80_FR_34864 80 FR 34748 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc.

80 FR 34748 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 116 (June 17, 2015)

Page Range34748-34751
FR Document2015-14831

Federal Register, Volume 80 Issue 116 (Wednesday, June 17, 2015) 
[Federal Register Volume 80, Number 116 (Wednesday, June 17, 2015)]
[Notices]
[Pages 34748-34751]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-14831]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75158; File No. SR-BATS-2015-44]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Fees for Use of BATS 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 Exchange, Inc. (the ``Exchange'' or 
``BATS'') 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.
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    \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-BATS-2015-41. The proposal was withdrawn on June 9, 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).
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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.
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    \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).
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    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

[[Page 34749]]

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.
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    \7\ See Nasdaq Equity Trader Alert #2015-70, Nasdaq Ends Access 
Fee Experiment, available at http://www.nasdaqtrader.com/TraderNews.aspx?id=ETA2015-70.
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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 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.
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    \8\ See file no. SR-BATS-2015-40.
    \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 Y-Exchange, Inc. (``BYX''). 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.
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    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, EDGA, and BYX. 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.
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    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(4).
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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

[[Page 34750]]

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.
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    \13\ See supra note 6.
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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 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.
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    \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.
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    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 that charged by Nasdaq.
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    \16\ See Nasdaq Rule 7034 (setting forth Nasdaq's connectivity 
fees for receipt of third party market data products).
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    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.
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    \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.
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    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.
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    \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.).
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    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.

[[Page 34751]]

(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. 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.
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f).
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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-BATS-2015-44 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-BATS-2015-44. 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-BATS-2015-44 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\
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    \21\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-14831 Filed 6-16-15; 8:45 am]
 BILLING CODE 8011-01-P

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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Federal Register / Vol. 80, No. 116 / Wednesday, June 17, 2015 / Notices 34749 rebate of $0.0004 per share for Members’ other method of connectivity available subscribers a means to access exchanges orders that yield fee code A, applicable to subscribers. The servers of the and market centers on the Exchange’s to orders routed to Nasdaq that add subscriber need not be located in the network. In all cases, BATS Connect liquidity. The Exchange proposes to same facilities as the Exchange in order subscribers would be continue to be amend its Fee Schedule to increase this to subscribe to BATS Connect. liable for the necessary fees charged by rebate to $0.0015 per share for Members’ Subscribers may also seek to utilize that exchange or market center, orders that yield fee code A. The BATS Connect in the event of a market including any required connectivity proposed change represents a pass disruption where other alternative fees. Market participants who chose a through of the rate that BATS Trading, connection methods become method other than BATS Connect to Inc. (‘‘BATS Trading’’), the Exchange’s unavailable. connect to another exchange or market affiliated routing broker-dealer, will be The Exchange will charge a monthly center would also pay any required rebated for routing orders to Nasdaq connectivity fee to subscribers utilizing connectivity fees directly to that when it does not qualify for a volume BATS Connect to route orders to other exchange or market center. Likewise, tiered rebate. The Exchange notes that exchanges and broker-dealers that are BATS Connect subscribers would be the proposed change is in response to connected to the Exchange’s network. liable for any connectivity fees charged Nasdaq’s June 2015 fee change where The amount of the connectivity fee by the Exchange’s affiliate. Nasdaq will no longer offer a rebate of varies based solely on the bandwidth $0.0004 per share for orders in select Implementation Date selected by the subscriber. Specifically, symbols (‘‘Nasdaq’s Select Symbol the Exchange proposes to charge $350 The Exchange proposes to implement Program’’) to its customers, such as for 1 Mb, $700 for 5 Mb, $950 for 10 Mb, these amendments to its Fee Schedule BATS Trading, and such orders will be $1,500 for 25 Mb, $2,500 for 50 Mb, and immediately. subject to the regular Nasdaq Pricing $3,500 for 100 Mb. 2. Statutory Basis Schedule.7 Accordingly, when BATS BATS Connect would also allow Trading routes to Nasdaq in any symbol, subscribers to receive market data feeds The Exchange believes that the it will be rebated a standard rate of from the exchanges connected to the proposed rule change is consistent with $0.0015 per share. BATS Trading will Exchange’s network. In such case, the the objectives of Section 6 of the Act,11 pass through this rate on Nasdaq to the subscriber would pay the Exchange a in general, and furthers the objectives of Exchange and the Exchange, in turn, connectivity fee, which varies and is Section 6(b)(4),12 in particular, as it is will pass through this rate to its based solely on the amount of designed to provide for the equitable Members. bandwidth required to transmit the allocation of reasonable dues, fees and selected data product to the subscriber. other charges among its Members and BATS Connect other persons using its facilities. The The proposed connectivity fees are set On May 26 [sic], 2015, the Exchange forth in the Exhibit 5 attached hereto Exchange also notes that it operates in filed a proposed rule change with the and range from no charge to $11,500 a highly-competitive market in which Commission to adopt a communication based on the market data product the market participants can readily direct and routing service known as BATS subscriber selects. order flow to competing venues if they Connect.8 The Exchange now proposes The Exchange also proposes to adopt deem fee levels at a particular venue to to adopt fees related to the use of BATS a discounted fee of $4,160 per month for be excessive. The proposed rule change Connect that are equal to the fees subscribers who purchase connectivity reflects a competitive pricing structure charged for an identical service, also to a bundle of select market data designed to incent market participants called BATS Connect, offered by the products. The following market data to direct their order flow to the Exchange’s affiliate, EDGX.9 BATS products would be included in the Exchange. The Exchange believes that Connect is offered by the Exchange on bundle: UQDF/UTDF/OMDF, CQS/CTS, the proposed rates are equitable and a voluntary basis in a capacity similar Nasdaq TotalView, Nasdaq BX non-discriminatory in that they apply to a vendor. In sum, BATS Connect is TotalView, Nasdaq PSX TotalView, uniformly to all Members. The a communication service that provides NYSE ArcaBook, NYSE MKT OpenBook Exchange believes the fees and credits subscribers an additional means to Ultra, and BBS/TTDS. Absent the remain competitive with those charged receive market data from and route discount, a subscriber purchasing by other venues and therefore continue orders to any destination connected to connectivity through BATS Connect for to be reasonable and equitably allocated the Exchange’s network. BATS Connect each of these market data products to Members. does not provide any advantage to would pay a total monthly fee of $5,200. subscribers for connecting to the Fee Code A As proposed, a subscriber who Exchange’s affiliates 10 as compared to purchases connectivity to each of the The Exchange believes that its above market data products would be proposal to increase the pass through 7 See Nasdaq Equity Trader Alert #2015–70, charged a monthly fee of $4,160, which rebate for Members’ orders that yield fee Nasdaq Ends Access Fee Experiment, available at code A from $0.0004 to $0.0015 per http://www.nasdaqtrader.com/ represents a 20% discount. The TraderNews.aspx?id=ETA2015-70. subscribers would pay any fees charged share represents an equitable allocation 8 See file no. SR–BATS–2015–40. by the exchange providing the market of reasonable dues, fees, and other 9 See the EDGX fee schedule available at http:// data feed directly to that exchange. charges among Members and other batstrading.com/support/fee_schedule/edgx/. See The Exchange notes that it will not persons using its facilities. Under also Securities Exchange Act Release No. 73780 asabaliauskas on DSK5VPTVN1PROD with NOTICES charge a fee to subscribers utilizing Nasdaq’s Select Symbol Program, (December 8, 2014), 79 FR 73942 (December 12, 2014) (SR–EDGX–2014–28) and file no. SR–EDGX– BATS Connect to route orders to or Nasdaq provided BATS Trading a rebate 2015–27. receive market data products from the of $0.0004 per share for orders executed 10 The Exchange’s affiliated exchanges are EDGX, Exchange’s affiliates, EDGX, EDGA, and in select symbols, which BATS Trading EDGA Exchange, Inc. (‘‘EDGA’’), and BATS Y- passed through to the Exchange and the Exchange, Inc. (‘‘BYX’’). The Exchange understands BYX. BATS Connect provides that its affiliated exchanges intend to file identical Exchange passed through to its proposed rule changes to adopt the fees for the have also filed proposed rule changes with the 11 15 U.S.C. 78f. BATS Connect service with the Commission. The Commission to adopt rules describing the BATS Exchange also notes that its affiliated exchanges Connect service. 12 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 18:47 Jun 16, 2015 Jkt 235001 PO 00000 Frm 00144 Fmt 4703 Sfmt 4703 E:\FR\FM\17JNN1.SGM 17JNN1

34750 Federal Register / Vol. 80, No. 116 / Wednesday, June 17, 2015 / Notices Members, not only for orders routed in bandwidth required to transmit that well as expenses involved in select symbols but in all securities. In specific data product to the subscribers. maintaining and managing the service. June 2015, Nasdaq will terminate its The amounts of the connectivity fees are The proposed fees allow the Exchange Select Symbol Program, thereby also reasonable as compared to similar to recoup these costs, while providing increasing the rebate it provides its fees charged by other exchanges. For subscribers with an alternative means to customers, such as BATS Trading, in example, for market data connectivity, connect to other exchange and market select symbols from a rebate of $0.0004 the Nasdaq Stock Market LLC centers. The Exchange believes that the per share to its standard rebate of (‘‘Nasdaq’’) charges $1,412 per month proposed fees are reasonable and $0.0015 per share for orders that are for CQS/CTS data feed, and the equitable in that they reflect the costs routed to Nasdaq.13 Therefore, the Exchange proposes to charge $1,000 per and the benefit of providing alternative Exchange believes that the proposed month connectivity for CQS/CTS data connectivity. change in fee code A from a rebate of feed.16 The Exchange notes that, overall, $0.0004 per share to a rebate of $0.0015 the connectivity fee for receipt of other The Exchange also believes it is per share is equitable and reasonable market centers’ data feed proposed by equitable and reasonable to provide because it accounts for the pricing the Exchange is similar to that charged BATS Connect to subscribers for no changes on Nasdaq. In addition, the by Nasdaq. charge to route orders to or receive proposal allows the Exchange to The Exchange believes it is reasonable market data products from the continue to charge its Members a pass- to offer such discounted pricing to Exchange’s affiliates. BATS Connect through rate for orders that are routed to subscribers who purchase connectivity provides subscribers a means to access Nasdaq. The Exchange notes that to a bundle of market data products as exchanges and market centers on the routing through BATS Trading is it would enable them to reduce their Exchange’s network. In all cases, BATS voluntary. Lastly, the Exchange also overall connectivity costs for the receipt Connect subscribers would be continue believes that the proposed amendment of market data. As stated above, BATS to be liable for the necessary fees is non-discriminatory because it applies Connect is offered and purchased on a charged by the Exchange, its affiliate, or uniformly to all Members. voluntary basis and subscribers can another exchange or market center, discontinue use at any time and for any BATS Connect reason, including due to an assessment including any required connectivity of the reasonableness of fees charged. fees. As stated above, BATS Connect is The Exchange also believes that its offered and purchased on a voluntary proposal is consistent with Section Moreover, the Exchange believes the proposed fees are reasonable and basis, and subscribers and market 6(b)(4) of the Act,14 in that it provides equitable because they continue to be participants may choose an alternative for the equitable allocation of reasonable based on the Exchange’s costs to cover method to connect to the Exchange, its dues, fees and other charges among members and other persons using its the amount of bandwidth required to affiliates, or another exchange or market facilities. First, the Exchange will charge provide connectivity to the select center connected to the Exchange’s a connectivity fee to subscribers bundle of data feeds. The proposed fees network. Such other services may also utilizing BATS Connect to route orders will continue to allow the Exchange to offer at no charge connectivity to certain to other exchanges and market centers recoup this cost, while providing exchanges or a group of exchanges.18 that are connected to the Exchange’s subscribers with an alternative means to Therefore, the Exchange believes that network, which varies based solely on connect to the select bundle of data the [sic] providing BATS Connect to the amount of bandwidth selected by feeds at a discounted rate. subscribers at no charge to route orders the subscriber. The amounts of the The subscribers would pay any fees: to or receive market data products from connectivity fees are also reasonable as (i) charged by the exchange providing the Exchange’s affiliates is reasonable the market data feed directly to that and equitable as they will continue to be compared to similar fees charged by exchange (ii) charged by a market center other exchanges. For purposes of order liable to the Exchange or its affiliate for to which they routed an order and an routing, the Exchange proposes to any required connectivity fees. execution occurred directly to that charge $350 for 1 Mb, $700 for 5 Mb, Lastly, the Exchange also believes that market center. The Exchange itself $950 for 10 Mb, $1,500 for 25 Mb, the proposed amendments to its fee would not charge any additional fees.17 $2,500 for 50 Mb, and $3,500 for 100 BATS Connect is offered and purchased schedule are non-discriminatory Mb. The New York Stock Exchange, Inc. on a voluntary basis, in that neither the because they will apply uniformly to all (‘‘NYSE’’) currently charges $300 for 1 Exchange nor subscribers are required subscribers. All subscribers that Mb, $700 for 5 Mb, $900 for 10 Mb, by any rule or regulation to make this voluntarily select various service $1,500 for 25 Mb, $2,000 for 50 Mb, and product available. Accordingly, options will be charged the same $2,600 for 100 Mb.15 The Exchange subscribers can discontinue use at any amount for the same services. All notes that, overall, the connectivity fee time and for any reason, including due subscribers have the option to select any for routing of orders to other market to an assessment of the reasonableness connectivity option, and there is no centers proposed by the Exchange is of fees charged. differentiation among subscribers with similar to that charged by the NYSE. Moreover, the Exchange believes the Second, with regard to utilizing BATS regard to the fees charged for the proposed fees are reasonable and service. Further, the benefits of selecting Connect to receive market data products equitable because they are based on the from other exchanges, the Exchange such services are the same for all asabaliauskas on DSK5VPTVN1PROD with NOTICES Exchange’s costs to cover hardware, would only charge subscribers a subscribers, irrespective of whether installation, testing and connection, as connectivity fee, the amount of which is their servers are located in the same based solely on the amount of 16 See Nasdaq Rule 7034 (setting forth Nasdaq’s facility as the Exchange. connectivity fees for receipt of third party market 13 See supra note 6. data products). 14 15 18 See NYSE’s SFTI Americas Product and Service U.S.C. 78f(b)(4). 17 The Exchange’s rules and fees would not 15 See NYSE’s SFTI Americas Product and Service address the fees or manner of operation of any List available at http://www.nyxdata.com/docs/ List available at http://www.nyxdata.com/docs/ destination to which the subscriber asked that an connectivity (offering at no charge connectivity to connectivity. order be routed. the NYSE, NYSE MKT LLC, and NYSE Arca, Inc.). 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Federal Register / Vol. 80, No. 116 / Wednesday, June 17, 2015 / Notices 34751 (B) Self-Regulatory Organization’s III. Date of Effectiveness of the inspection and copying at the principal Statement on Burden on Competition Proposed Rule Change and Timing for office of the Exchange. All comments Commission Action received will be posted without change; The Exchange believes its proposed amendments to its Fee Schedule would The foregoing rule change has become the Commission does not edit personal not impose any burden on competition effective pursuant to Section 19(b)(3)(A) identifying information from that is not necessary or appropriate in of the Act 19 and paragraph (f) of Rule submissions. You should submit only furtherance of the purposes of the Act. 19b–4 thereunder.20 At any time within information that you wish to make The Exchange does not believe that the 60 days of the filing of the proposed rule available publicly. All submissions proposed change represents a significant change, the Commission summarily may should refer to File Number SR–BATS– departure from previous pricing offered temporarily suspend such rule change if 2015–44 and should be submitted on or by the Exchange or pricing offered by it appears to the Commission that such before July 8, 2015. the Exchange’s competitors. action is necessary or appropriate in the For the Commission, by the Division of Additionally, Members may opt to public interest, for the protection of Trading and Markets, pursuant to delegated disfavor the Exchange’s pricing if they investors, or otherwise in furtherance of authority.21 believe that alternatives offer them the purposes of the Act. Robert W. Errett, better value. Accordingly, the Exchange IV. Solicitation of Comments Deputy Secretary. does not believe that the proposed [FR Doc. 2015–14831 Filed 6–16–15; 8:45 am] change will impair the ability of Interested persons are invited to BILLING CODE 8011–01–P Members or competing venues to submit written data, views, and arguments concerning the foregoing, maintain their competitive standing in including whether the proposed rule SECURITIES AND EXCHANGE the financial markets. change is consistent with the Act. COMMISSION Fee Code A Comments may be submitted by any of The Exchange believes that its the following methods: [Release No. 34–75148; File No. SR– proposal to pass through a rebate of Electronic Comments NYSEMKT–2015–27] $0.0015 per share for Members’ orders • Use the Commission’s Internet that yield fee code A would increase comment form (http://www.sec.gov/ Self-Regulatory Organizations; NYSE intermarket competition because it rules/sro.shtml); or MKT LLC; Order Approving Proposed offers customers an alternative means to • Send an email to rule-comments@ Rule Change To Amend the Sixth route to Nasdaq for a similar rate as sec.gov. Please include File Number SR– Amended and Restated Operating entering orders in certain symbols on BATS–2015–44 on the subject line. Agreement of the Exchange Nasdaq directly. The Exchange believes Paper Comments June 11, 2015. that its proposal would not burden intramarket competition because the • Send paper comments in triplicate I. Introduction proposed rate would apply uniformly to to Brent J. Fields, Secretary, Securities On April 17, 2015, NYSE MKT LLC all Members. and Exchange Commission, 100 F Street (‘‘Exchange’’ or ‘‘NYSE MKT’’) filed NE., Washington, DC 20549–1090. with the Securities and Exchange BATS Connect All submissions should refer to File Commission (‘‘Commission’’), pursuant The Exchange does not believe the Number SR–BATS–2015–44. This file to Section 19(b)(1) 1 of the Securities proposed fees for BATS Connect will number should be included on the Exchange Act of 1934 (‘‘Act’’),2 and result in any burden on competition. subject line if email is used. To help the Rule 19b–4 thereunder,3 a proposed rule The proposed rule change is designed to Commission process and review your change to amend the Sixth Amended provide subscribers with an alternative comments more efficiently, please use and Restated Operating Agreement means to access other market centers on only one method. The Commission will (‘‘Operating Agreement’’) of the the Exchange’s network if they choose post all comments on the Commission’s Exchange. The proposed rule change or in the event of a market disruption Internet Web site (http://www.sec.gov/ was published for comment in the where other alternative connection rules/sro.shtml). Copies of the Federal Register on May 4, 2015.4 The methods become unavailable. BATS submission, all subsequent Commission received no comment Connect is not the exclusive method to amendments, all written statements letters on the proposed rule change. connect to these market centers and with respect to the proposed rule This order approves the proposed rule subscribers may utilize alternative change that are filed with the change. methods to connect to the product if Commission, and all written they believe the Exchange’s proposed communications relating to the II. Description of the Proposal pricing is unreasonable or otherwise. proposed rule change between the NYSE MKT proposes to amend the Therefore, the Exchange does not Commission and any person, other than Exchange’s Operating Agreement to (1) believe the proposed rule change will those that may be withheld from the establish a Regulatory Oversight have any effect on competition. public in accordance with the Committee (‘‘ROC’’), and (2) remove the (C) Self-Regulatory Organization’s provisions of 5 U.S.C. 552, will be requirement that the independent Statement on Comments on the available for Web site viewing and directors who make up the majority of asabaliauskas on DSK5VPTVN1PROD with NOTICES Proposed Rule Change Received From printing in the Commission’s Public the board of directors of the Exchange Members, Participants or Others Reference Room, 100 F Street NE., (‘‘Board’’) also be directors of Washington, DC 20549, on official The Exchange has not solicited, and business days between the hours of 21 17 CFR 200.30–3(a)(12). does not intend to solicit, comments on 10:00 a.m. and 3:00 p.m. Copies of the 1 15 U.S.C. 78s(b)(1). this proposed rule change. The filing will also be available for 2 15 U.S.C. 78a. Exchange has not received any 3 17 CFR 240.19b–4. unsolicited written comments from 19 15 U.S.C. 78s(b)(3)(A). 4 See Securities Exchange Act Release No. 74825 Members or other interested parties. 20 17 CFR 240.19b–4(f). (April 28, 2015), 80 FR 25341 (‘‘Notice’’). VerDate Sep<11>2014 18:47 Jun 16, 2015 Jkt 235001 PO 00000 Frm 00146 Fmt 4703 Sfmt 4703 E:\FR\FM\17JNN1.SGM 17JNN1


Document Created: 2015-12-15 14:23:13
Document Modified: 2015-12-15 14:23:13
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 34748 
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