Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rules 2.5(c)(4) and 11.5 To Harmonize With EDGA and EDGX Rules, Its Membership Requirements Applicable to Clearing Agencies That Clear Transactions for Members, 5593-5595 [2015-01870]
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Federal Register / Vol. 80, No. 21 / Monday, February 2, 2015 / Notices
investor.’’ The public is invited to
submit written statements for the
meeting, including any comments.
DATES: The public meeting will be held
on Tuesday, February 17, 2015. Written
statements should be received on or
before Friday, February 13, 2015.
ADDRESSES: Written statements may be
submitted by any of the following
methods:
Electronic Statements
• Use the Commission’s Internet
submission form (https://www.sec.gov/
info/smallbus/acsec.shtml); or
• Send an email message to rulecomments@sec.gov. Please include File
Number 265–27 on the subject line; or
mstockstill on DSK4VPTVN1PROD with NOTICES
Paper Statements
Send paper statements in triplicate to
Brent J. Fields, Federal Advisory
Committee Management Officer,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090. All submissions should
refer to File No. 265–27. This file
number should be included on the
subject line if email is used. To help us
process and review your statement more
efficiently, please use only one method.
The Commission will post all
statements on the Advisory Committee’s
Web site at https://www.sec.gov./info/
smallbus/acsec.shtml.
Statements also will be available for
Web site viewing and printing in the
Commission’s Public Reference Room,
100 F Street NE., Room 1580,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. All statements
received will be posted without change;
we do not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly.
FOR FURTHER INFORMATION CONTACT: Julie
Z. Davis, Senior Special Counsel, at
(202) 551–3460, Office of Small
Business Policy, Division of Corporation
Finance, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–3628.
SUPPLEMENTARY INFORMATION: In
accordance with Section 10(a) of the
Federal Advisory Committee Act, 5
U.S.C.–App. 1, and the regulations
thereunder, Keith F. Higgins, Designated
Federal Officer of the Committee, has
ordered publication of this notice.
Dated: January 28, 2015.
Brent J. Fields,
Committee Management Officer.
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold an Open Meeting
on Wednesday, February 4, 2015 at
10:00 a.m., in the Auditorium, Room L–
002.
The subject matter of the Open
Meeting will be:
• The Commission will consider
whether to approve the 2015 budget of
the Public Company Accounting
Oversight Board and will consider the
related annual accounting support fee
for the Board under Section 109 of the
Sarbanes-Oxley Act of 2002.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact: The Office of the Secretary at
(202) 551–5400.
Dated: January 28, 2015.
Lynn M. Powalski,
Deputy Secretary.
[FR Doc. 2015–01955 Filed 1–29–15; 11:15 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74152; File No. SR–BATS–
2015–07]
Self-Regulatory Organizations; BATS
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Rules 2.5(c)(4)
and 11.5 To Harmonize With EDGA and
EDGX Rules, Its Membership
Requirements Applicable to Clearing
Agencies That Clear Transactions for
Members
January 27, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
22, 2015, BATS Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BATS’’) 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
[FR Doc. 2015–01898 Filed 1–30–15; 8:45 am]
1 15
BILLING CODE 8011–01–P
2 17
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CFR 240.19b–4.
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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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
amend Rules 2.5(c)(4) and 11.15 to
harmonize its membership requirements
applicable to clearing agencies that clear
transactions for Members 5 of the
Exchange with those set forth under
EDGX Exchange, Inc. (‘‘EDGX’’) and
EDGA Exchange, Inc. (‘‘EDGA’’) rules.6
The text of the proposed rule change
is available at the Exchange’s Web site
at www.batstrading.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rules 2.5(c)(4) and 11.15 to harmonize
its membership requirements applicable
to clearing agencies that clear
transactions for Members with those set
forth under EDGX and EDGA rules.7
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii).
5 The term ‘‘Member’’ is defined as ‘‘any
registered broker or dealer that has been admitted
to membership in the Exchange. A Member will
have the status of a ‘‘member’’ of the Exchange as
that term is defined in Section 3(a)(3) of the Act.
Membership may be granted to a sole proprietor,
partnership, corporation, limited liability company
or other organization which is a registered broker
or dealer pursuant to Section 15 of the Act, and
which has been approved by the Exchange.’’ See
Exchange Rule 1.5(n).
6 See EDGA Rules 2.5(c)(4) and 11.13; EDGX
Rules 2.5(c)(4) and 11.13.
7 See supra note 6.
4 17
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Federal Register / Vol. 80, No. 21 / Monday, February 2, 2015 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
Earlier this year, the Exchange and its
affiliate, BATS Y-Exchange, Inc.
(‘‘BYX’’), received approval to effect a
merger (the ‘‘Merger’’) of the Exchange’s
parent company, BATS Global Markets,
Inc., with Direct Edge Holdings LLC, the
indirect parent of EDGX and EDGA
(together with BZX, BYX and EDGX, the
‘‘BGM Affiliated Exchanges’’).8 In the
context of the Merger, the BGM
Affiliated Exchanges are working to
align certain rules, retaining only
intended differences between the BGM
Affiliated Exchanges. As part of this
effort, the proposal set forth below
harmonizes Exchange Rules 2.5 and
11.15 with EDGA and EDGX Rules 2.5
and 11.13 by no longer requiring that a
Qualified Clearing Agency 9 be a
Member in order to clear other
Member’s transactions executed on the
Exchange.10
In sum, Rule 2.5(a)(4) currently
provides that a Member also be a
member of a Qualified Clearing Agency
or clear its transactions executed on the
Exchange through another Member that
is a member of a Qualified Clearing
Agency. Rule 11.15(a) currently requires
a Qualified Clearing Agency be a
Member of the Exchange in order to
clear transactions on behalf of another
Member. EDGA and EDGX Rules
2.5(c)(4) and 11.13(a) do not require
that: (i) A Qualified Clearing Agency be
a member in order to clear other
member’s transactions executed on
EDGA or EDGX; (ii) that a member be
a member of a Qualified Clearing
Agency; or (iii) that a member clear its
transaction through a member of a
Qualified Clearing Agency. Rather,
EDGA and EDGX Rules simply require
that a member clear transactions
through a registered clearing agency
using a continuous net settlement
system. EDGA and EDGX Rules 11.13(a)
further state that this requirement may
be satisfied by direct participation, use
of direct clearing services, or by entering
into a correspondent clearing
arrangement with another member that
clears trades through such agency.
As amended, Rules 2.5(a)(4) and
11.15(a) would be substantially similar
to EDGA and EDGX rules 2.5(c)(4) and
11.3(a). Like EDGA and EDGX Rules
2.5(c)(4), Exchange Rules 2.5(a)(4)
would require that a Member clear
8 See Securities Exchange Act Release No. 71375
(January 23, 2014), 79 FR 4771 (January 29, 2014)
(SR–BATS–2013–059; SR–BYX–2013–039).
9 The term ‘‘Qualified Clearing Agency’’ is
defined as ‘‘a clearing agency registered with the
Commission pursuant to Section 17A of the Act that
is deemed qualified by the Exchange.’’ See
Exchange Rule 1.5(u).
10 The Exchange understands that BYX is to file
a proposed rule change with the Commission to
adopt similar changes.
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transactions through a Qualified
Clearing Agency using a continuous net
settlement system. Like EDGA and
EDGX Rules 11.13(a), amended
Exchange Rule 11.15(a) would state that
this requirement may be satisfied by
direct participation, use of direct
clearing services, or by entering into a
correspondent clearing arrangement
with another member that clears trades
through such agency. In addition,
Exchange Rule 11.15(a) would no longer
require a Qualified Clearing Agency be
a Member in order to clear another
Members’ transactions executed on the
Exchange.
The Exchange also proposes to add
new subparagraph (b) to Rule 11.15
stating that notwithstanding
subparagraph (a) of Rule 11.15,
transactions may be settled ‘‘exclearing,’’ provided that both parties to
the transaction agree. Proposed
subparagraph (b) to Rule 11.15 would be
identical to EDGA and EDGX Rules
11.13(b). The Exchange also proposes to
renumber the remaining subparagraphs
of Rule 11.13 accordingly.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 11 and furthers
the objectives of Section 6(b)(5) of the
Act,12 in that it is designed to promote
just and equitable principles of trade,
remove impediments to, and perfect the
mechanism of, a free and open market
and a national market system, and, in
general, protect investors and the public
interest. The Exchange believes that the
proposed rule change is not designed to
permit unfair discrimination between
customers, issuers, brokers or dealers.
The proposed rule change is identical
to the existing rules of EDGA and
EDGX.13 Requiring Qualified Clearing
Agencies to be Members of the
Exchange has unreasonably limited the
ability of Members to clear trades
through such agencies that are not
Members when no such restriction is
contained in the rules of EDGA or
EDGX. The proposed rule change is,
therefore, intended to align the
Exchange’s rules regarding Members
clearing transaction through a Qualified
Clearing Agency with that of EDGA and
EDGX as well as BYX 14 in order to
provide consistent rules across the BGM
Affiliated Exchanges. Consistent rules,
in turn, will simplify the membership
requirements for clearing agencies that
are also clear transactions for members
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
13 See supra note 6.
14 See supra note 10.
of the other BGM Affiliated Exchanges.
The proposed rule change would
provide greater harmonization between
the rules of the BGM Affiliated
Exchanges of similar purpose, resulting
in greater uniformity and less
burdensome and more efficient
regulatory compliance. As such, the
proposed rule change would foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities and would
remove impediments to and perfect the
mechanism of a free and open market
and a national market system.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed rule change would not
impose any burden on competition. The
Exchange believes that the proposed
rule changes will not burden
intramarket competition because all
Members would be subject to the same
requirements with regard to clearing
transactions through non-Member
registered clearing agencies. The
proposed rule change is not designed to
address any competitive issues but
rather is designed to provide greater
harmonization among the Exchange,
BYX, EDGA and EDGX rules of similar
purpose, resulting in less burdensome
and more efficient regulatory
compliance for common members of the
BGM Affiliated Exchanges.
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 foregoing 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, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 15 and Rule 19b–
4(f)(6)(iii) thereunder.16 The Exchange
provided the Commission with written
notice of its intent to file the proposed
rule change, along with a brief
description and text of the proposed
rule change, at least five business days
prior to the date of filing the proposed
12 15
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15 15
16 17
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E:\FR\FM\02FEN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii).
02FEN1
Federal Register / Vol. 80, No. 21 / Monday, February 2, 2015 / Notices
rule change as required by Rule 19b–
4(f)(6).17
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily
temporarily suspend such rule change if
it appears to the Commission that such
action is: (1) Necessary or appropriate in
the public interest; (2) for the protection
of investors; or (3) 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 proposal is
consistent with the Act. Comments may
be submitted by any of the following
methods:
mstockstill on DSK4VPTVN1PROD with NOTICES
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
No. SR–BATS–2015–07 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
No. SR–BATS–2015–07. 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 will also be available for
inspection and copying at the principal
office of the Exchange.
All comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File No.
SR–BATS–2015–07 and should be
submitted on or before February 23,
2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015–01870 Filed 1–30–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74146; File No. SR–
NASDAQ–2015–005]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Regarding
the Short Term Option Series Program
January 27, 2015.
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 January
21, 2015. The NASDAQ Stock Market
LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) 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
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Chapter IV, Section 6 (Series of Options
Contracts Open for Trading) to
introduce finer $.50 strike price
intervals in non-index Short Term
Options with strike prices less than
$100.
The text of the proposed rule change
is available at https://
nasdaq.cchwallstreet.com/, at the
Exchange’s principal office, and at the
Commission’s Public Reference Room.
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
17 17
CFR 240.19b–(f)(6).
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5595
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 aspects 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 amend Chapter IV, Section
6 governing the Short Term Option
(‘‘STO’’) 3 Series Program to introduce
finer strike price intervals for certain
STOs. In particular, the Exchange
proposes to amend Chapter IV,
Supplementary Material .07(e) to
Section 6 to extend $0.50 strike price
intervals in non-index options to STOs
with strike prices less than $100 instead
of the current $75. This proposed
change is intended to eliminate gapped
strikes between $75 and $100 that result
from conflicting strike price parameters
under the STO Series Program and the
$2.50 Strike Price Program, as described
in more detail below.
This is a competitive filing that is
based on a recent STO proposal of the
International Securities Exchange, LLC
(‘‘ISE’’).4
Under the Exchange’s rules, the
Exchange may list STOs in up to fifty
option classes in addition to option
classes that are selected by other
securities exchanges that employ a
similar program under their respective
3 STOs, also known as ‘‘weekly options’’ as well
as ‘‘Short Term Options’’, are series in an options
class that are approved for listing and trading on the
Exchange in which the series are opened for trading
on any Thursday or Friday that is a business day
and that expire on the Friday of the next business
week. If a Thursday or Friday is not a business day,
the series may be opened (or shall expire) on the
first business day immediately prior to that
Thursday or Friday, respectively. STOs are listed
and traded pursuant to the STO Series Program. For
STO Series Program rules regarding non-index
options, see Chapter 1, Section 1(a)(59) and Chapter
IV, Supplementary Material .07 to Section 6. For
STO Series Program rules regarding index options,
see Chapter XIV, Section 2(p) and Chapter XIV,
Section 11(h).
4 See Securities Exchange Act Release No. 73999
(January 6, 2015), 80 FR 1559 (January 12, 2015)
(SR–ISE–2014–52) (order approving).
E:\FR\FM\02FEN1.SGM
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]]>Agencies
[Federal Register Volume 80, Number 21 (Monday, February 2, 2015)]
[Notices]
[Pages 5593-5595]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-01870]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74152; File No. SR-BATS-2015-07]
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rules 2.5(c)(4) and 11.5 To Harmonize With EDGA and EDGX Rules, Its
Membership Requirements Applicable to Clearing Agencies That Clear
Transactions for Members
January 27, 2015.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on January 22, 2015, BATS Exchange, Inc. (the ``Exchange'' or
``BATS'') 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 filed a proposal to amend Rules 2.5(c)(4) and 11.15 to
harmonize its membership requirements applicable to clearing agencies
that clear transactions for Members \5\ of the Exchange with those set
forth under EDGX Exchange, Inc. (``EDGX'') and EDGA Exchange, Inc.
(``EDGA'') rules.\6\
---------------------------------------------------------------------------
\5\ The term ``Member'' is defined as ``any registered broker or
dealer that has been admitted to membership in the Exchange. A
Member will have the status of a ``member'' of the Exchange as that
term is defined in Section 3(a)(3) of the Act. Membership may be
granted to a sole proprietor, partnership, corporation, limited
liability company or other organization which is a registered broker
or dealer pursuant to Section 15 of the Act, and which has been
approved by the Exchange.'' See Exchange Rule 1.5(n).
\6\ See EDGA Rules 2.5(c)(4) and 11.13; EDGX Rules 2.5(c)(4) and
11.13.
---------------------------------------------------------------------------
The text of the proposed rule change is available at the Exchange's
Web site at www.batstrading.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rules 2.5(c)(4) and 11.15 to
harmonize its membership requirements applicable to clearing agencies
that clear transactions for Members with those set forth under EDGX and
EDGA rules.\7\
[[Page 5594]]
Earlier this year, the Exchange and its affiliate, BATS Y-Exchange,
Inc. (``BYX''), received approval to effect a merger (the ``Merger'')
of the Exchange's parent company, BATS Global Markets, Inc., with
Direct Edge Holdings LLC, the indirect parent of EDGX and EDGA
(together with BZX, BYX and EDGX, the ``BGM Affiliated Exchanges'').\8\
In the context of the Merger, the BGM Affiliated Exchanges are working
to align certain rules, retaining only intended differences between the
BGM Affiliated Exchanges. As part of this effort, the proposal set
forth below harmonizes Exchange Rules 2.5 and 11.15 with EDGA and EDGX
Rules 2.5 and 11.13 by no longer requiring that a Qualified Clearing
Agency \9\ be a Member in order to clear other Member's transactions
executed on the Exchange.\10\
---------------------------------------------------------------------------
\7\ See supra note 6.
\8\ See Securities Exchange Act Release No. 71375 (January 23,
2014), 79 FR 4771 (January 29, 2014) (SR-BATS-2013-059; SR-BYX-2013-
039).
\9\ The term ``Qualified Clearing Agency'' is defined as ``a
clearing agency registered with the Commission pursuant to Section
17A of the Act that is deemed qualified by the Exchange.'' See
Exchange Rule 1.5(u).
\10\ The Exchange understands that BYX is to file a proposed
rule change with the Commission to adopt similar changes.
---------------------------------------------------------------------------
In sum, Rule 2.5(a)(4) currently provides that a Member also be a
member of a Qualified Clearing Agency or clear its transactions
executed on the Exchange through another Member that is a member of a
Qualified Clearing Agency. Rule 11.15(a) currently requires a Qualified
Clearing Agency be a Member of the Exchange in order to clear
transactions on behalf of another Member. EDGA and EDGX Rules 2.5(c)(4)
and 11.13(a) do not require that: (i) A Qualified Clearing Agency be a
member in order to clear other member's transactions executed on EDGA
or EDGX; (ii) that a member be a member of a Qualified Clearing Agency;
or (iii) that a member clear its transaction through a member of a
Qualified Clearing Agency. Rather, EDGA and EDGX Rules simply require
that a member clear transactions through a registered clearing agency
using a continuous net settlement system. EDGA and EDGX Rules 11.13(a)
further state that this requirement may be satisfied by direct
participation, use of direct clearing services, or by entering into a
correspondent clearing arrangement with another member that clears
trades through such agency.
As amended, Rules 2.5(a)(4) and 11.15(a) would be substantially
similar to EDGA and EDGX rules 2.5(c)(4) and 11.3(a). Like EDGA and
EDGX Rules 2.5(c)(4), Exchange Rules 2.5(a)(4) would require that a
Member clear transactions through a Qualified Clearing Agency using a
continuous net settlement system. Like EDGA and EDGX Rules 11.13(a),
amended Exchange Rule 11.15(a) would state that this requirement may be
satisfied by direct participation, use of direct clearing services, or
by entering into a correspondent clearing arrangement with another
member that clears trades through such agency. In addition, Exchange
Rule 11.15(a) would no longer require a Qualified Clearing Agency be a
Member in order to clear another Members' transactions executed on the
Exchange.
The Exchange also proposes to add new subparagraph (b) to Rule
11.15 stating that notwithstanding subparagraph (a) of Rule 11.15,
transactions may be settled ``ex-clearing,'' provided that both parties
to the transaction agree. Proposed subparagraph (b) to Rule 11.15 would
be identical to EDGA and EDGX Rules 11.13(b). The Exchange also
proposes to renumber the remaining subparagraphs of Rule 11.13
accordingly.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \11\ and furthers the objectives of
Section 6(b)(5) of the Act,\12\ in that it is designed to promote just
and equitable principles of trade, remove impediments to, and perfect
the mechanism of, a free and open market and a national market system,
and, in general, protect investors and the public interest. The
Exchange believes that the proposed rule change is not designed to
permit unfair discrimination between customers, issuers, brokers or
dealers.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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The proposed rule change is identical to the existing rules of EDGA
and EDGX.\13\ Requiring Qualified Clearing Agencies to be Members of
the Exchange has unreasonably limited the ability of Members to clear
trades through such agencies that are not Members when no such
restriction is contained in the rules of EDGA or EDGX. The proposed
rule change is, therefore, intended to align the Exchange's rules
regarding Members clearing transaction through a Qualified Clearing
Agency with that of EDGA and EDGX as well as BYX \14\ in order to
provide consistent rules across the BGM Affiliated Exchanges.
Consistent rules, in turn, will simplify the membership requirements
for clearing agencies that are also clear transactions for members of
the other BGM Affiliated Exchanges. The proposed rule change would
provide greater harmonization between the rules of the BGM Affiliated
Exchanges of similar purpose, resulting in greater uniformity and less
burdensome and more efficient regulatory compliance. As such, the
proposed rule change would foster cooperation and coordination with
persons engaged in facilitating transactions in securities and would
remove impediments to and perfect the mechanism of a free and open
market and a national market system.
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\13\ See supra note 6.
\14\ See supra note 10.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change would not impose any burden on
competition. The Exchange believes that the proposed rule changes will
not burden intramarket competition because all Members would be subject
to the same requirements with regard to clearing transactions through
non-Member registered clearing agencies. The proposed rule change is
not designed to address any competitive issues but rather is designed
to provide greater harmonization among the Exchange, BYX, EDGA and EDGX
rules of similar purpose, resulting in less burdensome and more
efficient regulatory compliance for common members of the BGM
Affiliated Exchanges.
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 foregoing 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, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6)(iii) thereunder.\16\ The Exchange provided the Commission with
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at least
five business days prior to the date of filing the proposed
[[Page 5595]]
rule change as required by Rule 19b-4(f)(6).\17\
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
\17\ 17 CFR 240.19b-(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily temporarily suspend such rule
change if it appears to the Commission that such action is: (1)
Necessary or appropriate in the public interest; (2) for the protection
of investors; or (3) 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 proposal is
consistent with the Act. Comments may be submitted by any of the
following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File No. SR-BATS-2015-07 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File No. SR-BATS-2015-07. 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 will also be available
for inspection and copying at the principal office of the Exchange.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File No. SR-BATS-2015-07 and
should be submitted on or before February 23, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-01870 Filed 1-30-15; 8:45 am]
BILLING CODE 8011-01-P
