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., 41453-41455 [2013-16532]
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<![CDATA[
Federal Register / Vol. 78, No. 132 / Wednesday, July 10, 2013 / Notices
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 BYX. 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–
2013–23 and should be submitted on or
before July 31, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–16534 Filed 7–9–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69933; File No. SR–BATS–
2013–040]
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.
TKELLEY on DSK3SPTVN1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
The Exchange filed a proposal to
amend the fee schedule applicable to
Members 5 and non-members of the
Exchange pursuant to BATS 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 July 1, 2013.
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.
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
July 3, 2013.
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 June 28,
2013, 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
26 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Mar<15>2010
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.
17:42 Jul 09, 2013
Jkt 229001
The purpose of the proposed rule
change is to begin charging a monthly
fee for the Multicast PITCH Spin Server
Port and GRP Port, each of which are
logical ports 6 used to receive data from
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.
6 A logical port is commonly referred to as a TCP/
IP port, and represents a port established by the
Exchange within the Exchange’s system for trading
and billing purposes. Each logical port established
is specific to a Member or non-member and grants
that Member or non-member the ability to operate
a specific application, such as FIX order entry or
Multicast PITCH data receipt. Logical port fees are
limited to logical ports in the Exchange’s primary
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3 15
4 17
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Sfmt 4703
41453
the Exchange.7 Currently, the Exchange
charges a monthly fee for all other port
types used to enter orders in the
Exchange’s system and to receive data
from the Exchange; 8 however, for both
BATS Equities and BATS Options,9 the
Exchange provides 32 primary Multicast
PITCH Spin Server Ports free of charge
(32 ports currently makes a complete set
of Spin Server Ports) and, if such ports
are used, one free primary GRP Port. In
addition, all redundant Multicast PITCH
Spin Server Ports and GRP Ports are
provided free of charge.10 Currently, the
Exchange charges $400 per month per
additional set of primary Multicast
PITCH Spin Server Ports and $400 per
month per additional primary GRP Port.
Beginning July 1, 2013, the Exchange
proposes to charge $400 per month per
set of primary Multicast PITCH Spin
Server Ports and $400 per month per
primary GRP Port for BATS Equities and
BATS Options. The Exchange is also
proposing to eliminate the reference to
the exact number of ports that makes a
complete set of Multicast Spin Server
Ports, as this number has changed in the
past and could again change in the
future. A complete set of Multicast Spin
Server Ports is the number of ports
necessary to get one full set of
information from the Exchange based on
load balancing by the Exchange.11 The
Exchange believes that this concept is
clearly understood amongst recipients
of Multicast data, and, therefore, does
not believe that eliminating the fee
schedule reference to the exact number
of ports necessary to receive Exchange
PITCH data via Multicast will cause
data center and no logical port fees are assessed for
redundant secondary data center ports.
7 BATS FIX ports are the only ports that may be
used to send orders and related instructions to the
Exchange. All other port types, including the
Multicast PITCH Spin Server Port and GRP Port,
permit Members and non-members to receive
information from the Exchange.
8 The Exchange currently charges a monthly fee
for all other Exchange FIX, FIXDROP, BOE, DROP,
TCP PITCH, and TOP ports.
9 BATS Equities is the Exchange’s platform for
trading cash equity securities whereas BATS
Options is the Exchange’s platform for trading
equity options.
10 Exchange Multicast PITCH data feed for both
BATS Equities and BATS Options is currently
offered through two primary feeds, identified as the
‘‘A feed’’ and the ‘‘C feed’’, which contain the same
information but differ only in the way such feeds
are received. The Exchange offers for free the ports
necessary to receive the Exchange’s redundant
Multicast ‘‘B feed’’ and ‘‘D feed’’, as well as all ports
made available in the Exchange’s secondary data
center. Accordingly, this proposal only applies to
ports used to receive an Exchange primary
Multicast Feed at the Exchange’s primary data
center.
11 The Exchange load balances information
regarding securities traded on the Exchange across
multiple channels (today 32) with each channel
requiring a separate Multicast PITCH Spin Server
Port.
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Federal Register / Vol. 78, No. 132 / Wednesday, July 10, 2013 / Notices
TKELLEY on DSK3SPTVN1PROD with NOTICES
confusion amongst recipients of
Multicast data.
Based on the proposal, the change
applies to Members that obtain ports for
direct access to the Exchange,
Sponsored Participants sponsored by
Members to receive direct access to the
Exchange, non-member service bureaus
that act as a conduit for orders entered
by Exchange Members that are their
customers, and market data recipients.
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.12
Specifically, the Exchange believes that
the proposed rule change is consistent
with Section 6(b)(4) of the Act,13 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 operates in a highly
competitive market in which exchanges
offer connectivity services as a means to
facilitate the trading activities of
members and other participants.
Accordingly, fees charged for
connectivity are constrained by the
active competition for the order flow of
such participants as well as demand for
market data from the Exchange. If a
particular exchange charges excessive
fees for connectivity, affected members
will opt to terminate their connectivity
arrangements with that exchange, and
adopt a possible range of alternative
strategies, including routing to the
applicable exchange through another
participant or market center or taking
that exchange’s data indirectly.
Accordingly, the exchange charging
excessive fees would stand to lose not
only connectivity revenues but also
revenues associated with the execution
of orders routed to it by affected
members, and, to the extent applicable,
market data revenues. The Exchange
believes that this competitive dynamic
imposes powerful restraints on the
ability of any exchange to charge
unreasonable fees for connectivity.
The Exchange believes that its
proposed changes to logical port fees are
reasonable in light of the benefits to
Exchange participants of direct market
access and receipt of data.14 In addition,
12 15
U.S.C. 78f.
U.S.C. 78f(b)(4).
14 Through a different filing, beginning July 1,
2013, the Exchange has proposed to implement fees
13 15
VerDate Mar<15>2010
17:42 Jul 09, 2013
Jkt 229001
the Exchange believes that its fees are
equitably allocated among Exchange
constituents based upon the number of
access ports that they require to receive
data from the Exchange. Further, the
Exchange believes that its fees are not
unreasonably discriminatory because all
market participants are charged
standard fees for port usage. The
Exchange notes that it believes its prior
fee structure, under which ports
necessary for receipt of Multicast data
were provided free of charge, was
reasonable, equitably allocated and not
unreasonably discriminatory because it
was available to all market participants
and was intended to encourage the use
of Multicast PITCH. However, by
moving towards a more uniform
approach to ports billing, the Exchange
believes that its fees are even more
equitably allocated and
nondiscriminatory. The Exchange also
believes that its fees for access services
will enable it to better cover its
infrastructure costs and to improve its
market technology and services.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. As discussed
above, the Exchange believes that fees
for connectivity are constrained by the
robust competition for order flow among
exchanges and non-exchange markets.
Further, excessive fees for connectivity,
including logical port fees, would serve
to impair an exchange’s ability to
compete for order flow rather than
burdening 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
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 15 and paragraph (f) of Rule
19b–4 thereunder.16 At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
for the BATS Equities PITCH (including both TCP
PITCH and Multicast PITCH) and TOP data
products, and to revise the fee for the Last Sale Feed
data product.
15 15 U.S.C. 78s(b)(3)(A).
16 17 CFR 240.19b–4(f).
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Frm 00103
Fmt 4703
Sfmt 4703
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 rulecomments@sec.gov. Please include File
Number SR–BATS–2013–040 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–2013–040. 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 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 Number SR–BATS–
E:\FR\FM\10JYN1.SGM
10JYN1
Federal Register / Vol. 78, No. 132 / Wednesday, July 10, 2013 / Notices
2013–040 and should be submitted on
or before July 31, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–16532 Filed 7–9–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69929; File No. SR–
NASDAQ–2013–091]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Penny Pilot Option Rebates To Add
Liquidity
July 3, 2013.
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 June 27,
2013, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared by NASDAQ. 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
NASDAQ proposes to modify Chapter
XV, entitled ‘‘Options Pricing,’’ at
Section 2 governing pricing for
NASDAQ members using the NASDAQ
Options Market (‘‘NOM’’), NASDAQ’s
facility for executing and routing
standardized equity and index options.
Specifically, NOM proposes to amend
certain Customer,3 Professional 4 and
NOM Market Maker 5 Rebates to Add
Liquidity in Penny Pilot Options.6
While the changes proposed herein
are effective upon filing, the Exchange
has designated that the amendments be
operative on July 1, 2013.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
www.nasdaq.cchwallstreet.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. 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 aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NASDAQ proposes to modify Chapter
XV, entitled ‘‘Options Pricing,’’ at
Section 2(1) governing the rebates and
fees assessed for option orders entered
into NOM. The Exchange proposes to
amend the Customer, Professional and
NOM Market Maker Penny Pilot
Options Rebates to Add Liquidity and
make other technical amendments to the
Section 2(1) as described more fully
below.
Today, the Exchange offers an eighttiered Rebate to Add Liquidity in Penny
Pilot Options to Customers and
Professionals as follows:
Rebate to add
liquidity
Monthly volume
Tier 1 .........................................................
Tier 2 .........................................................
Tier 3 .........................................................
Tier 4 .........................................................
Tier 5 .........................................................
17 17
TKELLEY on DSK3SPTVN1PROD with NOTICES
Participant adds Customer and Professional liquidity of up to 0.20% of total industry
customer equity and ETF option average daily volume (‘‘ADV’’) contracts per day
in a month.
Participant adds Customer and Professional liquidity of 0.21% to 0.30% of total industry customer equity and ETF option ADV contracts per day in a month.
Participant adds Customer and Professional liquidity of 0.31% to 0.49% of total industry customer equity and ETF option ADV contracts per day in a month.
Participant adds Customer and Professional liquidity of 0.5% or more of total industry customer equity and ETF option ADV contracts per day in a month.
Participant adds (1) Customer and Professional liquidity of 25,000 or more contracts per day in a month, (2) the Participant has certified for the Investor Support Program set forth in Rule 7014, and (3) the Participant executed at least one
order on NASDAQ’s equity market.
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 The term ‘‘Customer’’ applies to any transaction
that is identified by a Participant for clearing in the
Customer range at The Options Clearing
Corporation (‘‘OCC’’) which is not for the account
of broker or dealer or for the account of a
‘‘Professional’’ (as that term is defined in Chapter
I, Section 1(a)(48)).
4 The term ‘‘Professional’’ means any person or
entity that (i) is not a broker or dealer in securities,
and (ii) places more than 390 orders in listed
options per day on average during a calendar month
for its own beneficial account(s) pursuant to
Chapter I, Section 1(a)(48). All Professional orders
shall be appropriately marked by Participants.
5 The term ‘‘NOM Market Maker’’ is a Participant
that has registered as a Market Maker on NOM
pursuant to Chapter VII, Section 2, and must also
1 15
VerDate Mar<15>2010
17:42 Jul 09, 2013
Jkt 229001
remain in good standing pursuant to Chapter VII,
Section 4. In order to receive NOM Market Maker
pricing in all securities, the Participant must be
registered as a NOM Market Maker in at least one
security.
6 The Penny Pilot was established in March 2008
and in October 2009 was expanded and extended
through June 30, 2013. See Securities Exchange Act
Release Nos. 57579 (March 28, 2008), 73 FR 18587
(April 4, 2008) (SR–NASDAQ–2008–026) (notice of
filing and immediate effectiveness establishing
Penny Pilot); 60874 (October 23, 2009), 74 FR 56682
(November 2, 2009) (SR–NASDAQ–2009–091)
(notice of filing and immediate effectiveness
expanding and extending Penny Pilot); 60965
(November 9, 2009), 74 FR 59292 (November 17,
2009) (SR–NASDAQ–2009–097) (notice of filing
and immediate effectiveness adding seventy-five
classes to Penny Pilot); 61455 (February 1, 2010),
75 FR 6239 (February 8, 2010) (SR–NASDAQ–
2010–013) (notice of filing and immediate
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41455
$0.25
0.40
0.43
0.45
0.42
effectiveness adding seventy-five classes to Penny
Pilot); 62029 (May 4, 2010), 75 FR 25895 (May 10,
2010) (SR–NASDAQ–2010–053) (notice of filing
and immediate effectiveness adding seventy-five
classes to Penny Pilot); 65969 (December 15, 2011),
76 FR 79268 (December 21, 2011) (SR–NASDAQ–
2011–169) (notice of filing and immediate
effectiveness extension and replacement of Penny
Pilot); 67325 (June 29, 2012), 77 FR 40127 (July 6,
2012) (SR–NASDAQ–2012–075) (notice of filing
and immediate effectiveness and extension and
replacement of Penny Pilot through December 31,
2012); and 68519 (December 21, 2012), 78 FR 136
(January 2, 2013) (SR–NASDAQ–2012–143) (notice
of filing and immediate effectiveness and extension
and replacement of Penny Pilot through June 30,
2013). See also NOM Rules, Chapter VI, Section 5.
The Exchange recently filed a proposed rule change
to extend the pilot through December 31, 2013. See
SR–Phlx–2013–64, which is not yet published.
E:\FR\FM\10JYN1.SGM
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]]>Agencies
[Federal Register Volume 78, Number 132 (Wednesday, July 10, 2013)]
[Notices]
[Pages 41453-41455]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-16532]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69933; File No. SR-BATS-2013-040]
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.
July 3, 2013.
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 June 28, 2013, 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 the
Substance of the Proposed Rule Change
The Exchange filed a proposal to amend the fee schedule applicable
to Members \5\ and non-members of the Exchange pursuant to BATS 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 July 1, 2013.
---------------------------------------------------------------------------
\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.
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 purpose of the proposed rule change is to begin charging a
monthly fee for the Multicast PITCH Spin Server Port and GRP Port, each
of which are logical ports \6\ used to receive data from the
Exchange.\7\ Currently, the Exchange charges a monthly fee for all
other port types used to enter orders in the Exchange's system and to
receive data from the Exchange; \8\ however, for both BATS Equities and
BATS Options,\9\ the Exchange provides 32 primary Multicast PITCH Spin
Server Ports free of charge (32 ports currently makes a complete set of
Spin Server Ports) and, if such ports are used, one free primary GRP
Port. In addition, all redundant Multicast PITCH Spin Server Ports and
GRP Ports are provided free of charge.\10\ Currently, the Exchange
charges $400 per month per additional set of primary Multicast PITCH
Spin Server Ports and $400 per month per additional primary GRP Port.
---------------------------------------------------------------------------
\6\ A logical port is commonly referred to as a TCP/IP port, and
represents a port established by the Exchange within the Exchange's
system for trading and billing purposes. Each logical port
established is specific to a Member or non-member and grants that
Member or non-member the ability to operate a specific application,
such as FIX order entry or Multicast PITCH data receipt. Logical
port fees are limited to logical ports in the Exchange's primary
data center and no logical port fees are assessed for redundant
secondary data center ports.
\7\ BATS FIX ports are the only ports that may be used to send
orders and related instructions to the Exchange. All other port
types, including the Multicast PITCH Spin Server Port and GRP Port,
permit Members and non-members to receive information from the
Exchange.
\8\ The Exchange currently charges a monthly fee for all other
Exchange FIX, FIXDROP, BOE, DROP, TCP PITCH, and TOP ports.
\9\ BATS Equities is the Exchange's platform for trading cash
equity securities whereas BATS Options is the Exchange's platform
for trading equity options.
\10\ Exchange Multicast PITCH data feed for both BATS Equities
and BATS Options is currently offered through two primary feeds,
identified as the ``A feed'' and the ``C feed'', which contain the
same information but differ only in the way such feeds are received.
The Exchange offers for free the ports necessary to receive the
Exchange's redundant Multicast ``B feed'' and ``D feed'', as well as
all ports made available in the Exchange's secondary data center.
Accordingly, this proposal only applies to ports used to receive an
Exchange primary Multicast Feed at the Exchange's primary data
center.
---------------------------------------------------------------------------
Beginning July 1, 2013, the Exchange proposes to charge $400 per
month per set of primary Multicast PITCH Spin Server Ports and $400 per
month per primary GRP Port for BATS Equities and BATS Options. The
Exchange is also proposing to eliminate the reference to the exact
number of ports that makes a complete set of Multicast Spin Server
Ports, as this number has changed in the past and could again change in
the future. A complete set of Multicast Spin Server Ports is the number
of ports necessary to get one full set of information from the Exchange
based on load balancing by the Exchange.\11\ The Exchange believes that
this concept is clearly understood amongst recipients of Multicast
data, and, therefore, does not believe that eliminating the fee
schedule reference to the exact number of ports necessary to receive
Exchange PITCH data via Multicast will cause
[[Page 41454]]
confusion amongst recipients of Multicast data.
---------------------------------------------------------------------------
\11\ The Exchange load balances information regarding securities
traded on the Exchange across multiple channels (today 32) with each
channel requiring a separate Multicast PITCH Spin Server Port.
---------------------------------------------------------------------------
Based on the proposal, the change applies to Members that obtain
ports for direct access to the Exchange, Sponsored Participants
sponsored by Members to receive direct access to the Exchange, non-
member service bureaus that act as a conduit for orders entered by
Exchange Members that are their customers, and market data recipients.
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.\12\
Specifically, the Exchange believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\13\ 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.
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\12\ 15 U.S.C. 78f.
\13\ 15 U.S.C. 78f(b)(4).
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The Exchange operates in a highly competitive market in which
exchanges offer connectivity services as a means to facilitate the
trading activities of members and other participants. Accordingly, fees
charged for connectivity are constrained by the active competition for
the order flow of such participants as well as demand for market data
from the Exchange. If a particular exchange charges excessive fees for
connectivity, affected members will opt to terminate their connectivity
arrangements with that exchange, and adopt a possible range of
alternative strategies, including routing to the applicable exchange
through another participant or market center or taking that exchange's
data indirectly. Accordingly, the exchange charging excessive fees
would stand to lose not only connectivity revenues but also revenues
associated with the execution of orders routed to it by affected
members, and, to the extent applicable, market data revenues. The
Exchange believes that this competitive dynamic imposes powerful
restraints on the ability of any exchange to charge unreasonable fees
for connectivity.
The Exchange believes that its proposed changes to logical port
fees are reasonable in light of the benefits to Exchange participants
of direct market access and receipt of data.\14\ In addition, the
Exchange believes that its fees are equitably allocated among Exchange
constituents based upon the number of access ports that they require to
receive data from the Exchange. Further, the Exchange believes that its
fees are not unreasonably discriminatory because all market
participants are charged standard fees for port usage. The Exchange
notes that it believes its prior fee structure, under which ports
necessary for receipt of Multicast data were provided free of charge,
was reasonable, equitably allocated and not unreasonably discriminatory
because it was available to all market participants and was intended to
encourage the use of Multicast PITCH. However, by moving towards a more
uniform approach to ports billing, the Exchange believes that its fees
are even more equitably allocated and nondiscriminatory. The Exchange
also believes that its fees for access services will enable it to
better cover its infrastructure costs and to improve its market
technology and services.
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\14\ Through a different filing, beginning July 1, 2013, the
Exchange has proposed to implement fees for the BATS Equities PITCH
(including both TCP PITCH and Multicast PITCH) and TOP data
products, and to revise the fee for the Last Sale Feed data product.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. As discussed above, the
Exchange believes that fees for connectivity are constrained by the
robust competition for order flow among exchanges and non-exchange
markets. Further, excessive fees for connectivity, including logical
port fees, would serve to impair an exchange's ability to compete for
order flow rather than burdening 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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \15\ and paragraph (f) of Rule 19b-4
thereunder.\16\ 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.
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f).
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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-2013-040 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-2013-040. 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 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 Number SR-BATS-
[[Page 41455]]
2013-040 and should be submitted on or before July 31, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013-16532 Filed 7-9-13; 8:45 am]
BILLING CODE 8011-01-P
