81 FR 30372 - Self-Regulatory Organizations; Bats BZX 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 94 (May 16, 2016)

Page Range		30372-30373
FR Document		2016-11400
Federal Register, Volume 81 Issue 94 (Monday, May 16, 2016)
[Federal Register Volume 81, Number 94 (Monday, May 16, 2016)]
[Notices]
[Pages 30372-30373]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-11400]



[[Page 30372]]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77789; File No. SR-BatsBZX-2016-12]


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

May 10, 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 BZX Exchange, Inc. (``Exchange'' or 
``BZX'') 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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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 BZX Rules 
15.1(a) and (c).
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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 maintains a Step-Up Tier that provides Members with an 
additional way to qualify for enhanced rebates where they increase 
their liquidity each month over a predetermined baseline. The Exchange 
currently offers a Step-Up Tier under footnote 2 of its Fee Schedule. 
Under the Step-Up Tier, a Member receives a rebate of $0.0030 per share 
where: (1) Their Step-Up Add TCV \6\ from August 2015 is equal to or 
greater than 0.08%; and (2) their ADAV \7\ as a percentage of TCV \8\ 
is equal to or greater than 0.35%. The Step-Up Tier is applicable to 
fee codes B, V and Y.
---------------------------------------------------------------------------

    \6\ As defined in the Exchange's Fee Schedule.
    \7\ Id.
    \8\ Id.
---------------------------------------------------------------------------

    The Exchange proposes to amend footnote 2 to change the Step-Up 
Tier to provide a Member a rebate of $0.0030 per share: (1) Where their 
Step-Up Add TCV from April 2016 is equal to or greater than 0.15%; and 
(2) their ADAV as a percentage of TCV is equal to or greater than 
0.20%. Thus, while the Exchange is not proposing to modify the rebate 
provided, the Exchange is proposing to reset the starting date for the 
baseline measurement from August 2015 to April 2016. The Exchange is 
also proposing to increase the Step-Up Add TCV and to reduce the ADAV 
required to qualify for the tier.
Implementation Date
    The Exchange proposes to implement these amendments 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 change reflects a competitive 
pricing structure designed to incent market participants to direct 
their order flow to the Exchange. The Exchange believes that the 
proposed tier is equitable and non-discriminatory in it would apply 
uniformly to all Members. The Exchange believes the rates remain 
competitive with those charged by other venues and, therefore, 
reasonable and equitably allocated to Members.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    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 
proposed tier is a reasonable, fair and equitable, and not unfairly 
discriminatory allocation of fees and rebates because it will continue 
to provide Members with an incentive to reach certain thresholds on the 
Exchange.
    In particular, the Exchange believes the modification to the Step-
Up Tier is a reasonable means to encourage Members to increase their 
liquidity on the Exchange. The Exchange further believes that the 
proposed Step-Up Tier represents an equitable allocation of reasonable 
dues, fees, and other charges because the thresholds necessary to 
achieve the tier encourages Members to add increased liquidity to the 
BATS Book \11\ each month. The increased liquidity benefits all 
investors by deepening the Exchange'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. More specifically, the 
Exchange believes that increasing the Step-Up Add TCV from equal to or 
greater than 0.08% to equal to or greater than 0.15% will incentivize 
Members to provide increased volume and therefore increased liquidity. 
Additionally, the Exchange believes that by reducing the requirement 
for a Member's ADAV as a percentage of TCV from equal to or greater 
than 0.35% to equal to or greater than 0.20% the Exchange increases the 
number of participants potentially eligible to qualify for the rebate 
and thereby incentivizing a greater number

[[Page 30373]]

of participants to provide the required liquidity to obtain the rebate. 
The increased liquidity benefits all investors by deepening the 
Exchange'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.
---------------------------------------------------------------------------

    \11\ See Exchange Rule 1.5(e).
---------------------------------------------------------------------------

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 modified 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)(2) 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.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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 No. SR-BatsBZX-2016-12 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-BatsBZX-2016-12. 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 No. SR-BatsBZX-2016-12, and should be 
submitted on or before June 6, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-11400 Filed 5-13-16; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 94 / Monday, May 16, 2016 / Notices 30373

of participants to provide the required public interest, for the protection of For the Commission, by the Division of
liquidity to obtain the rebate. The investors, or otherwise in furtherance of Trading and Markets, pursuant to delegated
increased liquidity benefits all investors the purposes of the Act. authority.14
by deepening the Exchange’s liquidity Robert W. Errett,
pool, offering additional flexibility for IV. Solicitation of Comments Deputy Secretary.
all investors to enjoy cost savings, Interested persons are invited to [FR Doc. 2016–11400 Filed 5–13–16; 8:45 am]
supporting the quality of price submit written data, views, and BILLING CODE 8011–01–P
discovery, promoting market
arguments concerning the foregoing,
transparency and improving investor
including whether the proposed rule
protection. SECURITIES AND EXCHANGE
change is consistent with the Act.
B. Self-Regulatory Organization’s COMMISSION
Comments may be submitted by any of
Statement on Burden on Competition the following methods:
[Release No. 34–77797; File No. SR–
The Exchange does not believe its Electronic Comments BatsBZX–2016–13]
proposed amendment to its Fee
Schedule would impose any burden on • Use the Commission’s Internet Self-Regulatory Organizations; Bats
competition that is not necessary or comment form (http://www.sec.gov/ BZX Exchange, Inc.; Notice of Filing
appropriate in furtherance of the rules/sro.shtml); or and Immediate Effectiveness of a
purposes of the Act. The Exchange does Proposed Rule Change to Rule 11.13,
• Send an email to rule-comments@
not believe that the proposed change Order Execution and Routing, To
sec.gov. Please include File No. SR–
represents a significant departure from Delete References to the TRIM3
BatsBZX–2016–12 on the subject line.
previous pricing offered by the Routing Option
Exchange or pricing offered by the Paper Comments
Exchange’s competitors. Additionally, May 10, 2016.
Members may opt to disfavor the • Send paper comments in triplicate Pursuant to section 19(b)(1) of the
Exchange’s pricing if they believe that to Secretary, Securities and Exchange Securities Exchange Act of 1934 (the
alternatives offer them better value. The Commission, 100 F Street NE., ‘‘Act’’),1 and Rule 19b–4 thereunder,2
Exchange does not believe that the Washington, DC 20549–1090. notice is hereby given that on May 2,
modified tier would burden All submissions should refer to File No. 2016, BATS Exchange, Inc. (the
competition, but instead, enhances ‘‘Exchange’’ or ‘‘BATS’’) filed with the
SR–BatsBZX–2016–12. This file number
competition, as it is intended to increase Securities and Exchange Commission
should be included on the subject line
the competitiveness of and draw (‘‘Commission’’) the proposed rule
if email is used. To help the
additional volume to the Exchange. The change as described in Items I and II
Exchange does not believe the amended Commission process and review your
comments more efficiently, please use below, which Items have been prepared
tier would burden intramarket by the Exchange. The Exchange has
competition as it would apply to all only one method. The Commission will
post all comments on the Commission’s designated this proposal as a ‘‘non-
Members uniformly. Accordingly, the controversial’’ proposed rule change
Exchange does not believe that the Internet Web site (http://www.sec.gov/
pursuant to section 19(b)(3)(A) of the
proposed change will impair the ability rules/sro.shtml). Copies of the
Act 3 and Rule 19b–4(f)(6)(iii)
of Members or competing venues to submission, all subsequent
thereunder,4 which renders it effective
maintain their competitive standing in amendments, all written statements upon filing with the Commission. The
the financial markets. with respect to the proposed rule Commission is publishing this notice to
change that are filed with the solicit comments on the proposed rule
C. Self-Regulatory Organization’s Commission, and all written
Statement on Comments on the change from interested persons.
communications relating to the
Proposed Rule Change Received From proposed rule change between the I. Self-Regulatory Organization’s
Members, Participants, or Others Statement of the Terms of Substance of
Commission and any person, other than
The Exchange has not solicited, and those that may be withheld from the the Proposed Rule Change
does not intend to solicit, comments on public in accordance with the
this proposed rule change. The The Exchange filed a proposal to
provisions of 5 U.S.C. 552, will be amend Rule 11.13, Order Execution and
Exchange has not received any available for Web site viewing and
unsolicited written comments from Routing, to delete references to the
printing in the Commission’s Public TRIM3 routing option. The Exchange
Members or other interested parties. Reference Room, 100 F Street NE., also proposes to amend its fee schedule
III. Date of Effectiveness of the Washington, DC 20549, on official to delete references to the TRIM3
Proposed Rule Change and Timing for business days between the hours of routing option under fee codes BY and
Commission Action 10:00 a.m. and 3:00 p.m. Copies of the TV.
The foregoing rule change has become filing also will be available for
The text of the proposed rule change
effective pursuant to section 19(b)(3)(A) inspection and copying at the principal
is available at the Exchange’s Web site
of the Act 12 and paragraph (f)(2) of Rule office of the Exchange. All comments
at www.batstrading.com, at the
received will be posted without change;
asabaliauskas on DSK3SPTVN1PROD with NOTICES

19b–4 thereunder.13 At any time within principal office of the Exchange, and at
60 days of the filing of the proposed rule the Commission does not edit personal
the Commission’s Public Reference
change, the Commission summarily may identifying information from Room.
temporarily suspend such rule change if submissions. You should submit only
it appears to the Commission that such information that you wish to make 14 17 CFR 200.30–3(a)(12).
action is necessary or appropriate in the available publicly. All submissions 1 15 U.S.C. 78s(b)(1).
should refer to File No. SR–BatsBZX– 2 17 CFR 240.19b–4.
12 15 U.S.C. 78s(b)(3)(A). 2016–12, and should be submitted on or 3 15 U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f). before June 6, 2016. 4 17 CFR 240.19b–4(f)(6)(iii).

VerDate Sep<11>2014 18:48 May 13, 2016 Jkt 238001 PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 E:\FR\FM\16MYN1.SGM 16MYN1
Document Created: 2016-05-14 01:16:57
Document Modified: 2016-05-14 01:16:57
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		81 FR 30372