81 FR 22678 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Fees Under Rule 7018(a)
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 74 (April 18, 2016)
Federal Register Volume 81, Issue 74 (April 18, 2016)
| Page Range | 22678-22681 | |
| FR Document | 2016-08821 |
[Federal Register Volume 81, Number 74 (Monday, April 18, 2016)] [Notices] [Pages 22678-22681] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-08821] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77590; File No. SR-BX-2016-020] Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Fees Under Rule 7018(a) April 12, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on March 30, 2016, NASDAQ BX, Inc. (``BX'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. 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. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Exchange's transaction fees at Rule 7018(a) relating to charges assessed for providing liquidity through the NASDAQ OMX BX Equities System in securities priced at $1 or more per share that it trades to: (i) Eliminate Qualified Market Maker- based criteria and adopt new Consolidated Volume-based criteria required to receive the $0.0014 per share executed charge; and (ii) decrease the $0.0018 per share executed charge, and amend the qualification criteria currently required to receive the charge, for a displayed order entered by a member. While these amendments are effective upon filing, the Exchange has designated the proposed amendments to be operative on April 1, 2016. [[Page 22679]] The text of the proposed rule change is available on the Exchange's Web site at http://nasdaqomxbx.cchwallstreet.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 aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to amend the Exchange's transaction fees at Rule 7018(a) relating to charges assessed for providing liquidity through the NASDAQ OMX BX Equities System in securities priced at $1 or more per share that it trades to: (i) Eliminate Qualified Market Maker-based criteria and adopt new Consolidated Volume-based criteria required to receive the $0.0014 per share executed charge; and (ii) decrease the $0.0018 per share executed charge, and amend the qualification criteria currently required to receive the charge, for a displayed order entered by a member. First Change The purpose of the first change is to eliminate the Qualified Market Maker-based criteria required to receive the $0.0014 per share executed charge. Currently, this fee applies to all displayed orders entered by a Qualified Market Maker. A member firm may become a Qualified Market Maker by being a member firm that provides through one or more of its NASDAQ OMX BX Equities System MPIDs more than 0.20% of Consolidated Volume \3\ during the month. For a member firm qualifying under this method, the member must have at least one Qualified MPID, that is, an MPID through which, for at least 200 securities, the Qualified Market Maker quotes at the National Best Bid and Offer (``NBBO'') an average of at least 50% of the time during regular market hours (9:30 a.m. through 4:00 p.m.) during the month. Because the Exchange is proposing to eliminate the Qualified Market Maker criteria there will no longer be references to Qualified Market Makers in Rule 7018. Thus, the Exchange is also proposing to eliminate language concerning how a member firm may become a Qualified Market Maker. --------------------------------------------------------------------------- \3\ Consolidated Volume is defined as the total consolidated volume reported to all consolidated transaction reporting plans by all exchanges and trade reporting facilities during a month in equity securities, excluding executed orders with a size of less than one round lot. For purposes of calculating Consolidated Volume and the extent of a member's trading activity, expressed as a percentage of or ratio to Consolidated Volume, the date of the annual reconstitution of the Russell Investments Indexes shall be excluded from both total Consolidated Volume and the member's trading activity. See Rule 7018. --------------------------------------------------------------------------- In lieu of the Qualified Market Maker-based criteria, the Exchange proposes to adopt new Consolidated Volume-based criteria that a member must meet to receive the $0.0014 per share executed charge. Specifically, the Exchange proposes to provide the $0.0014 per share executed charge for a displayed order entered by a member firm that adds liquidity equal to or exceeding 0.25% of total Consolidated Volume during a month. The Exchange notes that, like the eliminated $0.0014 charge criteria discussed above, the proposed new charge criteria requires a level of Consolidated Volume in return for a reduced charge assessed for displayed orders. Although the proposed level of Consolidated Volume is 0.05% higher than the eliminated charge tier, the proposed new charge criteria does not require the member firm to also qualify as a Qualified Market Maker, which includes certain quoting requirements discussed above. Second Change The purpose of the second change is to decrease the $0.0018 per share executed charge, and amend the qualifications currently required to receive the charge, for a displayed order entered by a member. Under Rule 7018(a), a member firm may receive a $0.0018 per share executed charge for a displayed order if it adds liquidity equal to or exceeding 0.20% of total Consolidated Volume during a month. The Exchange is proposing to reduce the level of total Consolidated Volume required from 0.20% to 0.15% during a month, in light of the new $0.0014 per share executed charge tier discussed above that requires 0.25% Consolidated Volume to qualify. The Exchange is also proposing to decrease the charge assessed member firms that qualify under the rule from $0.0018 to $0.0017 per share executed. As a consequence of the changes, the amended charge tier will be easier to attain and will provide a further reduced per share executed charge [sic] 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\4\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\5\ in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which the Exchange operates or controls, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78f(b). \5\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- First Change The Exchange believes that eliminating the $0.0014 per share executed charge for a displayed order entered by a Qualified Market Maker is reasonable because the Exchange must, from time to time, assess the effectiveness of the criteria it applies in providing reduced charges, including the nature of the market improving behavior required to receive the reduced charge. The Exchange will modify or eliminate such criteria when it believes the criteria are ineffective, which in turn may allow the Exchange to offer other incentives instead. In this instance, the Exchange believes the criteria required to receive the $0.0014 per share executed charge were ineffective at providing incentive to market participants to improve the market appreciably. As a consequence, the Exchange believes it is reasonable to eliminate the Qualified Market Maker-based criteria and replace it with new criteria, as discussed below. The Exchange believes that the new $0.0014 per share executed charge criteria is reasonable because it is similar to the Qualified Market Maker charge tier criteria that the Exchange is proposing to eliminate. Under the existing Qualified Market Maker charge tier, a member firm must be a Qualified Market Maker to receive the $0.0014 per share executed charge for its displayed orders. To be a Qualified Market Maker, a member firm must: (i) Provide through one or more of its NASDAQ OMX BX Equities System MPIDs more than 0.20% of Consolidated Volume during [[Page 22680]] the month; and (ii) have at least one Qualified MPID, that is, an MPID through which, for at least 200 securities, the Qualified Market Maker quotes at the NBBO an average of at least 50% of the time during regular market hours (9:30 a.m. through 4:00 p.m.) during the month. Under the proposed new charge tier, a member firm must provide a higher level of Consolidated Volume in contrast to the Qualified Market Maker criteria, but is not required to meet the quoting requirements of the Qualified Market Maker criteria. Accordingly, the Exchange believes that the proposed new $0.0014 per share executed charge criteria is reasonable. The Exchange believes that assessing a $0.0014 per share executed charge and requiring a member to provide a level of Consolidated Volume to qualify for that charge is an equitable allocation and is not unfairly discriminatory because the Exchange will apply the new criteria and assess the charge to all similarly situated members. Any member firm that elects to provide the level of Consolidated Volume required by the tier will receive the charge. In this regard, the Exchange notes that all member firms that could meet the eliminated criteria will have the opportunity to qualify under the new Consolidated Volume-based criteria. Second Change The Exchange believes that the proposed changes to the $0.0018 per share executed charge provided for a displayed order if it is entered by a member firm that adds liquidity equal to or exceeding 0.20% of total Consolidated Volume during a month are reasonable because they better align the reduced charge with the level of Consolidated Volume required to qualify, in light of the proposed changes the Exchange is making to the $0.0014 per share executed charge criteria. Specifically, the Exchange is reducing the level of Consolidated Volume required to qualify from 0.20%, which is close to the proposed level of Consolidated Volume required to receive the $0.0014 per share executed charge, to 0.15%, which the Exchange believes is better aligned with the charges provided and the criteria required to receive the charges. As a further incentive, the Exchange is proposing to decrease the charge assessed qualifying member firms from $0.0018 to $0.0017 per share executed. The Exchange believes that it is reasonable to reduce the charge because it may provide greater incentive to member firms to provide the level of Consolidated Volume necessary to receive the reduced charge. Moreover, the reduced charge better aligns the charge tier with the proposed new $0.0014 per share executed charge tier and its 0.25% Consolidated Volume requirement and the $0.0019 per share executed tier, which requires a member to provide 0.10% of total Consolidated Volume to receive that charge. The Exchange believes that the proposed $0.0017 per share executed charge and changes to the Consolidated Volume requirement are an equitable allocation and are not unfairly discriminatory because the Exchange will apply the same charge to all similarly situated members. Any member firm that elects to provide the level of Consolidated Volume required by the amended tier will receive the reduced charge [sic] 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. In terms of inter-market competition, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. In this instance, the proposed changes to the charges assessed member firms for execution of displayed orders do not impose a burden on competition because the Exchange's execution services are completely voluntary and subject to extensive competition both from other exchanges and from off-exchange venues. The proposed changes are reflective of this competition and the Exchange's desire to offer lower fees in return for market-improving liquidity, which is ultimately limited by the Exchange's need to cover costs and make a profit. Thus, the Exchange must carefully adjust its access fees with the understanding that if the proposed changes are unattractive to market participants, it is likely that the Exchange will lose market share to other exchanges and off-exchange venues as a result. In this proposal, the Exchange is modifying qualification criteria and reducing the charges that it assesses its member firms for providing liquidity to the Exchange. The Exchange believes that such changes will support liquidity on the Exchange and are pro-competitive, since any other market is free to provide similar, if not better, fees should they choose to do so. For these reasons, the Exchange does not believe that the proposed changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. 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)(ii) of the Act.\6\ --------------------------------------------------------------------------- \6\ 15 U.S.C. 78s(b)(3)(A)(ii). --------------------------------------------------------------------------- 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule 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 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-BX-2016-020 on the subject line. [[Page 22681]] 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-BX-2016-020. 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-BX-2016-020, and should be submitted on or before May 9, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\7\ --------------------------------------------------------------------------- \7\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-08821 Filed 4-15-16; 8:45 am] BILLING CODE 8011-01-P
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Finally, the Exchange believes that it it appears to the Commission that such submissions. You should submit only
is subject to significant competitive action is necessary or appropriate in the information that you wish to make
forces, as described below in the public interest, for the protection of available publicly. All submissions
Exchange’s statement regarding the investors, or otherwise in furtherance of should refer to File Number SR–
burden on competition. For these the purposes of the Act. If the NYSEArca–2016–54, and should be
reasons, the Exchange believes that the Commission takes such action, the submitted on or before May 9, 2016.
proposal is consistent with the Act. Commission shall institute proceedings For the Commission, by the Division of
For the foregoing reasons, the under section 19(b)(2)(B) 16 of the Act to Trading and Markets, pursuant to delegated
Exchange believes that the proposal is determine whether the proposed rule authority.17
consistent with the Act. change should be approved or Robert W. Errett,
disapproved. Deputy Secretary.
B. Self-Regulatory Organization’s
Statement on Burden on Competition IV. Solicitation of Comments [FR Doc. 2016–08819 Filed 4–15–16; 8:45 am]
BILLING CODE 8011–01–P
In accordance with section 6(b)(8) of Interested persons are invited to
the Act,12 the Exchange believes that the submit written data, views, and
proposed rule change would not impose arguments concerning the foregoing,
SECURITIES AND EXCHANGE
any burden on competition that is not including whether the proposed rule
COMMISSION
necessary or appropriate in furtherance change is consistent with the Act.
of the purposes of the Act. In particular, Comments may be submitted by any of [Release No. 34–77590; File No. SR–BX–
the routing fees would not place a the following methods: 2016–020]
burden on competition because the Electronic Comments Self-Regulatory Organizations;
Exchange is standardizing the fee so that
each participant would pay a uniform • Use the Commission’s Internet NASDAQ BX, Inc.; Notice of Filing and
comment form (http://www.sec.gov/ Immediate Effectiveness of Proposed
fee. Further, the proposed change to Rule Change To Amend Fees Under
credits applicable to MPL Orders would rules/sro.shtml); or
• Send an email to rule-comments@ Rule 7018(a)
also not place a burden on competition
sec.gov. Please include File Number SR–
as the modified credit is comparable to April 12, 2016.
NYSEArca–2016–54 on the subject line.
the level of credit for Tape C Securities Pursuant to Section 19(b)(1) of the
provided by at least one other Paper Comments Securities Exchange Act of 1934
exchange.13 • Send paper comments in triplicate (‘‘Act’’),1 and Rule 19b–4 thereunder,2
The Exchange notes that it operates in to Brent J. Fields, Secretary, Securities notice is hereby given that on March 30,
a highly competitive market in which and Exchange Commission, 100 F Street 2016, NASDAQ BX, Inc. (‘‘BX’’ or
market participants can readily favor NE., Washington, DC 20549–1090. ‘‘Exchange’’) filed with the Securities
competing venues. In such an and Exchange Commission (‘‘SEC’’ or
All submissions should refer to File
environment, the Exchange must ‘‘Commission’’) the proposed rule
Number SR–NYSEArca–2016–54. This
continually review, and consider change as described in Items I, II, and
file number should be included on the
adjusting, its fees and credits to remain III below, which Items have been
subject line if email is used. To help the
competitive with other exchanges. For prepared by the Exchange. The
Commission process and review your
the reasons described above, the Commission is publishing this notice to
comments more efficiently, please use
Exchange believes that this proposal solicit comments on the proposed rule
only one method. The Commission will
promotes a competitive environment. change from interested persons.
post all comments on the Commission’s
C. Self-Regulatory Organization’s Internet Web site (http://www.sec.gov/ I. Self-Regulatory Organization’s
Statement on Comments on the rules/sro.shtml). Copies of the Statement of the Terms of Substance of
Proposed Rule Change Received From submission, all subsequent the Proposed Rule Change
Members, Participants, or Others amendments, all written statements The Exchange proposes to amend the
No written comments were solicited with respect to the proposed rule Exchange’s transaction fees at Rule
or received with respect to the proposed change that are filed with the 7018(a) relating to charges assessed for
rule change. Commission, and all written providing liquidity through the
communications relating to the NASDAQ OMX BX Equities System in
III. Date of Effectiveness of the proposed rule change between the securities priced at $1 or more per share
Proposed Rule Change and Timing for Commission and any person, other than that it trades to: (i) Eliminate Qualified
Commission Action those that may be withheld from the Market Maker-based criteria and adopt
The foregoing rule change is effective public in accordance with the new Consolidated Volume-based criteria
upon filing pursuant to section provisions of 5 U.S.C. 552, will be required to receive the $0.0014 per
19(b)(3)(A) 14 of the Act and available for Web site viewing and share executed charge; and (ii) decrease
subparagraph (f)(2) of Rule 19b–4 15 printing in the Commission’s Public the $0.0018 per share executed charge,
thereunder, because it establishes a due, Reference Room, 100 F Street NE., and amend the qualification criteria
fee, or other charge imposed by the Washington, DC 20549 on official currently required to receive the charge,
Exchange. business days between the hours of for a displayed order entered by a
At any time within 60 days of the 10:00 a.m. and 3:00 p.m. Copies of such member.
mstockstill on DSK4VPTVN1PROD with NOTICES
filing of such proposed rule change, the filing also will be available for While these amendments are effective
Commission summarily may inspection and copying at the principal upon filing, the Exchange has
temporarily suspend such rule change if office of the Exchange. All comments designated the proposed amendments to
received will be posted without change; be operative on April 1, 2016.
12 15 U.S.C. 78f(b)(8). the Commission does not edit personal
13 See supra, note 11. identifying information from 17 17 CFR 200.30–3(a)(12).
14 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1).
15 17 CFR 240.19b–4(f)(2). 16 15 U.S.C. 78s(b)(2)(B). 2 17 CFR 240.19b–4.
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The text of the proposed rule change during the month. For a member firm Volume to qualify. The Exchange is also
is available on the Exchange’s Web site qualifying under this method, the proposing to decrease the charge
at http://nasdaqomxbx.cchwall member must have at least one assessed member firms that qualify
street.com/, at the principal office of the Qualified MPID, that is, an MPID under the rule from $0.0018 to $0.0017
Exchange, and at the Commission’s through which, for at least 200 per share executed. As a consequence of
Public Reference Room. securities, the Qualified Market Maker the changes, the amended charge tier
quotes at the National Best Bid and will be easier to attain and will provide
II. Self-Regulatory Organization’s a further reduced per share executed
Offer (‘‘NBBO’’) an average of at least
Statement of the Purpose of, and charge [sic]
50% of the time during regular market
Statutory Basis for, the Proposed Rule
hours (9:30 a.m. through 4:00 p.m.) 2. Statutory Basis
Change
during the month. Because the
In its filing with the Commission, the Exchange is proposing to eliminate the The Exchange believes that its
Exchange included statements Qualified Market Maker criteria there proposal is consistent with Section 6(b)
concerning the purpose of and basis for will no longer be references to Qualified of the Act,4 in general, and furthers the
the proposed rule change and discussed Market Makers in Rule 7018. Thus, the objectives of Sections 6(b)(4) and 6(b)(5)
any comments it received on the Exchange is also proposing to eliminate of the Act,5 in particular, in that it
proposed rule change. The text of these language concerning how a member provides for the equitable allocation of
statements may be examined at the firm may become a Qualified Market reasonable dues, fees and other charges
places specified in Item IV below. The Maker. among members and issuers and other
Exchange has prepared summaries, set In lieu of the Qualified Market Maker- persons using any facility or system
forth in sections A, B, and C below, of based criteria, the Exchange proposes to which the Exchange operates or
the most significant aspects of such adopt new Consolidated Volume-based controls, and is not designed to permit
statements. criteria that a member must meet to unfair discrimination between
receive the $0.0014 per share executed customers, issuers, brokers, or dealers.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and charge. Specifically, the Exchange First Change
Statutory Basis for, the Proposed Rule proposes to provide the $0.0014 per
The Exchange believes that
Change share executed charge for a displayed
eliminating the $0.0014 per share
order entered by a member firm that
1. Purpose executed charge for a displayed order
adds liquidity equal to or exceeding
entered by a Qualified Market Maker is
The purpose of the proposed rule 0.25% of total Consolidated Volume
reasonable because the Exchange must,
change is to amend the Exchange’s during a month.
from time to time, assess the
transaction fees at Rule 7018(a) relating The Exchange notes that, like the
effectiveness of the criteria it applies in
to charges assessed for providing eliminated $0.0014 charge criteria
providing reduced charges, including
liquidity through the NASDAQ OMX discussed above, the proposed new
the nature of the market improving
BX Equities System in securities priced charge criteria requires a level of
behavior required to receive the reduced
at $1 or more per share that it trades to: Consolidated Volume in return for a
charge. The Exchange will modify or
(i) Eliminate Qualified Market Maker- reduced charge assessed for displayed
eliminate such criteria when it believes
based criteria and adopt new orders. Although the proposed level of
the criteria are ineffective, which in turn
Consolidated Volume-based criteria Consolidated Volume is 0.05% higher
may allow the Exchange to offer other
required to receive the $0.0014 per than the eliminated charge tier, the
incentives instead.
share executed charge; and (ii) decrease proposed new charge criteria does not In this instance, the Exchange
the $0.0018 per share executed charge, require the member firm to also qualify believes the criteria required to receive
and amend the qualification criteria as a Qualified Market Maker, which the $0.0014 per share executed charge
currently required to receive the charge, includes certain quoting requirements were ineffective at providing incentive
for a displayed order entered by a discussed above. to market participants to improve the
member. Second Change market appreciably. As a consequence,
First Change the Exchange believes it is reasonable to
The purpose of the second change is
eliminate the Qualified Market Maker-
The purpose of the first change is to to decrease the $0.0018 per share
based criteria and replace it with new
eliminate the Qualified Market Maker- executed charge, and amend the
criteria, as discussed below.
based criteria required to receive the qualifications currently required to
The Exchange believes that the new
$0.0014 per share executed charge. receive the charge, for a displayed order
$0.0014 per share executed charge
Currently, this fee applies to all entered by a member. Under Rule
criteria is reasonable because it is
displayed orders entered by a Qualified 7018(a), a member firm may receive a
similar to the Qualified Market Maker
Market Maker. A member firm may $0.0018 per share executed charge for a
charge tier criteria that the Exchange is
become a Qualified Market Maker by displayed order if it adds liquidity equal
proposing to eliminate. Under the
being a member firm that provides to or exceeding 0.20% of total
existing Qualified Market Maker charge
through one or more of its NASDAQ Consolidated Volume during a month.
tier, a member firm must be a Qualified
OMX BX Equities System MPIDs more The Exchange is proposing to reduce
Market Maker to receive the $0.0014 per
than 0.20% of Consolidated Volume 3 the level of total Consolidated Volume
share executed charge for its displayed
required from 0.20% to 0.15% during a
mstockstill on DSK4VPTVN1PROD with NOTICES
orders. To be a Qualified Market Maker,
3 Consolidated Volume is defined as the total
month, in light of the new $0.0014 per
consolidated volume reported to all consolidated a member firm must: (i) Provide through
share executed charge tier discussed
transaction reporting plans by all exchanges and one or more of its NASDAQ OMX BX
trade reporting facilities during a month in equity above that requires 0.25% Consolidated
Equities System MPIDs more than
securities, excluding executed orders with a size of
less than one round lot. For purposes of calculating annual reconstitution of the Russell Investments
0.20% of Consolidated Volume during
Consolidated Volume and the extent of a member’s Indexes shall be excluded from both total
4 15 U.S.C. 78f(b).
trading activity, expressed as a percentage of or Consolidated Volume and the member’s trading
ratio to Consolidated Volume, the date of the activity. See Rule 7018. 5 15 U.S.C. 78f(b)(4) and (5).
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the month; and (ii) have at least one receive the reduced charge. Moreover, changes are unattractive to market
Qualified MPID, that is, an MPID the reduced charge better aligns the participants, it is likely that the
through which, for at least 200 charge tier with the proposed new Exchange will lose market share to other
securities, the Qualified Market Maker $0.0014 per share executed charge tier exchanges and off-exchange venues as a
quotes at the NBBO an average of at and its 0.25% Consolidated Volume result.
least 50% of the time during regular requirement and the $0.0019 per share In this proposal, the Exchange is
market hours (9:30 a.m. through 4:00 executed tier, which requires a member modifying qualification criteria and
p.m.) during the month. to provide 0.10% of total Consolidated reducing the charges that it assesses its
Under the proposed new charge tier, Volume to receive that charge. member firms for providing liquidity to
a member firm must provide a higher The Exchange believes that the the Exchange. The Exchange believes
level of Consolidated Volume in proposed $0.0017 per share executed that such changes will support liquidity
contrast to the Qualified Market Maker charge and changes to the Consolidated on the Exchange and are pro-
criteria, but is not required to meet the Volume requirement are an equitable competitive, since any other market is
quoting requirements of the Qualified allocation and are not unfairly free to provide similar, if not better, fees
Market Maker criteria. Accordingly, the discriminatory because the Exchange should they choose to do so. For these
Exchange believes that the proposed will apply the same charge to all reasons, the Exchange does not believe
new $0.0014 per share executed charge similarly situated members. Any that the proposed changes will impair
criteria is reasonable. member firm that elects to provide the
the ability of members or competing
The Exchange believes that assessing level of Consolidated Volume required
order execution venues to maintain
a $0.0014 per share executed charge and by the amended tier will receive the
requiring a member to provide a level of their competitive standing in the
reduced charge [sic]
Consolidated Volume to qualify for that financial markets.
charge is an equitable allocation and is B. Self-Regulatory Organization’s
C. Self-Regulatory Organization’s
not unfairly discriminatory because the Statement on Burden on Competition
Statement on Comments on the
Exchange will apply the new criteria The Exchange does not believe that Proposed Rule Change Received From
and assess the charge to all similarly the proposed rule change will impose Members, Participants, or Others
situated members. Any member firm any burden on competition not
that elects to provide the level of necessary or appropriate in furtherance No written comments were either
Consolidated Volume required by the of the purposes of the Act. In terms of solicited or received.
tier will receive the charge. In this inter-market competition, the Exchange III. Date of Effectiveness of the
regard, the Exchange notes that all notes that it operates in a highly Proposed Rule Change and Timing for
member firms that could meet the competitive market in which market Commission Action
eliminated criteria will have the participants can readily favor competing
opportunity to qualify under the new venues if they deem fee levels at a The foregoing rule change has become
Consolidated Volume-based criteria. particular venue to be excessive, or effective pursuant to Section
rebate opportunities available at other 19(b)(3)(A)(ii) of the Act.6
Second Change venues to be more favorable. At any time within 60 days of the
The Exchange believes that the In such an environment, the Exchange filing of the proposed rule change, the
proposed changes to the $0.0018 per must continually adjust its fees to Commission summarily may
share executed charge provided for a remain competitive with other temporarily suspend such rule change if
displayed order if it is entered by a exchanges and with alternative trading it appears to the Commission that such
member firm that adds liquidity equal to systems that have been exempted from action is: (i) Necessary or appropriate in
or exceeding 0.20% of total compliance with the statutory standards the public interest; (ii) for the protection
Consolidated Volume during a month applicable to exchanges. Because of investors; or (iii) otherwise in
are reasonable because they better align competitors are free to modify their own furtherance of the purposes of the Act.
the reduced charge with the level of fees in response, and because market If the Commission takes such action, the
Consolidated Volume required to participants may readily adjust their Commission shall institute proceedings
qualify, in light of the proposed changes order routing practices, the Exchange to determine whether the proposed rule
the Exchange is making to the $0.0014 believes that the degree to which fee should be approved or disapproved.
per share executed charge criteria. changes in this market may impose any
Specifically, the Exchange is reducing burden on competition is extremely IV. Solicitation of Comments
the level of Consolidated Volume limited. In this instance, the proposed
Interested persons are invited to
required to qualify from 0.20%, which changes to the charges assessed member
submit written data, views, and
is close to the proposed level of firms for execution of displayed orders
arguments concerning the foregoing,
Consolidated Volume required to do not impose a burden on competition
including whether the proposed rule
receive the $0.0014 per share executed because the Exchange’s execution
change is consistent with the Act.
charge, to 0.15%, which the Exchange services are completely voluntary and
Comments may be submitted by any of
believes is better aligned with the subject to extensive competition both
the following methods:
charges provided and the criteria from other exchanges and from off-
required to receive the charges. As a exchange venues. Electronic Comments
further incentive, the Exchange is The proposed changes are reflective of
• Use the Commission’s Internet
mstockstill on DSK4VPTVN1PROD with NOTICES
proposing to decrease the charge this competition and the Exchange’s
assessed qualifying member firms from desire to offer lower fees in return for comment form (http://www.sec.gov/
$0.0018 to $0.0017 per share executed. market-improving liquidity, which is rules/sro.shtml); or
The Exchange believes that it is ultimately limited by the Exchange’s • Send an email to rule-comments@
reasonable to reduce the charge because need to cover costs and make a profit. sec.gov. Please include File Number SR–
it may provide greater incentive to Thus, the Exchange must carefully BX–2016–020 on the subject line.
member firms to provide the level of adjust its access fees with the
Consolidated Volume necessary to understanding that if the proposed 6 15 U.S.C. 78s(b)(3)(A)(ii).
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![Federal Register / Vol. 81, No. 74 / Monday, April 18, 2016 / Notices 22681
Paper Comments SECURITIES AND EXCHANGE the most significant parts of such
COMMISSION statements.
• Send paper comments in triplicate
to Secretary, Securities and Exchange [Release No. 34–77594; File No. SR– A. Self-Regulatory Organization’s
Commission, 100 F Street NE., BatsBZX–2016–01] Statement of the Purpose of, and
Washington, DC 20549–1090. Statutory Basis for, the Proposed Rule
Self-Regulatory Organizations; Bats Change
All submissions should refer to File BZX Exchange, Inc.; Notice of Filing of
Number SR–BX–2016–020. This file Proposed Rule Change To List and 1. Purpose
number should be included on the Trade Under BZX Rule 14.11(c)(4)
subject line if email is used. To help the The Exchange proposes to list and
Shares of the Following Series of trade shares (‘‘Shares’’) of the following
Commission process and review your Market Vectors ETF Trust: Market
comments more efficiently, please use series of the Trust under BZX Rule
Vectors 6–8 Year Municipal Index ETF;
only one method. The Commission will 14.11(c)(4),3 which governs the listing
Market Vectors 8–12 Year Municipal
post all comments on the Commission’s and trading of index fund shares based
Index ETF; and Market Vectors 12–17
Internet Web site (http://www.sec.gov/ on fixed income securities indexes:
Year Municipal Index ETF
rules/sro.shtml). Copies of the Market Vectors AMT-Free 6–8 Year
submission, all subsequent
April 12, 2016 Municipal Index ETF; Market Vectors
amendments, all written statements Pursuant to Section 19(b)(1) of the AMT-Free 8–12 Year Municipal Index
with respect to the proposed rule Securities Exchange Act of 1934 (the ETF; and Market Vectors AMT-Free 12–
‘‘Act’’),1 and Rule 19b–4 thereunder,2 17 Year Municipal Index ETF (each a
change that are filed with the
notice is hereby given that on March 29, ‘‘Fund’’ and, collectively, the
Commission, and all written
2016, Bats BZX Exchange, Inc. (the ‘‘Funds’’).4 The Shares will be offered
communications relating to the ‘‘Exchange’’ or ‘‘BZX’’) filed with the
proposed rule change between the by the Trust, which was established as
Securities and Exchange Commission a Delaware statutory trust on March 15,
Commission and any person, other than (‘‘Commission’’) the proposed rule
those that may be withheld from the 2001. The Trust is registered with the
change as described in Items I and II Commission as an open-end investment
public in accordance with the below, which Items have been prepared
provisions of 5 U.S.C. 552, will be company and has filed a registration
by the Exchange. The Commission is statement on behalf of the Funds on
available for Web site viewing and publishing this notice to solicit
printing in the Commission’s Public comments on the proposed rule change 3 The Commission approved BZX Rule 14.11(c) in
Reference Room, 100 F Street NE., from interested persons. Securities Exchange Act Release No. 65225 (August
Washington, DC 20549 on official 30, 2011), 76 FR 55148 (September 6, 2011) (SR–
I. Self-Regulatory Organization’s
business days between the hours of BATS–2011–018).
Statement of the Terms of Substance of 4 The Commission previously has approved a
10:00 a.m. and 3:00 p.m. Copies of the
the Proposed Rule Change proposed rule change relating to listing and trading
filing also will be available for of funds based on municipal bond indexes. See
inspection and copying at the principal The Exchange filed a proposal to list Securities Exchange Act Release Nos. 67985
office of the Exchange. All comments and trade under BZX Rule 14.11(c)(4) (October 4, 2012), 77 FR 61804 (October 11, 2012)
received will be posted without change; the shares of the following series of (SR–NYSEArca–2012–92) (order approving
Market Vectors ETF Trust (the ‘‘Trust’’): proposed rule change relating to the listing and
the Commission does not edit personal trading of iShares 2018 S&P AMT-Free Municipal
identifying information from Market Vectors 6–8 Year Municipal Series and iShares 2019 S&P AMT-Free Municipal
submissions. You should submit only Index ETF; Market Vectors 8–12 Year Series under NYSE Arca, Inc. (‘‘NYSE Arca’’) Rule
information that you wish to make Municipal Index ETF; and Market 5.2(j)(3), Commentary .02); 72523 (July 2, 2014), 79
Vectors 12–17 Year Municipal Index FR 39016 (July 9, 2014) (SR–NYSEArca–2014–37)
available publicly. All submissions (order approving proposed rule change relating to
ETF.
should refer to File Number SR–BX– the listing and trading of iShares 2020 S&P AMT-
The text of the proposed rule change Free Municipal Series under NYSE Arca Rule
2016–020, and should be submitted on is available at the Exchange’s Web site 5.2(j)(3), Commentary .02); and 75468 (July 16,
or before May 9, 2016. at www.batstrading.com, at the 2015), 80 FR 43500 (July 22, 2015) (SR–NYSEArca–
For the Commission, by the Division of principal office of the Exchange, and at 2015–25) (order approving proposed rule change
relating to the listing and trading of the iShares
Trading and Markets, pursuant to delegated the Commission’s Public Reference iBonds Dec 2021 AMT-Free Muni Bond ETF and
authority.7 Room. iShares iBonds Dec 2022 AMT-Free Muni Bond
Robert W. Errett, ETF under NYSE Arca Rule 5.2(j)(3), Commentary
II. Self-Regulatory Organization’s .02). The Commission also has issued a notice of
Deputy Secretary. Statement of the Purpose of, and filing and immediate effectiveness of a proposed
[FR Doc. 2016–08821 Filed 4–15–16; 8:45 am] Statutory Basis for, the Proposed Rule rule change relating to listing and trading on the
Exchange of the iShares Taxable Municipal Bond
BILLING CODE 8011–01–P Change Fund. See Securities Exchange Act Release No.
In its filing with the Commission, the 63176 (October 25, 2010), 75 FR 66815 (October 29,
Exchange included statements 2010) (SR–NYSEArca–2010–94). The Commission
has approved two actively managed funds of the
concerning the purpose of and basis for PIMCO ETF Trust that hold municipal bonds. See
the proposed rule change and discussed Securities Exchange Act Release No. 60981
any comments it received on the (November 10, 2009), 74 FR 59594 (November 18,
2009) (SR–NYSEArca–2009–79) (order approving
mstockstill on DSK4VPTVN1PROD with NOTICES
proposed rule change. The text of these
listing and trading of PIMCO ShortTerm Municipal
statements may be examined at the Bond Strategy Fund and PIMCO Intermediate
places specified in Item IV below. The Municipal Bond Strategy Fund, among others). The
Exchange has prepared summaries, set Commission also has approved listing and trading
forth in Sections A, B, and C below, of on the Exchange of the SPDR Nuveen S&P High
Yield Municipal Bond Fund. See Securities
Exchange Act Release No.63881 (February 9, 2011),
1 15 U.S.C. 78s(b)(1). 76 FR 9065 (February 16, 2011) (SR–NYSEArca–
7 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. 2010–120).
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Document Created: 2016-04-16 01:45:23
Document Modified: 2016-04-16 01:45:23
| 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 22678 |
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