81_FR_52646 81 FR 52494 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Period for the Exchange's Supplemental Competitive Liquidity Provider Program

81 FR 52494 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Period for the Exchange's Supplemental Competitive Liquidity Provider Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 152 (August 8, 2016)

Page Range52494-52496
FR Document2016-18697

Federal Register, Volume 81 Issue 152 (Monday, August 8, 2016)
[Federal Register Volume 81, Number 152 (Monday, August 8, 2016)]
[Notices]
[Pages 52494-52496]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-18697]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78454; File No. SR-BatsBZX-2016-46]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Extend 
the Pilot Period for the Exchange's Supplemental Competitive Liquidity 
Provider Program

August 2, 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 28, 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 and 
II 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 is proposing to extend the pilot period for the 
Exchange's Supplemental Competitive Liquidity Provider Program (the 
``Program''), which is currently set to expire on July 28, 2016, for 
three months, to expire on October 28, 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
Background
    On August 30, 2011, the Exchange received approval of rules 
applicable to the qualification, listing and delisting of securities of 
issuers on the Exchange.\3\ More recently, the Exchange received 
approval to operate a pilot program that is designed to incentivize 
certain Market Makers \4\ registered with the Exchange as ETP CLPs, as 
defined in Interpretation and Policy .03 to Rule 11.8, to enhance 
liquidity on the Exchange in certain ETPs \5\ listed on the Exchange 
and thereby qualify to receive part of a daily rebate as part of the

[[Page 52495]]

Program under Interpretation and Policy .03 to Rule 11.8.\6\
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    \3\ See Securities Exchange Act Release No. 65225 (August 30, 
2011), 76 FR 55148 (September 6, 2011) (SR-BATS-2011-018).
    \4\ As defined in BZX Rules, the term ``Market Maker'' means a 
Member that acts a as a market maker pursuant to Chapter XI of BZX 
Rules.
    \5\ ETP is defined in Interpretation and Policy .03(b)(4) to 
Rule 11.8.
    \6\ See Securities Exchange Act Release No. 72692 (July 28, 
2014), 79 FR 44908 (August 1, 2014) (SR-BATS-2014-022) (``CLP 
Approval Order'').
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    The Program was approved by the Commission on a pilot basis running 
one-year from the date of implementation.\7\ The Commission approved 
the Program on July 28, 2014.\8\ The Exchange implemented the Program 
on July 28, 2014 and the pilot period for the Program was originally 
scheduled to end on July 28, 2015 until it was extended to end on 
October 28, 2015,\9\ later extended to January 28, 2016,\10\ again 
extended to April 28, 2016,\11\ and most recently extended to July 28, 
2016.\12\
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    \7\ See id at 44909.
    \8\ Id.
    \9\ See Securities Exchange Act Release No. 75518 (July 24, 
2015), 80 FR 45566 (July 30, 2015 (SR-BATS-2015-55).
    \10\ See Securities Exchange Act Release No. 76293 (October 28, 
2015), 80 FR 67808 (November 3, 2015) (SR-BATS-2015-96).
    \11\ See Securities Exchange Act Release No. 77033 (February 2, 
2016), 81 FR 6558 (February 8, 2016) (SR-BATS-2016-12).
    \12\ See Securities Exchange Act Release No. 77721 (April 27, 
2016), 81 FR 26591 (May 3, 2016) (SR-BatsBZX-2016-11).
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Proposal To Extend the Operation of the Program
    The Exchange established the Program in order to enhance liquidity 
on the Exchange in certain ETPs listed on the Exchange (and thereby 
enhance the Exchange's ability to compete as a listing venue) by 
providing a mechanism by which ETP CLPs compete for part of a daily 
quoting incentive on the basis of providing the most aggressive quotes 
with the greatest amount of size. Such competition has the ability to 
reduce spreads, facilitate the price discovery process, and reduce 
costs for investors trading in such securities, thereby promoting 
capital formation and helping the Exchange to compete as a listing 
venue. The Exchange believes that extending the pilot is appropriate 
because the Exchange has prepared and is also planning to submit a 
proposal to make the Program permanent. As part of this proposal, the 
Exchange has also prepared a report analyzing the Program. As such, the 
Exchange believes that it is appropriate to extend the current 
operation of the Program for three months in order to provide enough 
time for the Program to continue operating while such proposal is under 
consideration by the Commission. Through this filing, the Exchange 
seeks to extend the current pilot period of the Program until October 
28, 2016.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities exchange, and, in particular, 
with the requirements of Section 6(b) of the Act.\13\ In particular, 
the Exchange believes the proposed change furthers the objectives of 
Section 6(b)(5) of the Act,\14\ 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 facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. The Exchange believes that 
extending the pilot period for the Program is consistent with these 
principles because the Program is reasonably designed to enhance quote 
competition, improve liquidity in securities listed on the Exchange, 
support the quality of price discovery, promote market transparency, 
and increase competition for listings and trade executions, while 
reducing spreads and transaction costs in such securities. Maintaining 
and increasing liquidity in Exchange-listed securities will help raise 
investors' confidence in the fairness of the market and their 
transactions. The extension of the pilot period will allow Exchange to 
continue to operate the Program while its proposal to make the Program 
permanent is under consideration by the Commission.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change 
extends an established pilot program for three months, thus allowing 
the Program to enhance competition in both the listings market and in 
competition for market makers. The Program will continue to promote 
competition in the listings market by providing issuers with a vehicle 
for paying the Exchange additional fees in exchange for incentivizing 
tighter spreads and deeper liquidity in listed securities and allow the 
Exchange to continue to compete with similar programs at Nasdaq Stock 
Market LLC \15\ and NYSE Arca Equities, Inc.\16\
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    \15\ See Securities Exchange Act Release No. 69195 (March 20, 
2013), 78 FR 18393 (March 26, 2013) (SR-NASDAQ-2012-137).
    \16\ See Securities Exchange Act Release No. 69335 (April 5, 
2013), 78 FR 35340 (June 12, 2013) (SR-NYSEARCA-2013-34).
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    The Exchange also believes that extending the pilot program for an 
additional three months will allow the Program to continue to enhance 
competition among market participants by creating incentives for market 
makers to compete to make better quality markets. By continuing to 
require that market makers both meet the quoting requirements and also 
compete for the daily financial incentives, the quality of quotes on 
the Exchange will continue to improve. This, in turn, will attract more 
liquidity to the Exchange and further improve the quality of trading in 
exchange-listed securities participating in the Program, which will 
also act to bolster the Exchange's listing business.

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 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: (i) 
significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
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 \17\ and paragraph 
(f)(6) of Rule 19b-4 thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative before 30 days from the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\19\ the Commission may 
designate a shorter time if such action is consistent with the

[[Page 52496]]

protection of investors and the public interest.
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    \19\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange has asked the Commission to waive the 30-day operative 
delay. The Exchange asserts that waiver of the operative delay will 
allow the Exchange to extend the Program prior to its expiration on 
July 28, 2016, which will ensure that the Program continues to operate 
uninterrupted while the Exchange and the Commission continue to analyze 
data regarding the Program. The Commission believes that waiving the 
30-day operative delay is consistent with the protection of investors 
and the public interest. Therefore, the Commission hereby waives the 
30-day operative delay and designates the proposed rule change to be 
operative upon filing with the Commission.\20\
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    \20\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal 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-2016-46 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-2016-46. 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 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-2016-46 and should be 
submitted on or before August 29, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-18697 Filed 8-5-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                  52494                           Federal Register / Vol. 81, No. 152 / Monday, August 8, 2016 / Notices

                                                  will provide the Funds with continuous                    Fund shareholders and notification                      by the Exchange. The Commission is
                                                  and comprehensive investment                              about sub-advisory changes and                          publishing this notice to solicit
                                                  management services subject to the                        enhanced Board oversight to protect the                 comments on the proposed rule change
                                                  supervision of, and policies established                  interests of the Funds’ shareholders.                   from interested persons.
                                                  by, each Fund’s board of trustees                            4. Section 6(c) of the Act provides that
                                                                                                            the Commission may exempt any                           I. Self-Regulatory Organization’s
                                                  (‘‘Board’’). The Advisory Agreement
                                                  permits the Adviser, subject to the                       person, security, or transaction or any                 Statement of the Terms of Substance of
                                                  approval of the Board, to delegate to one                 class or classes of persons, securities, or             the Proposed Rule Change
                                                  or more sub-advisers (each, a ‘‘Sub-                      transactions from any provisions of the                    The Exchange is proposing to extend
                                                  Adviser’’ and collectively, the ‘‘Sub-                    Act, or any rule thereunder, if such                    the pilot period for the Exchange’s
                                                  Advisers’’) the responsibility to provide                 relief is necessary or appropriate in the               Supplemental Competitive Liquidity
                                                  the day-to-day portfolio investment                       public interest and consistent with the                 Provider Program (the ‘‘Program’’),
                                                  management of each Fund, subject to                       protection of investors and purposes                    which is currently set to expire on July
                                                  the supervision and direction of the                      fairly intended by the policy and                       28, 2016, for three months, to expire on
                                                  Adviser. The primary responsibility for                   provisions of the Act. Applicants                       October 28, 2016.
                                                  managing the Funds will remain vested                     believe that the requested relief meets
                                                                                                                                                                       The text of the proposed rule change
                                                  in the Adviser. The Adviser will hire,                    this standard because, as further
                                                                                                                                                                    is available at the Exchange’s Web site
                                                  evaluate, allocate assets to and oversee                  explained in the Application, the
                                                                                                                                                                    at www.batstrading.com, at the
                                                  the Sub-Advisers, including                               Advisory Agreements will remain
                                                                                                                                                                    principal office of the Exchange, and at
                                                  determining whether a Sub-Adviser                         subject to shareholder approval, while
                                                                                                                                                                    the Commission’s Public Reference
                                                  should be terminated, at all times                        the role of the Sub-Advisers is
                                                                                                                                                                    Room.
                                                  subject to the authority of the Board.                    substantially similar to that of
                                                     2. Applicants request an exemption to                  individual portfolio managers, so that                  II. Self-Regulatory Organization’s
                                                  permit the Adviser, subject to Board                      requiring shareholder approval of Sub-                  Statement of the Purpose of, and
                                                  approval, to hire certain Sub-Advisers                    Advisory Agreements would impose                        Statutory Basis for, the Proposed Rule
                                                  pursuant to Sub-Advisory Agreements                       unnecessary delays and expenses on the                  Change
                                                  and materially amend existing Sub-                        Funds. Applicants believe that the
                                                  Advisory Agreements without obtaining                     requested relief from the Disclosure                      In its filing with the Commission, the
                                                  the shareholder approval required under                   Requirements meets this standard                        Exchange included statements
                                                  section 15(a) of the Act and rule 18f–2                   because it will improve the Adviser’s                   concerning the purpose of and basis for
                                                  under the Act.2 Applicants also seek an                   ability to negotiate fees paid to the Sub-              the proposed rule change and discussed
                                                  exemption from the Disclosure                             Advisers that are more advantageous for                 any comments it received on the
                                                  Requirements to permit a Fund to                          the Funds.                                              proposed rule change. The text of these
                                                  disclose (as both a dollar amount and a                                                                           statements may be examined at the
                                                                                                            For the Commission, by the Division of
                                                  percentage of the Fund’s net assets): (a)                 Investment Management, under delegated
                                                                                                                                                                    places specified in Item IV below. The
                                                  The aggregate fees paid to the Adviser                    authority.                                              Exchange has prepared summaries, set
                                                  and any Affiliated Sub-Adviser; and (b)                   Robert W. Errett,
                                                                                                                                                                    forth in Sections A, B, and C below, of
                                                  the aggregate fees paid to Sub-Advisers                                                                           the most significant parts of such
                                                                                                            Deputy Secretary.
                                                  other than Affiliated Sub-Advisers                                                                                statements.
                                                                                                            [FR Doc. 2016–18754 Filed 8–5–16; 8:45 am]
                                                  (collectively, ‘‘Aggregate Fee                            BILLING CODE 8011–01–P                                  A. Self-Regulatory Organization’s
                                                  Disclosure’’). For any Fund that                                                                                  Statement of the Purpose of, and
                                                  employs an Affiliated Sub-Adviser, the                                                                            Statutory Basis for, the Proposed Rule
                                                  Fund will provide separate disclosure of                  SECURITIES AND EXCHANGE                                 Change
                                                  any fees paid to the Affiliated Sub-                      COMMISSION
                                                  Adviser.                                                                                                          1. Purpose
                                                     3. Applicants agree that any order                     [Release No. 34–78454; File No. SR–
                                                                                                            BatsBZX–2016–46]                                        Background
                                                  granting the requested relief will be
                                                  subject to the terms and conditions                                                                                  On August 30, 2011, the Exchange
                                                                                                            Self-Regulatory Organizations; Bats                     received approval of rules applicable to
                                                  stated in the Application. Such terms
                                                                                                            BZX Exchange, Inc.; Notice of Filing                    the qualification, listing and delisting of
                                                  and conditions provide for, among other
                                                                                                            and Immediate Effectiveness of a                        securities of issuers on the Exchange.3
                                                  safeguards, appropriate disclosure to
                                                                                                            Proposed Rule Change To Extend the                      More recently, the Exchange received
                                                                                                            Pilot Period for the Exchange’s                         approval to operate a pilot program that
                                                  other registered open-end management company or
                                                  series thereof that: (a) Is advised by RiskX              Supplemental Competitive Liquidity
                                                                                                                                                                    is designed to incentivize certain Market
                                                  Investments or its successor or by a person               Provider Program
                                                  controlling, controlled by, or under common
                                                                                                                                                                    Makers 4 registered with the Exchange
                                                  control with RiskX Investments or its successor           August 2, 2016.                                         as ETP CLPs, as defined in
                                                  (each, also an ‘‘Adviser’’); (b) uses the manager of         Pursuant to Section 19(b)(1) of the                  Interpretation and Policy .03 to Rule
                                                  managers structure described in the application;                                                                  11.8, to enhance liquidity on the
                                                  and (c) complies with the terms and conditions of
                                                                                                            Securities Exchange Act of 1934 (the
                                                  the application (any such series, a ‘‘Fund’’ and          ‘‘Act’’),1 and Rule 19b–4 thereunder,2                  Exchange in certain ETPs 5 listed on the
                                                  collectively, the ‘‘Funds’’). For purposes of the         notice is hereby given that on July 28,                 Exchange and thereby qualify to receive
                                                  requested order, ‘‘successor’’ is limited to an entity    2016, Bats BZX Exchange, Inc.                           part of a daily rebate as part of the
                                                  that results from a reorganization into another
mstockstill on DSK3G9T082PROD with NOTICES




                                                  jurisdiction or a change in the type of business
                                                                                                            (‘‘Exchange’’ or ‘‘BZX’’) filed with the
                                                  organization.                                             Securities and Exchange Commission                        3 See Securities Exchange Act Release No. 65225

                                                     2 The requested relief will not extend to any Sub-     (‘‘Commission’’) the proposed rule                      (August 30, 2011), 76 FR 55148 (September 6, 2011)
                                                                                                                                                                    (SR–BATS–2011–018).
                                                  Adviser, other than a ‘‘Wholly-Owned Sub-                 change as described in Items I and II                     4 As defined in BZX Rules, the term ‘‘Market
                                                  Adviser’’ (as defined in the application), that is an     below, which Items have been prepared
                                                  affiliated person, as defined in section 2(a)(3) of the                                                           Maker’’ means a Member that acts a as a market
                                                  Act, of a Fund or the Adviser, other than by reason                                                               maker pursuant to Chapter XI of BZX Rules.
                                                                                                              1 15   U.S.C. 78s(b)(1).                                5 ETP is defined in Interpretation and Policy
                                                  of serving as a sub-adviser to one or more of the
                                                  Funds (‘‘Affiliated Sub-Adviser’’).                         2 17   CFR 240.19b–4.                                 .03(b)(4) to Rule 11.8.



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                                                                                Federal Register / Vol. 81, No. 152 / Monday, August 8, 2016 / Notices                                                         52495

                                                  Program under Interpretation and Policy                 2. Statutory Basis                                      Market LLC 15 and NYSE Arca Equities,
                                                  .03 to Rule 11.8.6                                                                                              Inc.16
                                                     The Program was approved by the                         The Exchange believes that its
                                                                                                                                                                     The Exchange also believes that
                                                  Commission on a pilot basis running                     proposal is consistent with the
                                                                                                                                                                  extending the pilot program for an
                                                  one-year from the date of                               requirements of the Act and the rules
                                                                                                                                                                  additional three months will allow the
                                                  implementation.7 The Commission                         and regulations thereunder that are
                                                                                                                                                                  Program to continue to enhance
                                                  approved the Program on July 28, 2014.8                 applicable to a national securities
                                                                                                                                                                  competition among market participants
                                                  The Exchange implemented the Program                    exchange, and, in particular, with the
                                                                                                                                                                  by creating incentives for market makers
                                                  on July 28, 2014 and the pilot period for               requirements of Section 6(b) of the
                                                                                                                                                                  to compete to make better quality
                                                  the Program was originally scheduled to                 Act.13 In particular, the Exchange                      markets. By continuing to require that
                                                  end on July 28, 2015 until it was                       believes the proposed change furthers                   market makers both meet the quoting
                                                  extended to end on October 28, 2015,9                   the objectives of Section 6(b)(5) of the                requirements and also compete for the
                                                  later extended to January 28, 2016,10                   Act,14 in that it is designed to prevent                daily financial incentives, the quality of
                                                  again extended to April 28, 2016,11 and                 fraudulent and manipulative acts and                    quotes on the Exchange will continue to
                                                  most recently extended to July 28,                      practices, to promote just and equitable                improve. This, in turn, will attract more
                                                  2016.12                                                 principles of trade, to foster cooperation              liquidity to the Exchange and further
                                                                                                          and coordination with persons engaged                   improve the quality of trading in
                                                  Proposal To Extend the Operation of the                 in facilitating transactions in securities,
                                                  Program                                                                                                         exchange-listed securities participating
                                                                                                          and to remove impediments to and                        in the Program, which will also act to
                                                     The Exchange established the                         perfect the mechanism of a free and                     bolster the Exchange’s listing business.
                                                  Program in order to enhance liquidity                   open market and a national market
                                                  on the Exchange in certain ETPs listed                  system. The Exchange believes that                      C. Self-Regulatory Organization’s
                                                  on the Exchange (and thereby enhance                    extending the pilot period for the                      Statement on Comments on the
                                                  the Exchange’s ability to compete as a                  Program is consistent with these                        Proposed Rule Change Received From
                                                  listing venue) by providing a                           principles because the Program is                       Members, Participants or Others
                                                  mechanism by which ETP CLPs                             reasonably designed to enhance quote
                                                                                                                                                                    The Exchange has not solicited, and
                                                  compete for part of a daily quoting                     competition, improve liquidity in
                                                                                                                                                                  does not intend to solicit, comments on
                                                  incentive on the basis of providing the                 securities listed on the Exchange,
                                                                                                                                                                  this proposed rule change. The
                                                  most aggressive quotes with the greatest                support the quality of price discovery,
                                                                                                                                                                  Exchange has not received any written
                                                  amount of size. Such competition has                    promote market transparency, and
                                                                                                                                                                  comments from Members or other
                                                  the ability to reduce spreads, facilitate               increase competition for listings and
                                                                                                                                                                  interested parties.
                                                  the price discovery process, and reduce                 trade executions, while reducing
                                                  costs for investors trading in such                     spreads and transaction costs in such                   III. Date of Effectiveness of the
                                                  securities, thereby promoting capital                   securities. Maintaining and increasing                  Proposed Rule Change and Timing for
                                                  formation and helping the Exchange to                   liquidity in Exchange-listed securities                 Commission Action
                                                  compete as a listing venue. The                         will help raise investors’ confidence in
                                                  Exchange believes that extending the                    the fairness of the market and their                       Because the foregoing proposed rule
                                                  pilot is appropriate because the                        transactions. The extension of the pilot                change does not: (i) significantly affect
                                                  Exchange has prepared and is also                       period will allow Exchange to continue                  the protection of investors or the public
                                                  planning to submit a proposal to make                   to operate the Program while its                        interest; (ii) impose any significant
                                                  the Program permanent. As part of this                  proposal to make the Program                            burden on competition; and (iii) become
                                                  proposal, the Exchange has also                         permanent is under consideration by the                 operative for 30 days from the date on
                                                  prepared a report analyzing the                         Commission.                                             which it was filed, or such shorter time
                                                  Program. As such, the Exchange                                                                                  as the Commission may designate, it has
                                                  believes that it is appropriate to extend               B. Self-Regulatory Organization’s                       become effective pursuant to Section
                                                  the current operation of the Program for                Statement on Burden on Competition                      19(b)(3)(A) of the Act 17 and paragraph
                                                  three months in order to provide enough                                                                         (f)(6) of Rule 19b–4 thereunder.18
                                                                                                             The Exchange does not believe that
                                                  time for the Program to continue                                                                                   A proposed rule change filed under
                                                                                                          the proposed rule change will impose
                                                  operating while such proposal is under                                                                          Rule 19b–4(f)(6) normally does not
                                                                                                          any burden on competition that is not
                                                  consideration by the Commission.                                                                                become operative before 30 days from
                                                                                                          necessary or appropriate in furtherance
                                                  Through this filing, the Exchange seeks                                                                         the date of the filing. However, pursuant
                                                                                                          of the purposes of the Act. The
                                                  to extend the current pilot period of the                                                                       to Rule 19b–4(f)(6)(iii),19 the
                                                                                                          proposed rule change extends an
                                                  Program until October 28, 2016.                                                                                 Commission may designate a shorter
                                                                                                          established pilot program for three
                                                                                                                                                                  time if such action is consistent with the
                                                     6 See Securities Exchange Act Release No. 72692
                                                                                                          months, thus allowing the Program to
                                                  (July 28, 2014), 79 FR 44908 (August 1, 2014) (SR–
                                                                                                          enhance competition in both the listings                  15 See Securities Exchange Act Release No. 69195
                                                  BATS–2014–022) (‘‘CLP Approval Order’’).                market and in competition for market                    (March 20, 2013), 78 FR 18393 (March 26, 2013)
                                                     7 See id at 44909.                                   makers. The Program will continue to                    (SR–NASDAQ–2012–137).
                                                     8 Id.                                                promote competition in the listings                       16 See Securities Exchange Act Release No. 69335
                                                     9 See Securities Exchange Act Release No. 75518
                                                                                                          market by providing issuers with a                      (April 5, 2013), 78 FR 35340 (June 12, 2013) (SR–
                                                  (July 24, 2015), 80 FR 45566 (July 30, 2015 (SR–        vehicle for paying the Exchange                         NYSEARCA–2013–34).
                                                  BATS–2015–55).                                                                                                    17 15 U.S.C. 78s(b)(3)(A).
                                                                                                          additional fees in exchange for
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                                                     10 See Securities Exchange Act Release No. 76293                                                               18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
                                                  (October 28, 2015), 80 FR 67808 (November 3, 2015)      incentivizing tighter spreads and deeper                4(f)(6) requires a self-regulatory organization to give
                                                  (SR–BATS–2015–96).                                      liquidity in listed securities and allow                the Commission written notice of its intent to file
                                                     11 See Securities Exchange Act Release No. 77033
                                                                                                          the Exchange to continue to compete                     the proposed rule change at least five business days
                                                  (February 2, 2016), 81 FR 6558 (February 8, 2016)       with similar programs at Nasdaq Stock                   prior to the date of filing of the proposed rule
                                                  (SR–BATS–2016–12).                                                                                              change, or such shorter time as designated by the
                                                     12 See Securities Exchange Act Release No. 77721                                                             Commission. The Exchange has satisfied this
                                                                                                            13 15   U.S.C. 78f(b).                                requirement.
                                                  (April 27, 2016), 81 FR 26591 (May 3, 2016) (SR–
                                                  BatsBZX–2016–11).                                         14 15   U.S.C. 78f(b)(5).                               19 17 CFR 240.19b–4(f)(6)(iii).




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                                                  52496                         Federal Register / Vol. 81, No. 152 / Monday, August 8, 2016 / Notices

                                                  protection of investors and the public                  submission, all subsequent                            change pursuant to Section 19(b)(3)(A)
                                                  interest.                                               amendments, all written statements                    of the Act 3 and Rule 19b–4(f)(6)(iii)
                                                     The Exchange has asked the                           with respect to the proposed rule                     thereunder,4 which renders it effective
                                                  Commission to waive the 30-day                          change that are filed with the                        upon filing with the Commission. The
                                                  operative delay. The Exchange asserts                   Commission, and all written                           Commission is publishing this notice to
                                                  that waiver of the operative delay will                 communications relating to the                        solicit comments on the proposed rule
                                                  allow the Exchange to extend the                        proposed rule change between the                      change from interested persons.
                                                  Program prior to its expiration on July                 Commission and any person, other than
                                                  28, 2016, which will ensure that the                                                                          I. Self-Regulatory Organization’s
                                                                                                          those that may be withheld from the
                                                  Program continues to operate                                                                                  Statement of the Terms of Substance of
                                                                                                          public in accordance with the
                                                  uninterrupted while the Exchange and                                                                          the Proposed Rule Change
                                                                                                          provisions of 5 U.S.C. 552, will be
                                                  the Commission continue to analyze                      available for Web site viewing and                       The Exchange filed a proposal to
                                                  data regarding the Program. The                         printing in the Commission’s Public                   reflect the dissolution of one of the
                                                  Commission believes that waiving the                    Reference Room, 100 F Street NE.,                     Exchange’s intermediate holding
                                                  30-day operative delay is consistent                    Washington, DC 20549, on official                     companies, Direct Edge Holdings LLC
                                                  with the protection of investors and the                business days between the hours of                    (‘‘DEH’’), on December 31, 2015, by: (i)
                                                  public interest. Therefore, the                         10:00 a.m. and 3:00 p.m. Copies of such               Amending the bylaws of the Exchange’s
                                                  Commission hereby waives the 30-day                     filing also will be available for                     ultimate parent company, Bats Global
                                                  operative delay and designates the                      inspection and copying at the principal               Markets, Inc. (the ‘‘Corporation’’), to
                                                  proposed rule change to be operative                    office of the Exchange. All comments                  remove reference to DEH, as well as Bats
                                                  upon filing with the Commission.20                      received will be posted without change;               Global Markets Holdings, an
                                                     At any time within 60 days of the                    the Commission does not edit personal                 intermediate holding company wholly
                                                  filing of the proposed rule change, the                 identifying information from                          owned by the Corporation (‘‘BGMH’’),
                                                  Commission summarily may                                submissions. You should submit only                   (ii) amending the bylaws of the
                                                  temporarily suspend such rule change if                 information that you wish to make                     Exchange to remove reference to DEH,
                                                  it appears to the Commission that such                  available publicly. All submissions                   (iii) deleting the DEH certificate of
                                                  action is necessary or appropriate in the               should refer to File No. SR–BatsBZX–                  formation and operating agreement from
                                                  public interest, for the protection of                  2016–46 and should be submitted on or                 the Exchange’s rules, and (iv) amending
                                                  investors, or otherwise in furtherance of               before August 29, 2016.                               the operating agreement of the
                                                  the purposes of the Act.                                                                                      Exchange’s sole stockholder, Direct
                                                                                                            For the Commission, by the Division of
                                                                                                          Trading and Markets, pursuant to delegated            Edge LLC (‘‘DE LLC’’), to reflect that DE
                                                  IV. Solicitation of Comments                                                                                  LLC’s sole member is the Corporation
                                                                                                          authority.21
                                                    Interested persons are invited to                     Robert W. Errett,                                     rather than DEH and to make other
                                                  submit written data, views and                                                                                related changes.
                                                                                                          Deputy Secretary.
                                                  arguments concerning the foregoing,                                                                              The text of the proposed rule change
                                                                                                          [FR Doc. 2016–18697 Filed 8–5–16; 8:45 am]
                                                  including whether the proposal is                                                                             is available at the Exchange’s Web site
                                                                                                          BILLING CODE 8011–01–P                                at www.batstrading.com, at the
                                                  consistent with the Act. Comments may
                                                  be submitted by any of the following                                                                          principal office of the Exchange, and at
                                                  methods:                                                                                                      the Commission’s Public Reference
                                                                                                          SECURITIES AND EXCHANGE
                                                                                                                                                                Room.
                                                  Electronic Comments                                     COMMISSION
                                                    • Use the Commission’s Internet                                                                             II. Self-Regulatory Organization’s
                                                                                                          [Release No. 34–78460; File No. SR–
                                                  comment form (http://www.sec.gov/                       BatsEDGX–2016–36]                                     Statement of the Purpose of, and
                                                  rules/sro.shtml); or                                                                                          Statutory Basis for, the Proposed Rule
                                                    • Send an email to rule-                              Self-Regulatory Organizations; Bats                   Change
                                                  comments@sec.gov. Please include File                   EDGX Exchange, Inc.; Notice of Filing                    In its filing with the Commission, the
                                                  No. SR–BatsBZX–2016–46 on the                           and Immediate Effectiveness of a                      Exchange included statements
                                                  subject line.                                           Proposed Rule Change To Reflect the                   concerning the purpose of and basis for
                                                                                                          Dissolution of One of the Exchange’s                  the proposed rule change and discussed
                                                  Paper Comments                                          Intermediate Holding Companies,                       any comments it received on the
                                                     • Send paper comments in triplicate                  Direct Edge Holdings LLC                              proposed rule change. The text of these
                                                  to Secretary, Securities and Exchange                                                                         statements may be examined at the
                                                                                                          August 2, 2016.
                                                  Commission, 100 F Street NE.,                                                                                 places specified in Item IV below. The
                                                  Washington, DC 20549–1090.                                 Pursuant to Section 19(b)(1) of the
                                                                                                                                                                Exchange has prepared summaries, set
                                                                                                          Securities Exchange Act of 1934 (the
                                                  All submissions should refer to File No.                                                                      forth in Sections A, B, and C below, of
                                                                                                          ‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                  SR–BatsBZX–2016–46. This file number                                                                          the most significant parts of such
                                                                                                          notice is hereby given that on July 26,
                                                  should be included on the subject line                                                                        statements.
                                                                                                          2016, Bats EDGX Exchange, Inc. (the
                                                  if email is used. To help the                           ‘‘Exchange’’ or ‘‘EDGX’’) filed with the              (A) Self-Regulatory Organization’s
                                                  Commission process and review your                      Securities and Exchange Commission                    Statement of the Purpose of, and
                                                  comments more efficiently, please use                   (‘‘Commission’’) the proposed rule                    Statutory Basis for, the Proposed Rule
                                                  only one method. The Commission will                    change as described in Items I, II, and               Change
                                                  post all comments on the Commission’s
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                                                                                                          III below, which Items have been
                                                  Internet Web site (http://www.sec.gov/                  prepared by the Exchange. The                         1. Purpose
                                                  rules/sro.shtml). Copies of the                         Exchange has designated this proposal                    On December 17, 2015, DEH filed a
                                                                                                          as a ‘‘non-controversial’’ proposed rule              certificate of cancellation with the State
                                                     20 For purposes only of waiving the operative

                                                  delay for this proposal, the Commission has
                                                                                                                                                                of Delaware, effective December 31,
                                                                                                            21 17 CFR 200.30–3(a)(12).
                                                  considered the proposed rule’s impact on
                                                                                                            1 15 U.S.C. 78s(b)(1).                                3 15   U.S.C. 78s(b)(3)(A).
                                                  efficiency, competition, and capital formation. See
                                                  15 U.S.C. 78c(f).                                         2 17 CFR 240.19b–4.                                   4 17   CFR 240.19b–4(f)(6)(iii).



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Document Created: 2016-08-06 03:08:15
Document Modified: 2016-08-06 03:08:15
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation81 FR 52494 

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