81_FR_29690 81 FR 29598 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees

81 FR 29598 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 92 (May 12, 2016)

Page Range29598-29600
FR Document2016-11155

Federal Register, Volume 81 Issue 92 (Thursday, May 12, 2016)
[Federal Register Volume 81, Number 92 (Thursday, May 12, 2016)]
[Notices]
[Pages 29598-29600]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-11155]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77780; File No. SR-BatsEDGX-2016-13]


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

May 6, 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 29, 2016, Bats EDGX Exchange, Inc. (the ``Exchange'' or 
``EDGX'') 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 EDGX Rules 
15.1(a) and (c).
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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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange determines the liquidity adding rebate that it will 
provide to Members using the Exchange's tiered pricing structure. 
Currently, the Exchange provides a $0.0027 per share rebate under 
footnote 2 of the Fee Schedule for a Member that adds an ADV \6\ of at 
least 0.02% of the TCV \7\ in Tape B securities for orders that yield 
fee codes B and 4.\8\ The Exchange currently has only one Tape B Volume 
Tier.
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    \6\ As defined on the Exchange's Fee Schedule.
    \7\ Id.
    \8\ See Securities Exchange Act Release No. 76816 (January 4, 
2016, 81 FR 987 (January 8, 2016) (SR-EDGX-2015-67).
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    The Exchange now proposes to amend the Tape B Volume Tier to add an 
additional Tape B Volume Tier to provide two Tape B Volume Tiers. The 
Exchange proposes that the current Tape B Volume Tier be renamed Tape B 
Volume Tier 1. The Exchange proposes that the rebate and the required 
criteria for Tape B Volume Tier 1 remain substantively the same as the 
current Tape B Volume Tier. The Exchange also proposes a second Tape B 
Volume Tier named ``Tape B Volume Tier 2.'' The Exchange proposes to 
provide a rebate per share of $0.0030 pursuant to the Tier and proposes 
the required criteria to be that a Member adds an ADV of at least 0.15% 
of the TCV in Tape B securities. To accommodate this proposed change in 
its Fee Schedule, the Exchange proposes adding an additional row to the 
Tape B Volume Tier table to list the Tape B Volume Tier 2. The Exchange 
also proposes adding an additional column to separate Tape B Volume 
Tier 1 and Tape B Volume Tier 2. Finally, the Exchange proposes stating 
as a precursor that both Tape B Volume

[[Page 29599]]

Tiers are applicable to orders yielding fee codes B and 4 and removing 
the same statement from the current text describing Tape B Volume Tier 
1.
Implementation Date
    The Exchange proposes to implement this amendment to its Fee 
Schedule effective May 2, 2016.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\9\ in general, and 
furthers the objectives of Section 6(b)(4),\10\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities. The Exchange also notes that it operates in a highly-
competitive market in which market participants can readily direct 
order flow to competing venues if they deem fee levels at a particular 
venue to be excessive. The proposed rule changes reflect a competitive 
pricing structure designed to incent market participants to direct 
their order flow to the Exchange. The Exchange believes that the 
proposed amendments to the Tape B Volume Tier are equitable and non-
discriminatory in they would apply uniformly to all Members. The 
Exchange believes the rate remains competitive with those charged by 
other venues and, therefore, reasonable and equitably allocated to 
Members.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4).
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    Volume-based rebates such as that proposed herein have been widely 
adopted by exchanges, including the Exchange, and are equitable because 
they are open to all Members on an equal basis and provide additional 
benefits or discounts that are reasonably related to: (i) The value to 
an exchange's market quality; (ii) associated higher levels of market 
activity, such as higher levels of liquidity provision and/or growth 
patterns; and (iii) introduction of higher volumes of orders into the 
price and volume discovery processes. The Exchange believes that the 
proposal is a reasonable, fair and equitable, and not unfairly 
discriminatory allocation of fees and rebates because it will provide 
Members with an additional incentive to reach certain thresholds on the 
Exchange.
    In particular, the Exchange believes the addition of the proposed 
second, higher Tape B Volume Tier 2 is a reasonable means to encourage 
Members to increase the liquidity they provide on the Exchange. 
Further, Members will still be able to earn the currently offered 
rebate under Tape B Volume Tier 1. The addition of a second, higher 
tier merely incentivizes a Member to provide even greater liquidity. 
The Exchange further believes that the amendment to the Tape B Volume 
Tier represents an equitable allocation of reasonable dues, fees, and 
other charges because the thresholds necessary to achieve the tier 
continue to encourage Members to add displayed liquidity to the EDGX 
Book \11\ each month. The increased liquidity benefits all investors by 
deepening EDGX's liquidity pool, offering additional flexibility for 
all investors to enjoy cost savings, supporting the quality of price 
discovery, promoting market transparency and improving investor 
protection.
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    \11\ The EDGX Book is the System's electronic file of orders. 
See Exchange Rule 1.5(d).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe its proposed amendment to its Fee 
Schedule would impose any burden on competition that is not necessary 
or appropriate in furtherance of the purposes of the Act. The Exchange 
does not believe that the proposed change represents a significant 
departure from previous pricing offered by the Exchange or pricing 
offered by the Exchange's competitors. Additionally, Members may opt to 
disfavor the Exchange's pricing if they believe that alternatives offer 
them better value. The Exchange does not believe that the proposed 
additional tier would burden competition, but instead, enhances 
competition, as it is intended to increase the competitiveness of and 
draw additional volume to the Exchange. The Exchange does not believe 
the amended tier would burden intramarket competition as it would apply 
to all Members uniformly. 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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from Members or other interested 
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \12\ and paragraph (f) of Rule 19b-4 
thereunder.\13\ 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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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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 [email protected]. Please include 
File Number SR-BatsEDGX-2016-13 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-BatsEDGX-2016-13. 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

[[Page 29600]]

inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BatsEDGX-2016-13, and should 
be submitted on or before June 2, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Robert W. Errett,
Deputy Secretary.
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    \14\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-11155 Filed 5-11-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                    29598                            Federal Register / Vol. 81, No. 92 / Thursday, May 12, 2016 / Notices

                                                    IV. Solicitation of Comments                                For the Commission, by the Division of              II. Self-Regulatory Organization’s
                                                                                                              Trading and Markets, pursuant to delegated            Statement of the Purpose of, and
                                                      Interested persons are invited to                       authority.31                                          Statutory Basis for, the Proposed Rule
                                                    submit written data, views, and                           Robert W. Errett,                                     Change
                                                    arguments concerning the foregoing,                       Deputy Secretary.                                        In its filing with the Commission, the
                                                    including whether the proposed rule                                                                             Exchange included statements
                                                                                                              [FR Doc. 2016–11156 Filed 5–11–16; 8:45 am]
                                                    change is consistent with the Act.                                                                              concerning the purpose of and basis for
                                                                                                              BILLING CODE 8011–01–P
                                                    Comments may be submitted by any of                                                                             the proposed rule change and discussed
                                                    the following methods:                                                                                          any comments it received on the
                                                    Electronic Comments                                       SECURITIES AND EXCHANGE                               proposed rule change. The text of these
                                                                                                              COMMISSION                                            statements may be examined at the
                                                      • Use the Commission’s Internet                                                                               places specified in Item IV below. The
                                                    comment form (http://www.sec.gov/                                                                               Exchange has prepared summaries, set
                                                                                                              [Release No. 34–77780; File No. SR-
                                                    rules/sro.shtml); or                                                                                            forth in Sections A, B, and C below, of
                                                                                                              BatsEDGX–2016–13]
                                                                                                                                                                    the most significant parts of such
                                                      • Send an email to rule-comments@
                                                                                                              Self-Regulatory Organizations; Bats                   statements.
                                                    sec.gov. Please include File Number SR–
                                                    NASDAQ–2016–064 on the subject line.                      EDGX Exchange, Inc.; Notice of Filing                 A. Self-Regulatory Organization’s
                                                                                                              and Immediate Effectiveness of a                      Statement of the Purpose of, and the
                                                    Paper Comments                                            Proposed Rule Change Related to Fees                  Statutory Basis for, the Proposed Rule
                                                      • Send paper comments in triplicate                                                                           Change
                                                                                                              May 6, 2016.
                                                    to Secretary, Securities and Exchange                                                                           1. Purpose
                                                    Commission, 100 F Street NE.,                                Pursuant to Section 19(b)(1) of the
                                                                                                              Securities Exchange Act of 1934 (the                     The Exchange determines the
                                                    Washington, DC 20549–1090.                                                                                      liquidity adding rebate that it will
                                                                                                              ‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                    All submissions should refer to File                      notice is hereby given that on April 29,              provide to Members using the
                                                    Number SR–NASDAQ–2016–064. This                                                                                 Exchange’s tiered pricing structure.
                                                                                                              2016, Bats EDGX Exchange, Inc. (the
                                                    file number should be included on the                                                                           Currently, the Exchange provides a
                                                                                                              ‘‘Exchange’’ or ‘‘EDGX’’) filed with the
                                                    subject line if email is used. To help the                                                                      $0.0027 per share rebate under footnote
                                                                                                              Securities and Exchange Commission
                                                                                                                                                                    2 of the Fee Schedule for a Member that
                                                    Commission process and review your                        (‘‘Commission’’) the proposed rule                    adds an ADV 6 of at least 0.02% of the
                                                    comments more efficiently, please use                     change as described in Items I, II and III            TCV 7 in Tape B securities for orders
                                                    only one method. The Commission will                      below, which Items have been prepared                 that yield fee codes B and 4.8 The
                                                    post all comments on the Commission’s                     by the Exchange. The Exchange has                     Exchange currently has only one Tape B
                                                    Internet Web site (http://www.sec.gov/                    designated the proposed rule change as                Volume Tier.
                                                    rules/sro.shtml). Copies of the                           one establishing or changing a member                    The Exchange now proposes to amend
                                                    submission, all subsequent                                due, fee, or other charge imposed by the              the Tape B Volume Tier to add an
                                                    amendments, all written statements                        Exchange under Section 19(b)(3)(A)(ii)                additional Tape B Volume Tier to
                                                    with respect to the proposed rule                         of the Act 3 and Rule 19b–4(f)(2)                     provide two Tape B Volume Tiers. The
                                                    change that are filed with the                            thereunder,4 which renders the                        Exchange proposes that the current
                                                    Commission, and all written                               proposed rule change effective upon                   Tape B Volume Tier be renamed Tape
                                                    communications relating to the                            filing with the Commission. The                       B Volume Tier 1. The Exchange
                                                    proposed rule change between the                          Commission is publishing this notice to               proposes that the rebate and the
                                                    Commission and any person, other than                     solicit comments on the proposed rule                 required criteria for Tape B Volume Tier
                                                    those that may be withheld from the                       change from interested persons.                       1 remain substantively the same as the
                                                    public in accordance with the                                                                                   current Tape B Volume Tier. The
                                                                                                              I. Self-Regulatory Organization’s                     Exchange also proposes a second Tape
                                                    provisions of 5 U.S.C. 552, will be                       Statement of the Terms of Substance of
                                                    available for Web site viewing and                                                                              B Volume Tier named ‘‘Tape B Volume
                                                                                                              the Proposed Rule Change                              Tier 2.’’ The Exchange proposes to
                                                    printing in the Commission’s Public
                                                                                                                                                                    provide a rebate per share of $0.0030
                                                    Reference Room, 100 F Street NE.,                            The Exchange filed a proposal to
                                                                                                                                                                    pursuant to the Tier and proposes the
                                                    Washington, DC 20549, on official                         amend the fee schedule applicable to
                                                                                                                                                                    required criteria to be that a Member
                                                    business days between the hours of                        Members 5 and non-members of the                      adds an ADV of at least 0.15% of the
                                                    10:00 a.m. and 3:00 p.m. Copies of such                   Exchange pursuant to EDGX Rules                       TCV in Tape B securities. To
                                                    filing will also be available for                         15.1(a) and (c).                                      accommodate this proposed change in
                                                    inspection and copying at the principal                      The text of the proposed rule change               its Fee Schedule, the Exchange proposes
                                                    office of the Exchange. All comments                      is available at the Exchange’s Web site               adding an additional row to the Tape B
                                                    received will be posted without change;                   at www.batstrading.com, at the                        Volume Tier table to list the Tape B
                                                    the Commission does not edit personal                     principal office of the Exchange, and at              Volume Tier 2. The Exchange also
                                                    identifying information from                              the Commission’s Public Reference                     proposes adding an additional column
                                                    submissions. You should submit only                       Room.                                                 to separate Tape B Volume Tier 1 and
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    information that you wish to make                                                                               Tape B Volume Tier 2. Finally, the
                                                    available publicly. All submissions                         1 15 U.S.C. 78s(b)(1).                              Exchange proposes stating as a
                                                    should refer to File Number SR–                             2 17 CFR 240.19b–4.                                 precursor that both Tape B Volume
                                                                                                                3 15 U.S.C. 78s(b)(3)(A)(ii).
                                                    NASDAQ–2016–064 and should be
                                                                                                                4 17 CFR 240.19b–4(f)(2).                             6 As    defined on the Exchange’s Fee Schedule.
                                                    submitted on or before June 2, 2016.                        5 The term ‘‘Member’’ is defined as ‘‘any             7 Id.

                                                                                                              registered broker or dealer that has been admitted       8 See Securities Exchange Act Release No. 76816

                                                                                                              to membership in the Exchange.’’ See Exchange         (January 4, 2016, 81 FR 987 (January 8, 2016) (SR–
                                                      31 17   CFR 200.30–3(a)(12).                            Rule 1.5(n).                                          EDGX–2015–67).



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                                                                                      Federal Register / Vol. 81, No. 92 / Thursday, May 12, 2016 / Notices                                            29599

                                                    Tiers are applicable to orders yielding                    currently offered rebate under Tape B                 III. Date of Effectiveness of the
                                                    fee codes B and 4 and removing the                         Volume Tier 1. The addition of a                      Proposed Rule Change and Timing for
                                                    same statement from the current text                       second, higher tier merely incentivizes               Commission Action
                                                    describing Tape B Volume Tier 1.                           a Member to provide even greater                         The foregoing rule change has become
                                                    Implementation Date                                        liquidity. The Exchange further believes              effective pursuant to Section 19(b)(3)(A)
                                                                                                               that the amendment to the Tape B                      of the Act 12 and paragraph (f) of Rule
                                                       The Exchange proposes to implement                      Volume Tier represents an equitable                   19b–4 thereunder.13 At any time within
                                                    this amendment to its Fee Schedule
                                                                                                               allocation of reasonable dues, fees, and              60 days of the filing of the proposed rule
                                                    effective May 2, 2016.
                                                                                                               other charges because the thresholds                  change, the Commission summarily may
                                                    2. Statutory Basis                                         necessary to achieve the tier continue to             temporarily suspend such rule change if
                                                       The Exchange believes that the                          encourage Members to add displayed                    it appears to the Commission that such
                                                    proposed rule change is consistent with                    liquidity to the EDGX Book 11 each                    action is necessary or appropriate in the
                                                    the objectives of Section 6 of the Act,9                   month. The increased liquidity benefits               public interest, for the protection of
                                                    in general, and furthers the objectives of                 all investors by deepening EDGX’s                     investors, or otherwise in furtherance of
                                                    Section 6(b)(4),10 in particular, as it is                 liquidity pool, offering additional                   the purposes of the Act.
                                                    designed to provide for the equitable                      flexibility for all investors to enjoy cost           IV. Solicitation of Comments
                                                    allocation of reasonable dues, fees and                    savings, supporting the quality of price
                                                                                                                                                                       Interested persons are invited to
                                                    other charges among its Members and                        discovery, promoting market
                                                                                                                                                                     submit written data, views, and
                                                    other persons using its facilities. The                    transparency and improving investor                   arguments concerning the foregoing,
                                                    Exchange also notes that it operates in                    protection.                                           including whether the proposed rule
                                                    a highly-competitive market in which                                                                             change is consistent with the Act.
                                                    market participants can readily direct                     B. Self-Regulatory Organization’s
                                                                                                               Statement on Burden on Competition                    Comments may be submitted by any of
                                                    order flow to competing venues if they                                                                           the following methods:
                                                    deem fee levels at a particular venue to                      The Exchange does not believe its
                                                    be excessive. The proposed rule changes                                                                          Electronic Comments
                                                                                                               proposed amendment to its Fee
                                                    reflect a competitive pricing structure
                                                                                                               Schedule would impose any burden on                     • Use the Commission’s Internet
                                                    designed to incent market participants                                                                           comment form (http://www.sec.gov/
                                                                                                               competition that is not necessary or
                                                    to direct their order flow to the                                                                                rules/sro.shtml); or
                                                                                                               appropriate in furtherance of the
                                                    Exchange. The Exchange believes that
                                                                                                               purposes of the Act. The Exchange does                  • Send an email to rule-comments@
                                                    the proposed amendments to the Tape                                                                              sec.gov. Please include File Number SR–
                                                    B Volume Tier are equitable and non-                       not believe that the proposed change
                                                                                                                                                                     BatsEDGX–2016–13 on the subject line.
                                                    discriminatory in they would apply                         represents a significant departure from
                                                    uniformly to all Members. The                              previous pricing offered by the                       Paper Comments
                                                    Exchange believes the rate remains                         Exchange or pricing offered by the                       • Send paper comments in triplicate
                                                    competitive with those charged by other                    Exchange’s competitors. Additionally,                 to Secretary, Securities and Exchange
                                                    venues and, therefore, reasonable and                      Members may opt to disfavor the                       Commission, 100 F Street NE.,
                                                    equitably allocated to Members.                            Exchange’s pricing if they believe that               Washington, DC 20549–1090.
                                                       Volume-based rebates such as that                       alternatives offer them better value. The             All submissions should refer to File
                                                    proposed herein have been widely                           Exchange does not believe that the                    Number SR-BatsEDGX–2016–13. This
                                                    adopted by exchanges, including the                        proposed additional tier would burden                 file number should be included on the
                                                    Exchange, and are equitable because                        competition, but instead, enhances                    subject line if email is used. To help the
                                                    they are open to all Members on an                         competition, as it is intended to increase            Commission process and review your
                                                    equal basis and provide additional                         the competitiveness of and draw                       comments more efficiently, please use
                                                    benefits or discounts that are reasonably                  additional volume to the Exchange. The                only one method. The Commission will
                                                    related to: (i) The value to an exchange’s                 Exchange does not believe the amended                 post all comments on the Commission’s
                                                    market quality; (ii) associated higher                     tier would burden intramarket                         Internet Web site (http://www.sec.gov/
                                                    levels of market activity, such as higher                  competition as it would apply to all                  rules/sro.shtml). Copies of the
                                                    levels of liquidity provision and/or                       Members uniformly. Accordingly, the                   submission, all subsequent
                                                    growth patterns; and (iii) introduction of                 Exchange does not believe that the                    amendments, all written statements
                                                    higher volumes of orders into the price                    proposed change will impair the ability               with respect to the proposed rule
                                                    and volume discovery processes. The                        of Members or competing venues to                     change that are filed with the
                                                    Exchange believes that the proposal is a                   maintain their competitive standing in                Commission, and all written
                                                    reasonable, fair and equitable, and not                    the financial markets.                                communications relating to the
                                                    unfairly discriminatory allocation of                                                                            proposed rule change between the
                                                    fees and rebates because it will provide                   C. Self-Regulatory Organization’s                     Commission and any person, other than
                                                    Members with an additional incentive                       Statement on Comments on the                          those that may be withheld from the
                                                    to reach certain thresholds on the                         Proposed Rule Change Received From                    public in accordance with the
                                                    Exchange.                                                  Members, Participants, or Others                      provisions of 5 U.S.C. 552, will be
                                                       In particular, the Exchange believes                                                                          available for Web site viewing and
                                                                                                                 The Exchange has not solicited, and
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    the addition of the proposed second,                                                                             printing in the Commission’s Public
                                                    higher Tape B Volume Tier 2 is a                           does not intend to solicit, comments on               Reference Room, 100 F Street NE.,
                                                    reasonable means to encourage                              this proposed rule change. The                        Washington, DC 20549, on official
                                                    Members to increase the liquidity they                     Exchange has not received any                         business days between the hours of
                                                    provide on the Exchange. Further,                          unsolicited written comments from                     10:00 a.m. and 3:00 p.m. Copies of the
                                                    Members will still be able to earn the                     Members or other interested parties.                  filing also will be available for
                                                      9 15   U.S.C. 78f.                                         11 The EDGX Book is the System’s electronic file      12 15   U.S.C. 78s(b)(3)(A).
                                                      10 15   U.S.C. 78f(b)(4).                                of orders. See Exchange Rule 1.5(d).                    13 17   CFR 240.19b–4(f).



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                                                    29600                          Federal Register / Vol. 81, No. 92 / Thursday, May 12, 2016 / Notices

                                                    inspection and copying at the principal                 Register on March 22, 2016.4 No                         calendar days, before the anniversary of
                                                    office of the Exchange. All comments                    comment letters were received in                        the date that ICE mailed its Proxy
                                                    received will be posted without change;                 response to the proposals. This order                   Materials for the previous year’s annual
                                                    the Commission does not edit personal                   approves the proposed rule changes.                     meeting.9 In proposed Section 2.15, the
                                                    identifying information from                                                                                    Exchanges propose to set forth in the
                                                                                                            II. Description of the Proposed Rule
                                                    submissions. You should submit only                     Changes                                                 Bylaws the specific information that
                                                    information that you wish to make                                                                               would be needed to be included in the
                                                    available publicly. All submissions                        The Exchanges propose to amend and                   Nomination Notice. The following
                                                    should refer to File Number SR-                         restate the Bylaws to add a new Section                 information is required for the
                                                    BatsEDGX–2016–13, and should be                         2.15 that would, subject to a number of                 Nomination Notice:
                                                                                                            requirements, permit stockholders to
                                                    submitted on or before June 2, 2016.                                                                              • A Schedule 14N 10 (or any
                                                                                                            nominate director nominees for election
                                                      For the Commission, by the Division of                                                                        successor form) relating to the
                                                                                                            to the Board of Directors of ICE
                                                    Trading and Markets, pursuant to delegated                                                                      nomination, completed and filed with
                                                    authority.14                                            (‘‘Board’’) and require ICE to include
                                                                                                                                                                    the Commission; 11
                                                                                                            such director nominations in its proxy
                                                    Robert W. Errett,
                                                                                                            materials for the next annual meeting of                  • a written notice of the
                                                    Deputy Secretary.                                       stockholders (‘‘Proxy Materials’’). The                 nomination 12 containing a statement in
                                                    [FR Doc. 2016–11155 Filed 5–11–16; 8:45 am]             Exchanges further propose to amend                      support of the nominee’s election to the
                                                    BILLING CODE 8011–01–P                                  certain advance notice provisions in                    Board, if desired, as well as the
                                                                                                            Section 2.13 of the Bylaws to account                   following representations and
                                                                                                            for the implementation of proxy access                  warranties by each nominating
                                                    SECURITIES AND EXCHANGE                                 in proposed Section 2.15.5                              stockholder:
                                                    COMMISSION                                                                                                        Æ That the nominating stockholder
                                                                                                            Proposed Section 2.15 of the Bylaws
                                                                                                                                                                    did not acquire, and is not holding,
                                                    Release No. 34–77782; File Nos. SR–NYSE–                   Proposed Section 2.15 of the Bylaws                  securities of ICE for the purpose or with
                                                    2016–14; SR–NYSEArca–2016–25; SR–                       would enable an individual stockholder,                 the effect of influencing or changing
                                                    NYSEMKT–2016–20]                                        or a group of up to 20 stockholders, to                 control of ICE;
                                                                                                            nominate director nominees for the
                                                    Self-Regulatory Organizations; New                                                                                Æ that the nominee’s candidacy or, if
                                                                                                            Board and have them included in the
                                                    York Stock Exchange LLC; NYSE Arca,                                                                             elected, membership on the Board
                                                                                                            Proxy Materials, so long as such
                                                    Inc.; NYSE MKT LLC; Order Approving                                                                             would not violate applicable state or
                                                                                                            stockholder or stockholders have
                                                    Proposed Rule Change Amending and                                                                               federal law or the rules of the principal
                                                                                                            collectively owned at least three percent
                                                    Restating the Fifth Amended and                                                                                 national securities exchange on which
                                                                                                            of ICE’s outstanding shares of common
                                                    Restated Bylaws of the Exchanges’                                                                               ICE’s securities are traded;
                                                                                                            stock continuously for at least three
                                                    Ultimate Parent Company,                                years.6 No stockholder would be                           Æ that the nominee does not have any
                                                    Intercontinental Exchange, Inc., To                     permitted to participate in more than                   direct or indirect relationship with ICE
                                                    Implement Proxy Access                                  one group, and any stockholder                          that will cause the nominee to be
                                                                                                            appearing as a member of more than one                  deemed not independent under the
                                                    May 6, 2016.                                                                                                    Board’s Independence Policy; 13
                                                                                                            group would be counted as a member of
                                                    I. Introduction                                         the group with the largest ownership                      Æ that the nominee qualifies as
                                                                                                            position.7 Notwithstanding the                          independent under the rules of the
                                                       On March 2, 2016, each of the New
                                                                                                            foregoing, a stockholder whose nominee                  principal national securities exchange
                                                    York Stock Exchange LLC (‘‘NYSE’’),                     is elected to the Board at an annual                    on which ICE’s common stock is traded
                                                    NYSE Arca, Inc. (‘‘NYSE Arca’’) and                     meeting under proposed Section 2.15                     and meets that exchange’s audit
                                                    NYSE MKT LLC (‘‘NYSE MKT’’ and,                         would not be eligible to nominate
                                                    together with NYSE and NYSE Arca,                       another candidate for the next two                         9 Id. at 2.15(d). If an annual meeting is not
                                                    ‘‘Exchanges’’) filed with the Securities                annual meetings.8                                       scheduled to be held within a period that
                                                    and Exchange Commission                                    In order to nominate a director                      commences 30 days before and ends 30 days after
                                                    (‘‘Commission’’) pursuant to Section                    nominee to be included in the Proxy                     the anniversary date, the nominating stockholder
                                                    19(b)(1) of the Securities Exchange Act                                                                         would be required to submit the Nomination Notice
                                                                                                            Materials under proposed Section 2.15,                  by the later of the close of business 120 days prior
                                                    of 1934 (‘‘Act’’) 1 and Rule 19b–4                      a stockholder would need to submit a                    to the date of such annual meeting or the tenth day
                                                    thereunder,2 a proposed rule change to                  notice (‘‘Nomination Notice’’) to the                   following the first public disclosure of the annual
                                                    amend and restate the Fifth Amended                     Secretary of ICE, no earlier than the                   meeting date. Id.
                                                    and Restated Bylaws (‘‘Bylaws’’) of the                 close of business 150 calendar days, and
                                                                                                                                                                       10 17 CFR 240.14n–101.
                                                                                                                                                                       11 Proposed Section 2.15(d)(i).
                                                    Exchanges’ ultimate parent company,                     no later than the close of business 120                    12 Id. at 2.15(d)(ii). The written notice would need
                                                    Intercontinental Exchange, Inc.
                                                                                                                                                                    to include certain information that is required for
                                                    (‘‘ICE’’),3 to implement proxy access.                     4 See Securities Exchange Act Release Nos. 77384
                                                                                                                                                                    the nomination of directors by Section 2.13(b) of the
                                                    The proposed rule changes were                          (Mar. 17, 2016), 81 FR 15371 (Mar. 22, 2016) (SR–       Bylaws and details regarding any relationship in the
                                                    published for comment in the Federal                    NYSE–2016–14); 77385 (Mar. 17, 2016), 81 FR             past three years that would have been described by
                                                                                                            15378 (Mar. 22, 2016) (SR–NYSEArca–2016–25);            Item 6(e) of Schedule 14N if that relationship had
                                                                                                            and 77386 (Mar. 17, 2016), 81 FR 15366 (Mar. 22,        existed on the date of submission of the Schedule
                                                      14 17 CFR 200.30–3(a)(12).                            2016) (SR–NYSEMKT–2016–20) (collectively,               14N. Id. at 2.15(d)(ii)(A) and (B). In the case of a
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                      1 15 U.S.C. 78s(b)(1).                                ‘‘Notices’’).                                           nomination by a group, the notice would also need
                                                      2 17 CFR 240.19b–4.                                      5 See Notices, supra note 4, for a more detailed
                                                                                                                                                                    to include the designation by all group members of
                                                      3 ICE owns 100% of the equity interest in             description of the proposed amendments.                 one group member authorized to act on behalf of
                                                                                                               6 Proposed Section 2.15(c)(i)–(iii). Shares may be   all group members with respect to matters relating
                                                    Intercontinental Exchange Holdings, Inc., which in
                                                    turn owns 100% of the equity interest in NYSE           counted as ‘‘owned’’ only where a stockholder           to the nomination, including withdrawal of the
                                                    Holdings LLC. NYSE Holdings LLC owns 100% of            possesses both the full voting and investment rights    nomination. Id. at 2.15(d)(ii)(K).
                                                    the equity interest of NYSE Group, Inc., which          pertaining to the shares, as well as the full              13 The Board’s current Independence Policy can

                                                    owns 100% of the equity interest of each of the         economic interest in such shares. Id. at 2.15(c)(iv).   be found at: http://ir.theice.com/∼/media/Files/I/
                                                                                                               7 Id. at 2.15(c)(v).
                                                    Exchanges. ICE is a publicly traded company listed                                                              Ice-IR/documents/corporate-governance-
                                                    on the NYSE.                                               8 Id. at 2.15(c)(i).                                 documents/board-independence-policy.pdf.



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Document Created: 2016-05-12 01:08:03
Document Modified: 2016-05-12 01:08:03
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 29598 

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