81 FR 62192 - Self-Regulatory Organizations; Bats BYX Exchange, Inc.; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Exchange Rule 11.27 To Describe Changes to System Functionality Necessary To Implement the Regulation NMS Plan To Implement a Tick Size Pilot Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 174 (September 8, 2016)
Federal Register Volume 81, Issue 174 (September 8, 2016)
| Page Range | 62192-62195 | |
| FR Document | 2016-21649 |
[Federal Register Volume 81, Number 174 (Thursday, September 8, 2016)] [Notices] [Pages 62192-62195] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-21649] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78766; File No. SR-BatsBYX-2016-17] Self-Regulatory Organizations; Bats BYX Exchange, Inc.; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 1, To Amend Exchange Rule 11.27 To Describe Changes to System Functionality Necessary To Implement the Regulation NMS Plan To Implement a Tick Size Pilot Program September 2, 2016. I. Introduction On June 29, 2016, Bats BYX Exchange, Inc. (``Exchange'' or ``BYX'') filed with the Securities and Exchange Commission (``Commission'') pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Exchange Act'' or ``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to amend Exchange Rule 11.27(a) to specify that orders entered into the Exchange's Retail Price Improvement (``RPI'') Program qualify for certain exceptions to the Regulation NMS Plan to Implement a Tick Size Pilot Program (``Plan'' or ``Pilot'') and to adopt Exchange Rule 11.27(c) to describe changes to System \3\ functionality to [[Page 62193]] implement the Plan.\4\ The proposed rule change was published for comment in the Federal Register on July 20, 2016.\5\ The Commission received one comment letter from the Exchange in response to the Notice.\6\ On September 1, 2016, the Exchange filed an amendment to the proposed rule change (``Amendment No. 1''), which supersedes and replaces the proposal in its entirety.\7\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ The term ``System'' is defined as the ``electronic communications and trading facility designated by the Board of Directors of the Exchange through which securities orders of Users are consolidated for ranking, execution and, when applicable, routing away.'' See Exchange Rule 1.5(aa). \4\ See Securities Exchange Act Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015) (``Approval Order''). Unless otherwise specified, capitalized terms used in this rule filing are defined as set forth in the Plan. \5\ Securities Exchange Act Release No. 78333 (July 14, 2016), 81 FR 47198 (``Notice''). \6\ See Letter to Brent J. Fields, Secretary, Commission, from Eric Swanson, General Counsel, Exchange, dated July 26, 2016 (``Exchange Letter''). \7\ In Amendment No. 1, the Exchange proposes to: (1) Apply the changes in proposed Rule 11.27(c) to all Pilot Securities; (2) clarify in Rule 11.27(c)(1) that the increment for BYX Market Orders and Rule 11.27(c)(5) that the increment for Market Maker Peg Orders will be at ``permissible'' increments; (3) state in Rule 11.27(c)(2) that Market Pegged Orders, Rule 11.27(c)(4) that Discretionary Orders, and Rule 11.27(c)(6) that Supplemental Peg Orders will not be accepted in Pilot Securities; (4) clarify in Rule 11.27(c)(3) that Mid-Point Peg Orders may not be alternatively pegged to one minimum price variation inside the same side of the NBBO as the order; (5) delete the proposal to amend Non-Displayed Orders; and (6) clarify how orders subject to Display-Price Sliding will operate when they are unexecutable at the locking price. --------------------------------------------------------------------------- This order provides notice of filing of Amendment No. 1 and approves the proposal, as modified by Amendment No. 1, on an accelerated basis. II. Description of the Amended Proposal The proposed amendments to Exchange Rule 11.27(a) would specify that orders entered into the Exchange's RPI Program would qualify for certain exceptions to the Plan. Proposed Exchange Rule 11.27(c) would specify the order handling for the following order types in Pilot Securities: (i) BYX Market Orders; (ii) Market Pegged Orders; (iii) Mid-Point Peg Orders; (iv) Discretionary Orders; (v) Market Maker Peg Orders; (vi) Supplemental Peg Orders; and (vii) orders subject to Display-Price Sliding. As proposed, such order handling would apply to all orders entered into the System for Pilot Securities (i.e., Test Group One, Test Group Two, Test Group Three, and the Control Group). A. Amendment to Exchange Rule 11.27(a) The proposed amendments to Exchange Rule 11.27(a) would specify that the RPI Program qualifies as a Participant-operated retail liquidity program under the Plan and that Retail Orders \8\ entered into the Exchange's RPI Program qualify as Retail Investor Orders under the Plan. Accordingly, amended Exchange Rule 11.27(a)(4), (a)(5), and (a)(6) would allow orders entered into the RPI Program to be ranked and accepted in increments of less than $0.05 in Test Groups One, Two, and Three, respectively; amended Exchange Rule 11.27 (a)(5) and (a)(6) would specify that Retail Orders entered into the Exchange's RPI Program may be provided with price improvement that is at least $0.005 better than the best protected bid and best protected offer (``PBBO'') \9\ in Test Groups Two and Three, respectively; and amended Exchange Rule 11.27(a)(6)(D) would specify that Retail Orders entered into the Exchange's RPI Program that are executed with at least $0.005 price improvement qualify for the exception to the Trade-at Prohibition in Test Group Three. In addition, amended Exchange Rule 11.27(a)(4) would specify that in Test Group One Pilot Securities trades may continue at any price increment that is permitted under Exchange Rule 11.11, Price Variations. --------------------------------------------------------------------------- \8\ A ``Retail Order'' is defined in Exchange Rule 11.24(a)(2) as an agency order or riskless principal order that meets the criteria of FINRA Rule 5320.03 that originates from a natural person and is submitted to the Exchange by a Retail Member organization (``RMO''), provided that no change is made to the terms of the order with respect to price or side of market and the order does not originate from a trading algorithm or any computerized methodology. The Exchange believes that the definition of Retail Order is also substantially similar to the definition of Retail Investor Order under the Plan. See Section I(DD) of the Plan. \9\ See 17 CFR 242.600(57). See also Section I.Z of the Plan. --------------------------------------------------------------------------- B. Proposed Exchange Rule 11.27(c) The Exchange proposes in Exchange Rule 11.27(c) specific procedures for handling, executing, repricing and displaying certain order types and order type instructions. The provisions in proposed Rule 11.27(c) would apply to all Pilot Securities. Further, the Exchange proposes that only the provisions in Exchange Rules 11.27(a) and (b) would be limited to the Pilot Period.\10\ --------------------------------------------------------------------------- \10\ The Exchange proposes to clarify in the introduction to Exchange Rule 11.27 that only the provisions in 11.27(a) and 11.27(b) would be in effect during the Pilot Period. --------------------------------------------------------------------------- 1. BYX Market Orders Proposed Exchange Rule 11.27(c)(1) provides that for purposes of determining whether the execution price of a BYX Market Order is more than 5 percent worse than the national best bid or offer (``NBBO'') \11\ under current Exchange Rule 11.9(a)(2), the execution price for a buy (sell) will be rounded down (up) to the nearest permissible increment.\12\ --------------------------------------------------------------------------- \11\ See Exchange Rule 1.5(o). \12\ See Amendment No. 1. --------------------------------------------------------------------------- 2. Market Pegged Orders Under Exchange Rule 11.9(c)(8)(B), a Market Pegged Order is pegged to the contra-side NBBO. BYX Users can specify that a Market Pegged Order will offset the inside quote on the contra side of the market by an amount (``Offset Amount''). Under proposed Exchange Rule 11.27(c)(2), the Exchange proposes not to accept Market Pegged Orders, regardless of price, in any Pilot Security.\13\ --------------------------------------------------------------------------- \13\ Id. --------------------------------------------------------------------------- 3. Mid-Point Peg Orders Under Exchange Rule 11.9(c)(9), the System automatically adjusts the price of a Mid-Point Peg Order in response to changes in the NBBO to be pegged to the mid-point of the NBBO, or, alternatively, pegged to the less aggressive midpoint of the NBBO, or one minimum price variation inside the same side of the NBBO as the Mid-Point Peg Order. Under proposed Exchange Rule 11.27(c)(3), the Exchange proposes that Mid-Point Peg Orders for Pilot Securities would not be permitted to alternatively peg to one minimum price variation inside the same side of the NBBO as the order. \14\ --------------------------------------------------------------------------- \14\ Id. --------------------------------------------------------------------------- 4. Discretionary Orders Under Exchange Rule 11.9(c)(10), a Discretionary Order is a limit order with a displayed or non-displayed ranked price and size and an additional non-displayed ``discretionary price.'' The Exchange proposes to not accept Discretionary Orders, regardless of price, in any Pilot Security.\15\ --------------------------------------------------------------------------- \15\ Id. --------------------------------------------------------------------------- 5. Market Maker Peg Orders Under Exchange Rule 11.9(c)(16), a Market Maker Peg Order is a limit order that is automatically priced by the System at the Designated Percentage (as defined in Exchange Rule 11.8(d)) away from the then current national best bid (``NBB'') or national best offer (``NBO''), or if no NBB or NBO, at the Designated Percentage away from the last reported sale from the responsible single plan processor in order to comply with the quotation requirements for Market Makers set forth in Exchange Rule 11.8(d). The Exchange proposes that Market Marker Peg Orders to buy (sell) be rounded up (down) to the nearest permissible increment when the pricing results in an impermissible increment. [[Page 62194]] 6. Supplemental Peg Orders Under Exchange Rule 11.9(c)(19), a Supplemental Peg Order is a non- displayed limit order that posts to the Exchange Book and thereafter is eligible for execution at the NBB for buy orders and NBO for sell orders against routable orders that are equal to or less than the aggregate size of the Supplemental Peg Order interest available at that price. The Exchange proposes not to accept Supplemental Peg Orders, regardless of price, for any Pilot Security.\16\ --------------------------------------------------------------------------- \16\ Id. --------------------------------------------------------------------------- 7. Display-Price Sliding Under Exchange Rule 11.9(g)(1), an order eligible for display by the Exchange, that at the time of entry would create a violation of Rule 610(d) of Regulation NMS by locking or crossing a Protected Quotation of an external market, would be ranked at the locking price in the Exchange Book and displayed by the System at one minimum price variation below the current NBO (for bids) or one minimum price variation above the current NBB (for offers). The ranked and displayed prices of an order subject to Display-Price Sliding may be adjusted once or multiple times depending on the instructions of a User and changes to the prevailing NBBO. The Exchange proposes that orders subject to the Display-Price Sliding that are unexecutable at the locking price will be ranked at the midpoint of the NBBO, and displayed one minimum price variation below (above) the current NBO (NBB) for bids (for offers) for all Pilot Securities. In the Control Group, Test Group One, and Test Group Two, these orders would be initially ranked at the locking price and displayed one minimum price variation away. If a subsequent incoming Post-Only Order arrives on the Exchange book on the opposite side, then the orders subject to Display-Price Sliding would be adjusted to rank at the midpoint of the NBBO and continue to be displayed at one minimum price variation away. In Test Group Three, orders subject to Display- Price Sliding would be ranked at the midpoint of the NBBO and displayed at one minimum price variation away. In addition, the Exchange proposes to cancel orders subject to Display-Price Sliding when the NBBO widens and a contra-side Non-Displayed Order is resting on the Exchange Book at a price that such order would adjust, and the User has selected a single price adjustment. Like today, if the User has selected multiple price adjustments an order subject to Display-Price Sliding would not cancel in this scenario. III. Discussion and Commission's Findings After careful review of the proposed rule change, as modified by Amendment No. 1, the Commission finds that the proposal, as modified by Amendment No. 1,\17\ is consistent with the requirements of the Exchange Act and the rules and regulations thereunder that are applicable to a national securities exchange.\18\ Specifically, the Commission finds that the rule change is consistent with Section 6(b)(5) of the Exchange Act, which requires that the rules of a national securities exchange be designed, among other things, to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and to protect investors and the public interest; and are not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \17\ The Commission notes that the Exchange Letter was submitted in connection with the Exchange's original proposal. Because the Exchange has filed Amendment No. 1, which supersedes and replaces the Exchange's original proposal in its entirety, the Commission does not believe it is necessary to summarize or respond to the Exchange Letter. \18\ In approving this rule change, the Commission has considered the rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- As noted in the Approval Order, the Plan is by design, an objective, data-driven test to evaluate how a wider tick size would impact trading, liquidity, and market quality of securities of smaller capitalization companies. In addition, the Plan is designed with three Test Groups and a Control Group, to allow analysis and comparison of incremental market structure changes on the Pilot Securities and is designed to produce empirical data that could inform future policy decisions. The Exchange proposes certain changes to modify the operation of the System for compliance with the Plan. For example, the Exchange proposes to clarify how BYX Market Orders and Market Maker Peg Orders would be rounded to permissible increments under the Plan. In addition, the Exchange proposes to reflect its RPI Program in its Tick Pilot Rule. The Commission finds that these changes are consistent with the Section 6(b)(5) of the Exchange Act \19\ and Rule 608 of Regulation NMS \20\ because they implement the Plan and clarify Exchange rules. --------------------------------------------------------------------------- \19\ 15 U.S.C. 78f(b)(5). \20\ 17 CFR 242.608. --------------------------------------------------------------------------- In addition, the Exchange proposes to eliminate certain order types and modify certain order handling functions for Pilot Securities Specifically, the Exchange proposes to no longer accept three order types: Market Peg Orders, Discretionary Orders, and Supplemental Peg Orders. The Exchange noted that these orders are infrequently used in Pilot Securities. The Exchange stated that eliminating these order types for Pilot Securities could reduce System complexity and maintain consistent functionality among all Pilot Securities. Finally, the Exchange noted that these order types would have limited ability to execute under Test Group Three. The Exchange also proposes to change the handling of orders subject to Display-Price Sliding in Pilot Securities. Orders that are subject to Display Price-Sliding in Pilot Securities that are unexecutable at the locking price will be ranked at the midpoint of the NBBO and displayed one minimum variation away. Finally, the Exchange proposes to modify the handling of Mid-Point Peg Orders in Pilot Securities. As proposed, Mid-Point Peg Orders would not be able to alternatively peg to one minimum price variation inside the same side of the NBBO as the order. The Exchange noted that there is a de minimis usage of the alternative pegging function in Pilot Securities that does not justify the complexity and risk to the System that would be created by re-programming the System to support the function. In the Notice, the Commission noted that proposed rule changes, other than those necessary for compliance with Plan, that are targeted at Pilot Securities, that have a disparate impact on different Test Groups and the Control Group, and that are to apply temporarily only for the Pilot Period, could bias the results of the Pilot and undermine the value of the data generated in informing future policy decisions. The Commission notes that the Exchange has modified its proposal so that those proposed changes that are not necessary for compliance with the Plan apply equally to all three Test Groups and the Control Group, and their duration is not limited to the Pilot Period. Thus, the Commission believes that the incremental design of the Pilot is maintained such that the data generated by the Test Groups and the Control Group could allow the Commission and interested parties to compare the change in market structure of each group vis-[agrave]-vis the other groups. Further, the Commission does not believe that the changes would bias the results of the Pilot or undermine the [[Page 62195]] value of the data generated in informing future policy decisions. Accordingly, the Commission finds that the proposed rule change, as modified by Amendment No.1, is consistent with the requirements of the Exchange Act. IV. Solicitation of Comments on Amendment No. 1 to the Proposed Rule Change Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposal, as modified by Amendment No. 1, is consistent with the Exchange Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-BatsBYX-2016-17 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-BatsBYX-2016-17. 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 20549-1090, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing will also be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR- BatsBYX-2016-17 and should be submitted on or before September 29, 2016. V. Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 1, prior to the thirtieth day after the date of publication of notice of Amendment No. 1 in the Federal Register. In Amendment No. 1, the Exchange proposes to: (1) Apply the changes in proposed Rule 11.27(c) to all Pilot Securities; (2) clarify in Rule 11.27(c)(1) that the increment for BYX Market Orders and Rule 11.27(c)(5) that the increment for Market Maker Peg Orders will be at ``permissible'' increments; (3) state in Rule 11.27(c)(2) that Market Pegged Orders, Rule 11.27(c)(4) that Discretionary Orders, and Rule 11.27(c)(6) that Supplemental Peg Orders will not be accepted in Pilot Securities; (4) clarify in Rule 11.27(c)(3) that Mid-Point Peg Orders may not be alternatively pegged to one minimum price variation inside the same side of the NBBO as the order; (5) delete the proposal to amend Non-Displayed Orders; and (6) clarify how orders subject to Display-Price Sliding will operate when they are unexecutable at the locking price. The Commission believes that Amendment No. 1 modifies the proposal so that it does not cause a disparate impact on different Test Groups and the Control Group. In addition, the Commission notes that the Pilot is scheduled to start on October 3, 2016, and accelerated approval would ensure that the rules of the Exchange would be in place for the start of the Pilot. Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Exchange Act,\21\ to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78s(b)(2). --------------------------------------------------------------------------- VI. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Exchange Act,\22\ that the proposed rule change (SR-BatsBYX-2016-17), as modified by Amendment No. 1, be and hereby is approved on an accelerated basis. --------------------------------------------------------------------------- \22\ Id. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\23\ --------------------------------------------------------------------------- \23\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2016-21649 Filed 9-7-16; 8:45 am] BILLING CODE 8011-01-P
![62192 Federal Register / Vol. 81, No. 174 / Thursday, September 8, 2016 / Notices
Paper Comments SECURITIES AND EXCHANGE The Commission finds it appropriate
COMMISSION to designate a longer period within
• Send paper comments in triplicate which to take action on the proposed
to Secretary, Securities and Exchange [Release No. 34–78755; File No. SR– rule change so that it has sufficient time
Commission, 100 F Street NE., NYSEArca–2016–103] to consider the issues raised in the
Washington, DC 20549–1090. NASAA Letter, as well as those in the
Self-Regulatory Organizations; NYSE response from NYSE MKT LLC., in
All submissions should refer to File Arca Inc.; Notice of Designation of a
Number SR–NSX–2016–04. This file connection with the proposed rule
Longer Period for Commission Action change. Accordingly, the Commission,
number should be included on the on Proposed Rule Change Amending pursuant to Section 19(b)(2) of the Act,7
subject line if email is used. To help the Rules 2.17(c) and 2.23(i) To Extend the designates October 25, 2016, as the date
Commission process and review your Time Within Which OTP Holders and by which the Commission shall either
comments more efficiently, please use OTP Firms Must File a Uniform approve or disapprove, or institute
only one method. The Commission will Termination Notice for Securities proceedings to determine whether to
post all comments on the Commission’s Industry Registration (‘‘U5’’) disapprove, the proposed rule change
Internet Web site (http://www.sec.gov/ (File No. SR–NYSEArca–2016–103).
September 1, 2016.
rules/sro.shtml). Copies of the
On July 14, 2016, NYSE Arca, Inc. For the Commission, by the Division of
submission, all subsequent Trading and Markets, pursuant to delegated
amendments, all written statements filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant authority.8
with respect to the proposed rule Robert W. Errett,
to Section 19(b)(1) of the Securities
change that are filed with the Deputy Secretary.
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
Commission, and all written
19b–4 thereunder,2 a proposed rule [FR Doc. 2016–21519 Filed 9–7–16; 8:45 am]
communications relating to the change to amend Rules 2.17(c) and BILLING CODE 8011–01–P
proposed rule change between the 2.23(i) to extend the time within which
Commission and any person, other than OTP Holders and OTP Firms must file
those that may be withheld from the a U5. The proposed rule change was SECURITIES AND EXCHANGE
public in accordance with the published for comment in the Federal COMMISSION
provisions of 5 U.S.C. 552, will be Register on July 27, 2016.3 The [Release No. 34–78766; File No. SR–
available for Web site viewing and Commission received no comments in BatsBYX–2016–17]
printing in the Commission’s Public response to the proposal. In response to
Reference Room, 100 F Street NE., a related proposed rule change,4 Self-Regulatory Organizations; Bats
Washington, DC 20549, on official however, the Commission received a BYX Exchange, Inc.; Notice of Filing of
business days between the hours of comment letter and a response to those Amendment No. 1 and Order Granting
10:00 a.m. and 3:00 p.m. Copies of the comments from the proposing Accelerated Approval of a Proposed
filing also will be available for exchange.5 Rule Change, as Modified by
inspection and copying at the principal Section 19(b)(2) of the Act 6 provides Amendment No. 1, To Amend
office of the Exchange. All comments that within 45 days of the publication of Exchange Rule 11.27 To Describe
received will be posted without change; notice of the filing of a proposed rule Changes to System Functionality
the Commission does not edit personal change, or within such longer period up Necessary To Implement the
identifying information from to 90 days as the Commission may Regulation NMS Plan To Implement a
submissions. You should submit only designate if it finds such longer period Tick Size Pilot Program
information that you wish to make to be appropriate and publishes its
reasons for so finding, or as to which the September 2, 2016.
available publicly. All submissions
should refer to File Number SR–NSX– self-regulatory organization consents, I. Introduction
the Commission shall either approve the
2016–04 and should be submitted on or On June 29, 2016, Bats BYX
proposed rule change, disapprove the
before September 29, 2016. Exchange, Inc. (‘‘Exchange’’ or ‘‘BYX’’)
proposed rule change, or institute
For the Commission, by the Division of filed with the Securities and Exchange
proceedings to determine whether the
Trading and Markets, pursuant to delegated Commission (‘‘Commission’’) pursuant
proposed rule change should be
authority.38 to Section 19(b)(1) of the Securities
disapproved. The 45th day after
Exchange Act of 1934 (‘‘Exchange Act’’
Brent J. Fields, publication of the notice for this
or ‘‘Act’’) 1 and Rule 19b–4 thereunder,2
Secretary. proposed rule change is September 10,
a proposed rule change to amend
[FR Doc. 2016–21644 Filed 9–7–16; 8:45 am] 2016. The Commission is extending this
Exchange Rule 11.27(a) to specify that
45-day time period.
BILLING CODE 8011–01–P orders entered into the Exchange’s
1 15
Retail Price Improvement (‘‘RPI’’)
U.S.C. 78s(b)(1).
2 17
Program qualify for certain exceptions
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 78381 to the Regulation NMS Plan to
(July 21, 2016), 81 FR 49286. Implement a Tick Size Pilot Program
4 See Securities Exchange Act Release No. 78198 (‘‘Plan’’ or ‘‘Pilot’’) and to adopt
(June 30, 2016), 81 FR 44363. Exchange Rule 11.27(c) to describe
mstockstill on DSK3G9T082PROD with NOTICES
5 See letter from Judith Shaw, President, North
changes to System 3 functionality to
American Securities Administrators Association,
Inc., to Brent J. Fields, Secretary, Securities and 7 Id.
Exchange Commission, dated August 3, 2016
8 17 CFR 200.30–3(a)(31).
(‘‘NASAA Letter’’) and letter from Elizabeth K.
1 15 U.S.C. 78s(b)(1).
King, General Counsel and Corporate Secretary,
New York Stock Exchange to Brent J. Fields, 2 17 CFR 240.19b–4.
Secretary, SEC, dated August 12, 2016. 3 The term ‘‘System’’ is defined as the ‘‘electronic
38 17 CFR 200.30–3(a)(12). 6 15 U.S.C. 78s(b)(2). communications and trading facility designated by
VerDate Sep<11>2014 19:34 Sep 07, 2016 Jkt 238001 PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 E:\FR\FM\08SEN1.SGM 08SEN1](https://thefederalregister.org/doc/81_FR_62366/page/1.svg)
![Federal Register / Vol. 81, No. 174 / Thursday, September 8, 2016 / Notices 62195
value of the data generated in informing should refer to File Number SR– For the Commission, by the Division of
future policy decisions. BatsBYX–2016–17 and should be Trading and Markets, pursuant to delegated
Accordingly, the Commission finds authority.23
submitted on or before September 29,
that the proposed rule change, as 2016. Brent J. Fields,
modified by Amendment No.1, is Secretary.
consistent with the requirements of the V. Accelerated Approval of Proposed [FR Doc. 2016–21649 Filed 9–7–16; 8:45 am]
Exchange Act. Rule Change, as Modified by BILLING CODE 8011–01–P
Amendment No. 1
IV. Solicitation of Comments on
Amendment No. 1 to the Proposed Rule The Commission finds good cause to SECURITIES AND EXCHANGE
Change approve the proposed rule change, as COMMISSION
Interested persons are invited to modified by Amendment No. 1, prior to
submit written data, views, and the thirtieth day after the date of [Release No. 34–78765; File No. SR–
BatsBZX–2016–29]
arguments concerning the foregoing, publication of notice of Amendment No.
including whether the proposal, as 1 in the Federal Register. In Self-Regulatory Organizations; Bats
modified by Amendment No. 1, is Amendment No. 1, the Exchange BZX Exchange, Inc.; Notice of Filing of
consistent with the Exchange Act. proposes to: (1) Apply the changes in Amendment No. 1 and Order Granting
Comments may be submitted by any of proposed Rule 11.27(c) to all Pilot Accelerated Approval of a Proposed
the following methods: Securities; (2) clarify in Rule 11.27(c)(1) Rule Change, as Modified by
Electronic Comments that the increment for BYX Market Amendment No. 1, To Amend
Orders and Rule 11.27(c)(5) that the Exchange Rule 11.27 To Describe
• Use the Commission’s Internet
increment for Market Maker Peg Orders Changes to System Functionality
comment form (http://www.sec.gov/
will be at ‘‘permissible’’ increments; (3) Necessary To Implement the
rules/sro.shtml); or
Regulation NMS Plan To Implement a
• Send an email to rule-comments@ state in Rule 11.27(c)(2) that Market
Pegged Orders, Rule 11.27(c)(4) that Tick Size Pilot Program
sec.gov. Please include File Number SR–
BatsBYX–2016–17 on the subject line. Discretionary Orders, and Rule September 2, 2016.
11.27(c)(6) that Supplemental Peg
Paper Comments I. Introduction
Orders will not be accepted in Pilot
• Send paper comments in triplicate Securities; (4) clarify in Rule 11.27(c)(3) On June 29, 2016, Bats BZX Exchange,
to Secretary, Securities and Exchange that Mid-Point Peg Orders may not be Inc. (‘‘Exchange’’ or ‘‘BZX’’) filed with
Commission, 100 F Street NE., alternatively pegged to one minimum the Securities and Exchange
Washington, DC 20549–1090. price variation inside the same side of Commission (‘‘Commission’’) pursuant
All submissions should refer to File the NBBO as the order; (5) delete the to section 19(b)(1) of the Securities
Number SR–BatsBYX–2016–17. This proposal to amend Non-Displayed Exchange Act of 1934 (‘‘Exchange Act’’
file number should be included on the Orders; and (6) clarify how orders or ‘‘Act’’) 1 and Rule 19b–4 thereunder,2
subject line if email is used. To help the subject to Display-Price Sliding will a proposed rule change to amend
Commission process and review your Exchange Rule 11.27(a) and adopt
operate when they are unexecutable at
comments more efficiently, please use Exchange Rule 11.27(c) to describe
the locking price.
only one method. The Commission will changes to System 3 functionality to
post all comments on the Commission’s The Commission believes that implement the Plan.4 The proposed rule
Internet Web site (http://www.sec.gov/ Amendment No. 1 modifies the change was published for comment in
rules/sro.shtml). Copies of the proposal so that it does not cause a the Federal Register on July 20, 2016.5
submission, all subsequent disparate impact on different Test The Commission received one comment
amendments, all written statements Groups and the Control Group. In letter from the Exchange in response to
with respect to the proposed rule addition, the Commission notes that the the Notice.6 On September 1, 2016, the
change that are filed with the Pilot is scheduled to start on October 3, Exchange filed an amendment to the
Commission, and all written 2016, and accelerated approval would proposed rule change (‘‘Amendment No.
communications relating to the ensure that the rules of the Exchange 1’’), which supersedes and replaces the
proposed rule change between the would be in place for the start of the proposal in its entirety.7
Commission and any person, other than Pilot. Accordingly, the Commission 23 17 CFR 200.30–3(a)(12).
those that may be withheld from the finds good cause, pursuant to Section 1 15 U.S.C. 78s(b)(1).
public in accordance with the 19(b)(2) of the Exchange Act,21 to 2 17 CFR 240.19b–4.
provisions of 5 U.S.C. 552, will be approve the proposed rule change, as 3 The term ‘‘System’’ is defined as the ‘‘electronic
available for Web site viewing and modified by Amendment No. 1, on an communications and trading facility designated by
printing in the Commission’s Public accelerated basis. the Board of Directors of the Exchange through
Reference Room, 100 F Street NE., which securities orders of Users are consolidated
for ranking, execution and, when applicable,
Washington, DC 20549–1090, on official VI. Conclusion routing away.’’ See Exchange Rule 1.5(aa).
business days between the hours of 4 See Securities Exchange Act Release No. 74892
10:00 a.m. and 3:00 p.m. Copies of such It is therefore ordered, pursuant to (May 6, 2015), 80 FR 27513 (May 13, 2015)
filing will also be available for Section 19(b)(2) of the Exchange Act,22 (‘‘Approval Order’’). Unless otherwise specified,
inspection and copying at the principal that the proposed rule change (SR– capitalized terms used in this rule filing are defined
mstockstill on DSK3G9T082PROD with NOTICES
as set forth in the Plan.
office of the Exchange. All comments BatsBYX–2016–17), as modified by 5 Securities Exchange Act Release No. 78334 (July
received will be posted without change; Amendment No. 1, be and hereby is 14, 2016), 81 FR 47187 (‘‘Notice’’).
the Commission does not edit personal approved on an accelerated basis. 6 See Letter to Brent J. Fields, Secretary,
identifying information from Commission, from Eric Swanson, General Counsel,
Exchange, dated July 26, 2016 (‘‘Exchange Letter’’).
submissions. You should submit only 7 In Amendment No. 1, the Exchange proposes to:
information that you wish to make 21 15 U.S.C. 78s(b)(2). (1) Apply the changes in proposed Rule 11.27(c) to
available publicly. All submissions 22 Id. Continued
VerDate Sep<11>2014 19:34 Sep 07, 2016 Jkt 238001 PO 00000 Frm 00124 Fmt 4703 Sfmt 4703 E:\FR\FM\08SEN1.SGM 08SEN1](https://thefederalregister.org/doc/81_FR_62366/page/4.svg)
Document Created: 2018-02-09 13:12:39
Document Modified: 2018-02-09 13:12:39
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 62192 |
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