Self-Regulatory Organizations; BATS Exchange, Inc.; Order Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Amend BATS Fee Schedule to Impose Fees for Ports Used for Order Entry and Receipt of Market Data, 46256-46257 [E9-21455]
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46256
Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices
RECORD ACCESS PROCEDURES:
Persons wishing to obtain information
on the procedures for gaining access to
or contesting the contents of these
records may contact the FOIA/Privacy
Act Officer, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–5100.
CONTESTING RECORD PROCEDURES:
See Record Access Procedures above.
RECORD SOURCE CATEGORIES:
Information is provided by current
Members and employees of the
Commission or their designees in
accordance with the requirements of the
SEC Ethics Conduct Rules.
EXEMPTIONS CLAIMED FOR THE SYSTEM:
None.
Dated: September 1, 2009.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9–21444 Filed 9–4–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60586; File No. SR–BATS–
2009–026]
Self-Regulatory Organizations; BATS
Exchange, Inc.; Order Approving
Proposed Rule Change, as Modified by
Amendment No. 1 Thereto, To Amend
BATS Fee Schedule to Impose Fees for
Ports Used for Order Entry and Receipt
of Market Data
August 28, 2009.
jlentini on DSKJ8SOYB1PROD with NOTICES
On July 21, 2009, BATS Exchange,
Inc. (‘‘BATS’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend the fee schedule
applicable to Members 3 and nonmembers of the Exchange with respect
to ports used to enter orders into
Exchange systems and to receive data
from the Exchange. The proposed rule
change was published for comment in
the Federal Register on July 28, 2009.4
The Commission received no comments
regarding the proposal. On August 27,
2009, the Exchange filed Amendment
1 15
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 A Member is any registered broker or dealer that
has been admitted to membership in the Exchange.
See BATS Rule 1.5(n).
4 Securities Exchange Act Release No. 60364 (July
22, 2009), 74 FR 37285 (‘‘Notice’’).
VerDate Nov<24>2008
17:32 Sep 04, 2009
Jkt 217001
No. 1 to the proposed rule change.5 This
order grants approval of the proposed
rule change.
BATS proposes to begin charging a
monthly fee for ports used to enter
orders into the Exchange’s trading
system and to receive data from the
Exchange.6 Specifically, the Exchange
proposes to charge $250.00 per month
per pair 7 of any port type other than a
Multicast PITCH Spin Server Port or a
GRP Port. Thus, the proposed charge
will apply to all Exchange FIX,
FIXDROP, DROP, TCP PITCH, TCP
FAST PITCH, and TOP ports.8 In
addition, the Exchange proposes to
provide all Exchange constituents that
receive the Exchange’s Multicast PITCH
feed with 12 pairs of Multicast PITCH
Spin Server Ports free of charge and, if
such ports are used, one free pair of GRP
Ports.9 The Exchange proposes to charge
such customers $250.00 per month per
additional pair of GRP Ports or
additional set of 12 pairs of Multicast
PITCH Spin Server Ports. Any Member
or non-member that has entered into the
appropriate agreements with the
Exchange is permitted to receive
Multicast PITCH Spin Server Ports and
GRP Ports from the Exchange.
The proposed rule change will apply
to Members that obtain ports for direct
access to the Exchange, non-member
service bureaus that act as a conduit for
orders entered by Exchange Members
that are their customers, and market
data recipients. The Exchange states that
it has previously provided ports free of
charge to all Members and non-members
that use such ports for order entry to the
Exchange or for receipt of market data.
However, the Exchange states that its
infrastructure costs have increased over
time. In addition, the Exchange believes
5 In Amendment No. 1, the Exchange replaced the
bracketed ‘‘[July]’’ with ‘‘[August]’’ in the proposed
rule text to reflect the fact that the current fee
schedule is dated August 1, 2009. Because the
change in Amendment No. 1 is technical in nature,
it is not subject to notice and comment.
6 The Commission notes that BATS will
implement the proposed port fees commencing on
the first day of the month immediately following
Commission approval of this proposed rule change
(or on the date of approval, if on the first business
day of a month). See Notice, supra note 4.
7 Each pair of ports will consist of one port at the
Exchange’s primary data center and one port at the
Exchange’s secondary data center.
8 BATS FIX ports are the only ports that may be
used to send orders and related instructions to the
Exchange. All other port types, including Multicast
PITCH and GRP Ports, permit Members and nonmembers to receive information from the Exchange.
9 The Exchange’s proposal to provide certain
ports free of charge to Multicast PITCH customers
is designed to encourage use of the Exchange’s
Multicast PITCH feed because it is a relatively new
offering by the Exchange and because the Exchange
believes that the feed is its most efficient feed and
will reduce infrastructure costs for both the
Exchange and those who utilize the feed.
PO 00000
Frm 00177
Fmt 4703
Sfmt 4703
that providing ports free of charge has
not encouraged Members and nonmembers to reserve and maintain ports
efficiently, but rather, has led to a
significant number of ports that are
reserved and enabled by such market
participants, but are never used or are
under-used. Accordingly, the Exchange
believes that the imposition of port fees
will help the Exchange to continue to
maintain and improve its infrastructure,
while also encouraging Exchange
customers to request and enable only
the ports that are necessary for their
operations related to the Exchange.
The Commission has carefully
reviewed the proposed rule change and
finds that it is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities exchange.10
Specifically, the Commission finds that
the proposal is consistent with Section
6(b)(4) of the Act,11 which requires the
equitable allocation of reasonable dues,
fees, and other charges among Exchange
Members and other persons using the
Exchange’s facilities, and Section 6(b)(5)
of the Act,12 which requires, among
other things, that the rules of a national
securities exchange be designed to
promote just and equitable principles of
trade, 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
not be designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers. The
Commission also finds that the
proposed rule change is consistent with
Section 6(b)(8) of the Act,13 which
requires that the rules of an exchange
not impose a burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. Finally, the
Commission finds that the proposed
rule change is consistent with Rule
603(a) of Regulation NMS,14 which
requires an exclusive processor that
distributes information with respect to
quotations for or transactions in an NMS
stock to do so on terms that are fair and
reasonable and not unreasonably
discriminatory.
The Commission believes that the
proposed port fees are equitably
allocated among Members and nonmembers and do not unfairly or
unreasonably discriminate between
10 In approving this proposed rule change the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
11 15 U.S.C. 78f(b)(4).
12 15 U.S.C. 78f(b)(4).
13 15 U.S.C. 78f(b)(8).
14 17 CFR 242.603(a).
E:\FR\FM\08SEN1.SGM
08SEN1
Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices
customers, issuers, brokers, or dealers
because the proposed port fees do not
distinguish among the type of
participant but rather are the same for
all members and non-members. The
Commission also believes that BATS
was subject to significant competitive
pressure to act equitably, fairly, and
reasonably in setting the port fees, in
light of the highly competitive nature of
the market for execution and routing
services.15 The Commission further
notes that the Exchange’s proposed port
fees are consistent with similar port fees
charged by other exchanges.16
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,17 that the
proposed rule change (SR–BATS–2009–
026), as modified by Amendment No. 1
thereto, be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–21455 Filed 9–4–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60585; File No. SR–CBOE–
2009–053]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Permit FLEX Options
on Securities Eligible for Non-FLEX
Options Trading and on Corporate
Debt Securities
August 28, 2009.
jlentini on DSKJ8SOYB1PROD with NOTICES
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
15 See Securities Exchange Act Release No. 59039
(December 2, 2008), 73 FR 74770 (December 9,
2008) (SR–NYSEArca–2006–21).
16 See, e.g., Rule 7015 of The NASDAQ Stock
Market LLC (‘‘NASDAQ’’) (setting forth, among
other fees for access services, port fees charged to
members and non-members used to enter orders
into NASDAQ trading systems). See also Securities
Exchange Act Release Nos. 60546 (August 20,
2009), 74 FR 43184 (August 26, 2009) (SR–
NASDAQ–2009–058) (increasing the monthly fee
for each port used to enter orders in NASDAQ
trading systems from $400 per month to $500 per
month); 59337 (February 2, 2009), 74 FR 6441
(February 9, 2009) (SR–BX–2009–004) (establishing
fees for ports used by members to enter orders);
59615 (March 20, 2009), 74 FR 14604 (March 31,
2009) (SR–BX–2009–005) (establishing, among
other fees, port fees for accessing market data).
17 15 U.S.C. 78s(b)(2).
18 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
VerDate Nov<24>2008
17:32 Sep 04, 2009
Jkt 217001
19, 2009, the Chicago Board Options
Exchange, Incorporated (‘‘Exchange’’ or
‘‘CBOE’’) filed with the Securities and
Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange filed the
proposal as ‘‘non-controversial’’
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b–4(f)(6)
thereunder, which renders it effective
upon filing.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CBOE is proposing to amend certain
CBOE rules to (1) permit the Exchange
to list Flexible Exchange Options
(‘‘FLEX Options’’) on securities that are
eligible for Non-FLEX options trading,
even if the Exchange does not list NonFLEX options on such securities, and (2)
designate Corporate Debt Security
Options as eligible for FLEX Options
trading. The text of the rule proposal is
available on the Exchange’s website
(https://www.cboe.org/legal), at the
Exchange’s Office of the Secretary 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
self-regulatory organization 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 those 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 first change being proposed by
this filing is to permit CBOE to list
FLEX Options on securities that are
eligible for Non-FLEX options trading,
even if the Exchange does not list NonFLEX options on such securities.
Currently, CBOE’s rules only permit
FLEX Options on those securities on
which the Exchange lists and trades
Non-FLEX options. For various reasons,
exchange traded options are not listed
on every NMS stock, index or other
products approved for options trading.
The Exchange recognizes that market
participants may want access to options
on such securities, in addition to the
certainty and safeguards of a regulated
and standardized marketplace. As an
alternative to the over-the-counter
marketplace, CBOE proposes to increase
the spectrum of products that are
eligible for FLEX Options trading, even
if the Exchange does not list Non-FLEX
options on such securities. In order to
effect this change, the Exchange is
proposing to amend its Flexible
Exchange Options rules and other
product rules (e.g., Range Options,
binary options, Credit Options) that
currently designate such products as
eligible for FLEX Options trading to
permit FLEX Options trading even if
Non-FLEX options on such securities
are not traded.
The second change being proposed by
this filing is to designate Corporate Debt
Security Options as eligible for FLEX
Option trading. To effect this change,
the Exchange is proposing to adopt new
rule 28.17, which is similar to other
FLEX Option designation rules for other
products that have stand alone chapters
(e.g., Range Options, binary options,
Credit Options). The Exchange would
like to offer FLEX Option trading on
Corporate Debt Security Options as an
alternative to similar products trading in
the over-the-counter marketplace.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with the
Securities Exchange Act of 1934 (the
‘‘Act’’) 5 and the rules and regulations
thereunder and, in particular, the
requirements of Section 6(b) of the Act.6
Specifically, the Exchange believes the
proposed rule change is consistent with
the Section 6(b)(5) 7 requirements that
the rules of an exchange be designed to
promote just and equitable principles of
trade, to prevent fraudulent and
manipulative acts, to remove
impediments to and to perfect the
mechanism for a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. The Exchange believes
that the FLEX Option changes proposed
in this rule filing will provide market
investors with additional means to
manage their risk exposures and carry
5 15
3 15
U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
PO 00000
Frm 00178
Fmt 4703
Sfmt 4703
46257
U.S.C. 78s(b)(1).
U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(5).
6 15
E:\FR\FM\08SEN1.SGM
08SEN1
]]>Agencies
[Federal Register Volume 74, Number 172 (Tuesday, September 8, 2009)]
[Notices]
[Pages 46256-46257]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-21455]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60586; File No. SR-BATS-2009-026]
Self-Regulatory Organizations; BATS Exchange, Inc.; Order
Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto,
To Amend BATS Fee Schedule to Impose Fees for Ports Used for Order
Entry and Receipt of Market Data
August 28, 2009.
On July 21, 2009, BATS Exchange, Inc. (``BATS'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to
amend the fee schedule applicable to Members \3\ and non-members of the
Exchange with respect to ports used to enter orders into Exchange
systems and to receive data from the Exchange. The proposed rule change
was published for comment in the Federal Register on July 28, 2009.\4\
The Commission received no comments regarding the proposal. On August
27, 2009, the Exchange filed Amendment No. 1 to the proposed rule
change.\5\ This order grants approval of the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ A Member is any registered broker or dealer that has been
admitted to membership in the Exchange. See BATS Rule 1.5(n).
\4\ Securities Exchange Act Release No. 60364 (July 22, 2009),
74 FR 37285 (``Notice'').
\5\ In Amendment No. 1, the Exchange replaced the bracketed
``[July]'' with ``[August]'' in the proposed rule text to reflect
the fact that the current fee schedule is dated August 1, 2009.
Because the change in Amendment No. 1 is technical in nature, it is
not subject to notice and comment.
---------------------------------------------------------------------------
BATS proposes to begin charging a monthly fee for ports used to
enter orders into the Exchange's trading system and to receive data
from the Exchange.\6\ Specifically, the Exchange proposes to charge
$250.00 per month per pair \7\ of any port type other than a Multicast
PITCH Spin Server Port or a GRP Port. Thus, the proposed charge will
apply to all Exchange FIX, FIXDROP, DROP, TCP PITCH, TCP FAST PITCH,
and TOP ports.\8\ In addition, the Exchange proposes to provide all
Exchange constituents that receive the Exchange's Multicast PITCH feed
with 12 pairs of Multicast PITCH Spin Server Ports free of charge and,
if such ports are used, one free pair of GRP Ports.\9\ The Exchange
proposes to charge such customers $250.00 per month per additional pair
of GRP Ports or additional set of 12 pairs of Multicast PITCH Spin
Server Ports. Any Member or non-member that has entered into the
appropriate agreements with the Exchange is permitted to receive
Multicast PITCH Spin Server Ports and GRP Ports from the Exchange.
---------------------------------------------------------------------------
\6\ The Commission notes that BATS will implement the proposed
port fees commencing on the first day of the month immediately
following Commission approval of this proposed rule change (or on
the date of approval, if on the first business day of a month). See
Notice, supra note 4.
\7\ Each pair of ports will consist of one port at the
Exchange's primary data center and one port at the Exchange's
secondary data center.
\8\ BATS FIX ports are the only ports that may be used to send
orders and related instructions to the Exchange. All other port
types, including Multicast PITCH and GRP Ports, permit Members and
non-members to receive information from the Exchange.
\9\ The Exchange's proposal to provide certain ports free of
charge to Multicast PITCH customers is designed to encourage use of
the Exchange's Multicast PITCH feed because it is a relatively new
offering by the Exchange and because the Exchange believes that the
feed is its most efficient feed and will reduce infrastructure costs
for both the Exchange and those who utilize the feed.
---------------------------------------------------------------------------
The proposed rule change will apply to Members that obtain ports
for direct access to the Exchange, non-member service bureaus that act
as a conduit for orders entered by Exchange Members that are their
customers, and market data recipients. The Exchange states that it has
previously provided ports free of charge to all Members and non-members
that use such ports for order entry to the Exchange or for receipt of
market data. However, the Exchange states that its infrastructure costs
have increased over time. In addition, the Exchange believes that
providing ports free of charge has not encouraged Members and non-
members to reserve and maintain ports efficiently, but rather, has led
to a significant number of ports that are reserved and enabled by such
market participants, but are never used or are under-used. Accordingly,
the Exchange believes that the imposition of port fees will help the
Exchange to continue to maintain and improve its infrastructure, while
also encouraging Exchange customers to request and enable only the
ports that are necessary for their operations related to the Exchange.
The Commission has carefully reviewed the proposed rule change and
finds that it is consistent with the requirements of the Act and the
rules and regulations thereunder applicable to a national securities
exchange.\10\ Specifically, the Commission finds that the proposal is
consistent with Section 6(b)(4) of the Act,\11\ which requires the
equitable allocation of reasonable dues, fees, and other charges among
Exchange Members and other persons using the Exchange's facilities, and
Section 6(b)(5) of the Act,\12\ which requires, among other things,
that the rules of a national securities exchange be designed to promote
just and equitable principles of trade, 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 not be designed to permit unfair discrimination between customers,
issuers, brokers, or dealers. The Commission also finds that the
proposed rule change is consistent with Section 6(b)(8) of the Act,\13\
which requires that the rules of an exchange not impose a burden on
competition not necessary or appropriate in furtherance of the purposes
of the Act. Finally, the Commission finds that the proposed rule change
is consistent with Rule 603(a) of Regulation NMS,\14\ which requires an
exclusive processor that distributes information with respect to
quotations for or transactions in an NMS stock to do so on terms that
are fair and reasonable and not unreasonably discriminatory.
---------------------------------------------------------------------------
\10\ In approving this proposed rule change the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\11\ 15 U.S.C. 78f(b)(4).
\12\ 15 U.S.C. 78f(b)(4).
\13\ 15 U.S.C. 78f(b)(8).
\14\ 17 CFR 242.603(a).
---------------------------------------------------------------------------
The Commission believes that the proposed port fees are equitably
allocated among Members and non-members and do not unfairly or
unreasonably discriminate between
[[Page 46257]]
customers, issuers, brokers, or dealers because the proposed port fees
do not distinguish among the type of participant but rather are the
same for all members and non-members. The Commission also believes that
BATS was subject to significant competitive pressure to act equitably,
fairly, and reasonably in setting the port fees, in light of the highly
competitive nature of the market for execution and routing
services.\15\ The Commission further notes that the Exchange's proposed
port fees are consistent with similar port fees charged by other
exchanges.\16\
---------------------------------------------------------------------------
\15\ See Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21).
\16\ See, e.g., Rule 7015 of The NASDAQ Stock Market LLC
(``NASDAQ'') (setting forth, among other fees for access services,
port fees charged to members and non-members used to enter orders
into NASDAQ trading systems). See also Securities Exchange Act
Release Nos. 60546 (August 20, 2009), 74 FR 43184 (August 26, 2009)
(SR-NASDAQ-2009-058) (increasing the monthly fee for each port used
to enter orders in NASDAQ trading systems from $400 per month to
$500 per month); 59337 (February 2, 2009), 74 FR 6441 (February 9,
2009) (SR-BX-2009-004) (establishing fees for ports used by members
to enter orders); 59615 (March 20, 2009), 74 FR 14604 (March 31,
2009) (SR-BX-2009-005) (establishing, among other fees, port fees
for accessing market data).
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\17\ that the proposed rule change (SR-BATS-2009-026), as modified
by Amendment No. 1 thereto, be, and it hereby is, approved.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-21455 Filed 9-4-09; 8:45 am]
BILLING CODE 8010-01-P
