Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 8.15 Entitled “Imposition of Fines for Minor Violation(s) of Rules”, 9805-9807 [2015-03664]
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Federal Register / Vol. 80, No. 36 / Tuesday, February 24, 2015 / Notices
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 6 and Rule 19b–4(f)(6)(iii)
thereunder.7
The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest, as it
will allow the obvious error pilot
program to continue uninterrupted
while the industry gains further
experience operating under the Plan to
Address Extraordinary Market
Volatility, and avoid any investor
confusion that could result from a
temporary interruption in the pilot
program. For this reason, the
Commission designates the proposed
rule change to be operative upon filing.8
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:
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
C2–2015–003 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
Paper Comments
[Release No. 34–74293; File No. SR–BATS–
2015–12]
• 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–C2–2015–003. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 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–C2–
2015–003, and should be submitted on
or before March 17, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Brent J. Fields,
Secretary.
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
[FR Doc. 2015–03821 Filed 2–23–15; 8:45 am]
7 17
tkelley on DSK3SPTVN1PROD with NOTICES
6 15
BILLING CODE 8011–01–P
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii). 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.
8 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).
VerDate Sep<11>2014
17:31 Feb 23, 2015
Jkt 235001
9805
Self-Regulatory Organizations; BATS
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Rule 8.15
Entitled ‘‘Imposition of Fines for Minor
Violation(s) of Rules’’
February 18, 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 February
5, 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
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 Rule 8.15 entitled ‘‘Imposition of
Fines for Minor Violation(s) of Rules.’’
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.
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)(6)(iii).
2 17
9 17
PO 00000
CFR 200.30–3(a)(12).
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9806
Federal Register / Vol. 80, No. 36 / Tuesday, February 24, 2015 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
tkelley on DSK3SPTVN1PROD with NOTICES
1. Purpose
The Exchange proposes to amend
Rule 8.15 in order to make it
substantively identical to the
corresponding rules on EDGX Exchange,
Inc. (‘‘EDGX’’) and EDGA Exchange, Inc.
(‘‘EDGA’’), as further described below.
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’’).5 In the
context of the Merger, the BGM
Affiliated Exchanges are working to
align certain system and regulatory
functionality, retaining only intended
differences between the BGM Affiliated
Exchanges. Thus, the proposal set forth
below is intended to amend Rule 8.15
in order to make the rule substantively
identical to corresponding rules on
EDGA and EDGX related to minor
violations of exchange rules in order to
provide a consistent regulatory
approach across each of the BGM
Affiliated Exchanges.
Currently, Rule 8.15(a) provides that,
in lieu of commencing a disciplinary
proceeding as described in Rules 8.1
through 8.13, the Exchange may, subject
to the requirements set forth in this
Rule, impose a fine, not to exceed
$2,500, on any Member, associated
person of a Member, or registered or
non-registered employee of a Member,
for any violation of a Rule of the
Exchange, which violation the Exchange
shall have determined is minor in
nature. The Exchange is proposing to
add language in order to make Rule
8.15(a) and Interpretation and Policy .01
to Rule 8.15 identical to the
corresponding EDGA and EDGX rules.6
Specifically, the Exchange is proposing
that the Exchange may, if no exceptional
circumstances are present, impose a fine
based upon a determination that there
exists a pattern or practice of violative
conduct. As proposed, the Exchange
also may aggregate similar violations
generally if the conduct was
unintentional, there was no injury to
public investors, or the violations
5 See Securities Exchange Act Release No. 71375
(January 23, 2014), 79 FR 4771 (January 29, 2014)
(SR–BATS–2013–059; SR–BYX–2013–039).
6 See EDGX Rule 8.15(a) and Interpretation and
Policy .01 to Rule 8.15 and EDGA Rule 8.15(a) and
Interpretation and Policy .01 to Rule 8.15.
VerDate Sep<11>2014
17:31 Feb 23, 2015
Jkt 235001
resulted from a single systemic problem
or cause that has been corrected.
Currently, under Interpretation and
Policy .01 to Rule 8.15, the Exchange
fines individuals $100, $300, and $500
and Member firms $500, $1,000, and
$2,500 for their first, second, and third
time fined under Rule 8.15 within a
rolling 12-month period, respectively,
for the following violations of Exchange
rules: (a) Rule 4.2 and Interpretation and
Policy thereunder requiring the
submission of responses to Exchange
requests for trading data within a
specified time period; (b) Rule 11.19
requirement to identify short sale orders
as such; and (c) Rule 11.20 requirement
to comply with locked and crossed
market rules. The Exchange is proposing
to add two additional instances to the
fine structure described above. These
additional instances include: (1) Rule
3.5 Advertising Practices; and (2) Rule
12.11 Interpretation and Policy .01 and
Exchange Act Rule 604—Failure to
properly display limit orders.7
The Exchange is also proposing to
make several non-substantive changes to
Interpretation and Policy .01 to Rule
8.15. First, the Exchange is proposing to
change the numbering within the rule to
reflect the additions described above.
Second, the Exchange is proposing to
change the phrase ‘‘limit orders’’ in
paragraph (e) of Interpretation and
Policy .01 to Rule 8.15 to ‘‘quotations.’’
The Exchange believes that this change
is non-substantive because, in this
instance, the terms limit orders and
quotations are interchangeable.
Paragraph (e) is referring to the
obligation of a Market Maker under Rule
11.8 to maintain continuous liquidity of
both buy and sell orders, which are
referred to as quotes or quotations in
Rule 11.8, at certain prices. Based on
Exchange functionality, the only way to
enter priced orders that could meet such
quotation obligations would be through
use of limit orders. As such, the
Exchange believes that the proposed
change is non-substantive, makes the
rule more clear, and more accurately
reflects the language used in Exchange
Rule 11.8. Further, the change would
7 The Exchange notes that these proposed changes
would make the Exchange’s Rule 8.15, with the
exception of current Rule 8.15(a) [sic] and
paragraph (d) [sic] of Interpretation and Policy .01
to Rule 8.15 related to the rules of the Exchange’s
options platform (‘‘BATS Options’’), substantively
identical to the corresponding EDGA and EDGX
rules based on filings SR–EDGA–2015–11 and SR–
EDGX–2015–10. Such filings propose to remove
paragraph (d) of Interpretation and Policy .01 to
both EDGA and EDGX rules 8.15. The Exchange
also notes that BYX intends to file a proposal very
similar to this proposal that will align the rules
related to fines for minor violation of exchange
rules across each of the BGM Affiliated Exchanges.
PO 00000
Frm 00119
Fmt 4703
Sfmt 4703
make the rule text identical to that of
EDGA and EDGX.
2. Statutory Basis
The Exchange believes that the rule
change proposed in this submission is
consistent with the requirements of the
Act and the rules and regulations
thereunder that are applicable to a
national securities exchange, and, in
particular, with the requirements of
Section 6(b) of the Act.8 Specifically,
the proposed change is consistent with
Section 6(b)(5) of the Act,9 because it is
designed to promote just and equitable
principles of trade, to remove
impediments to, and perfect the
mechanism of, a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. As mentioned above, the
proposed rule changes, combined with
the planned filing for BYX,10 would
allow the BGM Affiliated Exchanges to
provide a consistent set of rules as it
relates to the imposition of fines for
minor violations of rules across each of
the exchanges. Consistent rules, in turn,
will simplify the regulatory
requirements for Members of the
Exchange that are also participants on
BYX, EDGA, and/or EDGX. The
proposed rule change would provide
greater harmonization between rules of
similar purpose on the BGM Affiliated
Exchanges, 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.
Specifically, the changes to Rule
8.15(a) and the addition of new
paragraphs (d) and (e) to Interpretation
and Policy .01 of Rule 8.15 will provide
the Exchange with additional ways to
handle related minor violations as well
as providing the Exchange with the
ability to handle other rule violations
which it believes to be minor under
Rule 8.15. The Exchange believes that,
in addition to the benefits to Members
described above, the proposal will
enhance the Exchange’s ability to
efficiently regulate its Members,
meaning that the proposed rule change
is equitable and will promote fairness in
the market place.
Further, the Exchange believes that
the proposal is consistent with Sections
8 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 See supra note 7.
9 15
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Federal Register / Vol. 80, No. 36 / Tuesday, February 24, 2015 / Notices
6(b)(1) and 6(b)(6) of the Act 11 which
require that the rules of an exchange
enforce compliance with, and provide
appropriate discipline for, violations of
the Commission and Exchange rules.
The Exchange also believes that the
proposal is consistent with the public
interest, the protection of investors, or
otherwise in furtherance of the purposes
of the Act because the proposal helps to
strengthen the Exchange’s ability to
carry out its oversight and enforcement
responsibilities as a self-regulatory
organization in cases where full
disciplinary proceedings are unsuitable
in view of the minor nature of a
particular violation.
Finally, the Exchange believes that
the non-substantive changes discussed
above will contribute to the protection
of investors and the public interest by
helping to avoid confusion with respect
to Exchange rules.
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, allowing the Exchange to
implement substantively identical rules
related to the imposition of fines for
minor violations of rules across each of
the BGM Affiliated Exchanges does not
present any competitive issues, but
rather is designed to provide greater
harmonization among 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 and an
enhanced ability of the BGM Affiliated
Exchanges to fairly and efficiently
regulate members, which will further
enhance competition.
tkelley on DSK3SPTVN1PROD with NOTICES
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 12 and paragraph
of Rule 19b–4(f)(6) thereunder.13
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the 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–2015–12 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–2015–12. 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
11 15
VerDate Sep<11>2014
17:31 Feb 23, 2015
Jkt 235001
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Brent J. Fields,
Secretary.
[FR Doc. 2015–03664 Filed 2–23–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74292; File No. SR–Phlx–
2015–14]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
Exchange’s Pricing Schedule Under
Section VIII With Respect to Execution
and Routing of Orders in Securities
Priced at $1 or More per Share
February 18, 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 February
3, 2015, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ 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 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 the
Exchange’s Pricing Schedule under
Section VIII, entitled ‘‘NASDAQ OMX
PSX FEES,’’ with respect to execution
and routing of orders in securities
priced at $1 or more per share.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
nasdaqomxphlx.cchwallstreet.com/, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4.
U.S.C. 78f(b)(1) and 78f(b)(6).
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–
2015–12 and should be submitted on or
before March 17, 2015.
14 17
12 15
PO 00000
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9807
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]]>Agencies
[Federal Register Volume 80, Number 36 (Tuesday, February 24, 2015)]
[Notices]
[Pages 9805-9807]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-03664]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74293; File No. SR-BATS-2015-12]
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rule 8.15 Entitled ``Imposition of Fines for Minor Violation(s) of
Rules''
February 18, 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 February 5, 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 Rule 8.15 entitled
``Imposition of Fines for Minor Violation(s) of Rules.'' 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.
[[Page 9806]]
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 Rule 8.15 in order to make it
substantively identical to the corresponding rules on EDGX Exchange,
Inc. (``EDGX'') and EDGA Exchange, Inc. (``EDGA''), as further
described below. 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'').\5\ In the context of the Merger, the BGM Affiliated
Exchanges are working to align certain system and regulatory
functionality, retaining only intended differences between the BGM
Affiliated Exchanges. Thus, the proposal set forth below is intended to
amend Rule 8.15 in order to make the rule substantively identical to
corresponding rules on EDGA and EDGX related to minor violations of
exchange rules in order to provide a consistent regulatory approach
across each of the BGM Affiliated Exchanges.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 71375 (January 23,
2014), 79 FR 4771 (January 29, 2014) (SR-BATS-2013-059; SR-BYX-2013-
039).
---------------------------------------------------------------------------
Currently, Rule 8.15(a) provides that, in lieu of commencing a
disciplinary proceeding as described in Rules 8.1 through 8.13, the
Exchange may, subject to the requirements set forth in this Rule,
impose a fine, not to exceed $2,500, on any Member, associated person
of a Member, or registered or non-registered employee of a Member, for
any violation of a Rule of the Exchange, which violation the Exchange
shall have determined is minor in nature. The Exchange is proposing to
add language in order to make Rule 8.15(a) and Interpretation and
Policy .01 to Rule 8.15 identical to the corresponding EDGA and EDGX
rules.\6\ Specifically, the Exchange is proposing that the Exchange
may, if no exceptional circumstances are present, impose a fine based
upon a determination that there exists a pattern or practice of
violative conduct. As proposed, the Exchange also may aggregate similar
violations generally if the conduct was unintentional, there was no
injury to public investors, or the violations resulted from a single
systemic problem or cause that has been corrected.
---------------------------------------------------------------------------
\6\ See EDGX Rule 8.15(a) and Interpretation and Policy .01 to
Rule 8.15 and EDGA Rule 8.15(a) and Interpretation and Policy .01 to
Rule 8.15.
---------------------------------------------------------------------------
Currently, under Interpretation and Policy .01 to Rule 8.15, the
Exchange fines individuals $100, $300, and $500 and Member firms $500,
$1,000, and $2,500 for their first, second, and third time fined under
Rule 8.15 within a rolling 12-month period, respectively, for the
following violations of Exchange rules: (a) Rule 4.2 and Interpretation
and Policy thereunder requiring the submission of responses to Exchange
requests for trading data within a specified time period; (b) Rule
11.19 requirement to identify short sale orders as such; and (c) Rule
11.20 requirement to comply with locked and crossed market rules. The
Exchange is proposing to add two additional instances to the fine
structure described above. These additional instances include: (1) Rule
3.5 Advertising Practices; and (2) Rule 12.11 Interpretation and Policy
.01 and Exchange Act Rule 604--Failure to properly display limit
orders.\7\
---------------------------------------------------------------------------
\7\ The Exchange notes that these proposed changes would make
the Exchange's Rule 8.15, with the exception of current Rule 8.15(a)
[sic] and paragraph (d) [sic] of Interpretation and Policy .01 to
Rule 8.15 related to the rules of the Exchange's options platform
(``BATS Options''), substantively identical to the corresponding
EDGA and EDGX rules based on filings SR-EDGA-2015-11 and SR-EDGX-
2015-10. Such filings propose to remove paragraph (d) of
Interpretation and Policy .01 to both EDGA and EDGX rules 8.15. The
Exchange also notes that BYX intends to file a proposal very similar
to this proposal that will align the rules related to fines for
minor violation of exchange rules across each of the BGM Affiliated
Exchanges.
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The Exchange is also proposing to make several non-substantive
changes to Interpretation and Policy .01 to Rule 8.15. First, the
Exchange is proposing to change the numbering within the rule to
reflect the additions described above. Second, the Exchange is
proposing to change the phrase ``limit orders'' in paragraph (e) of
Interpretation and Policy .01 to Rule 8.15 to ``quotations.'' The
Exchange believes that this change is non-substantive because, in this
instance, the terms limit orders and quotations are interchangeable.
Paragraph (e) is referring to the obligation of a Market Maker under
Rule 11.8 to maintain continuous liquidity of both buy and sell orders,
which are referred to as quotes or quotations in Rule 11.8, at certain
prices. Based on Exchange functionality, the only way to enter priced
orders that could meet such quotation obligations would be through use
of limit orders. As such, the Exchange believes that the proposed
change is non-substantive, makes the rule more clear, and more
accurately reflects the language used in Exchange Rule 11.8. Further,
the change would make the rule text identical to that of EDGA and EDGX.
2. Statutory Basis
The Exchange believes that the rule change proposed in this
submission is consistent with the requirements of the Act and the rules
and regulations thereunder that are applicable to a national securities
exchange, and, in particular, with the requirements of Section 6(b) of
the Act.\8\ Specifically, the proposed change is consistent with
Section 6(b)(5) of the Act,\9\ because it is designed to promote just
and equitable principles of trade, to remove impediments to, and
perfect the mechanism of, a free and open market and a national market
system, and, in general, to protect investors and the public interest.
As mentioned above, the proposed rule changes, combined with the
planned filing for BYX,\10\ would allow the BGM Affiliated Exchanges to
provide a consistent set of rules as it relates to the imposition of
fines for minor violations of rules across each of the exchanges.
Consistent rules, in turn, will simplify the regulatory requirements
for Members of the Exchange that are also participants on BYX, EDGA,
and/or EDGX. The proposed rule change would provide greater
harmonization between rules of similar purpose on the BGM Affiliated
Exchanges, 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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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ See supra note 7.
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Specifically, the changes to Rule 8.15(a) and the addition of new
paragraphs (d) and (e) to Interpretation and Policy .01 of Rule 8.15
will provide the Exchange with additional ways to handle related minor
violations as well as providing the Exchange with the ability to handle
other rule violations which it believes to be minor under Rule 8.15.
The Exchange believes that, in addition to the benefits to Members
described above, the proposal will enhance the Exchange's ability to
efficiently regulate its Members, meaning that the proposed rule change
is equitable and will promote fairness in the market place.
Further, the Exchange believes that the proposal is consistent with
Sections
[[Page 9807]]
6(b)(1) and 6(b)(6) of the Act \11\ which require that the rules of an
exchange enforce compliance with, and provide appropriate discipline
for, violations of the Commission and Exchange rules. The Exchange also
believes that the proposal is consistent with the public interest, the
protection of investors, or otherwise in furtherance of the purposes of
the Act because the proposal helps to strengthen the Exchange's ability
to carry out its oversight and enforcement responsibilities as a self-
regulatory organization in cases where full disciplinary proceedings
are unsuitable in view of the minor nature of a particular violation.
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\11\ 15 U.S.C. 78f(b)(1) and 78f(b)(6).
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Finally, the Exchange believes that the non-substantive changes
discussed above will contribute to the protection of investors and the
public interest by helping to avoid confusion with respect to Exchange
rules.
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, allowing the
Exchange to implement substantively identical rules related to the
imposition of fines for minor violations of rules across each of the
BGM Affiliated Exchanges does not present any competitive issues, but
rather is designed to provide greater harmonization among 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 and an enhanced ability of the BGM
Affiliated Exchanges to fairly and efficiently regulate members, which
will further enhance competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the 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 \12\ and paragraph
of Rule 19b-4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the 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-2015-12 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-2015-12. 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-2015-12 and should be
submitted on or before March 17, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-03664 Filed 2-23-15; 8:45 am]
BILLING CODE 8011-01-P
