82 FR 43598 - Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Transaction Fees

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 179 (September 18, 2017)

Page Range		43598-43601
FR Document		2017-19809
Federal Register, Volume 82 Issue 179 (Monday, September 18, 2017)
[Federal Register Volume 82, Number 179 (Monday, September 18, 2017)]
[Notices]
[Pages 43598-43601]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-19809]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81600; File No. SR-BatsEDGA-2017-23]


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

September 13, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 31, 2017, Bats EDGA Exchange, Inc. (the ``Exchange'' or 
``EDGA'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared 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 43599]]

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 to: (i) Outline the 
fees for MidPoint Discretionary Orders (``MDO'') \6\ by adopting new 
fee codes DA and DR as well as amending the descriptions of fee codes 
DM and DT; and (ii) amend the RMPT/RMPL Tiers under footnote 1.
---------------------------------------------------------------------------

    \6\ See Exchange Rule 11.8(e).
---------------------------------------------------------------------------

Fees for MidPoint Discretionary Orders
    In sum, an MDO is a limit order to buy that is displayed at and 
pegged to the National Best Bid (``NBB''), with discretion to execute 
at prices up to and including the midpoint of the National Best Bid and 
Offer (``NBBO''), or a limit order to sell that is displayed at and 
pegged to the National Best Offer (``NBO''), with discretion to execute 
at prices down to and including the midpoint of the NBBO.\7\ MDOs are 
designed to exercise discretion to execute to the midpoint of the NBBO 
and provide price improvement over the NBBO. Currently, an MDO is 
displayed on the EDGA Book \8\ at the NBB or NBO to which it is pegged. 
Starting on September 15, 2017, the Exchange will permit Users \9\ to 
elect that their MDO be non-displayed on the EDGA Book at the NBB or 
NBO to which it is pegged.\10\
---------------------------------------------------------------------------

    \7\ See Exchange Rule 11.8(e) for a complete description of the 
operation of MDOs.
    \8\ See Exchange Rule 1.5(d).
    \9\ See Exchange Rule 1.5(ee).
    \10\ See Update: Bats EDGA Exchange Announces Availability of 
Non-Displayed Midpoint Discretionary Orders (Non-Displayed MDO) 
Effective September 15, 2017, available at http://cdn.batstrading.com/resources/release_notes/2017/Update-Bats-EDGA-Exchange-Announces-Hidden-Midpoint-Discretionary-Order-Hidden-MDO-Functionality-Available-Effective-September-15-2017.pdf. See also 
Securities Exchange Act Release No. 81454 (August 22, 2017), 82 FR 
40823 (August 28, 2017) (SR-BatsEDGA-2017-21) (Notice of Filing and 
Immediate Effectiveness of a Proposed Rule Change To Amend Rule 
11.8, Order Types, To Permit Midpoint Discretionary Orders To Be 
Non- Displayed).
---------------------------------------------------------------------------

    Today, an MDO is subject to the standard rates for adding or 
removing liquidity when executed at the NBB or NBO to which it is 
pegged. The standard rate for adding or removing liquidity in 
securities priced at or above $1.00 is $0.0003 per share and free for 
securities priced below $1.00.\11\ MDOs that are executed within their 
discretionary range are free in securities priced at, above, or below 
$1.00. MDOs that are executed within their discretionary range yield 
fee code DM where they add liquidity and fee code DT where they remove 
liquidity.
---------------------------------------------------------------------------

    \11\ See the Standard Rates table of the Exchange's fee schedule 
available at http://www.bats.com/us/equities/membership/fee_schedule/edga/.
---------------------------------------------------------------------------

    The Exchange now proposes to adopt new fee codes DA and DR as well 
as amend the descriptions of fee codes DM and DT in order to outline 
the fees for MDOs. Today, a non-displayed order that adds liquidity 
yields fee code HA and is free for securities priced at, above, or 
below $1.00. A non-displayed order that removes liquidity yields fee 
code HR and is charged a fee of $0.0005 per share in securities priced 
at or above $1.00 and 0.05% of the transaction's dollar value in 
securities priced below $1.00. Absent this proposed rule change, 
beginning on September 15, 2017, an MDO that is non-displayed on the 
EDGA Book would yield fee codes HA or HR when executed at its pegged 
price.
    The Exchange now proposed to adopt new fee codes DA and DR that 
would apply to all MDO that are executed at their pegged price, 
regardless of whether they are displayed or not. Fee code DA would be 
appended to all MDOs that add liquidity not within their discretionary 
range (i.e., executed at their pegged price) and fee code DR would be 
appended to all MDOs that remove liquidity not within their 
discretionary range. MDOs that yield fee code DA or DR would be charged 
a rate of $0.0003 per share for orders priced at or above $1.00 and no 
fee for orders priced below $1.00. This results in no rate change for 
displayed MDOs and a fee decrease from $0.0005 per share to $0.003 per 
share for non-displayed MDOs when both are executed at their pegged 
price [sic].
    The Exchange also proposes to amend the descriptions of fee codes 
DM and DT to clarify that those fee codes apply when an MDO is executed 
within its discretionary range. The description of fee code DM 
currently states that it applies to a non-displayed order that adds 
liquidity using an MDO. Likewise, the description of fee code DT states 
that it applies to a non-displayed order that removes liquidity using 
an MDO. These descriptions were designed to include an MDO executed at 
a non-displayed price within its discretionary range and not at its 
displayed pegged price. In light of the proposed fee codes DA and DR 
that set forth fees for MDOs executed at their pegged price, the 
Exchange proposed to amend the descriptions of fee codes DM and DT to 
make clear they apply to MDOs executed within their discretionary 
range. As such, the description of fee code DM would be amended to 
state that it applies when an MDO adds liquidity within its 
discretionary range and the description of fee code DT would be amended 
to state that it applies when an MDO removes liquidity within its 
discretionary range. The Exchange does not propose to amend the rates 
applicable to fee codes DM and DT.
RMPT/RMPL Tiers
    The Exchange offers two tiers under footnote 1, the RMPT/RMPL Tiers 
under which a Member receives a discounted fee of either $0.0006 or 
$0.0008 per share for orders yielding fee code PX \12\ where that 
Member meets certain required criteria. Fee code PX is append to orders 
that are routed using the RMPL routing strategy to a destination not 
covered by fee code PL,\13\ or are routed using the RMPT routing 
strategy, and are assessed a fee of $0.0012 per share on securities 
priced over $1.00, and a fee of 30% of the total dollar value on 
securities priced below $1.00. Under Tier 1, a Members is charged a 
discounted fee of $0.0008 per share for orders yielding fee code PX 
where they add or remove an ADV \14\ greater than or equal to 2,000,000 
shares using the RMPT or RMPL\15\ routing strategies. Under Tier 2, a 
Member is charged a discounted fee of $0.0006 per share for orders 
yielding fee code PX where that Member adds or removes an ADV greater 
than or equal to 4,000,000 shares using the RMPT or RMPL routing 
strategies. The Exchange now proposes to delete Tier 1 and to increase 
the fee charged under Tier 2 from $0.0006 to $0.0008 per share. The 
Exchange also proposes to rename Tier 2 as Tier 1. The Exchange does 
not propose to amend

[[Page 43600]]

the remaining tier's required criteria. Lastly, the Exchange proposes 
to make ministerial changes to the introduction to the RMPT/RMPL Tiers 
and the heading of the second column to make clear the discounted rate 
only applies to routed orders and not orders that remove liquidity.
---------------------------------------------------------------------------

    \12\ See the Exchange's fee schedule available at http://www.bats.com/us/equities/membership/fee_schedule/edga/.
    \13\ Fee code PL is appended to orders that are routed to Bats 
BZX Exchange, Inc., Bats EDGX Exchange, Inc., the New York Stock 
Exchange, Inc., NYSE Arca, Inc. or the Nasdaq Stock Market LLC using 
the RMPL routing strategy and are assessed a fee of $0.0030 per 
share on securities priced over $1.00, and 30% of the transaction's 
dollar value for securities priced below $1.00. Id.
    \14\ ADV is generally defined as average daily volume calculated 
as the number of shares added to, removed from, or routed by, the 
Exchange, or any combination or subset thereof, per day. Id.
    \15\ The RMPT routing strategy operates similarly to RMPL in 
that under both Mid-Point Peg Orders check the System for available 
shares and any remaining shares are then sent to destinations on the 
System routing table that support midpoint eligible orders. If any 
shares remain unexecuted after routing, they are posted on the EDGA 
Book as a Mid-Point Peg Order, unless otherwise instructed by the 
User. While RMPL and RMPT operate in an identical manner, the 
trading venues that each routing strategy routes to and the order in 
which it routes them differ. See Exchange Rule 11.11(g)(13).
---------------------------------------------------------------------------

Implementation Date
    The Exchange proposes to implement these changes to its fee 
schedule on September 1, 2017. The remaining changes to its fee 
schedule applicable to non-displayed MDOs will be applicable until 
September 15, 2017 when that functionality becomes available.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\16\ in general, and 
furthers the objectives of Section 6(b)(4),\17\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f.
    \17\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

Fees for MidPoint Discretionary Orders
    The Exchange believes that its proposal to outline the fees for 
MDOs represents an equitable allocation of reasonable dues, fees, and 
other charges among Members and other persons using its facilities in 
that they are designed to clearly delineate the rates applicable when 
an MDO is executed at its pegged price or within its discretionary 
range, in light of upcoming functionality that would enable a User to 
elect that their MDO not be displayed on the EDGA Book. As noted above, 
proposed new fee codes DA and DR result in no rate change for displayed 
MDOs and a fee decrease from $0.0005 per share to $0.003 per share for 
non-displayed MDOs when both are executed at their pegged price [sic]. 
The Exchange believes it is equitable and reasonable to charge a lower 
fee to MDOs than other non-displayed orders here as MDOs add liquidity 
at the NBBO while offering price improvement opportunities to incoming 
contra-side orders that execute within its discretionary range. The 
amendments to the descriptions of fee codes DM and DT are also 
equitable and reasonable in that they clarify the application of those 
fee codes, thereby avoiding potential investor confusion. Lastly, the 
Exchange also believes that the proposed amendments are non-
discriminatory because they apply uniformly to all Members.
RMPT/RMPL Tiers
    The Exchange believe that the amendments to the RMPL/RMPT Tiers are 
also reasonable and equitable because it is designed to attract 
additional midpoint liquidity to the Exchange by removing a tier with 
lower ADV requirement, resulting in increased price improvement 
opportunities for orders seeking an execution at the midpoint of the 
NBBO on the Exchange or elsewhere. In addition, increasing the rate for 
the remaining tier is designed to cover the Exchange's routing costs 
while continuing to provide the Exchange revenue to be used to fund the 
Exchange generally. This includes the cost of maintaining and improving 
the technology used to handle and route orders from the Exchange as 
well as programs that the Exchange believes help to attract additional 
liquidity and thus improve the depth of liquidity available on the 
Exchange. The Exchange notes that routing through the Exchange is 
voluntary. The Exchange also believes that the proposed amendments are 
non-discriminatory because it applies uniformly to all Members.
    In addition, volume-based rebates such as that proposed herein have 
been widely adopted by exchanges 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 provision and/or growth 
patterns; and (iii) the introduction of higher volumes of orders into 
the price and volume discovery processes. The Exchange believes that 
the proposed tier is a reasonable, fair and equitable, and not an 
unfairly discriminatory allocation of fees and rebates, because it will 
provide Members with an additional incentive to reach certain 
thresholds on the Exchange.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    This proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act. The Exchange does not believe that this change represents a 
significant departure from previous pricing offered by the Exchange or 
from pricing offered by the Exchange's competitors. The proposed rates 
would apply uniformly to all Members, and Members may opt to disfavor 
the Exchange's pricing if they believe that alternatives offer them 
better value. Accordingly, the Exchange does not believe that the 
proposed changes will impair the ability of Members or competing venues 
to maintain their competitive standing in the financial markets. 
Further, excessive fees would serve to impair an exchange's ability to 
compete for order flow and members rather than burdening competition. 
The Exchange believes that its proposal would not burden intramarket 
competition because the proposed rate would apply uniformly to all 
Members.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any written comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \18\ and paragraph (f) of Rule 19b-4 
thereunder.\19\ 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.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BatsEDGA-2017-23 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-2017-23. This 
file number should be included on the

[[Page 43601]]

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 Number SR-BatsEDGA-2017-23 and should be submitted on or before 
October 10, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19809 Filed 9-15-17; 8:45 am]
 BILLING CODE 8011-01-P
43598 Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices

19(b)(3)(A) of the Act 7 and Rule 19b– • Send an email to rule-comments@ SECURITIES AND EXCHANGE
4(f)(6) thereunder.8 sec.gov. Please include File Number SR– COMMISSION
A proposed rule change filed MRX–2017–17 on the subject line.
pursuant to Rule 19b–4(f)(6) under the [Release No. 34–81600; File No. SR–
Paper Comments BatsEDGA–2017–23]
Act 9 normally does not become
operative for 30 days after the date of its
• Send paper comments in triplicate Self-Regulatory Organizations; Bats
filing. However, Rule 19b–4(f)(6)(iii) 10 EDGA Exchange, Inc.; Notice of Filing
permits the Commission to designate a to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street and Immediate Effectiveness of a
shorter time if such action is consistent Proposed Rule Change Related to
with the protection of investors and the NE., Washington, DC 20549–1090.
Transaction Fees
public interest. The Exchange has asked All submissions should refer to File
the Commission to waive the 30-day Number SR–MRX–2017–17. This file September 13, 2017.
operative delay. The Exchange states number should be included on the Pursuant to Section 19(b)(1) of the
that waiver of the operative delay is subject line if email is used. To help the Securities Exchange Act of 1934 (the
consistent with the protection of ‘‘Act’’),1 and Rule 19b–4 thereunder,2
Commission process and review your
investors and the public interest as it notice is hereby given that on August
comments more efficiently, please use
will allow the Exchange to immediately 31, 2017, Bats EDGA Exchange, Inc. (the
only one method. The Commission will
remove outdated language from Chapter ‘‘Exchange’’ or ‘‘EDGA’’) filed with the
19 and thereby avoid member confusion post all comments on the Commission’s Securities and Exchange Commission
about how Flash auction allocations are Internet Web site (http://www.sec.gov/ (‘‘Commission’’) the proposed rule
performed on the Exchange. The rules/sro.shtml). Copies of the change as described in Items I, II and III
Commission believes the waiver of the submission, all subsequent below, which Items have been prepared
operative delay is consistent with the amendments, all written statements by the Exchange. The Exchange has
protection of investors and the public with respect to the proposed rule designated the proposed rule change as
interest. Accordingly, the Commission change that are filed with the one establishing or changing a member
hereby waives the operative delay and Commission, and all written due, fee, or other charge imposed by the
designates the proposed rule change communications relating to the Exchange under Section 19(b)(3)(A)(ii)
operative upon filing.11 proposed rule change between the of the Act 3 and Rule 19b–4(f)(2)
At any time within 60 days of the Commission and any person, other than thereunder,4 which renders the
filing of the proposed rule change, the those that may be withheld from the proposed rule change effective upon
Commission summarily may public in accordance with the filing with the Commission. The
temporarily suspend such rule change if provisions of 5 U.S.C. 552, will be Commission is publishing this notice to
it appears to the Commission that such available for Web site viewing and solicit comments on the proposed rule
action is necessary or appropriate in the printing in the Commission’s Public change from interested persons.
public interest, for the protection of Reference Room, 100 F Street NE.,
investors, or otherwise in furtherance of I. Self-Regulatory Organization’s
Washington, DC 20549 on official Statement of the Terms of Substance of
the purposes of the Act. If the
business days between the hours of the Proposed Rule Change
Commission takes such action, the
Commission shall institute proceedings 10:00 a.m. and 3:00 p.m. Copies of such
The Exchange filed a proposal to
to determine whether the proposed rule filing also will be available for amend the fee schedule applicable to
should be approved or disapproved. inspection and copying at the principal Members 5 and non-Members of the
office of the Exchange. All comments Exchange pursuant to EDGA Rules
IV. Solicitation of Comments received will be posted without change; 15.1(a) and (c).
Interested persons are invited to the Commission does not edit personal The text of the proposed rule change
submit written data, views, and identifying information from is available at the Exchange’s Web site
arguments concerning the foregoing, submissions. You should submit only at www.bats.com, at the principal office
including whether the proposed rule information that you wish to make of the Exchange, and at the
change is consistent with the Act. available publicly. All submissions Commission’s Public Reference Room.
Comments may be submitted by any of should refer to File Number SR–MRX–
the following methods: II. Self-Regulatory Organization’s
2017–17, and should be submitted on or Statement of the Purpose of, and
Electronic Comments before October 10, 2017. Statutory Basis for, the Proposed Rule
• Use the Commission’s Internet For the Commission, by the Division of Change
comment form (http://www.sec.gov/ Trading and Markets, pursuant to delegated In its filing with the Commission, the
rules/sro.shtml); or authority.12 Exchange included statements
Eduardo A. Aleman, concerning the purpose of and basis for
7 15 U.S.C. 78s(b)(3)(A).
8 17
Assistant Secretary. the proposed rule change and discussed
CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the [FR Doc. 2017–19806 Filed 9–15–17; 8:45 am] any comments it received on the
Commission with written notice of its intent to file BILLING CODE 8011–01–P proposed rule change. The text of these
the proposed rule change, along with a brief statements may be examined at the
description and the text of the proposed rule places specified in Item IV below. The
change, at least five business days prior to the date
sradovich on DSKBBY8HB2PROD with NOTICES

of filing of the proposed rule change, or such
1 15 U.S.C. 78s(b)(1).
shorter time as designated by the Commission.
9 17 CFR 240.19b–4(f)(6). 2 17 CFR 240.19b–4.
10 17 CFR 240.19b–4(f)(6)(iii). 3 15 U.S.C. 78s(b)(3)(A)(ii).

11 For purposes only of waiving the 30-day 4 17 CFR 240.19b–4(f)(2).

operative delay, the Commission has also 5 The term ‘‘Member’’ is defined as ‘‘any

considered the proposed rule’s impact on registered broker or dealer that has been admitted
efficiency, competition, and capital formation. See to membership in the Exchange.’’ See Exchange
15 U.S.C. 78c(f). 12 17 CFR 200.30–3(a)(12). Rule 1.5(n).

VerDate Sep<11>2014 16:54 Sep 15, 2017 Jkt 241001 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 E:\FR\FM\18SEN1.SGM 18SEN1
Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 43601

subject line if email is used. To help the American’’) filed with the Securities related to the adjustment and
Commission process and review your and Exchange Commission (the nullification of erroneous options
comments more efficiently, please use ‘‘Commission’’) the proposed rule transactions, including a specific
only one method. The Commission will change as described in Items I and II provision related to coordination in
post all comments on the Commission’s below, which Items have been prepared connection with large-scale events
Internet Web site (http://www.sec.gov/ by the self-regulatory organization. The involving erroneous options
rules/sro.shtml). Copies of the Commission is publishing this notice to transactions.5 The Exchange believes
submission, all subsequent solicit comments on the proposed rule that the changes the options exchanges
amendments, all written statements change from interested persons. implemented with the harmonized rule
with respect to the proposed rule have led to increased transparency and
change that are filed with the I. Self-Regulatory Organization’s finality with respect to the adjustment
Commission, and all written Statement of the Terms of Substance of and nullification of erroneous options
communications relating to the the Proposed Rule Change transactions. As part of the initial
proposed rule change between the The Exchange proposes to amend initiative, however, the Exchange and
Commission and any person, other than Rule 975NY (Nullification and other options exchanges deferred a few
those that may be withheld from the Adjustment of Options Transactions specific matters for further discussion.6
public in accordance with the including Obvious Errors) and Rule Specifically, as described in the Initial
provisions of 5 U.S.C. 552, will be 953NY (Trading Halts and Filing, the Exchange and all other
available for Web site viewing and Suspensions). The proposed rule change options exchanges have been working to
printing in the Commission’s Public is available on the Exchange’s Web site further improve the review of
Reference Room, 100 F Street NE., at www.nyse.com, at the principal office potentially erroneous transactions as
Washington, DC 20549, on official of the Exchange, and at the well as their subsequent adjustment by
business days between the hours of Commission’s Public Reference Room. creating an objective and universal way
10:00 a.m. and 3:00 p.m. Copies of the to determine Theoretical Price in the
filing also will be available for II. Self-Regulatory Organization’s event a reliable NBBO is not available.
inspection and copying at the principal Statement of the Purpose of, and Because this initiative required
office of the Exchange. All comments Statutory Basis for, the Proposed Rule additional exchange and industry
received will be posted without change; Change discussion as well as additional time for
the Commission does not edit personal In its filing with the Commission, the development and implementation, the
identifying information from self-regulatory organization included Exchange and the other options
submissions. You should submit only statements concerning the purpose of, exchanges determined to proceed with
information that you wish to make and basis for, the proposed rule change the Initial Filing and to undergo an
available publicly. All submissions and discussed any comments it received effort to complete any additional
should refer to File Number SR– on the proposed rule change. The text improvements to the applicable rule. In
BatsEDGA–2017–23 and should be of those statements may be examined at this filing, the Exchange proposes to
submitted on or before October 10, the places specified in Item IV below. adopt procedures that will lead to a
2017. The Exchange has prepared summaries, more objective and uniform way to
For the Commission, by the Division of set forth in sections A, B, and C below, determine Theoretical Price in the event
Trading and Markets, pursuant to delegated of the most significant parts of such a reliable NBBO is not available. In
authority.20 statements. addition to this change, the Exchange
Eduardo A. Aleman, has proposed additional minor changes
A. Self-Regulatory Organization’s to its rules.
Assistant Secretary. Statement of the Purpose of, and
[FR Doc. 2017–19809 Filed 9–15–17; 8:45 am] Statutory Basis for, the Proposed Rule Calculation of Theoretical Price Using a
BILLING CODE 8011–01–P Change Third Party Provider
1. Purpose Under the harmonized rule, when
reviewing a transaction as potentially
SECURITIES AND EXCHANGE The purpose of this filing is to amend erroneous, the Exchange needs to first
COMMISSION Rule 975NY, relating to the adjustment determine the ‘‘Theoretical Price’’ of the
[Release No. 34–81582; File No. SR– and nullification of erroneous option, i.e., the Exchange’s estimate of
NYSEAMER–2017–12] transactions, and Rule 953NY, regarding the correct market price for the option.
trading halts and suspensions. The Pursuant to Rule 975NY, if the
Self-Regulatory Organizations; NYSE Exchange’s proposal is based on that of
American LLC; Notice of Filing and Bats BZX (‘‘BATS’’), which the 5 See Securities Exchange Act Release No. 74921
Immediate Effectiveness of Proposed Commission approved on July 6, 2017, (May 8, 2015), 80 FR 27816 (May 14, 2015) (SR–
Rule Change To Amend Rule 975NY and those that the other options NYSEMKT–2015–39) (the ‘‘Initial Filing’’).
6 For example, the Exchange, along with other
and Rule 953NY exchanges intend to file.4
options exchanges that offer complex orders on
September 12, 2017. Background their options platforms, recently filed proposals
related to rules for handling the adjustment and
Pursuant to Section 19(b)(1) 1 of the The Exchange and other options nullification of erroneous complex order
Securities Exchange Act of 1934 (the exchanges adopted a harmonized rule transactions, which proposals were approved by the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 Commission or filed on an immediately effective
sradovich on DSKBBY8HB2PROD with NOTICES

basis. See Securities Exchange Act Release Nos.
notice is hereby given that on 4 See Securities Exchange Act Release Nos. 81084
80040 (February 14, 2017), 82 FR 11248 (February
September 1, 2017, NYSE American (July 6, 2017), 82 FR 32216 (July12, 2017) (‘‘BATS 21, 2017) (granting approval of CBOE proposal
LLC (the ‘‘Exchange’’ or ‘‘NYSE Approval Order’’); 80709 (May 17, 2017), 82 FR related to the nullification and adjustment of
23684 (May 23, 2017) (‘‘Notice of BATS Filing’’) complex orders) (SR–CBOE–2016–088); 80497
20 17
(SR–BatsBZX–2017–35). See also Securities (April 20, 2017), 82 FR 19290 (April 26, 2017)
CFR 200.30–3(a)(12). Exchange Act Release No. 81348 (August 8, 2017), (notice of filing and immediate effectiveness of
1 15 U.S.C. 78s(b)(1). 82 FR 37910 (August 14, 2017) (SR–BX–2017–038) Exchange proposal related to the nullification and
2 15 U.S.C. 78a.
(immediately effective filing based on BATS adjustment of complex orders) (SR–NYSEMKT–
3 17 CFR 240.19b–4. Approval Order). 2017–22).

VerDate Sep<11>2014 16:54 Sep 15, 2017 Jkt 241001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 E:\FR\FM\18SEN1.SGM 18SEN1
Document Created: 2017-09-16 00:51:54
Document Modified: 2017-09-16 00:51:54
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
Dates		Bats EDGA Exchange Announces Availability of Non-Displayed Midpoint Discretionary Orders (Non-Displayed MDO) Effective September 15, 2017, available at http:// cdn.batstrading.com/resources/release_notes/2017/Update-Bats-EDGA- Exchange-Announces-Hidden-Midpoint-Discretionary-Order-Hidden-MDO- Functionality-Available-Effective-September-15-2017.pdf. See also Securities Exchange Act Release No. 81454 (August 22, 2017), 82 FR 40823 (August 28, 2017) (SR-BatsEDGA-2017-21) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.8, Order Types, To Permit Midpoint Discretionary Orders To Be Non- Displayed).
FR Citation		82 FR 43598