Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 21.1(d)(9), (h) and (i) To Modify the Operation of BATS Post Only Orders on the Exchange's Options Platform, 39816-39818 [2015-16857]
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39816
Federal Register / Vol. 80, No. 132 / Friday, July 10, 2015 / Notices
of the Act 6 and paragraph (f) of Rule
19b–4 7 thereunder. 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 will institute proceedings
to determine whether the proposed rule
change 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:
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 rule-comments@
sec.gov. Please include File Number SR–
C2–2015–017 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–C2–2015–017. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
6 15
7 17
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–
2015–017, and should be submitted on
or before July 31, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Brent J. Fields,
Secretary.
[FR Doc. 2015–16862 Filed 7–9–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75360; File No. SR–BATS–
2015–51]
Self-Regulatory Organizations; BATS
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change to Rule 21.1(d)(9), (h) and
(i) To Modify the Operation of BATS
Post Only Orders on the Exchange’s
Options Platform
July 6, 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 June 30,
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 Rules 21.1(d)(9), (h) and (i) to
modify the operation of BATS Post Only
Orders subject to the Price Adjust
process on the Exchange’s options
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
VerDate Sep<11>2014
21:07 Jul 09, 2015
Jkt 235001
PO 00000
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).
4 17 CFR 240.19b–4(f)(6)(iii).
1 15
Frm 00072
Fmt 4703
Sfmt 4703
platform (‘‘BATS Options’’). The
proposed rule change is based on the
operation of similar order types
currently offered by the Nasdaq Stock
Market LLC (‘‘Nasdaq’’) and Nasdaq
OMX BX, Inc. (‘‘BX’’).5
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 is proposing to amend
Rules 21.1(d)(9), (h) and (i) to modify
the operation of BATS Post Only Orders
that are subject to the Price Adjust
process on BATS Options. The
proposed rule change is based on the
operation of similar order types
currently offered by Nasdaq and BX.6
BATS Post Only Orders are orders
that are to be ranked and executed on
the Exchange pursuant to Rule 21.8
(Order Display and Book Processing) or
cancelled, as appropriate, without
routing away to another trading center.
Currently, a BATS Post Only Order will
not remove liquidity from the BATS
Options Book 7 unless the value of price
improvement associated with such
execution equals or exceeds the sum of
fees charged for such execution and the
value of any rebate that would be
5 See the description of Post-Only Orders under
chapter VI, section 1(e)(11) of the Nasdaq Rules and
chapter VI, section 1(e)(10) of the BX Rules. See
also Securities Exchange Act Release No. 65761
(November 16, 2011), 76 FR 72230 (November 22,
2011) (SR–Nasdaq–2011–152) (Notice of Filing and
Immediate Effectiveness of Proposed Rule Change
to Adopt a ‘‘Post-Only’’ Order Type). See also NYSE
Arca, Inc. (‘‘NYSE Arca’’) Rule 6.62(y) for a
description of PNP Plus orders.
6 See supra note 5.
7 ‘‘BATS Options Book’’ is defined as ‘‘the
electronic book of options orders maintained by the
Trading System.’’ See Exchange Rule 16.1(a)(9).
E:\FR\FM\10JYN1.SGM
10JYN1
mstockstill on DSK4VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 132 / Friday, July 10, 2015 / Notices
provided if the order posted to the
BATS Options Book and subsequently
provided liquidity. Unless otherwise
instructed by the User,8 a BATS Post
Only Order will be subject to the
Display-Price Sliding process set forth
under Rule 21.1(h).
The Exchange proposes to amend the
operation of BATS Post Only Orders
such that they will not remove liquidity
from the BATS Options Book where the
User elects that the order be subject to
the Price Adjust process set forth under
Exchange Rule 21.1(i). Specifically, a
BATS Post Only Order subject to the
Price Adjust process will no longer
remove liquidity from the BATS
Options Book pursuant to Rule
21.1(d)(9) where the value of price
improvement associated with such
execution equals or exceeds the sum of
fees charged for such execution and the
value of any rebate that would be
provided if the order posted to the
BATS Options Book and subsequently
provided liquidity. Under the Price
Adjust process, a BATS Post Only order
that locks or crosses a Protected
Quotation displayed by the Exchange
upon entry will continue to be ranked
and displayed by the System at one
minimum price variation below the
current NBO (for bids) or to one
minimum price variation above the
current NBB (for offers). As a result, the
Exchange proposes to amend: (i) The
description of BATS Post Only Orders
under Rule 21.1(d)(9) to specify that the
price improvement formula described
above would only be applied to BATS
Post Only Orders subject to the DisplayPrice Sliding process; (ii) the
description of the Price Adjust process
under Rule 21.1(i)(4) to no longer state
that a BATS Post Only Order subject to
the Price Adjust process would be
executed as set forth in Rule 21.1(d)(9);
and (iii) Rule 21.1(h) to clarify it is
limited to BATS Post Only Orders
subject to the Display-Price Sliding
process.
The Exchange does not propose to
amend the operation of BATS Post Only
Orders subject to the Display-Price
Sliding process. A BATS Post Only
Order subject to the Display-Price
Sliding process that locks or crosses a
Protected Quotation displayed by the
Exchange upon entry will either remove
liquidity from the BATS Options Book
pursuant to Rule 21.1(d)(9) or be
cancelled. Should the order lock or
cross a Protected Quotation displayed
by an external market upon entry, it will
8 ‘‘User’’ is defined as ‘‘any Options Member or
Sponsored Participant who is authorized to obtain
access to the System pursuant to Rule 11.3
(Access).’’ See Exchange Rule 16.1(a)(63).
VerDate Sep<11>2014
21:07 Jul 09, 2015
Jkt 235001
be subject to the Display-Price Sliding
process described in Rule 21.1(h). A
BATS Post Only Order subject to the
Display-Price Sliding process would
continue to be cancelled where the
NBBO changes such that the order
would be ranked at a price at which it
could remove displayed liquidity from
the BATS Options Book.
The Exchange does, however, propose
to amend the description of the DisplayPrice Sliding process under Rule
21.1(h)(4) to specify that a Partial Post
Only at Limit Order that locks or crosses
a Protected Quotation displayed by the
Exchange upon entry will be executed
subject to the price improvement
formula set forth in Rule 21.1(d)(10) or
cancelled when the order is subject to
display-price sliding process. The
Exchange does not propose to modify
the operation of Partial Post Only at
Limit Orders that are subject to the
Display-Price Sliding Process.
2. Statutory Basis
The Exchange believes that its
proposal 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.9
In particular, the proposal is consistent
with section 6(b)(5) of the Act 10 because
it is designed to encourage displayed
liquidity and offer market participants
greater flexibility to post liquidity on
the BATS Options Book, thereby
promoting just and equitable principles
of trade, fostering cooperation and
coordination with persons engaged in
facilitating transactions in securities,
removing impediments to, and
perfecting the mechanism of, a free and
open market and a national market
system. The Exchange notes that Users
who wish for their BATS Post Only
Orders to post to the BATS Options
Book and forego the opportunity to
remove liquidity upon entry under Rule
21.1(d)(9) would be required to
affirmatively elect that the order be
subject to the Price Adjust process.
Absent such an election, a BATS Post
Only Order would be subject to the
Display-Price Sliding process and
eligible to remove liquidity from the
BATS Options Book pursuant to the
price improvement formula set forth
under Rule 21.1(d)(9). In addition, the
proposed operation of BATS Post Only
Order subject to the Price Adjust
process is based on the operation of
similar order types, called Post-Only
Orders, currently offered by Nasdaq and
PO 00000
BX.11 There are no differences between
the operation of Post-Only Orders
offered by Nasdaq and BX and the
proposed amendments to the operation
of BATS Post Only Orders subject to the
Price Adjust process proposed herein.
Lastly, the Exchange believes the
proposed amendment to Rule 21.1(h)(4)
specifying that it applies to Partial Post
Only at Limit Orders that are subject to
the Display-Price Sliding process also
promotes just and equitable principles
of trade, and perfects the mechanism of
a free and open market and a national
market system because it provides
additional specificity to the rule and
does not modify the operation of Partial
Post Only at Limit Orders that are
subject to the Display-Price Sliding
Process.
(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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. To the
contrary, the proposed rule change is a
competitive change that is based on the
operation of similar order types
currently offered by Nasdaq and BX.12
The proposed rule change would,
therefore, increase competition by
enabling the Exchange to offer order
type functionality that is identical to
that offered by its competitors. For all
the reasons stated above, the Exchange
does not believe that the proposed rule
changes will impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act, and believes the
proposed change will 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. The Exchange
has not received any written comments
from members or other interested
parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has designated this rule
filing as non-controversial under section
19(b)(3)(A) of the Act 13 and paragraph
(f)(6) of Rule 19b–4 thereunder.14 The
11 See
supra note 5.
12 Id.
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
13 15
10 15
Frm 00073
Fmt 4703
14 17
Sfmt 4703
39817
E:\FR\FM\10JYN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4.
10JYN1
39818
Federal Register / Vol. 80, No. 132 / Friday, July 10, 2015 / Notices
proposed rule change effects a change
that (A) does not significantly affect the
protection of investors or the public
interest; (B) does not impose any
significant burden on competition; and
(C) by its terms, does not become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest; provided that the selfregulatory organization has given the
Commission 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
of the proposed rule change, or such
shorter time as designated by the
Commission.
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 proposed rule
change 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 rule-comments@
sec.gov. Please include File Number SR–
BATS–2015–51 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
Number SR–BATS–2015–51. 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
VerDate Sep<11>2014
21:07 Jul 09, 2015
Jkt 235001
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
offices 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–
2015–51, and should be submitted on or
before July 31, 2015.
19b–4 under the Act,3 which renders
the proposal effective upon receipt of
this filing by the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Brent J. Fields,
Secretary.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA 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. FINRA has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
[FR Doc. 2015–16857 Filed 7–9–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75364; File No. SR–FINRA–
2015–024]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend FINRA Rule
7650A Relating to Submission of
Billing Disputes by FINRA/Nasdaq
Trade Reporting Facility Participants
July 6, 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 July 1,
2015, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I and
II below, which Items have been
prepared by FINRA. FINRA has
designated the proposed rule change as
constituting a ‘‘non-controversial’’ rule
change under paragraph (f)(6) of Rule
PO 00000
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
FINRA is proposing to amend FINRA
Rule 7650A (Collection of Fees) to
require FINRA members that are
FINRA/Nasdaq Trade Reporting Facility
(‘‘FINRA/Nasdaq TRF’’) participants to
submit billing disputes within sixty
days of receipt of the invoice to the
FINRA/Nasdaq TRF. The proposed rule
change also would rename Rule 7650A
as ‘‘Collection of Fees and Billing
Policy.’’
The text of the proposed rule change
is available on FINRA’s Web site at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The FINRA/Nasdaq TRF is a facility
of FINRA that is operated by The
NASDAQ OMX Group, Inc. (‘‘NASDAQ
OMX’’). In connection with the
establishment of the FINRA/Nasdaq
TRF, FINRA and NASDAQ OMX
entered into a limited liability company
agreement (the ‘‘LLC Agreement’’).
Under the LLC Agreement, FINRA, the
‘‘SRO Member,’’ has sole regulatory
responsibility for the FINRA/Nasdaq
TRF. NASDAQ OMX, the ‘‘Business
Member,’’ is primarily responsible for
the management of the FINRA/Nasdaq
TRF’s business affairs to the extent
those affairs are not inconsistent with
the regulatory and oversight functions of
FINRA. As such, the Business Member
establishes pricing for use of the FINRA/
1 15
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3 17
E:\FR\FM\10JYN1.SGM
CFR 240.19b–4(f)(6).
10JYN1
]]>Agencies
[Federal Register Volume 80, Number 132 (Friday, July 10, 2015)]
[Notices]
[Pages 39816-39818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16857]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75360; File No. SR-BATS-2015-51]
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change to Rule
21.1(d)(9), (h) and (i) To Modify the Operation of BATS Post Only
Orders on the Exchange's Options Platform
July 6, 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 June 30, 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 21.1(d)(9), (h) and
(i) to modify the operation of BATS Post Only Orders subject to the
Price Adjust process on the Exchange's options platform (``BATS
Options''). The proposed rule change is based on the operation of
similar order types currently offered by the Nasdaq Stock Market LLC
(``Nasdaq'') and Nasdaq OMX BX, Inc. (``BX'').\5\
---------------------------------------------------------------------------
\5\ See the description of Post-Only Orders under chapter VI,
section 1(e)(11) of the Nasdaq Rules and chapter VI, section
1(e)(10) of the BX Rules. See also Securities Exchange Act Release
No. 65761 (November 16, 2011), 76 FR 72230 (November 22, 2011) (SR-
Nasdaq-2011-152) (Notice of Filing and Immediate Effectiveness of
Proposed Rule Change to Adopt a ``Post-Only'' Order Type). See also
NYSE Arca, Inc. (``NYSE Arca'') Rule 6.62(y) for a description of
PNP Plus orders.
---------------------------------------------------------------------------
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 is proposing to amend Rules 21.1(d)(9), (h) and (i) to
modify the operation of BATS Post Only Orders that are subject to the
Price Adjust process on BATS Options. The proposed rule change is based
on the operation of similar order types currently offered by Nasdaq and
BX.\6\
---------------------------------------------------------------------------
\6\ See supra note 5.
---------------------------------------------------------------------------
BATS Post Only Orders are orders that are to be ranked and executed
on the Exchange pursuant to Rule 21.8 (Order Display and Book
Processing) or cancelled, as appropriate, without routing away to
another trading center. Currently, a BATS Post Only Order will not
remove liquidity from the BATS Options Book \7\ unless the value of
price improvement associated with such execution equals or exceeds the
sum of fees charged for such execution and the value of any rebate that
would be
[[Page 39817]]
provided if the order posted to the BATS Options Book and subsequently
provided liquidity. Unless otherwise instructed by the User,\8\ a BATS
Post Only Order will be subject to the Display-Price Sliding process
set forth under Rule 21.1(h).
---------------------------------------------------------------------------
\7\ ``BATS Options Book'' is defined as ``the electronic book of
options orders maintained by the Trading System.'' See Exchange Rule
16.1(a)(9).
\8\ ``User'' is defined as ``any Options Member or Sponsored
Participant who is authorized to obtain access to the System
pursuant to Rule 11.3 (Access).'' See Exchange Rule 16.1(a)(63).
---------------------------------------------------------------------------
The Exchange proposes to amend the operation of BATS Post Only
Orders such that they will not remove liquidity from the BATS Options
Book where the User elects that the order be subject to the Price
Adjust process set forth under Exchange Rule 21.1(i). Specifically, a
BATS Post Only Order subject to the Price Adjust process will no longer
remove liquidity from the BATS Options Book pursuant to Rule 21.1(d)(9)
where the value of price improvement associated with such execution
equals or exceeds the sum of fees charged for such execution and the
value of any rebate that would be provided if the order posted to the
BATS Options Book and subsequently provided liquidity. Under the Price
Adjust process, a BATS Post Only order that locks or crosses a
Protected Quotation displayed by the Exchange upon entry will continue
to be ranked and displayed by the System at one minimum price variation
below the current NBO (for bids) or to one minimum price variation
above the current NBB (for offers). As a result, the Exchange proposes
to amend: (i) The description of BATS Post Only Orders under Rule
21.1(d)(9) to specify that the price improvement formula described
above would only be applied to BATS Post Only Orders subject to the
Display-Price Sliding process; (ii) the description of the Price Adjust
process under Rule 21.1(i)(4) to no longer state that a BATS Post Only
Order subject to the Price Adjust process would be executed as set
forth in Rule 21.1(d)(9); and (iii) Rule 21.1(h) to clarify it is
limited to BATS Post Only Orders subject to the Display-Price Sliding
process.
The Exchange does not propose to amend the operation of BATS Post
Only Orders subject to the Display-Price Sliding process. A BATS Post
Only Order subject to the Display-Price Sliding process that locks or
crosses a Protected Quotation displayed by the Exchange upon entry will
either remove liquidity from the BATS Options Book pursuant to Rule
21.1(d)(9) or be cancelled. Should the order lock or cross a Protected
Quotation displayed by an external market upon entry, it will be
subject to the Display-Price Sliding process described in Rule 21.1(h).
A BATS Post Only Order subject to the Display-Price Sliding process
would continue to be cancelled where the NBBO changes such that the
order would be ranked at a price at which it could remove displayed
liquidity from the BATS Options Book.
The Exchange does, however, propose to amend the description of the
Display-Price Sliding process under Rule 21.1(h)(4) to specify that a
Partial Post Only at Limit Order that locks or crosses a Protected
Quotation displayed by the Exchange upon entry will be executed subject
to the price improvement formula set forth in Rule 21.1(d)(10) or
cancelled when the order is subject to display-price sliding process.
The Exchange does not propose to modify the operation of Partial Post
Only at Limit Orders that are subject to the Display-Price Sliding
Process.
2. Statutory Basis
The Exchange believes that its proposal 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.\9\ In particular, the
proposal is consistent with section 6(b)(5) of the Act \10\ because it
is designed to encourage displayed liquidity and offer market
participants greater flexibility to post liquidity on the BATS Options
Book, thereby promoting just and equitable principles of trade,
fostering cooperation and coordination with persons engaged in
facilitating transactions in securities, removing impediments to, and
perfecting the mechanism of, a free and open market and a national
market system. The Exchange notes that Users who wish for their BATS
Post Only Orders to post to the BATS Options Book and forego the
opportunity to remove liquidity upon entry under Rule 21.1(d)(9) would
be required to affirmatively elect that the order be subject to the
Price Adjust process. Absent such an election, a BATS Post Only Order
would be subject to the Display-Price Sliding process and eligible to
remove liquidity from the BATS Options Book pursuant to the price
improvement formula set forth under Rule 21.1(d)(9). In addition, the
proposed operation of BATS Post Only Order subject to the Price Adjust
process is based on the operation of similar order types, called Post-
Only Orders, currently offered by Nasdaq and BX.\11\ There are no
differences between the operation of Post-Only Orders offered by Nasdaq
and BX and the proposed amendments to the operation of BATS Post Only
Orders subject to the Price Adjust process proposed herein.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
\11\ See supra note 5.
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Lastly, the Exchange believes the proposed amendment to Rule
21.1(h)(4) specifying that it applies to Partial Post Only at Limit
Orders that are subject to the Display-Price Sliding process also
promotes just and equitable principles of trade, and perfects the
mechanism of a free and open market and a national market system
because it provides additional specificity to the rule and does not
modify the operation of Partial Post Only at Limit Orders that are
subject to the Display-Price Sliding Process.
(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 that is not necessary or appropriate
in furtherance of the purposes of the Act. To the contrary, the
proposed rule change is a competitive change that is based on the
operation of similar order types currently offered by Nasdaq and
BX.\12\ The proposed rule change would, therefore, increase competition
by enabling the Exchange to offer order type functionality that is
identical to that offered by its competitors. For all the reasons
stated above, the Exchange does not believe that the proposed rule
changes will impose any burden on competition not necessary or
appropriate in furtherance of the purposes of the Act, and believes the
proposed change will enhance competition.
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\12\ Id.
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(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. The Exchange has not received any written
comments from members or other interested parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has designated this rule filing as non-controversial
under section 19(b)(3)(A) of the Act \13\ and paragraph (f)(6) of Rule
19b-4 thereunder.\14\ The
[[Page 39818]]
proposed rule change effects a change that (A) does not significantly
affect the protection of investors or the public interest; (B) does not
impose any significant burden on competition; and (C) by its terms,
does not become operative for 30 days after the date of the filing, or
such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest; provided that the
self-regulatory organization has given the Commission 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 of the proposed rule change,
or such shorter time as designated by the Commission.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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 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 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-2015-51 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 Number SR-BATS-2015-51. 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 offices 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-2015-51,
and should be submitted on or before July 31, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Brent J. Fields,
Secretary.
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\15\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2015-16857 Filed 7-9-15; 8:45 am]
BILLING CODE 8011-01-P
