81_FR_2285 81 FR 2275 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc.

81 FR 2275 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 10 (January 15, 2016)

Page Range2275-2276
FR Document2016-00640

Federal Register, Volume 81 Issue 10 (Friday, January 15, 2016) 
[Federal Register Volume 81, Number 10 (Friday, January 15, 2016)]
[Notices]
[Pages 2275-2276]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-00640]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76863; File No. SR-BATS-2015-120]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Fees for Use of BATS Exchange, Inc.

January 11, 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 29, 2015, BATS Exchange, Inc. (the ``Exchange'' or 
``BATS'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by the Exchange. The 
Exchange has designated the proposed rule change as one establishing or 
changing a member due, fee, or other charge imposed by the Exchange 
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposed rule change effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of 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 BATS Rules 
15.1(a) and (c). The change to the fee schedule pursuant to this 
proposal is effective upon filing.
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    \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).
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to modify its fee schedule applicable to the 
Exchange's options platform to modify the criteria necessary to meet 
the Customer \6\ Step-Up Volume Tier under footnote 1. The Exchange 
currently offers a total of eight Customer Penny Pilot Add Volume Tiers 
under footnote 1 that provide enhanced rebates for Customer orders in 
Penny Pilot Securities that add liquidity under fee code PY.\7\ Under 
the Customer Step-Up Volume Tier, the Member would receive a rebate of 
$0.53 per contract where they have an Options Step-Up Add TCV \8\ in 
Customer orders from September 2015 baseline equal to or greater than 
0.40%. The Exchange proposes to ease the criteria necessary to qualify 
for the Customer Step-Up Volume Tier by requiring an Options Step-Up 
Add TCV in Customer orders from September 2015 baseline equal to or 
greater than 0.35%. The Exchange proposes to implement this amendment 
to its fee schedule on January 4, 2016.
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    \6\ As defined in the Exchange's fee schedule available at 
http://www.batsoptions.com/support/fee_schedule/bzx/.
    \7\ Fee code PY is appended to Customer orders that add 
liquidity in Penny Pilot Securities. Id. Penny Pilot Securities is 
defined in the Exchange's fee schedule. Id. Orders yielding fee code 
PY receive a rebate of $0.25 per share, absent achieving a tier and 
receiving an increased rebate under footnote 1.
    \8\ As defined in the Exchange's fee schedule available at 
http://www.batsoptions.com/support/fee_schedule/bzx/.
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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 of the Act. 
Specifically, the Exchange believes that the proposed rule change is 
consistent with Section 6(b)(4) of the Act, in that it provides for the 
equitable allocation of reasonable dues, fees and other charges among 
members and other persons using any facility or system which the 
Exchange operates or controls. The Exchange notes that it operates in a 
highly competitive market in which market participants can readily 
direct order flow to competing venues if they deem fee levels to be 
excessive.
    Volume-based rebates such as those currently maintained on the 
Exchange

[[Page 2276]]

have been widely adopted by equities and options exchanges and are 
equitable because they are open to all Members on an equal basis and 
provide additional benefits or discounts that are reasonably related to 
the value to an exchange's market quality associated with higher levels 
of market activity, such as higher levels of liquidity provision and/or 
growth patterns, and introduction of higher volumes of orders into the 
price and volume discovery processes. Easing the criteria for the 
Customer Step-Up Volume Tier is intended to incentivize Members to send 
additional orders to the Exchange in an effort to qualify for the 
enhanced rebate available by the respective tier.
    The Exchange believes that this change is reasonable, fair and 
equitable and non-discriminatory, for the reasons set forth with 
respect to volume-based pricing generally and because such change will 
either incentivize participants to further contribute to market quality 
on the Exchange or will allow the Exchange to earn additional revenue 
that can be used to offset the addition of new pricing incentives. The 
Exchange also believes that the proposed rebate remains consistent with 
pricing previously offered by the Exchange as well as competitors of 
the Exchange and does not represent a significant departure from the 
Exchange's general pricing structure.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes the proposed amendment to its fee schedule 
would not impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange 
does not believe that 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 change to the Exchange's 
tiered pricing structure burdens competition, but instead, enhances 
competition as it is intended to increase the competitiveness of the 
Exchange by easing the criteria necessary to qualify for the Customer 
Step-Up Volume tier. Also, the Exchange believes that the decrease to 
the tier's threshold contributes to, rather than burdens competition, 
as such change is intended to incentivize participants to increase 
their participation on the Exchange.

(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 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 \9\ and paragraph (f) of Rule 19b-4 
thereunder.\10\ At any time within 60 days of the filing of the 
proposed rule change, the Commission summarily may temporarily suspend 
such rule change if it appears to the Commission that such action is 
necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File No. SR-BATS-2015-120 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-BATS-2015-120. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing 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-BATS-2015-120 and should be 
submitted on or before February 5, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Robert W. Errett,
Deputy Secretary.
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    \11\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-00640 Filed 1-14-16; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 81, No. 10 / Friday, January 15, 2016 / Notices 2275 (collectively, ‘‘Aggregate Fee ‘‘Act’’),1 and Rule 19b–4 thereunder,2 (A) Self-Regulatory Organization’s Disclosure’’). For any Fund that notice is hereby given that on December Statement of the Purpose of, and employs an Excluded Subadvisor, the 29, 2015, BATS Exchange, Inc. (the Statutory Basis for, the Proposed Rule Fund will provide separate disclosure of ‘‘Exchange’’ or ‘‘BATS’’) filed with the Change any fees paid to the Excluded Securities and Exchange Commission 1. Purpose Subadvisor. (‘‘Commission’’) the proposed rule 4. Applicants agree that any order The Exchange proposes to modify its change as described in Items I, II and III granting the requested relief will be fee schedule applicable to the below, which Items have been prepared subject to the terms and conditions Exchange’s options platform to modify by the Exchange. The Exchange has the criteria necessary to meet the stated in the application. Such terms designated the proposed rule change as and conditions provide for, among other Customer 6 Step-Up Volume Tier under one establishing or changing a member footnote 1. The Exchange currently safeguards, appropriate disclosure to due, fee, or other charge imposed by the Fund shareholders and notification offers a total of eight Customer Penny Exchange under Section 19(b)(3)(A)(ii) Pilot Add Volume Tiers under footnote about sub-advisory changes and of the Act 3 and Rule 19b–4(f)(2) 1 that provide enhanced rebates for enhanced Board oversight to protect the interests of the Funds’ shareholders. thereunder,4 which renders the Customer orders in Penny Pilot 5. Section 6(c) of the Act provides that proposed rule change effective upon Securities that add liquidity under fee the Commission may exempt any filing with the Commission. The code PY.7 Under the Customer Step-Up person, security, or transaction or any Commission is publishing this notice to Volume Tier, the Member would receive class or classes of persons, securities, or solicit comments on the proposed rule a rebate of $0.53 per contract where they transactions from any provisions of the change from interested persons. have an Options Step-Up Add TCV 8 in Act, or any rule thereunder, if such Customer orders from September 2015 I. Self-Regulatory Organization’s baseline equal to or greater than 0.40%. relief is necessary or appropriate in the Statement of the Terms of Substance of public interest and consistent with the The Exchange proposes to ease the the Proposed Rule Change criteria necessary to qualify for the protection of investors and purposes fairly intended by the policy and The Exchange filed a proposal to Customer Step-Up Volume Tier by provisions of the Act. Applicants requiring an Options Step-Up Add TCV amend the fee schedule applicable to believe that the requested relief meets in Customer orders from September Members 5 and non-members of the this standard because, as further 2015 baseline equal to or greater than Exchange pursuant to BATS Rules explained in the application, the 0.35%. The Exchange proposes to 15.1(a) and (c). The change to the fee implement this amendment to its fee Advisory Agreements will remain schedule pursuant to this proposal is subject to shareholder approval, while schedule on January 4, 2016. effective upon filing. the role of the Subadvisors is 2. Statutory Basis substantially similar to that of The text of the proposed rule change is available at the Exchange’s Web site The Exchange believes that the individual portfolio managers, so that at www.batstrading.com, at the proposed rule change is consistent with requiring shareholder approval of principal office of the Exchange, and at the requirements of the Act and the Subadvisory Agreements would impose the Commission’s Public Reference rules and regulations thereunder that unnecessary delays and expenses on the Room. are applicable to a national securities Funds. Applicants believe that the exchange, and, in particular, with the requested relief from the Disclosure II. Self-Regulatory Organization’s requirements of Section 6 of the Act. Requirements meets this standard Statement of the Purpose of, and Specifically, the Exchange believes that because it will improve the Advisor’s Statutory Basis for, the Proposed Rule the proposed rule change is consistent ability to negotiate fees paid to the Change with Section 6(b)(4) of the Act, in that Subadvisors that are more advantageous it provides for the equitable allocation for the Funds. In its filing with the Commission, the of reasonable dues, fees and other For the Commission, by the Division of Exchange included statements charges among members and other Investment Management, under delegated concerning the purpose of and basis for persons using any facility or system authority. the proposed rule change and discussed which the Exchange operates or Robert W. Errett, any comments it received on the controls. The Exchange notes that it Deputy Secretary. proposed rule change. The text of these operates in a highly competitive market [FR Doc. 2016–00662 Filed 1–14–16; 8:45 am] statements may be examined at the in which market participants can BILLING CODE 8011–01–P places specified in Item IV below. The readily direct order flow to competing Exchange has prepared summaries, set venues if they deem fee levels to be forth in Sections A, B, and C below, of excessive. SECURITIES AND EXCHANGE the most significant parts of such Volume-based rebates such as those COMMISSION statements. currently maintained on the Exchange [Release No. 34–76863; File No. SR–BATS– 6 As defined in the Exchange’s fee schedule 2015–120] available at http://www.batsoptions.com/support/ fee_schedule/bzx/. Self-Regulatory Organizations; BATS 7 Fee code PY is appended to Customer orders mstockstill on DSK4VPTVN1PROD with NOTICES Exchange, Inc.; Notice of Filing and 1 15 U.S.C. 78s(b)(1). that add liquidity in Penny Pilot Securities. Id. Immediate Effectiveness of a Proposed 2 17 CFR 240.19b–4. Penny Pilot Securities is defined in the Exchange’s Rule Change Related to Fees for Use 3 15 U.S.C. 78s(b)(3)(A)(ii). fee schedule. Id. Orders yielding fee code PY receive a rebate of $0.25 per share, absent achieving of BATS Exchange, Inc. 4 17 CFR 240.19b–4(f)(2). a tier and receiving an increased rebate under 5 The term ‘‘Member’’ is defined as ‘‘any footnote 1. January 11, 2016. registered broker or dealer that has been admitted 8 As defined in the Exchange’s fee schedule Pursuant to Section 19(b)(1) of the to membership in the Exchange.’’ See Exchange available at http://www.batsoptions.com/support/ Securities Exchange Act of 1934 (the Rule 1.5(n). fee_schedule/bzx/. VerDate Sep<11>2014 20:01 Jan 14, 2016 Jkt 238001 PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 E:\FR\FM\15JAN1.SGM 15JAN1

2276 Federal Register / Vol. 81, No. 10 / Friday, January 15, 2016 / Notices have been widely adopted by equities competition, as such change is intended change that are filed with the and options exchanges and are equitable to incentivize participants to increase Commission, and all written because they are open to all Members on their participation on the Exchange. communications relating to the an equal basis and provide additional proposed rule change between the (C) Self-Regulatory Organization’s benefits or discounts that are reasonably Commission and any person, other than Statement on Comments on the related to the value to an exchange’s those that may be withheld from the market quality associated with higher Proposed Rule Change Received From public in accordance with the levels of market activity, such as higher Members, Participants or Others provisions of 5 U.S.C. 552, will be levels of liquidity provision and/or The Exchange has not solicited, and available for Web site viewing and growth patterns, and introduction of does not intend to solicit, comments on printing in the Commission’s Public higher volumes of orders into the price this proposed rule change. The Reference Room, 100 F Street NE., and volume discovery processes. Easing Exchange has not received any written Washington, DC 20549, on official the criteria for the Customer Step-Up comments from members or other business days between the hours of Volume Tier is intended to incentivize interested parties. 10:00 a.m. and 3:00 p.m. Copies of such Members to send additional orders to filing will also be available for III. Date of Effectiveness of the the Exchange in an effort to qualify for inspection and copying at the principal Proposed Rule Change and Timing for the enhanced rebate available by the office of the Exchange. All comments Commission Action respective tier. received will be posted without change; The Exchange believes that this The foregoing rule change has become the Commission does not edit personal change is reasonable, fair and equitable effective pursuant to Section 19(b)(3)(A) identifying information from and non-discriminatory, for the reasons of the Act 9 and paragraph (f) of Rule submissions. You should submit only set forth with respect to volume-based 19b–4 thereunder.10 At any time within information that you wish to make pricing generally and because such 60 days of the filing of the proposed rule available publicly. All submissions change will either incentivize change, the Commission summarily may should refer to File No. SR–BATS– participants to further contribute to temporarily suspend such rule change if 2015–120 and should be submitted on market quality on the Exchange or will it appears to the Commission that such or before February 5, 2016. allow the Exchange to earn additional action is necessary or appropriate in the revenue that can be used to offset the public interest, for the protection of For the Commission, by the Division of Trading and Markets, pursuant to delegated addition of new pricing incentives. The investors, or otherwise in furtherance of authority.11 Exchange also believes that the the purposes of the Act. Robert W. Errett, proposed rebate remains consistent with pricing previously offered by the IV. Solicitation of Comments Deputy Secretary. Exchange as well as competitors of the Interested persons are invited to [FR Doc. 2016–00640 Filed 1–14–16; 8:45 am] Exchange and does not represent a submit written data, views, and BILLING CODE 8011–01–P significant departure from the arguments concerning the foregoing, Exchange’s general pricing structure. including whether the proposed rule change is consistent with the Act. SECURITIES AND EXCHANGE (B) Self-Regulatory Organization’s COMMISSION Comments may be submitted by any of Statement on Burden on Competition the following methods: The Exchange believes the proposed [Release No. 34–76869; File No. SR– amendment to its fee schedule would Electronic Comments NYSEArca–2015–86] not impose any burden on competition • Use the Commission’s Internet Self-Regulatory Organizations; NYSE that is not necessary or appropriate in comment form (http://www.sec.gov/ Arca, Inc.; Order Granting Approval of furtherance of the purposes of the Act. rules/sro.shtml); or Proposed Rule Change, and Notice of The Exchange does not believe that the • Send an email to rule-comments@ Filing and Order Granting Accelerated proposed change represents a significant sec.gov. Please include File No. SR– Approval of Amendment Nos. 1 and 3 departure from previous pricing offered BATS–2015–120 on the subject line. Thereto, Relating to Auctions for Pillar, by the Exchange or pricing offered by Paper Comments the Exchange’s New Trading the Exchange’s competitors. • Send paper comments in triplicate Technology Platform Additionally, Members may opt to disfavor the Exchange’s pricing if they to Secretary, Securities and Exchange January 11, 2016. believe that alternatives offer them Commission, 100 F Street NE., better value. Accordingly, the Exchange Washington, DC 20549–1090. I. Introduction does not believe that the proposed All submissions should refer to File No. On September 22, 2015, NYSE Arca, change will impair the ability of SR–BATS–2015–120. This file number Inc. (‘‘Exchange’’ or ‘‘Arca’’) filed with Members or competing venues to should be included on the subject line the Securities and Exchange maintain their competitive standing in if email is used. To help the Commission (‘‘Commission’’), pursuant the financial markets. The Exchange Commission process and review your to Section 19(b)(1) of the Securities does not believe that the proposed comments more efficiently, please use Exchange Act of 1934 (‘‘Act’’) 1 and Rule change to the Exchange’s tiered pricing only one method. The Commission will 19b-4 thereunder,2 a proposed rule structure burdens competition, but post all comments on the Commission’s change to adopt new equity trading mstockstill on DSK4VPTVN1PROD with NOTICES instead, enhances competition as it is Internet Web site (http://www.sec.gov/ rules relating to auctions for Pillar, the intended to increase the rules/sro.shtml). Copies of the Exchange’s new trading technology competitiveness of the Exchange by submission, all subsequent platform. The proposed rule change was easing the criteria necessary to qualify amendments, all written statements published for comment in the Federal for the Customer Step-Up Volume tier. with respect to the proposed rule Also, the Exchange believes that the 11 17 CFR 200.30–3(a)(12). decrease to the tier’s threshold 9 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1). contributes to, rather than burdens 10 17 CFR 240.19b–4(f). 2 17 CFR 240.19b–4. VerDate Sep<11>2014 20:01 Jan 14, 2016 Jkt 238001 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 E:\FR\FM\15JAN1.SGM 15JAN1


Document Created: 2018-02-02 12:32:08
Document Modified: 2018-02-02 12:32:08
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 2275 
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