82 FR 49904 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.10, Order Execution

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 207 (October 27, 2017)

Page Range		49904-49905
FR Document		2017-23376
Federal Register, Volume 82 Issue 207 (Friday, October 27, 2017)
[Federal Register Volume 82, Number 207 (Friday, October 27, 2017)]
[Notices]
[Pages 49904-49905]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-23376]



[[Page 49904]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81923; File No. SR-BatsEDGX-2017-38]


Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Rule 11.10, Order Execution

October 23, 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 October 10, 2017, Bats EDGX Exchange, Inc. (the ``Exchange'' or 
``EDGX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders it 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).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 Rule 11.10, Order Execution, 
to remove language allowing a change to the minimum quantity of an 
order with a Minimum Execution Quantity \5\ instruction to be included 
in a Replace message. The proposed amendments would harmonize the rule 
with the rules of its affiliate exchanges, Bats BYX Exchange, Inc. 
(``BYX''), Bats BZX Exchange, Inc. (``BZX''), and Bats EDGA Exchange, 
Inc. (``EDGA'').\6\
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    \5\ See Exchange Rule 11.6(h) (describing the operation of the 
Minimum Execution Quantity order instruction).
    \6\ See BYX Rule 11.9(e)(3), BZX Rule 11.9(e)(3), and EDGA Rule 
11.10(e)(3).
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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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to remove language allowing a change to the 
minimum quantity of an order with a Minimum Execution Quantity 
instruction to be included in a Replace message. The proposed 
amendments would harmonize the rule with the rules of its affiliate 
exchanges, BYX, BZX, and EDGA.\7\
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    \7\ See supra note 6.
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    A Minimum Execution Quantity enables a User \8\ to specify a 
minimum share amount at which the order will execute. An order with a 
Minimum Execution Quantity will not execute unless the volume of 
contra-side liquidity available to execute against the order meets or 
exceeds the designated minimum. Specifically, Minimum Execution 
Quantity is an instruction a User may attach to an order with a Non-
Displayed \9\ instruction or a TIF of IOC requiring the System \10\ to 
execute the order only to the extent that a minimum quantity can be 
satisfied by execution against a single order or multiple aggregated 
orders simultaneously. An order with a Minimum Execution Quantity will 
execute upon entry against a single order or multiple orders if the sum 
of those orders is equal to or greater than its minimum quantity. 
Alternatively, a User may elect that an incoming order with a Minimum 
Execution Quantity to forego executions where multiple resting orders 
could otherwise be aggregated to satisfy the order's minimum quantity 
but do not individually satisfy the order's minimum quantity 
instruction.
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    \8\ The term ``User'' is defined as ``any Member or Sponsored 
Participant who is authorized to obtain access to the System 
pursuant to Rule 11.3.'' See Exchange Rule 1.5(ee).
    \9\ The term ``Non-Displayed'' is defined as ``[a]n instruction 
the User may attach to an order stating that the order is not to be 
displayed by the System on the EDGX Book.'' See Exchange Rule 
11.6(e)(2).
    \10\ The term ``System'' is defined as ``the electronic 
communications and trading facility designated by the Board through 
which securities orders of Users are consolidated for ranking, 
execution and, when applicable, routing away.'' See Exchange Rule 
1.5(cc).
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    Paragraph (e)(3) of Rule 11.10 states that other than changing a 
Limit Order to a Market Order, only the price, Stop Price,\11\ the sell 
long indicator, Short Sale instruction,\12\ Max Floor \13\ of an order 
with a Reserve Quantity, size of the order, and the minimum quantity of 
a Minimum Execution Quantity instruction may be changed with a Replace 
message. The Exchange recently proposed to amend paragraph (e)(3) of 
Rule 11.10, Order Execution, to allow a change to the minimum quantity 
of an order with a Minimum Execution Quantity instruction to be 
included in a Replace message.\14\ However, this functionality was 
never implemented and the Exchange now proposes to remove this language 
from its rule.\15\ Removal of this language would, therefore, not 
result in a change in functionality. The proposal would also harmonize 
the rule with the rules of its affiliate exchanges, BYX, BZX, and 
EDGA.\16\
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    \11\ See Exchange Rules 11.8(a)(1) and (b)(1).
    \12\ See Exchange Rule 11.6(o).
    \13\ See Exchange Rule 11.6(m)(1).
    \14\ See Securities Exchange Act Release No. 81457 (August 22, 
2017), 82 FR 40812 (August 28, 2017) (SR-BatsEDGX-2017-34).
    \15\ While the rule change became operative on September 11, 
2017 and the Exchange's rules were then updated to reflect the 
change, no Member has attempted to change an order's Minimum 
Execution Quantity via a Replace message.
    \16\ See supra note 6.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \17\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \18\ in particular, in that it 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. The Exchange believes the 
proposed amendment to paragraph (e)(3) of Rule 11.10 is consistent with 
the Act in that it will clarify the rule by removing language that 
reflects functionality not offered by the Exchange, thereby avoiding 
any potential investor confusion. The proposed amendments would also 
harmonize the rule with the rules of its affiliate exchanges, BYX, BZX, 
and EDGA,\19\ thereby ensuring consistent

[[Page 49905]]

rules amongst the Exchange and its affiliates.
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    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
    \19\ See supra note 6.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended. The 
proposed amendment to paragraph (e)(3) of Rule 11.10 would not have any 
impact on competition as it simply clarifies the rule by removing 
language that reflects functionality not offered by the Exchange.

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

    No comments were solicited or received on the proposed rule change.

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

    Because the foregoing proposed rule change does not (i) 
significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \20\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\21\
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    \20\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \21\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of its filing. However, 
Rule 19b-4(f)(6)(iii) \22\ permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay so that the proposed rule 
change will become operative upon filing. The Exchange stated that such 
waiver would enable the Exchange to immediately clarify its rule by 
removing language that reflects functionality not offered by the 
Exchange, and thereby avoid any potential investor confusion. The 
Commission believes that waiver of the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it would enable the Exchange to update its rule without delay. 
Therefore, the Commission hereby waives the operative delay and 
designates the proposed rule change operative upon filing.\23\
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    \22\ 17 CFR 240.19b-4(f)(6)(iii).
    \23\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such 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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

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-BatsEDGX-2017-38 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-BatsEDGX-2017-38. 
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. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BatsEDGX-2017-38, and should 
be submitted on or before November 17, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-23376 Filed 10-26-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 207 / Friday, October 27, 2017 / Notices 49905

rules amongst the Exchange and its public interest because it would enable available for Web site viewing and
affiliates. the Exchange to update its rule without printing in the Commission’s Public
delay. Therefore, the Commission Reference Room, 100 F Street NE.,
B. Self-Regulatory Organization’s
hereby waives the operative delay and Washington, DC 20549 on official
Statement on Burden on Competition
designates the proposed rule change business days between the hours of
The Exchange does not believe that operative upon filing.23 10:00 a.m. and 3:00 p.m. Copies of the
the proposed rule change will result in At any time within 60 days of the filing also will be available for
any burden on competition that is not filing of such proposed rule change, the inspection and copying at the principal
necessary or appropriate in furtherance Commission summarily may office of the Exchange. All comments
of the purposes of the Act, as amended. temporarily suspend such rule change if received will be posted without change.
The proposed amendment to paragraph it appears to the Commission that such Persons submitting comments are
(e)(3) of Rule 11.10 would not have any action is necessary or appropriate in the cautioned that we do not redact or edit
impact on competition as it simply public interest, for the protection of personal identifying information from
clarifies the rule by removing language investors, or otherwise in furtherance of comment submissions. You should
that reflects functionality not offered by the purposes of the Act. If the submit only information that you wish
the Exchange. Commission takes such action, the to make available publicly. All
C. Self-Regulatory Organization’s Commission shall institute proceedings submissions should refer to File
Statement on Comments on the to determine whether the proposed rule Number SR–BatsEDGX–2017–38, and
Proposed Rule Change Received From change should be approved or should be submitted on or before
Members, Participants, or Others disapproved. November 17, 2017.
No comments were solicited or IV. Solicitation of Comments For the Commission, by the Division of
received on the proposed rule change. Interested persons are invited to Trading and Markets, pursuant to delegated
authority.24
III. Date of Effectiveness of the submit written data, views, and
Proposed Rule Change and Timing for arguments concerning the foregoing,
Eduardo A. Aleman,
Commission Action including whether the proposed rule
change is consistent with the Act. Assistant Secretary.
Because the foregoing proposed rule Comments may be submitted by any of [FR Doc. 2017–23376 Filed 10–26–17; 8:45 am]
change does not (i) significantly affect the following methods: BILLING CODE 8011–01–P
the protection of investors or the public
interest; (ii) impose any significant Electronic Comments
burden on competition; and (iii) become • Use the Commission’s Internet SECURITIES AND EXCHANGE
operative for 30 days from the date on comment form (http://www.sec.gov/ COMMISSION
which it was filed, or such shorter time rules/sro.shtml); or
as the Commission may designate, it has • Send an email to rule-comments@ [Release No. 34–81919; File No. SR-
become effective pursuant to Section sec.gov. Please include File Number SR– BatsBZX–2017–68]
19(b)(3)(A)(iii) of the Act 20 and BatsEDGX–2017–38 on the subject line.
subparagraph (f)(6) of Rule 19b–4 Self-Regulatory Organizations; Bats
thereunder.21 Paper Comments
BZX Exchange, Inc.; Notice of Filing
A proposed rule change filed under • Send paper comments in triplicate and Immediate Effectiveness of a
Rule 19b–4(f)(6) normally does not to Secretary, Securities and Exchange Proposed Rule Change to Rule 21.1,
become operative for 30 days after the Commission, 100 F Street NE., Definitions, To Modify Stop Orders and
date of its filing. However, Rule 19b– Washington, DC 20549–1090. Stop Limit Orders Applicable to the
4(f)(6)(iii) 22 permits the Commission to All submissions should refer to File Exchange’s Equity Options Platform in
designate a shorter time if such action Number SR–BatsEDGX–2017–38. This Preparation for the C2 Options
is consistent with the protection of file number should be included on the Exchange, Incorporated Technology
investors and the public interest. The subject line if email is used. To help the Migration
Exchange has requested that the Commission process and review your
Commission waive the 30-day operative comments more efficiently, please use October 23, 2017.
delay so that the proposed rule change only one method. The Commission will Pursuant to Section 19(b)(1) of the
will become operative upon filing. The post all comments on the Commission’s Securities Exchange Act of 1934 (the
Exchange stated that such waiver would Internet Web site (http://www.sec.gov/ ‘‘Act’’),1 and Rule 19b–4 thereunder,2
enable the Exchange to immediately rules/sro.shtml). Copies of the notice is hereby given that on October
clarify its rule by removing language submission, all subsequent 10, 2017, Bats BZX Exchange, Inc. (the
that reflects functionality not offered by amendments, all written statements ‘‘Exchange’’ or ‘‘BZX’’) filed with the
the Exchange, and thereby avoid any with respect to the proposed rule Securities and Exchange Commission
potential investor confusion. The change that are filed with the (‘‘Commission’’) the proposed rule
Commission believes that waiver of the Commission, and all written change as described in Items I and II
30-day operative delay is consistent communications relating to the below, which Items have been prepared
with the protection of investors and the proposed rule change between the by the Exchange. The Exchange has
Commission and any person, other than
asabaliauskas on DSKBBXCHB2PROD with NOTICES

20 15 U.S.C. 78s(b)(3)(A)(iii).
designated this proposal as a ‘‘non-
those that may be withheld from the controversial’’ proposed rule change
21 17 CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
public in accordance with the pursuant to Section 19(b)(3)(A) of the
Commission with written notice of its intent to file provisions of 5 U.S.C. 552, will be Act 3 and Rule 19b–4(f)(6)(iii)
the proposed rule change, along with a brief
description and the text of the proposed rule 23 For purposes only of waiving the 30-day
24 17 CFR 200.30–3(a)(12).
change, at least five business days prior to the date operative delay, the Commission also has
1 15 U.S.C. 78s(b)(1).
of filing of the proposed rule change, or such considered the proposed rule’s impact on
shorter time as designated by the Commission. efficiency, competition, and capital formation. See 2 17 CFR 240.19b–4.
22 17 CFR 240.19b–4(f)(6)(iii). 15 U.S.C. 78c(f). 3 15 U.S.C. 78s(b)(3)(A).

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Document Created: 2017-10-27 02:05:49
Document Modified: 2017-10-27 02:05:49
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 49904