81 FR 46745 - Self-Regulatory Organizations; Bats BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to BYX Rule 11.26(a), Stating it Will Utilize IEX Market Data From the CQS/UQDF for Purposes of Order Handling, Routing, and Related Compliance Processes

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 137 (July 18, 2016)

Page Range		46745-46746
FR Document		2016-16860
Federal Register, Volume 81 Issue 137 (Monday, July 18, 2016)
[Federal Register Volume 81, Number 137 (Monday, July 18, 2016)]
[Notices]
[Pages 46745-46746]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-16860]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78302; File No. SR-BatsBYX-2016-18]


Self-Regulatory Organizations; Bats BYX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change to BYX 
Rule 11.26(a), Stating it Will Utilize IEX Market Data From the CQS/
UQDF for Purposes of Order Handling, Routing, and Related Compliance 
Processes

July 12, 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 July 5, 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 
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.
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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 update Rule 11.26(a) regarding the 
public disclosure of the sources of data that the Exchange utilizes 
when performing: (i) Order handling; (ii) order routing; and (iii) 
related compliance processes to reflect the operation of the Investors 
Exchange LLC (``IEX'') as a registered national securities exchange \3\ 
beginning on August 19, 2016.\4\
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    \3\ See Securities Exchange Act Release No. 78101 (June 17, 
2016), 81 FR 41141 (June 23, 2016) (``IEX Approval Order'').
    \4\ See Letter from Brad Katsuyama, CEO, IEX, to IEX's Sell-Side 
and Buy-Side Partners, dated June 17, 2016 (https://www.iextrading.com/) (stating that IEX will commence a symbol-by-
symbol roll-out on August 19, 2016, concluding on September 2, 
2016).
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    On June 17, 2016, the Commission approved IEX's application to 
register as a national securities exchange.\5\ As part of its 
transition to exchange status, IEX announced that it will commence a 
symbol-by-symbol roll-out on August 19, 2016, concluding on September 
2, 2016.\6\ The Exchange, therefore, proposes to update Rule 11.26(a) 
regarding the public disclosure of the sources of data that the 
Exchange utilizes when performing: (i) Order handling; (ii) order 
routing; and (iii) related compliance processes to reflect the 
operation of IEX as a registered national securities exchange beginning 
on August 19, 2016. Specifically, the Exchange proposes to amend Rule 
11.26(a) to include IEX by stating it will utilize IEX market data from 
the CQS/UQDF for purposes of order handling, routing, and related 
compliance processes.
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    \5\ See supra note 3.
    \6\ See supra note 4.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\7\ in general, and furthers the 
objectives of section 6(b)(5) of the Act,\8\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that its proposal to update Exchange Rule 
11.26(a) to include IEX will ensure that the rule correctly identifies 
and publicly states on a market-by-market basis all of the specific 
network processor and proprietary data feeds that the Exchange utilizes 
for the handling, routing, and execution of orders, and for performing 
the regulatory compliance checks related to each of those functions. 
The proposed rule change also removes impediments to and perfects the 
mechanism of a free and open market and protects investors and the 
public interest because it provides additional specificity, clarity and 
transparency.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes its proposed rule change would not impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. To the contrary, the Exchange 
believes the proposal would enhance competition because including all 
of the exchanges enhances transparency and enables investors to better 
assess the quality of the Exchange's execution and routing services.

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

[[Page 46746]]

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

    Because the foregoing proposed rule change does not: (A) 
Significantly affect the protection of investors or the public 
interest; (B) impose any significant burden on competition; and (C) by 
its terms, become operative for 30 days from the date on which it was 
filed or such shorter time as the Commission may designate it has 
become effective pursuant to section 19(b)(3)(A) of the Act \9\ and 
paragraph (f)(6) of Rule 19b-4 thereunder,\10\ the Exchange has 
designated this rule filing as non-controversial. The Exchange has 
given the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change at least five business days prior to the date of filing of 
the proposed rule change, or such shorter time as designated by the 
Commission.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (1) 
Necessary or appropriate in the public interest; (2) for the protection 
of investors; or (3) otherwise in furtherance of the purposes of the 
Act. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule should be 
approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BatsBYX-2016-18 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-BatsBYX-2016-18. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing will also be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BatsBYX-2016-18 and should 
be submitted on or before August 8, 2016.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-16860 Filed 7-15-16; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 137 / Monday, July 18, 2016 / Notices 46745

Commission’s Public Reference Room, I. Self-Regulatory Organization’s Exchange proposes to amend Rule
100 F Street NE., Room 1580, Statement of the Terms of Substance of 11.26(a) to include IEX by stating it will
Washington, DC 20549, on official the Proposed Rule Change utilize IEX market data from the CQS/
business days between the hours of The Exchange filed a proposal to UQDF for purposes of order handling,
10:00 a.m. and 3:00 p.m. All statements update Rule 11.26(a) regarding the routing, and related compliance
received will be posted without change; public disclosure of the sources of data processes.
we do not edit personal identifying that the Exchange utilizes when 2. Statutory Basis
information from submissions. You performing: (i) Order handling; (ii) order
routing; and (iii) related compliance The Exchange believes that the
should submit only information that
processes to reflect the operation of the proposed rule change is consistent with
you wish to make available publicly. section 6(b) of the Act,7 in general, and
Investors Exchange LLC (‘‘IEX’’) as a
FOR FURTHER INFORMATION CONTACT: registered national securities exchange 3 furthers the objectives of section 6(b)(5)
Arisa Tinaves Kettig, Special Counsel, at beginning on August 19, 2016.4 of the Act,8 in particular, in that it is
(202) 551–5676, Division of Trading and The text of the proposed rule change designed to prevent fraudulent and
Markets, Securities and Exchange is available at the Exchange’s Web site manipulative acts and practices, to
Commission, 100 F Street NE., at www.batstrading.com, at the promote just and equitable principles of
Washington, DC 20549–7010. principal office of the Exchange, and at trade, to foster cooperation and
the Commission’s Public Reference coordination with persons engaged in
SUPPLEMENTARY INFORMATION: In regulating, clearing, settling, processing
Room.
accordance with section 10(a) of the information with respect to, and
Federal Advisory Committee Act, 5 II. Self-Regulatory Organization’s facilitating transactions in securities, to
U.S.C. App. 1, and the regulations Statement of the Purpose of, and remove impediments to and perfect the
thereunder, Stephen Luparello, Statutory Basis for, the Proposed Rule mechanism of a free and open market
Designated Federal Officer of the Change and a national market system, and, in
Committee, has ordered publication of In its filing with the Commission, the general, to protect investors and the
this notice. Exchange included statements public interest.
concerning the purpose of and basis for The Exchange believes that its
Dated: July 13, 2016.
the proposed rule change and discussed proposal to update Exchange Rule
Brent J. Fields, any comments it received on the 11.26(a) to include IEX will ensure that
Committee Management Officer. proposed rule change. The text of these the rule correctly identifies and publicly
[FR Doc. 2016–16892 Filed 7–15–16; 8:45 am] statements may be examined at the states on a market-by-market basis all of
BILLING CODE 8011–01–P places specified in Item IV below. The the specific network processor and
Exchange has prepared summaries, set proprietary data feeds that the Exchange
forth in sections A, B, and C below, of utilizes for the handling, routing, and
SECURITIES AND EXCHANGE the most significant parts of such execution of orders, and for performing
COMMISSION statements. the regulatory compliance checks
related to each of those functions. The
A. Self-Regulatory Organization’s
[Release No. 34–78302; File No. SR– proposed rule change also removes
Statement of the Purpose of, and
BatsBYX–2016–18] impediments to and perfects the
Statutory Basis for, the Proposed Rule
mechanism of a free and open market
Change
Self-Regulatory Organizations; Bats and protects investors and the public
BYX Exchange, Inc.; Notice of Filing 1. Purpose interest because it provides additional
and Immediate Effectiveness of a On June 17, 2016, the Commission specificity, clarity and transparency.
Proposed Rule Change to BYX Rule approved IEX’s application to register as B. Self-Regulatory Organization’s
11.26(a), Stating it Will Utilize IEX a national securities exchange.5 As part Statement on Burden on Competition
Market Data From the CQS/UQDF for of its transition to exchange status, IEX
announced that it will commence a The Exchange believes its proposed
Purposes of Order Handling, Routing, rule change would not impose any
and Related Compliance Processes symbol-by-symbol roll-out on August
19, 2016, concluding on September 2, burden on competition that is not
July 12, 2016. 2016.6 The Exchange, therefore, necessary or appropriate in furtherance
proposes to update Rule 11.26(a) of the purposes of the Act. To the
Pursuant to section 19(b)(1) of the contrary, the Exchange believes the
regarding the public disclosure of the
Securities Exchange Act of 1934 (the proposal would enhance competition
sources of data that the Exchange
‘‘Act’’),1 and Rule 19b–4 thereunder,2 because including all of the exchanges
utilizes when performing: (i) Order
notice is hereby given that on July 5, handling; (ii) order routing; and (iii) enhances transparency and enables
2016, Bats BYX Exchange, Inc. (the related compliance processes to reflect investors to better assess the quality of
‘‘Exchange’’ or ‘‘BYX’’) filed with the the operation of IEX as a registered the Exchange’s execution and routing
Securities and Exchange Commission national securities exchange beginning services.
(‘‘Commission’’) the proposed rule on August 19, 2016. Specifically, the C. Self-Regulatory Organization’s
change as described in Items I, II, and Statement on Comments on the
asabaliauskas on DSK3SPTVN1PROD with NOTICES

III below, which Items have been 3 See Securities Exchange Act Release No. 78101
Proposed Rule Change Received From
prepared by the Exchange. The (June 17, 2016), 81 FR 41141 (June 23, 2016) (‘‘IEX
Approval Order’’). Members, Participants or Others
Commission is publishing this notice to 4 See Letter from Brad Katsuyama, CEO, IEX, to
The Exchange has not solicited, and
solicit comments on the proposed rule IEX’s Sell-Side and Buy-Side Partners, dated June does not intend to solicit, comments on
change from interested persons. 17, 2016 (https://www.iextrading.com/) (stating that
IEX will commence a symbol-by-symbol roll-out on this proposed rule change. The
August 19, 2016, concluding on September 2, 2016).
1 15 U.S.C. 78s(b)(1). 5 See supra note 3. 7 15 U.S.C. 78f.
2 17 CFR 240.19b–4. 6 See supra note 4. 8 15 U.S.C. 78f(b)(5).

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46746 Federal Register / Vol. 81, No. 137 / Monday, July 18, 2016 / Notices

Exchange has not received any All submissions should refer to File 19(b)(1) of the Securities Exchange Act
unsolicited written comments from Number SR–BatsBYX–2016–18. This of 1934 (‘‘Act’’) 1 and Rule 19b–4
Members or other interested parties. file number should be included on the thereunder,2 a proposed rule change to
subject line if email is used. To help the amend its Bylaws and Rules with
III. Date of Effectiveness of the
Commission process and review your respect to delegations of certain
Proposed Rule Change and Timing for comments more efficiently, please use
Commission Action authorities to senior management. The
only one method. The Commission will proposed rule change was published for
Because the foregoing proposed rule post all comments on the Commission’s comment in the Federal Register on
change does not: (A) Significantly affect Internet Web site (http://www.sec.gov/ June 7, 2016.3 The Commission received
the protection of investors or the public rules/sro.shtml). Copies of the
no comments on the proposal. This
interest; (B) impose any significant submission, all subsequent
order approves the proposed rule
burden on competition; and (C) by its amendments, all written statements
with respect to the proposed rule change.
terms, become operative for 30 days
from the date on which it was filed or change that are filed with the II. Description of the Proposed Rule
such shorter time as the Commission Commission, and all written Change 4
may designate it has become effective communications relating to the
pursuant to section 19(b)(3)(A) of the proposed rule change between the The Exchange proposes to updates
Act 9 and paragraph (f)(6) of Rule 19b– Commission and any person, other than references to senior management
4 thereunder,10 the Exchange has those that may be withheld from the contained in its Bylaws and Rules to
designated this rule filing as non- public in accordance with the more accurately reflect roles and
controversial. The Exchange has given provisions of 5 U.S.C. 552, will be responsibilities within its current senior
the Commission written notice of its available for Web site viewing and management structure. The Exchange
intent to file the proposed rule change, printing in the Commission’s Public notes that historically the C2 Chairman
along with a brief description and text Reference Room, 100 F Street NE., of the Board also held the title of Chief
of the proposed rule change at least five Washington, DC 20549, on official Executive Officer (‘‘CEO’’). Currently,
business days prior to the date of filing business days between the hours of however, the titles of Chairman of
of the proposed rule change, or such 10:00 a.m. and 3:00 p.m. Copies of such Board, CEO, and President are held by
shorter time as designated by the filing will also be available for
three different individuals. As such, the
Commission. inspection and copying at the principal
office of the Exchange. All comments Exchange proposes to amend its rules
At any time within 60 days of the relating to authorities delegated to
filing of the proposed rule change, the received will be posted without change;
the Commission does not edit personal senior management to more accurately
Commission summarily may reflect the current senior management
temporarily suspend such rule change if identifying information from
submissions. You should submit only structure.
it appears to the Commission that such
action is: (1) Necessary or appropriate in information that you wish to make A. Reference to Office of the Chairman
available publicly. All submissions
the public interest; (2) for the protection
should refer to File Number SR– First, the Exchange proposes to
of investors; or (3) otherwise in
BatsBYX–2016–18 and should be eliminate the reference to the Office of
furtherance of the purposes of the Act.
submitted on or before August 8, 2016. the Chairman in Section 6.1 (Advisory
If the Commission takes such action, the
Commission shall institute proceedings For the Commission, by the Division of Board) of the Exchange’s Bylaws and
to determine whether the proposed rule Trading and Markets, pursuant to delegated replace it with a reference to
authority.11 ‘‘management.’’ 5 Section 6.1 currently
should be approved or disapproved.
Robert W. Errett, provides that the Board will establish an
IV. Solicitation of Comments Deputy Secretary. Advisory Board which shall advise the
Interested persons are invited to [FR Doc. 2016–16860 Filed 7–15–16; 8:45 am] Board and the Office of the Chairman
submit written data, views, and BILLING CODE 8011–01–P regarding matters of interest to Trading
arguments concerning the foregoing, Permit Holders (‘‘TPHs’’). The Exchange
including whether the proposed rule notes that the Advisory Board’s Charter
change is consistent with the Act. SECURITIES AND EXCHANGE provides that the Advisory Board shall
Comments may be submitted by any of COMMISSION advise the Board and ‘‘management’’
the following methods: [Release No. 34–78294; File No. SR–C2– regarding matters of interest to TPHs.6
2016–005] In order to conform the language in
Electronic Comments
Section 6.1 to the Advisory Board
• Use the Commission’s Internet Self-Regulatory Organizations; C2
Charter, the Exchange proposes to
comment form (http://www.sec.gov/ Options Exchange, Incorporated;
Order Approving a Proposed Rule replace the reference to the Office of the
rules/sro.shtml); or Chairman with management.7
• Send an email to rule-comments@ Change Relating to Senior
sec.gov. Please include File Number SR– Management Authority
1 15 U.S.C. 78s(b)(1).
BatsBYX–2016–18 on the subject line. July 12, 2016. 2 17 CFR 240.19b–4.
asabaliauskas on DSK3SPTVN1PROD with NOTICES

3 See Securities Exchange Act Release No. 77961
Paper Comments I. Introduction (June 1, 2016), 81 FR 36639 (June 7, 2016)
• Send paper comments in triplicate On May 23, 2016, C2 Options (‘‘Notice’’).
4 A more detailed description of the proposed
to Secretary, Securities and Exchange Exchange, Incorporated (‘‘C2’’ or
rule change appears in the Notice. See id.
Commission, 100 F Street NE., ‘‘Exchange’’) filed with the Securities 5 See id.
Washington, DC 20549–1090. and Exchange Commission 6 See id.
(‘‘Commission’’), pursuant to Section 7 See id. Additionally, the title of the Bylaws will
9 15 U.S.C. 78s(b)(3)(A). be changed to Fifth Amended and Restated Bylaws
10 17 CFR 240.19b–4. 11 17 CFR 200.30–3(a)(12). of C2. See id.

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Document Created: 2016-07-16 02:28:26
Document Modified: 2016-07-16 02:28:26
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 46745