82 FR 33525 - Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to BZX Rule 14.13, Company Listing Fees, To Amend the Fees Applicable to Securities Listed on the Exchange

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 138 (July 20, 2017)

[Federal Register Volume 82, Number 138 (Thursday, July 20, 2017)]
[Notices]
[Pages 33525-33526]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-15197]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81152; File No. SR-BatsBZX-2017-45]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change to BZX 
Rule 14.13, Company Listing Fees, To Amend the Fees Applicable to 
Securities Listed on the Exchange

July 14, 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 July 3, 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 
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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposed rule change to amend the fees 
applicable to securities listed on the Exchange, which are set forth in 
Exchange Rule 14.13. Changes to the Exchange's fees pursuant to this 
proposal are effective upon filing.
    The text of the proposed rule change is available at the Exchange's 
Web site at www.bats.com, at the principal office of the Exchange, and 
at the Commission's Public Reference Room.

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

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

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

1. Purpose
    On August 30, 2011, the Exchange received approval of rules 
applicable to the qualification, listing, and delisting of companies on 
the Exchange,\3\ which it modified on February 8, 2012 in order to 
adopt pricing for the listing of exchange traded products (``ETPs'') 
\4\ on the Exchange,\5\ which it subsequently modified again on June 4, 
2014.\6\ On October 16, 2014, the Exchange modified Rule 14.13, 
``Company Listing Fees,'' to eliminate the annual fees for ETPs not 
participating in the Exchange's Competitive Liquidity Provider Program 
pursuant to Rule 11.8, Interpretations and Policies .02 (the ``CLP 
Program'').\7\ On May 22, 2015, the Exchange further modified Rule 
14.13 to eliminate the application fee for ETPs, effectively 
eliminating any compulsory fees for both new ETP issues and transfer 
listings onto the Exchange.\8\ On September 30, 2015, the Exchange 
began offering an incentive payment to ETPs that are listed on the 
Exchange based on the consolidated average daily volume (the ``CADV'') 
of the ETP (the ``Issuer Incentive Program'').\9\ The Exchange 
subsequently made an administrative change to the Issuer Incentive 
Program that required an issuer to enroll in order to receive 
payment.\10\
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    \3\ See Securities Exchange Act Release No. 65225 (August 30, 
2011), 76 FR 55148 (September 6, 2011) (SR-BATS-2011-018).
    \4\ As defined in Exchange Rule 11.8(e)(1)(A), the term ``ETP'' 
means any security listed pursuant to Exchange Rule 14.11.
    \5\ See Securities Exchange Act Release No. 66422 (February 17, 
2012), 77 FR 11179 (February 24, 2012) (SR-BATS-2012-010).
    \6\ See Securities Exchange Act Release No. 72377 (June 12, 
2014), 79 FR 34822 (June 18, 2014) (SR-BATS-2014-024).
    \7\ See Securities Exchange Act Release No. 73414 (October 23, 
2014), 79 FR 64434 (October 29, 2014) (SR-BATS-2014-050).
    \8\ See Securities Exchange Act Release No. 75085 (June 1, 
2015), 80 FR 32190 (June 5, 2015) (SR-BATS-2015-39).
    \9\ See Securities Exchange Act Release No. 76113 (October 8, 
2015), 80 FR 62142 (October 15, 2015) (SR-BATS-2015-80).
    \10\ See Securities Exchange Act Release No. 77960 (June 1, 
2016), 81 FR 36632 (June 7, 2016) (SR-BatsBZX-2016-20).
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    The Exchange submits this proposal to decommission the Issuer 
Incentive Program. Currently, under Exchange Rule 14.13(b)(2)(C), the 
issuer of each class of securities that is a domestic or foreign issue 
listed on the Exchange as an ETP is eligible to receive payments from 
the Exchange on a quarterly basis based on the CADV of the ETP for each 
trading day of the preceding calendar

[[Page 33526]]

quarter that the ETP was listed on the Exchange. The annualized 
payments range from the lowest bracket of $3,000 for CADV between 1-3 
million shares to the highest bracket of $400,000 for CADV greater than 
35 million shares. The Exchange is proposing to eliminate such 
payments.
Implementation Date
    The Exchange proposes to implement the amendments to Rule 
14.13(b)(2)(C) effective July 3, 2017.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder that are applicable to a national securities exchange, and, 
in particular, with the requirements of Section 6 of the Act.\11\ 
Specifically, the Exchange believes that the proposed rule change is 
consistent with Section 6(b)(4) and 6(b)(5) of the Act,\12\ in that it 
provides for the equitable allocation of reasonable dues, fees and 
other charges among issuers and is designed to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general, to protect 
investors and the public interest, and are not designed to permit 
unfair discrimination between customers, issuers, brokers, or dealers.
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    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange is proposing to decommission the Issuer Incentive 
Program, which established payments from the Exchange to ETP issuers 
that list on the Exchange and achieve a particular CADV threshold. The 
Exchange believes that the proposal is equitable, reasonable, and non-
discriminatory because decommissioning the Issuer Incentive Program 
will affect all ETP issuers listing on the Exchange equally. The 
Exchange also believes that the proposal to eliminate the Issuer 
Incentive Program is reasonable, fair and equitable, and not an 
unfairly discriminatory allocation of fees and other charges because it 
would apply equally to all Issuers and eliminating the payment will 
allow the Exchange to better allocate its resources in order to make it 
a more attractive listing venue for ETPs. Additionally, the payments 
under the Issuer Incentive Program have not had the impact that the 
Exchange sought when it was implemented.
    Based on the foregoing, the Exchange believes that the proposed 
amendment to Rule 14.13(b)(2)(C) to eliminate the Issuer Incentive 
Program is a reasonable, equitable, and non-discriminatory allocation 
of fees and other charges to issuers.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposal would not impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of the Act. The Exchange acknowledges that it operates in 
a highly competitive environment, and that ETP issuers may opt to 
disfavor listing on the Exchange if they believe that alternatives 
offer them better value. Accordingly, the Exchange does not believe 
that the proposed changes will impair the ability of ETP issuers or 
competing venues to maintain their competitive standing in the 
financial markets. The Exchange does not believe that the proposed 
changes to the Exchange's standard fees, rebates and tiered pricing 
structure burdens competition, but instead, enhances competition as it 
is intended to increase the competitiveness of the Exchange.

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 \13\ and paragraph (f) of Rule 19b-4 
thereunder.\14\ 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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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 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 proposal 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-2017-45 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-2017-45. 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 will also be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File No. SR-BatsBZX-2017-45 and should be 
submitted on or before August 10, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2017-15197 Filed 7-19-17; 8:45 am]
 BILLING CODE 8011-01-P