80_FR_53524 80 FR 53353 - Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees a Market Data Product Known as BYX Book Viewer

80 FR 53353 - Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees a Market Data Product Known as BYX Book Viewer

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 171 (September 3, 2015)

Page Range53353-53358
FR Document2015-21871

Federal Register, Volume 80 Issue 171 (Thursday, September 3, 2015)
[Federal Register Volume 80, Number 171 (Thursday, September 3, 2015)]
[Notices]
[Pages 53353-53358]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-21871]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75786; File No. SR-BYX-2015-36]


Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Fees a Market Data Product Known as BYX Book Viewer

August 28, 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 August 24, 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. The 
Exchange has designated the proposed rule change as one establishing or 
changing a member due, fee, or other charge imposed by the Exchange 
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposed rule change effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 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 the Market Data section of 
its fee schedule to adopt fees for a market data product called BYX 
Book Viewer.
    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

[[Page 53354]]

the most significant parts of such statements.

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Market Data section of its fee 
schedule to adopt fees for a market data product called BYX Book 
Viewer. BYX Book Viewer is a data feed that disseminates, on a real-
time basis, the aggregated two-side quotations for up to five (5) price 
levels for all displayed orders for securities traded on the Exchange 
and for which the Exchanges reports quotes under the Consolidated Tape 
Association (``CTA'') Plan or the Nasdaq/UTP Plan. BYX Book Viewer also 
contains the last ten (10) trades including time of trade, price and 
share quantity.\5\ BYX Book Viewer is currently available via 
www.batstrading.com without charge.
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    \5\ See Securities Exchange Act Release No. 75717 (August 18, 
2015) (SR-BYX-2015-35) (Notice of Filing and Immediate Effectiveness 
of a Proposed Rule Change to Amend Rule 11.22 to Describe the Market 
Data Product BYX Book Viewer).
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    The Exchange now proposes to amend its fee schedule to incorporate 
fees for distribution of BYX Book Viewer to subscribers.\6\ BYX Book 
Viewer will remain available via www.batstrading.com for viewing 
without charge. The proposed fees include the following, each of which 
are described in detail below: (i) Distribution Fees for both Internal 
and External Distributors; \7\ (ii) Usage Fees for both Professional 
\8\ and Non-Professional \9\ Users; \10\ (iii) an Enterprise Fee; \11\ 
and (iv) a Digital Media Enterprise Fee.
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    \6\ The Exchange notes that its affiliated exchanges, EDGX 
Exchange, Inc. (``EDGX''), EDGA Exchange, Inc. (``EDGA'') and BATS 
Exchange, Inc. (``BZX'', together with the Exchange, EDGX and EDGA, 
the ``BATS Exchanges''), also intent to file proposed rule changes 
with Commission to adopt similar fees for their respective Book 
Viewer market data product.
    \7\ A ``Distributor'' is defined as ``any entity that receives 
the Exchange Market Data product directly from the Exchange or 
indirectly through another entity and then distributes it internally 
or externally to a third party.'' See the Exchange Fee Schedule 
available at http://batstrading.com/support/fee_schedule/byx/. An 
``Internal Distributor'' is defined as ``a Distributor that receives 
the Exchange Market Data product and then distributes that data to 
one or more Users within the Distributor's own entity.'' Id. An 
``External Distributor'' is defined as ``a Distributor that receives 
the Exchange Market Data product and then distributes that data to a 
third party or one or more Users outside the Distributor's own 
entity.'' Id.
    \8\ A ``Professional User'' is defined as ``any User other than 
a Non-Professional User.'' See the Exchange Fee Schedule available 
at http://batstrading.com/support/fee_schedule/byx/.
    \9\ A ``Non-Professional User'' is defined as ``a natural person 
who is not: (i) Registered or qualified in any capacity with the 
Commission, the Commodity Futures Trading Commission, any state 
securities agency, any securities exchange or association, or any 
commodities or futures contract market or association; (ii) engaged 
as an ``investment adviser'' as that term is defined in Section 
[202(a)(11)] of the Investment Advisers Act of 1940 (whether or not 
registered or qualified under that Act); or (iii) employed by a bank 
or other organization exempt from registration under federal or 
state securities laws to perform functions that would require 
registration or qualification if such functions were performed for 
an organization not so exempt.'' Id.
    \10\ The Exchange notes that User fees as well as the 
distinctions based on professional and non-professional users have 
been previously filed with or approved by the Commission by the BATS 
Exchanges and the Nasdaq Stock Market LLC (``Nasdaq''). See 
Securities Exchange Act Release No. 59582 (March 16, 2009), 74 FR 
12423 (March 24, 2009) (Order approving SR-Nasdaq-2008-102). See 
also See Securities Exchange Act Release Nos. 74285 (February 18, 
2015), 80 FR 9828 (February 24, 2015) (SR-BATS-2015-11); 74283 
(February 18, 2015), 80 FR 9809 (February 24, 2015) (SR-EDGA-2015-
09); 74282 (February 17, 2015), 80 FR 9487 (February 23, 2015) (SR-
EDGX-2015-09); and 74284 (February 18, 2015), 80 FR 9792 (February 
24, 2015) (SR-BYX-2015-09) (``Initial BATS One Feed Fee Filings'').
    \11\ The Exchange notes that Enterprise fees have been 
previously filed with or approved by the Commission by the Exchange, 
EDGA, EDGX, BZX, Nasdaq, NYSE, and the CTA/CQ Plans. See Nasdaq Rule 
7047. Securities Exchange Act Release Nos. 71507 (February 7, 2014), 
79 FR 8763 (February 13, 2014) (SR-NASDAQ-2014-011); 70211 (August 
15, 2013), 78 FR 51781 (August 21, 2013) (SR-NYSE-2013-58); and 
70010 (July 19, 2013) (File No. SR-CTA/CQ-2013-04). See also the 
Initial BATS One Feed Fee Filings, supra note 10.
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    Distribution Fees. As proposed, each Internal Distributor that 
receives BYX Book Viewer shall pay a fee of $500 per month. The 
Exchange does not propose to charge any User fees for BYX Book Viewer 
where the data is received and subsequently internally distributed to 
Professional or Non-Professional Users. In addition, the Exchange 
proposes to charge External Distributors that receives BYX Book Viewer 
a fee of $2,500 per month.
    User Fees. The Exchange proposes to charge those who receive BYX 
Book Viewer from External Distributors different fees for both their 
Professional Users and Non-Professional Users. The Exchange will assess 
a monthly fee for Professional Users of $3.00 per User. Non-
Professional Users will be assessed a monthly fee of $0.10 per User. 
The Exchange does not propose to charge per User fees to Internal 
Distributors.
    External Distributors that receives BYX Book Viewer would be 
required to count every Professional User and Non-Professional User to 
which they provide BYX Book Viewer, the requirements for which are 
identical to that currently in place for the BATS One Feed.\12\ Thus, 
the External Distributor's count will include every person and device 
that accesses the data regardless of the purpose for which the 
individual or device uses the data. External Distributors must report 
all Professional and Non-Professional Users in accordance with the 
following:
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    \12\ See the Initial BATS One Feed Fee Filings, supra note 10.
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     In connection with an External Distributor's distribution 
of BYX Book Viewer, the Distributor should count as one User each 
unique User that the Distributor has entitled to have access to BYX 
Book Viewer. However, where a device is dedicated specifically to a 
single individual, the Distributor should count only the individual and 
need not count the device.
     The External Distributor should identify and report each 
unique User. If a User uses the same unique method to gain access to 
BYX Book Viewer, the Distributor should count that as one User. 
However, if a unique User uses multiple methods to gain access to BYX 
Book Viewer (e.g., a single User has multiple passwords and user 
identifications), the External Distributor should report all of those 
methods as an individual User.
     External Distributors should report each unique individual 
person who receives access through multiple devices as one User so long 
as each device is dedicated specifically to that individual.
     If an External Distributor entitles one or more 
individuals to use the same device, the External Distributor should 
include only the individuals, and not the device, in the count.
    Each External Distributor will receive a credit against its monthly 
Distributor Fee for BYX Book Viewer equal to the amount of its monthly 
Usage Fees up to a maximum of the Distributor Fee for BYX Book Viewer. 
For example, an External Distributor will be subject to a $2,500 
monthly Distributor Fee where they receive BYX Book Viewer. If that 
External Distributor reports User quantities totaling $2,500 or more of 
monthly usage of BYX Book Viewer, it will pay no net Distributor Fee, 
whereas if that same External Distributor were to report User 
quantities totaling $1,000 of monthly usage, it will pay a net of 
$1,500 for the Distributor Fee. External Distributors will remain 
subject to the per User fees discussed above.
    Enterprise Fee. The Exchange also proposes to establish a $20,000 
per month Enterprise Fee that will permit a recipient firm who receives 
BYX Book Viewer from an External Distributor to

[[Page 53355]]

receive the data for an unlimited number of Professional and Non-
Professional Users. For example, if a recipient firm had 15,000 
Professional Users who each receive BYX Book Viewer at $3.00 per month, 
then that recipient firm will pay $45,000 per month in Professional 
Users fees. Under the proposed Enterprise Fee, the recipient firm will 
pay a flat fee of $20,000 for an unlimited number of Professional and 
Non-Professional Users for BYX Book Viewer. A recipient firm must pay a 
separate Enterprise Fee for each External Distributor that controls the 
display of BYX Book Viewer if it wishes such User to be covered by an 
Enterprise Fee rather than by per User fees. A recipient firm that pays 
the Enterprise Fee will not have to report its number of such Users on 
a monthly basis. However, every six months, a recipient firm must 
provide the Exchange with a count of the total number of natural person 
users of each product, including both Professional and Non-Professional 
Users. Lastly, the proposed Enterprise Fee would be counted towards the 
Distributor Fee credit described above, under which an External 
Distributor receives a credit towards its Distributor Fee equal to the 
amount of its monthly BYX Book Viewer User fees.
    Digital Media Enterprise Fee. The Exchange proposes to adopt a 
Digital Media Enterprise Fee of $5,000 per month for BYX Book Viewer. 
As an alternative to proposed User fees discussed above, a recipient 
firm may purchase a monthly Digital Media Enterprise license to receive 
BYX Book Viewer from an External Distributor to distribute to an 
unlimited number of Professional and Non-Professional Users for viewing 
via television, Web sites, and mobile devices for informational and 
non-trading purposes only without having to account for the extent of 
access to the data or the report the number of Users to the Exchange. 
Lastly, the proposed Digital Media Enterprise Fee would be counted 
towards the Distributor Fee credit described above, under which an 
External Distributor receives a credit towards its Distributor Fee 
equal to the amount of its monthly BYX Book Viewer User fees.
Implementation Date
    The Exchange proposes to implement the proposed changes to its fee 
schedule on September 8, 2015.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\13\ in general, and 
furthers the objectives of Section 6(b)(4),\14\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its members and other recipients of 
Exchange data. The Exchange believes that the proposed rates are 
equitable and non-discriminatory in that they apply uniformly to all 
recipients of Exchange data. The Exchange believes the proposed fees 
are competitive with those charged by other venues and, therefore, 
reasonable and equitably allocated to recipients. Lastly, the Exchange 
also believes that the proposed fees are reasonable and non-
discriminatory because they will apply uniformly to all recipients of 
Exchange data.
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    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(b)(4).
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    The Exchange also believes that the proposed rule change is 
consistent with Section 11(A) of the Act \15\ in that it supports (i) 
fair competition among brokers and dealers, among exchange markets, and 
between exchange markets and markets other than exchange markets and 
(ii) the availability to brokers, dealers, and investors of information 
with respect to quotations for and transactions in securities. 
Furthermore, the proposed rule change is consistent with Rule 603 of 
Regulation NMS,\16\ which provides that any national securities 
exchange that distributes information with respect to quotations for or 
transactions in an NMS stock do so on terms that are not unreasonably 
discriminatory. In adopting Regulation NMS, the Commission granted 
self-regulatory organizations and broker-dealers increased authority 
and flexibility to offer new and unique market data to the public. It 
was believed that this authority would expand the amount of data 
available to consumers, and also spur innovation and competition for 
the provision of market data.
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    \15\ 15 U.S.C. 78k-1.
    \16\ See 17 CFR 242.603.
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    In addition, the proposed fees would not permit unfair 
discrimination because all of the Exchange's customers and market data 
vendors will be subject to the proposed fees on an equivalent basis. 
BYX Book Viewer is distributed and purchased on a voluntary basis, in 
that neither the Exchange nor market data distributors are required by 
any rule or regulation to make this data available. Accordingly, 
Distributors and Users can discontinue use at any time and for any 
reason, including due to an assessment of the reasonableness of fees 
charged. Firms have a wide variety of alternative market data products 
from which to choose, such as similar proprietary data products offered 
by other exchanges and consolidated data. Moreover, the Exchange is not 
required to make any proprietary data products available or to offer 
any specific pricing alternatives to any customers.
    In addition, the fees that are the subject of this rule filing are 
constrained by competition. As explained below in the Exchange's 
Statement on Burden on Competition, the existence of alternatives to 
BYX Book Viewer further ensures that the Exchange cannot set 
unreasonable fees, or fees that are unreasonably discriminatory, when 
vendors and subscribers can elect such alternatives. That is, the 
Exchange competes with other exchanges (and their affiliates) that 
provide similar market data products. If another exchange (or its 
affiliate) were to charge less to distribute its similar product than 
the Exchange charges to consolidate and distribute BYX Book Viewer, 
prospective Users likely would not subscribe to, or would cease 
subscribing to, BYX Book Viewer.
    The Exchange notes that the Commission is not required to undertake 
a cost-of-service or rate-making approach. The Exchange believes that, 
even if it were possible as a matter of economic theory, cost-based 
pricing for non-core market data would be so complicated that it could 
not be done practically.\17\
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    \17\ The Exchange believes that cost-based pricing would be 
impractical because it would create enormous administrative burdens 
for all parties, including the Commission, to cost-regulate a large 
number of participants and standardize and analyze extraordinary 
amounts of information, accounts, and reports. In addition, it is 
impossible to regulate market data prices in isolation from prices 
charged by markets for other services that are joint products. Cost-
based rate regulation would also lead to litigation and may distort 
incentives, including those to minimize costs and to innovate, 
leading to further waste. Under cost-based pricing, the Commission 
would be burdened with determining a fair rate of return, and the 
industry could experience frequent rate increases based on 
escalating expense levels. Even in industries historically subject 
to utility regulation, cost-based ratemaking has been discredited. 
As such, the Exchange believes that cost-based ratemaking would be 
inappropriate for proprietary market data and inconsistent with 
Congress's direction that the Commission use its authority to foster 
the development of the national market system, and that market 
forces will continue to provide appropriate pricing discipline. See 
Appendix C to NYSE's comments to the Commission's 2000 Concept 
Release on the Regulation of Market Information Fees and Revenues, 
which can be found on the Commission's Web site at http://www.sec.gov/rules/concept/s72899/buck1.htm. See also Securities 
Exchange Act Release No. 73816 (December 11, 2014), 79 FR 75200 
(December 17, 2014) (SR-NYSE-2014-64) (Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change to Establish an 
Access Fee for the NYSE Best Quote and Trades Data Feed, Operative 
December 1, 2014).

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[[Page 53356]]

    Distributor Fee. The Exchange believes that the proposed 
Distributor Fees are also reasonable, equitably allocated, and not 
unreasonably discriminatory. The fees for Members and non-Members are 
uniform except with respect to reasonable distinctions with respect to 
internal and external distribution.\18\ The Exchange believes that the 
Distributor Fees for BYX Book Viewer are reasonable and fair in light 
of alternatives offered by other market centers. For example, BYX Book 
Viewer provides investors with alternative market data and competes 
with similar market data product currently offered by the New York 
Stock Exchange, Inc. (``NYSE'') and the Nasdaq Stock Market LLC 
(``Nasdaq'').\19\ Specifically, the NYSE charges an access fee of 
$5,000 per month for NYSE OpenBook,\20\ which is higher than the 
External Distributor fee proposed herein for BYX Book Viewer.
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    \18\ The Exchange notes that distinctions based on external 
versus internal distribution have been previously filed with the 
Commission by Nasdaq, Nasdaq OMX BX, and Nasdaq OMX PSX. See Nasdaq 
Rule 019(b); see also Securities Exchange Act Release No. 62876 
(September 9, 2010), 75 FR 56624 (September 16, 2010) (SR-PHLX-2010-
120); Securities Exchange Act Release No. 62907 (September 14, 
2010), 75 FR 57314 (September 20, 2010) (SR-NASDAQ-2010-110); 
Securities Exchange Act Release No. 63442 (December 6, 2010), 75 FR 
77029 (December 10, 2010) (SR-BX-2010-081). See also the Initial 
BATS One Feed Fee Filings, supra note 10.
    \19\ See Nasdaq Rule 7023(a)(1)(C) (describing Nasdaq TotalView 
is a depth-of-book data feed that includes all orders and quotes 
from all Nasdaq members displayed in the Nasdaq Market Center as 
well as the aggregate size of such orders and quotes at each price 
level in the execution functionality of the Nasdaq Market Center). 
See also Nasdaq Book Viewer, a description of which is available at 
https://data.nasdaq.com/Book Viewer.aspx (last visited July 29, 
2015). See NYSE OpenBook available at http://www.nyxdata.com/openbook (last visited July 29, 2015) (providing real-time view of 
the NYSE limit order book).
    \20\ See NYSE Market Data Pricing dated May 2015 available at 
http://www.nyxdata.com/. Nasdaq charges distribution fees ranging 
from $300 for 1-10 subscribers to $75,000 for more than $250 [sic] 
subscribers. See Nasdaq Rule 7023(b)(4).
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    User Fees. The Exchange believes that implementing the Professional 
and Non-Professional User fees for BYX Book Viewer are equitable and 
reasonable because they will result in greater availability to 
Professional and Non-Professional Users. Moreover, introducing a modest 
Non-Professional User fee for BYX Book Viewer is reasonable because it 
provides an additional method for retail investors to access BYX Book 
Viewer data by providing the same data that is available to 
Professional Users. The Exchange believes that the proposed fees are 
equitable and not unfairly discriminatory because they will be charged 
uniformly to recipient firms and Users. The fee structure of 
differentiated Professional and Non-Professional fees is utilized by 
the Exchange for the BATS One Feed and has long been used by other 
exchanges for their proprietary data products, and by the Nasdaq UTP 
and the CTA and CQ Plans in order to reduce the price of data to retail 
investors and make it more broadly available.\21\ Offering BYX Book 
Viewer to Non-Professional Users with the same data available to 
Professional Users results in greater equity among data recipients.
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    \21\ See the Initial BATS One Feed Fee Filings, supra note 10. 
See also, e.g., Securities Exchange Act Release No. 20002, File No. 
S7-433 (July 22, 1983) (establishing nonprofessional fees for CTA 
data); Nasdaq Rules 7023(b), 7047.
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    In addition, the proposed fees are reasonable when compared to 
similar fees for comparable products offered by the NYSE and Nasdaq. 
Specifically, NYSE offers NYSE OpenBook for a monthly fee of $60.00 per 
professional subscriber and $15 per non-professional subscriber.\22\ 
Nasdaq offers Nasdaq BookViewer for the same fees as Nasdaq TotalView, 
which is a monthly fee of $70.00 per professional subscriber and $14 
per non-professional subscriber.\23\ The Exchange's proposed per User 
Fees for BYX Book Viewer are less than the NYSE and Nasdaq fees.
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    \22\ See NYSE Market Data Pricing dated May 2015 available at 
http://www.nyxdata.com/.
    \23\ See Nasdaq Rule 7023(b)(2).
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    Enterprise Fee. The proposed Enterprise Fee for BYX Book Viewer is 
equitable and reasonable as the fees proposed are less than the 
enterprise fees currently charged for Nasdaq Book Viewer, which is 
subject to the exact same fees as Nasdaq TotalView. Nasdaq charges an 
enterprise fee of $100,000 per month for Nasdaq TotalView,\24\ which is 
far greater than the proposed Enterprise Fee of $20,000 per month for 
BYX Book Viewer. In addition, the Enterprise Fee proposed by the 
Exchange could result in a fee reduction for recipient firms with a 
large number of Professional and Non-Professional Users. If a recipient 
firm has a smaller number of Professional Users of BYX Book Viewer, 
then it may continue using the per User structure and benefit from the 
per User Fee reductions. By reducing prices for recipient firms with a 
large number of Professional and Non-Professional Users, the Exchange 
believes that more firms may choose to receive and to distribute BYX 
Book Viewer, thereby expanding the distribution of this market data for 
the benefit of investors.
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    \24\ See Nasdaq Rule 7023(c)(2) (stating that a distributor that 
is also a broker-dealer pays a monthly fee of $100,000 for the right 
to provide Nasdaq TotalView and for display usage for internal 
distribution, or for external distribution to both professional and 
non-professional subscribers with whom the firm has a brokerage 
relationship.) Nasdaq also charges an enterprise fee of $25,000 to 
provide Nasdaq TotalView to an unlimited number of non-professional 
subscribers only. See Nasdaq Rule 7023(c)(1).
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    The Exchange further believes that the proposed Enterprise Fee is 
reasonable because it will simplify reporting for certain recipients 
that have large numbers of Professional and Non-Professional Users. 
Firms that pay the proposed Enterprise Fee will not have to report the 
number of Users on a monthly basis as they currently do, but rather 
will only have to count natural person users every six months, which is 
a significant reduction in administrative burden. Finally, the Exchange 
believes that it is equitable and not unfairly discriminatory to 
establish an Enterprise Fee because it reduces the Exchange's costs and 
the Distributor's administrative burdens in tracking and auditing large 
numbers of Users.
    Digital Media Enterprise Fee. The Exchange believes that the 
proposed Digital Media Enterprise Fee for BYX Book Viewer provides for 
an equitable allocation of reasonable fees among recipients of the data 
and is not designed to permit unfair discrimination among customers, 
brokers, or dealers. In establishing the Digital Media Enterprise Fee, 
the Exchange recognizes that there is demand for a more seamless and 
easier-to-administer data distribution model that takes into account 
the expanded variety of media and communication devices that investors 
utilize today. The Exchange believes the Digital Media Enterprise Fee 
will be easy to administer because data recipients that purchase it 
would not be required to differentiate between Professional and Non-
Professional Users, account for the extent of access to the data, or 
report the number of Users. This is a significant reduction on a 
recipient firm's administrative burdens and is a significant value to 
investors. For example, a television broadcaster could display BYX Book 
Viewer data during market-related programming and on its Web site or 
allow viewers to view the data via their mobile devices, creating a 
more seamless distribution model that will allow investors more choice 
in how they receive and view market data, all without having to account 
for and/or measure who accesses the data and how often they do so.
    The proposed Digital Media Enterprise Fee is equitable and 
reasonable because it will also enable

[[Page 53357]]

recipient firms to more widely distribute data from BYX Book Viewer to 
investors for informational purposes at a lower cost than is available 
today. For example, a recipient firm may purchase an Enterprise license 
in the amount of $20,000 per month for to receive BYX Book Viewer from 
an External Distributor for an unlimited number of Professional and 
Non-Professional Users, which is greater than the proposed Digital 
Media Enterprise Fee. The Exchange also believes the amount of the 
Digital Media Enterprise Fee is reasonable as compared to the existing 
enterprise fees discussed above because the distribution of BYX Book 
Viewer data is limited to television, Web sites, and mobile devices for 
informational purposes only, while distribution of BYX Book Viewer data 
pursuant to an Enterprise license contains no such limitation. The 
Exchange also believes that the proposed Digital Media Enterprise Fee 
is equitable and reasonable because it is less than similar fees 
charged by other exchanges.\25\
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    \25\ The Nasdaq Stock Market offers proprietary data products 
for distribution over the internet and television under alternative 
fee schedules that are subject to maximum fee of $50,000 per month. 
See Nasdaq Rule 7039(b). The NYSE charges a Digit Media Enterprise 
fee of $40,000 per month for the NYSE Trade Digital Media product. 
See Securities Exchange Act Release No. 69272 (April 2, 2013), 78 FR 
20983 (April 8, 2013) (SR-NYSE-2013-23).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended. The 
Exchange's ability to price BYX Book Viewer is constrained by: (i) 
Competition among exchanges, other trading platforms, and Trade 
Reporting Facilities (``TRF'') that compete with each other in a 
variety of dimensions; (ii) the existence of inexpensive real-time 
consolidated data and market-specific data and free delayed data; and 
(iii) the inherent contestability of the market for proprietary data.
    The Exchange and its market data products are subject to 
significant competitive forces and the proposed fees represent 
responses to that competition. To start, the Exchange competes 
intensely for order flow. It competes with the other national 
securities exchanges that currently trade equities, with electronic 
communication networks, with quotes posted in FINRA's Alternative 
Display Facility, with alternative trading systems, and with securities 
firms that primarily trade as principal with their customer order flow.
    In addition, BYX Book Viewer competes with a number of alternative 
products. For instance, BYX Book Viewer does provide a complete picture 
of all trading activity in a security. Rather, the other national 
securities exchanges, the several TRFs of FINRA, and Electronic 
Communication Networks (``ECN'') that produce proprietary data all 
produce trades and trade reports. Each is currently permitted to 
produce last sale information products, and many currently do, 
including Nasdaq and NYSE. In addition, market participants can gain 
access to BYX last sale and depth-of-book quotations, though integrated 
with the prices of other markets, on feeds made available through the 
SIPs.
    In sum, the availability of a variety of alternative sources of 
information imposes significant competitive pressures on Exchange data 
products and the Exchange's compelling need to attract order flow 
imposes significant competitive pressure on the Exchange to act 
equitably, fairly, and reasonably in setting the proposed data product 
fees. The proposed data product fees are, in part, responses to that 
pressure. The Exchange believes that the proposed fees would reflect an 
equitable allocation of its overall costs to users of its facilities.
    In addition, when establishing the proposed fees, the Exchange 
considered the competitiveness of the market for proprietary data and 
all of the implications of that competition. The Exchange believes that 
it has considered all relevant factors and has not considered 
irrelevant factors in order to establish fair, reasonable, and not 
unreasonably discriminatory fees and an equitable allocation of fees 
among all Users. The existence of alternatives to BYX Book Viewer, 
including existing similar feeds by other exchanges, consolidated data, 
and proprietary data from other sources, ensures that the Exchange 
cannot set unreasonable fees, or fees that are unreasonably 
discriminatory, when vendors and subscribers can elect these 
alternatives or choose not to purchase a specific proprietary data 
product if its cost to purchase is not justified by the returns any 
particular vendor or subscriber would achieve through the purchase.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \26\ and paragraph (f) of Rule 19b-4 
thereunder.\27\ 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.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78s(b)(3)(A).
    \27\ 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 proposal 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 rule-comments@sec.gov. Please include 
File No. SR-BYX-2015-36 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File No. SR-BYX-2015-36. 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

[[Page 53358]]

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 such 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 No. SR-BYX-2015-36 and should be 
submitted on or before September 24, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-21871 Filed 9-2-15; 8:45 am]
 BILLING CODE 8011-01-P



                                                                        Federal Register / Vol. 80, No. 171 / Thursday, September 3, 2015 / Notices                                            53353

                                                 Estimated Annual Number of Survey                    III. Ordering Paragraphs                               SECURITIES AND EXCHANGE
                                              Form Respondents: 320.                                                                                         COMMISSION
                                                                                                      I. Introduction
                                                 Frequency of Survey form use:
                                                                                                                                                             [Release No. 34–75786; File No. SR–BYX–
                                              Annual.                                                    On August 27, 2015, the Postal                      2015–36]
                                                 Estimated Average Amount of Time                     Service filed notice that it has entered
                                              for a Person to Respond to survey: 12                   into an additional Global Expedited                    Self-Regulatory Organizations; BATS
                                              minutes.                                                Package Services 3 (GEPS 3) negotiated                 Y-Exchange, Inc.; Notice of Filing and
                                                 Estimated Annual Survey Burden: 109                  service agreement (Agreement).1                        Immediate Effectiveness of a Proposed
                                              hours.                                                                                                         Rule Change Related to Fees a Market
                                                 This survey form is used to survey                      To support its Notice, the Postal
                                                                                                                                                             Data Product Known as BYX Book
                                              current and former Federal employees                    Service filed a copy of the Agreement,
                                                                                                                                                             Viewer
                                              and applicants for Federal employment                   a copy of the Governors’ Decision
                                              who have submitted allegations of                       authorizing the product, a certification               August 28, 2015.
                                              possible prohibited personnel practices                 of compliance with 39 U.S.C. 3633(a),                     Pursuant to Section 19(b)(1) of the
                                              or other prohibited activity for                        and an application for non-public                      Securities Exchange Act of 1934 (the
                                              investigation and possible prosecution                  treatment of certain materials. It also                ‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                              by OSC, and whose matter has been                       filed supporting financial workpapers.                 notice is hereby given that on August
                                              closed or otherwise resolved during the                                                                        24, 2015, BATS Y-Exchange, Inc. (the
                                              prior fiscal year, on their experience                  II. Notice of Commission Action                        ‘‘Exchange’’ or ‘‘BYX’’) filed with the
                                              with OSC. Specifically, the survey asks                   The Commission establishes Docket                    Securities and Exchange Commission
                                              questions relating to whether the                       No. CP2015–131 for consideration of                    (‘‘Commission’’) the proposed rule
                                              respondent was: (1) Apprised of his or                                                                         change as described in Items I, II and III
                                                                                                      matters raised by the Notice.
                                              her rights; (2) successful at the OSC or                                                                       below, which Items have been prepared
                                              at the Merit Systems Protection Board;                    The Commission invites comments on                   by the Exchange. The Exchange has
                                              and (3) satisfied with the treatment                    whether the Postal Service’s filing is                 designated the proposed rule change as
                                              received at the OSC.                                    consistent with 39 U.S.C. 3632, 3633, or               one establishing or changing a member
                                                Dated: August 25th, 2015.
                                                                                                      3642, 39 CFR part 3015, and 39 CFR                     due, fee, or other charge imposed by the
                                                                                                      part 3020, subpart B. Comments are due                 Exchange under Section 19(b)(3)(A)(ii)
                                              Carolyn N. Lerner,
                                                                                                      no later than September 4, 2015. The                   of the Act 3 and Rule 19b–4(f)(2)
                                              Special Counsel.
                                                                                                      public portions of the filing can be                   thereunder,4 which renders the
                                              [FR Doc. 2015–21780 Filed 9–2–15; 8:45 am]
                                                                                                      accessed via the Commission’s Web site                 proposed rule change effective upon
                                              BILLING CODE 7405–01–P                                                                                         filing with the Commission. The
                                                                                                      (http://www.prc.gov).
                                                                                                        The Commission appoints Derrick D.                   Commission is publishing this notice to
                                                                                                                                                             solicit comments on the proposed rule
                                              POSTAL REGULATORY COMMISSION                            Dennis to serve as Public Representative
                                                                                                                                                             change from interested persons.
                                                                                                      in this docket.
                                              [Docket No. CP2015–131; Order No. 2688]                                                                        I. Self-Regulatory Organization’s
                                                                                                      III. Ordering Paragraphs                               Statement of the Terms of Substance of
                                              New Postal Product                                                                                             the Proposed Rule Change
                                                                                                        It is ordered:
                                              AGENCY: Postal Regulatory Commission.                                                                             The Exchange filed a proposal to
                                                                                                        1. The Commission establishes Docket
                                              ACTION: Notice.                                         No. CP2015–131 for consideration of the                amend the Market Data section of its fee
                                                                                                      matters raised by the Postal Service’s                 schedule to adopt fees for a market data
                                              SUMMARY:    The Commission is noticing a                                                                       product called BYX Book Viewer.
                                              recent Postal Service filing concerning                 Notice.
                                                                                                                                                                The text of the proposed rule change
                                              an additional Global Expedited Package                    2. Pursuant to 39 U.S.C. 505, Derrick                is available at the Exchange’s Web site
                                              Services 3 negotiated service agreement.                D. Dennis is appointed to serve as an                  at www.batstrading.com, at the
                                              This notice informs the public of the                   officer of the Commission to represent                 principal office of the Exchange, and at
                                              filing, invites public comment, and                     the interests of the general public in this            the Commission’s Public Reference
                                              takes other administrative steps.                       proceeding (Public Representative).                    Room.
                                              DATES: Comments are due: September 4,                     3. Comments are due no later than
                                              2015.                                                                                                          II. Self-Regulatory Organization’s
                                                                                                      September 4, 2015.                                     Statement of the Purpose of, and
                                              ADDRESSES: Submit comments                                                                                     Statutory Basis for, the Proposed Rule
                                                                                                        4. The Secretary shall arrange for
                                              electronically via the Commission’s                                                                            Change
                                                                                                      publication of this order in the Federal
                                              Filing Online system at http://
                                              www.prc.gov. Those who cannot submit                    Register.                                                In its filing with the Commission, the
                                              comments electronically should contact                    By the Commission.                                   Exchange included statements
                                              the person identified in the FOR FURTHER                Shoshana M. Grove,                                     concerning the purpose of and basis for
                                              INFORMATION CONTACT section by                                                                                 the proposed rule change and discussed
                                                                                                      Secretary.
                                              telephone for advice on filing                                                                                 any comments it received on the
                                                                                                      [FR Doc. 2015–21787 Filed 9–2–15; 8:45 am]             proposed rule change. The text of these
                                              alternatives.
                                                                                                      BILLING CODE 7710–FW–P                                 statements may be examined at the
                                              FOR FURTHER INFORMATION CONTACT:                                                                               places specified in Item IV below. The
tkelley on DSK3SPTVN1PROD with NOTICES




                                              David A. Trissell, General Counsel, at                                                                         Exchange has prepared summaries, set
                                              202–789–6820.                                             1 Notice of United States Postal Service of Filing   forth in Sections A, B, and C below, of
                                              SUPPLEMENTARY INFORMATION:                              a Functionally Equivalent Global Expedited
                                                                                                                                                              1 15 U.S.C. 78s(b)(1).
                                                                                                      Package Services 3 Negotiated Service Agreement
                                              Table of Contents                                                                                               2 17
                                                                                                      and Application for Non-Public Treatment of                  CFR 240.19b–4.
                                              I. Introduction                                         Materials Filed Under Seal, August 27, 2015             3 15 U.S.C. 78s(b)(3)(A)(ii).

                                              II. Notice of Commission Action                         (Notice).                                               4 17 CFR 240.19b–4(f)(2).




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                                              53354                       Federal Register / Vol. 80, No. 171 / Thursday, September 3, 2015 / Notices

                                              the most significant parts of such                        Professional 9 Users; 10 (iii) an Enterprise             place for the BATS One Feed.12 Thus,
                                              statements.                                               Fee; 11 and (iv) a Digital Media                         the External Distributor’s count will
                                                                                                        Enterprise Fee.                                          include every person and device that
                                              (A) Self-Regulatory Organization’s                          Distribution Fees. As proposed, each                   accesses the data regardless of the
                                              Statement of the Purpose of, and                          Internal Distributor that receives BYX                   purpose for which the individual or
                                              Statutory Basis for, the Proposed Rule                    Book Viewer shall pay a fee of $500 per                  device uses the data. External
                                              Change                                                    month. The Exchange does not propose                     Distributors must report all Professional
                                                                                                        to charge any User fees for BYX Book                     and Non-Professional Users in
                                              1. Purpose
                                                                                                        Viewer where the data is received and                    accordance with the following:
                                                 The Exchange proposes to amend the                     subsequently internally distributed to                      • In connection with an External
                                              Market Data section of its fee schedule                   Professional or Non-Professional Users.                  Distributor’s distribution of BYX Book
                                              to adopt fees for a market data product                   In addition, the Exchange proposes to                    Viewer, the Distributor should count as
                                              called BYX Book Viewer. BYX Book                          charge External Distributors that                        one User each unique User that the
                                              Viewer is a data feed that disseminates,                  receives BYX Book Viewer a fee of                        Distributor has entitled to have access to
                                              on a real-time basis, the aggregated two-                 $2,500 per month.                                        BYX Book Viewer. However, where a
                                                                                                          User Fees. The Exchange proposes to                    device is dedicated specifically to a
                                              side quotations for up to five (5) price                  charge those who receive BYX Book                        single individual, the Distributor should
                                              levels for all displayed orders for                       Viewer from External Distributors                        count only the individual and need not
                                              securities traded on the Exchange and                     different fees for both their Professional               count the device.
                                              for which the Exchanges reports quotes                    Users and Non-Professional Users. The                       • The External Distributor should
                                              under the Consolidated Tape                               Exchange will assess a monthly fee for                   identify and report each unique User. If
                                              Association (‘‘CTA’’) Plan or the                         Professional Users of $3.00 per User.                    a User uses the same unique method to
                                              Nasdaq/UTP Plan. BYX Book Viewer                          Non-Professional Users will be assessed                  gain access to BYX Book Viewer, the
                                              also contains the last ten (10) trades                    a monthly fee of $0.10 per User. The                     Distributor should count that as one
                                              including time of trade, price and share                  Exchange does not propose to charge                      User. However, if a unique User uses
                                              quantity.5 BYX Book Viewer is currently                   per User fees to Internal Distributors.                  multiple methods to gain access to BYX
                                              available via www.batstrading.com                           External Distributors that receives                    Book Viewer (e.g., a single User has
                                              without charge.                                           BYX Book Viewer would be required to                     multiple passwords and user
                                                 The Exchange now proposes to amend                     count every Professional User and Non-                   identifications), the External Distributor
                                              its fee schedule to incorporate fees for                  Professional User to which they provide                  should report all of those methods as an
                                                                                                        BYX Book Viewer, the requirements for                    individual User.
                                              distribution of BYX Book Viewer to
                                                                                                        which are identical to that currently in                    • External Distributors should report
                                              subscribers.6 BYX Book Viewer will
                                                                                                                                                                 each unique individual person who
                                              remain available via                                         9 A ‘‘Non-Professional User’’ is defined as ‘‘a
                                                                                                                                                                 receives access through multiple
                                              www.batstrading.com for viewing                           natural person who is not: (i) Registered or qualified   devices as one User so long as each
                                              without charge. The proposed fees                         in any capacity with the Commission, the
                                                                                                                                                                 device is dedicated specifically to that
                                              include the following, each of which are                  Commodity Futures Trading Commission, any state
                                                                                                        securities agency, any securities exchange or            individual.
                                              described in detail below: (i)                            association, or any commodities or futures contract         • If an External Distributor entitles
                                              Distribution Fees for both Internal and                   market or association; (ii) engaged as an                one or more individuals to use the same
                                              External Distributors; 7 (ii) Usage Fees                  ‘‘investment adviser’’ as that term is defined in
                                                                                                        Section [202(a)(11)] of the Investment Advisers Act
                                                                                                                                                                 device, the External Distributor should
                                              for both Professional 8 and Non-                          of 1940 (whether or not registered or qualified          include only the individuals, and not
                                                                                                        under that Act); or (iii) employed by a bank or other    the device, in the count.
                                                 5 See Securities Exchange Act Release No. 75717        organization exempt from registration under federal         Each External Distributor will receive
                                              (August 18, 2015) (SR–BYX–2015–35) (Notice of             or state securities laws to perform functions that       a credit against its monthly Distributor
                                              Filing and Immediate Effectiveness of a Proposed          would require registration or qualification if such
                                                                                                        functions were performed for an organization not so      Fee for BYX Book Viewer equal to the
                                              Rule Change to Amend Rule 11.22 to Describe the
                                              Market Data Product BYX Book Viewer).                     exempt.’’ Id.                                            amount of its monthly Usage Fees up to
                                                 6 The Exchange notes that its affiliated exchanges,
                                                                                                           10 The Exchange notes that User fees as well as       a maximum of the Distributor Fee for
                                              EDGX Exchange, Inc. (‘‘EDGX’’), EDGA Exchange,            the distinctions based on professional and non-          BYX Book Viewer. For example, an
                                                                                                        professional users have been previously filed with
                                              Inc. (‘‘EDGA’’) and BATS Exchange, Inc. (‘‘BZX’’,
                                                                                                        or approved by the Commission by the BATS
                                                                                                                                                                 External Distributor will be subject to a
                                              together with the Exchange, EDGX and EDGA, the                                                                     $2,500 monthly Distributor Fee where
                                                                                                        Exchanges and the Nasdaq Stock Market LLC
                                              ‘‘BATS Exchanges’’), also intent to file proposed
                                              rule changes with Commission to adopt similar fees
                                                                                                        (‘‘Nasdaq’’). See Securities Exchange Act Release        they receive BYX Book Viewer. If that
                                                                                                        No. 59582 (March 16, 2009), 74 FR 12423 (March           External Distributor reports User
                                              for their respective Book Viewer market data
                                                                                                        24, 2009) (Order approving SR–Nasdaq–2008–102).
                                              product.
                                                                                                        See also See Securities Exchange Act Release Nos.
                                                                                                                                                                 quantities totaling $2,500 or more of
                                                 7 A ‘‘Distributor’’ is defined as ‘‘any entity that
                                                                                                        74285 (February 18, 2015), 80 FR 9828 (February          monthly usage of BYX Book Viewer, it
                                              receives the Exchange Market Data product directly        24, 2015) (SR–BATS–2015–11); 74283 (February 18,         will pay no net Distributor Fee, whereas
                                              from the Exchange or indirectly through another           2015), 80 FR 9809 (February 24, 2015) (SR–EDGA–
                                              entity and then distributes it internally or externally
                                                                                                                                                                 if that same External Distributor were to
                                                                                                        2015–09); 74282 (February 17, 2015), 80 FR 9487
                                              to a third party.’’ See the Exchange Fee Schedule         (February 23, 2015) (SR–EDGX–2015–09); and
                                                                                                                                                                 report User quantities totaling $1,000 of
                                              available at http://batstrading.com/support/fee_          74284 (February 18, 2015), 80 FR 9792 (February          monthly usage, it will pay a net of
                                              schedule/byx/. An ‘‘Internal Distributor’’ is defined     24, 2015) (SR–BYX–2015–09) (‘‘Initial BATS One           $1,500 for the Distributor Fee. External
                                              as ‘‘a Distributor that receives the Exchange Market      Feed Fee Filings’’).                                     Distributors will remain subject to the
                                              Data product and then distributes that data to one           11 The Exchange notes that Enterprise fees have
                                              or more Users within the Distributor’s own entity.’’                                                               per User fees discussed above.
                                                                                                        been previously filed with or approved by the
                                              Id. An ‘‘External Distributor’’ is defined as ‘‘a         Commission by the Exchange, EDGA, EDGX, BZX,                Enterprise Fee. The Exchange also
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                                              Distributor that receives the Exchange Market Data        Nasdaq, NYSE, and the CTA/CQ Plans. See Nasdaq           proposes to establish a $20,000 per
                                              product and then distributes that data to a third         Rule 7047. Securities Exchange Act Release Nos.          month Enterprise Fee that will permit a
                                              party or one or more Users outside the Distributor’s      71507 (February 7, 2014), 79 FR 8763 (February 13,
                                              own entity.’’ Id.
                                                                                                                                                                 recipient firm who receives BYX Book
                                                                                                        2014) (SR–NASDAQ–2014–011); 70211 (August 15,
                                                 8 A ‘‘Professional User’’ is defined as ‘‘any User     2013), 78 FR 51781 (August 21, 2013) (SR–NYSE–           Viewer from an External Distributor to
                                              other than a Non-Professional User.’’ See the             2013–58); and 70010 (July 19, 2013) (File No. SR–
                                              Exchange Fee Schedule available at http://                CTA/CQ–2013–04). See also the Initial BATS One             12 See the Initial BATS One Feed Fee Filings,

                                              batstrading.com/support/fee_schedule/byx/.                Feed Fee Filings, supra note 10.                         supra note 10.



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                                                                        Federal Register / Vol. 80, No. 171 / Thursday, September 3, 2015 / Notices                                                     53355

                                              receive the data for an unlimited                       the objectives of Section 6 of the Act,13             charged. Firms have a wide variety of
                                              number of Professional and Non-                         in general, and furthers the objectives of            alternative market data products from
                                              Professional Users. For example, if a                   Section 6(b)(4),14 in particular, as it is            which to choose, such as similar
                                              recipient firm had 15,000 Professional                  designed to provide for the equitable                 proprietary data products offered by
                                              Users who each receive BYX Book                         allocation of reasonable dues, fees and               other exchanges and consolidated data.
                                              Viewer at $3.00 per month, then that                    other charges among its members and                   Moreover, the Exchange is not required
                                              recipient firm will pay $45,000 per                     other recipients of Exchange data. The                to make any proprietary data products
                                              month in Professional Users fees. Under                 Exchange believes that the proposed                   available or to offer any specific pricing
                                              the proposed Enterprise Fee, the                        rates are equitable and non-                          alternatives to any customers.
                                              recipient firm will pay a flat fee of                   discriminatory in that they apply                        In addition, the fees that are the
                                              $20,000 for an unlimited number of                      uniformly to all recipients of Exchange               subject of this rule filing are constrained
                                              Professional and Non-Professional Users                 data. The Exchange believes the                       by competition. As explained below in
                                              for BYX Book Viewer. A recipient firm                   proposed fees are competitive with                    the Exchange’s Statement on Burden on
                                              must pay a separate Enterprise Fee for                  those charged by other venues and,                    Competition, the existence of
                                              each External Distributor that controls                 therefore, reasonable and equitably                   alternatives to BYX Book Viewer further
                                              the display of BYX Book Viewer if it                    allocated to recipients. Lastly, the                  ensures that the Exchange cannot set
                                              wishes such User to be covered by an                    Exchange also believes that the                       unreasonable fees, or fees that are
                                              Enterprise Fee rather than by per User                  proposed fees are reasonable and non-                 unreasonably discriminatory, when
                                              fees. A recipient firm that pays the                    discriminatory because they will apply                vendors and subscribers can elect such
                                              Enterprise Fee will not have to report its              uniformly to all recipients of Exchange               alternatives. That is, the Exchange
                                              number of such Users on a monthly                       data.                                                 competes with other exchanges (and
                                              basis. However, every six months, a                        The Exchange also believes that the                their affiliates) that provide similar
                                              recipient firm must provide the                         proposed rule change is consistent with               market data products. If another
                                              Exchange with a count of the total                      Section 11(A) of the Act 15 in that it                exchange (or its affiliate) were to charge
                                              number of natural person users of each                  supports (i) fair competition among                   less to distribute its similar product
                                              product, including both Professional                    brokers and dealers, among exchange                   than the Exchange charges to
                                              and Non-Professional Users. Lastly, the                 markets, and between exchange markets                 consolidate and distribute BYX Book
                                              proposed Enterprise Fee would be                        and markets other than exchange                       Viewer, prospective Users likely would
                                              counted towards the Distributor Fee                     markets and (ii) the availability to                  not subscribe to, or would cease
                                              credit described above, under which an                  brokers, dealers, and investors of                    subscribing to, BYX Book Viewer.
                                              External Distributor receives a credit                  information with respect to quotations                   The Exchange notes that the
                                                                                                      for and transactions in securities.                   Commission is not required to
                                              towards its Distributor Fee equal to the
                                                                                                      Furthermore, the proposed rule change                 undertake a cost-of-service or rate-
                                              amount of its monthly BYX Book
                                                                                                      is consistent with Rule 603 of                        making approach. The Exchange
                                              Viewer User fees.
                                                                                                      Regulation NMS,16 which provides that                 believes that, even if it were possible as
                                                 Digital Media Enterprise Fee. The                                                                          a matter of economic theory, cost-based
                                              Exchange proposes to adopt a Digital                    any national securities exchange that
                                                                                                      distributes information with respect to               pricing for non-core market data would
                                              Media Enterprise Fee of $5,000 per                                                                            be so complicated that it could not be
                                              month for BYX Book Viewer. As an                        quotations for or transactions in an NMS
                                                                                                      stock do so on terms that are not                     done practically.17
                                              alternative to proposed User fees
                                              discussed above, a recipient firm may                   unreasonably discriminatory. In
                                                                                                                                                               17 The Exchange believes that cost-based pricing
                                              purchase a monthly Digital Media                        adopting Regulation NMS, the
                                                                                                                                                            would be impractical because it would create
                                              Enterprise license to receive BYX Book                  Commission granted self-regulatory                    enormous administrative burdens for all parties,
                                              Viewer from an External Distributor to                  organizations and broker-dealers                      including the Commission, to cost-regulate a large
                                              distribute to an unlimited number of                    increased authority and flexibility to                number of participants and standardize and analyze
                                                                                                      offer new and unique market data to the               extraordinary amounts of information, accounts,
                                              Professional and Non-Professional Users                                                                       and reports. In addition, it is impossible to regulate
                                              for viewing via television, Web sites,                  public. It was believed that this                     market data prices in isolation from prices charged
                                              and mobile devices for informational                    authority would expand the amount of                  by markets for other services that are joint products.
                                              and non-trading purposes only without                   data available to consumers, and also                 Cost-based rate regulation would also lead to
                                                                                                      spur innovation and competition for the               litigation and may distort incentives, including
                                              having to account for the extent of                                                                           those to minimize costs and to innovate, leading to
                                              access to the data or the report the                    provision of market data.                             further waste. Under cost-based pricing, the
                                                                                                         In addition, the proposed fees would               Commission would be burdened with determining
                                              number of Users to the Exchange.
                                                                                                      not permit unfair discrimination                      a fair rate of return, and the industry could
                                              Lastly, the proposed Digital Media                                                                            experience frequent rate increases based on
                                                                                                      because all of the Exchange’s customers
                                              Enterprise Fee would be counted                                                                               escalating expense levels. Even in industries
                                                                                                      and market data vendors will be subject               historically subject to utility regulation, cost-based
                                              towards the Distributor Fee credit
                                                                                                      to the proposed fees on an equivalent                 ratemaking has been discredited. As such, the
                                              described above, under which an
                                                                                                      basis. BYX Book Viewer is distributed                 Exchange believes that cost-based ratemaking
                                              External Distributor receives a credit                                                                        would be inappropriate for proprietary market data
                                                                                                      and purchased on a voluntary basis, in
                                              towards its Distributor Fee equal to the                                                                      and inconsistent with Congress’s direction that the
                                                                                                      that neither the Exchange nor market                  Commission use its authority to foster the
                                              amount of its monthly BYX Book
                                                                                                      data distributors are required by any                 development of the national market system, and
                                              Viewer User fees.                                                                                             that market forces will continue to provide
                                                                                                      rule or regulation to make this data
                                                                                                                                                            appropriate pricing discipline. See Appendix C to
                                              Implementation Date                                     available. Accordingly, Distributors and              NYSE’s comments to the Commission’s 2000
                                                                                                      Users can discontinue use at any time                 Concept Release on the Regulation of Market
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                                                The Exchange proposes to implement
                                                                                                      and for any reason, including due to an               Information Fees and Revenues, which can be
                                              the proposed changes to its fee schedule
                                                                                                      assessment of the reasonableness of fees              found on the Commission’s Web site at http://
                                              on September 8, 2015.                                                                                         www.sec.gov/rules/concept/s72899/buck1.htm. See
                                                                                                                                                            also Securities Exchange Act Release No. 73816
                                              2. Statutory Basis                                        13 15 U.S.C. 78f.                                   (December 11, 2014), 79 FR 75200 (December 17,
                                                                                                        14 15 U.S.C. 78f(b)(4).                             2014) (SR–NYSE–2014–64) (Notice of Filing and
                                                The Exchange believes that the                          15 15 U.S.C. 78k–1.
                                                                                                                                                            Immediate Effectiveness of Proposed Rule Change
                                              proposed rule change is consistent with                   16 See 17 CFR 242.603.                                                                          Continued




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                                              53356                      Federal Register / Vol. 80, No. 171 / Thursday, September 3, 2015 / Notices

                                                 Distributor Fee. The Exchange                         equitable and not unfairly                            from the per User Fee reductions. By
                                              believes that the proposed Distributor                   discriminatory because they will be                   reducing prices for recipient firms with
                                              Fees are also reasonable, equitably                      charged uniformly to recipient firms                  a large number of Professional and Non-
                                              allocated, and not unreasonably                          and Users. The fee structure of                       Professional Users, the Exchange
                                              discriminatory. The fees for Members                     differentiated Professional and Non-                  believes that more firms may choose to
                                              and non-Members are uniform except                       Professional fees is utilized by the                  receive and to distribute BYX Book
                                              with respect to reasonable distinctions                  Exchange for the BATS One Feed and                    Viewer, thereby expanding the
                                              with respect to internal and external                    has long been used by other exchanges                 distribution of this market data for the
                                              distribution.18 The Exchange believes                    for their proprietary data products, and              benefit of investors.
                                              that the Distributor Fees for BYX Book                   by the Nasdaq UTP and the CTA and CQ                     The Exchange further believes that the
                                              Viewer are reasonable and fair in light                  Plans in order to reduce the price of                 proposed Enterprise Fee is reasonable
                                              of alternatives offered by other market                  data to retail investors and make it more             because it will simplify reporting for
                                              centers. For example, BYX Book Viewer                    broadly available.21 Offering BYX Book                certain recipients that have large
                                              provides investors with alternative                      Viewer to Non-Professional Users with                 numbers of Professional and Non-
                                              market data and competes with similar                    the same data available to Professional               Professional Users. Firms that pay the
                                              market data product currently offered by                 Users results in greater equity among                 proposed Enterprise Fee will not have to
                                              the New York Stock Exchange, Inc.                        data recipients.                                      report the number of Users on a
                                              (‘‘NYSE’’) and the Nasdaq Stock Market                     In addition, the proposed fees are                  monthly basis as they currently do, but
                                              LLC (‘‘Nasdaq’’).19 Specifically, the                    reasonable when compared to similar                   rather will only have to count natural
                                              NYSE charges an access fee of $5,000                     fees for comparable products offered by               person users every six months, which is
                                              per month for NYSE OpenBook,20                           the NYSE and Nasdaq. Specifically,                    a significant reduction in administrative
                                              which is higher than the External                        NYSE offers NYSE OpenBook for a                       burden. Finally, the Exchange believes
                                              Distributor fee proposed herein for BYX                  monthly fee of $60.00 per professional                that it is equitable and not unfairly
                                              Book Viewer.                                             subscriber and $15 per non-professional               discriminatory to establish an Enterprise
                                                 User Fees. The Exchange believes that                 subscriber.22 Nasdaq offers Nasdaq                    Fee because it reduces the Exchange’s
                                              implementing the Professional and Non-                   BookViewer for the same fees as Nasdaq                costs and the Distributor’s
                                              Professional User fees for BYX Book                      TotalView, which is a monthly fee of                  administrative burdens in tracking and
                                              Viewer are equitable and reasonable                      $70.00 per professional subscriber and                auditing large numbers of Users.
                                              because they will result in greater                      $14 per non-professional subscriber.23                   Digital Media Enterprise Fee. The
                                              availability to Professional and Non-                    The Exchange’s proposed per User Fees                 Exchange believes that the proposed
                                              Professional Users. Moreover,                            for BYX Book Viewer are less than the                 Digital Media Enterprise Fee for BYX
                                              introducing a modest Non-Professional                    NYSE and Nasdaq fees.                                 Book Viewer provides for an equitable
                                              User fee for BYX Book Viewer is                            Enterprise Fee. The proposed                        allocation of reasonable fees among
                                              reasonable because it provides an                        Enterprise Fee for BYX Book Viewer is                 recipients of the data and is not
                                              additional method for retail investors to                equitable and reasonable as the fees                  designed to permit unfair
                                              access BYX Book Viewer data by                           proposed are less than the enterprise                 discrimination among customers,
                                              providing the same data that is available                fees currently charged for Nasdaq Book                brokers, or dealers. In establishing the
                                              to Professional Users. The Exchange                      Viewer, which is subject to the exact                 Digital Media Enterprise Fee, the
                                              believes that the proposed fees are                      same fees as Nasdaq TotalView. Nasdaq                 Exchange recognizes that there is
                                                                                                       charges an enterprise fee of $100,000                 demand for a more seamless and easier-
                                              to Establish an Access Fee for the NYSE Best Quote       per month for Nasdaq TotalView,24                     to-administer data distribution model
                                              and Trades Data Feed, Operative December 1,              which is far greater than the proposed                that takes into account the expanded
                                              2014).                                                   Enterprise Fee of $20,000 per month for               variety of media and communication
                                                 18 The Exchange notes that distinctions based on
                                                                                                       BYX Book Viewer. In addition, the                     devices that investors utilize today. The
                                              external versus internal distribution have been
                                              previously filed with the Commission by Nasdaq,          Enterprise Fee proposed by the                        Exchange believes the Digital Media
                                              Nasdaq OMX BX, and Nasdaq OMX PSX. See                   Exchange could result in a fee reduction              Enterprise Fee will be easy to
                                              Nasdaq Rule 019(b); see also Securities Exchange         for recipient firms with a large number               administer because data recipients that
                                              Act Release No. 62876 (September 9, 2010), 75 FR                                                               purchase it would not be required to
                                              56624 (September 16, 2010) (SR–PHLX–2010–120);
                                                                                                       of Professional and Non-Professional
                                              Securities Exchange Act Release No. 62907                Users. If a recipient firm has a smaller              differentiate between Professional and
                                              (September 14, 2010), 75 FR 57314 (September 20,         number of Professional Users of BYX                   Non-Professional Users, account for the
                                              2010) (SR–NASDAQ–2010–110); Securities                   Book Viewer, then it may continue                     extent of access to the data, or report the
                                              Exchange Act Release No. 63442 (December 6,                                                                    number of Users. This is a significant
                                              2010), 75 FR 77029 (December 10, 2010) (SR–BX–
                                                                                                       using the per User structure and benefit
                                                                                                                                                             reduction on a recipient firm’s
                                              2010–081). See also the Initial BATS One Feed Fee
                                              Filings, supra note 10.                                    21 See the Initial BATS One Feed Fee Filings,       administrative burdens and is a
                                                 19 See Nasdaq Rule 7023(a)(1)(C) (describing          supra note 10. See also, e.g., Securities Exchange    significant value to investors. For
                                              Nasdaq TotalView is a depth-of-book data feed that       Act Release No. 20002, File No. S7–433 (July 22,      example, a television broadcaster could
                                              includes all orders and quotes from all Nasdaq           1983) (establishing nonprofessional fees for CTA
                                                                                                       data); Nasdaq Rules 7023(b), 7047.
                                                                                                                                                             display BYX Book Viewer data during
                                              members displayed in the Nasdaq Market Center as
                                              well as the aggregate size of such orders and quotes       22 See NYSE Market Data Pricing dated May 2015      market-related programming and on its
                                              at each price level in the execution functionality of    available at http://www.nyxdata.com/.                 Web site or allow viewers to view the
                                              the Nasdaq Market Center). See also Nasdaq Book            23 See Nasdaq Rule 7023(b)(2).                      data via their mobile devices, creating a
                                              Viewer, a description of which is available at             24 See Nasdaq Rule 7023(c)(2) (stating that a
                                                                                                                                                             more seamless distribution model that
                                              https://data.nasdaq.com/Book Viewer.aspx (last           distributor that is also a broker-dealer pays a
                                              visited July 29, 2015). See NYSE OpenBook
                                                                                                                                                             will allow investors more choice in how
                                                                                                       monthly fee of $100,000 for the right to provide
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                                              available at http://www.nyxdata.com/openbook             Nasdaq TotalView and for display usage for internal   they receive and view market data, all
                                              (last visited July 29, 2015) (providing real-time view   distribution, or for external distribution to both    without having to account for and/or
                                              of the NYSE limit order book).                           professional and non-professional subscribers with    measure who accesses the data and how
                                                 20 See NYSE Market Data Pricing dated May 2015        whom the firm has a brokerage relationship.)          often they do so.
                                              available at http://www.nyxdata.com/. Nasdaq             Nasdaq also charges an enterprise fee of $25,000 to
                                              charges distribution fees ranging from $300 for 1–       provide Nasdaq TotalView to an unlimited number
                                                                                                                                                                The proposed Digital Media
                                              10 subscribers to $75,000 for more than $250 [sic]       of non-professional subscribers only. See Nasdaq      Enterprise Fee is equitable and
                                              subscribers. See Nasdaq Rule 7023(b)(4).                 Rule 7023(c)(1).                                      reasonable because it will also enable


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                                                                         Federal Register / Vol. 80, No. 171 / Thursday, September 3, 2015 / Notices                                          53357

                                              recipient firms to more widely                          trade as principal with their customer                (C) Self-Regulatory Organization’s
                                              distribute data from BYX Book Viewer                    order flow.                                           Statement on Comments on the
                                              to investors for informational purposes                    In addition, BYX Book Viewer                       Proposed Rule Change Received From
                                              at a lower cost than is available today.                competes with a number of alternative                 Members, Participants or Others
                                              For example, a recipient firm may                       products. For instance, BYX Book                        The Exchange has neither solicited
                                              purchase an Enterprise license in the                                                                         nor received written comments on the
                                                                                                      Viewer does provide a complete picture
                                              amount of $20,000 per month for to                                                                            proposed rule change.
                                                                                                      of all trading activity in a security.
                                              receive BYX Book Viewer from an
                                              External Distributor for an unlimited                   Rather, the other national securities                 III. Date of Effectiveness of the
                                              number of Professional and Non-                         exchanges, the several TRFs of FINRA,                 Proposed Rule Change and Timing for
                                              Professional Users, which is greater than               and Electronic Communication                          Commission Action
                                              the proposed Digital Media Enterprise                   Networks (‘‘ECN’’) that produce                          The foregoing rule change has become
                                              Fee. The Exchange also believes the                     proprietary data all produce trades and               effective pursuant to Section 19(b)(3)(A)
                                              amount of the Digital Media Enterprise                  trade reports. Each is currently                      of the Act 26 and paragraph (f) of Rule
                                              Fee is reasonable as compared to the                    permitted to produce last sale                        19b–4 thereunder.27 At any time within
                                              existing enterprise fees discussed above                information products, and many                        60 days of the filing of the proposed rule
                                              because the distribution of BYX Book                    currently do, including Nasdaq and                    change, the Commission summarily may
                                              Viewer data is limited to television,                   NYSE. In addition, market participants                temporarily suspend such rule change if
                                              Web sites, and mobile devices for                       can gain access to BYX last sale and                  it appears to the Commission that such
                                              informational purposes only, while                      depth-of-book quotations, though                      action is necessary or appropriate in the
                                              distribution of BYX Book Viewer data                    integrated with the prices of other                   public interest, for the protection of
                                              pursuant to an Enterprise license                       markets, on feeds made available                      investors, or otherwise in furtherance of
                                              contains no such limitation. The                        through the SIPs.                                     the purposes of the Act.
                                              Exchange also believes that the                            In sum, the availability of a variety of           IV. Solicitation of Comments
                                              proposed Digital Media Enterprise Fee
                                                                                                      alternative sources of information                      Interested persons are invited to
                                              is equitable and reasonable because it is
                                                                                                      imposes significant competitive                       submit written data, views and
                                              less than similar fees charged by other
                                              exchanges.25                                            pressures on Exchange data products                   arguments concerning the foregoing,
                                                                                                      and the Exchange’s compelling need to                 including whether the proposal is
                                              (B) Self-Regulatory Organization’s                      attract order flow imposes significant                consistent with the Act. Comments may
                                              Statement on Burden on Competition                      competitive pressure on the Exchange to               be submitted by any of the following
                                                 The Exchange does not believe that                   act equitably, fairly, and reasonably in              methods:
                                              the proposed rule change will result in                 setting the proposed data product fees.               Electronic Comments
                                              any burden on competition that is not                   The proposed data product fees are, in
                                              necessary or appropriate in furtherance                 part, responses to that pressure. The                   • Use the Commission’s Internet
                                              of the purposes of the Act, as amended.                 Exchange believes that the proposed                   comment form (http://www.sec.gov/
                                              The Exchange’s ability to price BYX                     fees would reflect an equitable                       rules/sro.shtml); or
                                                                                                                                                              • Send an email to rule-comments@
                                              Book Viewer is constrained by: (i)                      allocation of its overall costs to users of
                                                                                                                                                            sec.gov. Please include File No. SR–
                                              Competition among exchanges, other                      its facilities.                                       BYX–2015–36 on the subject line.
                                              trading platforms, and Trade Reporting                     In addition, when establishing the
                                              Facilities (‘‘TRF’’) that compete with                                                                        Paper Comments
                                                                                                      proposed fees, the Exchange considered
                                              each other in a variety of dimensions;                                                                           • Send paper comments in triplicate
                                                                                                      the competitiveness of the market for
                                              (ii) the existence of inexpensive real-                                                                       to Secretary, Securities and Exchange
                                                                                                      proprietary data and all of the
                                              time consolidated data and market-                                                                            Commission, 100 F Street NE.,
                                              specific data and free delayed data; and                implications of that competition. The
                                                                                                      Exchange believes that it has considered              Washington, DC 20549–1090.
                                              (iii) the inherent contestability of the                                                                      All submissions should refer to File No.
                                              market for proprietary data.                            all relevant factors and has not
                                                                                                      considered irrelevant factors in order to             SR–BYX–2015–36. This file number
                                                 The Exchange and its market data                                                                           should be included on the subject line
                                              products are subject to significant                     establish fair, reasonable, and not
                                                                                                      unreasonably discriminatory fees and an               if email is used. To help the
                                              competitive forces and the proposed                                                                           Commission process and review your
                                              fees represent responses to that                        equitable allocation of fees among all
                                                                                                      Users. The existence of alternatives to               comments more efficiently, please use
                                              competition. To start, the Exchange                                                                           only one method. The Commission will
                                              competes intensely for order flow. It                   BYX Book Viewer, including existing
                                                                                                                                                            post all comments on the Commission’s
                                              competes with the other national                        similar feeds by other exchanges,
                                                                                                                                                            Internet Web site (http://www.sec.gov/
                                              securities exchanges that currently trade               consolidated data, and proprietary data
                                                                                                                                                            rules/sro.shtml). Copies of the
                                              equities, with electronic communication                 from other sources, ensures that the                  submission, all subsequent
                                              networks, with quotes posted in                         Exchange cannot set unreasonable fees,                amendments, all written statements
                                              FINRA’s Alternative Display Facility,                   or fees that are unreasonably                         with respect to the proposed rule
                                              with alternative trading systems, and                   discriminatory, when vendors and                      change that are filed with the
                                              with securities firms that primarily                    subscribers can elect these alternatives              Commission, and all written
                                                                                                      or choose not to purchase a specific                  communications relating to the
                                                 25 The Nasdaq Stock Market offers proprietary
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                                              data products for distribution over the internet and
                                                                                                      proprietary data product if its cost to               proposed rule change between the
                                              television under alternative fee schedules that are     purchase is not justified by the returns              Commission and any person, other than
                                              subject to maximum fee of $50,000 per month. See        any particular vendor or subscriber                   those that may be withheld from the
                                              Nasdaq Rule 7039(b). The NYSE charges a Digit           would achieve through the purchase.
                                              Media Enterprise fee of $40,000 per month for the
                                                                                                                                                            public in accordance with the
                                              NYSE Trade Digital Media product. See Securities
                                                                                                                                                              26 15   U.S.C. 78s(b)(3)(A).
                                              Exchange Act Release No. 69272 (April 2, 2013), 78
                                              FR 20983 (April 8, 2013) (SR–NYSE–2013–23).                                                                     27 17   CFR 240.19b–4(f).



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                                              53358                       Federal Register / Vol. 80, No. 171 / Thursday, September 3, 2015 / Notices

                                              provisions of 5 U.S.C. 552, will be                       including the status of CHFR’s business               comments on the proposed rule change
                                              available for Web site viewing and                        operations.                                           from interested persons.
                                              printing in the Commission’s Public                         Based on CHFR’s amended Form 10–
                                                                                                                                                              I. Self-Regulatory Organization’s
                                              Reference Room, 100 F Street NE.,                         K/A annual report filed for its fiscal year
                                                                                                                                                              Statement of the Terms of Substance of
                                              Washington, DC 20549, on official                         ended December 31, 2014, CHFR is a
                                                                                                                                                              the Proposed Rule Change
                                              business days between the hours of                        Nevada corporation based in Beijing,
                                              10:00 a.m. and 3:00 p.m. Copies of such                   People’s Republic of China. The                          CME is filing the proposed rule
                                              filing will also be available for                         company’s common stock is quoted on                   change that is limited to its business as
                                              inspection and copying at the principal                   OTC Link operated by OTC Markets                      a derivatives clearing organization.
                                              office of the Exchange. All comments                      Group, Inc. under the symbol ‘‘CHFR.’’                More specifically, the proposed rule
                                              received will be posted without change;                   As of August 20, 2015, the company’s                  change would reduce the minimum IRS
                                              the Commission does not edit personal                     common stock had six market makers                    Guaranty Fund Contribution of IRS
                                              identifying information from                              and was eligible for the ‘‘piggyback’’                Clearing Members to $15,000,000 for all
                                              submissions. You should submit only                       exception of Rule 15c2–11(f)(3).                      IRS Clearing Members (including
                                              information that you wish to make                           The Commission is of the opinion that               affiliates).
                                              available publicly. All submissions                       the public interest and the protection of             II. Self-Regulatory Organization’s
                                              should refer to File No. SR–BYX–2015–                     investors require a suspension of trading             Statement of the Purpose of, and
                                              36 and should be submitted on or before                   in the securities of CHFR.                            Statutory Basis for, the Proposed Rule
                                              September 24, 2015.                                         Therefore, it is ordered, pursuant to               Change
                                                For the Commission, by the Division of                  Section 12(k) of the Securities Exchange
                                                                                                        Act of 1934, that trading in the                         In its filing with the Commission,
                                              Trading and Markets, pursuant to delegated
                                              authority.28                                              securities of CHFR is suspended for the               CME included statements concerning
                                                                                                        period from 9:30 a.m. EDT on                          the purpose and basis for the proposed
                                              Robert W. Errett,
                                                                                                        September 1, 2015, through 11:59 p.m.                 rule change and discussed any
                                              Deputy Secretary.                                                                                               comments it received on the proposed
                                              [FR Doc. 2015–21871 Filed 9–2–15; 8:45 am]
                                                                                                        EDT on September 15, 2015.
                                                                                                                                                              rule change. The text of these statements
                                              BILLING CODE 8011–01–P                                       By the Commission.                                 may be examined at the places specified
                                                                                                        Jill M. Peterson,                                     in Item IV below. CME has prepared
                                                                                                        Assistant Secretary.                                  summaries, set forth in sections A, B,
                                              SECURITIES AND EXCHANGE                                   [FR Doc. 2015–21975 Filed 9–1–15; 11:15 am]           and C below, of the most significant
                                              COMMISSION                                                BILLING CODE 8011–01–P                                aspects of such statements.

                                              [File No. 500–1]
                                                                                                                                                              A. Self-Regulatory Organization’s
                                                                                                        SECURITIES AND EXCHANGE                               Statement of the Purpose of, and
                                              In the Matter of China Fruits                             COMMISSION                                            Statutory Basis for, the Proposed Rule
                                              Corporation, Order of Suspension of                                                                             Change
                                              Trading                                                   [Release No. 34–75781; File No. SR–CME–                  CME is registered as a derivatives
                                                                                                        2015–016]
                                                                                                                                                              clearing organization with the
                                              September 1, 2015.
                                                                                                        Self-Regulatory Organizations;                        Commodity Futures Trading
                                                 It appears to the Securities and                                                                             Commission (‘‘CFTC’’) and currently
                                              Exchange Commission (the                                  Chicago Mercantile Exchange Inc.;
                                                                                                        Notice of Filing and Immediate                        offers clearing services for many
                                              ‘‘Commission’’) that there is a lack of                                                                         different futures and swaps products.
                                              current and accurate information                          Effectiveness of Proposed Rule
                                                                                                        Change To Reduce the Minimum IRS                      With this filing, CME proposes to make
                                              concerning the securities of China Fruits                                                                       rulebook changes that are limited to its
                                              Corporation (‘‘CHFR’’) because, among                     Guaranty Fund Contribution of IRS
                                                                                                        Clearing Members                                      business clearing futures and swaps
                                              other things, of questions regarding the                                                                        under the exclusive jurisdiction of the
                                              accuracy and completeness of CHFR’s                       August 28, 2015.                                      CFTC. More specifically, the proposed
                                              representations to investors and                             Pursuant to Section 19(b)(1) of the                rules would reduce the minimum IRS
                                              prospective investors in CHFR’s public                    Securities Exchange Act of 1934 (‘‘Act’’              Guaranty Fund Contribution of IRS
                                              filings with the Commission and                           or ‘‘Exchange Act’’),1 and Rule 19b–4                 Clearing Members to $15,000,000 for all
                                              CHFR’s publicly-available press releases                  thereunder,2 notice is hereby given that              IRS Clearing Members (including
                                              and other public statements.                              on August 24, 2015, Chicago Mercantile                affiliates).
                                                 In particular, CHFR is delinquent in                   Exchange Inc. (‘‘CME’’) filed with the                   CME periodically reviews its
                                              filing its Form 10–Q quarterly report for                 Securities and Exchange Commission                    requirements for clearing membership
                                              its second quarter ended June 30, 2015,                   (‘‘Commission’’) the proposed rule                    and has determined that it is
                                              and CHFR does not appear to have                          change described in Items I, II and III               appropriate to change the minimum
                                              publicly responded to news reports                        below, which Items have been prepared                 contribution to $15,000,000 as the
                                              concerning CHFR relating to, among                        primarily by CME. CME filed the                       current minimum, established at the
                                              other things, (i) the whereabouts of Mr.                  proposal pursuant to Section 19(b)(3)(A)              time of launch of the IRS clearing
                                              Quan Long Chen, CHFR’s current or                         of the Act,3 and Rule 19b–4(f)(4)(ii)                 service to ensure a robust financial
                                              former Chief Executive Officer,                           thereunder,4 so that the proposal was                 safeguards for IRS products, can be
                                              President, sole director, and controlling                 effective upon filing with the                        reduced due to the growth of IRS
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                                              shareholder; (ii) the status of any                       Commission. The Commission is                         clearing activity at CME and
                                              investor funds that may have been                         publishing this notice to solicit                     corresponding growth of the IRS
                                              collected by or through Mr. Chen in                                                                             Guaranty Fund size.5 The change could
                                              connection with CHFR; and, (iii) the                        1 15 U.S.C. 78s(b)(1).                              also encourage more entities to apply for
                                              financial condition of the company,                         2 17 CFR 240.19b–4.
                                                                                                          3 15 U.S.C. 78s(b)(3)(A).                            5 As of March 31, 2015, the IRS Guaranty Fund
                                                28 17   CFR 200.30–3(a)(12).                              4 17 CFR 240.19b–4(f)(4)(ii).                       was approximately $2.473 billion.



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Document Created: 2015-12-15 09:57:02
Document Modified: 2015-12-15 09:57:02
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 53353 

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