82 FR 18516 - Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use on Bats EDGA Exchange, Inc.
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 74 (April 19, 2017)
Federal Register Volume 82, Issue 74 (April 19, 2017)
| Page Range | 18516-18519 | |
| FR Document | 2017-07869 |
[Federal Register Volume 82, Number 74 (Wednesday, April 19, 2017)] [Notices] [Pages 18516-18519] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-07869] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80448; File No. SR-BatsEDGA-2017-06] Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use on Bats EDGA Exchange, Inc. April 13, 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 March 31, 2017, 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 [[Page 18517]] 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 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 EDGA 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its fee schedule for its equity platform (``EDGA Equities'') to: (i) Adopt fee code PL, modify fee codes PA, PT, and PX, as well as the RMPT Tier under footnote 3 to provide fees for the recently implemented RMPL routing strategy; and (ii) modify the descriptions of fee codes MM and MT. Fees for RMPL Routing Strategy The Exchange recently implemented a new midpoint routing strategy known as RMPL \6\ under which a MidPoint Peg Order \7\ first checks the System \8\ for available shares and routes any remaining shares to destinations on the System routing table \9\ that support midpoint eligible orders. If any shares remain unexecuted after routing, they are posted on the EDGA Book \10\ as MidPoint Peg Orders, unless otherwise instructed by the User.\11\ As a result of this additional functionality, the Exchange proposes to amend its fee schedule to adopt fees which would apply to orders routed pursuant to the RMPL routing strategy. --------------------------------------------------------------------------- \6\ See Securities Exchange Act Release No. 79596 (December 19, 2016), 81 FR 94454 (December 26, 2016) (SR-BatsEDGA-2016-34) (``RMPL Filing''). \7\ In sum, a MidPoint Peg Order is a non-displayed Market Order or Limit Order with an instruction to execute at the midpoint of the NBBO, or, alternatively, pegged to the less aggressive of the midpoint of the NBBO or one minimum price variation inside the same side of the NBBO as the order. See Exchange Rule 11.8(d). \8\ The term ``System'' is defined as ``the electronic communications and trading facility designated by the Board through which securities orders of Users are consolidated for ranking, execution and, when applicable, routing away.'' See Exchange Rule 1.5(cc). \9\ The term ``System routing table'' refers to the proprietary process for determining the specific trading venues to which the System routes orders and the order in which it routes them. See Exchange Rule 11.11(g). While the process for determining the specific trading venues to which orders are routed is proprietary, the Exchange publicly discloses the trading venues associated with each routing strategy via its Web site at http://cdn.batstrading.com/resources/features/bats_exchange_routing-strategies.pdf. \10\ The term ``EDGA Book'' is defined as the ``System's electronic file of orders.'' See Exchange Rule 1.5(d). The Exchange also proposed to capitalize the word ``Book'' within Rule 11.11(g)(13) as the term EDGA Book is a defined term in the Exchange's Rules. \11\ The term ``User'' is defined as ``any Member or Sponsored Participant who is authorized to obtain access to the System pursuant to Rule 11.3.'' See Exchange Rule 1.5(ee). --------------------------------------------------------------------------- Fee Code PL. The Exchange proposes to adopt fee code PL, which would apply to orders routed to Bats BZX Exchange, Inc. (``BZX''), Bats EDGX Exchange, Inc. (``EDGX''), the New York Stock Exchange, Inc. (``NYSE''), NYSE Arca, Inc. (``NYSE Arca''), or Nasdaq Stock Market LLC (``Nasdaq'') using a RMPL routing strategy. Orders that yield fee code PL would be charged a fee of $0.0030 per share in securities priced at or above $1.00 and 0.30% of the trade's total dollar value in securities priced below $1.00. Fee Codes PA, PT, PX, and RMPT Tier. The RMPT routing strategy operates similarly to RMPL in that under both Mid-Point Peg Orders check the System for available shares and any remaining shares are then sent to destinations on the System routing table that support midpoint eligible orders. If any shares remain unexecuted after routing, they are posted on the EDGA Book as a Mid-Point Peg Order, unless otherwise instructed by the User. While RMPL and RMPT operate in an identical manner, the trading venues that each routing strategy routes to and the order in which it routes them differ. Due to the identical behavior of RMPT and RMPL routing options, the Exchange proposes to amend fee Codes PA, PT, PX, and RMPT Tier, all of which set forth fees for the RMPT routing strategy, to also provide fees for the RMPL routing strategy. Each of these changes are as follows:Fee Code PA. Currently, fee code PA only applies to orders which add liquidity to the Exchange using a RMPT routing strategy. Orders that yield fee code PA are assessed a fee of $0.0008 per share in securities priced at or above $1.00 and are not assessed a fee in securities below $1.00. The Exchange now proposes modify the application of fee code PA not only apply to RMPT, but to also apply RMPL. The Exchange does not propose to modify the fee associated with PA. Fee Code PT. Currently, fee code PT only applies to orders which remove liquidity on the Exchange using a RMPT routing strategy. Orders that yield fee code PT are assessed a fee of $0.0010 per share in securities priced at or above $1.00 and are not assessed a fee in securities below $1.00. The Exchange now proposes modify the application of fee code PT not only apply to RMPT, but to also apply RMPL. The Exchange does not propose to modify the fee associated with PT. Fee Code PX. Currently, fee code PX only applies to orders routed using a RMPT routing strategy. Order that yield fee code PX are assessed a fee of $0.0012 per share in securities priced at or above $1.00 and 0.30% of the trade's total dollar value in securities priced below $1.00. The Exchange now proposes modify the application of fee code PX not only apply to RMPT, but to also apply RMPL. However, fee code PX would only apply to orders routed to destinations not covered by fee code PL using the RMPL routing strategy, as set forth above. The Exchange does not propose to modify the fee associated with PX. RMPT Tier Under Footnote 3. Currently, the Exchange offers one RMPT Tier under which a Member may receive a discounted fee of $0.0008 per share for orders yielding fee codes PT or PX where that Member adds or removes [[Page 18518]] an ADV \12\ greater than or equal to 2,000,000 shares using a the RMPT routing strategy. The Exchange now proposes to amend the RMPT Tier to allow the Member's ADV to also include shares that use the RMPL routing strategy. The Exchange does not propose to modify the fee associated with PT. --------------------------------------------------------------------------- \12\ ADV is generally defined as average daily volume calculated as the number of shares added to, removed from, or routed by, the Exchange, or any combination or subset thereof, per day. See the Exchange's fee schedule available at http://www.bats.com/us/equities/membership/fee_schedule/edga/. --------------------------------------------------------------------------- Fee Codes MM and MT The Exchange proposes to amend the descriptions of fee code MM and MT to align with the description of similar fee codes of its affiliated exchanges.\13\ Fee code MM is [sic] applies to Non-Displayed \14\ orders that add liquidity at the midpoint of the national best bid and offer (``NBBO'') while fee code MT is [sic] applies to Non-Displayed orders that remove liquidity at the midpoint of the NBBO. Orders that yield fee code MM or MT are charged a fee of $0.00080 per share in securities priced at or above $1.00 and 0.08% of the trade's total dollar value in securities priced below $1.00. To align the description of fee codes MM and MT with similar fee codes of its affiliated exchanges,\15\ the Exchange proposes to amend their descriptions as follows. Fee code MM would now state that is applies to Non-displayed orders that add liquidity using Mid-Point Peg order type. Fee code MT would now state that is applies to Non-displayed orders that remove liquidity using Mid-Point Peg order type. The proposed changes do not alter the types of orders to which the fee codes would apply. The Exchange does not propose to modify the fee associated with MM and MT. --------------------------------------------------------------------------- \13\ The Exchange's affiliates are Bats EDGX Exchange, Inc. (``EDGX''), Bats BYX Exchange, Inc., (``BYX''), and Bats BZX Exchange, Inc. (``BZX''). \14\ See Exchange Rule 11.6(e)(2). \15\ See e.g., fee codes MM and MT on the BYX fee schedule available at http://www.bats.com/us/equities/membership/fee_schedule/byx/; and fee code MM on the EDGX fee schedule available at http://www.bats.com/us/equities/membership/fee_schedule/edgx/. --------------------------------------------------------------------------- Implementation Date The Exchange proposes to implement the above changes to its fee schedule on April 3, 2017. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,\16\ in general, and furthers the objectives of Section 6(b)(4),\17\ 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. --------------------------------------------------------------------------- \16\ 15 U.S.C. 78f. \17\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- Fees for RMPL Routing Strategy The Exchange believes the proposed fee code PL and the expansion of fee codes PA, PT and PX as well as the RMPT Tier to adopt fees for orders routed using the options RMPL routing strategy represents an equitable allocation of reasonable dues, fees. The proposed fee code structure 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 destinations described in fee codes PL, PA, PT and PX when it does not qualify for a volume tier reduced fee. As a result, when Bats Trading is charged a fee when it routes an order which removes liquidity from a destination described in fee codes PL, PA, PT and PX.\18\ Bats Trading will pass through these rates to the Exchange and the Exchange, in turn, will charge the rates under fee codes PL, PA, PT and PX, as applicable. The proposed fee under fee codes PL, PA, PT and PX for orders routed pursuant to the RMPL routing strategy would enable the Exchange to equitably allocate its costs among all Members. Further, the Exchange believe that the expansion of the RMPT Tier to allow the Member's ADV to also include shares that use the RMPL routing strategy is also reasonable and equitable because of the similar operation of the RMPL and RMPT routing strategies and results in the equal treatment of those orders under the Exchange's tiered pricing structure. In addition, the inclusion of the RMPL routing strategy in the RMPT Tier should also attract additional midpoint liquidity to the Exchange, resulting in increased price improvement opportunities for orders seeking an execution at the midpoint of the NBBO on the Exchange or elsewhere. --------------------------------------------------------------------------- \18\ For example, Nasdaq, NYSE, NYSE Arca, BZX, and EDGX charge a fee of $0.0030 per share for orders that remove midpoint liquidity. See Nasdaq's fee schedule available at http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2; NYSE's price list available at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf; NYSE Arca's price list available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf; BZX's fee schedule available at http://www.bats.com/us/equities/membership/fee_schedule/bzx/; and EDGX's fee schedule available at http://www.bats.com/us/equities/membership/fee_schedule/edgx/. --------------------------------------------------------------------------- The Exchange notes that routing through Bats Trading is voluntary. Members seeking to [sic] midpoint eligible route such orders to BZX, EDGX, NYSE, NYSE Arca, and Nasdaq, or to any other destination covered by the RMPL routing strategy may connect to those destinations directly and be charged the fee or provided the rebate from that destination. The Exchange further believes that this pricing structure is non- discriminatory as it applies equally to all Members. Fee Codes MM and MT The Exchange believes [sic] proposed rule change represents an equitable allocation of reasonable dues, fees, and other charges because the amended the descriptions of fee code MM and MT to [sic] solely intended to align with the description of similar fee codes of its affiliated exchanges. Harmonized descriptions should help alleviate potential investor confusion for those that send midpoint eligible order to the exchange and its affiliates. The proposed changes do not alter the types of orders to which the fee codes would apply. Nor does the Exchange propose to modify the fees associated with MM and MT. In addition, the Exchange also believes that the proposed modifications of the descriptions of fee codes MM and MT are non-discriminatory because they would apply uniformly to all Members. 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 rates 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 [sic] fees would increase intermarket competition by offering customers an alternative means to route to destinations covered by fee codes PL, PA, PT and PX. As stated above, routing through Bats Trading is voluntary and Members may utilize other avenues to route orders to destinations covered by fee codes PL, PA, PT and PX, such as connecting to those destinations directly. The changes [[Page 18519]] to the RMPT Tier to include the RMPL routing strategy as part of the tier's ADV calculation should increase competition as it is designed to attract additional midpoint order flow to the Exchange. The changes to the descriptions of fee codes MM and MT should have no impact on competition as they are similar designed to align their descriptions with that of similar fee codes offered by the Exchange's affiliates. 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 \19\ and paragraph (f) of Rule 19b-4 thereunder.\20\ 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. --------------------------------------------------------------------------- \19\ 15 U.S.C. 78s(b)(3)(A). \20\ 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 No. SR-BatsEDGA-2017-06 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-BatsEDGA-2017-06. 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 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-BatsEDGA-2017-06, and should be submitted on or before May 10, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\21\ --------------------------------------------------------------------------- \21\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2017-07869 Filed 4-18-17; 8:45 am] BILLING CODE 8011-01-P
![18516 Federal Register / Vol. 82, No. 74 / Wednesday, April 19, 2017 / Notices
identified its current dichotomy-based above, is consistent with the applicable Internet Web site (http://www.sec.gov/
algorithm as a source of operational risk, requirements of the Act, eliminates rules/sro.shtml). Copies of the
based on its observation of the algorithm operational risk and provides reliable submission, all subsequent
as an operationally intensive and time pricing of CDS in the event that the amendments, all written statements
consuming practice. LCH SA believes ISDA Pricer fails. Therefore, LCH SA with respect to the proposed rule
that the new pricing method as does not believe the proposed rule change that are filed with the
described in the proposed rule change is change will impose any burden on Commission, and all written
reasonably designed to minimize competition that is not necessary or communications relating to the
operational risk and eliminate possible appropriate in furtherance of the proposed rule change between the
delays existing in the current overnight purposes of the Act. Commission and any person, other than
batch process as a result of the those that may be withheld from the
dichotomy-based algorithm in the event C. Clearing Agency’s Statement on public in accordance with the
of extreme spread curves that cause the Comments on the Proposed Rule provisions of 5 U.S.C. 552, will be
ISDA Pricer to fail. In addition, LCH SA Change Received From Members, available for Web site viewing and
has performed analysis comparing its Participants or Others printing in the Commission’s Public
approximation method to the ISDA Written comments relating to the Reference Room, 100 F Street NE.,
Pricer and the results indicate that its proposed rule change have not been Washington, DC 20549, on official
approximation method provides a solicited or received. LCH SA will business days between the hours of
reliable pricing estimate. Therefore, notify the Commission of any written 10:00 a.m. and 3:00 p.m. Copies of such
LCH SA believes that the proposed rule comments received by LCH SA. filings will also be available for
change is reasonably designed to inspection and copying at the principal
III. Date of Effectiveness of the office of LCH SA and on LCH SA’s Web
minimize or mitigate the operational
risk identified by LCH SA through the Proposed Rule Change and Timing for site at http://www.lch.com/asset-
use of appropriate systems and policies, Commission Action classes/cdsclear.
consistent with Rule 17Ad–22(d)(4) and Within 45 days of the date of All comments received will be posted
Rule 17Ad–22(e)(17). The proposed rule publication of this notice in the Federal without change; the Commission does
change is also consistent with Rule Register or within such longer period not edit personal identifying
17Ad–22(b)(1) and (2),6 which require a up to 90 days (i) as the Commission may information from submissions. You
clearing agency to maintain margin and designate if it finds such longer period should submit only information that
limit a clearing agency’s exposures to to be appropriate and publishes its you wish to make available publicly. All
potential losses from participants’ reasons for so finding or (ii) as to which submissions should refer to File
defaults under normal market the self-regulatory organization Number SR–LCH SA–2017–004 and
conditions, and Rule 17Ad–22(e)(4),7 consents, the Commission will: should be submitted on or before May
which requires a covered clearing (A) by order approve or disapprove 10, 2017.
agency to manage credit exposures to such proposed rule change, or For the Commission, by the Division of
participants by maintaining sufficient (B) institute proceedings to determine Trading and Markets, pursuant to delegated
financial resources to cover its credit whether the proposed rule change authority.9
exposure to each participant fully with should be disapproved. Brent J. Fields,
a high degree of confidence. LCH SA IV. Solicitation of Comments Secretary.
has performed analysis to support the [FR Doc. 2017–07873 Filed 4–18–17; 8:45 am]
new pricing method for extreme spread Interested persons are invited to
BILLING CODE 8011–01–P
curves as a reliable pricing tool to use submit written data, views, and
in its margin methodology in the event arguments concerning the foregoing,
of extreme spread curves that cause the including whether the proposed rule SECURITIES AND EXCHANGE
ISDA Pricer to fail, and, therefore, change is consistent with the Act. COMMISSION
believes that the proposed rule change Comments may be submitted by any of
the following methods: [Release No. 34–80448; File No. SR–
would continue to cause LCH SA to
BatsEDGA–2017–06]
maintain margin to cover its credit Electronic Comments
exposure to, and to limit its exposures Self-Regulatory Organizations; Bats
to potential losses, each Clearing • Use the Commission’s Internet
comment form (http://www.sec.gov/ EDGA Exchange, Inc.; Notice of Filing
Member’s defaults [sic] under normal and Immediate Effectiveness of a
market conditions with a high degree of rules/sro.shtml); or
• Send an email to rule-comments@ Proposed Rule Change Related to Fees
confidence. for Use on Bats EDGA Exchange, Inc.
sec.gov. Please include File Number SR–
B. Clearing Agency’s Statement on LCH SA–2017–004 on the subject line. April 13, 2017.
Burden on Competition Pursuant to Section 19(b)(1) of the
Paper Comments
Section 17A(b)(3)(I) of the Act Securities Exchange Act of 1934 (the
requires that the rules of a clearing • Send paper comments in triplicate ‘‘Act’’),1 and Rule 19b–4 thereunder,2
agency not impose any burden on to Secretary, Securities and Exchange notice is hereby given that on March 31,
competition not necessary or Commission, 100 F Street NE., 2017, Bats EDGA Exchange, Inc. (the
appropriate in furtherance of the Washington, DC 20549–1090. ‘‘Exchange’’ or ‘‘EDGA’’) filed with the
All submissions should refer to File
jstallworth on DSK7TPTVN1PROD with NOTICES
purposes of the Act.8 The proposed rule Securities and Exchange Commission
change is part of the spread margin Number SR–LCH SA–2017–004. This (‘‘Commission’’) the proposed rule
calculation, which will uniformly apply file number should be included on the change as described in Items I, II and III
across all participants and, as noted subject line if email is used. To help the below, which Items have been prepared
Commission process and review your
6 17 CFR 240.17Ad–22(b)(1)–(2). comments more efficiently, please use 9 17 CFR 200.30–3(a)(12).
7 17 CFR 240.17Ad–22(e)(4). only one method. The Commission will 1 15 U.S.C. 78s(b)(1).
8 15 U.S.C. 78q–1(b)(3)(I). post all comments on the Commission’s 2 17 CFR 240.19b–4.
VerDate Sep<11>2014 15:06 Apr 18, 2017 Jkt 241001 PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 E:\FR\FM\19APN1.SGM 19APN1](https://thefederalregister.org/doc/82_FR_18590/page/1.svg)
![18518 Federal Register / Vol. 82, No. 74 / Wednesday, April 19, 2017 / Notices
an ADV 12 greater than or equal to Section 6(b)(4),17 in particular, as it is The Exchange notes that routing
2,000,000 shares using a the RMPT designed to provide for the equitable through Bats Trading is voluntary.
routing strategy. The Exchange now allocation of reasonable dues, fees and Members seeking to [sic] midpoint
proposes to amend the RMPT Tier to other charges among its Members and eligible route such orders to BZX,
allow the Member’s ADV to also include other persons using its facilities. EDGX, NYSE, NYSE Arca, and Nasdaq,
shares that use the RMPL routing or to any other destination covered by
Fees for RMPL Routing Strategy the RMPL routing strategy may connect
strategy. The Exchange does not propose
to modify the fee associated with PT. The Exchange believes the proposed to those destinations directly and be
fee code PL and the expansion of fee charged the fee or provided the rebate
Fee Codes MM and MT from that destination. The Exchange
codes PA, PT and PX as well as the
The Exchange proposes to amend the RMPT Tier to adopt fees for orders further believes that this pricing
descriptions of fee code MM and MT to routed using the options RMPL routing structure is non-discriminatory as it
align with the description of similar fee strategy represents an equitable applies equally to all Members.
codes of its affiliated exchanges.13 Fee allocation of reasonable dues, fees. The Fee Codes MM and MT
code MM is [sic] applies to Non- proposed fee code structure would
Displayed 14 orders that add liquidity at enable the Exchange to charge a rate The Exchange believes [sic] proposed
the midpoint of the national best bid reasonably related to the rate that Bats rule change represents an equitable
and offer (‘‘NBBO’’) while fee code MT Trading, Inc. (‘‘Bats Trading’’), the allocation of reasonable dues, fees, and
is [sic] applies to Non-Displayed orders Exchange’s affiliated routing broker- other charges because the amended the
that remove liquidity at the midpoint of dealer, would be charged for routing descriptions of fee code MM and MT to
the NBBO. Orders that yield fee code orders to destinations described in fee [sic] solely intended to align with the
MM or MT are charged a fee of $0.00080 codes PL, PA, PT and PX when it does description of similar fee codes of its
per share in securities priced at or above not qualify for a volume tier reduced affiliated exchanges. Harmonized
$1.00 and 0.08% of the trade’s total fee. As a result, when Bats Trading is descriptions should help alleviate
charged a fee when it routes an order potential investor confusion for those
dollar value in securities priced below
which removes liquidity from a that send midpoint eligible order to the
$1.00. To align the description of fee
destination described in fee codes PL, exchange and its affiliates. The
codes MM and MT with similar fee
PA, PT and PX.18 Bats Trading will pass proposed changes do not alter the types
codes of its affiliated exchanges,15 the
of orders to which the fee codes would
Exchange proposes to amend their through these rates to the Exchange and
apply. Nor does the Exchange propose
descriptions as follows. Fee code MM the Exchange, in turn, will charge the
to modify the fees associated with MM
would now state that is applies to Non- rates under fee codes PL, PA, PT and
and MT. In addition, the Exchange also
displayed orders that add liquidity PX, as applicable. The proposed fee
believes that the proposed modifications
using Mid-Point Peg order type. Fee under fee codes PL, PA, PT and PX for
of the descriptions of fee codes MM and
code MT would now state that is applies orders routed pursuant to the RMPL
MT are non-discriminatory because they
to Non-displayed orders that remove routing strategy would enable the
would apply uniformly to all Members.
liquidity using Mid-Point Peg order Exchange to equitably allocate its costs
type. The proposed changes do not alter among all Members. Further, the B. Self-Regulatory Organization’s
the types of orders to which the fee Exchange believe that the expansion of Statement on Burden on Competition
codes would apply. The Exchange does the RMPT Tier to allow the Member’s This proposed rule change does not
not propose to modify the fee associated ADV to also include shares that use the impose any burden on competition that
with MM and MT. RMPL routing strategy is also reasonable is not necessary or appropriate in
and equitable because of the similar furtherance of the purposes of the Act.
Implementation Date
operation of the RMPL and RMPT The Exchange does not believe that this
The Exchange proposes to implement routing strategies and results in the change represents a significant
the above changes to its fee schedule on equal treatment of those orders under departure from previous pricing offered
April 3, 2017. the Exchange’s tiered pricing structure. by the Exchange or from pricing offered
In addition, the inclusion of the RMPL by the Exchange’s competitors. The
2. Statutory Basis routing strategy in the RMPT Tier proposed rates would apply uniformly
The Exchange believes that the should also attract additional midpoint to all Members, and Members may opt
proposed rule change is consistent with liquidity to the Exchange, resulting in to disfavor the Exchange’s pricing if
the objectives of Section 6 of the Act,16 increased price improvement they believe that alternatives offer them
in general, and furthers the objectives of opportunities for orders seeking an better value. Accordingly, the Exchange
execution at the midpoint of the NBBO does not believe that the proposed
12 ADV is generally defined as average daily on the Exchange or elsewhere. changes will impair the ability of
volume calculated as the number of shares added Members or competing venues to
to, removed from, or routed by, the Exchange, or
any combination or subset thereof, per day. See the
17 15 U.S.C. 78f(b)(4). maintain their competitive standing in
18 For example, Nasdaq, NYSE, NYSE Arca, BZX,
Exchange’s fee schedule available at http:// the financial markets. The Exchange
and EDGX charge a fee of $0.0030 per share for
www.bats.com/us/equities/membership/fee_
orders that remove midpoint liquidity. See Nasdaq’s
believes that its proposal to [sic] fees
schedule/edga/. would increase intermarket competition
13 The Exchange’s affiliates are Bats EDGX
fee schedule available at http://
www.nasdaqtrader.com/ by offering customers an alternative
Exchange, Inc. (‘‘EDGX’’), Bats BYX Exchange, Inc., Trader.aspx?id=PriceListTrading2; NYSE’s price means to route to destinations covered
jstallworth on DSK7TPTVN1PROD with NOTICES
(‘‘BYX’’), and Bats BZX Exchange, Inc. (‘‘BZX’’). list available at https://www.nyse.com/publicdocs/
14 See Exchange Rule 11.6(e)(2).
nyse/markets/nyse/NYSE_Price_List.pdf; NYSE
by fee codes PL, PA, PT and PX. As
15 See e.g., fee codes MM and MT on the BYX fee
Arca’s price list available at https://www.nyse.com/ stated above, routing through Bats
schedule available at http://www.bats.com/us/ publicdocs/nyse/markets/nyse-arca/NYSE_Arca_ Trading is voluntary and Members may
equities/membership/fee_schedule/byx/; and fee Marketplace_Fees.pdf; BZX’s fee schedule available utilize other avenues to route orders to
code MM on the EDGX fee schedule available at at http://www.bats.com/us/equities/membership/
http://www.bats.com/us/equities/membership/fee_ fee_schedule/bzx/; and EDGX’s fee schedule
destinations covered by fee codes PL,
schedule/edgx/. available at http://www.bats.com/us/equities/ PA, PT and PX, such as connecting to
16 15 U.S.C. 78f. membership/fee_schedule/edgx/. those destinations directly. The changes
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![Federal Register / Vol. 82, No. 74 / Wednesday, April 19, 2017 / Notices 18519
to the RMPT Tier to include the RMPL • Send an email to rule-comments@ SECURITIES AND EXCHANGE
routing strategy as part of the tier’s ADV sec.gov. Please include File No. SR- COMMISSION
calculation should increase competition BatsEDGA–2017–06 on the subject line.
as it is designed to attract additional [Release No. 34–80455; File No. 4–631]
midpoint order flow to the Exchange. Paper Comments
Joint Industry Plan; Order Approving
The changes to the descriptions of fee • Send paper comments in triplicate the Thirteenth Amendment to the
codes MM and MT should have no to Secretary, Securities and Exchange National Market System Plan To
impact on competition as they are
Commission, 100 F Street NE., Address Extraordinary Market
similar designed to align their
Washington, DC 20549–1090. Volatility by Bats BZX Exchange, Inc.,
descriptions with that of similar fee
Bats BYX Exchange, Inc., Bats EDGA
codes offered by the Exchange’s All submissions should refer to File No.
Exchange, Inc., Bats EDGX Exchange,
affiliates. Additionally, Members may SR-BatsEDGA–2017–06. This file Inc., Chicago Stock Exchange, Inc.,
opt to disfavor the Exchange’s pricing if number should be included on the Financial Industry Regulatory
they believe that alternatives offer them subject line if email is used. To help the Authority, Inc., Investors Exchange
better value. Accordingly, the Exchange Commission process and review your LLC, NASDAQ BX, Inc., NASDAQ PHLX
does not believe that the proposed comments more efficiently, please use LLC, The Nasdaq Stock Market LLC,
changes will impair the ability of only one method. The Commission will NYSE National, Inc., New York Stock
Members or competing venues to post all comments on the Commission’s Exchange LLC, NYSE MKT LLC, and
maintain their competitive standing in Internet Web site (http://www.sec.gov/ NYSE Arca, Inc.
the financial markets. The Exchange rules/sro.shtml). Copies of the
believes that its proposal would not submission, all subsequent April 13, 2017.
burden intramarket competition because
amendments, all written statements I. Introduction
the proposed rate would apply
with respect to the proposed rule
uniformly to all Members. On February 13, 2017, NYSE Group,
change that are filed with the
Inc., on behalf of the other parties 1 to
C. Self-Regulatory Organization’s Commission, and all written the National Market System Plan to
Statement on Comments on the communications relating to the Address Extraordinary Market Volatility
Proposed Rule Change Received From proposed rule change between the (the ‘‘Plan’’), filed with the Securities
Members, Participants, or Others Commission and any person, other than and Exchange Commission
The Exchange has not solicited, and those that may be withheld from the (‘‘Commission’’) pursuant to Section
does not intend to solicit, comments on public in accordance with the 11A of the Securities Exchange Act of
this proposed rule change. The provisions of 5 U.S.C. 552, will be 1934 (‘‘Act’’) 2 and Rule 608
Exchange has not received any written available for Web site viewing and thereunder,3 a proposal to amend the
comments from members or other printing in the Commission’s Public Plan.4 The proposal represents the
interested parties. Reference Room, 100 F Street NE., thirteenth amendment to the Plan, and
Washington, DC 20549, on official reflects proposed changes unanimously
III. Date of Effectiveness of the
business days between the hours of approved by the Participants
Proposed Rule Change and Timing for
10:00 a.m. and 3:00 p.m. Copies of the (‘‘Thirteenth Amendment’’). The
Commission Action
filing also will be available for proposed Thirteenth Amendment was
The foregoing rule change has become inspection and copying at the principal published for comment in the Federal
effective pursuant to Section 19(b)(3)(A) office of the Exchange. All comments Register on March 16, 2017.5 The
of the Act 19 and paragraph (f) of Rule received will be posted without change; Commission received no comment
19b–4 thereunder.20 At any time within the Commission does not edit personal letters regarding the amendment. This
60 days of the filing of the proposed rule identifying information from order approves the Thirteenth
change, the Commission summarily may submissions. You should submit only Amendment to the Plan as proposed.
temporarily suspend such rule change if information that you wish to make II. Description of the Proposal
it appears to the Commission that such available publicly. All submissions
action is necessary or appropriate in the In the Thirteenth Amendment, the
should refer to File No. SR–BatsEDGA– Participants propose to (1) extend the
public interest, for the protection of 2017–06, and should be submitted on or
investors, or otherwise in furtherance of pilot period of the Plan from April 21,
before May 10, 2017. 2017 to April 16, 2018; (2) require the
the purposes of the Act.
For the Commission, by the Division of Processor to publish, in connection with
IV. Solicitation of Comments Trading and Markets, pursuant to delegated a reopening after a Trading Pause, the
Interested persons are invited to authority.21 auction reference price, auction collars,
submit written data, views, and Brent J. Fields,
1 Bats BZX Exchange, Inc., Bats BYX Exchange,
arguments concerning the foregoing, Secretary. Inc., Bats EDGA Exchange, Inc., Bats EDGX
including whether the proposed rule [FR Doc. 2017–07869 Filed 4–18–17; 8:45 am] Exchange, Inc., Chicago Stock Exchange, Inc., the
change is consistent with the Act. BILLING CODE 8011–01–P
Financial Industry Regulatory Authority, Inc.,
Comments may be submitted by any of Investors Exchange LLC, NASDAQ BX, Inc.,
NASDAQ PHLX LLC, The NASDAQ Stock Market
the following methods: LLC, New York Stock Exchange LLC (‘‘NYSE’’),
jstallworth on DSK7TPTVN1PROD with NOTICES
Electronic Comments NYSE Arca, Inc., NYSE MKT LLC, and NYSE
National Inc. (collectively, the ‘‘Participants’’).
• Use the Commission’s Internet 2 15 U.S.C. 78k–1.
3 17 CFR 242.608.
comment form (http://www.sec.gov/
4 See Letter from Elizabeth King, General Counsel,
rules/sro.shtml); or
NYSE, to Brent J. Fields, Secretary, Commission,
dated February 10, 2017 (‘‘Transmittal Letter’’).
19 15 U.S.C. 78s(b)(3)(A). 5 See Securities Exchange Act Release No. 80203
20 17 CFR 240.19b–4(f). 21 17 CFR 200.30–3(a)(12). (March 10, 2017), 82 FR 14068.
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Document Created: 2018-11-14 09:44:09
Document Modified: 2018-11-14 09:44:09
| 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 18516 |
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