80 FR 55882 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees To Adopt a Tape B Volume Tier

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 180 (September 17, 2015)

[Federal Register Volume 80, Number 180 (Thursday, September 17, 2015)]
[Notices]
[Pages 55882-55883]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-23286]



[[Page 55882]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75902; File No. SR-BATS-2015-74]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Fees To Adopt a Tape B Volume Tier

September 11, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on September 9, 2015, BATS Exchange, Inc. (the ``Exchange'' or 
``BATS'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. 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 the 
Substance of the Proposed Rule Change

    The Exchange filed a proposal to amend its fees and rebates 
applicable to Members \5\ of the Exchange pursuant to Rule 15.1(a) and 
(c) (``Fee Schedule'') to adopt a Tape B Volume Tier.
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    \5\ A Member is defined as ``any registered broker or dealer 
that has been admitted to membership in the Exchange.'' See Exchange 
Rule 1.5(n).
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant parts of such 
statements.

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

1. Purpose
    Currently, the Exchange offers a rebate of $0.0020 per share as the 
standard rebate for orders with fee code B, which applies to orders 
that add liquidity to the Exchange in Tape B securities. The Exchange 
also offers various tiers that provide Members with the opportunity to 
earn higher rebates by meeting certain volume metrics, including the 
Cross-Asset Tape B Tier which provides a $0.0031 per share rebate to a 
Member's orders with a fee code of B for which the Member: (1) Has a 
Tape B Step-Up Add TCV \6\ from February 2015 that is equal to or 
greater than 0.06%; and (2) has an Options Market Maker Add TCV \7\ 
that is equal to or greater than 0.75% on the BATS Options.
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    \6\ As provided in the fee schedule, for purposes of BATS 
Equities pricing, ``Tape B Step-Up Add TCV'' means ADAV in Tape B 
securities as a percentage of TCV in the relevant baseline month 
subtracted from current ADAV in Tape B securities as a percentage of 
TCV.
    \7\ As provided in the fee schedule, for purposes of BATS 
Equities pricing, ``Options Market Maker Add TCV'' for purposes of 
equities pricing means ADAV resulting from Market Maker orders as a 
percentage of TCV, using the definitions of ADAV, Market Maker and 
TCV as provided under the Exchange's fee schedule for BATS Options.
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    The Exchange is proposing to adopt a new tier in footnote 13 titled 
``Tape B Volume Tier.'' Under the Tape B Volume Tier, the Exchange is 
proposing to provide a $0.0027 per share rebate to a Member's orders 
with a fee code of B for which the Member's Tape B ADAV as a percentage 
of TCV is equal to or greater than 0.08%. As is the case with any other 
rebates on the fee schedule, to the extent that a Member qualifies for 
higher rebates than those provided under the proposed Tape B Volume 
Tier, the higher rebates shall apply.
Implementation Date
    The Exchange proposes to implement this amendment to its Fee 
Schedule immediately.\8\
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    \8\ The Exchange initially filed the proposed fee change on 
August 31, 2015 (SR-BATS-2015-66). On September 2, 2015, the 
Exchange withdrew that filing and submitted filing SR-BATS-2015-70. 
On that same day, the Exchange withdrew SR-BATS-2015-70 and 
submitted SR-BATS-2015-72. On September 9, 2015, the Exchange 
withdrew SR-BATS-2015-72 and submitted this filing.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\9\ in general, and 
furthers the objectives of Section 6(b)(4),\10\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities. The Exchange also notes that it operates in a highly-
competitive market in which market participants can readily direct 
order flow to competing venues if they deem fee levels at a particular 
venue to be excessive. The proposed rule change reflects a competitive 
pricing structure designed to incent market participants to direct 
their order flow to the Exchange. The Exchange believes that the 
proposed rates are equitable and non-discriminatory in that they apply 
uniformly to all Members. The Exchange believes the fees and credits 
remain competitive with those charged by other venues and therefore 
continue to be reasonable and equitably allocated to Members.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4).
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    Volume-based rebates and fees such as the proposed Tape B Volume 
Tier have been widely adopted by equities and options exchanges and are 
equitable because they are open to all Members on an equal basis and 
provide additional benefits or discounts that are reasonably related to 
the value to an exchange's market quality associated with higher levels 
of market activity, such as higher levels of liquidity provision and/or 
growth patterns, and introduction of higher volumes of orders into the 
price and volume discovery processes.
    The Exchange believes that the proposal to add a Tape B Volume Tier 
is a reasonable, fair and equitable, and not unfairly discriminatory 
allocation of fees and rebates because it will provide Members with an 
additional incentive to reach certain thresholds on both [sic] the 
Exchange in Tape B securities. Such pricing programs thereby reward a 
Member's growth pattern in Tape B securities and such increased volume 
increases potential revenue to the Exchange, and will allow the 
Exchange to continue to provide and potentially expand the incentive 
programs operated by the Exchange. Further, the proposed changes will 
result in Members receiving either the same or an increased rebate than 
they would currently receive. The Exchange also notes that the proposed 
Tape B Volume Tier is similar to pricing tier already employed by the 
Exchange as well as on

[[Page 55883]]

other exchanges, including EDGX Exchange, Inc. (``EDGX''), which 
maintains a Tape B Step Up tier to incentivize added liquidity in Tape 
B securities.\11\
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    \11\ See EDGX fee schedule, footnote 2.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe its proposed amendments to its Fee 
Schedule would impose any burden on competition that is not necessary 
or appropriate in furtherance of the purposes of the Act. The Exchange 
does not believe that the proposed changes represent a significant 
departure from previous pricing offered by the Exchange or pricing 
offered by the Exchange's competitors. Additionally, Members may opt to 
disfavor the Exchange's pricing if they believe that alternatives offer 
them better value. Accordingly, the Exchange does not believe that the 
proposed change will impair the ability of Members or competing venues 
to maintain their competitive standing in the financial markets.
    The Exchange does not believe that the proposed new tier would 
burden competition, but instead, enhances competition, as they [sic] 
are intended to increase the competitiveness of and draw additional 
volume to the Exchange. As stated above, the Exchange notes that it 
operates in a highly competitive market in which market participants 
can readily direct order flow to competing venues if the deem fee 
structures to be unreasonable or excessive. The proposed changes are 
generally intended to enhance the rebates for liquidity added to the 
Exchange, which is intended to draw additional liquidity to the 
Exchange. The Exchange does not believe the proposed tier would burden 
intramarket competition as they [sic] would apply to all Members 
uniformly.

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

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from Members or other interested 
parties.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \12\ and paragraph (f) of Rule 19b-4 
thereunder.\13\ At any time within 60 days of the filing of the 
proposed rule change, the Commission summarily may temporarily suspend 
such rule change if it appears to the Commission that such action is 
necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BATS-2015-74 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-BATS-2015-74. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BATS-2015-74, and should be 
submitted on or before October 8, 2015.
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    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Brent J. Fields,
Secretary.
[FR Doc. 2015-23286 Filed 9-16-15; 8:45 am]
BILLING CODE 8011-01-P