Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Fees for Use of BATS Y-Exchange, Inc., 13681-13683 [2011-5774]

Download as PDF Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Notices 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 a.m. and 3 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–Phlx– 2011–29 and should be submitted on or before April 4, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–5775 Filed 3–11–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64055; File No. SR–BYX– 2011–005] Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Fees for Use of BATS Y-Exchange, Inc. mstockstill on DSKH9S0YB1PROD with NOTICES March 8, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 28, 2011, BATS Y-Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BYX’’) 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. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to amend the fee schedule applicable to Members 5 of the Exchange pursuant to BYX Rules 15.1(a) and (c). While changes to the fee schedule pursuant to this proposal will be effective upon filing, the changes will become operative on March 1, 2011. The text of the proposed rule change is available at the Exchange’s Web site at http://www.batstrading.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 modify its fee schedule applicable to use of the Exchange effective March 1, 2011, in order to: (i) Amend the liquidity fees for adding liquidity, including increased fees to add non-displayed liquidity and adoption of a fee to add displayed liquidity unless a Member has an average daily volume of 10 million shares or more added per day in a given month; (ii) reduce certain standard routing fees; and (iii) expand the Exchange’s Discounted Destination Specific Routing program to include a 3 15 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 5 A Member is any registered broker or dealer that has been admitted to membership in the Exchange. 17 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. VerDate Mar<15>2010 16:20 Mar 11, 2011 4 17 Jkt 223001 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 13681 rebate for Destination Specific Orders 6 routed to EDGA Exchange. (i) Amending the Liquidity Fees for Adding Liquidity The Exchange has not previously provided any rebate or imposed any charge for adding displayed liquidity to the BYX order book in securities priced $1.00 and above. The Exchange proposes to introduce a tiered pricing structure applicable to added displayed liquidity in securities priced $1.00 and above, under which Members adding a daily average of 10 million shares or more of liquidity (including displayed and non-displayed liquidity) during a month will continue to be able to add displayed liquidity without charge, while Members adding a daily average of less than 10 million shares of liquidity during a month will be charged $0.0002 per share. Thus, while the fee change will result in a small fee increase for Members providing low volumes of liquidity on BYX, it will remain unchanged for Members providing higher volumes of liquidity. The Exchange also proposes to increase its fee to add non-displayed liquidity to the BYX order book in securities priced $1.00 and above from a charge of $0.0005 per share to a charge of $0.0010 per share. As defined on the BYX fee schedule, the reference to ‘‘nondisplayed liquidity’’ for purposes of the fee schedule includes liquidity resulting from all forms of Pegged Orders,7 MidPoint Peg Orders,8 and Non-Displayed Orders,9 but does not include liquidity resulting from Reserve Orders 10 or Discretionary Orders.11 The Exchange does not propose to change its pricing structure for added liquidity in securities priced below $1.00. (ii) Reduced Standard Routing Fees The Exchange proposes to reduce the fee that it charges for certain of its standard best execution routing strategies. The Exchange currently offers the Parallel D, Parallel 2D, CYCLE and RECYCLE routing strategies at a charge of $0.0028 per share for executions that occur at other trading venues as a result of such strategies in securities priced $1.00 and above.12 The Exchange proposes to reduce the fee for use of such strategies to a charge of $0.0026 per share to in order to encourage use 6 As defined in BYX Rule 11.9(c)(12). defined in BYX Rule 11.9(c)(8). 8 As defined in BYX Rule 11.9(c)(9). 9 As defined in BYX Rule 11.9(c)(11). 10 As defined in BYX Rule 11.9(c)(1). 11 As defined in BYX Rule 11.9(c)(10). 12 The Exchange’s routing strategies are described in Rule 11.13(a)(3). 7 As E:\FR\FM\14MRN1.SGM 14MRN1 13682 Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Notices of these strategies. To be consistent with this change, the Exchange proposes to charge 0.26%, rather than 0.28%, of the total dollar value of the executions at other trading venues as a result of Parallel D, Parallel 2D, CYCLE and RECYCLE in securities priced under $1.00 per share. mstockstill on DSKH9S0YB1PROD with NOTICES (iii) Destination Specific Routing to EDGA Exchange The Exchange currently provides a discounted fee for Destination Specific Orders routed to certain market centers (NYSE, NYSE Arca and NASDAQ), which, in each instance is $0.0001 less per share for orders routed to such market centers by the Exchange than such market centers currently charge for removing liquidity (referred to by the Exchange as ‘‘One Under’’ pricing). Consistent with this program, the Exchange proposes to adopt pricing for Destination Specific Orders routed to EDGA Exchange. Specifically, the Exchange proposes to provide a rebate of $0.00025 per share for BYX + EDGA Destination Specific Orders executed at EDGA, which is $0.0001 higher per share than the $0.00015 per share rebate provided by EDGA for orders that remove liquidity. The Exchange imposes a charge of $0.0030 per share for Destination Specific Orders sent to and executed by any market center for which it does not have any separately identified pricing. Based on the change described above, the Exchange proposes to add EDGA to the list of market centers to which this charge does not apply. Consistent with the changes described above, the Exchange proposes to change the title of its Discounted Destination Specific Routing section to refer to the program as ‘‘One Under/Better,’’ rather than ‘‘One Under,’’ and to add reference to EDGA. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6 of the Act.13 Specifically, the Exchange believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,14 in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and other persons using any facility or system which the Exchange operates or controls. The Exchange notes that it 13 15 14 15 U.S.C. 78f. U.S.C. 78f(b)(4). VerDate Mar<15>2010 16:20 Mar 11, 2011 Jkt 223001 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. The Exchange believes that its fees and credits are competitive with those charged by other venues. While the establishment of tiered pricing for adding displayed liquidity to the Exchange’s order book will result in a small increase in fees for some Members, this fee still remains lower than other markets that impose a fee to add liquidity, such as EDGA Exchange and NASDAQ OMX BX. Similarly, while the Exchange’s proposal to increase the fee to add non-displayed liquidity to the Exchange will result in an increase in fees for Members that add non-displayed liquidity, this fee is lower than the fee to add liquidity (whether displayed or non-displayed) to NASDAQ OMX BX. As it relates to its differentiation between displayed and non-displayed liquidity, the Exchange believes that a fee structure that provides greater incentives to add displayed liquidity than incentives to add non-displayed liquidity is fair and reasonable. In addition, to the extent the proposed changes will result in increased fees charged to Members, the Exchange believes that any additional revenue it receives will allow the Exchange to devote additional capital to its operations and to continue to offer competitive pricing, which, in turn, will benefit Members of the Exchange. The reduction of the routing fee for several of the BYX standard routing options and the adoption of new pricing for a Destination Specific Order that offers improvement of the execution rebate offered by another market center are changes intended to attract order flow to BYX by offering competitive rates to Exchange Members for strategies that first check the BYX order book before routing to away venues. Accordingly, the Exchange’s proposal will result in reduced fees that will benefit Members due to the obvious economic savings those Members will receive and the potential of increased available liquidity at the Exchange. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change imposes any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Pursuant to Section 19(b)(3)(A)(ii) of the Act 15 and Rule 19b–4(f)(2) thereunder,16 the Exchange has designated this proposal as establishing or changing a due, fee, or other charge applicable to its members, which renders the proposed rule change effective upon filing. 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. 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 e-mail to rulecomments@sec.gov. Please include File Number SR–BYX–2011–005 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–BYX–2011–005. This file number should be included on the subject line if e-mail 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 website (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 15 15 16 17 E:\FR\FM\14MRN1.SGM U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). 14MRN1 Federal Register / Vol. 76, No. 49 / Monday, March 14, 2011 / Notices available for Web site viewing and printing in the Commission’s Public Reference Room on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal offices 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–BYX–2011–005, and should be submitted on or before April 4, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–5774 Filed 3–11–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64053; File No. SR–FICC– 2011–01] Self-Regulatory Organizations; The Fixed Income Clearing Corporation; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Notify Participants That the Mortgage Backed Securities Division Intends To Move the Time at Which It Runs Its Daily Morning Pass March 8, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on March 2, 2011, the Fixed Income Clearing Corporation (‘‘FICC’’) 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 primarily by FICC. The Commission is publishing this notice to solicit comments from interested persons. mstockstill on DSKH9S0YB1PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The purpose of the proposed rule change is to notify participants that the Mortgage Backed Securities Division (‘‘MBSD’’) intends to move the time at which it runs its daily morning pass (also referred to as the ‘‘AM Pass’’) from 10:30 a.m. to 2 p.m. (EST). 17 17 1 15 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). VerDate Mar<15>2010 16:20 Mar 11, 2011 Jkt 223001 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FICC 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. FICC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of such statements.2 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The purpose of this filing is to notify participants that MBSD intends to move the time at which it runs its daily morning pass from 10:30 a.m. to 2 p.m. (EST).3 The proposed change to 2 p.m. for the morning pass will allow more trades to be included into the TBA Net and therefore will assist in reducing the amount of fails in the market in addition to reducing the related operational risk. The above change is being made at the request of The Securities Industry and Financial Markets Association (‘‘SIFMA’’) MBS Operations Committee. In addition, MBSD reviewed the potential change with member firms not represented on the SIFMA Committee, and no objections were raised. The effective date of this change will be announced to MBSD participants by Important Notice. FICC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act 4 and the rules and regulations thereunder applicable to FICC because it should provide for the prompt and accurate clearance and settlement of securities transactions by including a greater proportion of transactions in the TBA netting cycle. Additionally, the proposed rule change should result in fewer fails, and reduced operational risk. (B) Self-Regulatory Organization’s Statement on Burden on Competition FICC does not believe that the proposed rule change will have any impact on or impose any burden on competition. 2 The Commission has modified the text of the summaries prepared by FICC. 3 MBSD also executes an evening pass (also referred to as the ‘‘PM Pass’’) at 8 p.m. (EST) that will remain unchanged. On days where MBSD executes its TBA Netting cycle, it immediately follows the completion of the morning pass. 4 15 U.S.C. 78q–1. PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 13683 (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments relating to the proposed rule change have been solicited or received. FICC will notify the Commission of any written comments received by FICC. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective upon filing pursuant to Section 19(b)(3)(A)(iii) of the Act 5 and Rule 19b–4(f)(4) 6 thereunder because the proposed rule effects a change in an existing service that (i) does not adversely affect the safeguarding of securities or funds in the custody or control of FICC or for which it is responsible and (ii) does not significantly affect the respective rights or obligations of FICC or persons using the service. At any time within sixty days of the filing of such 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. 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 e-mail to rulecomments@sec.gov. Please include File Number SR–FICC–2011–01 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–FICC–2011–01. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will 5 15 6 17 E:\FR\FM\14MRN1.SGM U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(4). 14MRN1

Agencies

[Federal Register Volume 76, Number 49 (Monday, March 14, 2011)]
[Notices]
[Pages 13681-13683]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-5774]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64055; File No. SR-BYX-2011-005]


Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Related to 
Fees for Use of BATS Y-Exchange, Inc.

March 8, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on February 28, 2011, BATS Y-Exchange, Inc. (the ``Exchange'' or 
``BYX'') 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend the fee schedule applicable to 
Members \5\ of the Exchange pursuant to BYX Rules 15.1(a) and (c). 
While changes to the fee schedule pursuant to this proposal will be 
effective upon filing, the changes will become operative on March 1, 
2011. The text of the proposed rule change is available at the 
Exchange's Web site at http://www.batstrading.com, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.
---------------------------------------------------------------------------

    \5\ A Member is any registered broker or dealer that has been 
admitted to membership in the Exchange.
---------------------------------------------------------------------------

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 modify its fee schedule applicable to use 
of the Exchange effective March 1, 2011, in order to: (i) Amend the 
liquidity fees for adding liquidity, including increased fees to add 
non-displayed liquidity and adoption of a fee to add displayed 
liquidity unless a Member has an average daily volume of 10 million 
shares or more added per day in a given month; (ii) reduce certain 
standard routing fees; and (iii) expand the Exchange's Discounted 
Destination Specific Routing program to include a rebate for 
Destination Specific Orders \6\ routed to EDGA Exchange.
---------------------------------------------------------------------------

    \6\ As defined in BYX Rule 11.9(c)(12).
---------------------------------------------------------------------------

(i) Amending the Liquidity Fees for Adding Liquidity
    The Exchange has not previously provided any rebate or imposed any 
charge for adding displayed liquidity to the BYX order book in 
securities priced $1.00 and above. The Exchange proposes to introduce a 
tiered pricing structure applicable to added displayed liquidity in 
securities priced $1.00 and above, under which Members adding a daily 
average of 10 million shares or more of liquidity (including displayed 
and non-displayed liquidity) during a month will continue to be able to 
add displayed liquidity without charge, while Members adding a daily 
average of less than 10 million shares of liquidity during a month will 
be charged $0.0002 per share. Thus, while the fee change will result in 
a small fee increase for Members providing low volumes of liquidity on 
BYX, it will remain unchanged for Members providing higher volumes of 
liquidity.
    The Exchange also proposes to increase its fee to add non-displayed 
liquidity to the BYX order book in securities priced $1.00 and above 
from a charge of $0.0005 per share to a charge of $0.0010 per share. As 
defined on the BYX fee schedule, the reference to ``non-displayed 
liquidity'' for purposes of the fee schedule includes liquidity 
resulting from all forms of Pegged Orders,\7\ Mid-Point Peg Orders,\8\ 
and Non-Displayed Orders,\9\ but does not include liquidity resulting 
from Reserve Orders \10\ or Discretionary Orders.\11\
---------------------------------------------------------------------------

    \7\ As defined in BYX Rule 11.9(c)(8).
    \8\ As defined in BYX Rule 11.9(c)(9).
    \9\ As defined in BYX Rule 11.9(c)(11).
    \10\ As defined in BYX Rule 11.9(c)(1).
    \11\ As defined in BYX Rule 11.9(c)(10).
---------------------------------------------------------------------------

    The Exchange does not propose to change its pricing structure for 
added liquidity in securities priced below $1.00.
(ii) Reduced Standard Routing Fees
    The Exchange proposes to reduce the fee that it charges for certain 
of its standard best execution routing strategies. The Exchange 
currently offers the Parallel D, Parallel 2D, CYCLE and RECYCLE routing 
strategies at a charge of $0.0028 per share for executions that occur 
at other trading venues as a result of such strategies in securities 
priced $1.00 and above.\12\ The Exchange proposes to reduce the fee for 
use of such strategies to a charge of $0.0026 per share to in order to 
encourage use

[[Page 13682]]

of these strategies. To be consistent with this change, the Exchange 
proposes to charge 0.26%, rather than 0.28%, of the total dollar value 
of the executions at other trading venues as a result of Parallel D, 
Parallel 2D, CYCLE and RECYCLE in securities priced under $1.00 per 
share.
---------------------------------------------------------------------------

    \12\ The Exchange's routing strategies are described in Rule 
11.13(a)(3).
---------------------------------------------------------------------------

(iii) Destination Specific Routing to EDGA Exchange
    The Exchange currently provides a discounted fee for Destination 
Specific Orders routed to certain market centers (NYSE, NYSE Arca and 
NASDAQ), which, in each instance is $0.0001 less per share for orders 
routed to such market centers by the Exchange than such market centers 
currently charge for removing liquidity (referred to by the Exchange as 
``One Under'' pricing). Consistent with this program, the Exchange 
proposes to adopt pricing for Destination Specific Orders routed to 
EDGA Exchange. Specifically, the Exchange proposes to provide a rebate 
of $0.00025 per share for BYX + EDGA Destination Specific Orders 
executed at EDGA, which is $0.0001 higher per share than the $0.00015 
per share rebate provided by EDGA for orders that remove liquidity.
    The Exchange imposes a charge of $0.0030 per share for Destination 
Specific Orders sent to and executed by any market center for which it 
does not have any separately identified pricing. Based on the change 
described above, the Exchange proposes to add EDGA to the list of 
market centers to which this charge does not apply.
    Consistent with the changes described above, the Exchange proposes 
to change the title of its Discounted Destination Specific Routing 
section to refer to the program as ``One Under/Better,'' rather than 
``One Under,'' and to add reference to EDGA.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder that are applicable to a national securities exchange, and, 
in particular, with the requirements of Section 6 of the Act.\13\ 
Specifically, the Exchange believes that the proposed rule change is 
consistent with Section 6(b)(4) of the Act,\14\ in that it provides for 
the equitable allocation of reasonable dues, fees and other charges 
among members and other persons using any facility or system which the 
Exchange operates or controls. 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 levels at a 
particular venue to be excessive. The Exchange believes that its fees 
and credits are competitive with those charged by other venues.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    While the establishment of tiered pricing for adding displayed 
liquidity to the Exchange's order book will result in a small increase 
in fees for some Members, this fee still remains lower than other 
markets that impose a fee to add liquidity, such as EDGA Exchange and 
NASDAQ OMX BX. Similarly, while the Exchange's proposal to increase the 
fee to add non-displayed liquidity to the Exchange will result in an 
increase in fees for Members that add non-displayed liquidity, this fee 
is lower than the fee to add liquidity (whether displayed or non-
displayed) to NASDAQ OMX BX. As it relates to its differentiation 
between displayed and non-displayed liquidity, the Exchange believes 
that a fee structure that provides greater incentives to add displayed 
liquidity than incentives to add non-displayed liquidity is fair and 
reasonable. In addition, to the extent the proposed changes will result 
in increased fees charged to Members, the Exchange believes that any 
additional revenue it receives will allow the Exchange to devote 
additional capital to its operations and to continue to offer 
competitive pricing, which, in turn, will benefit Members of the 
Exchange.
    The reduction of the routing fee for several of the BYX standard 
routing options and the adoption of new pricing for a Destination 
Specific Order that offers improvement of the execution rebate offered 
by another market center are changes intended to attract order flow to 
BYX by offering competitive rates to Exchange Members for strategies 
that first check the BYX order book before routing to away venues. 
Accordingly, the Exchange's proposal will result in reduced fees that 
will benefit Members due to the obvious economic savings those Members 
will receive and the potential of increased available liquidity at the 
Exchange.

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

    The Exchange does not believe that the proposed rule change imposes 
any burden on competition.

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

    No written comments were solicited or received.

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

    Pursuant to Section 19(b)(3)(A)(ii) of the Act \15\ and Rule 19b-
4(f)(2) thereunder,\16\ the Exchange has designated this proposal as 
establishing or changing a due, fee, or other charge applicable to its 
members, which renders the proposed rule change effective upon filing.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \16\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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.

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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-BYX-2011-005 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BYX-2011-005. This file 
number should be included on the subject line if e-mail 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 website (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

[[Page 13683]]

available for Web site viewing and printing in the Commission's Public 
Reference Room on official business days between the hours of 10 a.m. 
and 3 p.m. Copies of such filing also will be available for inspection 
and copying at the principal offices 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-BYX-2011-005, and should be 
submitted on or before April 4, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
---------------------------------------------------------------------------

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

Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-5774 Filed 3-11-11; 8:45 am]
BILLING CODE 8011-01-P