81 FR 42013 - Self-Regulatory Organizations; Bats BYX 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 124 (June 28, 2016)

Page Range		42013-42016
FR Document		2016-15172

Federal Register, Volume 81 Issue 124 (Tuesday, June 28, 2016)

[Federal Register Volume 81, Number 124 (Tuesday, June 28, 2016)]
[Notices]
[Pages 42013-42016]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-15172]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78122; File No. SR-BatsBYX-2016-12]

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

June 22, 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 June 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, 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 BYX Rules
15.1(a) and (c) (``Fee Schedule'') to: (i) Add fee codes NA and NB;
(ii) reduce the rebate for fee codes BB, N, and W; (iii) add Add Volume
Tier 2 under footnote 1; and (iv) add Remove Volume Tier under footnote
1.
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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 proposes to amend its Fee Schedule to: (i) Add fee
codes NA and NB; (ii) reduce the rebate for fee codes BB, N, and W;
(iii) add Add Volume Tier 2 under footnote 1; and (iv) add Remove
Volume Tier under footnote 1.
Fee Codes NA and NB
The Exchange previously filed a proposed rule change with the
Commission to identify Non-Displayed Orders \6\ as such when routed to
an away Trading Center.\7\ The Exchange intends to implement this
functionality on June 1, 2016.\8\ Because other Trading Centers
typically provide different rebates or fees with respect to non-
displayed liquidity the Exchange proposes to amend its Fee Schedule to
add fee codes NA and NB, which would apply to routed Non-Displayed
Orders. Proposed fee code NA would be applied to Non-Displayed Orders
that are routed to and add liquidity on Bats EDGX Exchange, Inc.
(``EDGX''), Bats BZX Exchange, Inc. (``BZX''), the New York

[[Page 42014]]

Stock Exchange, Inc. (``NYSE''), NYSE Arca, Inc. (``NYSE Arca''), NYSE
MKT LLC (``NYSE MKT''), or the Nasdaq Stock Market LLC (``Nasdaq'').\9\
Orders that yield fee code NA would not be charged a fee nor receive a
rebate in both securities priced at or above $1.00 or below $1.00.
Proposed fee code NB would be applied to Non-Displayed Orders that are
routed to and add liquidity on any exchange not listed in proposed fee
code NA. Orders that yield fee code NB would be charged a fee of
$0.0030 per share in securities priced at or above $1.00 and 0.30% of
the trade's total dollar value in securities priced below $1.00.
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\6\ See Exchange Rule 11.9(c)(11).
\7\ The Exchange notes that the Exchange also amended its rules
to route Reserve Orders (as defined in Rule 11.9(c)(1)) as such to
other Trading Centers. See Securities Exchange Act 77187 (February
19, 2016), 81 FR 9556 (February 25, 2016) (SR-BYX-2016-04). Non-
Displayed Orders and Reserve Orders would be handled in accordance
with the rules of the Trading Center to which they are routed. Id.
This proposal does not impact the routing of Reserve Orders.
\8\ See Bats Announces Support for Hidden Post-to-Away Routed
Orders,available at http://cdn.batstrading.com/resources/release_notes/2016/Bats-Announces-Support-for-Hidden-Post-to-Away-Routed-Orders.pdf.
\9\ Today, all orders that are routed to post to an away market
are routed for display on such market and receive the following
rates: (i) Rebate of $0.0015 per share for orders routed to the
NYSE; (ii) rebate of $0.0021 per share for Tapes A and C securities
and a rebate of $0.0022 per share for Tape B securities for orders
routed to NYSE Arca; (iii) rebate of $0.0015 per share for orders
routed to NYSE MKT; (iv) rebate of $0.0015 per share for orders
routed to Nasdaq; and (v) a rebate of $0.0020 per share for orders
routed to EDGX or BZX. See the Exchange's Fee Schedule available at
http://batstrading.com/support/fee_schedule/byx/. These rates
generally represent a pass through of the rate that Bats Trading,
Inc. (``Bats Trading''), the Exchange's affiliated routing broker-
dealer, is provided for adding displayed liquidity at NYSE, NYSE
Arca, NYSE MKT, Nasdaq, EDGX, or BZX when it does not qualify for a
volume tiered reduced fee or enhanced rebate.
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Fee Codes BB, N, and W
Fee codes BB, N, and W are appended to orders that are to receive
the standard rebate of $0.00150 per share for removing liquidity in
securities priced at or above $1.00.\10\ Fee code W is appended to
order in Tape A Securities, fee code BB is appended to orders in Tape B
securities, and fee code N is appended to orders in Tape C Securities.
The Exchange now proposes to reduce the standard rebate provided for
under fee codes, BB, N, and W from $00.150 per share to $0.00100 per
share. The Exchange also proposes to amend the Fee Schedule's Standard
Rates table to reflect the amended standard removal rate under fee
codes BB, N, and W.
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\10\ Order that remove liquidity in securities priced below
$1.00 are charged 0.10% of the trades total dollar value. See the
Exchange's Fee Schedule available at http://batstrading.com/support/fee_schedule/byx/. The Exchange does not proposes to amend the
standard rate for securities priced below $1.00.
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Add Volume Tier 2
Currently, the Exchange charges a standard rate of $0.0018 per
share for orders that add liquidity. Members may be charged a reduced
fee of $0.0014 per share under footnote 1 where they have an ADAV \11\
equal to or greater than 0.30% of the TCV.\12\ The Exchange proposes to
name this existing tier under footnote 1 the ``Add Volume Tier 1'' and
add a new tier called the ``Add Volume Tier 2''. Under the proposed Add
Volume Tier 2, Members would be eligible to receive a reduced fee of
$0.0013 per share where they have an ADAV equal to or greater than
0.40% of the TCV.
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\11\ As provided in the Fee Schedule, ``ADAV'' means average
daily added volume calculated as the number of shares added per day.
\12\ As provided in the Fee Schedule, ``TCV'' means total
consolidated volume calculated as the volume reported by all
exchanges and trade reporting facilities to a consolidated
transaction reporting plan for the month for which the fees apply.
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Add Remove Volume Tier
Currently, the Exchange does not offer an enhanced rebate for
removing liquidity. Such orders would receive the standard rebate under
fee codes BB, N, and W described above. The Exchange now proposes to
provide an enhanced rebate for removing liquidity by adding the Remove
Volume Tier under footnote 1. Under the proposed Remove Volume Tier, a
Member's orders that yield fee codes BB, N, or W would receive a rebate
of $0.00150 per share where the Member has an ADV equal to or greater
than 0.05% of the TCV.
The Exchange also proposes to append footnote 1 to fee codes BB, N,
and W as orders that yield those fee codes would be eligible to receive
the enhanced rebate of $0.00150 provided for by the proposed Remove
Volume Tier. With the addition of the Remove Volume Tier, the Exchange
proposes to amend the title of footnote 1 from ``Add Volume Tier'' to
``Add/Remove Volume Tiers''.
Implementation Date
The Exchange proposes to implement these amendments to its Fee
Schedule effective immediately.\13\
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\13\ The Exchange initially filed the proposed fee change on May
31, 2016 (SR-BatsBYX-2016-11). On June 8, 2016, the Exchange
withdrew SR-BatsBYX-2016-11 and submitted this filing.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\14\ in general, and
furthers the objectives of Section 6(b)(4),\15\ 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 fee codes are equitable and non-discriminatory in they would
apply uniformly to all Members. The Exchange believes the rates remains
competitive with those charged by other venues and, therefore,
reasonable and equitably allocated to Members.
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\14\ 15 U.S.C. 78f.
\15\ 15 U.S.C. 78f(b)(4).
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In particular, the Exchange believes that proposed fee codes NA and
NB represent an equitable allocation of reasonable dues, fees, and
other charges. The proposed fees are similar to and based on the fees
and rebates assessed or provided to Bats Trading when routing to away
Trading Centers. For instance, like proposed fee code NA, the NYSE,
NYSE Arca, and Nasdaq charge no fee nor provide a rebate for non-
displayed orders that add liquidity.\16\ In addition, the exchanges
that would be covered by proposed fee code NB charge a fee of up to
$0.0030 per share to add liquidity.\17\ In addition, the proposed rate
for fee code NB is equal to or greater than similar routing fees
charged by other exchanges. For example, the NYSE, NYSE MKT, Nasdaq,
and BZX charge a fee of $0.0030 per share and NYSE Arca charges a fee
of $0.0035 per share regardless of which destination the order is
routed.\18\
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\16\ See the NYSE fee schedule available at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf (dated
May 23, 2016); the NYSE Arca fee schedule available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf (dated May 23, 2016); and the Nasdaq
fee schedule available at http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2. The Exchange notes that NYSE MKT,
EDGX, and BZX provide a rebate of $0.0016, $ 0.0015, and $0.0017 per
share respectively for non-displayed orders that add liquidity. See
the NYSE MKT fee schedule available at https://www.nyse.com/publicdocs/nyse/markets/nyse-mkt/NYSE_MKT_Equities_Price_List.pdf
(dated May 23, 2016); the EDGX fee schedule available at http://batstrading.com/support/fee_schedule/edgx/; and the BZX fee schedule
available at http://batstrading.com/support/fee_schedule/bzx/.
\17\ See the Bats EDGA Exchange, Inc. fee schedule available at
http://batstrading.com/support/fee_schedule/edga/; and the Nasdaq
BX, Inc. fee schedule available at http://www.nasdaqtrader.com/Trader.aspx?id=bx_pricing. The Exchange notes that it currently does
not provide for routing orders to post on the Chicago Stock
Exchange, Inc. or the National Stock Exchange, Inc.
\18\ See supra note 16. Nasdaq charges a fee of $0.0035 per
share for routed orders that are directed to another market. See the
Nasdaq fee schedule at id.
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The Exchange notes that routing through Bats Trading is voluntary.
The Exchange is providing a service to allow Members to post Non-
Displayed Orders to these destinations and that those Members seeking
to post such orders to

[[Page 42015]]

away destinations may connect to those destinations directly and be
charged the fee or provided the rebate from that destination.
Therefore, the Exchange believes the rates for proposed fee codes NA
and NB are equitable and reasonable because they are related to the
rates provided by the away exchange and reasonably account for the
routing service provided for by the Exchange. Lastly, the Exchange
believes that the proposed amendments are non-discriminatory because it
applies uniformly to all Members and that the proposed rates are
directly related to rates provided by the destinations to which the
orders may be routed.
The Exchange also believes that proposed changes to fee codes BB,
N, and W represent an equitable allocation of reasonable dues, fees,
and other charges because the Exchange's standard rebate for removing
liquidity continues to be higher than that provided by other exchanges.
For example, Nasdaq BX, Inc. BX provides a standard rebate of $0.0006
per share for orders that remove liquidity.\19\
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\19\ See the Nasdaq BX, Inc. fee schedule available at http://www.nasdaqtrader.com/Trader.aspx?id=bx_pricing.
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Volume-based rebates such as that proposed herein have been widely
adopted by equities and options exchanges and are equitable because
they are open to all Members on an equal basis and provide additional
benefits or discounts that are reasonably related to: (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) the introduction of higher volumes of orders into
the price and volume discovery processes. The Exchange believes that
the proposed tiers are a reasonable, fair and equitable, and not
unfairly discriminatory allocation of fees and rebates, because they
will provide Members with an additional incentive to reach certain
thresholds on the Exchange.
In particular, the Exchange believes the addition of the Add Volume
Tier 2 and Remove Volume Tier are a reasonable means to encourage
Members to increase their liquidity on the Exchange. The Exchange
further believes that the proposed tiers represents an equitable
allocation of reasonable dues, fees, and other charges because the
thresholds necessary to achieve the tiers encourages Members to add
liquidity to the BYX Book \20\ each month. Specifically, the Exchange
notes that the criteria and reduced rate under Add Volume Tier 2 are
equitable and reasonable as compared to other tiers offered by the
Exchange. For example, under Add Volume Tier 1, Members may receive a
reduced fee of $0.0013 per share where they have an ADAV equal to or
greater than 0.30% of the TCV. To receive a reduced fee of $0.0014 per
share under the proposed Add Volume Tier 2, a Member must have an ADAV
equal to or greater than 0.40% of the TCV. Therefore, the Exchange
believes the proposed Add Volume Tier 2 is consistent with Section
6(b)(4) \21\ of the Act as the more stringent criteria correlates with
the tier's reduced rate.
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\20\ See Exchange Rule 1.5(e).
\21\ 15 U.S.C. 78f(b)(4).
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The Exchange also believes the proposed Remove Volume Tier's
criteria and rate are reasonable when compare to tier provided for by
other exchanges. For example, Nasdaq BX, Inc. BX also provides an
enhanced rebate of $0.0015 per share but require different, but
similar, criteria.\22\ In order to achieve the tier, Nasdaq BX, Inc.
requires their members to remove at least 0.05% of TCV.\23\ Therefore,
the Exchange believes the proposed Remove Volume Tier is consistent
with Section 6(b)(4) \24\ of the Act.
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\22\ See the Nasdaq BX, Inc. fee schedule available at http://www.nasdaqtrader.com/Trader.aspx?id=bx_pricing.
\23\ Id.
\24\ 15 U.S.C. 78f(b)(4).
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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 changes 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. For example, routing through Bats Trading is
voluntary and Members seeking to post such orders to away destinations
may connect to those destinations directly and be charged the fee or
provide the rebate from that destination. Accordingly, the Exchange
does not believe that the proposed changes will impair the ability of
Members or competing venues to maintain their competitive standing in
the financial markets. The Exchange believes that its proposal would
not burden intramarket competition because the proposed rate would
apply uniformly to all Members.
The Exchange does not believe that the proposed new tiers and
standard removal rates would burden competition, but instead, enhances
competition, as they are intended to increase the competitiveness of
and draw additional volume to the Exchange. As stated above, the
Exchange notes that it operates in a highly competitive market in which
market participants can readily direct order flow to competing venues
if they deem fee structures to be unreasonable or excessive. The
proposed changes are generally intended to draw additional liquidity to
the Exchange. The Exchange does not believe the proposed tiers and
standard rates would burden intramarket competition as they would apply
to all Members uniformly.

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 \25\ and paragraph (f) of Rule 19b-4
thereunder.\26\ 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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\25\ 15 U.S.C. 78s(b)(3)(A).
\26\ 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-BatsBYX-2016-12 on the subject line.

[[Page 42016]]

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-2016-12. 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 Number SR-BatsBYX-2016-12, and should
be submitted on or before July 19, 2016.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-15172 Filed 6-27-16; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 81, No. 124 / Tuesday, June 28, 2016 / Notices 42013

action is necessary or appropriate in the 2016–052, and should be submitted on at www.batstrading.com, at the
public interest, for the protection of or before July 19, 2016. principal office of the Exchange, and at
investors, or otherwise in furtherance of For the Commission, by the Division of the Commission’s Public Reference
the purposes of the Act. If the Trading and Markets, pursuant to delegated Room.
Commission takes such action, the authority.13
II. Self-Regulatory Organization’s
Commission shall institute proceedings Brent J. Fields, Statement of the Purpose of, and
to determine whether the proposed rule Secretary. Statutory Basis for, the Proposed Rule
should be approved or disapproved. [FR Doc. 2016–15179 Filed 6–27–16; 8:45 am] Change
IV. Solicitation of Comments BILLING CODE 8011–01–P
In its filing with the Commission, the
Interested persons are invited to Exchange included statements
submit written data, views, and SECURITIES AND EXCHANGE concerning the purpose of and basis for
arguments concerning the foregoing, COMMISSION the proposed rule change and discussed
including whether the proposed rule any comments it received on the
change is consistent with the Act. [Release No. 34–78122; File No. SR- proposed rule change. The text of these
BatsBYX–2016–12] statements may be examined at the
Comments may be submitted by any of
the following methods: Self-Regulatory Organizations; Bats places specified in Item IV below. The
BYX Exchange, Inc.; Notice of Filing Exchange has prepared summaries, set
Electronic Comments forth in Sections A, B, and C below, of
and Immediate Effectiveness of a
• Use the Commission’s Internet Proposed Rule Change Related to Fees the most significant parts of such
comment form (http://www.sec.gov/ statements.
rules/sro.shtml); or June 22, 2016.
A. Self-Regulatory Organization’s
• Send an email to rule-comments@ Pursuant to Section 19(b)(1) of the
Statement of the Purpose of, and the
sec.gov. Please include File Number SR– Securities Exchange Act of 1934 (the
Statutory Basis for, the Proposed Rule
CBOE–2016–052 on the subject line. ‘‘Act’’),1 and Rule 19b–4 thereunder,2
Change
notice is hereby given that on June 8,
Paper Comments 2016, Bats BYX Exchange, Inc. (the 1. Purpose
• Send paper comments in triplicate ‘‘Exchange’’ or ‘‘BYX’’) filed with the The Exchange proposes to amend its
to Brent J. Fields, Secretary, Securities Securities and Exchange Commission Fee Schedule to: (i) Add fee codes NA
and Exchange Commission, 100 F Street (‘‘Commission’’) the proposed rule and NB; (ii) reduce the rebate for fee
NE., Washington, DC 20549–1090. change as described in Items I, II and III codes BB, N, and W; (iii) add Add
All submissions should refer to File below, which Items have been prepared Volume Tier 2 under footnote 1; and (iv)
by the Exchange. The Exchange has
Number SR–CBOE–2016–052. This file add Remove Volume Tier under
designated the proposed rule change as
number should be included on the footnote 1.
one establishing or changing a member
subject line if email is used. To help the
due, fee, or other charge imposed by the Fee Codes NA and NB
Commission process and review your
Exchange under Section 19(b)(3)(A)(ii) The Exchange previously filed a
comments more efficiently, please use
of the Act 3 and Rule 19b–4(f)(2) proposed rule change with the
only one method. The Commission will
thereunder,4 which renders the Commission to identify Non-Displayed
post all comments on the Commission’s
proposed rule change effective upon Orders 6 as such when routed to an
Internet Web site (http://www.sec.gov/
filing with the Commission. The away Trading Center.7 The Exchange
rules/sro.shtml). Copies of the
Commission is publishing this notice to intends to implement this functionality
submission, all subsequent solicit comments on the proposed rule
amendments, all written statements on June 1, 2016.8 Because other Trading
change from interested persons. Centers typically provide different
with respect to the proposed rule
change that are filed with the I. Self-Regulatory Organization’s rebates or fees with respect to non-
Commission, and all written Statement of the Terms of Substance of displayed liquidity the Exchange
communications relating to the the Proposed Rule Change proposes to amend its Fee Schedule to
proposed rule change between the The Exchange filed a proposal to add fee codes NA and NB, which would
Commission and any person, other than amend the fee schedule applicable to apply to routed Non-Displayed Orders.
those that may be withheld from the Members 5 and non-members of the Proposed fee code NA would be applied
public in accordance with the Exchange pursuant to BYX Rules 15.1(a) to Non-Displayed Orders that are routed
provisions of 5 U.S.C. 552, will be and (c) (‘‘Fee Schedule’’) to: (i) Add fee to and add liquidity on Bats EDGX
available for Web site viewing and codes NA and NB; (ii) reduce the rebate Exchange, Inc. (‘‘EDGX’’), Bats BZX
printing in the Commission’s Public for fee codes BB, N, and W; (iii) add Exchange, Inc. (‘‘BZX’’), the New York
Reference Room, 100 F Street NE., Add Volume Tier 2 under footnote 1; 6 See Exchange Rule 11.9(c)(11).
Washington, DC 20549 on official and (iv) add Remove Volume Tier under 7 The Exchange notes that the Exchange also
business days between the hours of footnote 1. amended its rules to route Reserve Orders (as
10:00 a.m. and 3:00 p.m. Copies of such The text of the proposed rule change defined in Rule 11.9(c)(1)) as such to other Trading
filing also will be available for is available at the Exchange’s Web site Centers. See Securities Exchange Act 77187
inspection and copying at the principal (February 19, 2016), 81 FR 9556 (February 25, 2016)
asabaliauskas on DSK3SPTVN1PROD with NOTICES

office of the Exchange. All comments 13 17 (SR–BYX–2016–04). Non-Displayed Orders and
CFR 200.30–3(a)(12).
Reserve Orders would be handled in accordance
received will be posted without change; 1 15 U.S.C. 78s(b)(1). with the rules of the Trading Center to which they
the Commission does not edit personal 2 17 CFR 240.19b–4.
are routed. Id. This proposal does not impact the
3 15 U.S.C. 78s(b)(3)(A)(ii).
identifying information from routing of Reserve Orders.
4 17 CFR 240.19b–4(f)(2). 8 See Bats Announces Support for Hidden Post-
submissions. You should submit only 5 The term ‘‘Member’’ is defined as ‘‘any to-Away Routed Orders,available at http://
information that you wish to make registered broker or dealer that has been admitted cdn.batstrading.com/resources/release_notes/2016/
available publicly. All submissions to membership in the Exchange.’’ See Exchange Bats-Announces-Support-for-Hidden-Post-to-Away-
should refer to File Number SR–CBOE– Rule 1.5(n). Routed-Orders.pdf.

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42016 Federal Register / Vol. 81, No. 124 / Tuesday, June 28, 2016 / Notices

Paper Comments SECURITIES AND EXCHANGE summaries, set forth in sections A, B,
COMMISSION and C below, of the most significant
• Send paper comments in triplicate aspects of such statements.
to Secretary, Securities and Exchange [Release No. 34–78130; File No. SR–FINRA–
Commission, 100 F Street NE., 2016–019] A. Self-Regulatory Organization’s
Washington, DC 20549–1090. Statement of the Purpose of, and
Self-Regulatory Organizations; Statutory Basis for, the Proposed Rule
All submissions should refer to File Financial Industry Regulatory Change
Number SR BatsBYX–2016–12. This file Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed 1. Purpose
number should be included on the
subject line if email is used. To help the Rule Change To Adopt NASD Rule As part of the process of developing
Commission process and review your 2830 as FINRA Rule 2341 (Investment a new consolidated rulebook
comments more efficiently, please use Company Securities) in the (‘‘Consolidated FINRA Rulebook’’),4
only one method. The Commission will Consolidated FINRA Rulebook FINRA is proposing to transfer NASD
Rule 2830 (Investment Company
post all comments on the Commission’s June 22, 2016. Securities) into the Consolidated FINRA
Internet Web site (http://www.sec.gov/ Pursuant to Section 19(b)(1) of the Rulebook as FINRA Rule 2341
rules/sro.shtml). Copies of the Securities Exchange Act of 1934 (Investment Company Securities)
submission, all subsequent (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 without any substantive changes. NASD
amendments, all written statements notice is hereby given that on June 9, Rule 2830 regulates members’ activities
with respect to the proposed rule 2016, Financial Industry Regulatory in connection with the sale and
change that are filed with the Authority, Inc. (‘‘FINRA’’) filed with the distribution of securities of companies
Commission, and all written Securities and Exchange Commission registered under the Investment
communications relating to the (‘‘SEC’’ or ‘‘Commission’’) the proposed Company Act of 1940 (‘‘investment
proposed rule change between the rule change as described in Items I, II, company securities’’).5 In connection
Commission and any person, other than and III below, which Items have been with the distribution and sale of
those that may be withheld from the prepared by FINRA. FINRA has investment company securities, NASD
public in accordance with the designated the proposed rule change as Rule 2830 limits the sales charges
provisions of 5 U.S.C. 552, will be constituting a ‘‘non-controversial’’ rule members may receive, prohibits
available for Web site viewing and change under paragraph (f)(6) of Rule directed brokerages arrangements, limits
printing in the Commission’s Public 19b–4 under the Act,3 which renders the payment and receipt of cash and
Reference Room, 100 F Street NE., the proposal effective upon receipt of non-cash compensation, sets conditions
this filing by the Commission. The on discounts to dealers, and addresses
Washington, DC 20549, on official
Commission is publishing this notice to other issues such as members’
business days between the hours of
solicit comments on the proposed rule purchases and sales of investment
10:00 a.m. and 3:00 p.m. Copies of the change from interested persons. company securities as principal.
filing also will be available for Proposed FINRA Rule 2341 closely
inspection and copying at the principal I. Self-Regulatory Organization’s
tracks the language of NASD Rule 2830
office of the Exchange. All comments Statement of the Terms of Substance of
and makes only non-substantive,
received will be posted without change; the Proposed Rule Change
technical changes to the text of the
the Commission does not edit personal FINRA is proposing to adopt NASD NASD rule by, for instance, replacing
identifying information from Rule 2830 (Investment Company the reference to a legacy NASD rule
submissions. You should submit only Securities) as FINRA Rule 2341 with the applicable FINRA rule and
information that you wish to make (Investment Company Securities) in the making other non-substantive, technical
available publicly. All submissions consolidated FINRA rulebook without conforming changes.6
should refer to File Number SR– any substantive changes. FINRA also
BatsBYX–2016–12, and should be proposes to update cross-references 4 The current FINRA rulebook consists of: (1)

submitted on or before July 19, 2016. within other FINRA rules accordingly. FINRA Rules; (2) NASD Rules; and (3) rules
The text of the proposed rule change incorporated from New York Stock Exchange LLC
For the Commission, by the Division of (‘‘NYSE’’) (‘‘Incorporated NYSE Rules’’) (together,
is available on FINRA’s Web site at the NASD Rules and Incorporated NYSE Rules are
Trading and Markets, pursuant to delegated http://www.finra.org, at the principal referred to as the ‘‘Transitional Rulebook’’). While
authority.27 office of FINRA and at the the NASD Rules generally apply to all FINRA
Brent J. Fields, Commission’s Public Reference Room. members, the Incorporated NYSE Rules apply only
to those members of FINRA that are also members
Secretary. of the NYSE (‘‘Dual Members’’). The FINRA Rules
II. Self-Regulatory Organization’s
[FR Doc. 2016–15172 Filed 6–27–16; 8:45 am] apply to all FINRA members, unless such rules
Statement of the Purpose of, and have a more limited application by their terms. For
BILLING CODE 8011–01–P Statutory Basis for, the Proposed Rule more information about the rulebook consolidation
Change process, see Information Notice, March 12, 2008
(Rulebook Consolidation Process).
In its filing with the Commission, 5 As with NASD Rule 2830, FINRA Rule 2341

FINRA included statements concerning would not regulate members’ activities in
the purpose of and basis for the connection with variable insurance contracts,
which are regulated by FINRA Rule 2320 (Variable
asabaliauskas on DSK3SPTVN1PROD with NOTICES

proposed rule change and discussed any Contracts of an Insurance Company).
comments it received on the proposed 6 FINRA previously solicited comment on a
rule change. The text of these statements proposal to move NASD Rule 2830 to the
may be examined at the places specified Consolidated FINRA Rulebook with substantive
in Item IV below. FINRA has prepared changes. See Regulatory Notice 09–34 (June 2009);
see also Securities Exchange Act Release No. 64386
May 3, 2011), 76 FR 26779 (May 9, 2011) (Notice
1 15 U.S.C. 78s(b)(1). of Filing File No. SR–FINRA–2011–018)
2 17 CFR 240.19b–4. (withdrawn on August 1, 2011). Given that FINRA
27 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4(f)(6). would like to proceed with the rulebook

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Document Created: 2016-06-28 00:53:40
Document Modified: 2016-06-28 00:53:40

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 42013