82 FR 22583 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 93 (May 16, 2017)

Page Range		22583-22586
FR Document		2017-09814

Federal Register, Volume 82 Issue 93 (Tuesday, May 16, 2017)

[Federal Register Volume 82, Number 93 (Tuesday, May 16, 2017)]
[Notices]
[Pages 22583-22586]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2017-09814]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80641; File No. SR-BatsBZX-2017-28]

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

May 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 May 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of 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).
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\5\ The term ``Member'' is defined as ``any registered broker or
dealer that has been admitted to membership in the Exchange.'' See
Exchange Rule 1.5(n).
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The text of the proposed rule change is available at the Exchange's
Web site at www.bats.com, at the principal office of the Exchange, and
at the Commission's Public Reference Room.

[[Page 22584]]

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 amend its fee schedule applicable to its
equities trading platform (``BZX Equities'') to: (i) Add the definition
of OCC Customer Volume or OCV, to the Definitions section of the fee
schedule; (ii) modify five definitions in the fee schedule to reflect
the new definition of OCV; (iii) modify the criteria under footnotes 1
and 12 required to achieve certain Cross-Asset Tiers to reflect the new
definition of OCV; (iv) add two Cross-Asset Add Volume Tiers under
footnote 1; and (v) and eliminate the Cross-Asset Step-Up Tiers under
footnote 3.
OCC Customer Volume Definition
The Exchange proposes to add the definition of ``OCC Customer
Volume'' or ``OCV'' to the Definitions section of its fee schedule. OCC
Customer Volume or OCV will be defined as the total equity and Exchange
Traded Fund (``ETF'') options volume that clears in the Customer \6\
range at the Options Clearing Corporation (``OCC'') for the month for
which the fees apply, excluding volume on any day that the Exchange
experiences an Exchange System Disruption \7\ and on any day with a
scheduled early market close, using the definition of Customer as
provided under the Exchange's fee schedule for BZX Options.
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\6\ ``Customer'' applies to any transaction identified by a
Member for clearing in the Customer range at the OCC, excluding any
transaction for a Broker Dealer or a ``Professional'' as defined in
Exchange Rule 16.1. See BZX Options' fee schedule available at
http://www.bats.com/us/options/membership/fee_schedule/bzx/.
\7\ An ``Exchange System Disruption'' means ``any day that the
Exchange's system experiences a disruption that lasts for more than
60 minutes during Regular Trading Hours.'' See the Exchange's fee
schedule available at http://www.bats.com/us/equities/membership/fee_schedule/bzx/.
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In connection with this change, the Exchange proposes to modify
five definitions which reference TCV \8\ to reflect the new definition
of OCV, specifically Options Add TCV, Options Customer Add TCV, Options
Customer Remove TCV, Options Market Maker Add TCV, and Options Step-Up
Add TCV.
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\8\ ``TCV'' means total consolidated volume calculated as the
volume reported by all exchanges and trade reporting facilities to a
consolidated transaction reporting plan for the month for which the
fees apply. Id.
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Currently ``Options Add TCV'' for purposes of equities
pricing means ADAV \9\ as a percentage of TCV,\10\ using the
definitions of ADAV and TCV as provided under the Exchange's fee
schedule for BZX Options. The Exchange proposes the definition be
modified to, ``Options Add OCV'' for purposes of equities pricing means
ADAV as a percentage of OCV, using the definitions of ADAV and OCV as
provided under the Exchange's fee schedule for BZX Options.
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\9\ ``ADAV'' means average daily added volume calculated as the
number of shares added per day and ``ADV'' means average daily
volume calculated as the number of shares added or removed,
combined, per day. ADAV and ADV are calculated on a monthly basis.
See the Exchange's fee schedule available at http://www.bats.com/us/options/membership/fee_schedule/bzx/.
\10\ ``TCV'' means total consolidated volume calculated as the
volume reported by all exchanges to the consolidated transaction
reporting plan for the month for which the fees apply, excluding
volume on any day that the Exchange experiences an Exchange System
Disruption and on any day with a scheduled early market close. Id.
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Currently ``Options Customer Add TCV'' for purposes of
equities pricing means ADAV resulting from Customer orders as a
percentage of TCV, using the definitions of ADAV, Customer and TCV as
provided under the Exchange's fee schedule for BZX Options. The
Exchange proposes the definition be modified to, ``Options Customer Add
OCV'' for purposes of equities pricing means ADAV resulting from
Customer orders as a percentage of OCV, using the definitions of ADAV,
Customer and OCV as provided under the Exchange's fee schedule for BZX
Options.
Currently ``Options Customer Remove TCV'' for purposes of
equities pricing means ADV resulting from Customer orders that remove
liquidity as a percentage of TCV, using the definitions of ADV,
Customer and TCV as provided under the Exchange's fee schedule for BZX
Options. The Exchange proposes the definition be modified to, ``Options
Customer Remove OCV'' for purposes of equities pricing means ADV
resulting from Customer orders that remove liquidity as a percentage of
OCV, using the definitions of ADV, Customer and OCV as provided under
the Exchange's fee schedule for BZX Options.
Currently ``Options Market Maker Add TCV'' for purposes of
equities pricing means ADAV resulting from Market Maker \11\ orders as
a percentage of TCV, using the definitions of ADAV, Market Maker and
TCV as provided under the Exchange's fee schedule for BZX Options. The
Exchange proposes the definition be modified to, ``Options Market Maker
Add OCV'' for purposes of equities pricing means ADAV resulting from
Market Maker orders as a percentage of OCV, using the definitions of
ADAV, Market Maker and OCV as provided under the Exchange's fee
schedule for BZX Options.
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\11\ ``Market Maker'' applies to any transaction identified by a
Member for clearing in the Market Maker range at the OCC, where such
Member is registered with the Exchange as a Market Maker as defined
in Rule 16.1(a)(37). Id.
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Currently ``Options Step-Up Add TCV'' for purposes of
equities pricing means ADAV as a percentage of TCV in January 2014
subtracted from current ADAV as a percentage of TCV, using the
definitions of ADAV and TCV as provided under the Exchange's fee
schedule for BZX Options. The Exchange proposes the definition be
modified to, ``Options Step-Up Add OCV'' for purposes of equities
pricing means ADAV as a percentage of OCV in January 2014 subtracted
from current ADAV as a percentage of OCV, using the definitions of ADAV
and OCV as provided under the Exchange's fee schedule for BZX Options.
Update Cross-Asset Tier Criteria From TCV to OCV
By definition OCV is a smaller amount of volume than TCV, and thus,
the Exchange proposes to slightly increase the volume percentages
required to meet the criteria of the Cross-Asset volume tiers that
utilize the definition of OCV. Doing so will keep each tier's criteria
relatively unchanged from its current requirements.
Footnote 1, the Add Volume Tiers. The Exchange currently offers
eleven tiers under footnote 1, the Add Volume Tiers, upon a Member
achieving each tier's required criteria; these tiers offer enhance
rebates for orders that yield fee

[[Page 22585]]

codes B,\12\ V,\13\ Y \14\ or HA.\15\ Footnote 1 of the fee schedule
includes two Cross-Asset Add Volume Tiers that the Exchange proposes to
amend to include the new definition of OCV as discussed above.
Additionally, the Exchange proposes the addition of two new tiers,
Cross-Asset Add Volume Tier 3 and Cross-Asset Add Volume Tier 4. These
proposed changes are described in greater detail below.
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\12\ Fee code B is appended to displayed orders that add
liquidity to BZX (Tape B) and is provided a standard rebate of
$0.0025 per share. See the Exchange's fee schedule available at
http://www.bats.com/us/equities/membership/fee_schedule/bzx/.
\13\ Fee code V is appended to displayed orders that add
liquidity to BZX (Tape A) and is provided a standard rebate of
$0.0020 per share. Id.
\14\ Fee code Y is appended to displayed orders that add
liquidity to BZX (Tape C) and is provided a standard rebate of
$0.0020 per share. Id.
\15\ Fee code HA is appended to non-displayed orders that add
liquidity and is provided a rebate of $0.0017 per share. Id.
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Currently, under Cross-Asset Add Volume Tier 1, Members
may receive an enhanced rebate of $0.0028 where they have: (1) An ADAV
as a percentage of TCV greater than or equal to 0.15%; and (2) an
Options Customer Add TCV greater than or equal to 0.10%. As amended,
Members must have: (1) An ADAV as a percentage of TCV greater than or
equal to 0.15%; and (2) an Options Customer Add OCV greater than or
equal to 0.15%. The Exchange does not propose to alter the rebate
associated with this tier.
Currently, under Cross-Asset Add Volume Tier 2, Members
may receive an enhanced rebate of $0.0030 where they have: (1) On BZX
Options an ADAV in Customer orders greater than or equal to 0.60% of
average TCV; (2) on BZX Options an ADAV in Market Maker orders greater
than or equal to 0.25% of average TCV; and (3) an ADAV greater than or
equal to 0.30% of average TCV. As amended, Members must have: (1) an
Options Customer Add OCV greater than or equal to 0.80%; (2) an Options
Market Maker Add OCV greater than or equal to 0.35%; and (3) an ADAV
greater than or equal to 0.30% of average TCV. The Exchange does not
propose to alter the rebate associated with this tier.
As proposed, under the new Cross-Asset Add Volume Tier 3
Members may receive an enhanced rebate of $0.0028 where they have on
BZX Options an ADAV greater than or equal to 2.00% of average OCV.
As proposed, under the new Cross-Asset Add Volume Tier 4
Members may receive an enhanced rebate of $0.0029 where they have: (1)
An ADAV greater than or equal to 0.15% of the TCV; and (2) an Options
Market Maker Add OCV greater than or equal to 2.75%.
Footnote 12, the Cross-Asset Tape B Tier. The Exchange offers one
tier under footnote 12, the Cross-Asset Tape B Tier, upon a Member
achieving the tier's required criteria, this tier offers an enhance
rebate of $0.0031 for orders that yield fee code B. The Exchange
proposes to amend the tier's criteria to include the new definition of
OCV as discussed above. Currently, under the Cross-Asset Tape B Tier,
Members may receive an enhanced rebate where they have: (1) A Tape B
Step-Up Add TCV \16\ from February 2015 greater than or equal to 0.06%;
and (2) an Options Market Maker Add TCV greater than or equal to 0.75%.
As amended, Members may receive an enhanced rebate where they have: (1)
A Tape B Step-Up Add TCV from February 2015 greater than or equal to
0.06%; and (2) an Options Market Maker Add OCV greater than or equal to
1.00%.
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\16\ ``Tape B Step-Up Add TCV'' means ADAV in Tape B securities
as a percentage of TCV in the relevant baseline month subtracted
from current ADAV in Tape B securities as a percentage of TCV. Id.
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Eliminate Cross-Asset Step-Up Tiers
The Exchange currently offers three Cross-Asset Step-Up Tiers
pursuant to footnote 3 under which a Member is provided an enhanced
rebate ranging from $0.0027 to $0.0029 per share and one Cross-Asset
Step-Up Tier under which a Member pays a reduced fee of $0.00295 per
share. The Exchange now proposes to delete these tiers as they were not
incentivizing order flow as originally designed. Accordingly, the
Exchange proposes to remove all text from footnote 3, reserving it for
future use, and to remove footnote 3 from each of the fee codes in the
Fee Codes and Associated Fees table to which it currently applies,
namely, fee codes B, BB, N, V, W, and Y. The Exchange notes that
Members that previously qualified for enhanced rebates under the Cross-
Asset Step-Up Tiers of footnote 3 may achieve the same range of
enhanced rebates by satisfying what the Exchange believes to be similar
criteria as the existing and proposed Cross-Asset Add Volume Tiers
discussed above, or the existing Step-Up Tier under footnote 2 of the
fee schedule.
Implementation Date
The Exchange proposes to implement these amendments to its fee
schedule effective May 1, 2017.
2. Statutory Basis
The Exchange believes that the proposed rule changes are consistent
with the objectives of Section 6 of the Act,\17\ in general, and
furthers the objectives of Section 6(b)(4),\18\ 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 also notes that it operates in a highly-
competitive market in which market participants can readily direct
order flow to competing venues if they deem fee levels at a particular
venue to be excessive or incentives to be insufficient. The proposed
rule changes reflect a competitive pricing structure designed to
incentivize market participants to direct their order flow to the
Exchange
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\17\ 15 U.S.C. 78f.
\18\ 15 U.S.C. 78f(b)(4).
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The Exchange believes adopting a definition of OCV and utilizing
OCV in lieu of TCV for its Cross-Asset Tiers and its associated
definitions is reasonable, fair and equitable, and non-discriminatory
because the Exchange also proposed to modify the tier's related
criteria in order to maintain substantially identical requirements to
qualify for the tier. The Exchange notes that its affiliate, Bats EDGX
Exchange, Inc. (``EDGX''), also uses OCV in lieu of TCV for cross-asset
pricing.\19\ Competitors of the Exchange also use similar calculations
and the proposed qualifications do not represent a significant
departure from such pricing structures.\20\ The Exchange believes that
the proposed qualifications are reasonable, fair and equitable, and
non-discriminatory, and will provide additional transparency to Members
regarding the calculations used to determine volume levels for purposes
of the proposed tiered pricing model.
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\19\ See the EDGX fee schedule available at http://www.bats.com/us/equities/membership/fee_schedule/edgx/.
\20\ NYSE Amex Options Customer volume tiers require a specific
``Customer Electronic ADV as a % of Industry Customer Equity and ETF
Options ADV''. https://www.nyse.com/publicdocs/nyse/markets/amexoptions/NYSE_Amex_Options_Fee_Schedule.pdf. Nasdaq NOM Options
Customer volume tiers require a specific percentage of ``total
industry customer equity and ETF option average daily volume
(``ADV'') contracts per day in a month.'' http://www.nasdaqtrader.com/Micro.aspx?id=optionsPricing.
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The Exchange believes that the proposed modifications to the tiered
pricing structure are reasonable, fair and equitable, and non-
discriminatory. The Exchange operates in a highly competitive market in
which market participants may readily send order flow to many competing
venues if they deem fees at the Exchange to be excessive or incentives
provided to be insufficient. The proposed fee structure

[[Page 22586]]

remains intended to attract order flow to the Exchange by offering
market participants a competitive pricing structure. The Exchange
believes it is reasonable to offer and incrementally modify incentives
intended to help to contribute to the growth of the Exchange. Volume-
based pricing such as that proposed herein have been widely adopted by
exchanges, including the Exchange, 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: (i) The value to an
exchange's market quality; (ii) associated higher levels of market
activity, such as higher levels of liquidity provisions and/or growth
patterns; and (iii) introduction of higher volumes of orders into the
price and volume discovery processes. The proposed modifications
proposed herein are also intended to incentivize additional Members to
send orders to the Exchange in an effort to qualify for the enhanced
rebate or reduced fee made available by the tiers, in turn contributing
to the growth of the Exchange. Thus, the Exchange believes that the
proposed modifications to the tiered pricing structure is a reasonable,
fair and equitable, and not an unfairly discriminatory allocation of
fees and rebates, because it will provide Members with an incentive to
reach certain thresholds on the Exchange by contributing a meaningful
amount of order flow to the Exchange. The Exchange believes the
proposed change to each tier's criteria is consistent with the Act.
The Exchange believes that the proposed modifications to eliminate
the Cross-Asset Step Up Tiers under footnote 3 is reasonable, fair, and
equitable because the current tiers were not providing the desired
result of incentivizing Members to increase their participation in BZX
Equities and in BZX Options. Therefore, eliminating this tier will have
a negligible effect on order flow and market behavior. The Exchange
believes the proposed change is not unfairly discriminatory because it
will apply equally to all participants. Further, as described above,
the Exchange notes that Members that previously qualified for enhanced
rebates under the Cross-Asset Step-Up Tier may achieve the same range
of enhanced rebates by satisfying what the Exchange believes to be
similar criteria as the existing and proposed Cross-Asset Add Volume
Tiers discussed above, or the existing Step-Up Tier under footnote 2 of
the fee schedule.

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
that any of the proposed change to the Exchange's tiered pricing
structure burden competition, but instead, that they enhance
competition as they are intended to increase the competitiveness of the
Exchange by modifying pricing incentives in order to attract order flow
and incentivize participants to increase their participation on the
Exchange. The Exchange notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee structures to be unreasonable or
excessive. The proposed changes are generally intended to enhance the
rebates for liquidity added to the Exchange, which is intended to draw
additional liquidity to the Exchange, and to eliminate a rebate that
has not achieved its desired result. The Exchange does not believe the
proposed amendments would burden intramarket competition as they would
be available to all Members uniformly.

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 \21\ and paragraph (f) of Rule 19b-4
thereunder.\22\ At any time within 60 days of the filing of the
proposed rule change, the Commission summarily may temporarily suspend
such rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act.
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\21\ 15 U.S.C. 78s(b)(3)(A).
\22\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

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

Electronic Comments

Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File No. SR-BatsBZX-2017-28 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-2017-28. 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-2017-28, and should be
submitted on or before June 6, 2017.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-09814 Filed 5-15-17; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 82, No. 93 / Tuesday, May 16, 2017 / Notices 22583

become operative prior to 30 days after it appears to the Commission that such Number SR–IEX–2017–12 and should
the date of the filing. However, pursuant action is necessary or appropriate in the be submitted on or before June 6, 2017.
to Rule 19b–4(f)(6)(iii), the Commission public interest, for the protection of For the Commission, by the Division of
may designate a shorter time if such investors, or otherwise in furtherance of Trading and Markets, pursuant to delegated
action is consistent with the protection the purposes of the Act. If the authority.23
of investors and the public interest. The Commission takes such action, the Eduardo A. Aleman,
Exchange has filed the proposed rule Commission shall institute proceedings Assistant Secretary.
change for immediate effectiveness and to determine whether the proposed rule [FR Doc. 2017–09822 Filed 5–15–17; 8:45 am]
has requested that the Commission should be approved or disapproved.
BILLING CODE 8011–01–P
waive the requirement that the proposed
rule change not become operative for 30 IV. Solicitation of Comments
days after the date of the filing so that Interested persons are invited to SECURITIES AND EXCHANGE
it may become operative on the date of submit written data, views and COMMISSION
filing. arguments concerning the foregoing,
The Exchange notes that the proposed including whether the proposed rule
rule change is intended to mitigate change is consistent with the Act. [Release No. 34–80641; File No. SR–
confidentiality concerns raised in BatsBZX–2017–28]
Comments may be submitted by any of
connection with Section VII(A) of the the following methods: Self-Regulatory Organizations; Bats
Plan, which provides that the data made
Electronic Comments BZX Exchange, Inc.; Notice of Filing
publicly available will not identify the
and Immediate Effectiveness of a
Trading Center that generated the data. • Use the Commission’s Internet Proposed Rule Change Related to Fees
The Exchange states that the additional comment form (http://www.sec.gov/
time would allow consideration of a rules/sro.shtml); or May 10, 2017.
methodology to mitigate concerns • Send an email to rule-comments@ Pursuant to Section 19(b)(1) of the
related to the publication of Appendix sec.gov. Please include File Number SR– Securities Exchange Act of 1934 (the
B data.20 IEX–2017–12 on the subject line. ‘‘Act’’),1 and Rule 19b–4 thereunder,2
The Commission believes that
Paper Comments notice is hereby given that on May 1,
waiving the 30-day operative delay is
2017, Bats BZX Exchange, Inc. (the
consistent with the protection of • Send paper comments in triplicate ‘‘Exchange’’ or ‘‘BZX’’) filed with the
investors and the public interest to Brent J. Fields, Secretary, Securities Securities and Exchange Commission
because it will synchronize the timing and Exchange Commission, 100 F Street (‘‘Commission’’) the proposed rule
for publication of Appendix B data for NE., Washington, DC 20549–1090. change as described in Items I, II and III
all Participants, which should enhance
All submissions should refer to File below, which Items have been prepared
the consistency and usefulness of the
data.21 Therefore, the Commission Number SR–IEX–2017–12. This file by the Exchange. The Exchange has
hereby waives the 30-day operative number should be included in the designated the proposed rule change as
delay and designates the proposed rule subject line if email is used. To help the one establishing or changing a member
change to be operative on the date of Commission process and review your due, fee, or other charge imposed by the
filing.22 comments more efficiently, please use Exchange under Section 19(b)(3)(A)(ii)
At any time within 60 days of the only one method. The Commission will of the Act 3 and Rule 19b–4(f)(2)
filing of the proposed rule change, the post all comments on the Commission’s thereunder,4 which renders the
Commission summarily may Internet Web site (http://www.sec.gov/ proposed rule change effective upon
temporarily suspend such rule change if rules/sro.shtml). Copies of the filing with the Commission. The
submission, all subsequent Commission is publishing this notice to
20 The Commission recently approved a FINRA amendments, all written statements solicit comments on the proposed rule
proposal to implement an aggregated, anonymous with respect to the proposed rule change from interested persons.
grouped masking methodology for the publication change that are filed with the
of Appendix B data related to OTC trading activity. I. Self-Regulatory Organization’s
See Securities Exchange Release No. 80551, (April Commission, and all written Statement of the Terms of the Substance
28, 2017), 82 FR 20948 (May 4, 2017). See also communications relating to the of the Proposed Rule Change
Letter from David S. Shillman, Associate Director, proposed rule change between the
Division of Trading and Markets, Commission, to The Exchange filed a proposal to
Marcia E. Asquith, Executive Vice President FINRA,
Commission and any person, other than
dated April 28, 2017. those that may be withheld from the amend the fee schedule applicable to
21 The Commission recently granted exemptive public in accordance with the Members 5 and non-Members of the
relief to the Participants to delay the publication of provisions of 5 U.S.C. 552, will be Exchange pursuant to BZX Rules 15.1(a)
their Appendix B data until August 31, 2017. See available for Web site viewing and and (c).
Letter from David S. Shillman, Associate Director,
Division of Trading and Markets, Commission, to printing in the Commission’s Public The text of the proposed rule change
Jennifer Piorko Mitchell, Vice President and Deputy Reference Section, 100 F Street NE., is available at the Exchange’s Web site
Corporate Secretary, FINRA, dated April 28, 2017. Washington, DC 20549–1090. Copies of at www.bats.com, at the principal office
The Commission notes that other Participants have
submitted proposed rule changes to delay the
the filing will also be available for of the Exchange, and at the
publication of Appendix B data until August 31, inspection and copying at the IEX’s Commission’s Public Reference Room.
2017. See e.g., SR–BatsBYX–2017–10; SR– principal office and on its Internet Web
BatsBZX–2017–31; SR–BatsEDGA–2017–10; SR– site at www.iextrading.com. All
sradovich on DSK3GMQ082PROD with NOTICES

23 17 CFR 200.30–3(a)(12).
BatsEDGX–2017–19; SR–BX–2017–022; SR–CHX–
2017–07; SR–FINRA–2017–010; SR–NASDAQ–
comments received will be posted 1 15 U.S.C. 78s(b)(1).
2017–044; SR–Phlx–2017–33; SR–NYSE–2017–19; without change; the Commission does 2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
SR–NYSEArca–2017–49; SR–NYSEMKT–2017–24. not edit personal identifying
22 For purposes only of waiving the operative 4 17 CFR 240.19b–4(f)(2).
information from submissions. You 5 The term ‘‘Member’’ is defined as ‘‘any
delay for this proposal, the Commission has
considered the proposed rule’s impact on
should submit only information that registered broker or dealer that has been admitted
efficiency, competition, and capital formation. See you wish to make available publicly. All to membership in the Exchange.’’ See Exchange
15 U.S.C. 78c(f). submissions should refer to File Rule 1.5(n).

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22586 Federal Register / Vol. 82, No. 93 / Tuesday, May 16, 2017 / Notices

remains intended to attract order flow to B. Self-Regulatory Organization’s including whether the proposed rule
the Exchange by offering market Statement on Burden on Competition change is consistent with the Act.
participants a competitive pricing The Exchange does not believe that Comments may be submitted by any of
structure. The Exchange believes it is the proposed rule change will impose the following methods:
reasonable to offer and incrementally any burden on competition not Electronic Comments
modify incentives intended to help to necessary or appropriate in furtherance
contribute to the growth of the of the purposes of the Act. The • Use the Commission’s Internet
Exchange. Volume-based pricing such Exchange does not believe that any of comment form (http://www.sec.gov/
as that proposed herein have been the proposed change to the Exchange’s rules/sro.shtml); or
widely adopted by exchanges, including tiered pricing structure burden • Send an email to rule-comments@
the Exchange, and are equitable because competition, but instead, that they sec.gov. Please include File No. SR–
they are open to all Members on an enhance competition as they are BatsBZX–2017–28 on the subject line.
equal basis and provide additional intended to increase the
benefits or discounts that are reasonably competitiveness of the Exchange by Paper Comments
related to: (i) The value to an exchange’s modifying pricing incentives in order to
attract order flow and incentivize • Send paper comments in triplicate
market quality; (ii) associated higher to Secretary, Securities and Exchange
levels of market activity, such as higher participants to increase their
participation on the Exchange. The Commission, 100 F Street NE.,
levels of liquidity provisions and/or Washington, DC 20549–1090.
growth patterns; and (iii) introduction of Exchange notes that it operates in a
higher volumes of orders into the price highly competitive market in which All submissions should refer to File No.
market participants can readily direct SR–BatsBZX–2017–28. This file number
and volume discovery processes. The
order flow to competing venues if they should be included on the subject line
proposed modifications proposed herein
deem fee structures to be unreasonable if email is used. To help the
are also intended to incentivize or excessive. The proposed changes are
additional Members to send orders to Commission process and review your
generally intended to enhance the comments more efficiently, please use
the Exchange in an effort to qualify for rebates for liquidity added to the
the enhanced rebate or reduced fee only one method. The Commission will
Exchange, which is intended to draw post all comments on the Commission’s
made available by the tiers, in turn additional liquidity to the Exchange,
contributing to the growth of the Internet Web site (http://www.sec.gov/
and to eliminate a rebate that has not rules/sro.shtml). Copies of the
Exchange. Thus, the Exchange believes achieved its desired result. The submission, all subsequent
that the proposed modifications to the Exchange does not believe the proposed amendments, all written statements
tiered pricing structure is a reasonable, amendments would burden intramarket with respect to the proposed rule
fair and equitable, and not an unfairly competition as they would be available change that are filed with the
discriminatory allocation of fees and to all Members uniformly. Commission, and all written
rebates, because it will provide communications relating to the
B. Self-Regulatory Organization’s
Members with an incentive to reach Statement on Comments on the proposed rule change between the
certain thresholds on the Exchange by Proposed Rule Change Received From Commission and any person, other than
contributing a meaningful amount of Members, Participants, or Others those that may be withheld from the
order flow to the Exchange. The public in accordance with the
Exchange believes the proposed change The Exchange has not solicited, and
does not intend to solicit, comments on provisions of 5 U.S.C. 552, will be
to each tier’s criteria is consistent with available for Web site viewing and
this proposed rule change. The
the Act. printing in the Commission’s Public
Exchange has not received any
The Exchange believes that the unsolicited written comments from Reference Room, 100 F Street NE.,
proposed modifications to eliminate the Members or other interested parties. Washington, DC 20549 on official
Cross-Asset Step Up Tiers under business days between the hours of
footnote 3 is reasonable, fair, and III. Date of Effectiveness of the 10:00 a.m. and 3:00 p.m. Copies of such
equitable because the current tiers were Proposed Rule Change and Timing for filing also will be available for
not providing the desired result of Commission Action inspection and copying at the principal
incentivizing Members to increase their The foregoing rule change has become office of the Exchange. All comments
participation in BZX Equities and in effective pursuant to Section 19(b)(3)(A) received will be posted without change;
BZX Options. Therefore, eliminating of the Act 21 and paragraph (f) of Rule the Commission does not edit personal
this tier will have a negligible effect on 19b–4 thereunder.22 At any time within identifying information from
order flow and market behavior. The 60 days of the filing of the proposed rule submissions. You should submit only
change, the Commission summarily may information that you wish to make
Exchange believes the proposed change
temporarily suspend such rule change if available publicly. All submissions
is not unfairly discriminatory because it
it appears to the Commission that such should refer to File No. SR–BatsBZX–
will apply equally to all participants.
action is necessary or appropriate in the 2017–28, and should be submitted on or
Further, as described above, the before June 6, 2017.
Exchange notes that Members that public interest, for the protection of
previously qualified for enhanced investors, or otherwise in furtherance of For the Commission, by the Division of
the purposes of the Act. Trading and Markets, pursuant to delegated
rebates under the Cross-Asset Step-Up
sradovich on DSK3GMQ082PROD with NOTICES

authority.23
Tier may achieve the same range of IV. Solicitation of Comments
enhanced rebates by satisfying what the Eduardo A. Aleman,
Interested persons are invited to
Exchange believes to be similar criteria Assistant Secretary.
submit written data, views, and
as the existing and proposed Cross- [FR Doc. 2017–09814 Filed 5–15–17; 8:45 am]
arguments concerning the foregoing,
Asset Add Volume Tiers discussed BILLING CODE 8011–01–P
above, or the existing Step-Up Tier 21 15 U.S.C. 78s(b)(3)(A).
under footnote 2 of the fee schedule. 22 17 CFR 240.19b–4(f). 23 17 CFR 200.30–3(a)(12).

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Document Created: 2017-05-16 13:52:29
Document Modified: 2017-05-16 13:52:29

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 22583