80 FR 21782 - Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Content of the BATS One Feed Under Rule 11.22(i) To Include Consolidated Volume for All Listed Equity Securities

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 75 (April 20, 2015)

[Federal Register Volume 80, Number 75 (Monday, April 20, 2015)]
[Notices]
[Pages 21782-21784]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-08939]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74723; File No. SR-BYX-2015-22]


Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Content of the BATS One Feed Under Rule 11.22(i) To Include 
Consolidated Volume for All Listed Equity Securities

April 14, 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 April 1, 2015, BATS Y-Exchange, Inc. (the ``Exchange'' or 
``BYX'') 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 this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange amend [sic] the content of the BATS One Feed under 
Rule 11.22(i) to include consolidated volume for all listed equity 
securities. 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 content of the BATS One Feed 
under Rule 11.22(i) to include consolidated volume for all listed 
equity securities. The Exchange also proposes to make a ministerial 
change to Rule 11.22(i). The Commission recently approved a proposed 
rule change by the Exchange to establish a new market data product 
called the BATS One Feed.\5\ 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 BYX and its 
affiliated exchanges \6\ and for which the BATS Exchanges reports 
quotes under the Consolidated Tape Association (``CTA'') Plan or the 
Nasdaq/UTP Plan.\7\
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    \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\ BYX's affiliated exchanges are the BATS Exchange, Inc. 
(``BZX''), the EDGA Exchange, Inc. (``EDGA''), and the EDGX 
Exchange, Inc. (``EDGX'', together with EDGA, BZX, and BYX, the 
``BATS Exchanges''). On January 23, 2014, BATS Global Markets, Inc. 
(``BGMI''), the former parent company of the Exchange and BZX, 
completed its business combination with Direct Edge Holdings LLC, 
the parent company of EDGA and EDGX. See Securities Exchange Act 
Release No. 71375 (January 23, 2014), 79 FR 4771 (January 29, 2014) 
(SR-BATS-2013-059; SR-BYX-2013-039). Upon completion of the business 
combination, DE Holdings and BGMI 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.'' and BGMI changed 
its name to ``BATS Global Markets Holdings, Inc.''
    \7\ 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.
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Consolidated Volume
    The last sale information disseminated as part of the BATS One Feed 
includes the price, size, time of execution, and individual BATS 
Exchange on which the trade was executed. The last sale information 
also includes the cumulative number of shares executed on all BATS 
Exchanges for that trading day.\8\ The Exchange now proposes to expand 
the last sale information to include consolidated volume for all listed 
equity securities regardless of where the transaction was executed. The 
Exchange would obtain the consolidated volume directly from the 
securities information processors and then distribute in a manner 
consistent with the requirements for redistributing such data as set 
forth in the CTA Plan and Nasdaq UTP Plan.\9\
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    \8\ The BATS One Feed also contains optional functionality which 
enables recipients to receive aggregated two-sided quotations from 
the BATS Exchanges for up to five (5) price levels for all 
securities that are traded on the BATS Exchanges in addition to the 
BATS One Summary Feed (``BATS One Premium Feed''). For each price 
level on one of the BATS Exchanges, the BATS One Premium Feed 
includes a two-sided quote and the number of shares available to buy 
and sell at that particular price level.
    \9\ See CTA Consolidated Volume Display Policy available at 
https://www.ctaplan.com (dated March 2015). The CTA Consolidated 
Volume Display Policy requires that, ``[i]f a Customer calculates 
the CTA Consolidated Volume and displays that alongside last sale 
prices or bid-asked quotes that are not consolidated prices or 
quotes under the CTA Plan or the CQ Plan, then the Customer must 
incorporate into its display the following statement: ``Realtime 
quote and/or trade prices are not sourced from all markets.'' 
Customer must also assure that any person included in the 
redistribution chain starting with the Customer conspicuously places 
such a statement in any such display that it provides.'' Id.
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Ministerial Change
    The Exchange also proposes to delete from Rule 11.22(i) language 
indicating that the Retail Liquidity Identifier is disseminated on 
behalf of the Exchange, ``an affiliated exchange of the Exchange''. The 
Retail Liquidity Identifier indicator message is disseminated via the 
BATS One Feed on behalf of the Exchange pursuant to the Exchange's 
Retail Price Improvement (``RPI'') Program.\10\ For purposes of BYX 
Rule 11.22(i), the Exchange believes it is unnecessary to include the 
phrase ``an affiliated exchange of the Exchange'' and could lead to 
potential investor confusion.
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    \10\ For a description of BYX's RPI Program, see BYX Rule 11.24. 
See also Securities Exchange Act Release No. 68303 (November 27, 
2012), 77 FR 71652 (December 3, 2012) (SR-BYX-2012-019) (Order 
Granting Approval of Proposed Rule Change, as Modified by Amendment 
No. 2, to Adopt a Retail Price Improvement Program); Securities 
Exchange Act Release No. 67734 (August 27, 2012), 77 FR 53242 
(August 31, 2012) (SR-BYX-2012-019) (Notice of Filing of Proposed 
Rule Change to Adopt a Retail Price Improvement Program).
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b)

[[Page 21783]]

of the Act \11\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \12\ in particular, in that it is designed to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest. The Exchange also believes 
that the proposed rule change is consistent with Section 11(A) of the 
Act \13\ 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,\14\ 
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.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
    \13\ 15 U.S.C. 78k-1.
    \14\ See 17 CFR 242.603.
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    The proposed rule change is designed to promote just and equitable 
principles of trade and remove impediments to and perfect the mechanism 
of a free and open market and a national market system by providing for 
the broader dissemination of consolidated volume to investors. The 
Exchange also believes this proposal is consistent with Section 6(b)(5) 
of the Act because it protects investors and the public interest and 
promotes just and equitable principles of trade by providing investors 
with new options for receiving consolidated volume. The Exchange also 
believes that the proposed rule change is reasonable because 
consolidated volume is currently included in a competing market data 
products offered by the NYSE and Nasdaq.\15\ Therefore, the Exchange 
believes the proposed rule change removes impediments to and perfects 
the mechanism of a free and open market and a national market system, 
and, in general, protects investors and the public interest. The 
proposal would not permit unfair discrimination because the 
consolidated volume will be available to all of the Exchange's 
customers and market data vendors on an equivalent basis. In addition, 
any customer that wishes to receive consolidated volume via a different 
source will be able to do so.
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    \15\ See 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) (``NYSE 
BQT Approval Order''). See also Nasdaq Basic, http://www.nasdaqtrader.com/Trader.aspx?id=nasdaqbasic (last visited March 
26, 2015) (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'')); and 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).
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    The Exchange believes that the ministerial change to Rule 11.22(i) 
is reasonable because it is intended to make the description of the 
BATS One Feed clearer and less confusing for investors and eliminate 
potential investor confusion, thereby removing impediments to and 
perfecting the mechanism of a free and open market and a national 
market system, and, in general, protecting investors and the public 
interest.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposal will impose any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act. The Exchange believes that the proposed rule 
change will enhance competition because it would enable the Exchange to 
include consolidated volume as part of the BATS One Feed, thereby 
enabling it to better compete with similar market data products 
currently offered by the NYSE and Nasdaq that include such volume.\16\
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    \16\ See id. (noting that NYSE BQT and NLS Plus carry 
consolidated volume for all listed equities).
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    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 consolidated volume that would be included in the 
BATS One Feed. A vendor seeking to offer a similar product and include 
consolidated volume would be able to do so on the same terms as the 
Exchange from a cost perspective. As discussed in in the BATS One 
Approval Order,\17\ 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. Likewise, a 
competing vendor could also receive consolidated volume from the 
securities information processors and include it as part of their 
product to be disseminated to their customers under the same terms and 
policies provided to the Exchange.\18\ Therefore, the Exchange believes 
the inclusion of consolidated volume in the BATS One Feed would not 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.
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    \17\ See BATS One Approval Order, supra note 5.
    \18\ See CTA Consolidated Volume Display Policy, supra note 9.
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    Finally, the Exchange believes that the ministerial change to Rule 
11.22(i) will not affect competition because it does not amend the 
content of the BATS One Feed (other than as described above). Rather, 
it is simply intended to make the description of the BATS One Feed 
clearer and less confusing.

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

    Because the proposed rule change does not (i) significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A)

[[Page 21784]]

of the Act \19\ and Rule 19b-4(f)(6)(iii) thereunder.\20\
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \21\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \22\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The Exchange 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because it would allow 
the Exchange to timely offer investors a new option for receiving 
consolidated volume information. The Exchange further notes that other 
exchanges currently offer similar data products that include 
consolidated volume.\23\ The Commission believes that waiving the 30-
day operative delay is consistent with the protection of investors and 
the public interest. Therefore, the Commission hereby waives the 
operative delay and designates the proposed rule change operative upon 
filing.\24\
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    \21\ 17 CFR 240.19b-4(f)(6).
    \22\ 17 CFR 240.19b-4(f)(6)(iii).
    \23\ See supra note 15 (noting that NYSE BQT and NLS Plus carry 
consolidated volume for all listed equities).
    \24\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

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 Comments

     Use 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-BYX-2015-22 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-BYX-2015-22. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 10 
a.m. and 3 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-BYX-2015-22, and should be 
submitted on or before May 11, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\25\
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    \25\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-08939 Filed 4-17-15; 8:45 am]
 BILLING CODE 8011-01-P