Self-Regulatory Organizations; BATS-Y Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend BYX Rules Related to the Operation of BATS Post Only Orders and Match Trade Prevention Functionality, 33800-33801 [2012-13764]
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Federal Register / Vol. 77, No. 110 / Thursday, June 7, 2012 / Notices
All submissions should refer to File
Number SR–BATS–2012–018. 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
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–BATS–
2012–018 and should be submitted on
or before June 28, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–13765 Filed 6–6–12; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67092; File No. SR–BYX–
2012–009]
srobinson on DSK4SPTVN1PROD with NOTICES
Self-Regulatory Organizations; BATS–
Y Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend BYX Rules
Related to the Operation of BATS Post
Only Orders and Match Trade
Prevention Functionality
June 1, 2012
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Mar<15>2010
17:48 Jun 06, 2012
Jkt 226001
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 11.9, entitled ‘‘Orders and
Modifiers’’, to modify the operation of
BATS Post Only orders. The Exchange
is also proposing changes to its match
trade prevention functionality described
in Rule 11.9.
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
BILLING CODE 8011–01–P
18 17
notice is hereby given that on May 23,
2012, BATS–Y Exchange, Inc.
(‘‘Exchange’’ or ‘‘BYX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
1. Purpose
The Exchange proposes to modify the
functionality associated with its existing
BATS Post Only Order, which is an
order that an entering User 5 intends to
be posted to the Exchange’s order book
and thus will not remove liquidity or
route away from the Exchange. In
addition to modifying the Exchange’s
handling of BATS Post Only Orders, the
Exchange proposes a minor, unrelated
modification to allow an additional
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii).
5 As defined in BYX Rule 1.5(cc), a User is ‘‘any
Member or Sponsored Participant who is
authorized to obtain access to the System pursuant
to Rule 11.3.’’
4 17
PO 00000
Frm 00098
Fmt 4703
Sfmt 4703
option for users of the match trade
prevention functionality offered by the
Exchange.
BATS Post Only Orders
Under the Exchange’s current rules,
when the Exchange receives a BATS
Post Only order that would lock or cross
an order displayed by the Exchange,
because the Exchange cannot display
such order at a locking or crossing price
and the User has submitted the order
with the instruction not to remove
liquidity from the Exchange, such order
will be cancelled back to the User.
The Exchange proposes to modify the
functionality of BATS Post Only Orders
described in Rule 11.9(c)(6) to permit
such orders to remove liquidity from the
Exchange’s order book (‘‘BATS Book’’) if
the value of price improvement
associated with such execution equals
or exceeds the sum of fees charged for
such execution and the value of any
rebate that would be provided if the
order posted to the BATS Book and
subsequently provided liquidity.
Match Trade Prevention
In addition to the changes described
above, the Exchange proposes to
enhance its existing match trade
prevention (‘‘MTP’’) functionality,
which is a process through which Users
can delineate certain orders as being
ineligible to match with another order
from the same trading firm. Under
current MTP functionality, a User can
prevent orders from matching with
other orders from the same market
participant identifier (‘‘MPID’’),
Exchange member identifier or
sponsored participant identifier. The
Exchange proposes to allow Users to
apply more MTP functionality at a more
granular, trading group level. By
allowing Users to establish MTP at a
trading group level, the Exchange will
allow such Users to prevent matched
trades amongst traders or desks within
a certain firm, but permit orders from
outside such group or desk to interact
with other firm orders.
2. Statutory Basis
The rule change proposed in this
submission 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(b) of the Act.6
Specifically, the proposed change is
consistent with Section 6(b)(5) of the
Act,7 because it is designed to prevent
fraudulent and manipulative acts and
6 15
7 15
E:\FR\FM\07JNN1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
07JNN1
Federal Register / Vol. 77, No. 110 / Thursday, June 7, 2012 / Notices
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in facilitating transactions in securities,
and to remove impediments to, and
perfect the mechanism of, a free and
open market and a national market
system.
The Exchange believes that the
proposed modification to the handling
of BATS Post Only Orders is consistent
with the requirements of Section 6(b) of
the Act,8 particularly Section 6(b)(5),9 in
that the change will help to enhance
executions for market participants that
utilize BATS Post Only Orders. The
Exchange believes that the provision of
an additional level at which a User may
apply match trade prevention is
consistent with the requirements of
Section 6(b)(5) of the Act,10 because the
ability to prevent matches amongst the
same trading group identifier will allow
Users to better manage order flow and
prevent undesirable executions against
themselves. The Exchange notes that a
similar functionality was effective upon
filing with the Commission for EDGX
Exchange, Inc. (‘‘EDGX’’).11
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
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
srobinson on DSK4SPTVN1PROD with NOTICES
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 for 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)
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15 U.S.C. 78f(b)(5).
11 See EDGX Exchange, Inc. Rule 11.9(f);
Securities and Exchange Act Release No. 53428
(December 3, 2010), 75 FR 76763 (December 9,
2010) (SR–EDGX–2010–18), which was based on
NYSE Arca Equities Rule 7.31(qq).
9 15
VerDate Mar<15>2010
17:48 Jun 06, 2012
Jkt 226001
of the Act 12 and Rule 19b–4(f)(6)
thereunder.13
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 14 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6) 15
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
the Commission to waive the 30-day
operative delay. The proposal would
allow the Exchange to immediately offer
price-improving or economicallyneutral executions on BATS Post Only
Orders that currently would be
cancelled and MTP functionality similar
to that already offered by other
exchanges.16 The Commission believes
that waiving the 30-day operative delay
is consistent with the protection of
investors and the public interest.17
Therefore, the Commission designates
the proposal operative 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 Exchange
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 rulecomments@sec.gov. Please include File
Number SR–BYX–2012–009 on the
subject line.
12 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change along with a brief
description and the text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission.
14 17 CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6).
16 See NASDAQ Rules 4751(f)(10) and 4757(a)(4);
EDGX Rule 11.9(f); NYSE Arca Equities Rule
7.31(qq).
17 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
13 17
PO 00000
Frm 00099
Fmt 4703
Sfmt 9990
33801
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–2012–009. 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
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–BYX–
2012–009 and should be submitted on
or before June 28, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–13764 Filed 6–6–12; 8:45 am]
BILLING CODE 8011–01–P
18 17
E:\FR\FM\07JNN1.SGM
CFR 200.30–3(a)(12).
07JNN1
]]>Agencies
[Federal Register Volume 77, Number 110 (Thursday, June 7, 2012)]
[Notices]
[Pages 33800-33801]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-13764]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67092; File No. SR-BYX-2012-009]
Self-Regulatory Organizations; BATS-Y Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend BYX
Rules Related to the Operation of BATS Post Only Orders and Match Trade
Prevention Functionality
June 1, 2012
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 May 23, 2012, BATS-Y Exchange, Inc. (``Exchange'' or ``BYX'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Exchange has designated this
proposal as a ``non-controversial'' proposed rule change pursuant to
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)(iii)
thereunder,\4\ which renders it effective upon filing with the
Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 11.9, entitled ``Orders and
Modifiers'', to modify the operation of BATS Post Only orders. The
Exchange is also proposing changes to its match trade prevention
functionality described in Rule 11.9.
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 the functionality associated with
its existing BATS Post Only Order, which is an order that an entering
User \5\ intends to be posted to the Exchange's order book and thus
will not remove liquidity or route away from the Exchange. In addition
to modifying the Exchange's handling of BATS Post Only Orders, the
Exchange proposes a minor, unrelated modification to allow an
additional option for users of the match trade prevention functionality
offered by the Exchange.
---------------------------------------------------------------------------
\5\ As defined in BYX Rule 1.5(cc), a User is ``any Member or
Sponsored Participant who is authorized to obtain access to the
System pursuant to Rule 11.3.''
---------------------------------------------------------------------------
BATS Post Only Orders
Under the Exchange's current rules, when the Exchange receives a
BATS Post Only order that would lock or cross an order displayed by the
Exchange, because the Exchange cannot display such order at a locking
or crossing price and the User has submitted the order with the
instruction not to remove liquidity from the Exchange, such order will
be cancelled back to the User.
The Exchange proposes to modify the functionality of BATS Post Only
Orders described in Rule 11.9(c)(6) to permit such orders to remove
liquidity from the Exchange's order book (``BATS Book'') if the value
of price improvement associated with such execution equals or exceeds
the sum of fees charged for such execution and the value of any rebate
that would be provided if the order posted to the BATS Book and
subsequently provided liquidity.
Match Trade Prevention
In addition to the changes described above, the Exchange proposes
to enhance its existing match trade prevention (``MTP'') functionality,
which is a process through which Users can delineate certain orders as
being ineligible to match with another order from the same trading
firm. Under current MTP functionality, a User can prevent orders from
matching with other orders from the same market participant identifier
(``MPID''), Exchange member identifier or sponsored participant
identifier. The Exchange proposes to allow Users to apply more MTP
functionality at a more granular, trading group level. By allowing
Users to establish MTP at a trading group level, the Exchange will
allow such Users to prevent matched trades amongst traders or desks
within a certain firm, but permit orders from outside such group or
desk to interact with other firm orders.
2. Statutory Basis
The rule change proposed in this submission 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(b) of the Act.\6\ Specifically, the
proposed change is consistent with Section 6(b)(5) of the Act,\7\
because it is designed to prevent fraudulent and manipulative acts and
[[Page 33801]]
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, and to remove impediments to, and perfect
the mechanism of, a free and open market and a national market system.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed modification to the
handling of BATS Post Only Orders is consistent with the requirements
of Section 6(b) of the Act,\8\ particularly Section 6(b)(5),\9\ in that
the change will help to enhance executions for market participants that
utilize BATS Post Only Orders. The Exchange believes that the provision
of an additional level at which a User may apply match trade prevention
is consistent with the requirements of Section 6(b)(5) of the Act,\10\
because the ability to prevent matches amongst the same trading group
identifier will allow Users to better manage order flow and prevent
undesirable executions against themselves. The Exchange notes that a
similar functionality was effective upon filing with the Commission for
EDGX Exchange, Inc. (``EDGX'').\11\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ 15 U.S.C. 78f(b)(5).
\11\ See EDGX Exchange, Inc. Rule 11.9(f); Securities and
Exchange Act Release No. 53428 (December 3, 2010), 75 FR 76763
(December 9, 2010) (SR-EDGX-2010-18), which was based on NYSE Arca
Equities Rule 7.31(qq).
---------------------------------------------------------------------------
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
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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 for 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 \12\ and Rule 19b-4(f)(6)
thereunder.\13\
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
---------------------------------------------------------------------------
A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \14\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6) \15\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay. The proposal would
allow the Exchange to immediately offer price-improving or
economically-neutral executions on BATS Post Only Orders that currently
would be cancelled and MTP functionality similar to that already
offered by other exchanges.\16\ The Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest.\17\ Therefore, the Commission
designates the proposal operative upon filing.
---------------------------------------------------------------------------
\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6).
\16\ See NASDAQ Rules 4751(f)(10) and 4757(a)(4); EDGX Rule
11.9(f); NYSE Arca Equities Rule 7.31(qq).
\17\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
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 Exchange 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-BYX-2012-009 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-2012-009. 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
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-BYX-2012-009 and should be
submitted on or before June 28, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-13764 Filed 6-6-12; 8:45 am]
BILLING CODE 8011-01-P
