81 FR 81835 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of Bats BZX Exchange, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 223 (November 18, 2016)

Page Range		81835-81837
FR Document		2016-27747
Federal Register, Volume 81 Issue 223 (Friday, November 18, 2016)
[Federal Register Volume 81, Number 223 (Friday, November 18, 2016)]
[Notices]
[Pages 81835-81837]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-27747]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79309; File No. SR-BatsBZX-2016-76]


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

November 14, 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 November 7, 2016, Bats BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
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 proposal to amend the fee schedule applicable 
to Members \5\ and non-members of the Exchange pursuant to BZX Rules 
15.1(a) and (c).
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    \5\ The term ``Member'' is defined as ``any registered broker or 
dealer that has been admitted to membership in the Exchange.'' See 
Exchange Rule 1.5(n).
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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.

[[Page 81836]]

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

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

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

1. Purpose
    The Exchange proposes to increase the fee for orders yielding fee 
code Z, which results from an order routed to a dark liquidity venue 
(except through the SLIM \6\ routing strategy), from $0.00250 to 
$0.00280 per share for securities priced at or above $1.00 and for 
securities priced below $1.00. The Exchange proposes to implement this 
amendment to its Fee Schedule immediately.\7\
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    \6\ See Exchange Rule 11.13(b)(3).
    \7\ The Exchange initially submitted the proposed rule change on 
October 28, 2016. (SR-BatsBZX-2016-70). On November 3, 2016, the 
Exchange withdrew SR-BatsBZX-2016-70 and submitted SR-BatsBZX-2016-
72. On November 7, 2016, the Exchange withdrew SR-BatsBZX-2016-72 
and submitted this filing.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\8\ in general, and 
furthers the objectives of Section 6(b)(4),\9\ 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 its proposal to increase the fee 
for orders routed to a dark liquidity venue that yield fee code Z 
represents an equitable allocation of reasonable dues, fees, and other 
charges among Members and other person using its facilities in that 
they are designed in part to cover the costs of routing. While Members 
that route orders to a dark liquidity venue will be paying higher fees 
due to the proposal, the increased revenue received by the Exchange 
will be used to fund the Exchange generally, including the cost of 
maintaining and improving the technology used to handle and route 
orders from the Exchange as well as programs that the Exchange believes 
help to attract additional liquidity and thus improve the depth of 
liquidity available on the Exchange. Accordingly, although the cost of 
routing is increasing, the Exchange believes that the increase is a 
modest increase and that higher routing fees will benefit Members in 
other ways. Furthermore, the Exchange notes that routing through the 
Exchange is voluntary. Lastly the Exchange also believes that the 
proposed amendment is non-discriminatory because it applies uniformly 
to all Members.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
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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. Additionally, 
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 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 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 \10\ and paragraph (f) of Rule 19b-4 
thereunder.\11\ 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.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f).
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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-BatsBZX-2016-76 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BatsBZX-2016-76. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BatsBZX-2016-76, and should 
be submitted on or before December 9, 2016.


[[Page 81837]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-27747 Filed 11-17-16; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 223 / Friday, November 18, 2016 / Notices 81835

to qualify for a rebate, and rebates are to determine whether the proposed rule For the Commission, by the Division of
provided equally to qualifying should be approved or disapproved. Trading and Markets, pursuant to delegated
Participants. Other exchanges employ authority.9
similar incentive programs; 6 and the IV. Solicitation of Comments Brent J. Fields,
Exchange believes that the proposed Secretary.
Interested persons are invited to
changes to the volume thresholds are submit written data, views, and [FR Doc. 2016–27746 Filed 11–17–16; 8:45 am]
reasonable and competitive when arguments concerning the foregoing, BILLING CODE 8011–01–P
compared to incentive structures at
including whether the proposed rule
other exchanges. Finally, the Exchange
change is consistent with the Act. SECURITIES AND EXCHANGE
believes it is reasonable and appropriate
Comments may be submitted by any of COMMISSION
to continue to provide incentives for
Public Customers, which will result in the following methods:
greater liquidity and ultimately benefit Electronic Comments [Release No. 34–79309; File No. SR–
all Participants trading on the Exchange. BatsBZX–2016–76]
• Use the Commission’s Internet
B. Self-Regulatory Organization’s comment form (http://www.sec.gov/ Self-Regulatory Organizations; Bats
Statement on Burden on Competition BZX Exchange, Inc.; Notice of Filing
rules/sro.shtml); or
The Exchange does not believe that and Immediate Effectiveness of a
• Send an email to rule-comments@ Proposed Rule Change Related to Fees
the proposed rule change will impose sec.gov. Please include File Number SR–
any burden on competition not for Use of Bats BZX Exchange, Inc.
BOX–2016–52 on the subject line.
necessary or appropriate in furtherance November 14, 2016.
of the purposes of the Act. The Paper Comments Pursuant to Section 19(b)(1) of the
Exchange is simply proposing to amend Securities Exchange Act of 1934 (the
certain percentage thresholds for • Send paper comments in triplicate
to Secretary, Securities and Exchange ‘‘Act’’),1 and Rule 19b–4 thereunder,2
Auction Transaction fees and rebates in notice is hereby given that on November
the BOX Fee Schedule. The Exchange Commission, 100 F Street NE.,
7, 2016, Bats BZX Exchange, Inc. (the
believes that the volume based rebates Washington, DC 20549–1090.
‘‘Exchange’’ or ‘‘BZX’’) filed with the
and fees increase intermarket and All submissions should refer to File Securities and Exchange Commission
intramarket competition by incenting Number SR–BOX–2016–52. This file (‘‘Commission’’) the proposed rule
Participants to direct their order flow to number should be included on the change as described in Items I, II, and
the exchange, which benefits all subject line if email is used. To help the III below, which Items have been
participants by providing more trading prepared by the Exchange. The
Commission process and review your
opportunities and improves competition Exchange has designated the proposed
comments more efficiently, please use
on the Exchange. rule change as one establishing or
only one method. The Commission will
C. Self-Regulatory Organization’s post all comments on the Commission’s changing a member due, fee, or other
Statement on Comments on the Internet Web site (http://www.sec.gov/ charge imposed by the Exchange under
Proposed Rule Change Received From rules/sro.shtml). Copies of the Section 19(b)(3)(A)(ii) of the Act 3 and
Members, Participants, or Others submission, all subsequent Rule 19b–4(f)(2) thereunder,4 which
amendments, all written statements renders the proposed rule change
No written comments were either effective upon filing with the
solicited or received. with respect to the proposed rule
Commission. The Commission is
change that are filed with the
III. Date of Effectiveness of the publishing this notice to solicit
Commission, and all written comments on the proposed rule change
Proposed Rule Change and Timing for communications relating to the
Commission Action from interested persons.
proposed rule change between the
The foregoing rule change has become Commission and any person, other than I. Self-Regulatory Organization’s
effective pursuant to Section those that may be withheld from the Statement of the Terms of Substance of
19(b)(3)(A)(ii) of the Exchange Act 7 and public in accordance with the the Proposed Rule Change
Rule 19b–4(f)(2) thereunder,8 because it provisions of 5 U.S.C. 552, will be The Exchange filed a proposal to
establishes or changes a due, or fee. available for Web site viewing and amend the fee schedule applicable to
At any time within 60 days of the printing in the Commission’s Public Members 5 and non-members of the
filing of the proposed rule change, the Reference Room, 100 F Street NE., Exchange pursuant to BZX Rules 15.1(a)
Commission summarily may Washington, DC 20549 on official and (c).
temporarily suspend the rule change if business days between the hours of The text of the proposed rule change
it appears to the Commission that the 10:00 a.m. and 3:00 p.m. Copies of such is available at the Exchange’s Web site
action is necessary or appropriate in the filing also will be available for at www.batstrading.com, at the
public interest, for the protection of inspection and copying at the principal principal office of the Exchange, and at
investors, or would otherwise further office of the Exchange. All comments the Commission’s Public Reference
the purposes of the Act. If the received will be posted without change; Room.
Commission takes such action, the
the Commission does not edit personal
Commission shall institute proceedings
mstockstill on DSK3G9T082PROD with NOTICES

9 17 CFR 200.30–3(a)(12).
identifying information from 1 15 U.S.C. 78s(b)(1).
6 See Section B of the PHLX Pricing Schedule
submissions. You should submit only 2 17 CFR 240.19b–4.

entitled ‘‘Customer Rebate Program;’’ ISE Gemini’s information that you wish to make 3 15 U.S.C. 78s(b)(3)(A)(ii).

Qualifying Tier Thresholds (page 6 of the ISE available publicly. All submissions 4 17 CFR 240.19b–4(f)(2).
Gemini Fee Schedule); and CBOE’s Volume should refer to File Number SR–BOX– 5 The term ‘‘Member’’ is defined as ‘‘any
Incentive Program (VIP). registered broker or dealer that has been admitted
7 15 U.S.C. 78s(b)(3)(A)(ii).
2016–52, and should be submitted on or
to membership in the Exchange.’’ See Exchange
8 17 CFR 240.19b–4(f)(2). before December 9, 2016. Rule 1.5(n).

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Federal Register / Vol. 81, No. 223 / Friday, November 18, 2016 / Notices 81837

For the Commission, by the Division of Interpretations/SEC-Filings/2016- protect investors, municipal entities,
Trading and Markets, pursuant to delegated Filings.aspx, at the MSRB’s principal obligated persons, and the public
authority.12 office, and at the Commission’s Public interest. As part of that review, the
Brent J. Fields, Reference Room. MSRB solicited comments from market
Secretary. participants.5 In response, market
II. Self-Regulatory Organization’s
[FR Doc. 2016–27747 Filed 11–17–16; 8:45 am]
Statement of the Purpose of, and participants recommended that the
BILLING CODE 8011–01–P
Statutory Basis for, the Proposed Rule Board update Rule G–10.6 The proposed
Change rule change, consisting of amendments
to Rule G–10 and its related
SECURITIES AND EXCHANGE In its filing with the Commission, the recordkeeping rules, Rules G–8 and
COMMISSION MSRB included statements concerning G–9, and guidance under Rule G–32, is
the purpose of and basis for the an important element of both MSRB
[Release No. 34–79295; File No. SR–MSRB– proposed rule change and discussed any
2016–15] regulatory initiatives.
comments it received on the proposed
rule change. The text of these statements Proposed Rule Change
Self-Regulatory Organizations;
Municipal Securities Rulemaking may be examined at the places specified To extend its customer complaint and
Board; Notice of Filing of a Proposed in Item IV below. The MSRB has recordkeeping rules to municipal
Rule Change To Extend the MSRB’s prepared summaries, set forth in advisors and to modernize those rules,
Customer Complaint and Related Sections A, B, and C below, of the most the Board is filing this proposed rule
Recordkeeping Rules to Municipal significant aspects of such statements. change with the Commission.
Advisors and To Modernize Those A. Self-Regulatory Organization’s Specifically, the proposed rule change
Rules Statement of the Purpose of, and would (i) extend the Board’s customer
Statutory Basis for, the Proposed Rule complaint recordkeeping requirements
November 14, 2016. to all municipal advisors (i.e., non-
Change
Pursuant to Section 19(b)(1) of the solicitor and solicitor municipal
Securities Exchange Act of 1934 (the 1. Purpose advisors) as well as align those
‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule Background recordkeeping requirements more
19b–4 thereunder,2 notice is hereby closely with the customer complaint
given that on November 1, 2016, the Following the financial crisis of 2008,
Congress enacted the Dodd-Frank Wall recordkeeping requirements of other
Municipal Securities Rulemaking Board financial regulators, (ii) require that all
(the ‘‘MSRB’’ or ‘‘Board’’) filed with the Street Reform and Consumer Protection
Act (the ‘‘Dodd-Frank Act’’).3 The Dodd- regulated entities retain their customer
Securities and Exchange Commission or municipal advisory client 7 complaint
(the ‘‘SEC’’ or ‘‘Commission’’) the Frank Act amended Section 15B of the
Exchange Act to establish a new federal records for six years, (iii) overhaul Rule
proposed rule change as described in G–10 so that the rule would more
Items I, II, and III below, which Items regulatory regime requiring municipal
advisors to register with the closely focus on customer and
have been prepared by the MSRB. The municipal advisory client education and
Commission is publishing this notice to Commission, deeming them to owe a
fiduciary duty to their municipal entity protection as well as align that rule with
solicit comments on the proposed rule customer education and protection rules
change from interested persons. clients and granting the MSRB
rulemaking authority over them. The of other financial regulators, and (iv)
I. Self-Regulatory Organization’s MSRB, in the exercise of that 5 MSRB Notice 2012–63, Request for Comment on
Statement of the Terms of Substance of rulemaking authority, has been MSRB Rules and Interpretive Guidance (Dec. 18,
the Proposed Rule Change developing a comprehensive regulatory 2012).
The MSRB filed with the Commission framework for municipal advisors and 6 See, e.g., Letter from David L. Cohen, Managing

their associated persons.4 Director and Associate General Counsel, Securities
a proposed rule change consisting of (i) Industry and Financial Markets Association, dated
proposed amendments to Rule G–10, on Further, and concurrent with its February 19, 2013, to Ronald W. Smith, Corporate
delivery of investor brochure, Rule G–8, efforts to develop a comprehensive Secretary, Municipal Securities Rulemaking Board
on books and records to be made by regulatory framework for municipal (commenting that (i) the requirement to deliver an
advisors and their associated persons, investor brochure under Rule G–10 should be
brokers, dealers, and municipal eliminated, (ii) the investor brochure is of limited
securities dealers and municipal the MSRB initiated a review of its rules value, if any, to institutional investors as well as
advisors, and Rule G–9, on preservation and related interpretive guidance for investors in municipal fund securities, and (iii)
of records, and (ii) a proposed Board brokers, dealers and municipal alternatively, the MSRB could accomplish the
securities dealers (collectively, objective of Rule G–10 by posting the investor
notice regarding electronic delivery and brochure on its Web site); Letter from Gerald K.
receipt of information by municipal ‘‘dealers’’) and municipal advisors Mayfield, Senior Counsel, Wells Fargo & Company
advisors under Rule G–32, on (municipal advisors, together with Law Department, dated February 19, 2013, to
disclosures in connection with primary dealers, ‘‘regulated entities’’). The Ronald W. Smith, Corporate Secretary, Municipal
MSRB initiated that review in the Securities Rulemaking Board (commenting that (i)
offerings (collectively, the ‘‘proposed the requirement to deliver an investor brochure
rule change’’). The MSRB requests that context of the Board’s obligation to under Rule G–10 should be eliminated, (ii) the
the proposed rule change be approved investor brochure is of limited value, if any, to
3 Public Law 111–203, 124 Stat. 1376 (2010).
with an implementation date of six institutional investors as well as investors in
4 MSRB Rule D–11 defines ‘‘associated persons’’ municipal fund securities, and (iii) alternatively,
months after the Commission approval as follows: the MSRB could accomplish the objective of Rule
mstockstill on DSK3G9T082PROD with NOTICES

date for all changes. Unless the context otherwise requires or a rule of G–10 by posting the investor brochure on its Web
The text of the proposed rule change the Board otherwise specifically provides, the terms site).
is available on the MSRB’s Web site at ‘‘broker,’’ ‘‘dealer,’’ ‘‘municipal securities broker,’’ 7 The proposed rule change, in Rule G–8(e)(ii),

www.msrb.org/Rules-and- ‘‘municipal securities dealer,’’ ‘‘bank dealer,’’ and would define a municipal advisory client as a
‘‘municipal advisor’’ shall refer to and include their municipal entity or an obligated person for whom
respective associated persons. Unless otherwise the municipal advisor engages in activities that
12 17 CFR 200.30–3(a)(12). specified, persons whose functions are solely would cause the municipal advisor to be a
1 15 U.S.C. 78s(b)(i). clerical or ministerial shall not be considered municipal advisor, as defined in Section 15B(e)(4)
2 17 CFR 240.19b–4. associated persons for purposes of the Board’s rules. of the Exchange Act, 15 U.S.C. 78o–4(e)(4).

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Document Created: 2018-02-14 08:32:01
Document Modified: 2018-02-14 08:32:01
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 81835