Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc., 5588-5590 [2012-2393]
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Federal Register / Vol. 77, No. 23 / Friday, February 3, 2012 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 11 and Rule
19b–4(f)(6) thereunder.12 Because the
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
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 13 and Rule 19b–4(f)(6)(iii)
thereunder.14
A proposed rule change filed under
Rule 19b–4(f)(6) 15 normally does not
become operative for 30 days after the
date of filing. However, pursuant to
Rule 19b–4(f)(6)(iii) 16 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest, as it
will allow the pilot program to continue
uninterrupted, thereby avoiding the
investor confusion that could result
from a temporary interruption in the
pilot program. For this reason, the
Commission designates the proposed
rule change to be operative upon
filing.17
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
IV. Solicitation of Comments
11 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
13 15 U.S.C. 78s(b)(3)(A).
14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change along with a brief
description and 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. The Exchange
has satisfied this requirement.
15 17 CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6)(iii).
17 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to
rule-comments@sec.gov. Please include
File No. SR–ISE–2012–05 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 No.
SR–ISE–2012–05. 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 (https://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 such 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 No. SR–ISE–2012–
05 and should be submitted on or before
February 24, 2012.
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–2392 Filed 2–2–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66273; File No. SR–BATS–
2012–003]
Self-Regulatory Organizations; BATS
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Related to Fees for Use
of BATS Exchange, Inc.
January 30, 2012.
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 January
24, 2012 BATS Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BATS’’) 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 Substance of
the Proposed Rule Change
The Exchange proposes [sic] amend
the fee schedule applicable to
Members 5 and non-members of the
Exchange pursuant to BATS Rules
15.1(a) and (c). Changes to the fee
schedule pursuant to this proposal will
be effective upon filing.
The text of the proposed rule change
is available at the Exchange’s Web site
at https://www.batstrading.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
18 17
CFR 200.30–3(a)(12).
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).
5 A Member is any registered broker or dealer that
has been admitted to membership in the Exchange.
1 15
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Federal Register / Vol. 77, No. 23 / Friday, February 3, 2012 / Notices
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
2. Statutory Basis
tkelley on DSK3SPTVN1PROD with NOTICES
1. Purpose
The Exchange recently proposed and
received approval of rules governing
auctions conducted on the Exchange for
securities listed on the Exchange
(‘‘Exchange Auctions’’).6 Specifically,
the Exchange adopted rules for
conducting an opening auction on the
Exchange (‘‘Opening Auction’’), a
closing auction on the Exchange
(‘‘Closing Auction’’), an auction in the
event of an initial public offering
(‘‘IPO’’) or a halt of trading in the
security (‘‘IPO Auction’’ or ‘‘Halt
Auction,’’ respectively). In preparation
for commencement of its listings
business, and in turn, the
commencement of Exchange Auctions,
the Exchange proposes pricing for
executions that occur in Exchange
Auctions, as set forth below.
The Exchange proposes to charge fees
of $0.0005 per share that executes in an
Opening Auction, IPO Auction or Halt
Auction and $0.0010 per share that
executes in a Closing Auction. These
rates are equivalent to the fees assessed
by the NASDAQ Stock Market LLC
(‘‘NASDAQ’’) for executions that occur
in crosses on NASDAQ.7
Also similar to NASDAQ, the
Exchange proposes to exempt certain
executions from fees, specifically any
executions in an Exchange Auction of
any Continuous Book,8 Late-Limit-OnOpen (‘‘LLOO’’) 9 or Late-Limit-On6 See Securities Exchange Act Release No. 65619
(October 25, 2011), 76 FR 67238 (October 31, 2011)
(SR–BATS–2011–032).
7 See NASDAQ Rule 7018(d)–(f).
8 A ‘‘Continuous Book Order’’ is defined in Rule
11.23(a) as all orders on the Exchange’s order book
that are not Eligible Auction Orders.
9 The term ‘‘Late-Limit-On-Open’’ or ‘‘LLOO’’ is
defined in Rule 11.23(a) as a ‘‘BATS limit order that
is designated for execution only in the Opening
Auction.’’ Users may only submit LLOO orders
between 9:28 a.m. and 9:30 a.m. Eastern Time. A
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Close (‘‘LLOC’’) 10 orders as defined in
BZX Exchange Rule 11.23(a).
Accordingly, excluding LLOOs and
LLOCs, the Exchange will assess fees of
either $0.0005 per share or $0.0010 per
share (depending on the applicable
Exchange Auction) for all ‘‘Eligible
Auction Orders,’’ which term includes
Market-On-Open,11 Limit-On-Open,12
Market-On-Close,13 Limit-On-Close,14
any Regular Hours Only 15 order prior to
the Opening Auction, and any limit or
market order not designated to
exclusively participate in the Opening
Auction or Closing Auction entered
during the Quote-Only Period 16 of an
IPO Auction or Halt Auction.
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.17
Specifically, the Exchange believes that
the proposed rule change is consistent
with Section 6(b)(4) of the Act,18 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
‘‘User’’ is defined in Rule 1.5(cc) as any Member or
sponsored participant with access to the Exchange.
10 The term ‘‘Late-Limit-On-Close’’ or ‘‘LLOC’’ is
defined in Rule 11.23(a) as a ‘‘BATS limit order that
is designated for execution only in the Closing
Auction.’’ Users may only submit LLOC orders
between 3:55 p.m. and 4 p.m. Eastern Time.
11 A ‘‘Market-On-Open’’ order is defined in Rule
11.23(a) as a ‘‘BATS market order that is designated
for execution only in the Opening Auction.’’
12 A ‘‘Limit-On-Open’’ order is defined in Rule
11.23(a) as a ‘‘BATS limit order that is designated
for execution only in the Opening Auction.’’
13 A ‘‘Market-On-Close’’ order is defined in Rule
11.23(a) as a ‘‘BATS market order that is designated
for execution only in the Closing Auction.’’
14 A ‘‘Limit-On-Close’’ order is defined in Rule
11.23(a) as a ‘‘BATS limit order that is designated
for execution only in the Closing Auction.’’
15 A ‘‘Regular Hours Only’’ order is defined in
Rule 11.23(a) as a ‘‘BATS order that is designated
for execution only during Regular Trading Hours,
which includes the Opening Auction, the Closing
Auction, and IPO/Halt Auctions.’’ ‘‘Regular Trading
Hours’’ is defined in Rule 1.5(w) as ‘‘the time
between 9:30 a.m. and 4 p.m. Eastern Time.’’
16 The ‘‘Quote Only Period’’ is defined in Rule
11.23(a) as ‘‘a designated period of time prior to a
Halt Auction or an IPO during which Users may
submit orders to the Exchange for participation in
the auction.’’
17 15 U.S.C. 78f.
18 15 U.S.C. 78f(b)(4).
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5589
venues if they deem fee levels at a
particular venue to be excessive.
The Exchange believes that the
proposed fees for executions of Eligible
Auction Orders that occur in Exchange
Auctions (other than LLOOs and
LLOCs) are reasonable in that they are
equivalent to the fees charged by at least
one of the Exchange’s competitors, as
described above. The Exchange also
believes that the proposed fees are fair
and equitable and not unreasonably
discriminatory in that they apply
equally to all Exchange participants.
The Exchange believes that excluding
Continuous Book orders from fee
liability in Exchange Auctions is
reasonable because such orders, if
already posted to the Exchange’s order
book, would be eligible for rebates
provided by the Exchange, and would
not be assessed fees. Accordingly, while
the Exchange does not propose to
provide a rebate for any execution that
occurs in an Exchange Auction, the
Exchange believes it is reasonable to
provide executions of Continuous Book
orders free of charge. Similarly, the
Exchange believes that excluding
LLOOs and LLOCs from fee liability in
Exchange Auctions is reasonable
because such orders are late arriving
orders that are likely to improve the
execution quality received by other
orders submitted to the Auction.
Accordingly, the Exchange believes that
the proposal is not unfairly
discriminatory because it is consistent
with the overall goals of enhancing
market quality. As is true for the fees to
be assessed on executions that occur in
Exchange Auctions, the exclusion of
fees for Continuous Book orders, LLOOs
and LLOCs is fair and equitable and not
unreasonably discriminatory because
this fee treatment is equally available to
all Exchange Users.
The Exchange notes that NASDAQ
also excludes its equivalent of
Continuous Book orders from fee
liability in the NASDAQ opening and
closing crosses.19 While the Exchange
does not have a direct equivalent to the
NASDAQ ‘‘imbalance only’’ order,
which are also executed free of charge
by NASDAQ in the NASDAQ opening
and closing crosses,20 the Exchange’s
LLOOs and LLOCs are analogous in
some ways in that LLOOs and LLOCs
are late arriving limit orders that are
likely to provide additional liquidity
against which Eligible Auction Orders
will be able to execute.
19 See
NASDAQ Rule 7018(d) and (e).
20 Id.
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5590
Federal Register / Vol. 77, No. 23 / Friday, February 3, 2012 / Notices
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 21 and Rule 19b–4(f)(2)
thereunder,22 the Exchange has
designated this proposal as establishing
or changing a due, fee, or other charge
applicable to the Exchange’s Members
and non-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:
tkelley on DSK3SPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to
rule-comments@sec.gov. Please include
File Number SR–BATS–2012–003 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–BATS–2012–003. 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 (https://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 will
also be available for inspection and
copying at the principal office of the
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–BATS–
2012–003 and should be submitted on
or before February 24, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–2393 Filed 2–2–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66278; File No. SR–BX–
2011–046]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
of Amendment No. 1, and Order
Granting Accelerated Approval of
Proposed Rule Change as Modified by
Amendment No. 1, To Amend the BOX
Fee Schedule With Respect to Credits
and Fees for Transactions in the BOX
PIP
January 30, 2012.
On July 15, 2011, NASDAQ OMX BX,
Inc. (the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’), pursuant to
Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Exchange Act’’
or ‘‘Act’’) 1 and Rule 19b–4 thereunder,2
a proposed rule change to amend the
23 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
21 15
U.S.C. 78s(b)(3)(A)(ii).
22 17 CFR 240.19b–4(f)(2).
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Fee Schedule of the Boston Options
Exchange Group, LLC (‘‘BOX’’) to
increase the credits and fees for certain
transactions in the BOX Price
Improvement Period (‘‘PIP’’).3 The
proposed rule change was immediately
effective upon filing with the
Commission pursuant to Section
19(b)(3)(A) of the Act.4 Notice of filing
of the proposed rule change was
published in the Federal Register on
August 3, 2011.5 The Commission
received four comment letters on the
Notice 6 and a response from BOX.7
On September 13, 2011, the
Commission temporarily suspended
BOX’s proposal and simultaneously
instituted proceedings to determine
whether to approve or disapprove the
proposed rule change.8 On September
20, 2011, the Commission received
notice of BOX’s intention to petition for
review of the Division’s action by
delegated authority to suspend its PIP
fee filing, which triggered a stay of the
suspension order. On September 27,
2011, the Commission received BOX’s
petition to review the Division of
Trading and Markets’ suspension by
delegated authority.9 On October 19,
2011, the Commission issued an order
denying BOX’s petition, lifting the
3 The PIP is a mechanism in which a BOX
Options Participant submits an agency order on
behalf of a customer for price improvement, paired
with a contra-order guaranteeing execution of the
agency order at or better than the National Best Bid
or Offer (‘‘NBBO’’). The contra-order could be for
the account of the Options Participant, or an order
solicited from someone else. The agency order is
exposed for a one-second auction in which other
BOX Options Participants (‘‘Initiating Participant’’)
may submit competing interest at the same price or
better. The initiating BOX Options Participant is
guaranteed 40% of the order (after public
customers) at the final price for the PIP order,
assuming it is at the best price. See Chapter V,
Section 18 of the BOX Rules.
4 15 U.S.C. 78s(b)(3)(A).
5 See Securities Exchange Act Release No. 64981
(July 28, 2011), 76 FR 46858 (‘‘Notice’’).
6 See Letters to Elizabeth Murphy, Secretary,
Commission, from John C. Nagel, Managing Director
and General Counsel, Citadel Securities LLC
(‘‘Citadel’’), dated August 12, 2011 (‘‘Citadel
Letter’’); Andrew Stevens, Legal Counsel, IMC
Financial Markets (‘‘IMC’’), dated August 15, 2011
(‘‘IMC Letter’’); Michael J. Simon, Secretary,
International Securities Exchange (‘‘ISE’’), dated
August 22, 2011 (‘‘ISE Letter’’), and Christopher
Nagy, Managing Director Order Strategy, TD
Ameritrade, Inc. (‘‘TD Ameritrade’’), dated
September 12, 2011 (‘‘TD Ameritrade Letter’’).
7 See Letter to Elizabeth Murphy, Secretary,
Commission, from Anthony D. McCormick, Chief
Executive Officer, BOX, dated September 9, 2011
(‘‘BOX Letter’’).
8 See Securities Exchange Act Release No. 65330
(September 13, 2011), 76 FR 58065 (September 19,
2011) (‘‘Suspension Order’’).
9 Petition for Review of Action by Delegated
Authority from BOX, dated September 27, 2011
(‘‘BOX Petition’’).
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]]>Agencies
[Federal Register Volume 77, Number 23 (Friday, February 3, 2012)]
[Notices]
[Pages 5588-5590]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-2393]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66273; File No. SR-BATS-2012-003]
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Related to
Fees for Use of BATS Exchange, Inc.
January 30, 2012.
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 January 24, 2012 BATS Exchange, Inc. (the ``Exchange'' or
``BATS'') 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 proposes [sic] amend the fee schedule applicable to
Members \5\ and non-members of the Exchange pursuant to BATS Rules
15.1(a) and (c). Changes to the fee schedule pursuant to this proposal
will be effective upon filing.
---------------------------------------------------------------------------
\5\ A Member is any registered broker or dealer that has been
admitted to membership in the Exchange.
---------------------------------------------------------------------------
The text of the proposed rule change is available at the Exchange's
Web site at https://www.batstrading.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
[[Page 5589]]
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 recently proposed and received approval of rules
governing auctions conducted on the Exchange for securities listed on
the Exchange (``Exchange Auctions'').\6\ Specifically, the Exchange
adopted rules for conducting an opening auction on the Exchange
(``Opening Auction''), a closing auction on the Exchange (``Closing
Auction''), an auction in the event of an initial public offering
(``IPO'') or a halt of trading in the security (``IPO Auction'' or
``Halt Auction,'' respectively). In preparation for commencement of its
listings business, and in turn, the commencement of Exchange Auctions,
the Exchange proposes pricing for executions that occur in Exchange
Auctions, as set forth below.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 65619 (October 25,
2011), 76 FR 67238 (October 31, 2011) (SR-BATS-2011-032).
---------------------------------------------------------------------------
The Exchange proposes to charge fees of $0.0005 per share that
executes in an Opening Auction, IPO Auction or Halt Auction and $0.0010
per share that executes in a Closing Auction. These rates are
equivalent to the fees assessed by the NASDAQ Stock Market LLC
(``NASDAQ'') for executions that occur in crosses on NASDAQ.\7\
---------------------------------------------------------------------------
\7\ See NASDAQ Rule 7018(d)-(f).
---------------------------------------------------------------------------
Also similar to NASDAQ, the Exchange proposes to exempt certain
executions from fees, specifically any executions in an Exchange
Auction of any Continuous Book,\8\ Late-Limit-On-Open (``LLOO'') \9\ or
Late-Limit-On-Close (``LLOC'') \10\ orders as defined in BZX Exchange
Rule 11.23(a). Accordingly, excluding LLOOs and LLOCs, the Exchange
will assess fees of either $0.0005 per share or $0.0010 per share
(depending on the applicable Exchange Auction) for all ``Eligible
Auction Orders,'' which term includes Market-On-Open,\11\ Limit-On-
Open,\12\ Market-On-Close,\13\ Limit-On-Close,\14\ any Regular Hours
Only \15\ order prior to the Opening Auction, and any limit or market
order not designated to exclusively participate in the Opening Auction
or Closing Auction entered during the Quote-Only Period \16\ of an IPO
Auction or Halt Auction.
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\8\ A ``Continuous Book Order'' is defined in Rule 11.23(a) as
all orders on the Exchange's order book that are not Eligible
Auction Orders.
\9\ The term ``Late-Limit-On-Open'' or ``LLOO'' is defined in
Rule 11.23(a) as a ``BATS limit order that is designated for
execution only in the Opening Auction.'' Users may only submit LLOO
orders between 9:28 a.m. and 9:30 a.m. Eastern Time. A ``User'' is
defined in Rule 1.5(cc) as any Member or sponsored participant with
access to the Exchange.
\10\ The term ``Late-Limit-On-Close'' or ``LLOC'' is defined in
Rule 11.23(a) as a ``BATS limit order that is designated for
execution only in the Closing Auction.'' Users may only submit LLOC
orders between 3:55 p.m. and 4 p.m. Eastern Time.
\11\ A ``Market-On-Open'' order is defined in Rule 11.23(a) as a
``BATS market order that is designated for execution only in the
Opening Auction.''
\12\ A ``Limit-On-Open'' order is defined in Rule 11.23(a) as a
``BATS limit order that is designated for execution only in the
Opening Auction.''
\13\ A ``Market-On-Close'' order is defined in Rule 11.23(a) as
a ``BATS market order that is designated for execution only in the
Closing Auction.''
\14\ A ``Limit-On-Close'' order is defined in Rule 11.23(a) as a
``BATS limit order that is designated for execution only in the
Closing Auction.''
\15\ A ``Regular Hours Only'' order is defined in Rule 11.23(a)
as a ``BATS order that is designated for execution only during
Regular Trading Hours, which includes the Opening Auction, the
Closing Auction, and IPO/Halt Auctions.'' ``Regular Trading Hours''
is defined in Rule 1.5(w) as ``the time between 9:30 a.m. and 4 p.m.
Eastern Time.''
\16\ The ``Quote Only Period'' is defined in Rule 11.23(a) as
``a designated period of time prior to a Halt Auction or an IPO
during which Users may submit orders to the Exchange for
participation in the auction.''
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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.\17\
Specifically, the Exchange believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\18\ 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.
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\17\ 15 U.S.C. 78f.
\18\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed fees for executions of
Eligible Auction Orders that occur in Exchange Auctions (other than
LLOOs and LLOCs) are reasonable in that they are equivalent to the fees
charged by at least one of the Exchange's competitors, as described
above. The Exchange also believes that the proposed fees are fair and
equitable and not unreasonably discriminatory in that they apply
equally to all Exchange participants. The Exchange believes that
excluding Continuous Book orders from fee liability in Exchange
Auctions is reasonable because such orders, if already posted to the
Exchange's order book, would be eligible for rebates provided by the
Exchange, and would not be assessed fees. Accordingly, while the
Exchange does not propose to provide a rebate for any execution that
occurs in an Exchange Auction, the Exchange believes it is reasonable
to provide executions of Continuous Book orders free of charge.
Similarly, the Exchange believes that excluding LLOOs and LLOCs from
fee liability in Exchange Auctions is reasonable because such orders
are late arriving orders that are likely to improve the execution
quality received by other orders submitted to the Auction. Accordingly,
the Exchange believes that the proposal is not unfairly discriminatory
because it is consistent with the overall goals of enhancing market
quality. As is true for the fees to be assessed on executions that
occur in Exchange Auctions, the exclusion of fees for Continuous Book
orders, LLOOs and LLOCs is fair and equitable and not unreasonably
discriminatory because this fee treatment is equally available to all
Exchange Users.
The Exchange notes that NASDAQ also excludes its equivalent of
Continuous Book orders from fee liability in the NASDAQ opening and
closing crosses.\19\ While the Exchange does not have a direct
equivalent to the NASDAQ ``imbalance only'' order, which are also
executed free of charge by NASDAQ in the NASDAQ opening and closing
crosses,\20\ the Exchange's LLOOs and LLOCs are analogous in some ways
in that LLOOs and LLOCs are late arriving limit orders that are likely
to provide additional liquidity against which Eligible Auction Orders
will be able to execute.
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\19\ See NASDAQ Rule 7018(d) and (e).
\20\ Id.
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[[Page 5590]]
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 \21\ and Rule 19b-
4(f)(2) thereunder,\22\ the Exchange has designated this proposal as
establishing or changing a due, fee, or other charge applicable to the
Exchange's Members and non-members, which renders the proposed rule
change effective upon filing.
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\21\ 15 U.S.C. 78s(b)(3)(A)(ii).
\22\ 17 CFR 240.19b-4(f)(2).
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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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-BATS-2012-003 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-BATS-2012-003. 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 (https://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 will also be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-BATS-2012-003 and should be
submitted on or before February 24, 2012.
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\23\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-2393 Filed 2-2-12; 8:45 am]
BILLING CODE 8011-01-P
