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., 16412-16414 [2014-06460]
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16412
Federal Register / Vol. 79, No. 57 / Tuesday, March 25, 2014 / Notices
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE 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. Specifically, CBOE
believes that the appointment cost
reduction for VIX options will enhance
competition among market participants
and benefit of [sic] investors and the
marketplace because Market-Makers
with an appointment in VIX options
may use the excess capacity to quote
electronically an additional Hybrid
option class.
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 with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
emcdonald on DSK67QTVN1PROD 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, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 5 and Rule 19b–4(f)(6)
thereunder.6
The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative on April 1, 2014.
According to the Exchange, waiving the
30-day operative delay will allow
Market-Makers with an appointment in
VIX options to electronically quote an
additional Hybrid option class and thus
promote competition and efficiency
without undue delay. Based on the
Exchange’s statements, the Commission
believes that waiving the 30-day
operative delay so that the proposed
rule change may become operative on
April 1, 2014, is consistent with the
protection of investors and the public
interest. Accordingly, the Commission
hereby grants the Exchange’s request
5 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.
6 17
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and designates the proposal operative
on April 1, 2014.7
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. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
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–
CBOE–2014–024 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2014–024. 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
7 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).
PO 00000
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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 CBOE. 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–CBOE–
2014–024 and should be submitted on
or before April 15, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–06458 Filed 3–24–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71746; File No. SR–BATS–
2014–006]
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.
March 19, 2014.
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 March 7,
2014, 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 the Substance
of the Proposed Rule Change
The Exchange filed a proposal to
amend the fee schedule applicable to
8 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).
1 15
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Federal Register / Vol. 79, No. 57 / Tuesday, March 25, 2014 / Notices
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 are
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.
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
emcdonald on DSK67QTVN1PROD with NOTICES
1. Purpose
The purpose of this proposed rule
change is to implement pricing,
effective immediately, applicable to the
Exchange’s options platform (‘‘BATS
Options’’) with respect to executions
that occur as part of the modifications
to the market opening procedures as
described in Rule 20.7 [sic] (the ‘‘Market
Opening Procedures’’), which was
approved on March 15 [sic], 2014.6
Under the Market Opening Procedures,
the Exchange will accept orders and
quotes for queuing in a series of options
prior to the opening of trading in that
series of options. As such and as further
described in Rule 20.7 [sic], executions
might occur in a series as part of the
Market Opening Procedures as the series
is being opened for trading. The
Exchange is proposing that for
executions occurring as part of the
Market Opening Procedures, the
Exchange will neither charge a fee nor
provide a rebate.
Currently, all orders executed on
BATS Options are subject to standard
pricing, which includes variable fees
and/or rebates based on whether the
5 A Member is any registered broker or dealer that
has been admitted to membership in the Exchange.
6 See Securities Exchange Act Release No. 71651
(March 5, 2014), (SR–BATS–2014–003) (proposal to
modify the BATS Options Opening Process, which
was approved on March 5, 2014).
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order adds or removes liquidity, the
capacity of the order (Professional,7
Firm, Market Maker,8 or Customer 9
orders), a Member’s average daily
trading volume, and whether the issue
is a penny pilot issue, among others. In
addition to standard rebates, the
Exchange does not charge a fee nor does
it provide a rebate for executions in
Mini Options.10 Finally, orders that add
liquidity may be eligible for additional
rebates upon execution of orders that
originally set a new NBBO 11 as well as
executions that qualify for the
Exchange’s quoting incentive
program.12
The Exchange is proposing that for
executions occurring as part of the
Market Opening Procedures, the
Exchange will neither charge a fee nor
provide a rebate. Specifically,
executions in the Market Opening
Procedures will not be eligible for any
rebate, including the NBBO setter
liquidity rebate or the quoting incentive
program liquidity rebates. It should be
noted, however, that executions in the
Market Opening Procedures will be
counted in calculations of ADV 13 and
TCV 14 for purposes of calculating other
rebates and fees.
7 The term ‘‘Professional’’ is defined in Exchange
Rule 16.1 to mean any person or entity that (A) is
not a broker or dealer in securities, and (B) places
more than 390 orders in listed options per day on
average during a calendar month for its own
beneficial account(s).
8 As defined on the Exchange’s fee schedule, the
terms ‘‘Firm’’ and ‘‘Market Maker’’ apply to any
transaction identified by a member for clearing in
the Firm or Market Maker range, respectively, at the
Options Clearing Corporation (‘‘OCC’’).
9 As defined on the Exchange’s fee schedule, a
‘‘Customer order’’ refers to an order identified by
a Member for clearing in the Customer range at the
OCC, excluding any transaction for a ‘‘Professional’’
as defined in Exchange Rule 16.1.
10 Mini Options are options that overlie 10 equity
or ETF shares, rather than the standard 100 shares.
See Securities Exchange Act Release No. 69018
(March 1, 2013), 78 FR 15090 (March 8, 2013)
(notice of filing and immediate effectiveness
allowing Mini Options to be listed and traded on
BATS Options) (SR–BATS–2013–013).
11 As defined in Exchange Rule 27.1(11), the term
‘‘NBBO’’ is defined to mean the national best bid
and offer in an option series as calculated by an
Eligible Exchange.
12 See Securities Exchange Act Release No. 69079
(March 8, 2013), 78 FR 16306 (March 14, 2013) (SR–
BATS–2013–017) (notice of filing and immediate
effectiveness of proposed rule change related to fees
for use of BATS Options).
13 As defined on the Exchange’s fee schedule,
ADV means average daily volume calculated as the
number of contracts added or removed, combined,
per day on a monthly basis; routed contracts are not
included in ADV calculation; with prior notice to
the Exchange, a Member may aggregate ADV with
other Members that control, are controlled by, or are
under common control with such Member.
14 As defined on the Exchange’s fee schedule,
TCV means total consolidated volume calculated as
the volume reported by all exchanges to the
consolidated transaction reporting plan for the
month for which the fees apply.
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16413
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.
Specifically, the Exchange believes that
the proposed rule change is consistent
with Section 6(b)(4) of the Act, 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 to be
excessive.
The introduction of pricing for the
Market Opening Procedures, as
described above and proposed by this
filing, is intended to allow the Exchange
to begin allowing executions to occur as
part of the Market Opening Procedures
without charging any fees or providing
any rebates for such executions. The
Exchange believes that this is a
reasonable, fair and equitable approach
to pricing, particularly because the
Exchange does not have any specific
advanced knowledge of how market
participants will react to the
introduction of the Market Opening
Procedures. Further, the Exchange
believes that the proposal is reasonable
because a high level of fees for
executions occurring in the Market
Opening Procedures would discourage
participants from entering orders to
participate in the Market Opening
Procedures. In addition, the Exchange
believes that this structure is a fair and
equitable approach to pricing because it
provides certainty for market
participants with respect to execution
costs across all trades occurring as part
of the Market Opening Procedures.
Lastly, the Exchange also believes that
the proposed pricing for executions
occurring as part of the Market Opening
Procedures is non-discriminatory
because it will apply equally to all
Members.
The Exchange notes that this proposal
is not increasing fees or decreasing
rebates for any products traded on or
routed by BATS Options, but rather, the
proposal only proposes to introduce a
pricing structure for executions
occurring as part of the Market Opening
Procedures.
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16414
Federal Register / Vol. 79, No. 57 / Tuesday, March 25, 2014 / Notices
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. To the
contrary, the Exchange notes that this
rule change is being proposed as a
competitive offering at a time when
many other options exchanges are
already offering similar processes for
opening their respective markets. As a
result of the competitive environment,
market participants will have various
pricing and execution models to choose
from in making determinations on
where to enter orders prior to the
opening of trading in a series of options.
As stated above, 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 to be
excessive.
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.
emcdonald on DSK67QTVN1PROD with NOTICES
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:
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–BATS–2014–006. 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–
2014–006 and should be submitted on
or before April 15, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–06460 Filed 3–24–14; 8:45 am]
BILLING CODE 8011–01–P
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–2014–006 on the subject line.
15 15
16 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
VerDate Mar<15>2010
18:16 Mar 24, 2014
17 17
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PO 00000
CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71751; File No. SR–OCC–
2014–04]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Make
Administrative and Conforming
Changes To Rename the Membership/
Risk Committee to Risk Committee,
Reflect the Renaming of the Chairman
Title to Executive Chairman, and
Reflect That Two Management
Directors Are on the Board of Directors
March 19, 2014.
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 March 6,
2014, The Options Clearing Corporation
(‘‘OCC’’) 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 primarily by OCC.
OCC filed the proposed rule change
pursuant to Section 19(b)(3)(A) 3 of the
Act and Rule 19b–4(f)(3) 4 thereunder,
so that the proposal was effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the rule change
from interested parties.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
OCC proposes to amend its By-Laws
and Rules (collectively, ‘‘Rules’’) to
make administrative and/or conforming
rule changes to reflect a proposal that (i)
the ‘‘Membership/Risk Committee’’
would be renamed to ‘‘Risk Committee,’’
(ii) the title of ‘‘Chairman’’ has been
replaced with the title of ‘‘Executive
Chairman’’ and, (iii) two Management
Directors are members of OCC’s Board
of Directors (‘‘Board’’).5
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(3).
5 OCC filed, and the Commission approved, a
proposed rule change concerning the creation of the
role of Executive Chairman. See Securities
Exchange Act Release No. 70076 (July 30, 2013), 78
FR 47449 (August 5, 2013), (SR–OCC–2013–09). As
part of SR–OCC–2013–09, OCC (1) separated the
powers and duties previously combined in the
office of Chairman into two offices, Executive
Chairman and President; and (2) provided that the
President, by virtue of such office, would be a
Management Director. As a result, effective January
1, 2014, two Management Directors (i.e., the
Executive Chairman and the President) are on the
Board and the Board increased in size by one
member to a total of 19 directors.
2 17
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]]>Agencies
[Federal Register Volume 79, Number 57 (Tuesday, March 25, 2014)]
[Notices]
[Pages 16412-16414]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-06460]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71746; File No. SR-BATS-2014-006]
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.
March 19, 2014.
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 March 7, 2014, 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
[[Page 16413]]
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
are 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.
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 this proposed rule change is to implement pricing,
effective immediately, applicable to the Exchange's options platform
(``BATS Options'') with respect to executions that occur as part of the
modifications to the market opening procedures as described in Rule
20.7 [sic] (the ``Market Opening Procedures''), which was approved on
March 15 [sic], 2014.\6\ Under the Market Opening Procedures, the
Exchange will accept orders and quotes for queuing in a series of
options prior to the opening of trading in that series of options. As
such and as further described in Rule 20.7 [sic], executions might
occur in a series as part of the Market Opening Procedures as the
series is being opened for trading. The Exchange is proposing that for
executions occurring as part of the Market Opening Procedures, the
Exchange will neither charge a fee nor provide a rebate.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 71651 (March 5,
2014), (SR-BATS-2014-003) (proposal to modify the BATS Options
Opening Process, which was approved on March 5, 2014).
---------------------------------------------------------------------------
Currently, all orders executed on BATS Options are subject to
standard pricing, which includes variable fees and/or rebates based on
whether the order adds or removes liquidity, the capacity of the order
(Professional,\7\ Firm, Market Maker,\8\ or Customer \9\ orders), a
Member's average daily trading volume, and whether the issue is a penny
pilot issue, among others. In addition to standard rebates, the
Exchange does not charge a fee nor does it provide a rebate for
executions in Mini Options.\10\ Finally, orders that add liquidity may
be eligible for additional rebates upon execution of orders that
originally set a new NBBO \11\ as well as executions that qualify for
the Exchange's quoting incentive program.\12\
---------------------------------------------------------------------------
\7\ The term ``Professional'' is defined in Exchange Rule 16.1
to mean any person or entity that (A) is not a broker or dealer in
securities, and (B) places more than 390 orders in listed options
per day on average during a calendar month for its own beneficial
account(s).
\8\ As defined on the Exchange's fee schedule, the terms
``Firm'' and ``Market Maker'' apply to any transaction identified by
a member for clearing in the Firm or Market Maker range,
respectively, at the Options Clearing Corporation (``OCC'').
\9\ As defined on the Exchange's fee schedule, a ``Customer
order'' refers to an order identified by a Member for clearing in
the Customer range at the OCC, excluding any transaction for a
``Professional'' as defined in Exchange Rule 16.1.
\10\ Mini Options are options that overlie 10 equity or ETF
shares, rather than the standard 100 shares. See Securities Exchange
Act Release No. 69018 (March 1, 2013), 78 FR 15090 (March 8, 2013)
(notice of filing and immediate effectiveness allowing Mini Options
to be listed and traded on BATS Options) (SR-BATS-2013-013).
\11\ As defined in Exchange Rule 27.1(11), the term ``NBBO'' is
defined to mean the national best bid and offer in an option series
as calculated by an Eligible Exchange.
\12\ See Securities Exchange Act Release No. 69079 (March 8,
2013), 78 FR 16306 (March 14, 2013) (SR-BATS-2013-017) (notice of
filing and immediate effectiveness of proposed rule change related
to fees for use of BATS Options).
---------------------------------------------------------------------------
The Exchange is proposing that for executions occurring as part of
the Market Opening Procedures, the Exchange will neither charge a fee
nor provide a rebate. Specifically, executions in the Market Opening
Procedures will not be eligible for any rebate, including the NBBO
setter liquidity rebate or the quoting incentive program liquidity
rebates. It should be noted, however, that executions in the Market
Opening Procedures will be counted in calculations of ADV \13\ and TCV
\14\ for purposes of calculating other rebates and fees.
---------------------------------------------------------------------------
\13\ As defined on the Exchange's fee schedule, ADV means
average daily volume calculated as the number of contracts added or
removed, combined, per day on a monthly basis; routed contracts are
not included in ADV calculation; with prior notice to the Exchange,
a Member may aggregate ADV with other Members that control, are
controlled by, or are under common control with such Member.
\14\ As defined on the Exchange's fee schedule, TCV means total
consolidated volume calculated as the volume reported by all
exchanges to the consolidated transaction reporting plan for the
month for which the fees apply.
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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.
Specifically, the Exchange believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act, 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 to be
excessive.
The introduction of pricing for the Market Opening Procedures, as
described above and proposed by this filing, is intended to allow the
Exchange to begin allowing executions to occur as part of the Market
Opening Procedures without charging any fees or providing any rebates
for such executions. The Exchange believes that this is a reasonable,
fair and equitable approach to pricing, particularly because the
Exchange does not have any specific advanced knowledge of how market
participants will react to the introduction of the Market Opening
Procedures. Further, the Exchange believes that the proposal is
reasonable because a high level of fees for executions occurring in the
Market Opening Procedures would discourage participants from entering
orders to participate in the Market Opening Procedures. In addition,
the Exchange believes that this structure is a fair and equitable
approach to pricing because it provides certainty for market
participants with respect to execution costs across all trades
occurring as part of the Market Opening Procedures. Lastly, the
Exchange also believes that the proposed pricing for executions
occurring as part of the Market Opening Procedures is non-
discriminatory because it will apply equally to all Members.
The Exchange notes that this proposal is not increasing fees or
decreasing rebates for any products traded on or routed by BATS
Options, but rather, the proposal only proposes to introduce a pricing
structure for executions occurring as part of the Market Opening
Procedures.
[[Page 16414]]
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. To the contrary, the Exchange
notes that this rule change is being proposed as a competitive offering
at a time when many other options exchanges are already offering
similar processes for opening their respective markets. As a result of
the competitive environment, market participants will have various
pricing and execution models to choose from in making determinations on
where to enter orders prior to the opening of trading in a series of
options. As stated above, 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 to be
excessive.
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-2014-006 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-BATS-2014-006. 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-2014-006 and should be
submitted on or before April 15, 2014.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-06460 Filed 3-24-14; 8:45 am]
BILLING CODE 8011-01-P
