80 FR 17804 - Self-Regulatory Organizations; EDGX 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 | 17804-17807 | |
| FR Document | 2015-07522 |
[Federal Register Volume 80, Number 63 (Thursday, April 2, 2015)] [Notices] [Pages 17804-17807] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-07522] [[Page 17804]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74601; File No. SR-EDGX-2015-14]) Self-Regulatory Organizations; EDGX 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, EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') 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 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 EDGX 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\ EDGX's affiliated exchanges are BATS Exchange, Inc. (``BZX''), BATS Y-Exchange, Inc. (``BYX''), and EDGA Exchange, Inc. (``EDGA'', together with EDGX, BZX, and BYX, the ``BATS Exchanges''). On January 31, 2014, Direct Edge Holdings LLC (``DE Holdings''), the former parent company of the Exchange and EDGA, 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. --------------------------------------------------------------------------- [[Page 17805]] 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 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 EDGA, 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 [[Page 17806]] 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 6. --------------------------------------------------------------------------- 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 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 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 [[Page 17807]] 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 EDGA, 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 6. --------------------------------------------------------------------------- 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 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 [email protected]. Please include File Number SR-EDGX-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-EDGX-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- EDGX-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. 2015-07522 Filed 4-1-15; 8:45 am] BILLING CODE CODE 8011-01-P
![17804 Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Notices
SECURITIES AND EXCHANGE Exchange has prepared summaries, set ‘‘BATS One Summary Feed’’). In
COMMISSION forth in Sections A, B, and C below, of addition, the BATS One Feed contains
the most significant parts of such optional functionality which enables
[Release No. 34–74601; File No. SR–EDGX–
statements. recipients to receive aggregated two-
2015–14])
A. Self-Regulatory Organization’s sided quotations from the BATS
Self-Regulatory Organizations; EDGX Statement of the Purpose of, and Exchanges for up to five (5) price levels
Exchange, Inc.; Notice of Filing and Statutory Basis for, the Proposed Rule (‘‘BATS One Premium Feed’’).
Immediate Effectiveness of a Proposed Change BATS One Digital Media Enterprise Fee
Rule Change To Amend the Fees for
the BATS One Market Data Product 1. Purpose The Exchange proposes to amend its
The Exchange proposes to amend the fee schedule to establish a Digital Media
March 27, 2015. market data section of its fee schedule Enterprise Fee of $15,000 per month for
Pursuant to Section 19(b)(1) of the to: (i) Establish a Digital Media the BATS One Summary Feed and
Securities Exchange Act of 1934 (the Enterprise Fee for the BATS One Feed; $25,000 per month for the BATS One
‘‘Act’’),1 and Rule 19b–4 thereunder,2 and (ii) make a non-substantive change Premium Feed. As an alternative to User
notice is hereby given that on March 17, to the description of the BATS One Feed fees,9 a recipient firm may purchase a
2015, EDGX Exchange, Inc. (the Enterprise fee. monthly Digital Media Enterprise
‘‘Exchange’’ or ‘‘EDGX’’) filed with the The Commission recently approved a license to receive the BATS One Feed
Securities and Exchange Commission proposed rule change by the Exchange from an External Distributor 10 to
(‘‘Commission’’) the proposed rule to establish a new market data product distribute to an unlimited number of
change as described in Items I and II called the BATS One Feed 5 as well as Professional and Non-Professional
below, which Items have been prepared published proposed rule changes to Users 11 for viewing via television, Web
by the Exchange. The Exchange has establish related fees.6 The BATS One sites, and mobile devices for
designated the proposed rule change as Feed is a data feed that disseminates, on informational and non-trading purposes
one establishing or changing a member a real-time basis, the aggregate best bid only without having to account for the
due, fee, or other charge imposed by the and offer (‘‘BBO’’) of all displayed extent of access to the data or the report
Exchange under Section 19(b)(3)(A)(ii) orders for securities traded on EDGX the number of Users to the Exchange.
of the Act 3 and Rule 19b–4(f)(2) and its affiliated exchanges 7 and for The Digital Media Enterprise Fee would
thereunder,4 which renders the which the BATS Exchanges report be in addition to the Data Consolidation
proposed rule change effective upon quotes under the Consolidated Tape Fee.12
filing with the Commission. The Association (‘‘CTA’’) Plan or the
Commission is publishing this notice to Nasdaq/UTP Plan.8 The BATS One Feed 9 The Exchange assesses a monthly fee for
solicit comments on the proposed rule also contains the individual last sale Professional Users of $10.00 per User for receipt of
the BATS One Summary Feed or $15.00 per User
change from interested persons. information for the BATS Exchanges who elects to also receive the BATS One Premium
(collectively with the aggregate BBO, the Feed. Non-Professional Users are assessed a
I. Self-Regulatory Organization’s
monthly fee of $0.25 per user for the BATS One
Statement of the Terms of Substance of 5 See Securities Exchange Act Release No. 73918 Summary Feed or $0.50 per user for the BATS One
the Proposed Rule Change (December 23, 2014), 79 FR 78920 (December 31, Premium Feed. External Distributors must count
2014) (File Nos. SR–EDGX–2014–25; SR–EDGA– every Professional User and Non-Professional User
The Exchange filed a proposal to to which they provide BATS One Feed data. See
2014–25; SR–BATS–2014–055; SR–BYX–2014–030)
amend the market data section of its fee (Notice of Amendments No. 2 and Order Granting BATS One Fee Proposals, supra note 6.
schedule to: (i) Establish a Digital Media Accelerated Approval to Proposed Rule Changes, as 10 As defined in the Exchange’s fee schedule, an
Enterprise Fee for the BATS One Feed; Modified by Amendments Nos. 1 and 2, to Establish External Distributor of an Exchange Market Data
a New Market Data Product called the BATS One product is a Distributor that receives the Exchange
and (ii) make a non-substantive change Feed) (‘‘BATS One Approval Order’’). Market Data product and then distributes that data
to the description of the BATS One Feed 6 See Securities Exchange Act Release Nos. 74282 to a third party or one or more Users outside the
Enterprise fee. (February 17, 2015), 80 FR 9487 (February 23, 2015) Distributor’s own entity.
The text of the proposed rule change (SR–EDGX–2015–09); 74283 (February 18, 2015), 80 11 As defined in the Exchange’s fee schedule, a
is available at the Exchange’s Web site FR 9809 (February 24, 2015) (SR–EDGA–2015–09); User of an Exchange Market Data product is a
74284 (February 18, 2015), 80 FR 9792 (February natural person, a proprietorship, corporation,
at www.batstrading.com, at the 24, 2015) (SR–BYX–2015–09); and 74285 (February partnership, or entity, or device (computer or other
principal office of the Exchange, and at 18, 2015), 80 FR 9828 (February 24, 2015) (SR– automated service), that is entitled to receive
the Commission’s Public Reference BATS–2015–11) (‘‘BATS One Fee Proposals’’). Exchange data. A Non-Professional User of an
7 EDGX’s affiliated exchanges are BATS Exchange Market Data product is a natural person
Room.
Exchange, Inc. (‘‘BZX’’), BATS Y-Exchange, Inc. who is not: (i) Registered or qualified in any
II. Self-Regulatory Organization’s (‘‘BYX’’), and EDGA Exchange, Inc. (‘‘EDGA’’, capacity with the Commission, the Commodity
Statement of the Purpose of, and together with EDGX, BZX, and BYX, the ‘‘BATS Futures Trading Commission, any state securities
Exchanges’’). On January 31, 2014, Direct Edge agency, any securities exchange or association, or
Statutory Basis for, the Proposed Rule Holdings LLC (‘‘DE Holdings’’), the former parent any commodities or futures contract market or
Change company of the Exchange and EDGA, completed its association; (ii) engaged as an ‘‘investment adviser’’
business combination with BATS Global Markets, as that term is defined in Section 201(11) of the
In its filing with the Commission, the Inc., the parent company of BZX and BYX. See Investment Advisers Act of 1940 (whether or not
Exchange included statements Securities Exchange Act Release No. 71449 (January registered or qualified under that Act); or (iii)
concerning the purpose of and basis for 30, 2014), 79 FR 6961 (February 5, 2014) (SR– employed by a bank or other organization exempt
the proposed rule change and discussed EDGX–2013–43, SR–EDGA–2014–34). Upon from registration under federal or state securities
completion of the business combination, DE laws to perform functions that would require
any comments it received on the Holdings and BATS Global Markets, Inc. each registration or qualification if such functions were
proposed rule change. The text of these became intermediate holding companies, held performed for an organization not so exempt. A
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statements may be examined at the under a single new holding company. The new Professional User of an Exchange Market Data
places specified in Item IV below. The holding company, formerly named ‘‘BATS Global product is any User other than a Non-Professional
Markets Holdings, Inc.,’’ changed its name to User.
‘‘BATS Global Markets, Inc.’’ 12 The Data Consolidation Fee is $1,000 per
1 15 U.S.C. 78s(b)(1). 8 The Exchange understands that each of the month and is designed to reflect the value of the
2 17 CFR 240.19b–4. BATS Exchanges will separately file substantially aggregation and consolidation function the
3 15 U.S.C. 78s(b)(3)(A)(ii).
similar proposed rule changes with the Commission Exchange performs in creating the BATS One Feed.
4 17 CFR 240.19b–4(f)(2). to implement fees for the BATS One Feed. See BATS One Fee Proposals, supra note 6.
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![Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Notices 17805
Non-Substantive Change to the amount of data available to consumers, limited to television, Web sites, and
Description of the BATS One Enterprise and also spur innovation and mobile devices for informational
Fee competition for the provision of market purposes only, while distribution of the
The Exchange proposes a non- data. BATS One Feed data pursuant to an
substantive change to the description of In addition, the proposed fee is Enterprise license contains no such
the BATS One Enterprise fee. The fee equitable and not unfairly limitation. The Exchange also believes
discriminatory because it will apply that the proposed Digital Media
schedule currently states that, ‘‘[a]s an
uniformly to market data vendors, Enterprise fee is equitable and
alternative to User fees, a recipient firm
television broadcasters, Web site and reasonable because it is less than similar
may purchase a monthly Enterprise Fee
mobile service providers. The Exchange fees charged by other exchanges.17
to receive the BATS One Feed from an
believes it is reasonable to establish a The Exchange has taken into
External Distributor for an unlimited
lower cost fee structure that is designed consideration its affiliated relationship
number of Professional and Non-
to facilitate broader media distribution with EDGA, BYX, and BZX in proposing
Professional Users.’’ The Exchange
of the BATS One Data Feed for the Digital Media Enterprise fee to
proposes to amend this sentence in two
informational purposes because it will assure that vendors would be able to
ways. The first amendment is to state
benefit investors generally. offer a similar product on the same
that a recipient firm may purchase a In establishing the Digital Media
monthly Enterprise license, rather than terms as the Exchange from a cost
Enterprise Fee, the Exchange recognizes perspective. While the BATS Exchanges
Enterprise fee, as the term ‘‘license’’ is that there is demand for a more
a more accurate description. The second are the exclusive distributors of the
seamless and easier–to-administer data individual data feeds from which
is to specify that the recipient firm distribution mode that takes into
purchasing a monthly enterprise license certain data elements may be taken to
account the expanded variety of media create the BATS One Feed, they are not
does so to distribute the BATS One Feed and communication devices that
to an unlimited number of Professional the exclusive distributors of the
investors utilize today. The Exchange aggregated and consolidated
and Non-Professional Users. believes the Digital Media Enterprise information that comprises the BATS
2. Statutory Basis Fee will be easy to administer because One Feed. As discussed in in [sic] the
data recipients that purchase it would BATS One Fee Proposal,18 any entity
BATS One Digital Media Enterprise Fee not be required to differentiate between may separately purchase the individual
The Exchange believes that the Professional and Non-Professional underlying products, and if they so
proposed Digital Media Enterprise Fee Users, account for the extent of access choose, perform a similar aggregation
for the BATS One Feed is consistent to the data, or report the number of and consolidation function that the
with Section 6(b) of the Act,13 in Users. This is a significant reduction on
Exchange performs in creating the BATS
general, and Section 6(b)(4) of the Act,14 a recipient firm’s administrative
One Feed, and offer a data feed with the
in particular, in that it provides for an burdens and is a significant value to
same information included in the BATS
equitable allocation of reasonable fees investors. For example, a television
One Feed to sell and distribute it to its
among recipients of the data and is not broadcaster could display the BATS
clients with no greater cost than the
designed to permit unfair One Feed data during market-related
Exchange.
discrimination among customers, programming and on its Web site or
To enable such competition, the
brokers, or dealers. The Exchange also allow viewers to view the data via their
Exchange is offering the Digital Media
believes that the proposed rule change mobile devices, creating a more
Enterprise license for the BATS One
is consistent with Section 11(A) of the seamless distribution model that will
allow investors more choice in how they Feed on terms that a subscriber of the
Act 15 in that it supports (i) fair underlying feeds could offer a
competition among brokers and dealers, receive and view market data, all
without having to account for and/or competing product if it so chooses. The
among exchange markets, and between BATS One Feed is comprised of data
exchange markets and markets other measure who accesses the data and how
often they do so. included in EDGX Depth, EDGA Depth,
than exchange markets and (ii) the BYX Depth, and BZX Depth.19
availability to brokers, dealers, and The proposed Digital Media
Enterprise Fee is equitable and Currently, an External Distributor could
investors of information with respect to
reasonable because it will also enable create a competing product to the BATS
quotations for and transactions in
recipient firms to more widely One Premium Feed 20 by purchasing
securities. Furthermore, the proposed
distribute data from the BATS One Feed each of these depth of book products
rule change is consistent with Rule 603
of Regulation NMS,16 which provides to investors for informational purposes 17 The Nasdaq Stock Market offers proprietary
that any national securities exchange at a lower cost than is available today. data products for distribution over the internet and
that distributes information with respect For example, a recipient firm may television under alternative fee schedules that are
to quotations for or transactions in an purchase an Enterprise license in the subject to maximum fee of $50,000 per month. See
NMS stock do so on terms that are not amount of $50,000 per month for the Nasdaq Rule 7039(b). The NYSE charges a Digit
BATS One Summary Feed and $100,000 Media Enterprise fee of $40,000 per month for the
unreasonably discriminatory. In NYSE Trade Digital Media product. See Securities
adopting Regulation NMS, the per month for the BATS One Premium Exchange Act Release No. 69272 (April 2, 2013), 78
Commission granted self-regulatory Feed to receive the BATS One Feed FR 20983 (April 8, 2013) (SR–NYSE–2013–23).
organizations and broker-dealers from an External Distributor for an 18 See BATS One Fee Proposals, supra note 6.
increased authority and flexibility to unlimited number of Professional and 19 See EDGA Rule 13.8, EDGX Rule 13.8, BZX
Non-Professional Users, which is greater Rule 11.22(a) and (c), and BYX Rule 11.22 (a) and
offer new and unique market data (c) for a description of the depth of book feeds
tkelley on DSK3SPTVN1PROD with NOTICES
products to the public. It was believed than the Digital Media Enterprise fee offered by each of the BATS Exchanges.
that this authority would expand the proposed herein. The Exchange also 20 Like the Exchange, an External Distributor
believes the amount of the Digital would also be able to create a competing product
13 15 Enterprise [sic] is reasonable as to the BATS One Summary Feed from the data
U.S.C. 78f. received via EDGX Depth, EDGA Depth, BYX
14 15 U.S.C. 78f(b)(4). compared to the existing Enterprise fees Depth, and BZX Depth, without having to
15 15 U.S.C. 78k–1. discussed above because the separately purchase the top and last sale feeds from
16 See 17 CFR 242.603. distribution of BATS One Feed data is each of the BATS Exchanges.
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![Federal Register / Vol. 80, No. 63 / Thursday, April 2, 2015 / Notices 17807
fair, reasonable, and not unreasonably Digital Media Enterprise license the and Exchange Commission, 100 F Street
discriminatory fees and an equitable Exchange would charge clients for the NE., Washington, DC 20549–1090.
allocation of fees among all Users. The BATS One Feed compared to the cost of All submissions should refer to File
existence of alternatives to the BATS the individual data feeds from the BATS Number SR–EDGX–2015–14. This file
One Feed, including the existing Exchanges would enable a vendor to number should be included on the
underlying feeds, consolidated data, and receive the underlying data feeds and subject line if email is used. To help the
proprietary data from other sources, offer a similar product on a competitive Commission process and review your
ensures that the Exchange cannot set basis and with no greater cost than the comments more efficiently, please use
unreasonable fees, or fees that are Exchange. only one method. The Commission will
unreasonably discriminatory, when post all comments on the Commission’s
Non-Substantive Change to the
vendors and subscribers can elect these Internet Web site (http://www.sec.gov/
Description of the BATS One Enterprise
alternatives or choose not to purchase a rules/sro.shtml). Copies of the
Fee
specific proprietary data product if its submission, all subsequent
cost to purchase is not justified by the The proposal to amend the amendments, all written statements
returns any particular vendor or description of the Enterprise fee within with respect to the proposed rule
subscriber would achieve through the the fee schedule will not have any change that are filed with the
purchase. impact on completion [sic]. The Commission, and all written
Finally, although the BATS proposed changes are designed to clarify communications relating to the
Exchanges are the exclusive distributors the fee schedule and avoid potential proposed rule change between the
of the individual data feeds from which investor confusion and do not amend Commission and any person, other than
certain data elements would be taken to the amount or application of the BATS those that may be withheld from the
create the BATS One Feed, the One Enterprise fee. public in accordance with the
Exchange is not the exclusive C. Self-Regulatory Organization’s provisions of 5 U.S.C. 552, will be
distributor of the aggregated and Statement on Comments on the available for Web site viewing and
consolidated information that would Proposed Rule Change Received From printing in the Commission’s Public
compose the BATS One Feed. The Members, Participants, or Others Reference Room, 100 F Street NE.,
Exchange has taken into consideration Washington, DC 20549–1090, on official
its affiliated relationship with EDGA, The Exchange has neither solicited
nor received written comments on the business days between the hours of
BYX, and BZX in its design of the BATS 10:00 a.m. and 3:00 p.m. Copies of such
One Feed to assure that vendors would proposed rule change.
filing also will be available for
be able to offer a similar product on the III. Date of Effectiveness of the inspection and copying at the principal
same terms as the Exchange from a cost Proposed Rule Change and Timing for office of the Exchange. All comments
perspective. While the BATS Exchanges Commission Action received will be posted without change;
are the exclusive distributors of the the Commission does not edit personal
individual data feeds from which The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A) identifying information from
certain data elements may be taken to submissions. You should submit only
create the BATS One Feed, they are not of the Act 33 and paragraph (f) of Rule
19b–4 thereunder.34 At any time within information that you wish to make
the exclusive distributors of the available publicly. All submissions
aggregated and consolidated 60 days of the filing of the proposed rule
change, the Commission summarily may should refer to File Number SR–EDGX–
information that comprises the BATS 2015–14, and should be submitted on or
One Feed. As discussed in in the BATS temporarily suspend such rule change if
it appears to the Commission that such before April 23, 2015.
One Fee Proposal,32 any entity may
separately purchase the individual action is necessary or appropriate in the For the Commission, by the Division of
underlying products, and if they so public interest, for the protection of Trading and Markets, pursuant to delegated
choose, perform a similar aggregation investors, or otherwise in furtherance of authority.35
and consolidation function that the the purposes of the Act. Brent J. Fields,
Exchange performs in creating the BATS IV. Solicitation of Comments Secretary.
One Feed, and offer a data feed with the Interested persons are invited to [FR Doc. 2015–07522 Filed 4–1–15; 8:45 am]
same information included in the BATS submit written data, views, and BILLING CODE CODE 8011–01–P
One Feed to sell and distribute it to its arguments concerning the foregoing,
clients with no greater cost than the including whether the proposed rule
Exchange. SECURITIES AND EXCHANGE
change is consistent with the Act.
To enable such competition, the COMMISSION
Comments may be submitted by any of
amount of the proposed Digital Media
the following methods: [File No. 500–1]
Enterprise license compared to the cost
of the individual data feeds from the Electronic Comments In the Matter of Urban AG Corp.; Order
BATS Exchanges would enable a vendor • Use the Commission’s Internet of Suspension of Trading
to receive the underlying data feeds and comment form (http://www.sec.gov/
offer a similar product on a competitive March 31, 2015.
rules/sro.shtml); or
basis and with no greater cost than the • Send an email to rule-comments@ It appears to the Securities and
Exchange. The amount of the proposed sec.gov. Please include File Number SR– Exchange Commission that there is a
Digital Media Enterprise license, EDGX–2015–14 on the subject line. lack of current and accurate information
tkelley on DSK3SPTVN1PROD with NOTICES
coupled with the Data Consolidation concerning the securities of Urban AG
Fee, is not lower than the cost to a Paper Comments Corporation (‘‘Urban AG’’) because it
vendor of receiving the underlying data • Send paper comments in triplicate has not filed a periodic report since it
feeds to create a competing product. to Brent J. Fields, Secretary, Securities filed its Form 10–Q for the period
Therefore, the amount of the proposed ending September 30, 2013, filed on
33 15 U.S.C. 78s(b)(3)(A).
32 See BATS One Fee Proposals, supra note 6. 34 17 CFR 240.19b–4(f). 35 17 CFR 200.30–3(a)(12).
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Document Created: 2018-02-21 10:03:50
Document Modified: 2018-02-21 10:03:50
| 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 17804 |
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