81 FR 15596 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of the Exchange
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 56 (March 23, 2016)
Federal Register Volume 81, Issue 56 (March 23, 2016)
| Page Range | 15596-15599 | |
| FR Document | 2016-06514 |
[Federal Register Volume 81, Number 56 (Wednesday, March 23, 2016)] [Notices] [Pages 15596-15599] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-06514] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77394; File No. SR-BatsEDGX-2016-02] Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of the Exchange March 17, 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 March 17, 2016, Bats EDGX Exchange, Inc. f/k/a EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II 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'') to: (i) Increase the rebate for Retail Orders \6\ that yield fee code ZA; (ii) delete the Retail Order Tier under footnote 4; (iii) amend or delete various Add Volume Tiers under footnote 1; and (iv) amend the Tape B Step Up Tier under footnote 2. --------------------------------------------------------------------------- \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). \6\ A ``Retail Order'' is ``an order that: (i) Is an agency order or riskless principal order that meets the criteria of FINRA Rule 5320.03 that originates from a natural person; (ii) is submitted to EDGX by a Member, provided that no change is made to the terms of the order; and (iii) does not originate from a trading algorithm or any other computerized methodology.'' See Exchange Rule 11.24(a). --------------------------------------------------------------------------- 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 the Statutory Basis for, the Proposed Rule Change 1 Purpose The Exchange proposes to amend its Fee Schedule to: (i) Increase the rebate for Retail Orders that yield fee code ZA; (ii) delete the Retail Order Tier under footnote 4; (iii) amend or delete various Add Volume Tiers under footnote 1; and (iv) amend the Tape B Step Up Tier under footnote 2. Fee Code ZA and the Retail Order Tier The Exchange proposes to increase the rebate for Retail Orders that yield fee code ZA and delete the Retail Order Tier under footnote 4.\7\ First, the Exchange proposes to increase the rebate for Retail Orders that yield fee code ZA from $0.0032 per share to $0.0034 per share. Fee code ZA is appended to Retail Orders that add liquidity on the Exchange. In a related change, the Exchange proposes to delete the Retail Order Tier under footnote 4.\8\ Currently, under the Retail Order Tier, a Retail Order that yields fee code ZA will receive a rebate of $0.0034 per share where that Member adds Retail Orders that average at least 0.07% of TCV.\9\ Going forward, Members would receive a receive rebate of $0.0034 per share for their Retail Orders that yield fee code ZA without having to satisfy certain add volume criteria. Providing all Retail Orders that yield fee code ZA a rebate of $0.0034 per share would mirror the rebate currently provided by the Nasdaq Stock Market LLC (``Nasdaq'').\10\ --------------------------------------------------------------------------- \7\ Footnote 4 would continue to note that Members will only be able to designate their orders as Retail Orders on either an order- by-order basis using FIX ports or by designating certain of their FIX ports at the Exchange as ``Retail Order Ports.'' \8\ As a result of deleting the Retail Order Tier under footnote 4, the Exchange proposes to delete a reference to footnote 4 in the Standard Rates table of its Fee Schedule. \9\ As defined in the Exchange's Fee Schedule. \10\ See Nasdaq Price List--Trading Connectivity available at http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2 (offering a rebate of $0.0034 per share to add displayed designated retail liquidity). --------------------------------------------------------------------------- Add Volume Tiers--Footnote 1 Currently, the Exchange determines the liquidity adding rebate that it will provide to Members using the Exchange's tiered pricing structure. Under such pricing structure, a Member will receive a rebate of anywhere between $0.0025 and $0.0035 per share executed, depending on the volume tier for which such Member qualifies. The Exchange currently offers thirteen separate Add Volume Tiers under footnote 1 of its Fee schedule which provide various enhanced rebates based on the Members satisfying certain monthly volume thresholds. The Exchange now proposes to amend or delete various tiers under footnote 1 in order to update, streamline, and simply its tiered pricing structure. Tiers To Be Deleted First, the Exchange proposes to delete the Market Depth Tier 1 and Market [[Page 15597]] Depth Tier 2. Under the Market Depth Tier 1, a Member receives a rebate of $0.00325 per share when that Member adds an ADV \11\ of at least 0.85% of the TCV; and adds an ADV of at least 4,000,000 shares as non- displayed orders that yield fee code HA.\12\ Under the Market Depth Tier 2, a Member receives a rebate of $0.0029 per share when that Member adds an ADV of at least 10,000,000 shares; and adds an ADV of at least 1,000,000 shares as Non-displayed orders that yield fee code HA. The Exchange believes deleting the Market Depth Tier 1 and the Market Depth Tier 2 is reasonable as Members would be able to receive similar rebates by achieving other tiers without the additional requirement of adding a certain volume of non-displayed orders. --------------------------------------------------------------------------- \11\ As defined in the Exchange's Fee Schedule. \12\ Fee code HA is appended to non-displayed orders that add liquidity. --------------------------------------------------------------------------- In addition, the Exchange proposes to delete Mega Step-Up Tier 1, Mega Step-Up Tier 2, and Mega Step-Up Tier 3. Under Mega Step-Up Tier 1, a Member receives a rebate of $0.0032 per share when they add: (i) An ADV of at least 0.12% of the TCV more than the Member's added ADV from February 2011; and (ii) an ADV of at least 0.35% of the TCV. Under Mega Step-Up Tier 2, a Member receives a rebate of $0.0030 per share when they add an ADV of at least 0.12% of the TCV more than the Member's added ADV from February 2011. Lastly, under Mega Step-Up Tier 3, a Member receives a rebate of $0.0028 per share when they add an ADV of at least 0.065% of the TCV more than the Member's added ADV from February 2011. Each of these tiers require a Member add more liquidity than their added ADV from February 2011. The Exchange believes that each of these tiers have served their intended purpose of encouraging Members to increase their trading activity on the Exchange from a February 2011 baseline. In addition, the Exchange believes that these tiers have become outdated by utilizing a baseline ADV that is approximately five years old. Therefore, the Exchange proposes to delete Mega Step-Up Tier 1, Mega Step-Up Tier 2, and Mega Step-Up Tier 3 from footnote 1 of its Fee Schedule. Amendments to Mega Tiers 1, 2, and 3 The Exchange also proposes to amend the rebate and/or required criteria for the Mega Tier 1, Mega Tier 2, and Mega Tier 3. The Exchange proposes to amend Mega Tiers 1 and 3 by decreasing the applicable rebate and simplifying the criteria required to meet the tier. Under Mega Tier 1, a Member currently receives a rebate of $0.0035 per share where they satisfy the following three criteria: (i) Add or route a combined ADV of at least 4,000,000 shares prior to 9:30 a.m. or after 4:00 p.m.; (ii) add an ADV of at least 35,000,000 shares, including during both market hours and pre and post-trading hours; and (iii) has an ``added liquidity'' as a percentage of ``added plus removed liquidity'' of at least 85%. First, the Exchange proposes to simplify the criteria necessary to meet the tier by replacing the above three requirements with a single requirement that the Member add an ADV of at least 0.75% of TCV. Second, to reflect the simplified criteria, the Exchange proposes to decrease the rebate offered under Mega Tier 1 from $0.0035 per share to $0.0032 per share. Under Mega Tier 3, a Member currently receives a rebate of $0.0032 per share where they satisfy the following two criteria: (i) Add or route a combined ADV of at least 1,500,000 shares prior to 9:30 a.m. or after 4:00 p.m.; and (ii) add an ADV of at least 0.75% of the TCV, including during both market hours and pre and post-trading hours. First, the Exchange proposes to simplify the criteria necessary to meet the tier by replacing the above two requirements with a single requirement that the Member add an ADV of at least 0.45% of TCV. Second, to reflect the tier's simplified criteria, the Exchange proposes to decrease the rebate offered by Mega Tier 3 from $0.0032 per share to $0.0031 per share. The Exchange also proposes to increase the criteria necessary to achieve Mega Tier 2. Under Mega Tier 2, a Member currently receives a rebate of $0.0032 per share where they: (i) Add or route a combined ADV of at least 4,000,000 shares prior to 9:30 a.m. or after 4:00 p.m.; and (ii) adds an ADV of at least 0.20% of the TCV, including during both market hours and pre and post-trading hours. The Exchange proposes to amend the second requirement under Mega Tier 2 by increasing the add ADV from at least 0.20% of the TCV to at least 0.65% of TCV, including during both market hours and pre and post-trading hours. The Exchange believes the amendment to Mega Tier 2 is reasonable because increasing the criteria necessary to meet the tier reflects the amount of the rebate provided as compared to that necessary to achieve the next best tier, Mega Tier 1. Amendments to the Ultra Tier, Super Tier, Growth Tier, and Investor Tier The Exchange also proposes to amend the Ultra Tier, Super Tier, Growth Tier, and Investor Tier by altering the tiers' rebate and/or required criteria in order to incorporate a tiered rebate structure that is in relation to the Member's added ADV of at least a certain percentage of TCV. First, under the Ultra Tier, a Member receives a rebate of $0.0031 per share where they add an ADV of at least 0.50% of the TCV. The Exchange proposes to ease the criteria necessary to meet the tier by reducing the add ADV requirement to be at least 0.30% of TCV, rather than 0.50% of TCV. To reflect the easing of the tier's required criteria, the Exchange also proposes to decrease the rebate offered by the Ultra Tier from $0.0031 per share to $0.0030 per share. Under the Super Tier, a Member receives a rebate of $0.0028 per share where they add an ADV of at least 10,000,000 shares. The Exchange proposes to amend the tier to require that the Member add an ADV of at least 0.15% of the TCV, rather than 10,000,000 shares. Under the Growth Tier, a Member receives a rebate of $0.0025 per share where they add an ADV of at least 5,000,000 shares. The Exchange proposes to amend the tier to require that the Member add an ADV of at least 0.08% of the TCV, rather than 5,000,000 shares. Lastly, under the Investor Tier, a Member receives a rebate of $0.0032 per share where they satisfy the following two criteria: (i) Adds an ADV of at least 0.15% of the TCV; and (ii) has an ``added liquidity'' as a percentage of ``added plus removed liquidity'' of at least 85%. The Exchange proposes to amend the second requirement under the Investor Tier by increasing the add ADV from at least 0.15% of the TCV to at least 0.20% of TCV. Tape B Step Up Tier Under the Tape B Step Up Tier, Member's orders yielding fee codes B \13\ or 4 \14\ receive a rebate of $0.0027 per share where that Member adds an ADV of at least 600,000 shares in Tape B securities more than the Member's added ADV in Tape B Securities from August 2013. First the Exchange proposes to rename the Tape B Step Up Tier as the Tape B Volume Tier. Second, the Exchange proposes to update the criteria necessary to achieve the tier by removing the requirement that the Member add an ADV of at least 600,000 shares in Tape B securities more than the Member's added ADV in Tape B Securities from August 2013. Instead, [[Page 15598]] the Exchange would require that the Member add an ADV of at least 0.02% of TCV in Tape B securities. The Exchange believes that the tier's current criteria has served its intended purpose of encouraging Members to increase their trading activity on the Exchange in Tape B securities from an August 2013 baseline. In addition, the Exchange believes that this tier has become outdated by utilizing a baseline that is approximately two and a half years old and that the proposed criteria reflects a volume requirement reasonably related to the amount of the available rebate. --------------------------------------------------------------------------- \13\ Fee code B is appended to orders in Tape B securities that add liquidity. \14\ Fee code 4 is appended to orders in Tape B securities that add liquidity during the pre and post market. --------------------------------------------------------------------------- Implementation Date The Exchange proposes to implement this amendment to its Fee Schedule immediately.\15\ --------------------------------------------------------------------------- \15\ The Exchange initially filed the proposed fee change on March 1, 2016 (SR-EDGX-2016-15). On March 9, 2016, the Exchange withdrew SR-EDGX-2016-15 and submitted SR-EDGX-2016-17. On March 17, 2016, the Exchange withdrew SR-EDGX-2016-17 and submitted this filing. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,\16\ in general, and furthers the objectives of Section 6(b)(4),\17\ 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 tier is equitable and non-discriminatory in it would apply uniformly to all Members. The Exchange believes the rates remain competitive with those charged by other venues and, therefore, reasonable and equitably allocated to Members. --------------------------------------------------------------------------- \16\ 15 U.S.C. 78f. \17\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- Volume-based rebates such as that proposed herein have been widely adopted by equities 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: (i) The value to an exchange's market quality; (ii) associated higher levels of market activity, such as higher levels of liquidity provision and/or growth patterns; and (iii) introduction of higher volumes of orders into the price and volume discovery processes. The Exchange believes that the proposed tier revisions are a reasonable, fair and equitable, and not unfairly discriminatory allocation of fees and rebates because they will provide Members with an additional incentive to reach certain thresholds on the Exchange. In particular, the Exchange believes the proposed revisions to footnote 1 are equitable, reasonable, and not unfairly discriminatory as they are designed to amend or delete various tiers resulting in an updated, streamlined, and simplified tiered pricing structure. As noted above, the Exchange currently offers thirteen separate tiers under footnote 1 of its Fee Schedule. Under the proposed rule change, the number of tiers offered under footnote 1 would decrease by nearly 50% from thirteen to seven. The Exchange believes that is reasonable to delete Mega Step-Up Tiers 1, 2, and 3 because it believes each of these tiers have served their intended purpose of encouraging Members to increase their trading activity on the Exchange from a February 2011 baseline. In addition, the Exchange believes that these tiers have become outdated by utilizing a baseline ADV that is approximately five years old. In addition, the Exchange believes deleting the Market Depth Tier 1 and the Market Depth Tier 2 is equitable, reasonable, and not unfairly discriminatory as Members would be able to receive similar rebates by achieving other tiers without the additional requirement of adding a certain volume of non-displayed orders.\18\ --------------------------------------------------------------------------- \18\ See Mega Tier 2 under footnote 1 of the Fee Schedule (offering a rebate of $0.0032 per share), and the Super Tier under footnote 1 of the Fee Schedule (offering a rebate of $0.0028 per share). --------------------------------------------------------------------------- In addition, the Exchange believes its proposed changes to Mega Tier 1 and 3 are equitable, reasonable, and not unfairly discriminatory as they are designed to decrease the applicable rebate to reflect the proposed simplification of the criteria required to meet the tiers. The Exchange also believes the amendment to Mega Tier 2 is equitable, reasonable, and not unfairly discriminatory as increasing the criteria necessary to meet the tier reflects the amount of the rebate provided as compared to that necessary to achieve the next best tier, Mega Tier 1. In addition, the proposed amendments to the Ultra Tier, Super Tier, Growth Tier, and Investor Tier are designed to incorporate a rebate structure that is in relation to the Member's added ADV of at least a certain percentage of TCV. The Exchange believes that these incentives are reasonable, fair and equitable because the liquidity from each of these proposals also benefits all investors by deepening the Exchange's liquidity pool, offering additional flexibility for all investors to enjoy cost savings, supporting the quality of price discovery, promoting market transparency and improving investor protection. Such pricing programs thereby reward a Member's growth pattern and such increased volume increase potential revenue to the Exchange, and will allow the Exchange to continue to provide and potentially expand the incentive programs operated by the Exchange. The Exchange also believes that its proposed revision to the Tape B Step Up Tier is also equitable, reasonable and not unfairly discriminatory. The tier as currently constructed has served its intended purpose of encouraging Members to increase their trading activity on the Exchange in Tape B securities from an August 2013 baseline. In addition, the Exchange believes that this tier has become outdated by utilizing a baseline that is approximately two and a half years old. The Exchange also believes the proposed amendment to the Tape B Step Up Tier is a reasonable means to encourage Members to increase their liquidity in Tape B securities. The Exchange also believes providing a rebate of $0.0027 per share where a Member's Tape B ADV as a percentage of TCV is equal to or greater than 0.02% is also equitable and reasonable. Such pricing rewards a Member's growth pattern in Tape B securities and such increased volume, in turn, results in increased potential revenue to the Exchange, allowing the Exchange to continue to provide and potentially expand the incentive programs operated by the Exchange. Lastly, the Exchange believes that increasing the rebate for Retail Orders that yield fee code ZA and delete the Retail Order Tier under footnote 4 represents an equitable allocation of reasonable dues, fees, and other charges because providing a uniform rebate for Retail Orders would encourage Members to send additional Retail Orders that add liquidity to the Exchange without having to meet certain volume requirements. The increased liquidity benefits all investors by deepening the Exchange's liquidity pool, offering additional flexibility for all investors to enjoy cost savings, supporting the quality of price discovery, promoting market transparency and improving investor protection. Lastly, the proposed rebate [[Page 15599]] of $0.0034 per share for all Retail Orders is reasonable because it mirrors the rebate currently provided by Nasdaq.\19\ --------------------------------------------------------------------------- \19\ See Nasdaq Price List--Trading Connectivity available at http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2 (offering a rebate of $0.0034 per share to add displayed designated retail liquidity). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe the proposed amendment 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 change represents a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange's competitors. Additionally, Members may opt to disfavor the Exchange's pricing if they believe that alternatives offer them better value. Accordingly, the Exchange does not believe that the proposed change will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. The Exchange does not believe that the proposed tier revisions would burden competition, but instead, enhances competition, as they 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 they deem fee structures to be unreasonable or excessive. The proposed changes are generally intended to update, simplify, and streamline the Exchange's tiered pricing structure, which the Exchange designed to attract additional liquidity. The Exchange believes that the proposed tier revisions will allow the Exchange to compete more ably with other execution venues by drawing additional volume to the Exchange, thereby making it a more desirable destination venue for its customers. The Exchange does not believe the proposed tier revisions would burden intramarket competition as they would apply to all Members uniformly. Regarding the Retail Orders, the Exchange believes that its proposal to provide a uniform rebate to all Retail Orders will increase intermarket competition for Retail Orders because the proposed would mirror the rebate currently provided by Nasdaq.\20\ The Exchange believes that its proposal would neither increase nor decrease intramarket competition because the rebate would apply uniformly to all Members. --------------------------------------------------------------------------- \20\ See Nasdaq Price List--Trading Connectivity available at http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2 (offering a rebate of $0.0034 per share to add displayed designated retail liquidity). --------------------------------------------------------------------------- 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 \21\ and paragraph (f) of Rule 19b-4 thereunder.\22\ 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. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78s(b)(3)(A). \22\ 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-BatsEDGX-2016-02 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-BatsEDGX-2016-02. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing 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-BatsEDGX-2016-02, and should be submitted on or before April 13, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\23\ --------------------------------------------------------------------------- \23\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-06514 Filed 3-22-16; 8:45 am] BILLING CODE 8011-01-P
![15596 Federal Register / Vol. 81, No. 56 / Wednesday, March 23, 2016 / Notices
those that may be withheld from the thereunder,4 which renders the (iv) amend the Tape B Step Up Tier
public in accordance with the proposed rule change effective upon under footnote 2.
provisions of 5 U.S.C. 552, will be filing with the Commission. The
Fee Code ZA and the Retail Order Tier
available for Web site viewing and Commission is publishing this notice to
printing in the Commission’s Public solicit comments on the proposed rule The Exchange proposes to increase
Reference Room, 100 F Street NE., change from interested persons. the rebate for Retail Orders that yield fee
Washington, DC 20549, on official code ZA and delete the Retail Order
I. Self-Regulatory Organization’s Tier under footnote 4.7 First, the
business days between the hours of Statement of the Terms of Substance of
10:00 a.m. and 3:00 p.m. Copies of such Exchange proposes to increase the
the Proposed Rule Change rebate for Retail Orders that yield fee
filing also will be available for
inspection and copying at the principle The Exchange filed a proposal to code ZA from $0.0032 per share to
office of FINRA. All comments received amend the fee schedule applicable to $0.0034 per share. Fee code ZA is
will be posted without change. The Members 5 and non-members of the appended to Retail Orders that add
Commission does not edit personal Exchange pursuant to EDGX Rules liquidity on the Exchange. In a related
identifying information from 15.1(a) and (c) (‘‘Fee Schedule’’) to: (i) change, the Exchange proposes to delete
submissions. You should submit only Increase the rebate for Retail Orders 6 the Retail Order Tier under footnote 4.8
information that you wish to make that yield fee code ZA; (ii) delete the Currently, under the Retail Order Tier,
publicly available. Retail Order Tier under footnote 4; (iii) a Retail Order that yields fee code ZA
amend or delete various Add Volume will receive a rebate of $0.0034 per
All submissions should refer to File Tiers under footnote 1; and (iv) amend share where that Member adds Retail
Number SR–FINRA–2015–054 and the Tape B Step Up Tier under footnote Orders that average at least 0.07% of
should be submitted on or before April 2. TCV.9 Going forward, Members would
13, 2016. If comments are received, any The text of the proposed rule change receive a receive rebate of $0.0034 per
rebuttal comments should be submitted is available at the Exchange’s Web site share for their Retail Orders that yield
by May 9, 2016. at www.batstrading.com, at the fee code ZA without having to satisfy
For the Commission, by the Division of principal office of the Exchange, and at certain add volume criteria. Providing
Trading and Markets, pursuant to delegated the Commission’s Public Reference all Retail Orders that yield fee code ZA
authority.75 Room. a rebate of $0.0034 per share would
Robert W. Errett, mirror the rebate currently provided by
II. Self-Regulatory Organization’s
Deputy Secretary.
Statement of the Purpose of, and the Nasdaq Stock Market LLC
[FR Doc. 2016–06453 Filed 3–22–16; 8:45 am] Statutory Basis for, the Proposed Rule (‘‘Nasdaq’’).10
BILLING CODE 8011–01–P Change Add Volume Tiers—Footnote 1
In its filing with the Commission, the Currently, the Exchange determines
SECURITIES AND EXCHANGE Exchange included statements the liquidity adding rebate that it will
COMMISSION concerning the purpose of and basis for provide to Members using the
the proposed rule change and discussed Exchange’s tiered pricing structure.
[Release No. 34–77394; File No. SR– any comments it received on the Under such pricing structure, a Member
BatsEDGX–2016–02] proposed rule change. The text of these will receive a rebate of anywhere
statements may be examined at the between $0.0025 and $0.0035 per share
Self-Regulatory Organizations; Bats places specified in Item IV below. The executed, depending on the volume tier
EDGX Exchange, Inc.; Notice of Filing Exchange has prepared summaries, set for which such Member qualifies. The
and Immediate Effectiveness of a forth in Sections A, B, and C below, of Exchange currently offers thirteen
Proposed Rule Change Related to Fees the most significant parts of such separate Add Volume Tiers under
for Use of the Exchange statements. footnote 1 of its Fee schedule which
March 17, 2016. A. Self-Regulatory Organization’s provide various enhanced rebates based
Pursuant to Section 19(b)(1) of the Statement of the Purpose of, and the on the Members satisfying certain
Securities Exchange Act of 1934 (the monthly volume thresholds. The
Statutory Basis for, the Proposed Rule
‘‘Act’’),1 and Rule 19b–4 thereunder,2 Exchange now proposes to amend or
Change
notice is hereby given that on March 17, delete various tiers under footnote 1 in
1 Purpose order to update, streamline, and simply
2016, Bats EDGX Exchange, Inc. f/k/a
EDGX Exchange, Inc. (the ‘‘Exchange’’ The Exchange proposes to amend its its tiered pricing structure.
or ‘‘EDGX’’) filed with the Securities Fee Schedule to: (i) Increase the rebate Tiers To Be Deleted
and Exchange Commission for Retail Orders that yield fee code ZA;
First, the Exchange proposes to delete
(‘‘Commission’’) the proposed rule (ii) delete the Retail Order Tier under
the Market Depth Tier 1 and Market
change as described in Items I and II footnote 4; (iii) amend or delete various
below, which Items have been prepared Add Volume Tiers under footnote 1; and 7 Footnote 4 would continue to note that
by the Exchange. The Exchange has Members will only be able to designate their orders
4 17 CFR 240.19b–4(f)(2).
designated the proposed rule change as as Retail Orders on either an order-by-order basis
5 The term ‘‘Member’’ is defined as ‘‘any using FIX ports or by designating certain of their
one establishing or changing a member FIX ports at the Exchange as ‘‘Retail Order Ports.’’
registered broker or dealer that has been admitted
due, fee, or other charge imposed by the to membership in the Exchange.’’ See Exchange 8 As a result of deleting the Retail Order Tier
jstallworth on DSK7TPTVN1PROD with NOTICES
Exchange under Section 19(b)(3)(A)(ii) Rule 1.5(n). under footnote 4, the Exchange proposes to delete
of the Act 3 and Rule 19b–4(f)(2) 6 A ‘‘Retail Order’’ is ‘‘an order that: (i) Is an a reference to footnote 4 in the Standard Rates table
agency order or riskless principal order that meets of its Fee Schedule.
9 As defined in the Exchange’s Fee Schedule.
75 17 CFR 200.30–3(a)(12); 17 CFR 200.30–
the criteria of FINRA Rule 5320.03 that originates
from a natural person; (ii) is submitted to EDGX by 10 See Nasdaq Price List—Trading Connectivity
3(a)(57). a Member, provided that no change is made to the available at http://www.nasdaqtrader.com/
1 15 U.S.C. 78s(b)(1).
terms of the order; and (iii) does not originate from Trader.aspx?id=PriceListTrading2 (offering a rebate
2 17 CFR 240.19b–4.
a trading algorithm or any other computerized of $0.0034 per share to add displayed designated
3 15 U.S.C. 78s(b)(3)(A)(ii). methodology.’’ See Exchange Rule 11.24(a). retail liquidity).
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![Federal Register / Vol. 81, No. 56 / Wednesday, March 23, 2016 / Notices 15599
of $0.0034 per share for all Retail Orders Exchange believes that its proposal rules/sro.shtml). Copies of the
is reasonable because it mirrors the would neither increase nor decrease submission, all subsequent
rebate currently provided by Nasdaq.19 intramarket competition because the amendments, all written statements
rebate would apply uniformly to all with respect to the proposed rule
B. Self-Regulatory Organization’s
Members. change that are filed with the
Statement on Burden on Competition
C. Self-Regulatory Organization’s Commission, and all written
The Exchange does not believe the communications relating to the
proposed amendment to its Fee Statement on Comments on the
Proposed Rule Change Received From proposed rule change between the
Schedule would impose any burden on Commission and any person, other than
competition that is not necessary or Members, Participants, or Others
those that may be withheld from the
appropriate in furtherance of the The Exchange has not solicited, and public in accordance with the
purposes of the Act. The Exchange does does not intend to solicit, comments on provisions of 5 U.S.C. 552, will be
not believe that the proposed change this proposed rule change. The available for Web site viewing and
represents a significant departure from Exchange has not received any printing in the Commission’s Public
previous pricing offered by the unsolicited written comments from Reference Room, 100 F Street NE.,
Exchange or pricing offered by the Members or other interested parties. Washington, DC 20549, on official
Exchange’s competitors. Additionally, business days between the hours of
III. Date of Effectiveness of the
Members may opt to disfavor the 10:00 a.m. and 3:00 p.m. Copies of the
Proposed Rule Change and Timing for
Exchange’s pricing if they believe that filing also will be available for
Commission Action
alternatives offer them better value. inspection and copying at the principal
Accordingly, the Exchange does not The foregoing rule change has become
office of the Exchange. All comments
believe that the proposed change will effective pursuant to Section 19(b)(3)(A)
of the Act 21 and paragraph (f) of Rule received will be posted without change;
impair the ability of Members or the Commission does not edit personal
competing venues to maintain their 19b–4 thereunder.22 At any time within
60 days of the filing of the proposed rule identifying information from
competitive standing in the financial submissions. You should submit only
markets. change, the Commission summarily may
temporarily suspend such rule change if information that you wish to make
The Exchange does not believe that
it appears to the Commission that such available publicly. All submissions
the proposed tier revisions would
action is necessary or appropriate in the should refer to File Number SR–
burden competition, but instead,
public interest, for the protection of BatsEDGX–2016–02, and should be
enhances competition, as they are
investors, or otherwise in furtherance of submitted on or before April 13, 2016.
intended to increase the
competitiveness of and draw additional the purposes of the Act. For the Commission, by the Division of
volume to the Exchange. As stated Trading and Markets, pursuant to delegated
IV. Solicitation of Comments authority.23
above, the Exchange notes that it
operates in a highly competitive market Interested persons are invited to Robert W. Errett,
in which market participants can submit written data, views, and Deputy Secretary.
readily direct order flow to competing arguments concerning the foregoing, [FR Doc. 2016–06514 Filed 3–22–16; 8:45 am]
venues if they deem fee structures to be including whether the proposed rule BILLING CODE 8011–01–P
unreasonable or excessive. The change is consistent with the Act.
proposed changes are generally Comments may be submitted by any of
intended to update, simplify, and the following methods: SECURITIES AND EXCHANGE
streamline the Exchange’s tiered pricing Electronic Comments COMMISSION
structure, which the Exchange designed
• Use the Commission’s Internet [Release No. 34–77400]
to attract additional liquidity. The
comment form (http://www.sec.gov/
Exchange believes that the proposed tier Order Granting a Temporary
rules/sro.shtml); or
revisions will allow the Exchange to Exemption Pursuant to Section 36 of
• Send an email to rule-comments@
compete more ably with other execution the Securities Exchange Act of 1934
sec.gov. Please include File Number SR–
venues by drawing additional volume to From Compliance With Rules 13n–1 to
BatsEDGX–2016–02 on the subject line.
the Exchange, thereby making it a more 13n–12 Under the Securities Exchange
desirable destination venue for its Paper Comments Act of 1934
customers. The Exchange does not • Send paper comments in triplicate
believe the proposed tier revisions March 18, 2016.
to Secretary, Securities and Exchange
would burden intramarket competition Commission, 100 F Street NE., I. Introduction
as they would apply to all Members Washington, DC 20549–1090. On June 15, 2011, the Securities and
uniformly. All submissions should refer to File
Regarding the Retail Orders, the Exchange Commission (‘‘Commission’’)
Number SR–BatsEDGX–2016–02. This issued an exemptive order that provided
Exchange believes that its proposal to
file number should be included on the guidance and certain exemptions with
provide a uniform rebate to all Retail
subject line if email is used. To help the respect to the requirements under Title
Orders will increase intermarket
Commission process and review your VII of the Dodd-Frank Wall Street
competition for Retail Orders because
comments more efficiently, please use Reform and Consumer Protection Act of
the proposed would mirror the rebate
only one method. The Commission will 2010 (‘‘Dodd-Frank Act’’) that had an
jstallworth on DSK7TPTVN1PROD with NOTICES
currently provided by Nasdaq.20 The
post all comments on the Commission’s effective date of July 16, 2011 (i.e., the
19 See Nasdaq Price List—Trading Connectivity
Internet Web site (http://www.sec.gov/ effective date of Title VII).1 With respect
available at http://www.nasdaqtrader.com/
Trader.aspx?id=PriceListTrading2 (offering a rebate Trader.aspx?id=PriceListTrading2 (offering a rebate 23 17
CFR 200.30–3(a)(12).
of $0.0034 per share to add displayed designated of $0.0034 per share to add displayed designated 1 See
Temporary Exemptions and Other
retail liquidity). retail liquidity). Temporary Relief, Together With Information on
20 See Nasdaq Price List—Trading Connectivity 21 15 U.S.C. 78s(b)(3)(A).
Compliance Dates for New Provisions of the
available at http://www.nasdaqtrader.com/ 22 17 CFR 240.19b–4(f). Continued
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Document Created: 2016-03-23 00:03:30
Document Modified: 2016-03-23 00:03:30
| 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 15596 |
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