81_FR_62400 81 FR 62226 - Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees

81 FR 62226 - Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 174 (September 8, 2016)

Page Range62226-62228
FR Document2016-21491

Federal Register, Volume 81 Issue 174 (Thursday, September 8, 2016)
[Federal Register Volume 81, Number 174 (Thursday, September 8, 2016)]
[Notices]
[Pages 62226-62228]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-21491]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78748; File No. SR-BatsEDGA-2016-20]


Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change Related 
to Fees

September 1, 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 19, 2016, Bats EDGA Exchange, Inc. (the ``Exchange'' or 
``EDGA'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by the Exchange. The 
Exchange has designated the proposed rule change as one establishing or 
changing a member due, fee, or other charge imposed by the Exchange 
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposed rule change 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a rule change to amend the fee schedule 
applicable to Members and non-Members \5\ of the Exchange pursuant to 
Exchange Rules 15.1(a) and (c). Specifically, the Exchange proposes to 
adopt new fee code IX, which would be appended to all orders that are 
routed to the Investors Exchange, Inc. (``IEX'') using the using the 
Destination Specific (``DIRC'') routing strategy.\6\
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    \5\ A Member is defined as ``any registered broker or dealer 
that has been admitted to membership in the Exchange.'' See Exchange 
Rule 1.5(n).
    \6\ See Exchange Rule 11.11(g)(14).
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Commission has approved IEX as a registered national securities 
exchange,\7\ which is to begin a symbol-by-symbol roll out of symbols 
on August 19, 2016.\8\ As of that date, the Exchange will begin routing 
orders to IEX and Members may elect that their orders be routed 
directly to IEX using the DIRC routing strategy. The Exchange, 
therefore, proposes to amend its fee schedule to adopt new fee code IX, 
which would be appended to all orders that are routed to IEX using the 
DIRC routing strategy. Orders yielding fee code IX in securities priced 
at or above $1.00 will be charged a fee of $0.0010 per share. Orders 
yielding fee code IX in securities priced below $1.00 will charged 
0.30% of the transaction's dollar value.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 78101 (June 17, 
2016), 81 FR 41141 (June 23, 2016) (``IEX Approval Order'').
    \8\ See Letter from Brad Katsuyama, CEO, IEX, to IEX's Sell-Side 
and Buy-Side Partners, dated June 17, 2016 (https://www.iextrading.com/) (stating that IEX will commence a symbol-by-
symbol roll-out on August 19, 2016, concluding on September 2, 
2016).
---------------------------------------------------------------------------

    The proposed change would enable the Exchange to charge a rate 
reasonably related to the rate that Bats Trading, Inc. (``Bats 
Trading''), the Exchange's affiliated routing broker-dealer, would be 
charged for routing orders to IEX, when it does not qualify for a 
volume tier reduced fee.\9\ As a result, when Bats Trading routes an 
order to IEX which removes liquidity against a non-displayed order, it 
will be charged a standard rate of $0.0009 per share in securities 
priced at or above $1.00 and

[[Page 62227]]

0.30% of the transaction's dollar value in securities priced below 
$1.00.\10\ Bats Trading will not be charged a fee for orders it routes 
to IEX which remove liquidity against a displayed order.\11\ Bats 
Trading will pass through these rates to the Exchange and the Exchange, 
in turn, will charge a rate of $0.0010 per share for orders in 
securities priced at or above $1.00 and 0.30% of the transaction's 
dollar value for orders in securities less than $1.00. The Exchange 
notes it would not be able to control whether the order it routes to 
IEX executes against displayed or non-displayed liquidity, and 
therefore, propose to charge a fee for orders that yield fee code IX 
based on IEX's rates for removing non-displayed liquidity. The proposed 
fee under fee code IX would enable the Exchange to equitably allocate 
its costs among all Members utilizing fee code IX.
---------------------------------------------------------------------------

    \9\ The Exchange notes that IEX does not currently offer volume 
tiered pricing.
    \10\ See IEX fee schedule available at https://iextrading.com/trading/#fee-schedule (effective August 19, 2016). See also IEX 
Trading Alert #2016-036, Investors Exchange Fee Schedule Effective 
August 19, 2016, available at https://iextrading.com/trading/alerts/2016/036/.
    \11\ Id.
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    The Exchange proposes to implement this amendment to its fee 
schedule on August 19, 2016.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\12\ in general, and 
furthers the objectives of Section 6(b)(4),\13\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities. The Exchange believes that by allowing customers to route 
specifically to IEX through Bats Trading, as it does with the other 
exchanges, fee code IX represents an equitable allocation of reasonable 
dues, fees, and other charges among Members and other persons using its 
facilities. As of August 19, 2016, IEX will charge a fee of $0.0009 per 
share for orders which remove liquidity against non-displayed orders 
and no fee for orders that remove liquidity against displayed 
order.\14\ Because the Exchange would not be able to control whether 
the order it routes to IEX executes against displayed or non-displayed 
liquidity, it therefore, believes it is equitable and reasonable to 
charge a fee for orders that yield fee code IX based on IEX's rates for 
removing non-displayed interest. The Exchange further believes that its 
proposal to pass through a fee of $0.0010 per share is equitable and 
reasonable because it accounts for the prices charged by IEX plus the 
additional operation expenses that would be incurred by the Exchange in 
routing orders to IEX.\15\ Furthermore, the Exchange notes that routing 
through Bats Trading is voluntary and Members may utilize other avenues 
to route orders to IEX, such as connecting to IEX directly. Lastly, the 
Exchange also believes that the proposed fee code is non-discriminatory 
because it applies uniformly to all Members.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f.
    \13\ 15 U.S.C. 78f(b)(4).
    \14\ See supra note 10.
    \15\ The Exchange notes that the proposed rate for fee code IX 
is lower that its standard routing fee of $0.0029 per share under 
fee code X, which it charges, for example, to orders routed to the 
National Stock Exchange, Inc. (``NSX'') which charges a lower rate 
to remove liquidity. See NSX's fee schedule available at http://nsx.com/client/pricing (charging a fee of $0.0003 per share to 
orders that remove liquidity).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    This proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act. The Exchange does not believe that this change represents a 
significant departure from previous pricing offered by the Exchange or 
from pricing offered by the Exchange's competitors. The proposed rate 
would apply uniformly to all Members, and Members may opt to disfavor 
the Exchange's pricing if they believe that alternatives offer them 
better value. Accordingly, the Exchange does not believe that the 
proposed changes will impair the ability of Members or competing venues 
to maintain their competitive standing in the financial markets. The 
Exchange believes that its proposal to pass through a fee of $0.0010 
for Members' orders that yield fee code IX would increase intermarket 
competition by offering customers an alternative means to route to 
specifically to IEX. As stated above, routing through Bats Trading is 
voluntary and Members may utilize other avenues to route orders to IEX, 
such as connecting to IEX directly. The Exchange believes that its 
proposal would not burden intramarket competition because the proposed 
rate would apply uniformly to all Members.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from Members or other interested 
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \16\ and paragraph (f) of Rule 19b-4 
thereunder.\17\ 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.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BatsEDGA-2016-20 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-BatsEDGA-2016-20. 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 the filing also will be available 
for

[[Page 62228]]

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-BatsEDGA-2016-20, and should 
be submitted on or before September 29, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-21491 Filed 9-7-16; 8:45 am]
 BILLING CODE 8011-01-P



                                                  62226                     Federal Register / Vol. 81, No. 174 / Thursday, September 8, 2016 / Notices

                                                  it appears to the Commission that such                    For the Commission, by the Division of              principal office of the Exchange, and at
                                                  action is necessary or appropriate in the               Trading and Markets, pursuant to delegated            the Commission’s Public Reference
                                                  public interest, for the protection of                  authority.13                                          Room.
                                                  investors, or otherwise in furtherance of               Robert W. Errett,
                                                                                                          Deputy Secretary.                                     II. Self-Regulatory Organization’s
                                                  the purposes of the Act.                                                                                      Statement of the Purpose of, and
                                                                                                          [FR Doc. 2016–21488 Filed 9–7–16; 8:45 am]
                                                  IV. Solicitation of Comments                                                                                  Statutory Basis for, the Proposed Rule
                                                                                                          BILLING CODE 8011–01–P
                                                                                                                                                                Change
                                                    Interested persons are invited to
                                                  submit written data, views, and                                                                                  In its filing with the Commission, the
                                                  arguments concerning the foregoing,                     SECURITIES AND EXCHANGE                               Exchange included statements
                                                  including whether the proposed rule                     COMMISSION                                            concerning the purpose of and basis for
                                                  change is consistent with the Act.                                                                            the proposed rule change and discussed
                                                                                                          [Release No. 34–78748; File No. SR–
                                                  Comments may be submitted by any of                     BatsEDGA–2016–20]
                                                                                                                                                                any comments it received on the
                                                  the following methods:                                                                                        proposed rule change. The text of these
                                                                                                          Self-Regulatory Organizations; Bats                   statements may be examined at the
                                                  Electronic Comments                                     EDGA Exchange, Inc.; Notice of Filing                 places specified in Item IV below. The
                                                                                                          and Immediate Effectiveness of a                      Exchange has prepared summaries, set
                                                    • Use the Commission’s Internet                                                                             forth in Sections A, B, and C below, of
                                                  comment form (http://www.sec.gov/                       Proposed Rule Change Related to Fees
                                                                                                                                                                the most significant parts of such
                                                  rules/sro.shtml); or                                    September 1, 2016.                                    statements.
                                                    • Send an email to rule-comments@                        Pursuant to Section 19(b)(1) of the
                                                  sec.gov. Please include File No. SR–                    Securities Exchange Act of 1934 (the                  A. Self-Regulatory Organization’s
                                                  BatsBZX–2016–52 on the subject line.                    ‘‘Act’’),1 and Rule 19b–4 thereunder,2                Statement of the Purpose of, and the
                                                                                                          notice is hereby given that on August                 Statutory Basis for, the Proposed Rule
                                                  Paper Comments                                                                                                Change
                                                                                                          19, 2016, Bats EDGA Exchange, Inc. (the
                                                    • Send paper comments in triplicate                   ‘‘Exchange’’ or ‘‘EDGA’’) filed with the              1. Purpose
                                                  to Secretary, Securities and Exchange                   Securities and Exchange Commission                       The Commission has approved IEX as
                                                  Commission, 100 F Street NE.,                           (‘‘Commission’’) the proposed rule                    a registered national securities
                                                  Washington, DC 20549–1090.                              change as described in Items I, II and III            exchange,7 which is to begin a symbol-
                                                                                                          below, which Items have been prepared                 by-symbol roll out of symbols on August
                                                  All submissions should refer to File No.
                                                                                                          by the Exchange. The Exchange has                     19, 2016.8 As of that date, the Exchange
                                                  SR–BatsBZX–2016–52. This file number
                                                                                                          designated the proposed rule change as                will begin routing orders to IEX and
                                                  should be included on the subject line
                                                                                                          one establishing or changing a member                 Members may elect that their orders be
                                                  if email is used. To help the
                                                                                                          due, fee, or other charge imposed by the              routed directly to IEX using the DIRC
                                                  Commission process and review your
                                                                                                          Exchange under Section 19(b)(3)(A)(ii)                routing strategy. The Exchange,
                                                  comments more efficiently, please use
                                                                                                          of the Act 3 and Rule 19b–4(f)(2)                     therefore, proposes to amend its fee
                                                  only one method. The Commission will
                                                                                                          thereunder,4 which renders the                        schedule to adopt new fee code IX,
                                                  post all comments on the Commission’s
                                                                                                          proposed rule change effective upon                   which would be appended to all orders
                                                  Internet Web site (http://www.sec.gov/
                                                                                                          filing with the Commission. The                       that are routed to IEX using the DIRC
                                                  rules/sro.shtml). Copies of the
                                                                                                          Commission is publishing this notice to               routing strategy. Orders yielding fee
                                                  submission, all subsequent
                                                                                                          solicit comments on the proposed rule                 code IX in securities priced at or above
                                                  amendments, all written statements
                                                                                                          change from interested persons.                       $1.00 will be charged a fee of $0.0010
                                                  with respect to the proposed rule
                                                  change that are filed with the                          I. Self-Regulatory Organization’s                     per share. Orders yielding fee code IX in
                                                  Commission, and all written                             Statement of the Terms of Substance of                securities priced below $1.00 will
                                                  communications relating to the                          the Proposed Rule Change                              charged 0.30% of the transaction’s
                                                  proposed rule change between the                           The Exchange filed a rule change to                dollar value.
                                                  Commission and any person, other than                                                                            The proposed change would enable
                                                                                                          amend the fee schedule applicable to
                                                  those that may be withheld from the                                                                           the Exchange to charge a rate reasonably
                                                                                                          Members and non-Members 5 of the
                                                  public in accordance with the                                                                                 related to the rate that Bats Trading, Inc.
                                                                                                          Exchange pursuant to Exchange Rules
                                                  provisions of 5 U.S.C. 552, will be                                                                           (‘‘Bats Trading’’), the Exchange’s
                                                                                                          15.1(a) and (c). Specifically, the
                                                  available for Web site viewing and                                                                            affiliated routing broker-dealer, would
                                                                                                          Exchange proposes to adopt new fee
                                                  printing in the Commission’s Public                                                                           be charged for routing orders to IEX,
                                                                                                          code IX, which would be appended to
                                                  Reference Room, 100 F Street NE.,                                                                             when it does not qualify for a volume
                                                                                                          all orders that are routed to the Investors
                                                  Washington, DC 20549, on official                                                                             tier reduced fee.9 As a result, when Bats
                                                                                                          Exchange, Inc. (‘‘IEX’’) using the using
                                                  business days between the hours of                                                                            Trading routes an order to IEX which
                                                                                                          the Destination Specific (‘‘DIRC’’)
                                                  10:00 a.m. and 3:00 p.m. Copies of the                                                                        removes liquidity against a non-
                                                                                                          routing strategy.6
                                                  filing also will be available for                          The text of the proposed rule change               displayed order, it will be charged a
                                                  inspection and copying at the principal                 is available at the Exchange’s Web site               standard rate of $0.0009 per share in
                                                  office of the Exchange. All comments                    at www.batstrading.com, at the                        securities priced at or above $1.00 and
                                                  received will be posted without change;
                                                                                                                                                                   7 See Securities Exchange Act Release No. 78101
                                                  the Commission does not edit personal
mstockstill on DSK3G9T082PROD with NOTICES




                                                                                                            13 17 CFR 200.30–3(a)(12).
                                                                                                                                                                (June 17, 2016), 81 FR 41141 (June 23, 2016) (‘‘IEX
                                                  identifying information from                              1 15 U.S.C. 78s(b)(1).
                                                                                                                                                                Approval Order’’).
                                                  submissions. You should submit only                       2 17 CFR 240.19b–4.
                                                                                                                                                                   8 See Letter from Brad Katsuyama, CEO, IEX, to
                                                  information that you wish to make                         3 15 U.S.C. 78s(b)(3)(A)(ii).
                                                                                                                                                                IEX’s Sell-Side and Buy-Side Partners, dated June
                                                                                                            4 17 CFR 240.19b–4(f)(2).
                                                  available publicly. All submissions                                                                           17, 2016 (https://www.iextrading.com/) (stating that
                                                                                                            5 A Member is defined as ‘‘any registered broker    IEX will commence a symbol-by-symbol roll-out on
                                                  should refer to File No. SR–BatsBZX–
                                                                                                          or dealer that has been admitted to membership in     August 19, 2016, concluding on September 2, 2016).
                                                  2016–52, and should be submitted on or                  the Exchange.’’ See Exchange Rule 1.5(n).                9 The Exchange notes that IEX does not currently
                                                  before September 29, 2016.                                6 See Exchange Rule 11.11(g)(14).                   offer volume tiered pricing.



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                                                                             Federal Register / Vol. 81, No. 174 / Thursday, September 8, 2016 / Notices                                            62227

                                                  0.30% of the transaction’s dollar value                 through a fee of $0.0010 per share is                   III. Date of Effectiveness of the
                                                  in securities priced below $1.00.10 Bats                equitable and reasonable because it                     Proposed Rule Change and Timing for
                                                  Trading will not be charged a fee for                   accounts for the prices charged by IEX                  Commission Action
                                                  orders it routes to IEX which remove                    plus the additional operation expenses                     The foregoing rule change has become
                                                  liquidity against a displayed order.11                  that would be incurred by the Exchange                  effective pursuant to Section 19(b)(3)(A)
                                                  Bats Trading will pass through these                    in routing orders to IEX.15 Furthermore,                of the Act 16 and paragraph (f) of Rule
                                                  rates to the Exchange and the Exchange,                 the Exchange notes that routing through                 19b–4 thereunder.17 At any time within
                                                  in turn, will charge a rate of $0.0010 per              Bats Trading is voluntary and Members                   60 days of the filing of the proposed rule
                                                  share for orders in securities priced at                may utilize other avenues to route                      change, the Commission summarily may
                                                  or above $1.00 and 0.30% of the                         orders to IEX, such as connecting to IEX                temporarily suspend such rule change if
                                                  transaction’s dollar value for orders in                directly. Lastly, the Exchange also                     it appears to the Commission that such
                                                  securities less than $1.00. The Exchange                believes that the proposed fee code is                  action is necessary or appropriate in the
                                                  notes it would not be able to control                   non-discriminatory because it applies                   public interest, for the protection of
                                                  whether the order it routes to IEX                      uniformly to all Members.                               investors, or otherwise in furtherance of
                                                  executes against displayed or non-                      B. Self-Regulatory Organization’s                       the purposes of the Act.
                                                  displayed liquidity, and therefore,                     Statement on Burden on Competition
                                                  propose to charge a fee for orders that                                                                         IV. Solicitation of Comments
                                                  yield fee code IX based on IEX’s rates                     This proposed rule change does not                     Interested persons are invited to
                                                  for removing non-displayed liquidity.                   impose any burden on competition that                   submit written data, views, and
                                                  The proposed fee under fee code IX                      is not necessary or appropriate in                      arguments concerning the foregoing,
                                                  would enable the Exchange to equitably                  furtherance of the purposes of the Act.                 including whether the proposed rule
                                                  allocate its costs among all Members                    The Exchange does not believe that this                 change is consistent with the Act.
                                                  utilizing fee code IX.                                  change represents a significant                         Comments may be submitted by any of
                                                     The Exchange proposes to implement                   departure from previous pricing offered                 the following methods:
                                                  this amendment to its fee schedule on                   by the Exchange or from pricing offered
                                                  August 19, 2016.                                        by the Exchange’s competitors. The                      Electronic Comments
                                                                                                          proposed rate would apply uniformly to                    • Use the Commission’s Internet
                                                  2. Statutory Basis                                      all Members, and Members may opt to                     comment form (http://www.sec.gov/
                                                     The Exchange believes that the                       disfavor the Exchange’s pricing if they                 rules/sro.shtml); or
                                                  proposed rule change is consistent with                 believe that alternatives offer them                      • Send an email to rule-comments@
                                                  the objectives of Section 6 of the Act,12               better value. Accordingly, the Exchange                 sec.gov. Please include File Number SR–
                                                  in general, and furthers the objectives of              does not believe that the proposed                      BatsEDGA–2016–20 on the subject line.
                                                  Section 6(b)(4),13 in particular, as it is              changes will impair the ability of
                                                                                                          Members or competing venues to                          Paper Comments
                                                  designed to provide for the equitable
                                                  allocation of reasonable dues, fees and                 maintain their competitive standing in                     • Send paper comments in triplicate
                                                  other charges among its Members and                     the financial markets. The Exchange                     to Secretary, Securities and Exchange
                                                  other persons using its facilities. The                 believes that its proposal to pass                      Commission, 100 F Street NE.,
                                                  Exchange believes that by allowing                      through a fee of $0.0010 for Members’                   Washington, DC 20549–1090.
                                                  customers to route specifically to IEX                  orders that yield fee code IX would                     All submissions should refer to File
                                                  through Bats Trading, as it does with the               increase intermarket competition by                     Number SR–BatsEDGA–2016–20. This
                                                  other exchanges, fee code IX represents                 offering customers an alternative means                 file number should be included on the
                                                  an equitable allocation of reasonable                   to route to specifically to IEX. As stated              subject line if email is used. To help the
                                                  dues, fees, and other charges among                     above, routing through Bats Trading is                  Commission process and review your
                                                  Members and other persons using its                     voluntary and Members may utilize                       comments more efficiently, please use
                                                  facilities. As of August 19, 2016, IEX                  other avenues to route orders to IEX,                   only one method. The Commission will
                                                  will charge a fee of $0.0009 per share for              such as connecting to IEX directly. The                 post all comments on the Commission’s
                                                  orders which remove liquidity against                   Exchange believes that its proposal                     Internet Web site (http://www.sec.gov/
                                                  non-displayed orders and no fee for                     would not burden intramarket                            rules/sro.shtml). Copies of the
                                                  orders that remove liquidity against                    competition because the proposed rate                   submission, all subsequent
                                                  displayed order.14 Because the                          would apply uniformly to all Members.                   amendments, all written statements
                                                  Exchange would not be able to control                   C. Self-Regulatory Organization’s                       with respect to the proposed rule
                                                  whether the order it routes to IEX                      Statement on Comments on the                            change that are filed with the
                                                  executes against displayed or non-                      Proposed Rule Change Received From                      Commission, and all written
                                                  displayed liquidity, it therefore, believes             Members, Participants, or Others                        communications relating to the
                                                  it is equitable and reasonable to charge                                                                        proposed rule change between the
                                                                                                            The Exchange has not solicited, and                   Commission and any person, other than
                                                  a fee for orders that yield fee code IX
                                                                                                          does not intend to solicit, comments on                 those that may be withheld from the
                                                  based on IEX’s rates for removing non-                  this proposed rule change. The
                                                  displayed interest. The Exchange further                                                                        public in accordance with the
                                                                                                          Exchange has not received any                           provisions of 5 U.S.C. 552, will be
                                                  believes that its proposal to pass                      unsolicited written comments from                       available for Web site viewing and
                                                    10 See IEX fee schedule available at https://
                                                                                                          Members or other interested parties.                    printing in the Commission’s Public
mstockstill on DSK3G9T082PROD with NOTICES




                                                  iextrading.com/trading/#fee-schedule (effective
                                                                                                            15 The Exchange notes that the proposed rate for
                                                                                                                                                                  Reference Room, 100 F Street NE.,
                                                  August 19, 2016). See also IEX Trading Alert                                                                    Washington, DC 20549, on official
                                                  #2016–036, Investors Exchange Fee Schedule              fee code IX is lower that its standard routing fee of
                                                  Effective August 19, 2016, available at https://        $0.0029 per share under fee code X, which it            business days between the hours of
                                                  iextrading.com/trading/alerts/2016/036/.                charges, for example, to orders routed to the           10:00 a.m. and 3:00 p.m. Copies of the
                                                    11 Id.
                                                                                                          National Stock Exchange, Inc. (‘‘NSX’’) which           filing also will be available for
                                                                                                          charges a lower rate to remove liquidity. See NSX’s
                                                    12 15 U.S.C. 78f.
                                                                                                          fee schedule available at http://nsx.com/client/
                                                    13 15 U.S.C. 78f(b)(4).                                                                                        16   15 U.S.C. 78s(b)(3)(A).
                                                                                                          pricing (charging a fee of $0.0003 per share to
                                                    14 See supra note 10.                                 orders that remove liquidity).                           17   17 CFR 240.19b–4(f).



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                                                  62228                      Federal Register / Vol. 81, No. 174 / Thursday, September 8, 2016 / Notices

                                                  inspection and copying at the principal                 in light of requirements under the                     such period (or the clearing house
                                                  office of the Exchange. All comments                    European Market Infrastructure                         otherwise deems it necessary for its
                                                  received will be posted without change;                 Regulation (‘‘EMIR’’) 5 and relevant UK                protection), the clearing house will
                                                  the Commission does not edit personal                   law.                                                   terminate or liquidate such contracts,
                                                  identifying information from                                                                                   subject to applicable law and its default
                                                                                                          II. Self-Regulatory Organization’s                     rules. The transfer period is intended to
                                                  submissions. You should submit only
                                                                                                          Statement of the Purpose of, and                       be consistent with the timing set forth
                                                  information that you wish to make
                                                                                                          Statutory Basis for, the Proposed Rule                 in CFTC Rule 190.03 for the transfer of
                                                  available publicly. All submissions
                                                                                                          Change                                                 customer positions carried by a
                                                  should refer to File Number SR–
                                                  BatsEDGA–2016–20, and should be                            In its filing with the Commission, ICE              defaulting FCM and for the liquidation
                                                  submitted on or before September 29,                    Clear Europe included statements                       of such contracts that have not been
                                                  2016.                                                   concerning the purpose of and basis for                transferred. The amendments do not
                                                    For the Commission, by the Division of                the proposed rule changes. The text of                 otherwise affect the rights or obligations
                                                  Trading and Markets, pursuant to delegated              these statements may be examined at                    of the clearing house or clearing
                                                  authority.18                                            the places specified in Item IV below.                 members in respect of such a default.
                                                  Robert W. Errett,                                       ICE Clear Europe has prepared                          The amendments are also consistent
                                                  Deputy Secretary.                                       summaries, set forth in sections A, B,                 with the general approach in place for
                                                  [FR Doc. 2016–21491 Filed 9–7–16; 8:45 am]
                                                                                                          and C below, of the most significant                   non-FCM/BD Clearing Members in
                                                                                                          aspects of such statements.                            paragraph 6(f) of the applicable
                                                  BILLING CODE 8011–01–P
                                                                                                                                                                 Standard Terms Annexes to the Rules.
                                                                                                          A. Self-Regulatory Organization’s
                                                                                                          Statement of the Purpose of, and                       2. Statutory Basis
                                                  SECURITIES AND EXCHANGE                                 Statutory Basis for, the Proposed Rule                    ICE Clear Europe believes that the
                                                  COMMISSION                                              Change                                                 changes described herein are consistent
                                                  [Release No. 34–78762; File No. SR–ICEEU–               1. Purpose                                             with the requirements of Section 17A of
                                                  2016–010]                                                                                                      the Act 7 and the regulations thereunder
                                                                                                             The purpose of the rule amendments
                                                                                                                                                                 applicable to it, and are consistent with
                                                  Self-Regulatory Organizations; ICE                      is to modify the ICE Clear Europe
                                                                                                                                                                 the prompt and accurate clearance of
                                                  Clear Europe Limited; Notice of Filing                  Clearing Rules to clarify the timing of
                                                                                                                                                                 and settlement of securities transactions
                                                  and Immediate Effectiveness of a                        certain default procedures in light of
                                                                                                                                                                 and, to the extent applicable, derivative
                                                  Proposed Rule Change Relating to                        regulatory requirements under EMIR
                                                                                                                                                                 agreements, contracts and transactions,
                                                  Certain Default Management                              and UK law.
                                                                                                                                                                 the safeguarding of securities and funds
                                                  Requirements Under Applicable Law                          In particular, Rule 1604(c), which
                                                                                                                                                                 in the custody or control of ICE Clear
                                                                                                          applies to defaults involving an FCM/
                                                  September 2, 2016.                                                                                             Europe or for which it is responsible
                                                                                                          BD Clearing Member, has been revised
                                                     Pursuant to Section 19(b)(1) of the                                                                         and the protection of investors and the
                                                                                                          in light of EMIR Article 48(5)–(6) and
                                                  Securities Exchange Act of 1934                                                                                public interest, within the meaning of
                                                                                                          Paragraph 34(2)(d) of the UK FSMA
                                                  (‘‘Act’’),1 and Rule 19b–4 thereunder,2                                                                        Section 17A(b)(3)(F) of the Act.8 The
                                                                                                          Recognition Requirements (SI 2001/
                                                  notice is hereby given that on August                                                                          changes to the Rules clarify the timing
                                                                                                          995).6 These provisions require that the
                                                  30, 2016, ICE Clear Europe Limited                                                                             of certain actions to be taken in the
                                                                                                          clearing house rules explicitly specify a
                                                  (‘‘ICE Clear Europe’’) filed with the                                                                          management of a default of an FCM/BD
                                                                                                          pre-defined transfer period within
                                                  Securities and Exchange Commission                                                                             Clearing Member, in order to comply
                                                                                                          which a transfer of customer positions
                                                  (‘‘Commission’’) the proposed rule                                                                             with requirements under EMIR and UK
                                                                                                          carried by a defaulting clearing member
                                                  changes described in Items I, II and III                                                                       law, and do not limit the authority of
                                                                                                          to a new clearing member is to take
                                                  below, which Items have been prepared                                                                          the clearing house to act under its
                                                                                                          place, if possible (and after which the
                                                  primarily by ICE Clear Europe. ICE Clear                                                                       default management rules for its
                                                                                                          clearing house would exercise default
                                                  Europe filed the proposed rule changes                                                                         protection. As such, ICE Clear Europe
                                                                                                          remedies to close out any such positions
                                                  pursuant to Section 19(b)(3)(A) of the                                                                         believes that the changes will generally
                                                                                                          not transferred). The amendments to
                                                  Act,3 and Rule 19b–4(f)(4)(i) 4                                                                                promote the prompt and accurate
                                                                                                          Rule 1604(c) specify that the clearing
                                                  thereunder, so that the proposal was                                                                           clearance and settlement of securities
                                                                                                          house will seek to transfer under the
                                                  effective upon filing with the                                                                                 and derivatives transactions, and further
                                                                                                          Default Portability Rules any customer
                                                  Commission. The Commission is                                                                                  the public interest in the safe and
                                                                                                          positions carried by a defaulting FCM/
                                                  publishing this notice to solicit                                                                              effective clearing of such transactions.
                                                                                                          BD Clearing Member within seven
                                                  comments on the proposed rule changes                                                                          ICE Clear Europe does not believe the
                                                                                                          calendar days of the default, and if a
                                                  from interested persons.                                                                                       amendments will adversely affect the
                                                                                                          transfer has not been effected within
                                                                                                                                                                 safeguarding of securities and funds in
                                                  I. Self-Regulatory Organization’s                                                                              its custody or control or for which it is
                                                                                                            5 Regulation (EU) No 648/2012 of the European
                                                  Statement of the Terms of Substance of                                                                         responsible. The changes are thus
                                                                                                          Parliament and of the Council of 4 July 2012 on
                                                  the Proposed Rule Change                                OTC Derivatives, Central Counterparties and Trade      consistent with the requirements of
                                                     The principal purpose of the                         Repositories, as well as various implementing          Section 17A of the Act.9
                                                                                                          regulations and technical standards.
                                                  proposed changes is to modify the ICE                     6 Paragraph 34(2)(d) of the UK Financial Services    B. Self-Regulatory Organization’s
                                                  Clear Europe Clearing Rules (‘‘Clearing                 and Markets Act 2000 (Recognition Requirements         Statement on Burden on Competition
mstockstill on DSK3G9T082PROD with NOTICES




                                                  Rules’’) in order to clarify the timing of              for Investment Exchanges and Clearing Houses)
                                                  certain default management procedures                   Regulations 2001 (SI 2001/995), which was added          ICE Clear Europe does not believe the
                                                                                                          by UK Financial Services and Markets Act 2000          proposed changes would have any
                                                                                                          (Over the Counter Derivatives, Central                 impact, or impose any burden, on
                                                    18 17 CFR 200.30–3(a)(12).
                                                    1 15
                                                                                                          Counterparties and Trade Repositories) Regulations
                                                         U.S.C. 78s(b)(1).                                2013 (SI 2013/504), Part 4, Paragraph 5(6). Citation
                                                    2 17 CFR 240.19b–4.                                                                                           7 15 U.S.C. 78q–1.
                                                                                                          has been added by SEC staff and confirmed by
                                                    3 15 U.S.C. 78s(b)(3)(A).                                                                                     8 15 U.S.C. 78q–1(b)(3)(F).
                                                                                                          ICEEU’s outside counsel by telephone on August
                                                    4 17 CFR 240.19b–4(f)(4)(i).                          31, 2016.                                               9 15 U.S.C. 78q–1.




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Document Created: 2018-02-09 13:12:49
Document Modified: 2018-02-09 13:12:49
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 62226 

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