82 FR 28367 - Self-Regulatory Organizations; Bats BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use on Bats BYX Exchange, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 118 (June 21, 2017)

Page Range		28367-28369
FR Document		2017-12889
Federal Register, Volume 82 Issue 118 (Wednesday, June 21, 2017)
[Federal Register Volume 82, Number 118 (Wednesday, June 21, 2017)]
[Notices]
[Pages 28367-28369]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-12889]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80939; File No. SR-BatsBYX-2017-15]


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

June 15, 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 June 9, 2017, Bats BYX Exchange, Inc. (the ``Exchange'' or 
``BYX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by the Exchange. The 
Exchange has designated the proposed rule change as one establishing or 
changing a member due, fee, or other charge imposed by the Exchange 
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposed rule change effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend the fee schedule applicable 
to Members \5\ and non-Members of the Exchange pursuant to BYX 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.

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 applicable to its 
equities trading platform (``BYX Equities'') to: (i) Modify the rates 
associated with fee codes AA, BJ and RA; and (ii) increase the scope of 
executions subject to fee code IX. The Exchange notes that Bats EDGA 
Exchange, Inc. (``EDGA'') implemented certain pricing changes effective 
June 1, 2017, including modification of various fees and rebates to add 
and remove liquidity with a displayed or IOC order to a flat fee of 
$0.0003 per share to add or remove liquidity with a displayed or IOC 
order.\6\ The proposed changes to AA, BJ, and RA are proposed in light 
of these changes.
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    \6\ See Press Release, Bats Announces Fee Overhaul of EDGA 
Equities Exchange (May 30, 2017), available at http://ir.cboe.com/press-releases/2017/05-30-2017.aspx.
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Fee Code AA
    The Exchange proposes to modify the rate associated with orders 
yielding fee code AA, which results from an order routed to EDGA using 
ALLB routing strategy,\7\ from a $0.0002 per share rebate to a fee of 
$0.0003 per share for securities priced at or above $1.00. The Exchange 
does not propose to modify the rate for orders yielding fee code AA for 
securities priced below $1.00, which are currently not charged a fee 
nor provided a rebate.
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    \7\ ALLB is a routing option under which the order checks the 
System for available shares and is then sent to the Bats BZX 
Exchange, Inc. (``BZX''), EDGA, and Bats EDGX Exchange, Inc. 
(``EDGX'' collectively with the Exchange, BZX, and EDGA, the ``BGM 
Affiliated Exchanges''). See the Exchange's routing strategies 
available at http://cdn.batstrading.com/resources/features/bats_exchange_routing-strategies.pdf. See also Exchange Rule 
11.13(b)(3).
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Fee Code BJ
    The Exchange proposes to modify the rate associated with orders 
yielding fee code BJ, which result from an order routed to EDGA using 
the Destination Specific (``DIRC''),\8\ TRIM or TRIM2 routing 
strategies,\9\ from a rebate of $0.0002 per share to a fee of $0.0003 
per share for all securities (i.e., those priced at or above $1.00 and 
those priced below $1.00).
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    \8\ See the Exchange's routing strategies available at http://cdn.batstrading.com/resources/features/bats_exchange_routing-strategies.pdf. See also Exchange Rule 11.13(b)(3).
    \9\ The TRIM and TRIM2 routing strategies focus on seeking 
execution of orders while minimizing execution costs by routing only 
to certain low cost execution venues on the Exchange's System 
routing table. Id.
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Fee Code RA
    The Exchange proposes to decrease the fee associated with orders 
yielding fee code RA, which results from an order routed to EDGA which 
adds liquidity, from a fee of $0.0005 per share to a fee of $0.0003 per 
share for securities priced at or above $1.00. The Exchange does not 
propose to modify the rate for orders yielding fee code RA for 
securities priced below $1.00, which are currently not charged a fee 
nor provided a rebate.
Fee Code IX
    The Exchange proposes to modify the routing strategies applicable 
to fee code IX to include the TRIM or TRIM2 routing strategies. Fee 
code IX is currently appended to all orders that are routed to the 
Investors Exchange, Inc. (``IEX'') using the Destination Specific 
routing strategy (also referred to as ``DIRC'').\10\ The Exchange does 
not

[[Page 28368]]

propose to modify the rate of $0.0010 per share currently charged 
orders appended with IX. The Exchange notes that it has not previously 
included IEX on the routing tables for TRIM and TRIM2 but began to do 
so effective June 1, 2017, and thus, that the proposed change is 
necessary to account for executions at IEX through such routing 
strategies.
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    \10\ See the Exchange's routing strategies available at http://cdn.batstrading.com/resources/features/bats_exchange_routing-strategies.pdf. See also Rule 11.13(b)(3).
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Implementation Date
    The Exchange proposes to implement the above changes to its fee 
schedule immediately.\11\
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    \11\ The Exchange initially submitted the proposed fee change on 
June 1, 2017. (SR-BatsBYX-2017-14). On June 9, 2017, the Exchange 
withdrew SR-BatsBYX-2017-14 and submitted this filing.
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2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with the objectives of Section 6 of the Act,\12\ in general, and 
furthers the objectives of Section 6(b)(4),\13\ 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. Furthermore, the Exchange notes that routing through the 
Exchange's affiliate, Bats Trading, is voluntary.
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    \12\ 15 U.S.C. 78f.
    \13\ 15 U.S.C. 78f(b)(4).
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Fee Codes AA, BJ, and RA
    As noted above, EDGA implemented certain pricing changes effective 
June 1, 2017, including modification of various fees and rebates to and 
remove liquidity with a displayed or IOC order to a flat fee of $0.0003 
per share to add or remove liquidity with a displayed or IOC order.\14\ 
The changes to fee codes AA, BJ, and RA are proposed in light of these 
changes and reflect a pass-through of the pricing provided by EDGA. As 
the pricing in securities priced at or above $1.00 reflects the same 
pricing a Member would receive for participation on EDGA directly and 
the pricing in securities priced below $1.00 is based on the current 
pricing model applied by the Exchange, the Exchange believes the 
proposed fees are reasonable and equitably allocated. The Exchange 
further believes the proposed fees are non-discriminatory because they 
apply uniformly to all Members.
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    \14\ See supra, note 6.
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Fee Code IX
    The Exchange believes that its proposal to include TRIM and TRIM2 
routing strategies for orders routed to IEX that yield fee code IX is 
equitable and reasonable because routing through Bats Trading is 
voluntary and Members may utilize other avenues to route orders to IEX, 
such as connecting to IEX directly. Lastly, the Exchange also believes 
that the proposed alternative routing strategies are non-discriminatory 
because the availability applies uniformly 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 
that any of the proposed changes to the Exchange's routing pricing 
burden competition, as they are based on the pricing on other venues. 
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 
Exchange does not believe the proposed amendments would burden 
intramarket competition as they would be available to all Members 
uniformly.

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 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 \15\ and paragraph (f) of Rule 19b-4 
thereunder.\16\ 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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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 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-BatsBYX-2017-15 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-BatsBYX-2017-15. 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-BatsBYX-2017-15, and should be 
submitted on or before July 12, 2017.


[[Page 28369]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-12889 Filed 6-20-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 118 / Wednesday, June 21, 2017 / Notices 28369

For the Commission, by the Division of for Responses (‘‘RFR’’) detailing the and coordination with persons engaged
Trading and Markets, pursuant to delegated option, side, size, and initiating price is in regulating transactions in securities,
authority.17 sent to all subscribers of the Exchange’s to remove impediments to and perfect
Eduardo A. Aleman, data feeds. Currently, the RFR period the mechanism of a free and open
Assistant Secretary. lasts for 500 milliseconds, unless it is market and a national market system
[FR Doc. 2017–12889 Filed 6–20–17; 8:45 am] concluded early.6 The Exchange and, in general, to protect investors and
BILLING CODE 8011–01–P proposes to revise the RFR response the public interest, and not be designed
period to permit the Exchange to to permit unfair discrimination between
designate a specific time within a range customers, issuers, brokers, or dealers.
SECURITIES AND EXCHANGE of no less than 100 milliseconds and no The Commission also finds that the
COMMISSION more than 1 second.7 proposed rule change is consistent with
[Release No. 34–80940; File No. SR–MIAX– Section 6(b)(8) of the Act,10 which
III. Discussion and Commission’s
2017–16] requires that the rules of an exchange
Findings not impose any burden on competition
Self-Regulatory Organizations; Miami After careful review, the Commission that is not necessary or appropriate in
International Securities Exchange LLC; finds that the proposed rule change is furtherance of the purposes of the Act.
Order Approving a Proposed Rule consistent with the requirements of the The Commission believes that, given
Change Relating to the Exposure Act and the rules and regulations the electronic nature of the PRIME and
Periods of the MIAX Price thereunder applicable to a national PRIME Solicitation Mechanism and the
Improvement Mechanism and securities exchange.8 In particular, the ability of Members to respond within
Solicitation Mechanism Commission finds that the proposed the proposed exposure periods,
rule change is consistent with Section modifying each of the exposure periods
June 15, 2017. 6(b)(5) of the Act,9 which requires, from 500 milliseconds to a time
I. Introduction among other things, that the rules of a designated by the Exchange of no less
national securities exchange be than 100 milliseconds and no more than
On April 25, 2017, Miami
designed to promote just and equitable 1 second could facilitate the prompt
International Securities Exchange LLC
principles of trade, to foster cooperation execution of orders, while continuing to
(‘‘MIAX Options’’ or the ‘‘Exchange’’)
provide market participants with an
filed with the Securities and Exchange 6 A PRIME and PRIME Solicitation Auction will opportunity to compete to trade with
Commission (‘‘Commission’’) pursuant conclude at the sooner of: (1) Upon receipt of an
to Section 19(b)(1) of the Securities the exposed order by submitting
unrelated order (in the same option as the Agency
Exchange Act of 1934 (‘‘Act’’) 1 and Rule Order) on the opposite side of the market from the
responses to the auctions. According to
19b–4 thereunder,2 a proposed rule RFR responses, that is marketable against either the the Exchange, numerous Members have
change to amend MIAX Options Rule National Best Bid or Offer (‘‘NBBO’’), the initiating the capability to and do respond within
price, or the RFR responses; (2) upon receipt of an a 100 millisecond exposure period or
515A to modify the exposure periods of unrelated order (in the same option as the Agency
the Exchange’s Price Improvement Order) on the same side of the market as the RFR
less.11
responses, that is marketable against the NBBO; (3) To substantiate that its members can
Mechanism (‘‘PRIME’’) and PRIME
upon receipt of an unrelated limit order (in the receive, process, and communicate a
Solicitation Mechanism from 500 same option as the Agency Order) on the opposite
milliseconds to a time period designated response back to the Exchange within
of the market from the Agency Order that improves
by the Exchange of no less than 100 any RFR response; (4) any time an RFR response
100 milliseconds, the Exchange states
milliseconds and no more than 1 matches the NBBO on the opposite side of the that it surveyed all Members that
second. The proposed rule change was market from the RFR responses; (5) any time there responded to an auction broadcast in
is a quote lock in the subject option on the the period beginning November 2016
published for comment in the Federal Exchange pursuant to Exchange Rule 1402; or (6)
Register on May 5, 2017.3 The any time there is a trading halt in the option on the
and ending January 2017 (the ‘‘review
Commission received no comment Exchange. See Exchange Rule 515A. period’’).12 According to the Exchange,
letters on the proposed rule change. 7 The Exchange notes that its proposal is each Member it surveyed indicated that
This order approves the proposed rule consistent with exposure periods permitted in they can receive, process, and
similar mechanisms on other options exchanges. communicate a response back to the
change. See Notice, supra note 3, at 21288 & n.6; see also
Securities Exchange Act Release Nos. 76301 Exchange within 100 milliseconds.13 In
II. Description of the Proposed Rule (October 29, 2015), 80 FR 68347 (November 4, 2015) addition, the Exchange states that it
Change (SR–BX–2015–032) (establishing an exposure reviewed all responses received in
period for the Nasdaq BX’s options price PRIME and PRIME Solicitation Auctions
PRIME is a process by which a improvement mechanism (‘‘PRISM’’) of no less than
Member 4 may electronically submit for 100 milliseconds and no more than 1 second); from its Members for the review period,
execution an order it represents as agent 77557 (April 7, 2016), 81 FR 21935 (April 13, 2016) and its review indicated that
(‘‘Agency Order’’) against principal (SR–Phlx–2016–40) (amending the exposure period approximately 90% of responses were
for the Nasdaq Phlx’s Price Improvement XL submitted within 100 milliseconds.14
interest, and/or an Agency Order against (‘‘PIXL’’) to be no less than 100 milliseconds and
solicited interest.5 When the Exchange no more than 1 second); 79733 (January 4, 2017), Furthermore, with regard to the impact
receives a properly designated Agency 82 FR 3055 (January 10, 2017) (SR–ISE–2016–26) of the proposal on system capacity, the
Order for auction processing, a Request (amending the exposure period for the Nasdaq ISE’s Exchange states that it has analyzed its
Price Improvement Mechanism (‘‘PIM’’) to be no capacity and represents that it has the
less than 100 milliseconds and no more than 1
17 17 CFR 200.30–3(a)(12). second); and 80738 (May 22, 2017), 82 FR 24417 necessary systems capacity to handle
asabaliauskas on DSKBBXCHB2PROD with NOTICES

1 15 U.S.C. 78s(b)(1). (May 26, 2017) (SR–CBOE–2017–029) (amending the potential additional traffic
2 17 CFR 240.19b–4.
the exposure periods for the CBOE’s Automated associated with the additional
3 See Securities Exchange Act Release No. 80570 Improvement Mechanism (‘‘AIM’’) and Solicitation transactions that may occur with the
(May 1, 2017), 82 FR 21288 (‘‘Notice’’). Auction Mechanism (‘‘SAM’’) to be no less than 100
4 The term ‘‘Member’’ means an individual or milliseconds and no more than 1 second).
10 15 U.S.C. 78f(b)(8).
organization approved to exercise the trading rights 8 In approving this proposed rule change, the
11 See Notice, supra note 3, at 21289.
associated with a Trading Permit. Members are Commission has considered the proposed rule’s
12 See id.
deemed ‘‘members’’ under the Exchange Act. See impact on efficiency, competition, and capital
Exchange Rule 100. formation. See 15 U.S.C. 78c(f). 13 See id.
5 See Exchange Rule 515A. 9 15 U.S.C. 78f(b)(5). 14 See id.

VerDate Sep<11>2014 19:12 Jun 20, 2017 Jkt 241001 PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 E:\FR\FM\21JNN1.SGM 21JNN1
Document Created: 2018-11-14 10:09:24
Document Modified: 2018-11-14 10:09:24
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 28367