (A) of Section 19(b)(3) of the Act, 15 U.S.C. 78s(b)(3), to make clear that all exchange fees for market data may be filed by exchanges on an immediately effective basis. --------------------------------------------------------------------------- As the NetCoalition decision noted, the Commission is not required to undertake a cost-of-service or ratemaking approach, and the Exchange incorporates by reference into this proposed rule change its affiliate's [sic] analysis of this topic in another rule filing.\26\ --------------------------------------------------------------------------- \26\ See Securities Exchange Act Release No. 63291 (Nov. 9, 2010), 75 FR 70311 (November 17, 2010) (SR-NYSEArca-2010-97). --------------------------------------------------------------------------- For these reasons, the Exchange believes that the proposed fees are reasonable, equitable, and not unfairly discriminatory. Non-Substantive Change to the Description of the BATS One Enterprise Fee The Exchange believes that the proposed change to the BATS One Enterprise Fee is consistent with Section 6(b) of the Act,\27\ in general, and Section 6(b)(4) of the Act,\28\ in particular, in that it provides for an equitable allocation of reasonable fees among recipients of the data and is not designed to permit unfair discrimination among customers, brokers, or dealers. The proposal to amend the description of the Enterprise fee within the fee schedule is equitable and reasonable because the changes are designed to clarify the fee schedule and avoid potential investor confusion. The proposed changes do not amend the amount or application of the BATS One Enterprise fee. The proposed changes are also non-discriminatory as they would apply to all recipient firms uniformly. --------------------------------------------------------------------------- \27\ 15 U.S.C. 78f. \28\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- 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. BATS One Digital Media Enterprise Fee The BATS One Feed Digital Media Enterprise fee will enhance competition because it provides investors with an alternative option for receiving market data and competes directly with similar market data products currently offered by the NYSE and Nasdaq.\29\ The Exchange notes that there is already actual competition for products similar to the BATS One Feed. The NYSE offers BQT which provides BBO and last sale information for the NYSE, NYSE Arca Equities, Inc. and NYSE MKT LLC.\30\ Nasdaq offers Nasdaq Basic, a filed market data product, and through its affiliate, offers NLS Plus which provides a unified view of last sale information similar to the BATS One Feed.\31\ The existence of these competing data products demonstrates that there is ample, existing competition for products such as the BATS One Feed and the fees associated by such products is constrained by competition. --------------------------------------------------------------------------- \29\ See Nasdaq Basic, http://www.nasdaqtrader.com/Trader.aspx?id=nasdaqbasic (last visited May 29, 2014) (data feed offering the BBO and Last Sale information for all U.S. exchange- listed securities based on liquidity within the Nasdaq market center, as well as trades reported to the FINRA/Nasdaq Trade Reporting Facility (``TRF''));Nasdaq NLS Plus, http://www.nasdaqtrader.com/Trader.aspx?id=NLSplus (last visited July 8, 2014) (data feed providing last sale data as well as consolidated volume from the following Nasdaq OMX markets for U.S. exchange- listed securities: Nasdaq, FINRA/Nasdaq TRF, Nasdaq OMX BX, and Nasdaq OMX PSX); Securities Exchange Act Release No. 73553 (November 6, 2014), 79 FR 67491 (November 13, 2014) (SR-NYSE-2014-40) (Notice of Amendment No. 1 and Order Granting Accelerated Approval to a Proposed Rule Change, as Modified by Amendment No.1, To Establish the NYSE Best Quote & Trades (``BQT'') Data Feed); http://www.nyxdata.com/Data-Products/NYSE-Best-Quote-and-Trades (last visited May 27, 2014) (data feed providing unified view of BBO and last sale information for the NYSE, NYSE Arca, and NYSE MKT). \30\ Id. \31\ Id. --------------------------------------------------------------------------- In establishing the proposed fees, the Exchange considered the competitiveness of the market for proprietary data and all of the implications of that competition. The Exchange believes that it has considered all relevant factors in order to establish fair, reasonable, and not unreasonably discriminatory fees and an equitable allocation of fees among all Users. The existence of alternatives to the BATS One Feed, including the existing underlying feeds, consolidated data, and proprietary data from other sources, ensures that the Exchange cannot set unreasonable fees, or fees that are unreasonably discriminatory, when vendors and subscribers can elect these alternatives or choose not to purchase a specific proprietary data product if its cost to purchase is not justified by the returns any particular vendor or subscriber would achieve through the purchase. Finally, although the BATS Exchanges are the exclusive distributors of the individual data feeds from which certain data elements would be taken to create the BATS One Feed, the Exchange is not the exclusive distributor of the aggregated and consolidated information that would compose the BATS One Feed. The Exchange has taken into consideration its affiliated relationship with EDGX, BYX, and BZX in its design of the BATS One Feed to assure that vendors would be able to offer a similar product on the same terms as the Exchange from a cost perspective. While the BATS Exchanges are the exclusive distributors of the individual data feeds from which certain data elements may be taken to create the BATS One Feed, they are not the exclusive distributors of the aggregated and consolidated information that comprises the BATS One Feed. As discussed in in the BATS One Fee Proposal,\32\ any entity may separately purchase the individual underlying products, and if they so choose, perform a similar aggregation and consolidation function that the Exchange performs in creating the BATS One Feed, and offer a data feed with the same information included in the BATS One Feed to sell and distribute it to its clients with no greater cost than the Exchange. --------------------------------------------------------------------------- \32\ See BATS One Fee Proposals, supra note 7. --------------------------------------------------------------------------- To enable such competition, the amount of the proposed Digital Media Enterprise license compared to the cost of the individual data feeds from the BATS Exchanges would enable a vendor to receive the underlying data feeds and offer a similar product on a competitive basis and with no greater cost than the Exchange. The amount of the proposed Digital Media Enterprise license, coupled with the Data Consolidation Fee, is not lower than the cost to a vendor of receiving the underlying data feeds to create a competing product. Therefore, the amount of the proposed [[Page 17801]] Digital Media Enterprise license the Exchange would charge clients for the BATS One Feed compared to the cost of the individual data feeds from the BATS Exchanges would enable a vendor to receive the underlying data feeds and offer a similar product on a competitive basis and with no greater cost than the Exchange. Non-Substantive Change to the Description of the BATS One Enterprise Fee The proposal to amend the description of the Enterprise fee within the fee schedule will not have any impact on completion [sic]. The proposed changes are designed to clarify the fee schedule and avoid potential investor confusion and do not amend the amount or application of the BATS One Enterprise fee. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. 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 \33\ and paragraph (f) of Rule 19b-4 thereunder.\34\ 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. --------------------------------------------------------------------------- \33\ 15 U.S.C. 78s(b)(3)(A). \34\ 17 CFR 240.19b-4(f). --------------------------------------------------------------------------- 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 rule-comments@sec.gov. Please include File Number SR-EDGA-2015-14 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-EDGA-2015-14. 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 20549-1090, 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- EDGA-2015-14, and should be submitted on or before April 23, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\35\ --------------------------------------------------------------------------- \35\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-07521 Filed 4-1-15; 8:45 am] BILLING CODE CODE 8011-01-P
![Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Notices 17797
The Exchange deems the Shares to be 3 23 under the Act, as provided by NYSE SECURITIES AND EXCHANGE
equity securities, thus rendering trading Arca Equities Rule 5.3. COMMISSION
in the Shares subject to the Exchange’s (7) The Fund may hold up to an [Release No. 34–74600; File No. SR–EDGA–
existing rules governing the trading of aggregate amount of 15% of its net 2015–14]
equity securities. Additionally, in assets (calculated at the time of
support of its proposal, the Exchange Self-Regulatory Organizations; EDGA
investment) in assets deemed illiquid by
has made the following representations: Exchange, Inc.; Notice of Filing and
the Adviser, consistent with
(1) The Shares will conform to the Immediate Effectiveness of a Proposed
initial and continued listing criteria Commission guidance.
Rule Change To Amend the Fees for
under NYSE Arca Equities Rule 8.600. (8) A minimum of 100,000 Shares of the BATS One Market Data Product
(2) The Exchange has appropriate each Fund will be outstanding at the
rules to facilitate transactions in the commencement of trading on the March 27, 2015.
Shares during all trading sessions. Exchange. Pursuant to Section 19(b)(1) of the
(3) The Exchange has in place (9) Not more than 10% of the net Securities Exchange Act of 1934 (the
surveillance procedures that are ‘‘Act’’),1 and Rule 19b–4 thereunder,2
assets of the Fund in the aggregate
adequate to properly monitor trading in notice is hereby given that on March 17,
invested in exchange-traded equity
the Shares in all trading sessions and to 2015, EDGA Exchange, Inc. (the
securities shall consist of equity
deter and detect violations of Exchange ‘‘Exchange’’ or ‘‘EDGA’’) filed with the
rules and applicable federal securities securities whose principal market is not Securities and Exchange Commission
laws. a member of the ISG or is a market with (‘‘Commission’’) the proposed rule
(4) Financial Industry Regulatory which the Exchange does not have a change as described in Items I and II
Authority (‘‘FINRA’’), on behalf of the comprehensive surveillance sharing below, which Items have been prepared
Exchange, will communicate as needed agreement. by the Exchange. The Exchange has
regarding trading in the Shares and (10) The Fund will not invest in designated the proposed rule change as
underlying exchange-traded equity options, futures contracts or swaps one establishing or changing a member
securities with other markets and other agreements. due, fee, or other charge imposed by the
entities that are members of the ISG, and Exchange under Section 19(b)(3)(A)(ii)
(11) The Fund will not invest in
FINRA, on behalf of the Exchange, may of the Act 3 and Rule 19b–4(f)(2)
leveraged or inverse leveraged (e.g., 2X,
obtain trading information regarding thereunder,4 which renders the
¥2X, 3X or ¥3X) ETFs.
trading in the Shares, underlying proposed rule change effective upon
exchange-traded equity securities, from This approval order is based on all of filing with the Commission. The
such markets and other entities. the Exchange’s representations and Commission is publishing this notice to
(5) Prior to the commencement of description of the Funds. solicit comments on the proposed rule
trading, the Exchange will inform its For the foregoing reasons, the change from interested persons.
Equity Trading Permit Holders in an Commission finds that the proposed I. Self-Regulatory Organization’s
Information Bulletin (‘‘Bulletin’’) of the rule change, as modified by Amendment Statement of the Terms of Substance of
special characteristics and risks No. 1, is consistent with Section 6(b)(5) the Proposed Rule Change
associated with trading the Shares.
of the Act and the rules and regulations The Exchange filed a proposal to
Specifically, the Bulletin will discuss
thereunder applicable to a national amend the market data section of its fee
the following: (1) The procedures for
securities exchange. schedule to: (i) Establish a Digital Media
purchases and redemptions of Shares in
Creation Unit aggregations (and that III. Conclusion Enterprise Fee for the BATS One Feed;
Shares are not individually redeemable); and (ii) make a non-substantive change
(2) NYSE Arca Equities Rule 9.2(a), It is therefore ordered, pursuant to to the description of the BATS One Feed
which imposes a duty of due diligence Section 19(b)(2) of the Act, that the Enterprise fee.
on its Equity Trading Permit Holders to proposed rule change (SR–NYSEArca– The text of the proposed rule change
learn the essential facts relating to every 2015–04), as modified by Amendment is available at the Exchange’s Web site
customer prior to trading the Shares; (3) No. 1, be, and it hereby is, approved. at www.batstrading.com, at the
the risks involved in trading the Shares principal office of the Exchange, and at
For the Commission, by the Division of
during the Opening and Late Trading the Commission’s Public Reference
Trading and Markets, pursuant to delegated
Sessions when an updated Portfolio Room.
authority.24
Indicative Value will not be calculated II. Self-Regulatory Organization’s
Brent J. Fields,
or publicly disseminated; (4) how Statement of the Purpose of, and
information regarding the Portfolio Secretary.
Statutory Basis for, the Proposed Rule
Indicative Value is disseminated; (5) the [FR Doc. 2015–07517 Filed 4–1–15; 8:45 am]
Change
requirement that Equity Trading Permit BILLING CODE CODE 8011–01–P
Holders deliver a prospectus to In its filing with the Commission, the
investors purchasing newly issued Exchange included statements
Shares prior to or concurrently with the concerning the purpose of and basis for
confirmation of a transaction; and (6) the proposed rule change and discussed
trading information. any comments it received on the
(6) The Exchange represents that, for proposed rule change. The text of these
tkelley on DSK3SPTVN1PROD with NOTICES
initial and continued listing, the Fund statements may be examined at the
will be in compliance with Rule 10A– places specified in Item IV below. The
1 15 U.S.C. 78s(b)(1).
to procedures designed to prevent the use and
2 17 CFR 240.19b–4.
dissemination of material non-public information
23 17 CFR 240.10A–3. 3 15 U.S.C. 78s(b)(3)(A)(ii).
regarding such portfolio. See Notice, supra note 3,
80 FR at 9300. 24 17 CFR 200.30–3(a)(57). 4 17 CFR 240.19b–4(f)(2).
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![17798 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Notices
Exchange has prepared summaries, set ‘‘BATS One Summary Feed’’). In Non-Substantive Change to the
forth in Sections A, B, and C below, of addition, the BATS One Feed contains Description of the BATS One Enterprise
the most significant parts of such optional functionality which enables Fee
statements. recipients to receive aggregated two- The Exchange proposes a non-
sided quotations from the BATS substantive change to the description of
A. Self-Regulatory Organization’s
Statement of the Purpose of, and Exchanges for up to five (5) price levels the BATS One Enterprise fee. The fee
Statutory Basis for, the Proposed Rule (‘‘BATS One Premium Feed’’). schedule currently states that, ‘‘[a]s an
Change BATS One Digital Media Enterprise Fee alternative to User fees, a recipient firm
may purchase a monthly Enterprise Fee
1. Purpose The Exchange proposes to amend its to receive the BATS One Feed from an
The Exchange proposes to amend the fee schedule to establish a Digital Media External Distributor for an unlimited
market data section of its fee schedule Enterprise Fee of $15,000 per month for number of Professional and Non-
to: (i) Establish a Digital Media the BATS One Summary Feed and Professional Users.’’ The Exchange
Enterprise Fee for the BATS One Feed; $25,000 per month for the BATS One proposes to amend this sentence in two
and (ii) make a non-substantive change Premium Feed. As an alternative to User ways. The first amendment is to state
to the description of the BATS One Feed fees,9 a recipient firm may purchase a that a recipient firm may purchase a
Enterprise fee. monthly Digital Media Enterprise monthly Enterprise license, rather than
The Commission recently approved a license to receive the BATS One Feed Enterprise fee, as the term ‘‘license’’ is
proposed rule change by the Exchange from an External Distributor 10 to a more accurate description. The second
to establish a new market data product distribute to an unlimited number of is to specify that the recipient firm
called the BATS One Feed 5 as well as Professional and Non-Professional purchasing a monthly enterprise license
published proposed rule changes to Users 11 for viewing via television, Web does so to distribute the BATS One Feed
establish related fees.6 The BATS One sites, and mobile devices for to an unlimited number of Professional
Feed is a data feed that disseminates, on informational and non-trading purposes and Non-Professional Users.
a real-time basis, the aggregate best bid only without having to account for the
and offer (‘‘BBO’’) of all displayed extent of access to the data or the report 2. Statutory Basis
orders for securities traded on EDGA the number of Users to the Exchange. BATS One Digital Media Enterprise Fee
and its affiliated exchanges 7 and for The Digital Media Enterprise Fee would
which the BATS Exchanges report be in addition to the Data Consolidation The Exchange believes that the
quotes under the Consolidated Tape Fee.12 proposed Digital Media Enterprise Fee
Association (‘‘CTA’’) Plan or the for the BATS One Feed is consistent
Nasdaq/UTP Plan.8 The BATS One Feed 9 The Exchange assesses a monthly fee for with Section 6(b) of the Act,13 in
also contains the individual last sale Professional Users of $10.00 per User for receipt of general, and Section 6(b)(4) of the Act,14
information for the BATS Exchanges the BATS One Summary Feed or $15.00 per User in particular, in that it provides for an
who elects to also receive the BATS One Premium equitable allocation of reasonable fees
(collectively with the aggregate BBO, the Feed. Non-Professional Users are assessed a
monthly fee of $0.25 per user for the BATS One among recipients of the data and is not
5 See Securities Exchange Act Release No. 73918 Summary Feed or $0.50 per user for the BATS One designed to permit unfair
(December 23, 2014), 79 FR 78920 (December 31, Premium Feed. External Distributors must count discrimination among customers,
2014) (File Nos. SR–EDGX–2014–25; SR–EDGA– every Professional User and Non-Professional User brokers, or dealers. The Exchange also
2014–25; SR–BATS–2014–055; SR–BYX–2014–030) to which they provide BATS One Feed data. See
BATS One Fee Proposals, supra note 6. believes that the proposed rule change
(Notice of Amendments No. 2 and Order Granting
Accelerated Approval to Proposed Rule Changes, as 10 As defined in the Exchange’s fee schedule, an is consistent with Section 11(A) of the
Modified by Amendments Nos. 1 and 2, to Establish External Distributor of an Exchange Market Data Act 15 in that it supports (i) fair
a New Market Data Product called the BATS One product is a Distributor that receives the Exchange competition among brokers and dealers,
Feed) (‘‘BATS One Approval Order’’). Market Data product and then distributes that data
6 See Securities Exchange Act Release Nos. 74282 to a third party or one or more Users outside the
among exchange markets, and between
(February 17, 2015), 80 FR 9487 (February 23, 2015) Distributor’s own entity. exchange markets and markets other
(SR–EDGX–2015–09); 74283 (February 18, 2015), 80 11 As defined in the Exchange’s fee schedule, a than exchange markets and (ii) the
FR 9809 (February 24, 2015) (SR–EDGA–2015–09); User of an Exchange Market Data product is a availability to brokers, dealers, and
74284 (February 18, 2015), 80 FR 9792 (February natural person, a proprietorship, corporation, investors of information with respect to
24, 2015) (SR–BYX–2015–09); and 74285 (February partnership, or entity, or device (computer or other
18, 2015), 80 FR 9828 (February 24, 2015) (SR– automated service), that is entitled to receive quotations for and transactions in
BATS–2015–11) (‘‘BATS One Fee Proposals’’). Exchange data. A Non-Professional User of an securities. Furthermore, the proposed
7 EDGA’s affiliated exchanges are BATS Exchange Market Data product is a natural person rule change is consistent with Rule 603
Exchange, Inc. (‘‘BZX’’), BATS Y-Exchange, Inc. who is not: (i) Registered or qualified in any of Regulation NMS,16 which provides
(‘‘BYX’’), and EDGX Exchange, Inc. (‘‘EDGX’’, capacity with the Commission, the Commodity
together with EDGA, BZX, and BYX, the ‘‘BATS Futures Trading Commission, any state securities that any national securities exchange
Exchanges’’). On January 31, 2014, Direct Edge agency, any securities exchange or association, or that distributes information with respect
Holdings LLC (‘‘DE Holdings’’), the former parent any commodities or futures contract market or to quotations for or transactions in an
company of the Exchange and EDGX, completed its association; (ii) engaged as an ‘‘investment adviser’’ NMS stock do so on terms that are not
business combination with BATS Global Markets, as that term is defined in Section 201(11) of the
Inc., the parent company of BZX and BYX. See Investment Advisers Act of 1940 (whether or not unreasonably discriminatory. In
Securities Exchange Act Release No. 71449 (January registered or qualified under that Act); or (iii) adopting Regulation NMS, the
30, 2014), 79 FR 6961 (February 5, 2014) (SR– employed by a bank or other organization exempt Commission granted self-regulatory
EDGX–2013–43, SR–EDGA–2014–34). Upon from registration under federal or state securities organizations and broker-dealers
completion of the business combination, DE laws to perform functions that would require
Holdings and BATS Global Markets, Inc. each registration or qualification if such functions were increased authority and flexibility to
became intermediate holding companies, held performed for an organization not so exempt. A offer new and unique market data
tkelley on DSK3SPTVN1PROD with NOTICES
under a single new holding company. The new Professional User of an Exchange Market Data products to the public. It was believed
holding company, formerly named ‘‘BATS Global product is any User other than a Non-Professional that this authority would expand the
Markets Holdings, Inc.,’’ changed its name to User.
‘‘BATS Global Markets, Inc.’’ 12 The Data Consolidation Fee is $1,000 per
13 15 U.S.C. 78f.
8 The Exchange understands that each of the month and is designed to reflect the value of the
14 15 U.S.C. 78f(b)(4).
BATS Exchanges will separately file substantially aggregation and consolidation function the
15 15 U.S.C. 78k–1.
similar proposed rule changes with the Commission Exchange performs in creating the BATS One Feed.
to implement fees for the BATS One Feed. See BATS One Fee Proposals, supra note 6. 16 See 17 CFR 242.603.
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![Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Notices 17799
amount of data available to consumers, limited to television, Web sites, and from the individual BATS Exchanges
and also spur innovation and mobile devices for informational and then performing its own aggregation
competition for the provision of market purposes only, while distribution of the and consolidation functions. The
data. BATS One Feed data pursuant to an combined External Distributor fees for
In addition, the proposed fee is Enterprise license contains no such these individual data feeds of the BATS
equitable and not unfairly limitation. The Exchange also believes Exchanges is $12,500 per month.21 An
discriminatory because it will apply that the proposed Digital Media External Distributor that seeks to create
uniformly to market data vendors, Enterprise fee is equitable and a competing product to the BATS One
television broadcasters, Web site and reasonable because it is less than similar Summary Feed could instead subscribe
mobile service providers. The Exchange fees charged by other exchanges.17 to the following data feeds: EDGX Top,
believes it is reasonable to establish a The Exchange has taken into EDGX Last Sale, EDGA Top, EDGA Last
lower cost fee structure that is designed consideration its affiliated relationship Sale, BZX Top, BZX Last Sale, BYX
to facilitate broader media distribution with EDGX, BYX, and BZX in proposing Top, and BYX Last Sale,22 and then
of the BATS One Data Feed for the Digital Media Enterprise fee to perform their own aggregation and
informational purposes because it will assure that vendors would be able to consolidation function. The combined
benefit investors generally. offer a similar product on the same External Distributor fees for these
In establishing the Digital Media terms as the Exchange from a cost individual data feeds of the BATS
Enterprise Fee, the Exchange recognizes perspective. While the BATS Exchanges Exchanges is $5,000 per month.23 The
that there is demand for a more are the exclusive distributors of the Exchange proposes to charge a Digital
seamless and easier–to-administer data individual data feeds from which Media Enterprise Fee ($15,000 per
distribution mode that takes into certain data elements may be taken to month for the BATS One Summary Feed
account the expanded variety of media create the BATS One Feed, they are not and $25,000 per month for the BATS
and communication devices that the exclusive distributors of the One Premium Feed, plus the $1,000 per
investors utilize today. The Exchange aggregated and consolidated month Data Consolidation fee) that
believes the Digital Media Enterprise information that comprises the BATS exceeds the combined External
Fee will be easy to administer because One Feed. As discussed in in [sic] the Distributor fees for each of the
data recipients that purchase it would BATS One Fee Proposal,18 any entity individual feeds listed above to ensure
not be required to differentiate between may separately purchase the individual that vendors could compete with the
Professional and Non-Professional underlying products, and if they so Exchange by creating the same product
Users, account for the extent of access choose, perform a similar aggregation as the BATS One Feed to sell to their
to the data, or report the number of and consolidation function that the clients at no greater cost than the
Users. This is a significant reduction on Exchange performs in creating the BATS Exchange.
a recipient firm’s administrative The decision of the United States
One Feed, and offer a data feed with the
burdens and is a significant value to Court of Appeals for the District of
same information included in the BATS
investors. For example, a television Columbia Circuit in NetCoalition v.
One Feed to sell and distribute it to its
broadcaster could display the BATS SEC, 615 F.3d 525 (D.C. Cir. 2010),
clients with no greater cost than the
One Feed data during market-related upheld the Commission’s reliance upon
Exchange.
programming and on its Web site or the existence of competitive market
To enable such competition, the
allow viewers to view the data via their mechanisms to set reasonable and
Exchange is offering the Digital Media
mobile devices, creating a more equitably allocated fees for proprietary
Enterprise license for the BATS One
seamless distribution model that will market data.
Feed on terms that a subscriber of the
allow investors more choice in how they In fact, the legislative history
receive and view market data, all underlying feeds could offer a indicates that the Congress intended
without having to account for and/or competing product if it so chooses. The that the market system ‘evolve through
measure who accesses the data and how BATS One Feed is comprised of data the interplay of competitive forces as
often they do so. included in EDGX Depth, EDGA Depth, unnecessary regulatory restrictions are
The proposed Digital Media BYX Depth, and BZX Depth.19 removed’ and that the SEC wield its
Enterprise Fee is equitable and Currently, an External Distributor could regulatory power ‘in those situations
reasonable because it will also enable create a competing product to the BATS where competition may not be
recipient firms to more widely One Premium Feed 20 by purchasing sufficient,’ such as in the creation of a
distribute data from the BATS One Feed each of these depth of book products ‘consolidated transactional reporting
to investors for informational purposes 17 The Nasdaq Stock Market offers proprietary
system.’
at a lower cost than is available today. data products for distribution over the internet and
Id. at 535 (quoting H.R. Rep. No. 94–
For example, a recipient firm may television under alternative fee schedules that are 229 at 92 (1975), as reprinted in 1975
purchase an Enterprise license in the subject to maximum fee of $50,000 per month. See U.S.C.C.A.N. 323). The court agreed
amount of $50,000 per month for the Nasdaq Rule 7039(b). The NYSE charges a Digit with the Commission’s conclusion that
BATS One Summary Feed and $100,000 Media Enterprise fee of $40,000 per month for the
NYSE Trade Digital Media product. See Securities
‘‘Congress intended that ‘competitive
per month for the BATS One Premium Exchange Act Release No. 69272 (April 2, 2013), 78 forces should dictate the services and
Feed to receive the BATS One Feed FR 20983 (April 8, 2013) (SR–NYSE–2013–23).
from an External Distributor for an 18 See BATS One Fee Proposals, supra note 6. 21 The monthly External Distributor fee is $2,500
unlimited number of Professional and 19 See EDGA Rule 13.8, EDGX Rule 13.8, BZX per month for EDGX Depth, $2,500 per month for
Rule 11.22(a) and (c), and BYX Rule 11.22 (a) and EDGA Depth, $2,500 for BYX Depth, and $5,000 for
Non-Professional Users, which is greater BZX Depth.
(c) for a description of the depth of book feeds
tkelley on DSK3SPTVN1PROD with NOTICES
than the Digital Media Enterprise fee offered by each of the BATS Exchanges. 22 See supra note 5. See also BATS Rule 11.22(d)
proposed herein. The Exchange also 20 Like the Exchange, an External Distributor and (g).
believes the amount of the Digital would also be able to create a competing product 23 The monthly External Distributor fee is $1,250
Enterprise [sic] is reasonable as to the BATS One Summary Feed from the data per month for EDGX Top and EDGX Last Sale (as
received via EDGX Depth, EDGA Depth, BYX proposed herein), free for EDGA Top and EDGA
compared to the existing Enterprise fees Depth, and BZX Depth, without having to Last Sale, $1,250 for BYX Top and BYX Last Sale,
discussed above because the separately purchase the top and last sale feeds from and $2,500 for BZX Top and BZX Last Sale. See
distribution of BATS One Feed data is each of the BATS Exchanges. BATS One Fee Proposals, supra note 7.
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![17800 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Notices
practices that constitute the U.S. Enterprise fee. The proposed changes fair, reasonable, and not unreasonably
national market system for trading are also non-discriminatory as they discriminatory fees and an equitable
equity securities.’ ’’ 24 would apply to all recipient firms allocation of fees among all Users. The
As explained below in the Exchange’s uniformly. existence of alternatives to the BATS
Statement on Burden on Competition, One Feed, including the existing
the Exchange believes that there is B. Self-Regulatory Organization’s
underlying feeds, consolidated data, and
substantial evidence of competition in Statement on Burden on Competition
proprietary data from other sources,
the marketplace for data and that the The Exchange does not believe that ensures that the Exchange cannot set
Commission can rely upon such the proposed rule change will result in unreasonable fees, or fees that are
evidence in concluding that the fees any burden on competition that is not unreasonably discriminatory, when
established in this filing are the product necessary or appropriate in furtherance vendors and subscribers can elect these
of competition and therefore satisfy the of the purposes of the Act, as amended. alternatives or choose not to purchase a
relevant statutory standards.25 In BATS One Digital Media Enterprise Fee specific proprietary data product if its
addition, the existence of alternatives to cost to purchase is not justified by the
the BATS One Feed, including real-time The BATS One Feed Digital Media returns any particular vendor or
consolidated data, free delayed Enterprise fee will enhance competition subscriber would achieve through the
consolidated data, and proprietary last because it provides investors with an purchase.
sale data from other sources, as alternative option for receiving market Finally, although the BATS
described below, further ensures that data and competes directly with similar Exchanges are the exclusive distributors
the Exchange cannot set unreasonable market data products currently offered of the individual data feeds from which
fees, or fees that are unreasonably by the NYSE and Nasdaq.29 The certain data elements would be taken to
discriminatory, when vendors and users Exchange notes that there is already create the BATS One Feed, the
can elect such alternatives. actual competition for products similar Exchange is not the exclusive
As the NetCoalition decision noted, to the BATS One Feed. The NYSE offers distributor of the aggregated and
the Commission is not required to BQT which provides BBO and last sale consolidated information that would
undertake a cost-of-service or information for the NYSE, NYSE Arca compose the BATS One Feed. The
ratemaking approach, and the Exchange Equities, Inc. and NYSE MKT LLC.30 Exchange has taken into consideration
incorporates by reference into this Nasdaq offers Nasdaq Basic, a filed its affiliated relationship with EDGX,
proposed rule change its affiliate’s [sic] market data product, and through its BYX, and BZX in its design of the BATS
analysis of this topic in another rule affiliate, offers NLS Plus which provides One Feed to assure that vendors would
filing.26 a unified view of last sale information be able to offer a similar product on the
For these reasons, the Exchange similar to the BATS One Feed.31 The same terms as the Exchange from a cost
believes that the proposed fees are existence of these competing data perspective. While the BATS Exchanges
reasonable, equitable, and not unfairly products demonstrates that there is are the exclusive distributors of the
discriminatory. ample, existing competition for individual data feeds from which
Non-Substantive Change to the products such as the BATS One Feed certain data elements may be taken to
Description of the BATS One Enterprise and the fees associated by such products create the BATS One Feed, they are not
Fee is constrained by competition. the exclusive distributors of the
In establishing the proposed fees, the aggregated and consolidated
The Exchange believes that the Exchange considered the information that comprises the BATS
proposed change to the BATS One competitiveness of the market for One Feed. As discussed in in the BATS
Enterprise Fee is consistent with proprietary data and all of the One Fee Proposal,32 any entity may
Section 6(b) of the Act,27 in general, and implications of that competition. The separately purchase the individual
Section 6(b)(4) of the Act,28 in Exchange believes that it has considered underlying products, and if they so
particular, in that it provides for an all relevant factors in order to establish choose, perform a similar aggregation
equitable allocation of reasonable fees and consolidation function that the
among recipients of the data and is not 29 See Nasdaq Basic, http://
Exchange performs in creating the BATS
designed to permit unfair www.nasdaqtrader.com/ One Feed, and offer a data feed with the
discrimination among customers, Trader.aspx?id=nasdaqbasic (last visited May 29,
2014) (data feed offering the BBO and Last Sale same information included in the BATS
brokers, or dealers. The proposal to information for all U.S. exchange-listed securities One Feed to sell and distribute it to its
amend the description of the Enterprise based on liquidity within the Nasdaq market center, clients with no greater cost than the
fee within the fee schedule is equitable as well as trades reported to the FINRA/Nasdaq Exchange.
and reasonable because the changes are Trade Reporting Facility (‘‘TRF’’));Nasdaq NLS To enable such competition, the
Plus, http://www.nasdaqtrader.com/
designed to clarify the fee schedule and Trader.aspx?id=NLSplus (last visited July 8, 2014) amount of the proposed Digital Media
avoid potential investor confusion. The (data feed providing last sale data as well as Enterprise license compared to the cost
proposed changes do not amend the consolidated volume from the following Nasdaq of the individual data feeds from the
amount or application of the BATS One OMX markets for U.S. exchange-listed securities: BATS Exchanges would enable a vendor
Nasdaq, FINRA/Nasdaq TRF, Nasdaq OMX BX, and
Nasdaq OMX PSX); Securities Exchange Act to receive the underlying data feeds and
24 NetCoalition, 615 F.3d at 535. Release No. 73553 (November 6, 2014), 79 FR 67491 offer a similar product on a competitive
25 Section 916 of the Dodd-Frank Wall Street (November 13, 2014) (SR–NYSE–2014–40) (Notice basis and with no greater cost than the
Reform and Consumer Protection Act of 2010 (the of Amendment No. 1 and Order Granting
‘‘Dodd-Frank Act’’) amended paragraph (A) of
Exchange. The amount of the proposed
Accelerated Approval to a Proposed Rule Change,
Section 19(b)(3) of the Act, 15 U.S.C. 78s(b)(3), to as Modified by Amendment No.1, To Establish the Digital Media Enterprise license,
tkelley on DSK3SPTVN1PROD with NOTICES
make clear that all exchange fees for market data NYSE Best Quote & Trades (‘‘BQT’’) Data Feed); coupled with the Data Consolidation
may be filed by exchanges on an immediately http://www.nyxdata.com/Data-Products/NYSE- Fee, is not lower than the cost to a
effective basis. Best-Quote-and-Trades (last visited May 27, 2014)
26 See Securities Exchange Act Release No. 63291
vendor of receiving the underlying data
(data feed providing unified view of BBO and last
(Nov. 9, 2010), 75 FR 70311 (November 17, 2010) sale information for the NYSE, NYSE Arca, and feeds to create a competing product.
(SR–NYSEArca–2010–97). NYSE MKT). Therefore, the amount of the proposed
27 15 U.S.C. 78f. 30 Id.
28 15 U.S.C. 78f(b)(4). 31 Id. 32 See BATS One Fee Proposals, supra note 7.
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![Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Notices 17801
Digital Media Enterprise license the and Exchange Commission, 100 F Street SECURITIES AND EXCHANGE
Exchange would charge clients for the NE., Washington, DC 20549–1090. COMMISSION
BATS One Feed compared to the cost of All submissions should refer to File [Release No. 34–74597; File No. SR–NSX–
the individual data feeds from the BATS Number SR–EDGA–2015–14. This file 2015–01]
Exchanges would enable a vendor to
number should be included on the
receive the underlying data feeds and Self-Regulatory Organizations;
subject line if email is used. To help the
offer a similar product on a competitive National Stock Exchange, Inc.; Notice
basis and with no greater cost than the Commission process and review your
comments more efficiently, please use of Filing and Immediate Effectiveness
Exchange. of Proposed Rule Change in
only one method. The Commission will
Non-Substantive Change to the post all comments on the Commission’s Connection With the Amended and
Description of the BATS One Enterprise Internet Web site (http://www.sec.gov/ Restated Certificate of Incorporation of
Fee National Stock Exchange Holdings,
rules/sro.shtml). Copies of the
Inc., the Exchange’s Parent
The proposal to amend the submission, all subsequent
Corporation, and the Amended and
description of the Enterprise fee within amendments, all written statements
the fee schedule will not have any Restated Certificate of Incorporation of
with respect to the proposed rule the Exchange
impact on completion [sic]. The change that are filed with the
proposed changes are designed to clarify Commission, and all written March 27, 2015.
the fee schedule and avoid potential communications relating to the Pursuant to Section 19(b)(1) of the
investor confusion and do not amend proposed rule change between the Securities Exchange Act of 1934 (the
the amount or application of the BATS Commission and any person, other than ‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule
One Enterprise fee. 19b–4 thereunder,2 notice is hereby
those that may be withheld from the
C. Self-Regulatory Organization’s public in accordance with the given that on March 19, 2015, National
Statement on Comments on the provisions of 5 U.S.C. 552, will be Stock Exchange, Inc. (‘‘NSX®’’ or the
Proposed Rule Change Received From available for Web site viewing and ‘‘Exchange’’) filed with the Securities
Members, Participants, or Others printing in the Commission’s Public and Exchange Commission (the
Reference Room, 100 F Street NE., ‘‘Commission’’) the proposed rule
The Exchange has neither solicited
Washington, DC 20549–1090, on official change, as described in Items I, II, and
nor received written comments on the
III below, which Items have been
proposed rule change. business days between the hours of
substantially prepared by the Exchange.
10:00 a.m. and 3:00 p.m. Copies of such
III. Date of Effectiveness of the The Exchange has designated this rule
Proposed Rule Change and Timing for filing also will be available for proposal as ‘‘non-controversial’’
Commission Action inspection and copying at the principal pursuant to Section 19(b)(3)(A) of the
office of the Exchange. All comments Act 3 and Rule 19b–4(f)(6)(iii)
The foregoing rule change has become received will be posted without change;
effective pursuant to Section 19(b)(3)(A) thereunder.4 The Commission is
the Commission does not edit personal publishing this notice to solicit
of the Act 33 and paragraph (f) of Rule
identifying information from comments on the proposed rule change
19b–4 thereunder.34 At any time within
60 days of the filing of the proposed rule submissions. You should submit only from interested persons.
change, the Commission summarily may information that you wish to make
available publicly. All submissions I. Self-Regulatory Organization’s
temporarily suspend such rule change if Statement of the Terms of Substance of
it appears to the Commission that such should refer to File Number SR–EDGA–
the Proposed Rule Change
action is necessary or appropriate in the 2015–14, and should be submitted on or
public interest, for the protection of before April 23, 2015. The Exchange is filing the instant rule
investors, or otherwise in furtherance of amendment to effectuate ministerial,
For the Commission, by the Division of
the purposes of the Act. non-substantive amendments to (i) the
Trading and Markets, pursuant to delegated
certificate of incorporation of National
IV. Solicitation of Comments authority.35
Stock Exchange Holdings, Inc. (‘‘NSX
Brent J. Fields, Holdings’’), a Delaware corporation that
Interested persons are invited to
submit written data, views, and Secretary. owns all of the issued and outstanding
arguments concerning the foregoing, [FR Doc. 2015–07521 Filed 4–1–15; 8:45 am] shares of NSX; and (ii) the certificate of
including whether the proposed rule BILLING CODE CODE 8011–01–P incorporation of NSX. The text of the
change is consistent with the Act. proposed change to the NSX Holdings
Comments may be submitted by any of certificate of incorporation is attached
the following methods: as Exhibit 5A and the text of the
proposed change to the NSX certificate
Electronic Comments of incorporation is attached as Exhibit
• Use the Commission’s Internet 5B.
comment form (http://www.sec.gov/
rules/sro.shtml); or II. Self-Regulatory Organization’s
• Send an email to rule-comments@ Statement of the Purpose of, and
sec.gov. Please include File Number SR– Statutory Basis for, the Proposed Rule
EDGA–2015–14 on the subject line. Change
tkelley on DSK3SPTVN1PROD with NOTICES
In its filing with the Commission, the
Paper Comments
self-regulatory organization included
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities 1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
33 15 U.S.C. 78s(b)(3)(A). 3 15 U.S.C. 78s(b)(3)(A).
34 17 CFR 240.19b–4(f). 35 17 CFR 200.30–3(a)(12). 4 17 CFR 240.19b–4(f)(6)(iii).
VerDate Sep<11>2014 18:52 Apr 01, 2015 Jkt 235001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 E:\FR\FM\02APN1.SGM 02APN1](https://thefederalregister.org/doc/80_FR_17860/page/5.svg)
Document Created: 2018-02-21 10:03:52
Document Modified: 2018-02-21 10:03:52
| 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 17797 |
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