81 FR 83320 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Period for the Supplemental Competitive Liquidity Provider Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 224 (November 21, 2016)
Federal Register Volume 81, Issue 224 (November 21, 2016)
| Page Range | 83320-83322 | |
| FR Document | 2016-27892 |
[Federal Register Volume 81, Number 224 (Monday, November 21, 2016)] [Notices] [Pages 83320-83322] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-27892] [[Page 83320]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79312; File No. SR-BatsBZX-2016-75] Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Period for the Supplemental Competitive Liquidity Provider Program November 15, 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 and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to extend the pilot period for the Exchange's Supplemental Competitive Liquidity Provider Program (the ``Program''), which is currently set to expire on November 4, 2016 to expire on July 31, 2017. The text of the proposed rule change is available at the Exchange's Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Background On August 30, 2011, the Exchange received approval of rules applicable to the qualification, listing and delisting of securities of issuers on the Exchange.\3\ More recently, the Exchange received approval to operate a pilot program that is designed to incentivize certain Market Makers \4\ registered with the Exchange as ETP CLPs, as defined in Interpretation and Policy .03 to Rule 11.8, to enhance liquidity on the Exchange in certain ETPs \5\ listed on the Exchange and thereby qualify to receive part of a daily rebate as part of the Program under Interpretation and Policy .03 to Rule 11.8.\6\ --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 65225 (August 30, 2011), 76 FR 55148 (September 6, 2011) (SR-BATS-2011-018). \4\ As defined in BZX Rules, the term ``Market Maker'' means a Member that acts a as a market maker pursuant to Chapter XI of BZX Rules. \5\ ETP is defined in Interpretation and Policy .03(b)(4) to Rule 11.8. \6\ See Securities Exchange Act Release No. 72692 (July 28, 2014), 79 FR 44908 (August 1, 2014) (SR-BATS-2014-022) (``CLP Approval Order''). --------------------------------------------------------------------------- The Program was approved by the Commission on a pilot basis running one-year from the date of implementation.\7\ The Commission approved the Program on July 28, 2014.\8\ The Exchange implemented the Program on July 28, 2014 and the pilot period for the Program was originally scheduled to end on July 28, 2015 until it was extended to end on October 28, 2015,\9\ later extended to January 28, 2016,\10\ again extended to April 28, 2016,\11\ then again to July 28, 2016,\12\ again to October 28, 2016,\13\ and most recently to November 4, 2016.\14\ --------------------------------------------------------------------------- \7\ See id at 44909. \8\ Id. \9\ See Securities Exchange Act Release No. 75518 (July 24, 2015), 80 FR 45566 (July 30, 2015 (SR-BATS-2015-55). \10\ See Securities Exchange Act Release No. 76293 (October 28, 2015), 80 FR 67808 (November 3, 2015) (SR-BATS-2015-96). \11\ See Securities Exchange Act Release No. 77033 (February 2, 2016), 81 FR 6558 (February 8, 2016) (SR-BATS-2016-12). \12\ See Securities Exchange Act Release No. 77721 (April 27, 2016), 81 FR 26591 (May 3, 2016) (SR-BatsBZX-2016-11). \13\ See Securities Exchange Act Release No. 78454 (August 2, 2016), 81 FR 52494 (August 8, 2016) (SR-BatsBZX-2016-46). \14\ See Securities Exchange Act Release No. 79222 (November 2, 2016) (SR-BatsBZX-2016-71). --------------------------------------------------------------------------- Proposal To Extend the Operation of the Program The Exchange established the Program in order to enhance liquidity on the Exchange in certain ETPs listed on the Exchange (and thereby enhance the Exchange's ability to compete as a listing venue) by providing a mechanism by which ETP CLPs compete for part of a daily quoting incentive on the basis of providing the most aggressive quotes with the greatest amount of size. Such competition has the ability to reduce spreads, facilitate the price discovery process, and reduce costs for investors trading in such securities, thereby promoting capital formation and helping the Exchange to compete as a listing venue. The Exchange is proposing to extend the current pilot period for the Program from November 4, 2016 to July 31, 2017 in order to allow the Exchange to gather additional data related to the Program as the Program continues to operate. Prior to the end of the pilot period ending July 31, 2017, the Exchange will post a report relating to the Program (the ``Assessment Report'') on its Web site three months before the end of the pilot period or at the time it files to terminate the pilot, whichever comes first. The proposed Assessment Report would list the program objectives that are the focus of the pilot and, for each, provide (a) a statistical analysis that includes evidence that is sufficient to inform a reader about whether the program has met those objectives during the pilot period, along with (b) a narrative explanation of whether and how the evidence indicates the pilot has met the objective, including both strengths and weaknesses of the evidence in this regard. The Assessment Report also would include a discussion of (a) the procedures used in selecting any samples that are used in constructing tables or statistics for inclusion in the Assessment Report, (b) the definitions of any variables and statistics reported in the tables, including test statistics, (c) the statistical significance levels of any test statistics and (d) other statistical or qualitative information that may enhance the usefulness of the Assessment Report as a basis for evaluating the performance of the program. The Assessment Report would present statistics on product performance relative to the performance of comparable or other suitable benchmark products (including test statistics that permit the reader to evaluate the statistical significance of any differences reported or discussed in the report), along with information on the procedures that were used to identify those comparable or benchmark products, the characteristics of each comparable or benchmark products, the characteristics of each product that is [[Page 83321]] the focus of the pilot, the procedures used in selecting the time horizon of the sample and the sensitivity of reported statistics to changes in the time horizon of the sample. As such, the Exchange believes that it is appropriate to extend the current operation of the Program in order to allow the Exchange to gather additional data related to the Program as the Program continues to operate and the Exchange prepares the Assessment Report. Through this filing, the Exchange seeks to extend the current pilot period of the Program until July 31, 2017. 2. Statutory Basis The Exchange believes that its proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.\15\ In particular, the Exchange believes the proposed change furthers the objectives of Section 6(b)(5) of the Act,\16\ in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. The Exchange believes that extending the pilot period for the Program is consistent with these principles because the Program is reasonably designed to enhance quote competition, improve liquidity in securities listed on the Exchange, support the quality of price discovery, promote market transparency, and increase competition for listings and trade executions, while reducing spreads and transaction costs in such securities. Maintaining and increasing liquidity in Exchange-listed securities will help raise investors' confidence in the fairness of the market and their transactions. Further, the Exchange believes that extending the pilot period will allow the Exchange to gather additional data related to the Program as the Program continues to operate in order to better assess the effect of the Program on the public price discovery process and market structure generally as part of its preparation of the Assessment Report. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78f(b). \16\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change extends an established pilot period until July 31, 2017, thus allowing the Program to enhance competition in both the listings market and in competition for market makers. The Program will continue to promote competition in the listings market by providing issuers with a vehicle for paying the Exchange additional fees in exchange for incentivizing tighter spreads and deeper liquidity in listed securities and allow the Exchange to continue to compete with similar programs at Nasdaq Stock Market LLC \17\ and NYSE Arca Equities, Inc.\18\ --------------------------------------------------------------------------- \17\ See Securities Exchange Act Release No. 69195 (March 20, 2013), 78 FR 18393 (March 26, 2013) (SR-NASDAQ-2012-137). \18\ See Securities Exchange Act Release No. 69335 (April 5, 2013), 78 FR 35340 (June 12, 2013) (SR-NYSEARCA-2013-34). --------------------------------------------------------------------------- The Exchange also believes that extending the pilot period will allow the Program to continue to enhance competition among market participants by creating incentives for market makers to compete to make better quality markets. By continuing to require that market makers both meet the quoting requirements and also compete for the daily financial incentives, the quality of quotes on the Exchange will continue to improve. This, in turn, will attract more liquidity to the Exchange and further improve the quality of trading in exchange-listed securities participating in the Program, which will also act to bolster the Exchange's listing business. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from Members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (A) Significantly affect the protection of investors or the public interest; (B) impose any significant burden on competition; and (C) by its terms, become operative for 30 days from the date on which it was filed or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \19\ and paragraph (f)(6) of Rule 19b-4 thereunder.\20\ The Exchange has given the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. --------------------------------------------------------------------------- \19\ 15 U.S.C. 78s(b)(3)(A). \20\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative before 30 days from the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\21\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. --------------------------------------------------------------------------- \21\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- The Exchange has asked the Commission to waive the 30-day operative delay. The Exchange asserts that waiver of the operative delay will allow the Exchange to extend the Program prior to its expiration on November 4, 2016, which will ensure that the Program continues to operate uninterrupted while the Exchange and the Commission continue to analyze data regarding the Program.\22\ The Exchange represents that extending the pilot period will allow the Exchange to gather additional data related to the Program to better assess the effect of the Program on the public price discovery process and market structure, generally, as part of its preparation of the Assessment Report. According to the Exchange, prior to the end of the pilot period ending July 31, 2017, the Exchange will post the Assessment Report on its Web site three months before the end of the pilot period or at the time it files to terminate the pilot, whichever comes first. Based on these representations, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposed rule change to be operative upon filing with the Commission.\23\ --------------------------------------------------------------------------- \22\ The Commission notes that, on November 4, 2016, the Exchange filed a similar rule filing (SR-BatsBZX-2016-74) proposing to extend the Program to July 31, 2017. The Exchange withdrew that filing on November 7, 2016, and filed this proposed rule filing on the same day. \23\ For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- [[Page 83322]] 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: (1) Necessary or appropriate in the public interest; (2) for the protection of investors; or (3) otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File No. SR-BatsBZX-2016-75 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File No. SR-BatsBZX-2016-75. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing will also be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR-BatsBZX-2016-75 and should be submitted on or before December 12, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\24\ --------------------------------------------------------------------------- \24\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2016-27892 Filed 11-18-16; 8:45 am] BILLING CODE 8011-01-P
![83320 Federal Register / Vol. 81, No. 224 / Monday, November 21, 2016 / Notices
SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s on the Exchange in certain ETPs listed
COMMISSION Statement of the Purpose of, and on the Exchange (and thereby enhance
Statutory Basis for, the Proposed Rule the Exchange’s ability to compete as a
[Release No. 34–79312; File No. SR–
Change listing venue) by providing a
BatsBZX–2016–75] 1. Purpose mechanism by which ETP CLPs
compete for part of a daily quoting
Self-Regulatory Organizations; Bats Background incentive on the basis of providing the
BZX Exchange, Inc.; Notice of Filing On August 30, 2011, the Exchange most aggressive quotes with the greatest
and Immediate Effectiveness of a received approval of rules applicable to amount of size. Such competition has
Proposed Rule Change To Extend the the qualification, listing and delisting of the ability to reduce spreads, facilitate
Pilot Period for the Supplemental securities of issuers on the Exchange.3 the price discovery process, and reduce
Competitive Liquidity Provider More recently, the Exchange received costs for investors trading in such
Program approval to operate a pilot program that securities, thereby promoting capital
is designed to incentivize certain Market formation and helping the Exchange to
November 15, 2016. Makers 4 registered with the Exchange compete as a listing venue. The
as ETP CLPs, as defined in Exchange is proposing to extend the
Pursuant to Section 19(b)(1) of the
Interpretation and Policy .03 to Rule current pilot period for the Program
Securities Exchange Act of 1934 (the
11.8, to enhance liquidity on the from November 4, 2016 to July 31, 2017
‘‘Act’’),1 and Rule 19b–4 thereunder,2
Exchange in certain ETPs 5 listed on the in order to allow the Exchange to gather
notice is hereby given that on November
Exchange and thereby qualify to receive additional data related to the Program as
7, 2016, Bats BZX Exchange, Inc. (the the Program continues to operate.
part of a daily rebate as part of the
‘‘Exchange’’ or ‘‘BZX’’) filed with the Program under Interpretation and Policy
Securities and Exchange Commission Prior to the end of the pilot period
.03 to Rule 11.8.6 ending July 31, 2017, the Exchange will
(‘‘Commission’’) the proposed rule The Program was approved by the
change as described in Items I and II post a report relating to the Program (the
Commission on a pilot basis running ‘‘Assessment Report’’) on its Web site
below, which Items have been prepared one-year from the date of three months before the end of the pilot
by the Exchange. The Commission is implementation.7 The Commission period or at the time it files to terminate
publishing this notice to solicit approved the Program on July 28, 2014.8 the pilot, whichever comes first. The
comments on the proposed rule change The Exchange implemented the Program proposed Assessment Report would list
from interested persons. on July 28, 2014 and the pilot period for the program objectives that are the focus
the Program was originally scheduled to of the pilot and, for each, provide (a) a
I. Self-Regulatory Organization’s
end on July 28, 2015 until it was statistical analysis that includes
Statement of the Terms of Substance of
extended to end on October 28, 2015,9 evidence that is sufficient to inform a
the Proposed Rule Change
later extended to January 28, 2016,10 reader about whether the program has
The Exchange filed a proposal to again extended to April 28, 2016,11 then met those objectives during the pilot
extend the pilot period for the again to July 28, 2016,12 again to period, along with (b) a narrative
Exchange’s Supplemental Competitive October 28, 2016,13 and most recently to explanation of whether and how the
Liquidity Provider Program (the November 4, 2016.14 evidence indicates the pilot has met the
‘‘Program’’), which is currently set to Proposal To Extend the Operation of the objective, including both strengths and
expire on November 4, 2016 to expire Program weaknesses of the evidence in this
on July 31, 2017. The Exchange established the regard. The Assessment Report also
The text of the proposed rule change Program in order to enhance liquidity would include a discussion of (a) the
is available at the Exchange’s Web site procedures used in selecting any
at www.batstrading.com, at the 3 See Securities Exchange Act Release No. 65225 samples that are used in constructing
principal office of the Exchange, and at (August 30, 2011), 76 FR 55148 (September 6, 2011) tables or statistics for inclusion in the
(SR–BATS–2011–018). Assessment Report, (b) the definitions of
the Commission’s Public Reference 4 As defined in BZX Rules, the term ‘‘Market
Room. any variables and statistics reported in
Maker’’ means a Member that acts a as a market
maker pursuant to Chapter XI of BZX Rules. the tables, including test statistics, (c)
II. Self-Regulatory Organization’s 5 ETP is defined in Interpretation and Policy the statistical significance levels of any
Statement of the Purpose of, and .03(b)(4) to Rule 11.8. test statistics and (d) other statistical or
6 See Securities Exchange Act Release No. 72692
Statutory Basis for, the Proposed Rule qualitative information that may
(July 28, 2014), 79 FR 44908 (August 1, 2014) (SR–
Change BATS–2014–022) (‘‘CLP Approval Order’’).
enhance the usefulness of the
7 See id at 44909. Assessment Report as a basis for
In its filing with the Commission, the 8 Id. evaluating the performance of the
Exchange included statements 9 See Securities Exchange Act Release No. 75518 program. The Assessment Report would
concerning the purpose of and basis for (July 24, 2015), 80 FR 45566 (July 30, 2015 (SR– present statistics on product
the proposed rule change and discussed BATS–2015–55).
10 See Securities Exchange Act Release No. 76293
performance relative to the performance
any comments it received on the (October 28, 2015), 80 FR 67808 (November 3, 2015) of comparable or other suitable
proposed rule change. The text of these (SR–BATS–2015–96). benchmark products (including test
statements may be examined at the 11 See Securities Exchange Act Release No. 77033
statistics that permit the reader to
asabaliauskas on DSK3SPTVN1PROD with NOTICES
places specified in Item IV below. The (February 2, 2016), 81 FR 6558 (February 8, 2016) evaluate the statistical significance of
(SR–BATS–2016–12).
Exchange has prepared summaries, set 12 See Securities Exchange Act Release No. 77721 any differences reported or discussed in
forth in Sections A, B, and C below, of (April 27, 2016), 81 FR 26591 (May 3, 2016) (SR- the report), along with information on
the most significant parts of such BatsBZX–2016–11). the procedures that were used to
13 See Securities Exchange Act Release No. 78454
statements. identify those comparable or benchmark
(August 2, 2016), 81 FR 52494 (August 8, 2016) (SR-
BatsBZX–2016–46). products, the characteristics of each
1 15 U.S.C. 78s(b)(1). 14 See Securities Exchange Act Release No. 79222 comparable or benchmark products, the
2 17 CFR 240.19b–4. (November 2, 2016) (SR-BatsBZX–2016–71). characteristics of each product that is
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![83322 Federal Register / Vol. 81, No. 224 / Monday, November 21, 2016 / Notices
At any time within 60 days of the submissions. You should submit only the opening of the market.6 As is the
filing of the proposed rule change, the information that you wish to make case today, rejected quotes will not be
Commission summarily may available publicly. All submissions considered when determining a Market
temporarily suspend such rule change if should refer to File No. SR–BatsBZX– Maker’s quoting obligations.7
it appears to the Commission that such 2016–75 and should be submitted on or The Exchange also proposes to amend
action is: (1) Necessary or appropriate in before December 12, 2016. the treatment of incoming quotes after
the public interest; (2) for the protection For the Commission, by the Division of they interact with the Price
of investors; or (3) otherwise in Trading and Markets, pursuant to delegated Improvement Period (‘‘PIP’’).8
furtherance of the purposes of the Act. authority.24
Currently, when an incoming quote is
IV. Solicitation of Comments Brent J. Fields, on the same side as a PIP Order, it may
Secretary. cause the PIP auction to end early, if, at
Interested persons are invited to
[FR Doc. 2016–27892 Filed 11–18–16; 8:45 am] the time of submission, the price of the
submit written data, views and
arguments concerning the foregoing, BILLING CODE 8011–01–P incoming quote would cause an
including whether the proposal is execution to occur prior to the end of
consistent with the Act. Comments may the PIP.9 Under the proposal, the
SECURITIES AND EXCHANGE incoming quote will continue to cause
be submitted by any of the following
COMMISSION the PIP auction to end early if the
methods:
[Release No. 34–79311; File No. SR–BOX– conditions of Rule 7150(i) exist.
Electronic Comments
2016–45] However, after the PIP auction is
• Use the Commission’s Internet concluded, if the incoming quote is
comment form (http://www.sec.gov/ Self-Regulatory Organizations; BOX executable against resting orders or
rules/sro.shtml); or Options Exchange LLC; Order quotes on the BOX Book, it will be
• Send an email to rule- Approving a Proposed Rule Change To rejected. Additionally, currently, when
comments@sec.gov. Please include File Amend the Treatment of Quotes To an incoming quote on the opposite side
No. SR–BatsBZX–2016–75 on the Provide That All Quotes on BOX Are of the PIP Order is received such that it
subject line. Liquidity Adding Only would cause an execution to occur prior
Paper Comments November 15, 2016. to the end of the PIP auction, the
• Send paper comments in triplicate incoming quote will be immediately
I. Introduction
to Secretary, Securities and Exchange
Commission, 100 F Street NE., On September 13, 2016, BOX Options 6 Transactions occurring on the opening are
Exchange LLC (‘‘BOX’’ or ‘‘Exchange’’) deemed to neither add nor remove liquidity and
Washington, DC 20549–1090. therefore are exempt from the liquidity fees and
All submissions should refer to File No. filed with the Securities and Exchange credits on the Exchange. See Section II.C. of the
SR–BatsBZX–2016–75. This file number Commission (‘‘Commission’’), pursuant BOX Fee Schedule.
should be included on the subject line to Section 19(b)(1) of the Securities 7 On a daily basis, a Market Maker must, during
if email is used. To help the Exchange Act of 1934 (‘‘Act’’) 1 and Rule regular market hours, make markets and enter into
19b–4 thereunder,2 a proposed rule any resulting transactions consistent with the
Commission process and review your applicable quoting requirements, such that on a
comments more efficiently, please use change to amend the treatment of quotes daily basis a Market Maker must post valid quotes
only one method. The Commission will to provide that all quotes on BOX are at least sixty percent (60%) of the time that the
post all comments on the Commission’s liquidity adding only. The proposed classes are open for trading. These obligations apply
rule change was published for comment to all of the Market Maker’s appointed classes
Internet Web site (http://www.sec.gov/ collectively, rather than on a class-by-class basis.
rules/sro.shtml). Copies of the in the Federal Register on October 3, See Exchange Rule 8050(e); see also Exchange Rule
submission, all subsequent 2016.3 The Commission received no 8040.
amendments, all written statements comments on the proposal. This order 8 Options Participants, both Order Flow Providers
approves the proposed rule change. and Market Makers, executing agency orders may
with respect to the proposed rule designate Market Orders and marketable limit
change that are filed with the II. Description of the Proposal Customer Orders for price improvement and
Commission, and all written submission to the PIP. Customer Orders designated
The Exchange proposes to amend the for the PIP (‘‘PIP Orders’’) shall be submitted to
communications relating to the
treatment of incoming quotes to BOX so BOX with a matching contra order equal to the full
proposed rule change between the size of the PIP Order. See Exchange Rule 7150.
that they are only accepted if they are
Commission and any person, other than 9 Specifically, the submission to BOX of a Market
liquidity adding.4 Under the Exchange’s
those that may be withheld from the Order on the same side as a PIP Order will
proposed rule change, if an incoming prematurely terminate the PIP when, at the time of
public in accordance with the
quote or quote update is marketable the submission of the Market Order, the best
provisions of 5 U.S.C. 552, will be Improvement Order is equal to or better than the
because it would execute against a
available for Web site viewing and NBBO on the same side of the market as the best
resting order or quote on the BOX
printing in the Commission’s Public Improvement Order. The submission to BOX of an
Book,5 it will be rejected. The Exchange executable Limit Order or generation of an
Reference Room, 100 F Street NE.,
will not reject incoming quotes during executable Legging Order on the same side as a PIP
Washington, DC 20549, on official Order will prematurely terminate the PIP if at the
business days between the hours of 24 17 CFR 200.30–3(a)(12). time of submission: (1) The Buy (Sell) Limit Order
10:00 a.m. and 3:00 p.m. Copies of such 1 15 U.S.C. 78s(b)(1).
or Legging Order price is equal to or higher (lower)
asabaliauskas on DSK3SPTVN1PROD with NOTICES
filing will also be available for 2 17 CFR 240.19b–4.
than the National Best Offer (Bid) and either: (i) The
BOX Best Offer (Bid) is equal to the National Best
inspection and copying at the principal 3 See Securities Exchange Act Release No. 78946
Offer (Bid); or (ii) the BOX Best Offer (Bid) is higher
office of the Exchange. All comments (Septemeber 27, 2016), 81 FR 68069 (October 3, (lower) than the National Best Offer (Bid) and the
received will be posted without change; 2016) (‘‘Notice’’). price of the best Improvement Order is equal to or
4 See Notice, supra note 3 (proposing a new IM–
the Commission does not edit personal lower (higher) than the National Best Offer (Bid); or
8050–3 to Exchange Rule 8050). (2) the Buy (Sell) Limit Order or Legging Order
identifying information from 5 The term ‘‘Central Order Book’’ or ‘‘BOX Book’’ price is lower (higher) than the National Best Offer
means the electronic book of orders on each single (Bid) and its limit price equals or crosses the price
efficiency, competition, and capital formation. See option series maintained by the BOX Trading Host. of the best Improvement Order. See Exchange Rule
15 U.S.C. 78c(f). See Exchange Rule 100(a)(10). 7150(i).
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Document Created: 2018-02-14 08:34:01
Document Modified: 2018-02-14 08:34:01
| 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 83320 |
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