80 FR 28319 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to The Customized Option Pricing Service
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 95 (May 18, 2015)
Federal Register Volume 80, Issue 95 (May 18, 2015)
| Page Range | 28319-28322 | |
| FR Document | 2015-11877 |
[Federal Register Volume 80, Number 95 (Monday, May 18, 2015)] [Notices] [Pages 28319-28322] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-11877] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74937; File No. SR-CBOE-2015-046] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to The Customized Option Pricing Service May 12, 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 May 1, 2015, Chicago Board Options Exchange, Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. 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. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change Chicago Board Options Exchange, Incorporated (the ``Exchange'' or ``CBOE'') proposes to amend the terms of the Customized Option Pricing Service (``COPS''). The text of the proposed rule change is available on the Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the Secretary, 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 aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to amend the terms of the Exhange's COPS,\3\ specifically, the COPS data revenue-sharing plan. The Exchange is not proposing to change the fees for COPS data. --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 67813 (September 10, 2012), 77 FR 56903 (September 14, 2012) (SR-CBOE-2012-083), Securities Exchange Act Release No. 67928 (September 26, 2012), 77 FR 60161 (October 2, 2012) (SR-CBOE-2012-090), Securities Exchange Act Release No. 70705 (October 17, 2013), 78 FR 63265 (October 23, 2013) (SR-CBOE-2013-097), Securities Exchange Act Release No. 70845 (November 12, 2013), 78 FR 69168 (November 18, 2013) (SR-CBOE-2013- 104), Securities Exchange Act Release No. 72621 (July 16, 2014), 79 FR 42616 (July 22, 2014) (SR-CBOE-2014-057) and Securities Exchange Act Release No. 74159 (January 28, 2015), 80 FR 5863 (February 23, 2015) (SR-CBOE-2015-007). --------------------------------------------------------------------------- [[Page 28320]] Background COPS provides market participants with an ``end-of-day'' \4\ file and ``historical'' \5\ files of valuations for Flexible Exchange (``FLEX'') \6\ options and certain over-the-counter (``OTC'') options (collectively, ``COPS Data''). Market Data Express, LLC (``MDX''), an affiliate of CBOE, offers COPS Data for sale to all market participants. COPS Data is available to ``Subscribers'' for internal use and internal distribution only, and to ``Customers'' who, pursuant to a written vendor agreement between MDX and a Customer, may distribute the Data externally (i.e., act as a vendor) and/or use and distribute the Data internally. --------------------------------------------------------------------------- \4\ ``End of day'' refers to data that is distributed prior to the opening of the next trading day. \5\ ``Historical'' COPS data consists of COPS data that is over one month old (i.e., copies of the ``end-of-day'' COPS file that are over one month old). \6\ FLEX options are exchange traded options that provide investors with the ability to customize basic option features including size, expiration date, exercise style, and certain exercise prices. --------------------------------------------------------------------------- COPS Data consists of indicative \7\ values for four categories of ``customized'' options. The first category of options is all open series of FLEX options listed on any exchange that offers FLEX options for trading.\8\ The second category is OTC options that have the same degree of customization as FLEX options. The third category includes options with strike prices expressed in percentage terms. Values for such options are expressed in percentage terms and are theoretical values.\9\ The fourth category includes ``exotic'' options.\10\ --------------------------------------------------------------------------- \7\ ``Indicative'' values are indications of potential market prices only and as such are neither firm nor the basis for a transaction. \8\ Current FLEX options open interest spans over 2,000 series on over 300 different underlying securities. \9\ These values are theoretical in that they are indications of potential market prices for options that have not traded (i.e. do not yet exist). Market participants sometimes express option values in percentage terms rather than in dollar terms because they find it is easier to assess the change, or lack of change, in the marketplace from one day to the next when values are expressed in percentage terms. \10\ Exotic options are options which are generally traded OTC and are more complex than standard options, usually relating to determination of payoff. An exotic option may also include a non- standard underlying instrument, developed for a particular client or for a particular market. --------------------------------------------------------------------------- The Exchange uses values produced by CBOE Trading Permit Holders (``TPHs'') to produce COPS Data. Participating CBOE TPHs submit values to MDX on options series specified by MDX on a daily basis. These values are generated by the TPH's internal pricing models. The valuations that MDX ultimately publishes are an average of multiple contributions of values from participating CBOE TPHs. For each value provided by MDX through COPS, MDX includes a corresponding indication of the number of TPH contributors that factored into that value. CBOE TPHs that meet the following objective qualification criteria are allowed to contribute values to MDX for purposes of producing COPS Data. Interested CBOE TPHs must be approved by the Exchange, have the ability to provide valuations to MDX in a timely manner each day after the close of trading, and sign a services agreement with CBOE. Interested CBOE TPHs must also have the ability to provide both indicative and implied volatility valuations on several different types of options, including (i) options on all open FLEX series traded on any exchange that offers FLEX options for trading, (ii) options on any potential new FLEX options series, (iii) OTC options that have the same degree of customization as FLEX options, (iv) customized options where the strike price is expressed in percentage terms (the valuations provided to MDX must also be expressed in percentage terms), and (v) exotic options. In addition, interested CBOE TPHs must participate in a testing phase with MDX. The values submitted by a TPH during the testing phase and in live production must meet MDX's quality control standards designed to ensure the integrity and accuracy of COPS Data. MDX has implemented procedures including monthly performance reviews to help ensure the integrity and accuracy of COPS Data. To help ensure that MDX receives numerous values from multiple TPHs on a consistent basis, MDX shares revenue from the sale of COPS Data with participating CBOE TPHs.\11\ The amount of revenue that MDX shares with participating TPHs is a percentage of the total revenue received by MDX from the sale of COPS Data. The revenue sharing is based on the following table: --------------------------------------------------------------------------- \11\ The fees that MDX charges for COPS Data are set forth on the Price List on the MDX Web site (www.marketdataexpress.com). MDX currently charges a fee per option per day for ``end-of-day'' COPS data. The amount of the fee is reduced based on the number of options valuations purchased. ------------------------------------------------------------------------ Total revenue Revenue share per No. of participating TPHs share TPH (percent) ------------------------------------------------------------------------ 3.................................. 21 7%. 4.................................. 24 6%. 5 or more.......................... 30 30% divided by the number of participating TPHs. ------------------------------------------------------------------------ If only three TPHs participate, MDX shares 21% of total revenue with each TPH receiving a 7% share. If four TPHs participate, MDX shares 24% of total revenue with each TPH receiving a 6% share. If five or more TPHs participate, MDX shares 30% of total revenue divided equally among the TPHs. There are currently five participating TPHs. In July 2014, the Exchange submitted a proposed rule change to, among other things, temporarily change the COPS contributor compensation structure from a revenue sharing plan to a fixed payment structure for a six month period (``Fixed Payment Period'').\12\ MDX has now transitioned back to the revenue sharing plan described herein. If COPS revenue exceeds $2,000,000 in a calendar year, the percentage of total COPS revenue shared with TPH contributors will increase from 30% to 32% if a new contributor is added to COPS.\13\ In subsequent years, if the previous calendar year's COPS revenue increases by $1,000,000 or more, the percentage of total COPS revenue shared with contributors will increase by 2% if an additional contributor is added to COPS. The total number of COPS contributors is limited to fifteen. --------------------------------------------------------------------------- \12\ See Securities Exchange Act Release No. 72621 (July 16, 2014), 79 FR 42616 (July 22, 2014) (SR-CBOE-2014-057) (``COPS Enhancements Rule Filing''). \13\ The addition of new contributors is accomplished through a try out mechanism. See COPS Enhancements Rule Filing. --------------------------------------------------------------------------- Proposal The Exchange proposes to change the COPS contributor compensation structure for the remainder of 2015.\14\ All revenue from the sale of COPS Data would be paid to COPS contributors for the remainder of 2015 (including accrued revenue during the now expired Fixed Payment Period). The revenue would be divided equally among COPS contributors. The Exchange had hoped that at the conclusion of the Fixed Payment Period, COPS revenue would be at a level such that the COPS contributors would receive a revenue share roughly in line with the fixed payments they received during the Fixed Payment Period. This has not yet [[Page 28321]] occurred. The proposed payments are intended to, at a minimum, help COPS contributors cover their costs of producing valuations for COPS while the Exchange continues to grow the COPS business. MDX would transition back to the revenue share plan described above on January 1, 2016. --------------------------------------------------------------------------- \14\ The Exchange is not proposing to eliminate the revenue share plan, only to suspend it temporarily as described herein. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ``Act'') and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.\15\ Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \16\ requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and 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. Additionally, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5) \17\ requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78f(b). \16\ 15 U.S.C. 78f(b)(5). \17\ Id. --------------------------------------------------------------------------- The Exchange believes the proposed rule change is not designed to permit unfair discrimination between CBOE TPHs because all COPS data revenue would be divided equally among TPH contributors for the remainder of 2015. The Exchange believes the proposed rule change is consistent with the protection of investors and the public interest in that it would provide incentive for all of the COPS contributors to continue to participate in COPS while the Exchange continues to grow the COPS business, thereby helping to maintain the quality of COPS Data. B. Self-Regulatory Organization's Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes the proposal is procompetitive in that it will incentivize COPS TPH contributors to continue producing quality valuations to help keep COPS competitive with other similar market data products.\18\ --------------------------------------------------------------------------- \18\ Market data vendors including SuperDerivatives, Markit, Prism, and Bloomberg's BVAL service produce option value data that is similar to COPS Data. The Options Clearing Corporation (``OCC'') also produces FLEX option value data that is similar to the FLEX option value data that is included in COPS. --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule 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, provided that the self-regulatory organization has given the Commission written notice of its intent to file 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,\19\ the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \20\ and Rule 19b-4(f)(6) thereunder.\21\ --------------------------------------------------------------------------- \19\ The Exchange has fulfilled this requirement. \20\ 15 U.S.C. 78s(b)(3)(A). \21\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \22\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),\23\ the Commission may 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 the proposal is consistent with the protection of investors and the public interest because it help COPS contributors cover their costs of producing valuations for COPS while the Exchange continues to grow the COPS business, and thereby assist the Exchange with maintaining its current roster of TPH contributors. The Commission agrees and has determined to waive the 30-day operative date so that the proposal may take effect upon filing.\24\ --------------------------------------------------------------------------- \22\ 17 CFR 240.19b-4(f)(6). \23\ 17 CFR 240.19b-4(f)(6)(iii). \24\ For purposes only of accelerating the operative date of this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). --------------------------------------------------------------------------- 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 will institute proceedings to determine whether the proposed rule change 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 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-CBOE-2015-046 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-CBOE-2015-046. 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., [[Page 28322]] Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the 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-CBOE-2015-046 and should be submitted on or before June 8, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\25\ --------------------------------------------------------------------------- \25\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-11877 Filed 5-15-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 95 / Monday, May 18, 2015 / Notices 28319
become operative immediately upon subject line if email is used. To help the Exchange Commission (the
filing. The Exchange notes that such Commission process and review your ‘‘Commission’’) the proposed rule
waiver would accommodate the timing comments more efficiently, please use change as described in Items I and II
of the effectiveness under the Delaware only one method. The Commission will below, which Items have been prepared
General Corporation Law of the Second post all comments on the Commission’s by the Exchange. The Commission is
Amended and Restated Certificate of Internet Web site (http://www.sec.gov/ publishing this notice to solicit
Incorporation of ICE, which the rules/sro.shtml). Copies of the comments on the proposed rule change
Exchange represents will be filed in submission, all subsequent from interested persons.
Delaware upon approval by the amendments, all written statements
stockholders of ICE at the annual with respect to the proposed rule I. Self-Regulatory Organization’s
meeting of stockholders scheduled for change that are filed with the Statement of the Terms of Substance of
May 2015. The Exchange believes that Commission, and all written the Proposed Rule Change
waiving the 30-day operative delay communications relating to the
Chicago Board Options Exchange,
would permit the modifications to occur proposed rule change between the
Incorporated (the ‘‘Exchange’’ or
at an earlier time and thereby reduce the Commission and any person, other than
those that may be withheld from the ‘‘CBOE’’) proposes to amend the terms
potential for confusion among persons of the Customized Option Pricing
reading the Constituent Documents. The public in accordance with the
provisions of 5 U.S.C. 552, will be Service (‘‘COPS’’). The text of the
Commission believes that waiving the proposed rule change is available on the
30-day operative delay is consistent available for Web site viewing and
printing in the Commission’s Public Exchange’s Web site (http://
with the protection of investors and the
Reference Room, 100 F Street NE., www.cboe.com/AboutCBOE/
public interest. Therefore, the
Washington, DC 20549, on official CBOELegalRegulatoryHome.aspx), at
Commission hereby waives the
business days between the hours of the Exchange’s Office of the Secretary,
operative delay and designates the
10:00 a.m. and 3:00 p.m. Copies of the and at the Commission’s Public
proposed rule change operative upon
filing also will be available for Reference Room.
filing.21
At any time within 60 days of the inspection and copying at the principal II. Self-Regulatory Organization’s
filing of the proposed rule change, the office of the Exchange. All comments Statement of the Purpose of, and
Commission summarily may received will be posted without change; Statutory Basis for, the Proposed Rule
temporarily suspend such rule change if the Commission does not edit personal Change
it appears to the Commission that such identifying information from
action is necessary or appropriate in the submissions. You should submit only In its filing with the Commission, the
public interest, for the protection of information that you wish to make Exchange included statements
investors, or otherwise in furtherance of available publicly. All submissions concerning the purpose of and basis for
the purposes of the Act. If the should refer to File Number SR– the proposed rule change and discussed
Commission takes such action, the NYSEMKT–2015–32, and should be any comments it received on the
Commission shall institute proceedings submitted on or before June 8, 2015. proposed rule change. The text of these
to determine whether the proposed rule For the Commission, by the Division of statements may be examined at the
should be approved or disapproved. Trading and Markets, pursuant to delegated places specified in Item IV below. The
authority.22 Exchange has prepared summaries, set
IV. Solicitation of Comments Robert W. Errett, forth in sections A, B, and C below, of
Interested persons are invited to Deputy Secretary. the most significant aspects of such
submit written data, views, and [FR Doc. 2015–11872 Filed 5–15–15; 8:45 am] statements.
arguments concerning the foregoing, BILLING CODE 8011–01–P
including whether the proposed rule A. Self-Regulatory Organization’s
change is consistent with the Act. Statement of the Purpose of, and
Comments may be submitted by any of SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule
the following methods: COMMISSION Change
Electronic Comments [Release No. 34–74937; File No. SR–CBOE– 1. Purpose
2015–046]
• Use the Commission’s Internet The purpose of the proposed rule
comment form (http://www.sec.gov/ Self-Regulatory Organizations; change is to amend the terms of the
rules/sro.shtml); or Chicago Board Options Exchange, Exhange’s COPS,3 specifically, the
• Send an email to rule-comments@ Incorporated; Notice of Filing and COPS data revenue-sharing plan. The
sec.gov. Please include File Number SR– Immediate Effectiveness of a Proposed Exchange is not proposing to change the
NYSEMKT–2015–32 on the subject line. Rule Change Relating to The fees for COPS data.
Paper Comments Customized Option Pricing Service
3 See Securities Exchange Act Release No. 67813
• Send paper comments in triplicate May 12, 2015. (September 10, 2012), 77 FR 56903 (September 14,
to Brent J. Fields, Secretary, Securities Pursuant to Section 19(b)(1) of the 2012) (SR–CBOE–2012–083), Securities Exchange
and Exchange Commission, 100 F Street Securities Exchange Act of 1934 (the Act Release No. 67928 (September 26, 2012), 77 FR
asabaliauskas on DSK5VPTVN1PROD with NOTICES
‘‘Act’’),1 and Rule 19b–4 thereunder,2 60161 (October 2, 2012) (SR–CBOE–2012–090),
NE., Washington, DC 20549–1090. Securities Exchange Act Release No. 70705 (October
All submissions should refer to File notice is hereby given that on May 1, 17, 2013), 78 FR 63265 (October 23, 2013) (SR–
Number SR–NYSEMKT–2015–32. This 2015, Chicago Board Options Exchange, CBOE–2013–097), Securities Exchange Act Release
file number should be included on the Incorporated (the ‘‘Exchange’’ or No. 70845 (November 12, 2013), 78 FR 69168
‘‘CBOE’’) filed with the Securities and (November 18, 2013) (SR–CBOE–2013–104),
Securities Exchange Act Release No. 72621 (July 16,
21 For purposes only of waiving the 30-day 2014), 79 FR 42616 (July 22, 2014) (SR–CBOE–
22 17 CFR 200.30–3(a)(12).
operative delay, the Commission has considered the 2014–057) and Securities Exchange Act Release No.
1 15 U.S.C. 78s(b)(1).
proposed rule’s impact on efficiency, competition, 74159 (January 28, 2015), 80 FR 5863 (February 23,
and capital formation. See 15 U.S.C. 78c(f). 2 17 CFR 240.19b–4. 2015) (SR–CBOE–2015–007).
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![28322 Federal Register / Vol. 80, No. 95 / Monday, May 18, 2015 / Notices
Washington, DC 20549 on official I. Self-Regulatory Organization’s response to BYX’s May 2015 fee change
business days between the hours of Statement of the Terms of Substance of where BYX decreased its rebate from
10:00 a.m. and 3:00 p.m. Copies of the the Proposed Rule Change $0.0016 per share to $0.0015 per share.6
filing also will be available for The Exchange filed a proposal to When BATS Trading routes to and
inspection and copying at the principal amend the fee schedule applicable to removes liquidity from BYX, it will now
office of the Exchange. All comments Members 5 and non-members of the receive a standard rebate of $0.0015 per
received will be posted without change; Exchange pursuant to BATS Rules share. BATS Trading will pass through
the Commission does not edit personal 15.1(a) and (c). Changes to the fee the rebate provided by BYX to the
identifying information from schedule pursuant to this proposal are Exchange and the Exchange, in turn,
effective upon filing. will pass through this rate to its
submissions. You should submit only
The text of the proposed rule change Members.
information that you wish to make
available publicly. All submissions is available at the Exchange’s Web site NBBO Setter and Joiner Tiers
should refer to File Number SR–CBOE– at www.batstrading.com, at the
principal office of the Exchange, and at The Exchange currently offers an
2015–046 and should be submitted on additional rebate per share for certain
or before June 8, 2015. the Commission’s Public Reference
Room. orders that establish a new NBBO or
For the Commission, by the Division of that join the NBBO when the Exchange
Trading and Markets, pursuant to delegated II. Self-Regulatory Organization’s is not already at the NBBO. Such
authority.25 Statement of the Purpose of, and additional rebates range from $0.0001
Statutory Basis for, the Proposed Rule per share to $0.0005 per share. The
Robert W. Errett,
Change Exchange is proposing to eliminate
Deputy Secretary. these additional rebates because the
In its filing with the Commission, the
[FR Doc. 2015–11877 Filed 5–15–15; 8:45 am] rebates have not achieved the desired
Exchange included statements
BILLING CODE 8011–01–P
concerning the purpose of and basis for effect, despite being designed to
the proposed rule change and discussed incentivize Members to add liquidity
any comments it received on the that sets or joins the Exchange to the
SECURITIES AND EXCHANGE proposed rule change. The text of these NBBO. As such, the Exchange is
COMMISSION statements may be examined at the proposing to eliminate the text in
places specified in Item IV below. The footnote four related to the NBBO Setter
[Release No. 34–74938; File No. SR–BATS– Exchange has prepared summaries, set and Joiner Tiers.
2015–35] forth in Sections A, B, and C below, of Single MPID Investor Tier
the most significant parts of such
Self-Regulatory Organizations; BATS statements. The Exchange proposes to add new
Exchange, Inc.; Notice of Filing and text to footnote four to establish a new
Immediate Effectiveness of a Proposed A. Self-Regulatory Organization’s Investor Tier under which a Member
Statement of the Purpose of, and can qualify for a rebate of $0.0031 per
Rule Change Related to Fees for Use
Statutory Basis for, the Proposed Rule share on an MPID by MPID basis if they
of BATS Exchange, Inc.
Change meet the following criteria: (i) The
May 12, 2015. 1. Purpose MPID’s ADAV 7 as a percentage of TCV 8
Pursuant to Section 19(b)(1) of the is equal to or greater than 0.35%; and
The Exchange proposes to modify its (ii) the MPID’s ADAV as a percentage of
Securities Exchange Act of 1934 fee schedule in order to: (1) Amend the
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 ADV 9 is equal to or greater than 90%.
rebate associated with fee code BY; (2) The Exchange notes that this proposal is
notice is hereby given that on May 1, eliminate the NBBO Setter and Joiner substantively identical to the ‘‘Investor
2015, BATS Exchange, Inc. (the Tiers; (3) establish a Single MPID Tier’’ rebate offered on EDGX Exchange,
‘‘Exchange’’ or ‘‘BATS’’) filed with the Investor Tier; and (4) simplify pricing Inc. (‘‘EDGX’’).10
Securities and Exchange Commission related to Physical Connection Fees.
(‘‘SEC’’ or ‘‘Commission’’) the proposed Physical Connection Fees
Fee Code BY
rule change as described in Items I, II, The Exchange currently maintains a
and III below, which Items have been The Exchange currently provides a presence in two third-party data centers:
prepared by the Exchange. The rebate of $0.0016 per share for Members’ (i) The primary data center where the
Exchange has designated the proposed orders that yield fee code BY, which Exchange’s business is primarily
rule change as one establishing or routes to BYX and removes liquidity conducted on a daily basis, and (ii) a
changing a member due, fee, or other using Destination Specific, TRIM,
charge imposed by the Exchange under TRIM2, TRIM3, or SLIM routing 6 See BYX Exchange Fee Schedule Changes
Section 19(b)(3)(A)(ii) of the Act 3 and strategies. The Exchange proposes to Effective May 1, 2015 available at http://
amend its Fee Schedule to decrease the cdn.batstrading.com/resources/fee_schedule/2015/
Rule 19b–4(f)(2) thereunder,4 which BATS-BYX-Exchange-BZX-Exchange-EDGA-
rebate for orders that yield fee code BY
renders the proposed rule change Exchange-and-EDGX-Exchange-Fee-Schedule-
to $0.0015 per share. The proposed Changes-Effective-May-1-2015.pdf.
effective upon filing with the
change represents a pass through of the 7 ‘‘ADAV’’ means average daily volume calculated
Commission. The Commission is rate BATS Trading, Inc. (‘‘BATS as the number of shares added per day.
asabaliauskas on DSK5VPTVN1PROD with NOTICES
publishing this notice to solicit Trading’’), the Exchange’s affiliated 8 ‘‘TCV’’ means total consolidated volume
comments on the proposed rule change routing broker-dealer, is provided for calculated as the volume reported by all exchanges
from interested persons. routing orders to BYX that remove
to the consolidated transaction reporting plan for
the month for which the fees apply.
liquidity. The proposed change is in 9 ‘‘ADV’’ means average daily volume calculated
25 17 CFR 200.30–3(a)(12). as the number of shares added or removed,
1 15 U.S.C. 78s(b)(1). 5 The term ‘‘Member’’ is defined as ‘‘any combined, per day.
2 17 CFR 240.19b–4.
registered broker or dealer that has been admitted 10 See EDGX Exchange, Inc. Fee Schedule
3 15 U.S.C. 78s(b)(3)(A)(ii).
to membership in the Exchange.’’ See Exchange available at http://www.batstrading.com/support/
4 17 CFR 240.19b–4(f)(2). Rule 1.5(n). fee_schedule/edgx/.
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Document Created: 2015-12-16 07:39:24
Document Modified: 2015-12-16 07:39:24
| 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 28319 |
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