82 FR 10920 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use on Bats BZX Exchange, Inc. Adding NBBO Setter Tiers

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 31 (February 16, 2017)

Page Range		10920-10921
FR Document		2017-03106

Federal Register, Volume 82 Issue 31 (Thursday, February 16, 2017)

[Federal Register Volume 82, Number 31 (Thursday, February 16, 2017)]
[Notices]
[Pages 10920-10921]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2017-03106]

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80017; File No. SR-BatsBZX-2017-11]

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

February 10, 2017.
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 February 1, 2017, 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.
---------------------------------------------------------------------------

\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).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the
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).
---------------------------------------------------------------------------

\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).
---------------------------------------------------------------------------

The text of the proposed rule change is available at the Exchange's
Web site at www.bats.com, at the principal office of the Exchange, and
at the Commission's Public Reference Room.

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

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

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

1. Purpose
The Exchange proposes to modify its fee schedule applicable to the
Exchange's equities platform to add a new footnote 19, entitled ``NBBO
Setter Tiers.'' Under the proposed new tiers, orders that establish a
new National Best Bid or Offer (``NBBO'') and which are appended with
fee code B, V or Y, would receive an additional rebate ranging from
$0.0001 to $0.0004 per share. The Exchange proposes to add three NBBO
Setter Tiers, as set forth below.
Tier 1 would provide an additional rebate of $0.0001 in
qualifying orders where a Member has a Setter Add TCV \6\ of at least
0.05%.
---------------------------------------------------------------------------

\6\ As defined in the Exchange's fee schedule. The Exchange
notes that this definition has remained in place on the fee schedule
since the previous period during which the Exchange offered NBBO
Setter incentives. See infra, note 7 and accompanying text.
---------------------------------------------------------------------------

Tier 2 would provide an additional rebate of $0.0002 in
qualifying orders where a Member has a Setter Add TCV of at least
0.10%.
Tier 3 would provide an additional rebate of $0.0004 in
qualifying orders where a Member has a Setter Add TCV of at least
0.15%.
The Exchange also proposes to update the Fee Codes and Associated
Fees table accordingly, appending footnote 19 to Fee Codes B, V and Y.
The Exchange notes that the proposed the NBBO Setter Tiers are
additive rebates, and thus, can be combined with other incentives and
structures offered by the Exchange. For instance, while the standard
rebate for an execution yielding fee code V is $0.0020 per share, a
Member with an ADAV \7\ of 0.10% (but less than 0.20%) as a percentage
of TCV,\8\ would qualify for Add Volume Tier 1 under footnote 1, and
would instead receive an enhanced rebate of $0.0025 per share. If such
Member also had a Setter Add TCV of at least 0.05% (but less than
0.10%), such Member would also qualify for NBBO Setter Tier 1 and would
receive a total rebate of $0.0026 per share (representing the original,
enhanced rebate of $0.0025 per share plus the $0.0001 additional
incentive).
---------------------------------------------------------------------------

\7\ As defined in the Exchange's fee schedule.
\8\ As defined in the Exchange's fee schedule.
---------------------------------------------------------------------------

The Exchange notes that it previously has offered NBBO Setter Tiers
(as well as an NBBO ``Joiner Tier'' for orders that did not set but
joined the NBBO), but eliminated these tiers effective May 1,

[[Page 10921]]

2015.\9\ The Exchange is now proposing to re-introduce these incentives
to encourage Members to contribute to market quality on the Exchange.
---------------------------------------------------------------------------

\9\ See Securities Exchange Act Release No. 74938 (May 12,
2015), 80 FR 28322 (May 18, 2015) (SR-BATS-2015-35).
---------------------------------------------------------------------------

2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\10\ in general, and
furthers the objectives of Section 6(b)(4),\11\ 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 the proposed rates are equitable
and non-discriminatory in that they apply uniformly to all Members that
qualify. The Exchange believes the proposed rebates are competitive
with those provided by other venues and therefore continue to be
reasonable and equitably allocated to Members. Volume-based rebates
such as those currently maintained on the Exchange have been widely
adopted by equities and options exchanges and are equitable because
they are open to all Members on an equal basis and provide additional
benefits or discounts that are reasonably related to the value to an
exchange's market quality associated with higher levels of market
activity, such as higher levels of liquidity provision and/or growth
patterns, and introduction of higher volumes of orders into the price
and volume discovery processes.
---------------------------------------------------------------------------

\10\ 15 U.S.C. 78f.
\11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

In particular, the Exchange believes the adoption of the NBBO
Setter Tiers under footnote 19 is a reasonable means to encourage
Members to not only increase their liquidity on the Exchange but also
to contribute to the market quality of the Exchange by offering
aggressively priced liquidity. The Exchange further believes that the
proposed tiers represent an equitable allocation of reasonable dues,
fees, and other charges because the thresholds necessary to achieve the
tiers encourage Members to add additional liquidity to the Exchange.
The Exchange further believes that the NBBO Setter Tiers are not
unreasonably discriminatory as they are equally available to all
Members.

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 not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange does not believe
the proposed tiers will impose an undue burden on competition because
the Exchange will uniformly offer the additional rebates to all
qualifying Members. In fact, the Exchange believes the proposed tiers
enhance competition, as they are intended to increase the
competitiveness of and draw additional volume to the Exchange. Further,
the Exchange believes the proposed tiers enhance competition because
they are intended to incentivize Members to submit aggressively price
liquidity to the Exchange. The Exchange does not believe that the
proposed change represents a significant departure from the Exchange's
current pricing structure, but instead, is merely another incentive
offered by the Exchange to encourage Members to contribute to the
growth of the Exchange. Additionally, Members may opt to disfavor the
Exchange's pricing if they believe that alternatives offer them better
value.

B. 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 \12\ and paragraph (f) of Rule 19b-4
thereunder.\13\ 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.
---------------------------------------------------------------------------

\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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 rule-comments@sec.gov. Please include
File No. SR-BatsBZX-2017-11 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-2017-11. 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 No. SR-BatsBZX-2017-11, and should be
submitted on or before March 9, 2017.
---------------------------------------------------------------------------

\14\ 17 CFR 200.30-3(a)(12).

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-03106 Filed 2-15-17; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 82, No. 31 / Thursday, February 16, 2017 / Notices 10921

2015.9 The Exchange is now proposing Exchange does not believe the proposed • Send an email to rule-comments@
to re-introduce these incentives to tiers will impose an undue burden on sec.gov. Please include File No. SR–
encourage Members to contribute to competition because the Exchange will BatsBZX–2017–11 on the subject line.
market quality on the Exchange. uniformly offer the additional rebates to
all qualifying Members. In fact, the Paper Comments
2. Statutory Basis
Exchange believes the proposed tiers • Send paper comments in triplicate
The Exchange believes that the enhance competition, as they are
proposed rule change is consistent with to Secretary, Securities and Exchange
intended to increase the
the objectives of Section 6 of the Act,10 Commission, 100 F Street NE.,
competitiveness of and draw additional
in general, and furthers the objectives of Washington, DC 20549–1090.
volume to the Exchange. Further, the
Section 6(b)(4),11 in particular, as it is Exchange believes the proposed tiers All submissions should refer to File No.
designed to provide for the equitable enhance competition because they are SR–BatsBZX–2017–11. This file number
allocation of reasonable dues, fees and intended to incentivize Members to should be included on the subject line
other charges among its Members and submit aggressively price liquidity to if email is used. To help the
other persons using its facilities. The the Exchange. The Exchange does not Commission process and review your
Exchange believes that the proposed believe that the proposed change
rates are equitable and non- comments more efficiently, please use
represents a significant departure from only one method. The Commission will
discriminatory in that they apply the Exchange’s current pricing structure,
uniformly to all Members that qualify. post all comments on the Commission’s
but instead, is merely another incentive Internet Web site (http://www.sec.gov/
The Exchange believes the proposed offered by the Exchange to encourage
rebates are competitive with those rules/sro.shtml). Copies of the
Members to contribute to the growth of submission, all subsequent
provided by other venues and therefore the Exchange. Additionally, Members
continue to be reasonable and equitably amendments, all written statements
may opt to disfavor the Exchange’s
allocated to Members. Volume-based with respect to the proposed rule
pricing if they believe that alternatives
rebates such as those currently change that are filed with the
offer them better value.
maintained on the Exchange have been Commission, and all written
widely adopted by equities and options B. Self-Regulatory Organization’s communications relating to the
exchanges and are equitable because Statement on Comments on the proposed rule change between the
they are open to all Members on an Proposed Rule Change Received From Commission and any person, other than
equal basis and provide additional Members, Participants, or Others those that may be withheld from the
benefits or discounts that are reasonably The Exchange has not solicited, and public in accordance with the
related to the value to an exchange’s does not intend to solicit, comments on provisions of 5 U.S.C. 552, will be
market quality associated with higher this proposed rule change. The available for Web site viewing and
levels of market activity, such as higher Exchange has not received any printing in the Commission’s Public
levels of liquidity provision and/or unsolicited written comments from Reference Room, 100 F Street NE.,
growth patterns, and introduction of Members or other interested parties. Washington, DC 20549 on official
higher volumes of orders into the price
and volume discovery processes. III. Date of Effectiveness of the business days between the hours of
In particular, the Exchange believes Proposed Rule Change and Timing for 10:00 a.m. and 3:00 p.m. Copies of such
the adoption of the NBBO Setter Tiers Commission Action filing also will be available for
under footnote 19 is a reasonable means inspection and copying at the principal
The foregoing rule change has become
to encourage Members to not only office of the Exchange. All comments
effective pursuant to Section 19(b)(3)(A)
increase their liquidity on the Exchange of the Act 12 and paragraph (f) of Rule received will be posted without change;
but also to contribute to the market 19b–4 thereunder.13 At any time within the Commission does not edit personal
quality of the Exchange by offering 60 days of the filing of the proposed rule identifying information from
aggressively priced liquidity. The change, the Commission summarily may submissions. You should submit only
Exchange further believes that the temporarily suspend such rule change if information that you wish to make
proposed tiers represent an equitable it appears to the Commission that such available publicly. All submissions
allocation of reasonable dues, fees, and action is necessary or appropriate in the should refer to File No. SR–BatsBZX–
other charges because the thresholds public interest, for the protection of 2017–11, and should be submitted on or
necessary to achieve the tiers encourage investors, or otherwise in furtherance of before March 9, 2017.
Members to add additional liquidity to the purposes of the Act.
the Exchange. The Exchange further For the Commission, by the Division of
believes that the NBBO Setter Tiers are IV. Solicitation of Comments Trading and Markets, pursuant to delegated
not unreasonably discriminatory as they authority.14
Interested persons are invited to
are equally available to all Members. Eduardo A. Aleman,
submit written data, views, and
arguments concerning the foregoing, Assistant Secretary.
B. Self-Regulatory Organization’s
Statement on Burden on Competition including whether the proposed rule [FR Doc. 2017–03106 Filed 2–15–17; 8:45 am]
change is consistent with the Act. BILLING CODE 8011–01–P
The Exchange does not believe that
Comments may be submitted by any of
the proposed rule change will impose
asabaliauskas on DSK3SPTVN1PROD with NOTICES

the following methods:
any burden on competition not
necessary or appropriate in furtherance Electronic Comments
of the purposes of the Act. The • Use the Commission’s Internet
9 See Securities Exchange Act Release No. 74938
comment form (http://www.sec.gov/
(May 12, 2015), 80 FR 28322 (May 18, 2015) (SR– rules/sro.shtml); or
BATS–2015–35).
10 15 U.S.C. 78f. 12 15 U.S.C. 78s(b)(3)(A).
11 15 U.S.C. 78f(b)(4). 13 17 CFR 240.19b–4(f). 14 17 CFR 200.30–3(a)(12).

VerDate Sep<11>2014 19:05 Feb 15, 2017 Jkt 241001 PO 00000 Frm 00051 Fmt 4703 Sfmt 9990 E:\FR\FM\16FEN1.SGM 16FEN1

Document Created: 2018-02-01 15:02:21
Document Modified: 2018-02-01 15:02:21

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		82 FR 10920