81 FR 1647 - Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rules 11.17, Registration of Market Makers, and 11.20, Obligations of Market Makers
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 8 (January 13, 2016)
Federal Register Volume 81, Issue 8 (January 13, 2016)
| Page Range | 1647-1651 | |
| FR Document | 2016-00466 |
[Federal Register Volume 81, Number 8 (Wednesday, January 13, 2016)] [Notices] [Pages 1647-1651] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-00466] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76851; File No. SR-EDGA-2015-49] Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rules 11.17, Registration of Market Makers, and 11.20, Obligations of Market Makers January 7, 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 December 24, 2015, EDGA Exchange, Inc. (the ``Exchange'' or ``EDGA'') 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 this proposal as a ``non-controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b- 4(f)(6)(iii) thereunder,\4\ which renders it 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). \4\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend Rules 11.17, Registration of Market Makers, and 11.20, Obligations of Market Makers, in order to update certain provisions and conform to the rules of BATS Exchange, Inc. (``BZX''), BATS Y-Exchange, Inc. (``BYX''), EDGX Exchange, Inc.'s (``EDGX'') equity options trading platform (``EDGX Options''), BZX's equity options trading platform (``BZX Options''), and the Nasdaq Stock Market LLC (``Nasdaq'').\5\ --------------------------------------------------------------------------- \5\ See BYX and BZX Rules 11.5 and 11.8; BZX Options Rule 22.6(d)(4), (5), and (7); EDGX Options Rule 22.6(d)(4), (5), and (7); and Nasdaq Rules Rule 4613(a)(2)(ii), 4613(a)(2)(D) and (E). --------------------------------------------------------------------------- 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. [[Page 1648]] 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 In early 2014, the Exchange and its affiliate, EDGX received approval to effect a merger (the ``Merger'') of the Exchange's parent company, Direct Edge Holdings LLC, with BATS Global Markets, Inc., the parent of BZX and the BYX (together with BZX, EDGA and EDGX, the ``BGM Affiliated Exchanges'').\6\ In the context of the Merger, the BGM Affiliated Exchanges are working to align their rules, retaining only intended differences between the BGM Affiliated Exchanges. Thus, the Exchange proposes to amend Rules 11.17, Registration of Market Makers, and 11.20, Obligations of Market Makers, in order to update certain provisions and conform to the rules of BYX and BZX and provide a consistent rule set across each of the BGM Affiliated Exchanges.\7\ As amended, Exchange Rules 11.17 and 11.20 would be identical to BYX and BZX Rules 11.5 and 11.8 but for different cross references to Exchange Rules that are due to the different rule numbering amongst the Exchange, BYX and BZX.\8\ --------------------------------------------------------------------------- \6\ See Securities Exchange Act Release No. 71449 (January 30, 2014), 79 FR 6961 (February 5, 2014) (SR-EDGX-2013-43; SR-EDGA-2013- 34). \7\ The Exchange notes that EDGX intends to file an identical proposal with the Commission to amend its Rules 11.17 and 11.20 to update certain provisions and conform to BYX and BZX Rules 11.5 and 11.8. The Exchange notes that BYX and BZX intend to file proposed rule changes to make related changes to their Rules 11.5 and 11.8 to conform with the changes proposed herein. \8\ The Exchange notes that the substance of the rules that are cross-referenced in Rule 11.17 and 11.20 are identical or substantially similar to the corresponding BYX and BZX Rules. --------------------------------------------------------------------------- Rule 11.17, Registration of Market Makers Like BYX and BZX Rule 11.5, Exchange Rule 11.17 governs the registration of Market Makers on the Exchange. In particular, paragraphs (a) and (b) of Rule 11.17 set forth the application process for Members seeking to register as Market Makers on the Exchange. To harmonize Exchange Rule 11.17(a) with BYX and BZX Rule 11.5(a), the Exchange proposes to replace the word ``under'' with ``of'' when referencing Rule 15c3-1 of the Exchange Act. But for different cross- referencing to Exchange rules that are identical or substantially similar to corresponding BYX and BZX rules, this change would make Exchange Rule 11.17 identical to BYX and BZX Rule 11.5. The Exchange also proposes to amend paragraphs (c)(4) and (e) to update rule cross-references to reflect the renumbering of certain rules as part of an earlier exchange rule filing.\9\ Within paragraph (c)(4) to Rule 11.17, the Exchange proposes to replace reference to Rule 11.19(b)(5) with Rule 11.18(b)(5). The Exchange also proposes to amend paragraph (e) to Rule 11.17 to replace references to Rules 11.18, 11.19, and 11.20 with Rules 11.17, 11.18, and 11.19. --------------------------------------------------------------------------- \9\ See Securities Exchange Act Release No. 73592 (November 13, 2014), 79 FR 68937 (November 19, 2014) (SR-EDGA-2014-20). --------------------------------------------------------------------------- Rule 11.20, Obligations of Market Makers Like BYX and BZX Rules 11.8, Exchange Rule 11.20 sets forth the obligations of Market Makers. In short, Members who are registered as Market Makers in one or more securities traded on the Exchange must engage in a course of dealings for their own account to assist in the maintenance, insofar as reasonably practicable, of fair and orderly markets on the Exchange in accordance with these Rules. The Exchange proposes to make the following changes to harmonize Rule 11.20(a), (c), and (d) with BYX and BZX Rule 11.8:Amend subparagraph (a)(5) to replace in the second sentence the word ``entering'' with ``entry''; amend paragraph (c) to replace in the second sentence the word ``limits'' with ``will limit''; amend paragraph (d)(1) to: (i) add the phrase ``is identified to the Exchange as the interest meeting the obligation and'' to the first sentence; (ii) add the word ``either'' to the fourth sentence; and (iii) add the phrase ``or by identifying existing interest on the EDGA Book that will satisfy this obligation'' to the last sentence; and amend paragraphs (d)(2)(A) and (B) to add to the last sentence of each paragraph the phrase ``, or must be able to identify to the Exchange current resting interest that satisfies the Two-Sided Obligation.'' The Exchange also proposes to amend Rule 11.20(d)(1) to clarify the scenarios in which a Market Maker's two-sided quoting obligation may be temporarily suspended or alleviated. The provisions proposed to be added are each substantially similar to the rules of BZX Options and EDGX Options.\10\ Proposed Rule 11.20(d)(1)(A) addresses a Market Maker's ability to satisfy the quoting standard in the event of a technical failure or system limitation. In particular, if a technical failure or limitation of a system of the Exchange prevents the Market Maker from maintaining or communicating to the Exchange timely and accurate quotes in each security in which a Member is registered as a Market Maker, the duration of such failure shall not be considered in determining whether the Market Maker has satisfied the quoting standard with respect to that security.\11\ --------------------------------------------------------------------------- \10\ See BZX Options Rule 22.6(d)(4), (5), and (7). See also EDGX Options Rule 22.6(d)(4), (5), and (7). \11\ See Securities Exchange Act Release No. 71229 (December 18, 2013), 78 FR 77736 (December 24, 2013) (SR-BATS-2013-062) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Modify BATS Options Market Maker Continuous Quoting Obligation Rules). --------------------------------------------------------------------------- In addition, proposed Rule 11.20(d)(1)(B) addresses a Market Maker's ability to satisfy the quoting standard during a halt, suspension or pause. A Market Maker's quoting obligation under Rule 11.20 would be suspended during a trading halt, suspension, or pause in the security.\12\ A Market Maker's quoting obligation would re-commence after the first regular way transaction on the primary listing market following such halt, suspension, or pause in the security, as reported by the responsible single plan processor.\13\ A Market Maker's quoting obligation would also be suspended under Rule 11.20(d)(1)(B) for the duration that an NMS stock is in a Limit State or a Straddle State declared pursuant to the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS under the Act (the ``Limit Up-Limit Down Plan'' or ``Plan'').\14\ --------------------------------------------------------------------------- \12\ The Exchange notes that proposed Rule 11.20(d)(1)(B) would differ from BZX Options and EDGX Options Rules 22.6(d)(5) in so far as proposed Rule 11.20(d)(1)(B) references ``security'' rather than ``underlying security'' in order to conform to the equities markets. \13\ See also Nasdaq Stock Market LLC (``Nasdaq'') Rule 4613(a)(2)(ii). \14\ See EDGA and EDGX Rules 11.16(e). See also BZX and BYX Rules 11.18(e). Securities Exchange Act Release No. 67091 (May 31, 2012), 77 FR 33498 (June 6, 2012) (the ``Limit Up-Limit Down Release''). --------------------------------------------------------------------------- [[Page 1649]] Under proposed Rule 11.20(d)(1)(C), the Exchange would have the ability to consider other exceptions to the Two-Sided Obligation based on demonstrated legal or regulatory requirements or other mitigating circumstances. For example, a Market Maker must implement the pre-trade and other risk controls required by Rule 15c3-5 of the Act (the ``Market Access Rule'') with respect to all of their quoting activity. These pre-trade risk controls must be reasonably designed to systemically limit financial exposure and ensure compliance with all regulatory requirements. The risk controls a Market Maker may have in place to comply with the Market Access Rule may prevent that Market Maker from satisfying its quoting obligation. In such case, the Exchange would consider whether the Market Maker's failure to satisfy its quoting obligation due to its compliance with the Market Access Rule was proper. Lastly, the Exchange proposes to amend its definitions of ``Designated Percentage'' and ``Defined Limit'' under Rules 11.8(d)(2)(D) and (E) respectively to be substantially similar to Nasdaq Rules 4613(a)(2)(D) and (E). The pricing obligations applicable to quotations of Market Makers are based on the Designated Percentage and the Defined Limit, which are determined based on the applicable trigger percentage. The amended definitions would include additional specificity and updated descriptions of the categories of securities that are subject to those percentages. Notably, the Exchange proposes to replace references to the terms Original Circuit Breaker Securities (defined below) with Tier 1 or Tier 2 NMS Stocks under the Limit Up- Limit Down Plan (also defined below), as the Exchange believes these terms more accurately describe the securities to which a certain percentage applies. The Exchange is not proposing new percentages governing a Market Maker's quoting obligations; it is seeking to adopt revised definitions that are substantially similar to that of Nasdaq in order to provide consistent rules with regard to Market Maker's quoting obligations.\15\ The Exchange believes consistent definitions would avoid confusion amongst market participants that make markets on multiple venues. --------------------------------------------------------------------------- \15\ The Exchange proposed to categorize securities included in the S&P 500[supreg] Index, Russell 1000[supreg] Index, and a pilot list of Exchange Traded Products as Tier 1 NMS Stocks under the under the Limit Up-Limit Down Plan. Securities not included in the S&P 500[supreg] Index, Russell 1000[supreg] Index, or in the pilot list of Exchange Traded Products would be categorized as Tier 2 NMS Stocks under the under the Limit Up-Limit Down Plan. Nasdaq Rule 4613(a)(2)(D) and (E) references securities as included in the S&P 500[supreg] Index, Russell 1000[supreg] Index, and a pilot list of Exchange Traded Products as such and those that are not as Tier 2 NMS Stocks. The Exchange notes that BYX and BZX also intent to amend their definitions of Designated Percentage and Defined Limit to mirror that proposed herein. --------------------------------------------------------------------------- The Exchange currently defines Designated Percentage under Rule 11.20(d)(2)(D) as 8% with respect to securities included in the S&P 500[supreg] Index and the Russell 1000[supreg] Index, as well as a pilot list of Exchange Traded Products for securities subject to an individual stock pause trigger under the applicable rules of a primary listing market (``Original Circuit Breaker Securities''). For times during Regular Trading Hours \16\ when stock pause triggers are not in effect under the rules of the primary listing market, the Designated Percentage shall be 20% for Original Circuit Breaker Securities. Under Rule 11.20(d)(2)(E), the Designated Percentage shall be 28% for all NMS securities that are not Original Circuit Breaker Securities with a price equal to or greater than $1.00, and 30% for all NMS securities that are not Original Circuit Breaker Securities with a price less than $1.00. --------------------------------------------------------------------------- \16\ See Exchange Rule 1.5(y). --------------------------------------------------------------------------- As amended, Designated Percentage would be defined solely under Exchange Rule 11.20(d)(2)(D) as 8% for Tier 1 NMS Stocks under the Limit Up-Limit Down Plan,\17\ 28% for Tier 2 NMS Stocks under the Limit Up-Limit Down Plan \18\ with a price equal to or greater than $1.00, and 30% for Tier 2 NMS Stocks under the Limit Up-Limit Down Plan with a price less than $1.00, except that between 9:30 a.m. and 9:45 a.m. and between 3:35 p.m. and the close of trading, when Exchange Rule 11.16(e) is not in effect, the Designated Percentage shall be 20% for Tier 1 NMS Stocks under the Limit Up-Limit Down Plan, 28% for Tier 2 NMS Stocks under the Limit Up-Limit Down Plan with a price equal to or greater than $1.00, and 30% for Tier 2 NMS Stocks under the Limit Up-Limit Down Plan with a price less than $1.00. --------------------------------------------------------------------------- \17\ Tier 1 NMS Stocks under the Limit Up-Limit Down Plan are securities that are included in the S&P 500[supreg] Index, Russell 1000[supreg] Index, and a pilot list of Exchange Traded Products. See the Limit Up-Limit Down Release supra note 14. \18\ Tier 2 NMS Stocks under the Limit Up-Limit Down Plan are securities that are not included in the S&P 500[supreg] Index, Russell 1000[supreg] Index, and a pilot list of Exchange Traded Products. Id. --------------------------------------------------------------------------- The Exchange currently defines Defined Limit under Rule 11.20(d)(2)(F) and (G) as 9.5% for Original Circuit Breaker Securities. For times during Regular Trading Hours when stock pause triggers are not in effect under the rules of the primary listing market, the Defined Limit shall be 21.5% for Original Circuit Breaker Securities. The Defined Limit is 29.5% for all NMS securities that are not Original Circuit Breaker Securities with a price equal to or greater than $1.00, and 31.5% for all NMS securities that are not Original Circuit Breaker Securities with a price less than $1.00. As amended, subparagraphs (d)(2)(F) and (G) of Exchange Rule 11.20 would be deleted and Defined Limit would be defined solely under Exchange Rule 11.20(d)(2)(E) as 9.5% for Tier 1 NMS Stocks under the Limit Up-Limit Down Plan, 29.5% for Tier 2 NMS Stocks under the Limit Up-Limit Down Plan with a price equal to or greater than $1.00, and 31.5% for Tier 2 NMS Stocks under the Limit Up-Limit Down Plan with a price less than $1.00, except that between 9:30 a.m. and 9:45 a.m. and between 3:35 p.m. and the close of trading, when Exchange Rule 11.16(e) is not in effect, the Defined Limit shall be 21.5% for Tier 1 NMS Stocks under the Limit Up-Limit Down Plan, 29.5% for Tier 2 NMS Stocks under the Limit Up-Limit Down Plan with a price equal to or greater than $1.00, and 31.5% for Tier 2 NMS Stocks under the Limit Up-Limit Down Plan with a price less than $1.00. Exchange Rule 11.8(d)(2)(E) also states that for times during Regular Trading Hours when stock pause triggers are not in effect under the rules of the primary listing market, the Defined Limit will be 21.5% for securities included in the S&P 500[supreg] Index, Russell 1000[supreg] Index, and a pilot list of Exchange Traded Products. The Defined Limit will remain the same throughout Regular Trading Hours for all other NMS stocks. The Exchange proposes to delete Interpretation and Policy .01 to Rule 11.20 as its content is not included in BYX and BZX Rules 11.8 and its requirement to furnished records to the Exchange are duplicative with current Exchange Rule 4.2. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.\19\ Specifically, the proposed change is consistent with Section 6(b)(5) of the Act,\20\ because it is designed to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of, a free and open market and a national market system, and, in [[Page 1650]] general, to protect investors and the public interest. As mentioned above, the proposed rule changes, combined with the planned filing for the BYX, BZX, and EDGX would allow the BGM Affiliated Exchanges to provide a consistent set of rules as it relates to the registration and obligations of Market Makers. Consistent rules, in turn, will simplify the regulatory requirements for Market Makers on the Exchange that are also Market Makers on EDGX, BZX, and/or BYX. The proposed rule change would provide greater harmonization between rules of similar purpose on the BGM Affiliated Exchanges, resulting in greater uniformity and less burdensome and more efficient regulatory compliance and understanding of Exchange Rules. As such, the proposed rule change would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and a national market system. Similarly, the Exchange also believes that, by harmonizing the rules across each BGM Affiliated Exchange, the proposal will enhance the Exchange's ability to fairly and efficiently regulate its Market Makers by utilizing a consistent rule set and obligations across each of the BGM Affiliated Exchanges. Consistent rules would enable the Exchange to apply identical standards to that of its affiliates, alleviating confusion by Market Makers on who may also be registered as such on BYX, BZX, or EDGX, thereby promoting just and equitable principles of trade in accordance with Section 6(b)(5) of the Act.\21\ --------------------------------------------------------------------------- \19\ 15 U.S.C. 78f(b). \20\ 15 U.S.C. 78f(b)(5). \21\ Id. --------------------------------------------------------------------------- The Exchange also believes the proposed amendments to Rule 11.8(d) are consistent with Section 6(b)(5) of the Act,\22\ because they are designed to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of, a free and open market and a national market system, and, in general, to protect investors and the public interest. The proposed amendments to Rule 11.8(d)(1) are meant to clarify the scenarios in which a Market Maker's two-sided quoting obligation may be temporarily suspended or alleviated. The provisions proposed to be added are each substantially similar to the rules of the BZX Options, EDGX Options and Nasdaq.\23\ The Exchange believes it is appropriate to have consistent rules across its equities and options platforms. Consistent rules would aid in alleviating confusion amongst those that are Members on both platforms. The Exchange believes it is reasonable to suspend or alleviate a Market Maker's quoting obligations in the event of a technical or system limitation, during a trading halt, suspension or pause, as well as where demonstrated legal or regulatory requirements prevent the Market Maker from quoting. In each scenario, the Exchange will review the reasons behind the Market Maker inability to quote for compliance with the Rule. The Exchange is not proposing new percentages governing a Market Maker's quoting obligations; it is seeking to adopt revised definitions that are substantially similar to those of Nasdaq in order to provide a consistent rules with regard to Market Makers quoting obligations. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78f(b)(5). \23\ See supra notes 10 and 13. --------------------------------------------------------------------------- (B) Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the act. To the contrary, allowing the Exchange to implement substantively identical rules across each of the BGM Affiliated Exchanges regarding Market Maker registration and their obligations does not present any competitive issues, but rather is designed to provide greater harmonization among Exchange, BYX, BZX, and EDGX rules of similar purpose. The proposed rule change should, therefore, result in less burdensome and more efficient regulatory compliance and understanding of Exchange Rules for common members of the BGM Affiliated Exchanges and an enhanced ability of the BGM Affiliated Exchanges to fairly and efficiently regulate Market Makers. (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 Because the foregoing proposed rule change does not: A. Significantly affect the protection of investors or the public interest; B. impose any significant burden on competition; and C. become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \24\ and Rule 19b-4(f)(6) \25\ thereunder. The Exchange has given the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, --------------------------------------------------------------------------- \24\ 15 U.S.C. 78s(b)(3)(A). \25\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- 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. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. 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 [email protected]. Please include File No. SR-EDGA-2015-49 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-EDGA-2015-49. 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 [[Page 1651]] 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 No. SR-EDGA-2015-49 and should be submitted on or before February 3, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\26\ --------------------------------------------------------------------------- \26\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-00466 Filed 1-12-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 8 / Wednesday, January 13, 2016 / Notices 1647
4. Product Information—Environmental requirements (e.g., FCC approved) and/or SECURITIES AND EXCHANGE
Contraband Detection NIJ Compliance (e.g., NIJ Standard COMMISSION
a. Name and model number 0602.02, and 0601.02)
b. Primary purpose of product ee. Radiation safety standards (e.g., ANSI,
c. Physical dimensions (height × width × ICRP, NCRP, EURATOM, etc.), if [Release No. 34–76851; File No. SR–EDGA–
depth, in inches) of device applicable 2015–49]
d. Operational dimensions (i.e., limitations to ff. Length of warranty (in months) that comes
the detection area) standard with the system/device and the Self-Regulatory Organizations; EDGA
e. Weight (in pounds and ounces) of device components that are covered Exchange, Inc.; Notice of Filing and
f. Portability (e.g., fixed, portable, or gg. Auxiliary equipment (e.g., car chargers, Immediate Effectiveness of a Proposed
handheld) emergency chargers, etc.) Rule Change to Rules 11.17,
g. Operating conditions or limitations (e.g., hh. Manufacturer suggested retail price Registration of Market Makers, and
temperature, humidity, etc.) (MSRP) without optional features,
h. Ability of the system/device to detect 11.20, Obligations of Market Makers
accessories or service plans
metal objects ii. Availability of extended maintenance January 7, 2016.
i. Types of metals that are detected by the plans
system jj. Service contract costs Pursuant to Section 19(b)(1) of the
ii. Types of metals that are not detected by kk. Other information or notes that are Securities Exchange Act of 1934 (the
the system ‘‘Act’’),1 and Rule 19b–4 thereunder,2
relevant to the system/device
i. Ability of the system/device to detect non-
metal objects 5. Usability/Training notice is hereby given that on December
i. Types of non-metal materials that can be 24, 2015, EDGA Exchange, Inc. (the
a. Types of processes used to ensure usability
detected by the system/device (e.g., ‘‘Exchange’’ or ‘‘EDGA’’) filed with the
of hardware and software products (e.g.,
liquids, gels, plastic, wood, ceramic, Securities and Exchange Commission
requirements gathering, observation, task
powder, paper, currency, etc.) (‘‘Commission’’) the proposed rule
j. Ability of the system/device to detect other analysis, interaction design, usability
testing, ergonomics, etc.) change as described in Items I and II
types of contraband and related material
not specifically listed here (i.e., potential b. Types of data gathered from the user below, which Items have been prepared
next generation contraband detection) community (e.g., interviews, by the Exchange. The Exchange has
k. Modes of operation (e.g., settings for observations during hands-on training, designated this proposal as a ‘‘non-
detecting different materials) survey, satisfaction surveys, repeat controversial’’ proposed rule change
l. Number of detection areas (e.g., ability to customers, etc.) to evaluate your
pursuant to Section 19(b)(3)(A) of the
simultaneous detect threats) products, and how often it is collected
c. Types of user-group meetings and Act 3 and Rule 19b–4(f)(6)(iii)
m. Type of detector used (e.g., transmission
x-ray, active millimeter wave, pulse frequency of their occurrence thereunder,4 which renders it effective
induction detector, continuous wave d. Categories of problems reported to vendor upon filing with the Commission. The
detector, passive, etc.) and percentage of user community that Commission is publishing this notice to
n. Minimum size of objects that can be experienced them within the last three solicit comments on the proposed rule
detected (length × width × height in (3) years change from interested persons.
inches, or weight in pounds and ounces) i. Resolution(s) to the problems identified
o. Maximum size of objects that can be above I. Self-Regulatory Organization’s
detected (length × width × height in e. Hours of technology support and location Statement of the Terms of Substance of
inches, or weight in pounds and ounces) (e.g., telephone or at agency) the Proposed Rule Change
p. Alert/alarm mechanism (e.g., alarm only, f. Calibration requirements (e.g., cost,
anomaly image, full picture image, etc.) methodology, hours required) The Exchange filed a proposal to
q. Average time (in seconds) to process/ g. Hours and type of training provided (e.g.,
generate an alarm
amend Rules 11.17, Registration of
on-site, web-based, pre-recorded, play Market Makers, and 11.20, Obligations
r. Number of recommended operators environment etc.)
s. Safeguards for cyber security, of Market Makers, in order to update
unintentional disassembly, jamming, or 6. Features and Functions certain provisions and conform to the
intentional damage a. Types of reports that are available (e.g., rules of BATS Exchange, Inc. (‘‘BZX’’),
t. Sturdiness/fragility of the technology standard information examples, extent BATS Y-Exchange, Inc. (‘‘BYX’’), EDGX
material that reports are customizable, etc.)
u. Ability for easy storage when not in use
Exchange, Inc.’s (‘‘EDGX’’) equity
b. Types of on-demand custom reports options trading platform (‘‘EDGX
v. Data management with respect to saving,
archiving, retrieving, and printing scan 7. Performance and Security Options’’), BZX’s equity options trading
information a. Average time to install and activate device platform (‘‘BZX Options’’), and the
w. Onboard memory storage (e.g., quantity of (in minutes, hours, or days) Nasdaq Stock Market LLC (‘‘Nasdaq’’).5
data that can be stored on device in b. False positive (alert generated when it
number of files/alerts/days activity) The text of the proposed rule change
should not have been) and false negative is available at the Exchange’s Web site
x. Power requirements (e.g., 120 volts) (alert was not generated when it should
y. Battery discharge time (hours of have been) rates
at www.batstrading.com, at the
continuous operation before needing a principal office of the Exchange, and at
c. Mean time to failure
charge), if applicable the Commission’s Public Reference
d. Percent availability versus downtime of
z. Battery shelf life (in months), if applicable Room.
the device
aa. Battery recharge time (hours required to
e. Data protection mechanism while in transit
fully charge battery after complete
asabaliauskas on DSK5VPTVN1PROD with NOTICES
and during storage (e.g., SSL, encryption,
discharge), if applicable
bb. Battery replacement procedure and where password strength, etc.) 1 15 U.S.C. 78s(b)(1).
it must be done (e.g., field or factory), if f. Types of database change record 2 17 CFR 240.19b–4.
applicable maintenance practices for historical data 3 15 U.S.C. 78s(b)(3)(A).
cc. Availability of supplemental charger for Nancy Rodriguez,
4 17 CFR 240.19b–4(f)(6)(iii).
emergency battery charging (e.g., hand 5 See BYX and BZX Rules 11.5 and 11.8; BZX
Director, National Institute of Justice.
crank, backup battery, solar, etc.), if Options Rule 22.6(d)(4), (5), and (7); EDGX Options
applicable [FR Doc. 2016–00503 Filed 1–12–16; 8:45 am] Rule 22.6(d)(4), (5), and (7); and Nasdaq Rules Rule
dd. Regulatory and Compliance safety BILLING CODE 4410–18–P 4613(a)(2)(ii), 4613(a)(2)(D) and (E).
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![Federal Register / Vol. 81, No. 8 / Wednesday, January 13, 2016 / Notices 1651
those that may be withheld from the solicit comments on the proposed rule Registration of Market Makers, and
public in accordance with the change from interested persons. 11.20, Obligations of Market Makers, in
provisions of 5 U.S.C. 552, will be order to update certain provisions and
I. Self-Regulatory Organization’s
available for Web site viewing and conform to the rules of BYX and BZX
Statement of the Terms of Substance of
printing in the Commission’s Public and provide a consistent rule set across
the Proposed Rule Change
Reference Room, 100 F Street NE., each of the BGM Affiliated Exchanges.7
Washington, DC 20549, on official The Exchange filed a proposal to As amended, Exchange Rules 11.17 and
business days between the hours of amend Rules 11.17, Registration of 11.20 would be identical to BYX and
10:00 a.m. and 3:00 p.m. Copies of such Market Makers, and 11.20, Obligations BZX Rules 11.5 and 11.8 but for
filing will also be available for of Market Makers, in order to update different cross references to Exchange
inspection and copying at the principal certain provisions and conform to the Rules that are due to the different rule
office of the Exchange. All comments rules of BATS Exchange, Inc. (‘‘BZX’’), numbering amongst the Exchange, BYX
received will be posted without change; BATS Y-Exchange, Inc. (‘‘BYX’’), and BZX.8
the Commission does not edit personal Exchange’s equity options trading
platform (‘‘EDGX Options’’), BZX’s Rule 11.17, Registration of Market
identifying information from Makers
submissions. You should submit only equity options trading platform (‘‘BZX
information that you wish to make Options’’), and the Nasdaq Stock Market Like BYX and BZX Rule 11.5,
available publicly. All submissions LLC (‘‘Nasdaq’’).5 Exchange Rule 11.17 governs the
should refer to File No. SR–EDGA– The text of the proposed rule change registration of Market Makers on the
2015–49 and should be submitted on or is available at the Exchange’s Web site Exchange. In particular, paragraphs (a)
before February 3, 2016. at www.batstrading.com, at the and (b) of Rule 11.17 set forth the
principal office of the Exchange, and at application process for Members
For the Commission, by the Division of the Commission’s Public Reference seeking to register as Market Makers on
Trading and Markets, pursuant to delegated Room. the Exchange. To harmonize Exchange
authority.26
II. Self-Regulatory Organization’s Rule 11.17(a) with BYX and BZX Rule
Robert W. Errett, 11.5(a), the Exchange proposes to
Deputy Secretary.
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule replace the word ‘‘under’’ with ‘‘of’’
[FR Doc. 2016–00466 Filed 1–12–16; 8:45 am]
Change when referencing Rule 15c3–1 of the
BILLING CODE 8011–01–P Exchange Act. But for different cross-
In its filing with the Commission, the referencing to Exchange rules that are
Exchange included statements identical or substantially similar to
SECURITIES AND EXCHANGE concerning the purpose of and basis for corresponding BYX and BZX rules, this
COMMISSION the proposed rule change and discussed change would make Exchange Rule
any comments it received on the 11.17 identical to BYX and BZX Rule
proposed rule change. The text of these 11.5.
[Release No. 34–76853; File No. SR–EDGX–
2015–68]
statements may be examined at the The Exchange also proposes to amend
places specified in Item IV below. The paragraphs (c)(4) and (e) to update rule
Self-Regulatory Organizations; EDGX Exchange has prepared summaries, set cross-references to reflect the
Exchange, Inc.; Notice of Filing and forth in Sections A, B, and C below, of renumbering of certain rules as part of
Immediate Effectiveness of a Proposed the most significant parts of such an earlier exchange rule filing.9 Within
Rule Change to Rules 11.17, statements. paragraph (c)(4) to Rule 11.17, the
Registration of Market Makers, and (A) Self-Regulatory Organization’s Exchange proposes to replace reference
11.20, Obligations of Market Makers Statement of the Purpose of, and to Rule 11.19(b)(5) with Rule
Statutory Basis for, the Proposed Rule 11.18(b)(5). The Exchange also proposes
January 7, 2016. to amend paragraph (e) to Rule 11.17 to
Change
Pursuant to Section 19(b)(1) of the replace references to Rules 11.18, 11.19,
Securities Exchange Act of 1934 (the 1. Purpose and 11.20 with Rules 11.17, 11.18, and
‘‘Act’’),1 and Rule 19b–4 thereunder,2 In early 2014, the Exchange and its 11.19.
notice is hereby given that on December affiliate, EDGA Exchange, Inc. Rule 11.20, Obligations of Market
24, 2015, EDGX Exchange, Inc. (the (‘‘EDGA’’) received approval to effect a Makers
‘‘Exchange’’ or ‘‘EDGX’’) filed with the merger (the ‘‘Merger’’) of the Exchange’s
Securities and Exchange Commission parent company, Direct Edge Holdings Like BYX and BZX Rules 11.8,
(‘‘Commission’’) the proposed rule LLC, with BATS Global Markets, Inc., Exchange Rule 11.20 sets forth the
change as described in Items I and II the parent of BZX and the BYX (together obligations of Market Makers. In short,
below, which Items have been prepared with BZX, EDGA and EDGX, the ‘‘BGM Members who are registered as Market
Affiliated Exchanges’’).6 In the context Makers in one or more securities traded
by the Exchange. The Exchange has
designated this proposal as a ‘‘non- of the Merger, the BGM Affiliated 7 The Exchange notes that EDGA intends to file
controversial’’ proposed rule change Exchanges are working to align their an identical proposal with the Commission to
pursuant to Section 19(b)(3)(A) of the rules, retaining only intended amend its Rules 11.17 and 11.20 to update certain
Act 3 and Rule 19b–4(f)(6)(iii) differences between the BGM Affiliated provisions and conform to BYX and BZX Rules 11.5
and 11.8. The Exchange notes that BYX and BZX
asabaliauskas on DSK5VPTVN1PROD with NOTICES
thereunder,4 which renders it effective Exchanges. Thus, the Exchange
intend to file proposed rule changes to make related
upon filing with the Commission. The proposes to amend Rules 11.17, changes to their Rules 11.5 and 11.8 to conform
Commission is publishing this notice to with the changes proposed herein.
5 See BYX and BZX Rules 11.5 and 11.8; BZX 8 The Exchange notes that the substance of the
26 17
Options Rule 22.6(d)(4), (5), and (7); EDGX Options rules that are cross-referenced in Rule 11.17 and
CFR 200.30–3(a)(12). Rule 22.6(d)(4), (5), and (7); and Nasdaq Rules Rule 11.20 are identical or substantially similar to the
1 15 U.S.C. 78s(b)(1).
4613(a)(2)(ii), 4613(a)(2)(D) and (E). corresponding BYX and BZX Rules.
2 17 CFR 240.19b–4. 6 See Securities Exchange Act Release No. 71449 9 See Securities Exchange Act Release No. 73468
3 15 U.S.C. 78s(b)(3)(A).
(January 30, 2014), 79 FR 6961 (February 5, 2014) (October 29, 2014), 79 FR 65450 (November 4, 2014)
4 17 CFR 240.19b–4(f)(6)(iii). (SR–EDGX–2013–43; SR–EDGA–2013–34). (SR–EDGX–2014–18).
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Document Created: 2016-01-13 01:01:20
Document Modified: 2016-01-13 01:01:20
| 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 1647 |
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