81 FR 46747 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to BZX 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)
Federal Register Volume 81, Issue 137 (July 18, 2016)
| Page Range | 46747-46749 | |
| FR Document | 2016-16861 |
[Federal Register Volume 81, Number 137 (Monday, July 18, 2016)] [Notices] [Pages 46747-46749] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-16861] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78303; File No. SR-BatsBZX-2016-37] Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to BZX 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 [[Page 46748]] ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on July 5, 2016, Bats BZX Exchange, Inc. (the ``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 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. --------------------------------------------------------------------------- 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\ --------------------------------------------------------------------------- \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). --------------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \5\ See supra note 3. \6\ See supra note 4. --------------------------------------------------------------------------- 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. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78f. \8\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- 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 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. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(A). \10\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- 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: [[Page 46749]] Electronic CommentsUse 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-BatsBZX-2016-37 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-BatsBZX-2016-37. 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-BatsBZX-2016-37 and should be submitted on or before August 8, 2016. --------------------------------------------------------------------------- \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. 2016-16861 Filed 7-15-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 137 / Monday, July 18, 2016 / Notices 46747
B. Title of Chapter 16 in the C2 Rule’s responsibility is that of the presiding conform to the Advisory Board Charter,
Table of Contents officer at all meetings of the Board and thereby reducing uncertainty about the
Second, the Exchange proposes to stockholders, as well as of other powers responsibilities of the Advisory Board.
amend the title of Chapter 16 in the C2 and duties as are delegated by the The Exchange’s proposal to rename
Rule’s Table of Contents.8 Currently, the Board.14 The Exchange believes the the title of Chapter 16 will alleviate
title of Chapter 16 is ‘‘Summary responsibilities currently delegated to confusion as that Chapter incorporates
Suspension by Chairman of the Board or the Chairman of the Board under Rule by reference CBOE’s Chapter XVI rules
Vice Chairman of the Board.’’ The 6.33 pertain to the general charge and that are subject to a proposed rule
Exchange notes that rules contained supervision of the Exchange’s business change to remove references to the
within CBOE Chapter XVI are and therefore fall within the scope of Chairman of the Board and replace them
incorporated into C2’s Chapter 16.9 the CEO’s stated responsibilities, with CEO. Moreover, the proposed rule
CBOE Chapter XVI currently provides instead of the Chairman’s. change will eliminate a reference to the
that the Chairman of the Board or Vice Chairman, a title that C2 no longer
III. Discussion and Commission
President may summarily suspend a Findings uses.
Finally, the Exchange’s proposal to
TPH and limit or prohibit any person The Commission finds that the amend Rule 6.33 to replace the
with respect to access to services offered proposed rule change is consistent with references to the Chairman of the Board
by the Exchange.10 The Exchange notes the Act and the rules and regulations with the CEO should update and clarify
however, that CBOE is concurrently thereunder applicable to the Exchange which Exchange official is vested with
proposing to amend its rules to provide and, in particular, the requirements of the authorities established in that rule.
that the CEO (rather than Chairman) or Section 6(b) of the Act.15 Specifically, The Exchange represents that while
President may summarily suspend a the Commission believes the proposed historically the Chairman of the Board
TPH.11 Additionally, the Exchange rule change is consistent with the also held the title of CEO, currently, the
notes that it no longer maintains the role Section 6(b)(5) 16 requirements that the two titles are held by different
of Vice Chairman of the Board.12 As rules of an exchange be designed to individuals.18 The Exchange Bylaws
such, the Exchange proposes to amend prevent fraudulent and manipulative confer different responsibilities on the
the Chapter 16 title to simply state acts and practices, to promote just and Chairman of the Board and the CEO.19
‘‘Summary Suspension’’ to avoid equitable principles of trade, to foster The proposed rule change will ensure
confusion and maintain clarity in the cooperation and coordination with that the authority delegated pursuant to
rules. persons engaged in regulating, clearing, Rule 6.33 is consistent with the roles
C. References to Chairman of the Board settling, processing information with and responsibilities established in the
respect to, and facilitating transactions Bylaws.
Last, the Exchange proposes to amend
in securities, to remove impediments to
Rule 6.33 (Authority to Take Action IV. Conclusion
and perfect the mechanism of a free and
Under Emergency Conditions) to
open market and a national market It is therefore ordered, pursuant to
eliminate the reference to ‘‘Chairman of
system, and, in general, to protect Section 19(b)(2) of the Act,20 that the
the Board’’ and replace it with ‘‘Chief
investors and the public interest. proposed rule change (SR–C2–2016–
Executive Officer.’’ Rule 6.33 currently In particular, the Commission 005) be, and it hereby is, approved.
provides that the Chairman of the believes the proposed rule changes will
Board, the President, or such other For the Commission, by the Division of
remove impediments to, and perfect the Trading and Markets, pursuant to delegated
person or persons as may be designated mechanism of a free and open market authority.21
by the Board shall have the power to and a national market system, and, in
halt or suspend trading in some or all Robert W. Errett,
general, will protect investors and the Deputy Secretary.
securities traded on the Exchange, to public interest by updating the
close some or all Exchange facilities, to [FR Doc. 2016–16854 Filed 7–15–16; 8:45 am]
delegation of authority to senior
determine the duration of any such halt, management under certain of the
BILLING CODE 8011–01–P
suspension or closing, to take one or Exchange’s Rules, which should
more of the actions permitted to be facilitate the Exchange’s ability to
taken by any person or body of the SECURITIES AND EXCHANGE
operate and carry out its self-regulatory COMMISSION
Exchange under Exchange rules, or to responsibilities. In particular, the
take any other action deemed to be proposed rule changes to eliminate the [Release No. 34–78303; File No. SR–
necessary or appropriate for the reference to the Office of the Chairman BatsBZX–2016–37]
maintenance of a fair and orderly and replace it with a reference to
market or the protection of investors, or Self-Regulatory Organizations; Bats
management in Section 6.1 of the BZX Exchange, Inc.; Notice of Filing
otherwise in the public interest, due to Exchange’s Bylaws will alleviate
emergency conditions or extraordinary and Immediate Effectiveness of a
confusion regarding the responsibilities Proposed Rule Change to BZX Rule
circumstances. The Exchange notes that of the Advisory Board. The Exchange
the CEO’s responsibility is that of 11.26(a), Stating it Will Utilize IEX
notes that the Advisory Board’s Charter Market Data From the CQS/UQDF for
general charge and supervision of the provides that the Advisory Board shall
business of the Corporation,13 whereas Purposes of Order Handling, Routing,
advise the Board and ‘‘management’’ and Related Compliance Processes
the Chairman of the Board’s
asabaliauskas on DSK3SPTVN1PROD with NOTICES
regarding matters of interest to TPHs.17
8 See
Replacing the term Office of the July 12, 2016.
id.
9 See id.
Chairman with the term management Pursuant to section 19(b)(1) of the
10 See CBOE Rule 16.1. will ensure that the Exchange’s Bylaws Securities Exchange Act of 1934 (the
11 See Securities Exchange Act Release No. 77962
14 See Section 3.6 of the C2 Bylaws. 18 See id.
(June 1, 2016), 81 FR 36641 (June 7, 2016) (SR–
CBOE–2016–047). 15 15 U.S.C. 78f(b). 19 See id. at 36640.
12 See Notice, supra note 3, at 36640. 16 15 U.S.C. 78f(b)(5). 20 15 U.S.C. 78s(b)(2).
13 See Section 5.2 of the C2 Bylaws. 17 See Notice, supra note 3, at 36639. 21 17 CFR 200.30–3(a)(12).
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![Federal Register / Vol. 81, No. 137 / Monday, July 18, 2016 / Notices 46749
Electronic Comments SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
COMMISSION Statement of the Purpose of, and the
• Use the Commission’s Internet Statutory Basis for, the Proposed Rule
comment form (http://www.sec.gov/ Change
[Release No. 34–78297; File No. SR–
rules/sro.shtml); or
NYSEMKT–2016–67] 1. Purpose
• Send an email to rule-comments@
sec.gov. Please include File Number SR– The purpose of this filing is to amend
Self-Regulatory Organizations; NYSE
BatsBZX–2016–37 on the subject line. section I. E. of the Fee Schedule 3 to
MKT LLC; Notice of Filing and
adjust qualification levels for certain
Immediate Effectiveness of Proposed credit tiers and modify how certain
Paper Comments
Change To Modify the NYSE Amex volumes are weighted. The Exchange
• Send paper comments in triplicate Options Fee Schedule Effective July 1, proposes to implement these changes
to Secretary, Securities and Exchange 2016 effective on July 1, 2016.
Commission, 100 F Street NE., Section I.E. of the Fee Schedule
July 12, 2016.
Washington, DC 20549–1090. describes the Exchange’s ACE Program,
Pursuant to section 19(b)(1) of the which features five tiers (each a ‘‘Tier’’)
All submissions should refer to File Securities Exchange Act of 1934 expressed as a percentage of total
Number SR–BatsBZX–2016–37. This file (‘‘Act’’),1 and Rule 19b–4 thereunder,2 industry Customer equity and Exchange
number should be included on the notice is hereby given that on July 1, Traded Fund (‘‘ETF’’) option average
subject line if email is used. To help the 2016, NYSE MKT LLC (the ‘‘Exchange’’ daily volume 4 and provides two
Commission process and review your or ‘‘NYSE MKT’’) filed with the alternative methods through which
comments more efficiently, please use Securities and Exchange Commission Order Flow Providers (each an ‘‘OFP’’)
only one method. The Commission will (‘‘SEC’’ or ‘‘Commission’’) the proposed may receive per contract credits for
post all comments on the Commission’s rule change as described in Items I, II, Electronic Customer volume that the
Internet Web site (http://www.sec.gov/ and III below, which Items have been OFP, as agent, submits to the Exchange.5
rules/sro.shtml). Copies of the prepared by the Exchange. The The Exchange proposes to adjust the
submission, all subsequent Customer Electronic ADV volume
Commission is publishing this notice to
amendments, all written statements thresholds of the ACE Program by
solicit comments on the proposed rule
with respect to the proposed rule raising the qualification level for two of
change from interested persons.
change that are filed with the the five Tiers as well as to modify how
Commission, and all written I. Self-Regulatory Organization’s volumes are calculated for all five of the
communications relating to the Statement of the Terms of Substance of Tiers under both methods.
proposed rule change between the the Proposed Rule Change Currently, to qualify for Tier 2 on
Commission and any person, other than Customer Electronic ADV, the Customer
those that may be withheld from the The Exchange proposes to modify the Electronic ADV entered by an OFP must
NYSE Amex Options Fee Schedule exceed 0.60% of Industry Customer
public in accordance with the
(‘‘Fee Schedule’’). The Exchange Equity and ETF Options ADV
provisions of 5 U.S.C. 552, will be
proposes to implement the fee change (‘‘ICADV’’). The Exchange proposes to
available for Web site viewing and
effective July 1, 2016. The proposed raise the qualification level for Tier 2 on
printing in the Commission’s Public Customer Electronic ADV to be greater
Reference Room, 100 F Street NE., change is available on the Exchange’s
Web site at www.nyse.com, at the than 0.75% of ICADV and, for
Washington, DC 20549, on official
business days between the hours of principal office of the Exchange, and at
3 See Fee Schedule, section I.E. (Amex Customer
10:00 a.m. and 3:00 p.m. Copies of such the Commission’s Public Reference Engagement (‘‘ACE’’) Program—Standard Options),
filing will also be available for Room. available here, https://www.nyse.com/publicdocs/
nyse/markets/amex-options/NYSE_Amex_Options_
inspection and copying at the principal II. Self-Regulatory Organization’s Fee_Schedule.pdf.
office of the Exchange. All comments Statement of the Purpose of, and 4 Total industry Customer equity and ETF option
received will be posted without change; Statutory Basis for, the Proposed Rule volume is comprised of those equity and ETF
the Commission does not edit personal contracts that clear in the Customer account type
Change at OCC and does not include contracts that clear in
identifying information from either the Firm or Market Maker account type at
submissions. You should submit only In its filing with the Commission, the OCC or contracts overlying a security other than an
information that you wish to make self-regulatory organization included equity or ETF security. See OCC Monthly Statistics
statements concerning the purpose of, Reports, available here, http://www.theocc.com/
available publicly. All submissions webapps/monthly-volume-reports.
should refer to File Number SR– and basis for, the proposed rule change 5 The first method for determining whether an
BatsBZX–2016–37 and should be and discussed any comments it received OFP should receive credit is by calculating, on a
submitted on or before August 8, 2016. on the proposed rule change. The text monthly basis, the average daily Customer contract
of those statements may be examined at volume an OFP executes Electronically on the
For the Commission, by the Division of Exchange as a percentage of total average daily
the places specified in Item IV below. industry Customer equity and ETF options volume.
Trading and Markets, pursuant to delegated
authority.11
The Exchange has prepared summaries, The second method for determining whether an
set forth in sections A, B, and C below, OFP should receive credit is by calculating, on a
Robert W. Errett,
asabaliauskas on DSK3SPTVN1PROD with NOTICES
monthly basis, the average daily contract volume an
of the most significant parts of such OFP executes Electronically in all participant types
Deputy Secretary. statements. (i.e., Customer, Firm, Broker-Dealer, NYSE Amex
[FR Doc. 2016–16861 Filed 7–15–16; 8:45 am] Options Market Maker, Non-NYSE Amex Options
BILLING CODE 8011–01–P Market Maker, and Professional Customer) on the
Exchange, as a percentage of total average daily
industry Customer equity and ETF option volume,
with the further requirement that a specified
percentage of the minimum volume required to
1 15 U.S.C. 78s(b)(1). qualify for the Tier must be Customer volume. See
11 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. supra n. 3.
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Document Created: 2016-07-16 02:28:39
Document Modified: 2016-07-16 02:28:39
| 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 46747 |
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