82 FR 37154 - 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 151 (August 8, 2017)
Federal Register Volume 82, Issue 151 (August 8, 2017)
| Page Range | 37154-37156 | |
| FR Document | 2017-16637 |
[Federal Register Volume 82, Number 151 (Tuesday, August 8, 2017)] [Notices] [Pages 37154-37156] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-16637] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81291; File No. SR-BatsEDGA-2017-19] 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. August 2, 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 24, 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 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 [[Page 37155]] 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 (``EDGA Equities'') to re-name NYSE MKT as NYSE American throughout the fee schedule. The Exchange also proposes to modify fees for orders routed to NYSE American in connection with changes made by NYSE American to its fee structure. As of July 24, 2017, NYSE American transitioned to a fully automated cash equities market. In connection with this transition, NYSE American updated its fee structure in a variety of ways, including to charge a fee to add non-displayed liquidity and to provide no rebate (nor charge any fee) to add displayed liquidity.\6\ --------------------------------------------------------------------------- \6\ See SR-NYSEMKT-2017-43 (filed July 19, 2017), available at:https://www.nyse.com/regulation/rule-filings?market=NYSE. --------------------------------------------------------------------------- The Exchange proposes to modify the fee structure for orders that are routed to and add liquidity at NYSE American, which yielded fee code 8 for displayed liquidity and fee code NA for non-displayed liquidity. Orders yielding fee code 8 previously received a rebate of $0.00150 per share and orders yielding fee code NA were not provided a rebate or charged any fee. The Exchange proposes to continue to apply fee code 8 to orders that add displayed liquidity at NYSE American but to change the rate from a rebate to a fee, charging orders that yield fee code 8 a fee of $0.00020 per share. The Exchange also proposes to remove NYSE American (previously NYSE MKT) from the list of venues where an order that adds non-displayed liquidity yields fee code NA. The Exchange does not propose to modify the rate applied to orders yielding fee code NA, but, as a result of this change, orders adding non-displayed liquidity at NYSE American will yield fee code NB instead, which is applied to all routed executions at an exchange not covered by Fee Code NA that adds non- displayed liquidity. Similarly, the Exchange does not propose to modify the rate applied to orders yielding fee code NB, which is currently a fee of $0.00300 per share. The Exchange notes that the changes proposed above will not impact the current fee structure for orders that add displayed liquidity at NYSE American in securities priced below $1.00, which, pursuant to fee code 8 are provided without charge and without rebate. However, the proposed change to remove NYSE American from fee code NA will impact pricing for non-displayed orders routed to NYSE American that add liquidity. Specifically, consistent with other orders yielding fee code NB, orders in securities priced below $1.00 will be charged 0.30% of the total dollar value of an execution. Implementation Date The Exchange proposes to implement the above changes to its fee schedule immediately. 2. Statutory Basis The Exchange believes that the proposed rule changes are consistent with the objectives of Section 6 of the Act,\7\ in general, and furthers the objectives of Section 6(b)(4),\8\ 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. At the outset, the Exchange notes that its proposal to refer to NYSE American is consistent with the Act as it will avoid confusion with the Exchange's fee schedule by reflecting NYSE MKT's new name. 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 are designed to react to pricing changes at NYSE American, to avoid subsidizing routing to such venue. Furthermore, the Exchange notes that routing through the Exchange's affiliate, Bats Trading, Inc. is voluntary. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78f. \8\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- The changes to fee code 8 and to remove NYSE American (NYSE MKT) from fee code NA are primarily designed to react to pricing changes at NYSE American, effective July 24, 2017. These changes are necessary to avoid providing routing services with pricing that effectively subsidizes routing to NYSE American. The Exchange's prior pricing model for orders routed to NYSE American was based on a fee structure that provided rebates for orders that added liquidity. The Exchange believes it is reasonable and fair and equitable to charge fees for orders routed to NYSE American that no longer receive a rebate but instead are either assessed a fee by NYSE American or are provided free of charge. The Exchange also believes the proposed rates are reasonable and not unfairly discriminatory in that they are consistent with other rates already charged by the Exchange. Finally, the Exchange believes the proposed changes are not unfairly discriminatory in that they are equally applicable to all Members that use the Exchange's routing services to add liquidity at NYSE American. (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 \9\ and paragraph (f) of Rule 19b-4 thereunder.\10\ 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. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(A). \10\ 17 CFR 240.19b-4(f). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, [[Page 37156]] including whether the proposal is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-BatsEDGA-2017-19 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 Number SR-BatsEDGA-2017-19. 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 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 Number SR-BatsEDGA-2017-19 and should be submitted on or before August 29, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\ --------------------------------------------------------------------------- \11\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-16637 Filed 8-7-17; 8:45 am] BILLING CODE 8011-01-P
![37154 Federal Register / Vol. 82, No. 151 / Tuesday, August 8, 2017 / Notices
Commission notes that Participants and spread and trade type, effective spread, SECURITIES AND EXCHANGE
their associated persons trading for Floor Market Maker participation, and COMMISSION
covered accounts over which they BOX Book participation.222 This [Release No. 34–81291; File No. SR–
exercise investment discretion must information could be used to evaluate, BatsEDGA–2017–19]
comply with this condition in order to among other things, the levels of
rely on the rule’s exemption. participation and amount of price Self-Regulatory Organizations; Bats
F. Options Market Structure: Price improvement on the Trading Floor. EDGA Exchange, Inc.; Notice of Filing
Improvement, Fragmentation and Finally, BOX indicated that it believes and Immediate Effectiveness of a
Trading Floor Data a new trading floor will be good for the Proposed Rule Change Related to Fees
markets by providing increased for Use on Bats EDGA Exchange, Inc.
Three commenters expressed concern
competition which may lead to August 2, 2017.
that the proposed rule change would
negatively impact opportunities for improvements in the market, which will Pursuant to Section 19(b)(1) of the
orders to receive price improvement.215 inure to the benefit of all market Securities Exchange Act of 1934 (the
Specifically, one commenter stated that participants.223 ‘‘Act’’),1 and Rule 19b–4 thereunder,2
the proposed rule change is designed to The Commission believes that the notice is hereby given that on July 24,
minimize opportunities for market proposed rule change is consistent with 2017, Bats EDGA Exchange, Inc. (the
maker and public customer trading the Act. Under the proposed rule ‘‘Exchange’’ or ‘‘EDGA’’) filed with the
interest to interact with, and provide change, the Exchange will establish an Securities and Exchange Commission
price improvement to, orders being ‘‘open outcry’’ trading floor where (‘‘Commission’’) the proposed rule
crossed on the BOX floor.216 This orders will be sent to Floor Brokers who change as described in Items I, II and III
commenter asserts that the proposed will represent those orders in an agency below, which Items have been prepared
rule change is designed to offer a capacity, and who will be required to by the Exchange. The Exchange has
frictionless crossing mechanism, which announce such orders to a trading designated the proposed rule change as
can be utilized to the detriment of one establishing or changing a member
crowd composed of Floor Market
customers.217 due, fee, or other charge imposed by the
Makers prior to any execution. In this
Two commenters expressed concern Exchange under Section 19(b)(3)(A)(ii)
regard, the Commission notes that the of the Act 3 and Rule 19b–4(f)(2)
that the proposed rule change would
Exchange made modifications to the thereunder,4 which renders the
increase fragmentation in the options
trading market. One commenter stated initial proposal that are designed to proposed rule change effective upon
that the proposed BOX floor would add remove or reduce the potential filing with the Commission. The
an additional trading venue that firms, impediments to order interaction on the Commission is publishing this notice to
who have finite resources, would be BOX Floor and which are designed to solicit comments on the proposed rule
required to staff and which would increase opportunities for price change from interested persons.
further fragment liquidity without improvement. The Commission also
notes that the data the Exchange has I. Self-Regulatory Organization’s
offering anything unique or beneficial to Statement of the Terms of Substance of
customers.218 Another commenter committed to provide may assist the
the Proposed Rule Change
stated that opening a new trading floor Commission in assessing the level of
will exacerbate the practice of ‘‘venue participation in crossing transactions by The Exchange filed a proposal to
shopping,’’ and noted that the number market makers and other market amend the fee schedule applicable to
of market making firms is limited, and participants, aside from the firm that Members 5 and non-Members of the
that market making firms lack the initiated the cross, and to better review Exchange pursuant to EDGA Rules
resources necessary to staff an escalating whether existing exchange rules 15.1(a) and (c).
number of physical trading floors with The text of the proposed rule change
appropriately allow for robust and
dedicated personnel.219 is available at the Exchange’s Web site
beneficial competition on the options
In response, BOX argues that concerns at www.bats.com, at the principal office
trading floors. of the Exchange, and at the
about the general success of options
trading floors are beyond the scope of its IV. Conclusion Commission’s Public Reference Room.
proposal.220 BOX further asserts that II. Self-Regulatory Organization’s
raising concerns about options trading It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,224 that the Statement of the Purpose of, and
floors either lacks merit or is an attempt Statutory Basis for, the Proposed Rule
to delay the approval of its proposal.221 proposed rule change (SR–BOX–2016–
Change
In addition, BOX commits to provide 48), as modified by Amendment Nos. 1
and 2, be, hereby is, approved. In its filing with the Commission, the
the Commission with data related to
Exchange included statements
activity on the Trading Floor, For the Commission, by the Division of
concerning the purpose of and basis for
specifically information regarding size, Trading and Markets, pursuant to delegated
the proposed rule change and discussed
participation, price improvement by authority.225
any comments it received on the
Eduardo A. Aleman, proposed rule change. The text of these
deciding that such arrangements are suitable to
their interests’’). Assistant Secretary. statements may be examined at the
asabaliauskas on DSKBBXCHB2PROD with NOTICES
215 See CBOE Letters I & II, CTC Letters I & II, and [FR Doc. 2017–16638 Filed 8–7–17; 8:45 am] places specified in Item IV below. The
Nasdaq Letter II, supra notes 4, 8 and 13. BILLING CODE 8011–01–P
216 See CBOE Letter I, supra note 4, at 1–2. 1 15 U.S.C. 78s(b)(1).
217 See id. at 2. 2 17
222 See
CFR 240.19b–4.
218 See CBOE Response Letter I, supra note 4, at Notice of Amendment No. 2, supra note 3 15 U.S.C. 78s(b)(3)(A)(ii).
1. 11, at 23679. 4 17 CFR 240.19b–4(f)(2).
219 See CTC Letter I, supra note 4, at 3. 223 See BOX Response Letter III, supra note 14, at
5 The term ‘‘Member’’ is defined as ‘‘any
220 See BOX Response Letter I, supra note 6, at 3–4. registered broker or dealer that has been admitted
224 15 U.S.C. 78s(b)(2).
4. to membership in the Exchange.’’ See Exchange
221 See id. 225 17 CFR 200.30–3(a)(12). Rule 1.5(n).
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![37156 Federal Register / Vol. 82, No. 151 / Tuesday, August 8, 2017 / Notices
including whether the proposal is SECURITIES AND EXCHANGE ‘‘Act’’),1 and Rule 19b–4 thereunder,2
consistent with the Act. Comments may COMMISSION notice is hereby given that on July 24,
be submitted by any of the following 2017, Bats BYX Exchange, Inc. (the
methods: Sunshine Act Meeting ‘‘Exchange’’ or ‘‘BYX’’) filed with the
Securities and Exchange Commission
Electronic Comments Notice is hereby given, pursuant to
(‘‘Commission’’) the proposed rule
the provisions of the Government in the
• Use the Commission’s Internet change as described in Items I, II and III
Sunshine Act, Public Law 94–409, that
comment form (http://www.sec.gov/ below, which Items have been prepared
the Securities and Exchange
rules/sro.shtml); or by the Exchange. The Exchange has
Commission will hold a closed meeting
designated the proposed rule change as
• Send an email to rule-comments@ on Thursday, August 10, 2017 at 2 p.m.
one establishing or changing a member
sec.gov. Please include File Number SR– Commissioners, Counsel to the due, fee, or other charge imposed by the
BatsEDGA–2017–19 on the subject line. Commissioners, the Secretary to the Exchange under Section 19(b)(3)(A)(ii)
Commission, and recording secretaries of the Act 3 and Rule 19b–4(f)(2)
Paper Comments will attend the closed meeting. Certain thereunder,4 which renders the
• Send paper comments in triplicate staff members who have an interest in proposed rule change effective upon
to Secretary, Securities and Exchange the matters also may be present. filing with the Commission. The
Commission, 100 F Street NE., The General Counsel of the Commission is publishing this notice to
Washington, DC 20549–1090. Commission, or his designee, has solicit comments on the proposed rule
certified that, in his opinion, one or change from interested persons.
All submissions should refer to File more of the exemptions set forth in 5
Number SR–BatsEDGA–2017–19. This U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) I. Self-Regulatory Organization’s
file number should be included on the and 17 CFR 200.402(a)(3), (a)(5), (a)(7), Statement of the Terms of Substance of
subject line if email is used. To help the (a)(9)(ii) and (a)(10), permit the Proposed Rule Change
Commission process and review your consideration of the scheduled matters The Exchange filed a proposal to
comments more efficiently, please use at the closed meeting. amend the fee schedule applicable to
only one method. The Commission will Commissioner Stein, as duty officer, Members 5 and non-Members of the
post all comments on the Commission’s voted to consider the items listed for the Exchange pursuant to BYX Rules 15.1(a)
Internet Web site (http://www.sec.gov/ closed meeting in closed session. and (c).
rules/sro.shtml). Copies of the The subject matters of the closed The text of the proposed rule change
submission, all subsequent meeting will be: is available at the Exchange’s Web site
amendments, all written statements Institution and settlement of at www.bats.com, at the principal office
with respect to the proposed rule injunctive actions; of the Exchange, and at the
change that are filed with the Institution and settlement of Commission’s Public Reference Room.
Commission, and all written administrative proceedings;
communications relating to the Resolution of litigation claims; and II. Self-Regulatory Organization’s
proposed rule change between the Other matters relating to enforcement Statement of the Purpose of, and
Commission and any person, other than proceedings. Statutory Basis for, the Proposed Rule
those that may be withheld from the At times, changes in Commission Change
public in accordance with the priorities require alterations in the In its filing with the Commission, the
provisions of 5 U.S.C. 552, will be scheduling of meeting items. Exchange included statements
available for Web site viewing and For further information and to concerning the purpose of and basis for
printing in the Commission’s Public ascertain what, if any, matters have been the proposed rule change and discussed
Reference Room, 100 F Street NE., added, deleted or postponed; please any comments it received on the
Washington, DC 20549, on official contact Brent J. Fields from the Office of proposed rule change. The text of these
business days between the hours of the Secretary at (202) 551–5400. statements may be examined at the
10:00 a.m. and 3:00 p.m. Copies of such places specified in Item IV below. The
filing will also be available for Dated: August 3, 2017.
Brent J. Fields,
Exchange has prepared summaries, set
inspection and copying at the principal forth in Sections A, B, and C below, of
office of the Exchange. All comments Secretary.
the most significant parts of such
received will be posted without change; [FR Doc. 2017–16745 Filed 8–4–17; 11:15 am]
statements.
the Commission does not edit personal BILLING CODE 8011–01–P
identifying information from (A) Self-Regulatory Organization’s
submissions. You should submit only Statement of the Purpose of, and
information that you wish to make SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule
available publicly. All submissions COMMISSION Change
should refer to File Number SR– 1. Purpose
BatsEDGA–2017–19 and should be [Release No. 34–81288; File No. SR–
submitted on or before August 29, 2017. BatsBYX–2017–16] The Exchange proposes to amend its
fee schedule applicable to its equities
For the Commission, by the Division of
asabaliauskas on DSKBBXCHB2PROD with NOTICES
Trading and Markets, pursuant to delegated Self-Regulatory Organizations; Bats trading platform (‘‘BYX Equities’’) to re-
authority.11 BYX Exchange, Inc.; Notice of Filing
Eduardo A. Aleman,
and Immediate Effectiveness of a 1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b-4.
Proposed Rule Change Related to Fees
Assistant Secretary. 3 15 U.S.C. 78s(b)(3)(A)(ii).
for Use on Bats BYX Exchange, Inc. 4 17 CFR 240.19b-4(f)(2).
[FR Doc. 2017–16637 Filed 8–7–17; 8:45 am]
5 The term ‘‘Member’’ is defined as ‘‘any
BILLING CODE 8011–01–P August 2, 2017.
registered broker or dealer that has been admitted
Pursuant to Section 19(b)(1) of the to membership in the Exchange.’’ See Exchange
11 17 CFR 200.30–3(a)(12). Securities Exchange Act of 1934 (the Rule 1.5(n).
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Document Created: 2017-08-08 00:17:30
Document Modified: 2017-08-08 00:17:30
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 82 FR 37154 |
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