81 FR 11335 - Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees as They Apply to the Equity Options Platform
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 42 (March 3, 2016)
Federal Register Volume 81, Issue 42 (March 3, 2016)
| Page Range | 11335-11337 | |
| FR Document | 2016-04634 |
[Federal Register Volume 81, Number 42 (Thursday, March 3, 2016)] [Notices] [Pages 11335-11337] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-04634] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77242; File No. SR-EDGX-2016-12] Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees as They Apply to the Equity Options Platform February 26, 2016. 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 February 18, 2016, EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') 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. --------------------------------------------------------------------------- \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). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend the fee schedule applicable to Members \5\ and non-members of the Exchange pursuant to EDGX Rules 15.1(a) and (c) (``Fee Schedule''). --------------------------------------------------------------------------- \5\ The term ``Member'' is defined as ``any registered broker or dealer that has been admitted to membership in the Exchange.'' See Exchange Rule 1.5(n). --------------------------------------------------------------------------- The text of the proposed rule change is available at the Exchange's Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. (A) Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange's current approach to routing fees is to set forth in a simple manner certain sub-categories of fees that approximate the cost of routing to other options exchanges based on the cost of transaction fees assessed by each venue as well as costs to the Exchange for routing (i.e., clearing fees, connectivity and other infrastructure costs, membership fees, etc.) (collectively, ``Routing Costs''). The Exchange then monitors the fees charged as compared to the costs of its routing services and adjusts its routing fees and/or sub-categories to ensure that the Exchange's fees do indeed result in [[Page 11336]] a rough approximation of overall Routing Costs, and are not significantly higher or lower in any area. The Exchange proposes to adopt a routing fee in connection with the launch of the new options exchange, ISE Mercury, LLC (``ISE Mercury'') consistent with this approach. The Exchange proposes to adopt fee code YC which would be appended to orders routed to ISE Mercury beginning February 16, 2016, which is the same date that ISE Mercury initiated trading.\6\ Orders that yield fee code YC would be charged a fee of $0.99 per contract. Proposed fee code YC would be applied to all orders routed to ISE Mercury regardless of the capacity of the order \7\ or whether the order is in a Penny Pilot Security \8\ or not. --------------------------------------------------------------------------- \6\ See SEC Approves ISE's Form 1 Application for Third Options Exchange, dated February 1, 2016, available at http://www.ise.com/press-room/press-releases/2016/february/ise-mercury-to-launch-on-february-16-2016/. The Exchange initially filed the proposed fee change on February 16, 2016 (SR-EDGX-2016-11). On February 18, 2016, the Exchange withdrew that filing and submitted this filing. \7\ Order capacities include Customer, Professional, Firm, Broker-Dealer, Joint Back Office, Market Maker, and Non-BATS Market Maker. As defined in the Exchange's Fee Schedule. \8\ As defined in the Exchange's Fee Schedule. --------------------------------------------------------------------------- The Exchange anticipates that the proposed fee structure will approximate the cost of routing orders to ISE Mercury. The Exchange also notes that the proposed fee for fee code YC is higher than the fees charged by ISE Mercury and is designed to approximate Routing Costs based on the highest rate ISE Mercury charges.\9\ As it has done historically in connection with the fee structure for routing to other options exchanges, the Exchange is proposing the charge set forth above to maintain a simple Fee Schedule with respect to routing fees that approximates the total cost of routing, including Routing Costs. --------------------------------------------------------------------------- \9\ ISE Mercury's standard rates range from a rebate of $0.18 to a fee of $0.90 per contract. See ISE Mercury Fee Notice dated February 5, 2016 available at http://www.ise.com/assets/mercury/ documents/OptionsExchange/legal/fee/2016/ ISE%20Mercury%20Fee%20Announcement$20160205.pdf. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,\10\ in general, and furthers the objectives of Section 6(b)(4),\11\ 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. As explained above, the Exchange generally attempts to approximate the cost of routing to other options exchanges, including other applicable costs to the Exchange for routing. While the proposed fee for fee code YC is higher than the fees charged by ISE Mercury, the Exchange believes it is reasonable as it takes into account Routing Costs based on the highest rate charged by ISE Mercury. The Exchange believes that a pricing model based on approximate Routing Costs is a reasonable, fair and equitable approach to pricing. Specifically, the Exchange believes that its proposal to adopt routing fees to ISE Mercury is fair, equitable and reasonable because the fees are generally an approximation of the anticipated cost to the Exchange for routing orders to ISE Mercury. The Exchange notes that routing through the Exchange is voluntary. The Exchange also believes that the proposed fee structure for orders routed to and executed at ISE Mercury is fair and equitable and not unreasonably discriminatory in that it applies equally to all Members. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78f. \11\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- (B) Self-Regulatory Organization's Statement on Burden on Competition These proposed rule changes do not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that any of these 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 changes will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. The Exchange does not believe that its proposed pricing for routing to ISE Mercury burdens competition, as such rates are intended to approximate the cost of routing to ISE Mercury. The Exchange 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 to be excessive or providers of routing services if they deem routing fee levels to be excessive. The Exchange believes that its proposal would not burden intramarket competition because the proposed rate would apply uniformly to all Members. (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. --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A). \13\ 17 CFR 240.19b-4(f). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-EDGX-2016-12 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 Number SR-EDGX-2016-12. 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 [[Page 11337]] 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 will also be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-EDGX-2016-12 and should be submitted on or before March 24, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-04634 Filed 3-2-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 42 / Thursday, March 3, 2016 / Notices 11335
III. Date of Effectiveness of the rules/sro.shtml). Copies of the Exchange under Section 19(b)(3)(A)(ii)
Proposed Rule Change and Timing for submission, all subsequent of the Act 3 and Rule 19b–4(f)(2)
Commission Action amendments, all written statements thereunder,4 which renders the
Because the proposed rule change with respect to the proposed rule proposed rule change effective upon
does not (i) significantly affect the change that are filed with the filing with the Commission. The
protection of investors or the public Commission, and all written Commission is publishing this notice to
interest; (ii) impose any significant communications relating to the solicit comments on the proposed rule
burden on competition; and (iii) become proposed rule change between the change from interested persons.
operative for 30 days after the date of Commission and any person, other than
those that may be withheld from the I. Self-Regulatory Organization’s
the filing, or such shorter time as the Statement of the Terms of Substance of
Commission may designate, it has public in accordance with the
provisions of 5 U.S.C. 552, will be the Proposed Rule Change
become effective pursuant to Section
available for Web site viewing and The Exchange filed a proposal to
19(b)(3)(A) of the Act 78 and Rule 19b–
printing in the Commission’s Public amend the fee schedule applicable to
4(f)(6) thereunder.79
At any time within 60 days of the Reference Room, 100 F Street NE., Members 5 and non-members of the
filing of the proposed rule change, the Washington, DC 20549 on official Exchange pursuant to EDGX Rules
Commission summarily may business days between the hours of 15.1(a) and (c) (‘‘Fee Schedule’’).
temporarily suspend such rule change if 10:00 a.m. and 3:00 p.m. Copies of such The text of the proposed rule change
it appears to the Commission that such filing also will be available for is available at the Exchange’s Web site
action is necessary or appropriate in the inspection and copying at the principal at www.batstrading.com, at the
public interest, for the protection of office of the Exchange. All comments principal office of the Exchange, and at
received will be posted without change; the Commission’s Public Reference
investors, or otherwise in furtherance of
the Commission does not edit personal Room.
the purposes of the Act. If the
identifying information from
Commission takes such action, the II. Self-Regulatory Organization’s
submissions. You should submit only
Commission shall institute proceedings Statement of the Purpose of, and
information that you wish to make
to determine whether the proposed rule Statutory Basis for, the Proposed Rule
available publicly. All submissions
change should be approved or Change
should refer to File No. SR–NYSEMKT–
disapproved. In its filing with the Commission, the
2016–30, and should be submitted on or
IV. Solicitation of Comments before March 24, 2016. Exchange included statements
Interested persons are invited to For the Commission, by the Division of concerning the purpose of and basis for
submit written data, views, and Trading and Markets, pursuant to delegated the proposed rule change and discussed
arguments concerning the foregoing, authority.80 any comments it received on the
including whether the proposed rule Robert W. Errett, proposed rule change. The text of these
change is consistent with the Act. Deputy Secretary. statements may be examined at the
Comments may be submitted by any of [FR Doc. 2016–04633 Filed 3–2–16; 8:45 am] places specified in Item IV below. The
the following methods: BILLING CODE 8011–01–P
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
Electronic Comments the most significant parts of such
• Use the Commission’s Internet SECURITIES AND EXCHANGE statements.
comment form (http://www.sec.gov/ COMMISSION (A) Self-Regulatory Organization’s
rules/sro.shtml); or Statement of the Purpose of, and
[Release No. 34–77242; File No. SR–EDGX–
• Send an email to rule-comments@ 2016–12] Statutory Basis for, the Proposed Rule
sec.gov. Please include File No. SR– Change
NYSEMKT–2016–30 on the subject line. Self-Regulatory Organizations; EDGX
Exchange, Inc.; Notice of Filing and 1. Purpose
Paper Comments
Immediate Effectiveness of a Proposed The Exchange’s current approach to
• Send paper comments in triplicate Rule Change Related to Fees as They routing fees is to set forth in a simple
to Secretary, Securities and Exchange Apply to the Equity Options Platform manner certain sub-categories of fees
Commission, 100 F Street NE., that approximate the cost of routing to
Washington, DC 20549–1090. February 26, 2016.
other options exchanges based on the
All submissions should refer to File No. Pursuant to Section 19(b)(1) of the
cost of transaction fees assessed by each
SR–NYSEMKT–2016–30. This file Securities Exchange Act of 1934 (the
venue as well as costs to the Exchange
number should be included on the ‘‘Act’’),1 and Rule 19b–4 thereunder,2
for routing (i.e., clearing fees,
subject line if email is used. To help the notice is hereby given that on February
connectivity and other infrastructure
Commission process and review your 18, 2016, EDGX Exchange, Inc. (the
costs, membership fees, etc.)
comments more efficiently, please use ‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission (collectively, ‘‘Routing Costs’’). The
only one method. The Commission will Exchange then monitors the fees
post all comments on the Commission’s (‘‘Commission’’) the proposed rule
change as described in Items I, II and III charged as compared to the costs of its
Internet Web site (http://www.sec.gov/ routing services and adjusts its routing
below, which Items have been prepared
fees and/or sub-categories to ensure that
mstockstill on DSK4VPTVN1PROD with NOTICES
78 15 U.S.C. 78s(b)(3)(A). by the Exchange. The Exchange has
79 17 designated the proposed rule change as the Exchange’s fees do indeed result in
CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the one establishing or changing a member 3 15
Commission with written notice of its intent to file U.S.C. 78s(b)(3)(A)(ii).
due, fee, or other charge imposed by the 4 17 CFR 240.19b–4(f)(2).
the proposed rule change, along with a brief
description and the text of the proposed rule 5 The term ‘‘Member’’ is defined as ‘‘any
80 17 CFR 200.30–3(a)(12).
change, at least five business days prior to the date registered broker or dealer that has been admitted
1 15 U.S.C. 78s(b)(1).
of filing of the proposed rule change, or such to membership in the Exchange.’’ See Exchange
shorter time as designated by the Commission. 2 17 CFR 240.19b–4. Rule 1.5(n).
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![Federal Register / Vol. 81, No. 42 / Thursday, March 3, 2016 / Notices 11337
Commission and any person, other than SECURITIES AND EXCHANGE Media/Contra fee cap under FINRA Rule
those that may be withheld from the COMMISSION 7620A (FINRA/Nasdaq Trade Reporting
public in accordance with the [Release No. 34–77243; File No. SR–FINRA–
Facility Reporting Fees).
provisions of 5 U.S.C. 552, will be 2016–009] Below is the text of the proposed rule
available for Web site viewing and change. Proposed new language is in
printing in the Commission’s Public Self-Regulatory Organizations; italics; proposed deletions are in
Reference Room, 100 F Street NE., Financial Industry Regulatory brackets.
Washington, DC 20549, on official Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed * * * * *
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such Rule Change To Amend FINRA Rule 7000. CLEARING, TRANSACTION AND
filing will also be available for 7620A (FINRA/Nasdaq Trade Reporting ORDER DATA REQUIREMENTS, AND
inspection and copying at the principal Facility Reporting Fees) FACILITY CHARGES
office of the Exchange. All comments February 26, 2016. * * * * *
received will be posted without change; Pursuant to Section 19(b)(1) of the
the Commission does not edit personal Securities Exchange Act of 1934 7600. DATA PRODUCTS AND
identifying information from (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 CHARGES FOR TRADE REPORTING
submissions. You should submit only notice is hereby given that on February FACILITY SERVICES
information that you wish to make 23, 2016, Financial Industry Regulatory 7600A. DATA PRODUCTS AND
available publicly. All submissions Authority, Inc. (‘‘FINRA’’) filed with the CHARGES FOR FINRA/NASDAQ
should refer to File Number SR–EDGX– Securities and Exchange Commission
TRADE REPORTING FACILITY
2016–12 and should be submitted on or (‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II, SERVICES
before March 24, 2016.
and III below, which Items have been * * * * *
For the Commission, by the Division of
prepared by FINRA. FINRA has
Trading and Markets, pursuant to delegated
designated the proposed rule change as 7620A. FINRA/Nasdaq Trade Reporting
authority.14 Facility Reporting Fees
‘‘establishing or changing a due, fee or
Robert W. Errett, other charge’’ under Section The following charges shall be paid
Deputy Secretary. 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–
by participants for use of the FINRA/
[FR Doc. 2016–04634 Filed 3–2–16; 8:45 am] 4(f)(2) thereunder,4 which renders the
Nasdaq Trade Reporting Facility. In the
BILLING CODE 8011–01–P proposal effective upon receipt of this
filing by the Commission. The case of trades where the same market
Commission is publishing this notice to participant is on both sides of a trade
solicit comments on the proposed rule report, applicable fees assessed on a
change from interested persons. ‘‘per side’’ basis will be assessed once,
rather than twice, and the market
I. Self-Regulatory Organization’s participant will be assessed applicable
Statement of the Terms of the Substance Non-Comparison/Accept (Non-Match/
of the Proposed Rule Change Compare) Charges as the Executing
FINRA is proposing to adjust one of Party side only.
the thresholds required to qualify for the
Non-Comparison/Accept (Non-Match/Compare) Charges
Tape: Daily Average Number of Media/Executing Party Trades During the
Month Needed to Qualify for Cap:
A ........................................................................................................ 2500.
B ........................................................................................................ 2500.
C ........................................................................................................ 2500.
Media/Executing Party
Monthly Charge: Maximum Monthly Charge if Capped:
($0.018) × (Number of Media/Executing Party Reports During the ($0.018) × (Required Daily Average Number of Media/EP Trades
Month). for Tape A, B or C) × (Number of Trading Days During the
Month).
Non-Media/Executing Party
Monthly Charge: Maximum Monthly Charge if Capped:
($0.018) × (Number of Non-Media/Executing Party Reports During ($0.018) × 2500 for Tape A, B or C × (Number of Trading Days
the Month). During the Month).
Media/Contra
mstockstill on DSK4VPTVN1PROD with NOTICES
Monthly Charge: Maximum Monthly Charge if Capped:
($0.013) × (Number of Media/Contra Reports During the Month) .... ($0.013) × 2500 for Tape A, B or C × (Number of Trading Days
During the Month).
14 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. 4 17 CFR 240.19b–4(f)(2).
1 15 U.S.C. 78s(b)(1). 3 15 U.S.C. 78s(b)(3)(A)(ii).
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Document Created: 2016-03-03 03:51:47
Document Modified: 2016-03-03 03:51:47
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 11335 |
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