81 FR 23021 - Self-Regulatory Organizations; Bats BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Certificate of Incorporation of the Exchange's Ultimate Parent Company, Bats Global Markets, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 75 (April 19, 2016)

[Federal Register Volume 81, Number 75 (Tuesday, April 19, 2016)]
[Notices]
[Pages 23021-23023]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-08938]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77600; File No. SR-BatsBYX-2016-04]


Self-Regulatory Organizations; Bats BYX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Certificate of Incorporation of the Exchange's Ultimate Parent 
Company, Bats Global Markets, Inc.

April 13, 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 April 8, 2016, Bats BYX Exchange, Inc. (the ``Exchange'' or 
``BYX'') 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.
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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).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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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 certificate of 
incorporation of the Exchange's ultimate parent company, Bats Global 
Markets, Inc. (the ``Corporation'').
    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
    On December 16, 2015, the Corporation, the ultimate parent entity 
of the Exchange, filed a registration statement on Form S-1 with the 
Commission seeking to register shares of common stock and to conduct an 
initial public offering of those shares, which will be listed for 
trading on the Exchange (the ``IPO''). In connection with its IPO, the 
Corporation intends to amend and restate its certificate of 
incorporation (the ``New Certificate of Incorporation''). The Exchange 
previously received Commission approval of certain substantive 
amendments to the certificate of incorporation of the Corporation that 
comprise changes included in the New Certificate of Incorporation.\5\ 
Since that date, the Corporation has determined it to be necessary to 
further amend its certificate of incorporation to achieve the final, 
pre-IPO version of the New Certificate of Incorporation. The additional 
amendments will be achieved through the filing with the State of 
Delaware of a certificate of

[[Page 23022]]

amendment to the New Certificate of Incorporation. The additional 
amendments are described in further detail below.
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    \5\ See Securities Exchange Act Release No. 77464 (March 29, 
2016), 81 FR 19252 (April 1, 2016) (SR-BATS-2016-010; SR-BYX-2016-
02; SR-EDGX-2016-04; SR-EDGA-2016-01).
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    The Exchange, on behalf of the Corporation, proposes changes to the 
New Certificate of Incorporation in connection with a forward stock 
split, pursuant to which each share of common stock of the Corporation 
outstanding or held in treasury immediately prior to the completion of 
the IPO would automatically and without action on the part of the 
holders thereof be subdivided into 2.91 shares of common stock (the 
``Stock Split'').\6\ Accordingly, the number of authorized shares of 
the Corporation, both in the aggregate and as set forth by class, as 
codified in paragraph (a)(i) of Article Fourth of the New Certificate 
of Incorporation, will be adjusted. The Corporation also plans to 
adjust the preferred stock of the Corporation consistent with the Stock 
Split. The par value of the Corporation's common stock will remain 
$0.01 per share.
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    \6\ Common stock consists of voting common stock and non-voting 
common stock of the Corporation.
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    The purpose of this rule filing is to permit the Corporation, the 
ultimate parent company of the Exchange, to adopt an amendment to the 
New Certificate of Incorporation, as described in this proposal. The 
changes described herein relate to the certificate of incorporation of 
the Corporation only, not to the governance of the Exchange. The 
Exchange will continue to be governed by its existing certificate of 
incorporation and bylaws. The stock in, and voting power of, the 
Exchange will continue to be directly and solely held by Bats Global 
Markets Holdings, Inc., an intermediate holding company wholly-owned by 
the Corporation, and the governance of the Exchange will continue under 
its existing structure.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of the Act and 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.\7\ In particular, the 
proposal is consistent with Section 6(b)(1) of the Act, because it 
retains, without modification, the existing limitations on ownership 
and total voting power that currently exist and that are designed to 
prevent any stockholder from exercising undue control over the 
operation of the Exchange and to assure that the Exchange is able to 
carry out its regulatory obligations under the Act. Under the proposal, 
the Corporation is making certain administrative and structural changes 
to the New Certificate of Incorporation. These changes, however, do not 
impact the governance of the Exchange nor do they modify the ownership 
of the Corporation.
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    \7\ 15 U.S.C. 78f(b).
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change imposes 
any burden on competition. As described above, the proposed rule change 
is simply to make certain administrative and structural changes to the 
New Certificate of Incorporation. These changes do not impact the 
governance of the Exchange nor do they modify the ownership of the 
Corporation.

(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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to 
give the Commission written notice of the Exchange's 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, or such shorter time as 
designated by the Commission. The Exchange has satisfied this 
requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) under the Act 
\12\ normally does not become operative for 30 days after the date of 
filing. However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange states that 
the Corporation's IPO may occur in the near future, and the changes 
described in this notice are a critical component of such IPO. The 
Exchange states that waiver of the operative delay will allow the 
Corporation to promptly move forward with the IPO without delay. The 
Commission notes that the Exchange represents that there are no changes 
to the provisions of the New Certificate of Incorporation that impact 
the ownership or governance of the Exchange, and that instead, the 
amendments reflect administrative and structural amendments to the New 
Certificate of Incorporation. Based on the foregoing, the Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest.\14\ The Commission 
hereby grants the Exchange's request and designates the proposal 
operative upon filing.
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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 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 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 Number SR-BatsBYX-2016-04 on the subject line.

[[Page 23023]]

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-BatsBYX-2016-04. 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-BatsBYX-2016-04 and should 
be submitted on or before May 10, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-08938 Filed 4-18-16; 8:45 am]
BILLING CODE 8011-01-P