80 FR 34745 - Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Y-Exchange, Inc.
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 116 (June 17, 2015)
Federal Register Volume 80, Issue 116 (June 17, 2015)
| Page Range | 34745-34748 | |
| FR Document | 2015-14832 |
[Federal Register Volume 80, Number 116 (Wednesday, June 17, 2015)] [Notices] [Pages 34745-34748] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-14832] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75159; File No. SR-BYX-2015-28] Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Y-Exchange, Inc. June 11, 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 June 9, 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, II and III below, which Items have been prepared by the Exchange.\3\ 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 \4\ and Rule 19b-4(f)(2) thereunder,\5\ 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\ The Commission notes that a previous version of the proposal was filed as SR-BYX-2015-27. The proposal was withdrawn on June 9, 2015. \4\ 15 U.S.C. 78s(b)(3)(A)(ii). \5\ 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 its fees and rebates applicable to Members \6\ of the Exchange pursuant to Rule 15.1(a) and (c) (``Fee Schedule'') to: (i) Increase the rebate from $0.0004 per share to $0.0015 per share for orders that yield fee code A, which routes to the Nasdaq Stock Market LLC (``Nasdaq'') and adds liquidity; and (ii) adopt fees for the use of a communication and routing service known as BATS Connect. --------------------------------------------------------------------------- \6\ A Member is defined as ``any registered broker or dealer that has been admitted to membership in the Exchange.'' See Exchange Rule 1.5(n). --------------------------------------------------------------------------- The text of the proposed rule change is available at the Exchange's Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. (A) Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to: (i) Increase the rebate from $0.0004 per share to $0.0015 per share for orders that yield fee code A, which routes to Nasdaq and adds liquidity; and (ii) adopt fees for the use of a communication and routing service known as BATS Connect. Fee Code A In securities priced at or above $1.00, the Exchange currently provides a rebate of $0.0004 per share for Members' orders that yield fee code A, applicable to orders routed to Nasdaq that add liquidity. The Exchange proposes to amend its Fee Schedule to increase this rebate to $0.0015 per share for Members' orders that yield fee code A. The proposed change represents a pass through of the rate that BATS Trading, Inc. (``BATS Trading''), the Exchange's affiliated routing broker-dealer, will be rebated for routing orders to Nasdaq when it does not qualify for a volume tiered rebate. The Exchange notes that the proposed change is in response to Nasdaq's June 2015 fee change where Nasdaq will no longer offer a rebate of $0.0004 per share for orders in select symbols (``Nasdaq's Select Symbol Program'') to its customers, such as BATS Trading, and such orders will be subject to the regular Nasdaq Pricing Schedule.\7\ Accordingly, when BATS Trading routes to Nasdaq in any symbol, it will be rebated a standard rate of $0.0015 per share. BATS Trading will pass through this rate on Nasdaq to the Exchange and the Exchange, in turn, will pass through this rate to its Members. --------------------------------------------------------------------------- \7\ See Nasdaq Equity Trader Alert #2015-70, Nasdaq Ends Access Fee Experiment, available at http://www.nasdaqtrader.com/TraderNews.aspx?id=ETA2015-70. --------------------------------------------------------------------------- BATS Connect On May 26 [sic], 2015, the Exchange filed a proposed rule change with the Commission to adopt a communication and routing service known as BATS Connect.\8\ The Exchange now proposes to adopt fees related to the use of BATS Connect that are equal to the fees charged for an identical service, also called BATS Connect, offered by the Exchange's affiliate, EDGX.\9\ BATS [[Page 34746]] Connect is offered by the Exchange on a voluntary basis in a capacity similar to a vendor. In sum, BATS Connect is a communication service that provides subscribers an additional means to receive market data from and route orders to any destination connected to the Exchange's network. BATS Connect does not provide any advantage to subscribers for connecting to the Exchange's affiliates \10\ as compared to other method of connectivity available to subscribers. The servers of the subscriber need not be located in the same facilities as the Exchange in order to subscribe to BATS Connect. Subscribers may also seek to utilize BATS Connect in the event of a market disruption where other alternative connection methods become unavailable. --------------------------------------------------------------------------- \8\ See file no. SR-BYX-2015-26. \9\ See the EDGX fee schedule available at http://batstrading.com/support/fee_schedule/edgx/. See also Securities Exchange Act Release No. 73780 (December 8, 2014), 79 FR 73942 (December 12, 2014) (SR-EDGX-2014-28) and file no. SR-EDGX-2015-27. \10\ The Exchange's affiliated exchanges are EDGX, EDGA Exchange, Inc. (``EDGA''), and BATS Exchange, Inc. (``BZX''). The Exchange understands that its affiliated exchanges intend to file identical proposed rule changes to adopt the fees for the BATS Connect service with the Commission. The Exchange also notes that its affiliated exchanges have also filed proposed rule changes with the Commission to adopt rules describing the BATS Connect service. --------------------------------------------------------------------------- The Exchange will charge a monthly connectivity fee to subscribers utilizing BATS Connect to route orders to other exchanges and broker- dealers that are connected to the Exchange's network. The amount of the connectivity fee varies based solely on the bandwidth selected by the subscriber. Specifically, the Exchange proposes to charge $350 for 1 Mb, $700 for 5 Mb, $950 for 10 Mb, $1,500 for 25 Mb, $2,500 for 50 Mb, and $3,500 for 100 Mb. BATS Connect would also allow subscribers to receive market data feeds from the exchanges connected to the Exchange's network. In such case, the subscriber would pay the Exchange a connectivity fee, which varies and is based solely on the amount of bandwidth required to transmit the selected data product to the subscriber. The proposed connectivity fees are set forth in the Exhibit 5 attached hereto and range from no charge to $11,500 based on the market data product the subscriber selects. The Exchange also proposes to adopt a discounted fee of $4,160 per month for subscribers who purchase connectivity to a bundle of select market data products. The following market data products would be included in the bundle: UQDF/UTDF/OMDF, CQS/CTS, Nasdaq TotalView, Nasdaq BX TotalView, Nasdaq PSX TotalView, NYSE ArcaBook, NYSE MKT OpenBook Ultra, and BBS/TTDS. Absent the discount, a subscriber purchasing connectivity through BATS Connect for each of these market data products would pay a total monthly fee of $5,200. As proposed, a subscriber who purchases connectivity to each of the above market data products would be charged a monthly fee of $4,160, which represents a 20% discount. The subscribers would pay any fees charged by the exchange providing the market data feed directly to that exchange. The Exchange notes that it will not charge a fee to subscribers utilizing BATS Connect to route orders to or receive market data products from the Exchange's affiliates, EDGX, BZX, and EDGA. BATS Connect provides subscribers a means to access exchanges and market centers on the Exchange's network. In all cases, BATS Connect subscribers would be continue to be liable for the necessary fees charged by that exchange or market center, including any required connectivity fees. Market participants who chose a method other than BATS Connect to connect to another exchange or market center would also pay any required connectivity fees directly to that exchange or market center. Likewise, BATS Connect subscribers would be liable for any connectivity fees charged by the Exchange's affiliate. Implementation Date The Exchange proposes to implement these amendments to its Fee Schedule immediately. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,\11\ in general, and furthers the objectives of Section 6(b)(4),\12\ in particular, as it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its Members and other persons using its facilities. The Exchange also notes that it operates in a highly- competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive. The proposed rule change reflects a competitive pricing structure designed to incent market participants to direct their order flow to the Exchange. The Exchange believes that the proposed rates are equitable and non-discriminatory in that they apply uniformly to all Members. The Exchange believes the fees and credits remain competitive with those charged by other venues and therefore continue to be reasonable and equitably allocated to Members. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78f. \12\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- Fee Code A The Exchange believes that its proposal to increase the pass through rebate for Members' orders that yield fee code A from $0.0004 to $0.0015 per share represents an equitable allocation of reasonable dues, fees, and other charges among Members and other persons using its facilities. Under Nasdaq's Select Symbol Program, Nasdaq provided BATS Trading a rebate of $0.0004 per share for orders executed in select symbols, which BATS Trading passed through to the Exchange and the Exchange passed through to its Members, not only for orders routed in select symbols but in all securities. In June 2015, Nasdaq will terminate its Select Symbol Program, thereby increasing the rebate it provides its customers, such as BATS Trading, in select symbols from a rebate of $0.0004 per share to its standard rebate of $0.0015 per share for orders that are routed to Nasdaq.\13\ Therefore, the Exchange believes that the proposed change in fee code A from a rebate of $0.0004 per share to a rebate of $0.0015 per share is equitable and reasonable because it accounts for the pricing changes on Nasdaq. In addition, the proposal allows the Exchange to continue to charge its Members a pass-through rate for orders that are routed to Nasdaq. The Exchange notes that routing through BATS Trading is voluntary. Lastly, the Exchange also believes that the proposed amendment is non- discriminatory because it applies uniformly to all Members. --------------------------------------------------------------------------- \13\ See supra note 6. --------------------------------------------------------------------------- BATS Connect The Exchange also believes that its proposal is consistent with Section 6(b)(4) of the Act,\14\ in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and other persons using its facilities. First, the Exchange will charge a connectivity fee to subscribers utilizing BATS Connect to route orders to other exchanges and market centers that are connected to the Exchange's network, which varies based solely on the amount of bandwidth selected by the subscriber. The amounts of the connectivity fees are also reasonable as compared to similar fees charged by other exchanges. For purposes of order routing, the Exchange proposes to charge $350 for 1 Mb, $700 for 5 Mb, $950 for 10 Mb, $1,500 for 25 Mb, $2,500 for 50 Mb, and $3,500 for 100 [[Page 34747]] Mb. The New York Stock Exchange, Inc. (``NYSE'') currently charges $300 for 1 Mb, $700 for 5 Mb, $900 for 10 Mb, $1,500 for 25 Mb, $2,000 for 50 Mb, and $2,600 for 100 Mb.\15\ The Exchange notes that, overall, the connectivity fee for routing of orders to other market centers proposed by the Exchange is similar to that charged by the NYSE. --------------------------------------------------------------------------- \14\ 15 U.S.C. 78f(b)(4). \15\ See NYSE's SFTI Americas Product and Service List available at http://www.nyxdata.com/docs/connectivity. --------------------------------------------------------------------------- Second, with regard to utilizing BATS Connect to receive market data products from other exchanges, the Exchange would only charge subscribers a connectivity fee, the amount of which is based solely on the amount of bandwidth required to transmit that specific data product to the subscribers. The amounts of the connectivity fees are also reasonable as compared to similar fees charged by other exchanges. For example, for market data connectivity, the Nasdaq Stock Market LLC (``Nasdaq'') charges $1,412 per month for CQS/CTS data feed, and the Exchange proposes to charge $1,000 per month connectivity for CQS/CTS data feed.\16\ The Exchange notes that, overall, the connectivity fee for receipt of other market centers' data feed proposed by the Exchange is similar to than that charged by Nasdaq. --------------------------------------------------------------------------- \16\ See Nasdaq Rule 7034 (setting forth Nasdaq's connectivity fees for receipt of third party market data products). --------------------------------------------------------------------------- The Exchange believes it is reasonable to offer such discounted pricing to subscribers who purchase connectivity to a bundle of market data products as it would enable them to reduce their overall connectivity costs for the receipt of market data. As stated above, BATS Connect is offered and purchased on a voluntary basis and subscribers can discontinue use at any time and for any reason, including due to an assessment of the reasonableness of fees charged. Moreover, the Exchange believes the proposed fees are reasonable and equitable because they continue to be based on the Exchange's costs to cover the amount of bandwidth required to provide connectivity to the select bundle of data feeds. The proposed fees will continue to allow the Exchange to recoup this cost, while providing subscribers with an alternative means to connect to the select bundle of data feeds at a discounted rate. The subscribers would pay any fees: (i) Charged by the exchange providing the market data feed directly to that exchange (ii) charged by a market center to which they routed an order and an execution occurred directly to that market center. The Exchange itself would not charge any additional fees.\17\ BATS Connect is offered and purchased on a voluntary basis, in that neither the Exchange nor subscribers are required by any rule or regulation to make this product available. Accordingly, subscribers can discontinue use at any time and for any reason, including due to an assessment of the reasonableness of fees charged. --------------------------------------------------------------------------- \17\ The Exchange's rules and fees would not address the fees or manner of operation of any destination to which the subscriber asked that an order be routed. --------------------------------------------------------------------------- Moreover, the Exchange believes the proposed fees are reasonable and equitable because they are based on the Exchange's costs to cover hardware, installation, testing and connection, as well as expenses involved in maintaining and managing the service. The proposed fees allow the Exchange to recoup these costs, while providing subscribers with an alternative means to connect to other exchange and market centers. The Exchange believes that the proposed fees are reasonable and equitable in that they reflect the costs and the benefit of providing alternative connectivity. The Exchange also believes it is equitable and reasonable to provide BATS Connect to subscribers for no charge to route orders to or receive market data products from the Exchange's affiliates. BATS Connect provides subscribers a means to access exchanges and market centers on the Exchange's network. In all cases, BATS Connect subscribers would be continue to be liable for the necessary fees charged by the Exchange, its affiliate, or another exchange or market center, including any required connectivity fees. As stated above, BATS Connect is offered and purchased on a voluntary basis, and subscribers and market participants may choose an alternative method to connect to the Exchange, its affiliates, or another exchange or market center connected to the Exchange's network. Such other services may also offer at no charge connectivity to certain exchanges or a group of exchanges.\18\ Therefore, the Exchange believes that the [sic] providing BATS Connect to subscribers at no charge to route orders to or receive market data products from the Exchange's affiliates is reasonable and equitable as they will continue to be liable to the Exchange or its affiliate for any required connectivity fees. --------------------------------------------------------------------------- \18\ See NYSE's SFTI Americas Product and Service List available at http://www.nyxdata.com/docs/connectivity (offering at no charge connectivity to the NYSE, NYSE MKT LLC, and NYSE Arca, Inc.). --------------------------------------------------------------------------- Lastly, the Exchange also believes that the proposed amendments to its fee schedule are non-discriminatory because they will apply uniformly to all subscribers. All subscribers that voluntarily select various service options will be charged the same amount for the same services. All subscribers have the option to select any connectivity option, and there is no differentiation among subscribers with regard to the fees charged for the service. Further, the benefits of selecting such services are the same for all subscribers, irrespective of whether their servers are located in the same facility as the Exchange. (B) Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes its proposed amendments to its Fee Schedule would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed change represents a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange's competitors. Additionally, Members may opt to disfavor the Exchange's pricing if they believe that alternatives offer them better value. Accordingly, the Exchange does not believe that the proposed change will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. Fee Code A The Exchange believes that its proposal to pass through a rebate of $0.0015 per share for Members' orders that yield fee code A would increase intermarket competition because it offers customers an alternative means to route to Nasdaq for a similar rate as entering orders in certain symbols on Nasdaq directly. The Exchange believes that its proposal would not burden intramarket competition because the proposed rate would apply uniformly to all Members. BATS Connect The Exchange does not believe the proposed fees for BATS Connect will result in any burden on competition. The proposed rule change is designed to provide subscribers with an alternative means to access other market centers on the Exchange's network if they choose or in the event of a market disruption where other alternative connection methods become unavailable. BATS Connect is not the exclusive method to connect to these market centers and subscribers may utilize alternative methods to connect to the product if they believe the Exchange's proposed pricing is unreasonable or otherwise. [[Page 34748]] Therefore, the Exchange does not believe the proposed rule change will have any effect on competition. (C) Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from Members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \19\ and paragraph (f) of Rule 19b-4 thereunder.\20\ 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. --------------------------------------------------------------------------- \19\ 15 U.S.C. 78s(b)(3)(A). \20\ 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-BYX-2015-28 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-2015-28. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing will also 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-2015-28 and should be submitted on or before July 8, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\21\ --------------------------------------------------------------------------- \21\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-14832 Filed 6-16-15; 8:45 am] BILLING CODE 8011-01-P
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Arca Rule 3.3(a)(2)(C), the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 (A) Self-Regulatory Organization’s
responsibilities, enumerated functions, notice is hereby given that on June 9, Statement of the Purpose of, and
and authority of the ROC are 2015, BATS Y-Exchange, Inc. (the Statutory Basis for, the Proposed Rule
substantially similar to those of other ‘‘Exchange’’ or ‘‘BYX’’) filed with the Change
exchanges.15 In addition, the Securities and Exchange Commission
1. Purpose
Commission believes that the proposed (‘‘Commission’’) the proposed rule
requirement that the members of the change as described in Items I, II and III The Exchange proposes to: (i) Increase
ROC consist of either Public Directors of below, which Items have been prepared the rebate from $0.0004 per share to
the Exchange or directors of NYSE by the Exchange.3 The Exchange has $0.0015 per share for orders that yield
Regulation, who meet the Exchange’s designated the proposed rule change as fee code A, which routes to Nasdaq and
Public Director requirements,16 and the one establishing or changing a member adds liquidity; and (ii) adopt fees for the
provisions relating to the removal of a due, fee, or other charge imposed by the use of a communication and routing
member of the ROC either for cause or Exchange under Section 19(b)(3)(A)(ii) service known as BATS Connect.
for failing to qualify under the of the Act 4 and Rule 19b–4(f)(2)
Fee Code A
Exchange’s Public Director thereunder,5 which renders the
requirement,17 should help ensure the proposed rule change effective upon In securities priced at or above $1.00,
continued independence of the filing with the Commission. The the Exchange currently provides a
members of the ROC. The proposal to Commission is publishing this notice to rebate of $0.0004 per share for Members’
establish a ROC should assist the solicit comments on the proposed rule orders that yield fee code A, applicable
Exchange in meeting its statutory change from interested persons. to orders routed to Nasdaq that add
obligations to comply, and to enforce liquidity. The Exchange proposes to
I. Self-Regulatory Organization’s amend its Fee Schedule to increase this
compliance by its members and persons
Statement of the Terms of Substance of rebate to $0.0015 per share for Members’
associated with its members, with the
the Proposed Rule Change orders that yield fee code A. The
Act, the rules and regulations
thereunder, and the rules of the The Exchange filed a proposal to proposed change represents a pass
Exchange. Accordingly, the Commission amend its fees and rebates applicable to through of the rate that BATS Trading,
finds that the proposed rule change is Members 6 of the Exchange pursuant to Inc. (‘‘BATS Trading’’), the Exchange’s
consistent with the Act. Rule 15.1(a) and (c) (‘‘Fee Schedule’’) to: affiliated routing broker-dealer, will be
(i) Increase the rebate from $0.0004 per rebated for routing orders to Nasdaq
IV. Conclusion share to $0.0015 per share for orders when it does not qualify for a volume
It is therefore ordered, pursuant to that yield fee code A, which routes to tiered rebate. The Exchange notes that
Section 19(b)(2) of the Act,18 that the the Nasdaq Stock Market LLC the proposed change is in response to
proposed rule change (SR–NYSEARCA– (‘‘Nasdaq’’) and adds liquidity; and (ii) Nasdaq’s June 2015 fee change where
2015–29) be, and it hereby is, approved. adopt fees for the use of a Nasdaq will no longer offer a rebate of
communication and routing service $0.0004 per share for orders in select
For the Commission, by the Division of known as BATS Connect. symbols (‘‘Nasdaq’s Select Symbol
Trading and Markets, pursuant to delegated The text of the proposed rule change
authority.19 Program’’) to its customers, such as
is available at the Exchange’s Web site BATS Trading, and such orders will be
Robert W. Errett, at www.batstrading.com, at the subject to the regular Nasdaq Pricing
Deputy Secretary. principal office of the Exchange, and at Schedule.7 Accordingly, when BATS
[FR Doc. 2015–14829 Filed 6–16–15; 8:45 am] the Commission’s Public Reference Trading routes to Nasdaq in any symbol,
BILLING CODE 8011–01–P Room. it will be rebated a standard rate of
II. Self-Regulatory Organization’s $0.0015 per share. BATS Trading will
Statement of the Purpose of, and pass through this rate on Nasdaq to the
SECURITIES AND EXCHANGE Exchange and the Exchange, in turn,
COMMISSION Statutory Basis for, the Proposed Rule
Change will pass through this rate to its
Members.
[Release No. 34–75159; File No. SR–BYX– In its filing with the Commission, the
2015–28] Exchange included statements BATS Connect
concerning the purpose of and basis for On May 26 [sic], 2015, the Exchange
Self-Regulatory Organizations; BATS the proposed rule change and discussed filed a proposed rule change with the
Y-Exchange, Inc.; Notice of Filing and any comments it received on the Commission to adopt a communication
Immediate Effectiveness of a Proposed proposed rule change. The text of these and routing service known as BATS
Rule Change Related to Fees for Use statements may be examined at the Connect.8 The Exchange now proposes
of BATS Y-Exchange, Inc. places specified in Item IV below. The to adopt fees related to the use of BATS
Exchange has prepared summaries, set Connect that are equal to the fees
June 11, 2015.
forth in Sections A, B, and C below, of charged for an identical service, also
Pursuant to Section 19(b)(1) of the the most significant parts of such called BATS Connect, offered by the
Securities Exchange Act of 1934 (the statements. Exchange’s affiliate, EDGX.9 BATS
asabaliauskas on DSK5VPTVN1PROD with NOTICES
15 See, e.g., Bylaws of NASDAQ Stock Market 1 15 U.S.C. 78s(b)(1). 7 See Nasdaq Equity Trader Alert #2015–70,
LLC, Article III, Section 5(c); Third Amended and 2 17 CFR 240.19b–4. Nasdaq Ends Access Fee Experiment, available at
Restated Bylaws of BATS Exchange, Inc., Article V, 3 The Commission notes that a previous version
http://www.nasdaqtrader.com/
Section 6(c); Amended and Restated Bylaws of of the proposal was filed as SR–BYX–2015–27. The TraderNews.aspx?id=ETA2015-70.
Miami International Securities Exchange, LLC, proposal was withdrawn on June 9, 2015. 8 See file no. SR–BYX–2015–26.
Article IV, Section 4.5(c). 4 15 U.S.C. 78s(b)(3)(A)(ii). 9 See the EDGX fee schedule available at http://
16 See supra note 7 and accompanying text. 5 17 CFR 240.19b–4(f)(2).
batstrading.com/support/fee_schedule/edgx/. See
17 See supra note 8 and accompanying text. 6 A Member is defined as ‘‘any registered broker also Securities Exchange Act Release No. 73780
18 15 U.S.C. 78s(b)(2).
or dealer that has been admitted to membership in (December 8, 2014), 79 FR 73942 (December 12,
19 17 CFR 200.30–3(a)(12). the Exchange.’’ See Exchange Rule 1.5(n). Continued
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Mb. The New York Stock Exchange, Inc. would not charge any additional fees.17 because they will apply uniformly to all
(‘‘NYSE’’) currently charges $300 for 1 BATS Connect is offered and purchased subscribers. All subscribers that
Mb, $700 for 5 Mb, $900 for 10 Mb, on a voluntary basis, in that neither the voluntarily select various service
$1,500 for 25 Mb, $2,000 for 50 Mb, and Exchange nor subscribers are required options will be charged the same
$2,600 for 100 Mb.15 The Exchange by any rule or regulation to make this amount for the same services. All
notes that, overall, the connectivity fee product available. Accordingly, subscribers have the option to select any
for routing of orders to other market subscribers can discontinue use at any connectivity option, and there is no
centers proposed by the Exchange is time and for any reason, including due differentiation among subscribers with
similar to that charged by the NYSE. to an assessment of the reasonableness regard to the fees charged for the
Second, with regard to utilizing BATS of fees charged. service. Further, the benefits of selecting
Connect to receive market data products Moreover, the Exchange believes the such services are the same for all
from other exchanges, the Exchange proposed fees are reasonable and subscribers, irrespective of whether
would only charge subscribers a equitable because they are based on the their servers are located in the same
connectivity fee, the amount of which is Exchange’s costs to cover hardware, facility as the Exchange.
based solely on the amount of installation, testing and connection, as
well as expenses involved in (B) Self-Regulatory Organization’s
bandwidth required to transmit that Statement on Burden on Competition
specific data product to the subscribers. maintaining and managing the service.
The amounts of the connectivity fees are The proposed fees allow the Exchange The Exchange believes its proposed
also reasonable as compared to similar to recoup these costs, while providing amendments to its Fee Schedule would
fees charged by other exchanges. For subscribers with an alternative means to not impose any burden on competition
example, for market data connectivity, connect to other exchange and market that is not necessary or appropriate in
the Nasdaq Stock Market LLC centers. The Exchange believes that the furtherance of the purposes of the Act.
(‘‘Nasdaq’’) charges $1,412 per month proposed fees are reasonable and The Exchange does not believe that the
for CQS/CTS data feed, and the equitable in that they reflect the costs proposed change represents a significant
Exchange proposes to charge $1,000 per and the benefit of providing alternative departure from previous pricing offered
month connectivity for CQS/CTS data connectivity. by the Exchange or pricing offered by
feed.16 The Exchange notes that, overall, The Exchange also believes it is the Exchange’s competitors.
the connectivity fee for receipt of other equitable and reasonable to provide Additionally, Members may opt to
market centers’ data feed proposed by BATS Connect to subscribers for no disfavor the Exchange’s pricing if they
the Exchange is similar to than that charge to route orders to or receive believe that alternatives offer them
charged by Nasdaq. market data products from the better value. Accordingly, the Exchange
The Exchange believes it is reasonable Exchange’s affiliates. BATS Connect does not believe that the proposed
to offer such discounted pricing to provides subscribers a means to access change will impair the ability of
subscribers who purchase connectivity exchanges and market centers on the Members or competing venues to
to a bundle of market data products as Exchange’s network. In all cases, BATS maintain their competitive standing in
it would enable them to reduce their Connect subscribers would be continue the financial markets.
overall connectivity costs for the receipt to be liable for the necessary fees Fee Code A
of market data. As stated above, BATS charged by the Exchange, its affiliate, or
another exchange or market center, The Exchange believes that its
Connect is offered and purchased on a proposal to pass through a rebate of
voluntary basis and subscribers can including any required connectivity
fees. As stated above, BATS Connect is $0.0015 per share for Members’ orders
discontinue use at any time and for any that yield fee code A would increase
reason, including due to an assessment offered and purchased on a voluntary
basis, and subscribers and market intermarket competition because it
of the reasonableness of fees charged. offers customers an alternative means to
Moreover, the Exchange believes the participants may choose an alternative
method to connect to the Exchange, its route to Nasdaq for a similar rate as
proposed fees are reasonable and entering orders in certain symbols on
equitable because they continue to be affiliates, or another exchange or market
center connected to the Exchange’s Nasdaq directly. The Exchange believes
based on the Exchange’s costs to cover that its proposal would not burden
the amount of bandwidth required to network. Such other services may also
offer at no charge connectivity to certain intramarket competition because the
provide connectivity to the select proposed rate would apply uniformly to
bundle of data feeds. The proposed fees exchanges or a group of exchanges.18
Therefore, the Exchange believes that all Members.
will continue to allow the Exchange to
recoup this cost, while providing the [sic] providing BATS Connect to BATS Connect
subscribers with an alternative means to subscribers at no charge to route orders
to or receive market data products from The Exchange does not believe the
connect to the select bundle of data proposed fees for BATS Connect will
feeds at a discounted rate. the Exchange’s affiliates is reasonable
and equitable as they will continue to be result in any burden on competition.
The subscribers would pay any fees: The proposed rule change is designed to
(i) Charged by the exchange providing liable to the Exchange or its affiliate for
any required connectivity fees. provide subscribers with an alternative
the market data feed directly to that means to access other market centers on
exchange (ii) charged by a market center Lastly, the Exchange also believes that
the proposed amendments to its fee the Exchange’s network if they choose
to which they routed an order and an or in the event of a market disruption
asabaliauskas on DSK5VPTVN1PROD with NOTICES
execution occurred directly to that schedule are non-discriminatory
where other alternative connection
market center. The Exchange itself 17 The Exchange’s rules and fees would not methods become unavailable. BATS
address the fees or manner of operation of any Connect is not the exclusive method to
15 See NYSE’s SFTI Americas Product and Service destination to which the subscriber asked that an connect to these market centers and
List available at http://www.nyxdata.com/docs/ order be routed. subscribers may utilize alternative
connectivity. 18 See NYSE’s SFTI Americas Product and Service
16 See Nasdaq Rule 7034 (setting forth Nasdaq’s List available at http://www.nyxdata.com/docs/
methods to connect to the product if
connectivity fees for receipt of third party market connectivity (offering at no charge connectivity to they believe the Exchange’s proposed
data products). the NYSE, NYSE MKT LLC, and NYSE Arca, Inc.). pricing is unreasonable or otherwise.
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![34748 Federal Register / Vol. 80, No. 116 / Wednesday, June 17, 2015 / Notices
Therefore, the Exchange does not change that are filed with the of the Act 4 and Rule 19b–4(f)(2)
believe the proposed rule change will Commission, and all written thereunder,5 which renders the
have any effect on competition. communications relating to the proposed rule change effective upon
proposed rule change between the filing with the Commission. The
(C) Self-Regulatory Organization’s
Commission and any person, other than Commission is publishing this notice to
Statement on Comments on the
those that may be withheld from the solicit comments on the proposed rule
Proposed Rule Change Received From
public in accordance with the change from interested persons.
Members, Participants or Others
provisions of 5 U.S.C. 552, will be
The Exchange has not solicited, and I. Self-Regulatory Organization’s
available for Web site viewing and
does not intend to solicit, comments on Statement of the Terms of Substance of
printing in the Commission’s Public
this proposed rule change. The the Proposed Rule Change
Reference Room, 100 F Street NE.,
Exchange has not received any Washington, DC 20549, on official The Exchange filed a proposal to
unsolicited written comments from business days between the hours of amend its fees and rebates applicable to
Members or other interested parties. 10:00 a.m. and 3:00 p.m. Copies of the Members 6 of the Exchange pursuant to
filing will also be available for Rule 15.1(a) and (c) (‘‘Fee Schedule’’) to:
III. Date of Effectiveness of the
inspection and copying at the principal (i) Increase the rebate from $0.0004 per
Proposed Rule Change and Timing for
office of the Exchange. All comments share to $0.0015 per share for orders
Commission Action
received will be posted without change; that yield fee code A, which routes to
The foregoing rule change has become the Commission does not edit personal the Nasdaq Stock Market LLC
effective pursuant to Section 19(b)(3)(A) identifying information from (‘‘Nasdaq’’) and adds liquidity; and (ii)
of the Act 19 and paragraph (f) of Rule submissions. You should submit only adopt fees for the use of a
19b–4 thereunder.20 At any time within information that you wish to make communication and routing service
60 days of the filing of the proposed rule available publicly. All submissions known as BATS Connect.
change, the Commission summarily may should refer to File Number SR–BYX– The text of the proposed rule change
temporarily suspend such rule change if 2015–28 and should be submitted on or is available at the Exchange’s Web site
it appears to the Commission that such before July 8, 2015. at www.batstrading.com, at the
action is necessary or appropriate in the principal office of the Exchange, and at
For the Commission, by the Division of
public interest, for the protection of the Commission’s Public Reference
Trading and Markets, pursuant to delegated
investors, or otherwise in furtherance of authority.21 Room.
the purposes of the Act. Robert W. Errett, II. Self-Regulatory Organization’s
IV. Solicitation of Comments Deputy Secretary. Statement of the Purpose of, and
Interested persons are invited to [FR Doc. 2015–14832 Filed 6–16–15; 8:45 am] Statutory Basis for, the Proposed Rule
submit written data, views, and BILLING CODE 8011–01–P Change
arguments concerning the foregoing, In its filing with the Commission, the
including whether the proposed rule Exchange included statements
change is consistent with the Act. SECURITIES AND EXCHANGE concerning the purpose of and basis for
Comments may be submitted by any of COMMISSION the proposed rule change and discussed
the following methods: [Release No. 34–75158; File No. SR–BATS– any comments it received on the
2015–44] proposed rule change. The text of these
Electronic Comments
statements may be examined at the
• Use the Commission’s Internet Self-Regulatory Organizations; BATS places specified in Item IV below. The
comment form (http://www.sec.gov/ Exchange, Inc.; Notice of Filing and Exchange has prepared summaries, set
rules/sro.shtml); or Immediate Effectiveness of a Proposed forth in Sections A, B, and C below, of
• Send an email to rule-comments@ Rule Change Related to Fees for Use the most significant parts of such
sec.gov. Please include File Number SR– of BATS Exchange, Inc. statements.
BYX–2015–28 on the subject line.
June 11, 2015. (A) Self-Regulatory Organization’s
Paper Comments Pursuant to Section 19(b)(1) of the Statement of the Purpose of, and
• Send paper comments in triplicate Securities Exchange Act of 1934 (the Statutory Basis for, the Proposed Rule
to Brent J. Fields, Secretary, Securities ‘‘Act’’),1 and Rule 19b–4 thereunder,2 Change
and Exchange Commission, 100 F Street notice is hereby given that on June 9,
2015, BATS Exchange, Inc. (the 1. Purpose
NE., Washington, DC 20549–1090.
All submissions should refer to File ‘‘Exchange’’ or ‘‘BATS’’) filed with the The Exchange proposes to: (i) Increase
Number SR–BYX–2015–28. This file Securities and Exchange Commission the rebate from $0.0004 per share to
number should be included on the (‘‘Commission’’) the proposed rule $0.0015 per share for orders that yield
subject line if email is used. To help the change as described in Items I, II and III fee code A, which routes to Nasdaq and
Commission process and review your below, which Items have been prepared adds liquidity; and (ii) adopt fees for the
comments more efficiently, please use by the Exchange.3 The Exchange has use of a communication and routing
only one method. The Commission will designated the proposed rule change as service known as BATS Connect.
one establishing or changing a member
asabaliauskas on DSK5VPTVN1PROD with NOTICES
post all comments on the Commission’s Fee Code A
Internet Web site (http://www.sec.gov/ due, fee, or other charge imposed by the
Exchange under Section 19(b)(3)(A)(ii) In securities priced at or above $1.00,
rules/sro.shtml). Copies of the
the Exchange currently provides a
submission, all subsequent 21 17 CFR 200.30–3(a)(12).
amendments, all written statements 1 15 U.S.C. 78s(b)(1). 4 15U.S.C. 78s(b)(3)(A)(ii).
with respect to the proposed rule 2 17 CFR 240.19b–4. 5 17CFR 240.19b–4(f)(2).
3 The Commission notes that a previous version 6 A Member is defined as ‘‘any registered broker
19 15 U.S.C. 78s(b)(3)(A). of the proposal was filed as SR–BATS–2015–41. or dealer that has been admitted to membership in
20 17 CFR 240.19b–4(f). The proposal was withdrawn on June 9, 2015. the Exchange.’’ See Exchange Rule 1.5(n).
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Document Created: 2015-12-15 14:23:34
Document Modified: 2015-12-15 14:23:34
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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