81_FR_59182 81 FR 59016 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 21.8, Order Display and Book Processing

81 FR 59016 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 21.8, Order Display and Book Processing

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 166 (August 26, 2016)

Page Range59016-59018
FR Document2016-20457

Federal Register, Volume 81 Issue 166 (Friday, August 26, 2016)
[Federal Register Volume 81, Number 166 (Friday, August 26, 2016)]
[Notices]
[Pages 59016-59018]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-20457]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78630; File No. SR-BatsEDGX-2016-46]


Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 
21.8, Order Display and Book Processing

August 22, 2016.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 17, 2016, Bats EDGX Exchange, Inc. (the ``Exchange'' or 
``EDGX'') 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 Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to authorize the Exchange's equity 
options platform (``EDGX Options'') to amend Rule 21.8 (Order Display 
and Book Processing).
    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
    The Exchange is proposing to amend Rule 21.8 (Order Display and 
Book Processing), which sets forth the priority and order allocation 
rules applicable to EDGX Options. Rule 21.8 also describes the general 
priority rules for EDGX Options, including that quotes and orders are 
prioritized by price and then on a pro-rata basis according to size as 
well as various priority overlays applicable to the pro-rata allocation 
method. Specifically, Rule 21.8(g) (Primary Market Maker Participation 
Entitlements) allows for an exception to the pro-rata basis in cases of 
small size orders,\5\ where Primary Market Makers are allocated the 
full order amount if they have priority quotes at the NBBO. When the 
Exchange originally proposed rules for EDGX Options, the Exchange 
proposed to extend the small size order exception to Directed Market 
Makers as well. This aspect of the Exchange's Rules was eliminated 
prior to approval of rules for EDGX Options.\6\ However,

[[Page 59017]]

there is one remaining reference to Directed Market Makers in Rule 
21.8(g)(2), which describes the Exchange's monitoring of the small size 
order exception. Because the small size order exception is limited to 
Primary Makers, the Exchange proposes to eliminate reference to 
Directed Market Makers in Rule 21.8(g)(2). This amendment will align 
the Exchange with other option exchanges,\7\ and will ensure internal 
consistency of the Exchange's rulebook, which has been previously 
amended to delete the proposed rule granting Directed Market Makers 
participation entitlements to trade against small size orders.\8\
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    \5\ Small size orders are defined as five or fewer contracts. 
See Exchange Rule 21.8(g)(2).
    \6\ See Securities Exchange Act Release No. 75650 (August 7, 
2015), 80 FR 48600 (August 13, 2015) (SR-EDGX-2015-18) (Notice of 
Filing of Amendment Nos. 1 and 2 and Order Granting Accelerated 
Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1, 
2, and 3 Thereto, To Establish Rules Governing the Trading of 
Options on the EDGX Options Market).
    \7\ See, e.g., BX Options, chapter VI, section 10(1)(C)(2), 
``Orders for 5 contracts or fewer shall be allocated to the LMM. The 
Exchange will review this provision quarterly and will maintain the 
small order size at a level that will not allow orders of 5 
contracts or less executed by the LMM to account for more than 40% 
of the volume executed on the Exchange. This provision shall not 
apply if the order of 5 contracts or fewer is directed to a DMM who 
is quoting at or better than the NBBO.''
    \8\ See supra note 6.
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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.\9\ Specifically, the 
proposal is consistent with section 6(b)(5) of the Act \10\ because 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, 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The amended rule will remove reference to Directed Market Makers in 
the context of the small size order exception. Thus, this amendment 
will align the Exchange with other options exchanges,\11\ and will 
ensure internal consistency of the Exchange's rulebook, which has been 
previously amended to delete the proposed rule granting Directed Market 
Makers participation entitlements to trade against small size orders.
---------------------------------------------------------------------------

    \11\ See supra note 7.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    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.\12\ Specifically, the 
proposal is consistent with section 6(b)(5) of the Act \13\ because 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, 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.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The amended rule will remove reference to Directed Market Makers in 
the context of the small size order exception. Thus, this amendment 
will align the Exchange with other options exchanges,\14\ and will 
ensure internal consistency of the Exchange's rulebook, which has been 
previously amended to delete the proposed rule granting Directed Market 
Makers participation entitlements to trade against small size orders.
---------------------------------------------------------------------------

    \14\ See supra note 7.
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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 \15\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\16\
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(a).
    \16\ 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.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \17\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\18\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange requested 
that the Commission waive the 30-day operative delay. The Exchange 
states that the rule change proposed herein is a minor change to ensure 
internal consistency of the Exchange's rulebook. Further, the Exchange 
states that the proposed change is based on an existing rule of another 
options exchange \19\ and does not raise any new policy issues.
---------------------------------------------------------------------------

    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ 17 CFR 240.19b-4(f)(6)(iii).
    \19\ See supra note 7.
---------------------------------------------------------------------------

    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest, as 
the proposed rule change is a non-substantive change and will promote 
internal consistency of the Exchange's rulebook and avoid potential 
confusion as to the application of the Exchange's rules. Therefore, the 
Commission designates the proposed rule change to be operative as of 
the date of filing.\20\
---------------------------------------------------------------------------

    \20\ For purposes only of waiving the operative delay, 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-BatsEDGX-2016-46 on the subject line.

[[Page 59018]]

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-BatsEDGX-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 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 No. SR-BatsEDGX-2016-46 and should be 
submitted on or before September 16, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
Robert W. Errett,
Deputy Secretary.
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    \21\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-20457 Filed 8-25-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                  59016                          Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices

                                                  19(b)(3)(A) of the Act 18 and Rule 19b–                 available for Web site viewing and                    I. Self-Regulatory Organization’s
                                                  4(f)(6) thereunder.19                                   printing in the Commission’s Public                   Statement of the Terms of Substance of
                                                     At any time within 60 days of the                    Reference Room, 100 F Street NE.,                     the Proposed Rule Change
                                                  filing of the proposed rule change, the                 Washington, DC 20549, on official                        The Exchange filed a proposal to
                                                  Commission summarily may                                business days between the hours of                    authorize the Exchange’s equity options
                                                  temporarily suspend such rule change if                 10:00 a.m. and 3:00 p.m. Copies of the                platform (‘‘EDGX Options’’) to amend
                                                  it appears to the Commission that such                  filing also will be available for                     Rule 21.8 (Order Display and Book
                                                  action is necessary or appropriate in the               inspection and copying at the principal               Processing).
                                                  public interest, for the protection of                  office of the Exchange. All comments                     The text of the proposed rule change
                                                  investors, or otherwise in furtherance of               received will be posted without change;               is available at the Exchange’s Web site
                                                  the purposes of the Act. If the                         the Commission does not edit personal                 at www.batstrading.com, at the
                                                  Commission takes such action, the                                                                             principal office of the Exchange, and at
                                                                                                          identifying information from
                                                  Commission shall institute proceedings                                                                        the Commission’s Public Reference
                                                                                                          submissions. You should submit only
                                                  to determine whether the proposed rule                                                                        Room.
                                                  change should be approved or                            information that you wish to make
                                                  disapproved.                                            available publicly. All submissions                   II. Self-Regulatory Organization’s
                                                                                                          should refer to File No. SR–BatsBZX–                  Statement of the Purpose of, and
                                                  IV. Solicitation of Comments                            2016–50, and should be submitted on or                Statutory Basis for, the Proposed Rule
                                                    Interested persons are invited to                     before September 16, 2016.                            Change
                                                  submit written data, views, and                           For the Commission, by the Division of                 In its filing with the Commission, the
                                                  arguments concerning the foregoing,                     Trading and Markets, pursuant to delegated            Exchange included statements
                                                  including whether the proposed rule                     authority.20                                          concerning the purpose of and basis for
                                                  change is consistent with the Act.                      Robert W. Errett,                                     the proposed rule change and discussed
                                                  Comments may be submitted by any of                                                                           any comments it received on the
                                                                                                          Deputy Secretary.
                                                  the following methods:                                                                                        proposed rule change. The text of these
                                                                                                          [FR Doc. 2016–20459 Filed 8–25–16; 8:45 am]
                                                  Electronic Comments                                                                                           statements may be examined at the
                                                                                                          BILLING CODE 8011–01–P                                places specified in Item IV below. The
                                                    • Use the Commission’s Internet                                                                             Exchange has prepared summaries, set
                                                  comment form (http://www.sec.gov/                                                                             forth in sections A, B, and C below, of
                                                  rules/sro.shtml); or                                    SECURITIES AND EXCHANGE                               the most significant parts of such
                                                    • Send an email to rule-comments@                     COMMISSION                                            statements.
                                                  sec.gov. Please include File No. SR–
                                                  BatsBZX–2016–50 on the subject line.                                                                          A. Self-Regulatory Organization’s
                                                                                                          [Release No. 34–78630; File No. SR–
                                                                                                          BatsEDGX–2016–46]
                                                                                                                                                                Statement of the Purpose of, and
                                                  Paper Comments                                                                                                Statutory Basis for, the Proposed Rule
                                                     • Send paper comments in triplicate                  Self-Regulatory Organizations; Bats                   Change
                                                  to Secretary, Securities and Exchange                   EDGX Exchange, Inc.; Notice of Filing                 1. Purpose
                                                  Commission, 100 F Street NE.,                           and Immediate Effectiveness of a
                                                  Washington, DC 20549–1090.                                                                                       The Exchange is proposing to amend
                                                                                                          Proposed Rule Change to Rule 21.8,                    Rule 21.8 (Order Display and Book
                                                  All submissions should refer to File No.                Order Display and Book Processing                     Processing), which sets forth the priority
                                                  SR–BatsBZX–2016–50. This file number                                                                          and order allocation rules applicable to
                                                  should be included on the subject line                  August 22, 2016.
                                                                                                                                                                EDGX Options. Rule 21.8 also describes
                                                  if email is used. To help the                              Pursuant to section 19(b)(1) of the                the general priority rules for EDGX
                                                  Commission process and review your                      Securities Exchange Act of 1934 (the                  Options, including that quotes and
                                                  comments more efficiently, please use                   ‘‘Act’’),1 and Rule 19b–4 thereunder,2                orders are prioritized by price and then
                                                  only one method. The Commission will                    notice is hereby given that on August                 on a pro-rata basis according to size as
                                                  post all comments on the Commission’s                   17, 2016, Bats EDGX Exchange, Inc. (the               well as various priority overlays
                                                  Internet Web site (http://www.sec.gov/                  ‘‘Exchange’’ or ‘‘EDGX’’) filed with the              applicable to the pro-rata allocation
                                                  rules/sro.shtml). Copies of the                         Securities and Exchange Commission                    method. Specifically, Rule 21.8(g)
                                                  submission, all subsequent                              (‘‘Commission’’) the proposed rule                    (Primary Market Maker Participation
                                                  amendments, all written statements                      change as described in Items I and II                 Entitlements) allows for an exception to
                                                  with respect to the proposed rule                                                                             the pro-rata basis in cases of small size
                                                                                                          below, which Items have been prepared
                                                  change that are filed with the                                                                                orders,5 where Primary Market Makers
                                                                                                          by the Exchange. The Exchange has
                                                  Commission, and all written
                                                                                                          designated this proposal as a ‘‘non-                  are allocated the full order amount if
                                                  communications relating to the
                                                                                                          controversial’’ proposed rule change                  they have priority quotes at the NBBO.
                                                  proposed rule change between the
                                                                                                          pursuant to section 19(b)(3)(A) of the                When the Exchange originally proposed
                                                  Commission and any person, other than
                                                                                                          Act 3 and Rule 19b–4(f)(6)(iii)                       rules for EDGX Options, the Exchange
                                                  those that may be withheld from the
                                                                                                          thereunder,4 which renders it effective               proposed to extend the small size order
                                                  public in accordance with the
                                                                                                          upon filing with the Commission. The                  exception to Directed Market Makers as
                                                  provisions of 5 U.S.C. 552, will be
                                                                                                          Commission is publishing this notice to               well. This aspect of the Exchange’s
                                                                                                                                                                Rules was eliminated prior to approval
mstockstill on DSK3G9T082PROD with NOTICES




                                                    18 15  U.S.C. 78s(b)(3)(A).                           solicit comments on the proposed rule
                                                    19 17  CFR 240.19b–4(f)(6). As required under Rule    change from interested persons.                       of rules for EDGX Options.6 However,
                                                  19b–4(f)(6)(iii), the Exchange provided the
                                                                                                                                                                  5 Small size orders are defined as five or fewer
                                                  Commission with written notice of its intent to file      2017 CFR 200.30–3(a)(12).                           contracts. See Exchange Rule 21.8(g)(2).
                                                  the proposed rule change, along with a brief              1 15
                                                  description and the text of the proposed rule                  U.S.C. 78s(b)(1).                                6 See Securities Exchange Act Release No. 75650
                                                                                                            2 17 CFR 240.19b–4.
                                                  change, at least five business days prior to the date                                                         (August 7, 2015), 80 FR 48600 (August 13, 2015)
                                                                                                            3 15 U.S.C. 78s(b)(3)(A).
                                                  of filing of the proposed rule change, or such                                                                (SR–EDGX–2015–18) (Notice of Filing of
                                                  shorter time as designated by the Commission.             4 17 CFR 240.19b–4(f)(6)(iii).                      Amendment Nos. 1 and 2 and Order Granting



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                                                                                Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices                                                        59017

                                                  there is one remaining reference to                     B. Self-Regulatory Organization’s                            A proposed rule change filed under
                                                  Directed Market Makers in Rule                          Statement on Burden on Competition                        Rule 19b–4(f)(6) 17 normally does not
                                                  21.8(g)(2), which describes the                            The Exchange believes that its                         become operative for 30 days after the
                                                  Exchange’s monitoring of the small size                 proposal is consistent with the                           date of filing. However, pursuant to
                                                  order exception. Because the small size                 requirements of the Act and the rules                     Rule 19b–4(f)(6)(iii),18 the Commission
                                                  order exception is limited to Primary                   and regulations thereunder that are                       may designate a shorter time if such
                                                  Makers, the Exchange proposes to                        applicable to a national securities                       action is consistent with the protection
                                                  eliminate reference to Directed Market                  exchange, and in particular, with the                     of investors and the public interest. The
                                                  Makers in Rule 21.8(g)(2). This                         requirements of section 6(b) of the                       Exchange requested that the
                                                  amendment will align the Exchange                       Act.12 Specifically, the proposal is                      Commission waive the 30-day operative
                                                  with other option exchanges,7 and will                  consistent with section 6(b)(5) of the                    delay. The Exchange states that the rule
                                                  ensure internal consistency of the                      Act 13 because it is designed to prevent                  change proposed herein is a minor
                                                  Exchange’s rulebook, which has been                     fraudulent and manipulative acts and                      change to ensure internal consistency of
                                                  previously amended to delete the                        practices, to promote just and equitable                  the Exchange’s rulebook. Further, the
                                                  proposed rule granting Directed Market                  principles of trade, to foster cooperation                Exchange states that the proposed
                                                  Makers participation entitlements to                    and coordination with persons engaged                     change is based on an existing rule of
                                                  trade against small size orders.8                       in facilitating transactions in securities,               another options exchange 19 and does
                                                                                                          to remove impediments to, and perfect                     not raise any new policy issues.
                                                  2. Statutory Basis
                                                                                                          the mechanism of, a free and open                            The Commission believes that
                                                     The Exchange believes that its                       market and a national market system                       waiving the 30-day operative delay is
                                                  proposal is consistent with the                         and, in general, to protect investors and                 consistent with the protection of
                                                  requirements of the Act and the rules                   the public interest.                                      investors and the public interest, as the
                                                  and regulations thereunder that are                        The amended rule will remove                           proposed rule change is a non-
                                                  applicable to a national securities                     reference to Directed Market Makers in                    substantive change and will promote
                                                  exchange, and in particular, with the                   the context of the small size order                       internal consistency of the Exchange’s
                                                  requirements of section 6(b) of the Act.9               exception. Thus, this amendment will                      rulebook and avoid potential confusion
                                                  Specifically, the proposal is consistent                align the Exchange with other options                     as to the application of the Exchange’s
                                                  with section 6(b)(5) of the Act 10 because              exchanges,14 and will ensure internal                     rules. Therefore, the Commission
                                                  it is designed to prevent fraudulent and                consistency of the Exchange’s rulebook,                   designates the proposed rule change to
                                                  manipulative acts and practices, to                     which has been previously amended to                      be operative as of the date of filing.20
                                                  promote just and equitable principles of                delete the proposed rule granting                            At any time within 60 days of the
                                                  trade, to foster cooperation and                        Directed Market Makers participation                      filing of the proposed rule change, the
                                                  coordination with persons engaged in                    entitlements to trade against small size                  Commission summarily may
                                                  facilitating transactions in securities, to             orders.                                                   temporarily suspend such rule change if
                                                  remove impediments to, and perfect the                  C. Self-Regulatory Organization’s                         it appears to the Commission that such
                                                  mechanism of, a free and open market                    Statement on Comments on the                              action is necessary or appropriate in the
                                                  and a national market system and, in                    Proposed Rule Change Received From                        public interest, for the protection of
                                                  general, to protect investors and the                   Members, Participants or Others                           investors, or otherwise in furtherance of
                                                  public interest.                                                                                                  the purposes of the Act.
                                                                                                            The Exchange has not solicited, and
                                                     The amended rule will remove                         does not intend to solicit, comments on                   IV. Solicitation of Comments
                                                  reference to Directed Market Makers in                  this proposed rule change. The
                                                  the context of the small size order                                                                                 Interested persons are invited to
                                                                                                          Exchange has not received any written                     submit written data, views and
                                                  exception. Thus, this amendment will                    comments from members or other
                                                  align the Exchange with other options                                                                             arguments concerning the foregoing,
                                                                                                          interested parties.                                       including whether the proposal is
                                                  exchanges,11 and will ensure internal
                                                  consistency of the Exchange’s rulebook,                 III. Date of Effectiveness of the                         consistent with the Act. Comments may
                                                  which has been previously amended to                    Proposed Rule Change and Timing for                       be submitted by any of the following
                                                  delete the proposed rule granting                       Commission Action                                         methods:
                                                  Directed Market Makers participation                      Because the foregoing proposed rule                     Electronic Comments
                                                  entitlements to trade against small size                change does not: (i) Significantly affect
                                                  orders.                                                 the protection of investors or the public                   • Use the Commission’s Internet
                                                                                                          interest; (ii) impose any significant                     comment form (http://www.sec.gov/
                                                  Accelerated Approval of a Proposed Rule Change,         burden on competition; and (iii) become                   rules/sro.shtml); or
                                                  as Modified by Amendment Nos. 1, 2, and 3               operative for 30 days from the date on                      • Send an email to rule-comments@
                                                  Thereto, To Establish Rules Governing the Trading                                                                 sec.gov. Please include File No. SR–
                                                  of Options on the EDGX Options Market).
                                                                                                          which it was filed, or such shorter time
                                                    7 See, e.g., BX Options, chapter VI, section          as the Commission may designate, it has                   BatsEDGX–2016–46 on the subject line.
                                                  10(1)(C)(2), ‘‘Orders for 5 contracts or fewer shall    become effective pursuant to section
                                                  be allocated to the LMM. The Exchange will review       19(b)(3)(A) of the Act 15 and                             the proposed rule change at least five business days
                                                  this provision quarterly and will maintain the small    subparagraph (f)(6) of Rule 19b–4                         prior to the date of filing of the proposed rule
                                                  order size at a level that will not allow orders of                                                               change, or such shorter time as designated by the
                                                                                                          thereunder.16
mstockstill on DSK3G9T082PROD with NOTICES




                                                  5 contracts or less executed by the LMM to account                                                                Commission. The Exchange has satisfied this
                                                  for more than 40% of the volume executed on the                                                                   requirement.
                                                  Exchange. This provision shall not apply if the           12 15  U.S.C. 78f(b).                                     17 17 CFR 240.19b–4(f)(6).
                                                  order of 5 contracts or fewer is directed to a DMM        13 15  U.S.C. 78f(b)(5).                                  18 17 CFR 240.19b–4(f)(6)(iii).
                                                  who is quoting at or better than the NBBO.’’              14 See supra note 7.                                      19 See supra note 7.
                                                    8 See supra note 6.                                     15 15 U.S.C. 78s(b)(3)(a).                                20 For purposes only of waiving the operative
                                                    9 15 U.S.C. 78f(b).                                     16 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–       delay, the Commission has considered the proposed
                                                    10 15 U.S.C. 78f(b)(5).
                                                                                                          4(f)(6) requires a self-regulatory organization to give   rule’s impact on efficiency, competition, and capital
                                                    11 See supra note 7.                                  the Commission written notice of its intent to file       formation. See 15 U.S.C. 78c(f).



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                                                  59018                            Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices

                                                  Paper Comments                                            SECURITIES AND EXCHANGE                                the most significant parts of such
                                                                                                            COMMISSION                                             statements.
                                                    • Send paper comments in triplicate
                                                  to Secretary, Securities and Exchange                                                                            A. Self-Regulatory Organization’s
                                                                                                            [Release No. 34–78631; File No. SR–                    Statement of the Purpose of, and the
                                                  Commission, 100 F Street NE.,                             BatsBYX–2016–21]
                                                  Washington, DC 20549–1090.                                                                                       Statutory Basis for, the Proposed Rule
                                                                                                                                                                   Change
                                                                                                            Self-Regulatory Organizations; Bats
                                                  All submissions should refer to File No.
                                                                                                            BYX Exchange, Inc.; Notice of Filing                   1. Purpose
                                                  SR–BatsEDGX–2016–46. This file
                                                                                                            and Immediate Effectiveness of a                          The Exchange proposes to amend
                                                  number should be included on the
                                                                                                            Proposed Rule Change To Amend Rule                     Rule 11.22 to adopt a new market data
                                                  subject line if email is used. To help the                11.22, Data Products, To Adopt a New
                                                  Commission process and review your                                                                               product known as BYX Summary
                                                                                                            Market Data Product Known as BYX                       Depth.5 BYX Summary Depth would be
                                                  comments more efficiently, please use                     Summary Depth
                                                  only one method. The Commission will                                                                             a data feed that offers aggregated two-
                                                                                                            August 22, 2016.                                       sided quotations for all displayed orders
                                                  post all comments on the Commission’s
                                                                                                               Pursuant to section 19(b)(1) of the                 entered into the System 6 for up to five
                                                  Internet Web site (http://www.sec.gov/
                                                                                                            Securities Exchange Act of 1934 (the                   (5) price levels for securities traded on
                                                  rules/sro.shtml). Copies of the
                                                                                                            ‘‘Act’’),1 and Rule 19b–4 thereunder,2                 the Exchange and for which the
                                                  submission, all subsequent                                                                                       Exchange reports quotes under the
                                                  amendments, all written statements                        notice is hereby given that on August
                                                                                                            11, 2016, Bats BYX Exchange, Inc. (the                 Consolidated Tape Association (‘‘CTA’’)
                                                  with respect to the proposed rule                                                                                Plan or the Nasdaq/UTP Plan. BYX
                                                  change that are filed with the                            ‘‘Exchange’’ or ‘‘BYX’’) filed with the
                                                                                                            Securities and Exchange Commission                     Summary Depth also contains the
                                                  Commission, and all written                                                                                      individual last sale information, Market
                                                  communications relating to the                            (‘‘Commission’’) the proposed rule
                                                                                                            change as described in Items I and II                  Status, Retail Liquidity Identifier,
                                                  proposed rule change between the                                                                                 Trading Status, and Trade Break
                                                  Commission and any person, other than                     below, which Items have been prepared
                                                                                                            by the Exchange. The Exchange has                      messages. The individual last sale
                                                  those that may be withheld from the                                                                              information will include the price, size,
                                                                                                            designated this proposal as a ‘‘non-
                                                  public in accordance with the                                                                                    and time of execution. The last sale
                                                                                                            controversial’’ proposed rule change
                                                  provisions of 5 U.S.C. 552, will be                       pursuant to section 19(b)(3)(A) of the                 message will also include the
                                                  available for Web site viewing and                        Act 3 and Rule 19b–4(f)(6) thereunder,4                cumulative number of shares executed
                                                  printing in the Commission’s Public                       which renders it effective upon filing                 on the Exchange for that trading day.
                                                  Reference Room, 100 F Street NE.,                         with the Commission. The Commission                    The Exchange will disseminate the
                                                  Washington, DC 20549, on official                         is publishing this notice to solicit                   aggregate Best Bid and Offer (‘‘BBO’’)
                                                  business days between the hours of                        comments on the proposed rule change                   and last sale information through BYX
                                                  10:00 a.m. and 3:00 p.m. Copies of such                   from interested persons.                               Summary Depth no earlier than it
                                                  filing will also be available for                                                                                provides its BBO and last sale
                                                  inspection and copying at the principal                   I. Self-Regulatory Organization’s                      information to the processors under the
                                                  office of the Exchange. All comments                      Statement of the Terms of Substance of                 CTA Plan or the Nasdaq/UTP Plan.
                                                                                                            the Proposed Rule Change                                  The Market Status message will
                                                  received will be posted without change;
                                                                                                               The Exchange filed a proposal to                    reflect a change in the status of the
                                                  the Commission does not edit personal
                                                                                                            amend Rule 11.22 to adopt a new                        Exchange. For example, the Market
                                                  identifying information from                                                                                     Status message would indicate whether
                                                  submissions. You should submit only                       market data product known as BYX
                                                                                                            Summary Depth.                                         the Exchange is experiencing a systems
                                                  information that you wish to make                                                                                issue or disruption resulting in
                                                  available publicly. All submissions                          The text of the proposed rule change
                                                                                                            is available at the Exchange’s Web site                quotation or trade information not
                                                  should refer to File No. SR–BatsEDGX–                                                                            currently being disseminated as part of
                                                  2016–46 and should be submitted on or                     at www.batstrading.com, at the
                                                                                                            principal office of the Exchange, and at               the aggregated BBO. The Market Status
                                                  before September 16, 2016.                                                                                       message will also indicate when
                                                                                                            the Commission’s Public Reference
                                                    For the Commission, by the Division of                  Room.                                                  Exchange has resolved a systems issue
                                                  Trading and Markets, pursuant to delegated                                                                       or disruption and is properly reflecting
                                                  authority.21                                              II. Self-Regulatory Organization’s                     the status of the aggregated BBO. The
                                                  Robert W. Errett,
                                                                                                            Statement of the Purpose of, and                       Retail Liquidity Identifier indicator
                                                                                                            Statutory Basis for, the Proposed Rule                 message will be disseminated pursuant
                                                  Deputy Secretary.
                                                                                                            Change                                                 to the Exchange’s Retail Price
                                                  [FR Doc. 2016–20457 Filed 8–25–16; 8:45 am]
                                                                                                              In its filing with the Commission, the               Improvement (‘‘RPI’’) Program.7 The
                                                  BILLING CODE 8011–01–P
                                                                                                            Exchange included statements                             5 Currently, the paragraphs within Rule 11.22
                                                                                                            concerning the purpose of and basis for                skip from paragraph (i) to paragraph (k). The
                                                                                                            the proposed rule change and discussed                 Exchange now proposes to renumber current
                                                                                                            any comments it received on the                        paragraph (k) to Rule 11.22 to as paragraph (j) to
                                                                                                            proposed rule change. The text of these                ensure the paragraphs within the rule are
                                                                                                                                                                   consecutively numbered.
                                                                                                            statements may be examined at the                        6 ‘‘System’’ is defined as the ‘‘the electronic
mstockstill on DSK3G9T082PROD with NOTICES




                                                                                                            places specified in Item IV below. The                 communications and trading facility designated by
                                                                                                            Exchange has prepared summaries, set                   the Board through which securities orders of Users
                                                                                                            forth in Sections A, B, and C below, of                Are consolidated for ranking, execution and, when
                                                                                                                                                                   applicable, routing away.’’ See Exchange Rule
                                                                                                                                                                   1.5(aa).
                                                                                                              1 15 U.S.C. 78s(b)(1).                                 7 For a description of the RPI Program, see BYX
                                                                                                              2 17 CFR 240.19b–4.                                  Rule 11.24. See also Securities Exchange Act
                                                                                                              3 15 U.S.C. 78s(b)(3)(A).
                                                                                                                                                                   Release No. 68303 (November 27, 2012), 77 FR
                                                    21 17   CFR 200.30–3(a)(12).                              4 17 CFR 240.19b–4(f)(6).                            71652 (December 3, 2012) (SR–BYX–2012–019)



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Document Created: 2016-08-26 10:40:39
Document Modified: 2016-08-26 10:40:39
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 59016 

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