Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of EDGX Exchange, Inc., 41131-41133 [2015-17171]

Download as PDF Federal Register / Vol. 80, No. 134 / Tuesday, July 14, 2015 / Notices 2015–25, and should be submitted on or before August 4, 2015. the Commission’s Public Reference Room. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.33 Brent J. Fields, Secretary. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change [FR Doc. 2015–17173 Filed 7–13–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–75393; File No. SR–EDGX– 2015–29] Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of EDGX Exchange, Inc. July 8, 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, EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II and III below, which Items have been prepared by the Exchange. The Exchange has designated the proposed rule change as one establishing or changing a member due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. asabaliauskas on DSK5VPTVN1PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend the fee schedule applicable to Members 5 and non-members of the Exchange pursuant to EDGX Rules 15.1(a) and (c). Changes to the fee schedule pursuant to this proposal are effective upon filing. The text of the proposed rule change is available at the Exchange’s Web site at www.batstrading.com, at the principal office of the Exchange, and at 33 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 5 The term ‘‘Member’’ is defined as ‘‘any registered broker or dealer that has been admitted to membership in the Exchange.’’ See Exchange Rule 1.5(n). 1 15 VerDate Sep<11>2014 19:09 Jul 13, 2015 Jkt 235001 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 its Fee Schedule to: (i) Modify its fees for physical connectivity; and (ii) delete the MidPoint Match Volume Tier under footnote 3. Physical Connectivity A physical port is utilized by a Member or non-Member to connect to the Exchange at the data centers where the Exchange’s servers are located. The Exchange currently maintains a presence in two third-party data centers: (i) The primary data center where the Exchange’s business is primarily conducted on a daily basis, and (ii) a secondary data center, which is predominantly maintained for business continuity purposes. The Exchange currently assesses the following physical connectivity fees for Members and non-Members on a monthly basis: $500 per physical port that connects to the System 6 via 1 gigabyte copper circuit; $1,000 per physical port that connects to the System via 1 gigabyte fiber circuit; and $2,000 per physical port that connects to the System via 10 gigabyte fiber circuit. The Exchange now proposes to amend its physical connectivity fees to align the Exchange’s fees with its affiliates.7 6 The term ‘‘System’’ is defined as ‘‘the electronic communications and trading facility designated by the Board through which securities orders of Users are consolidated for ranking, execution and, when applicable, routing away.’’ See Exchange Rule 1.5(cc). 7 The Exchange’s affiliates are EDGA Exchange, Inc. (‘‘EDGA’’), BATS Y-Exchange, Inc. (‘‘BYX’’) and BATS Exchange, Inc. (‘‘BZX’’, together with the Exchange, EDGA and BYX, the ‘‘BATS Exchanges’’). The Exchange notes that each of its affiliates will also file proposed rule changes with Commission to PO 00000 Frm 00141 Fmt 4703 Sfmt 4703 41131 First, the Exchange proposes to amend its Fee Schedule to no longer distinguish between fiber and copper circuits. Therefore, it proposes to delete the charge of $500 per month per physical port that connects to the System via 1 gigabyte copper circuit and to assess a monthly fee of $2,000 per physical port that connects to the System via 1 gigabyte circuit regardless of the type of connection. Second, the Exchange proposes to increase the fee per physical port that connects to the System via 10 gigabyte circuit from $2,000 per month to $4,000 per month. The Exchange also proposes to replace the reference to ‘‘fiber’’ with ‘‘physical port’’ within the description of the 1 gigabyte and 10 gigabyte physical connectivity fees as it proposes to no longer distinguish between fiber and copper circuits within its Fee Schedule. Lastly, to further align its physical connectivity fees with its affiliates, the Exchange proposes to pass through in full any hardware costs or connectivity fees incurred that are directly related to completing a cross-connect where the expense to the Exchange billed by a third party exceeds $1,000.8 The Exchange proposes to pass through the expense as an alternative to the flat installation fees charged by the Exchange’s primary competitors. The Exchange does not anticipate that passing through these expenses will affect many of the Exchange’s constituents, because the majority of cross-connect completions cost less than $1,000. For this reason, the Exchange proposes to pass-through the charges associated with cross-connect completions that cost more than $1,000 rather than to charge an installation fee for all completions regardless of their cost. MidPoint Match Volume Tier The Exchange proposes to delete the MidPoint Match Volume Tier under footnote 3 of its Fee Schedule. Under fee code MM, a Member is currently charged a fee of $0.00120 per share for orders that add liquidity at midpoint of NBBO using: (1) A MidPoint Match 9 order; (2) an order with a Hide Not Slide 10 instruction; or (3) an order with a Non-Displayed 11 instruction. However, under the MidPoint Match Volume Tier, a Member would pay no adopt similar physical connectivity fees to be effective July 1, 2015. 8 See BZX fee schedule available at https:// batstrading.com/support/fee_schedule/bzx/a and the BYX fee schedule available at https:// batstrading.com/support/fee_schedule/byx/. 9 See Exchange Rule 11.8(d). 10 See Exchange Rule 11.6(l)(1)(B). 11 See Exchange Rule 11.6(e)(2). E:\FR\FM\14JYN1.SGM 14JYN1 41132 Federal Register / Vol. 80, No. 134 / Tuesday, July 14, 2015 / Notices fee for its orders that yielded fee code MM where that Member added or removed a combined ADV 12 of at least 2,500,000 shares yielding fee codes AA, AM, MM, or MT. Currently, no Member satisfies the tier’s criteria. Therefore, the Exchange proposes to delete the MidPoint Match Volume Tier. The Exchange also notes that the MidPoint Match Volume Tier would no longer be necessary as of July 6, 2015. The Exchange intends to file with the Commission a separate proposal to amend it Fee Schedule for July 6, 2015 effectiveness to, among other things: (i) Delete fee codes AA, AM, and MT; and (ii) amend fee code MM to (a) only apply to orders that add liquidity at the midpoint of the NBBO using MidPoint Peg orders; (b) delete references to MidPoint Match orders, orders utilizing the Hide Not Slide instruction, and orders with a Non-Displayed instruction. These changes are a result of proposed rule change to be filed with the Commission to align certain Exchange functionality with BZX.13 Therefore, removing the MidPoint Match Volume Tier as of July 1, 2015 would avoid Members confusion and prevent them from attempting to achieve the tier’s criteria as the functionality necessary to achieve the tier may be discontinued before the end of July 2015. Lastly, as a result of the above, the Exchange also proposes to remove a reference to footnote 3 from fee code MM under the Fee Codes and Associated Fee table within its Fee Schedule. Implementation Date The Exchange proposes to implement these amendments to its Fee Schedule on July 1, 2015. asabaliauskas on DSK5VPTVN1PROD with NOTICES 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,14 in general, and furthers the objectives of Section 6(b)(4),15 in particular, as it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its Members and other persons using its facilities. The Exchange also notes that it operates in a highly-competitive market in which 12 ‘‘ADV’’ is defined in the Exchange Fee Schedule available at https://batstrading.com/ support/fee_schedule/edgx/. 13 A description of the changes proposed in this filing may be found in BATS EDGX Exchange Modifications, Effective July 6, 2015, available at https://cdn.batstrading.com/resources/release_ notes/2015/BATS–EDGX-Exchange-ModificationsEffective-July-6-2015.pdf. 14 15 U.S.C. 78f. 15 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 19:09 Jul 13, 2015 Jkt 235001 market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive. The proposed rule change reflects a competitive pricing structure designed to incent market participants to direct their order flow to the Exchange. The Exchange believes that the proposed rates are equitable and non-discriminatory in that they apply uniformly to all Members. The Exchange believes the fees and credits remain competitive with those charged by other venues and therefore continue to be reasonable and equitably allocated to Members. Physical Connectivity The Exchange believes that the proposed physical connectivity fees represent an equitable allocation of reasonable dues, fees, and other charges as its fees for physical connectivity are reasonably constrained by competitive alternatives. If a particular exchange charges excessive fees for connectivity, affected Members and non-Members may opt to terminate their connectivity arrangements with that exchange, and adopt a possible range of alternative strategies, including routing to the applicable exchange through another participant or market center or taking that exchange’s data indirectly. Accordingly, if the Exchange charges excessive fees, it would stand to lose not only connectivity revenues but also revenues associated with the execution of orders routed to it, and, to the extent applicable, market data revenues. The Exchange believes that this competitive dynamic imposes powerful restraints on the ability of any exchange to charge unreasonable fees for connectivity. Furthermore, the proposed rule change is also an equitable allocation of reasonable dues, fees, and other charges as the Exchange believes that the increased fees obtained will enable it to cover its increased infrastructure costs associated with establishing physical ports to connect to the Exchange’s Systems. The additional revenue from the increased fees will also enable the Exchange to continue to maintain and improve its market technology and services. The Exchange believes that the proposed fees for 1 gigabyte circuit of $2,000 per month and for 10 gigabyte circuit of $4,000 per month are reasonable in that they are less than analogous fees charged by the Nasdaq Stock Market LLC (‘‘Nasdaq’’), which are $2,500 per month for 1 gigabyte connectivity and range from $10,000– $15,000 per month for 10 gigabyte circuits.16 In addition, the Exchange PO 00000 16 See Nasdaq Rule 7034(b). Frm 00142 Fmt 4703 Sfmt 4703 proposed physical connectivity fees are designed to align the Exchange’s fees with its affiliates.17 The Exchange also believes that passing through the cross-connect related expenses in excess of $1,000 as an alternative to the flat installation fees is equitable and reasonable. The proposed pass through would be in lieu of the flat installation fees charged by the Exchange’s primary competitors. The Exchange does not anticipate that passing through these expenses will affect many of the Exchange’s constituents, because the majority of cross-connect completions cost less than $1,000. Finally, the Exchange believes that the proposed rates are equitable and non-discriminatory in that they apply uniformly to all Members and nonMembers. Members and non-Members will continue to choose whether they want more than one physical port and choose the method of connectivity based on their specific needs. All Exchange Members that voluntarily select various service options will be charged the same amount for the same services. As is true of all physical connectivity, all Members and nonMembers have the option to select any connectivity option, and there is no differentiation with regard to the fees charged for the service. MidPoint Match Volume Tier The Exchange believes that the proposal to delete the MidPoint Match Volume Tier represents an equitable allocation of reasonable dues, fees, and other charges as it would avoid confusion by removing a tier from its Fee Schedule for which no Member currently qualifies. It is also reasonable as it would prevent a Member from attempting to achieve the tier’s criteria as the functionality necessary to achieve the tier is to be discontinued in the near future. Furthermore, removing the MidPoint Match Volume Tier as of July 1, 2015 would prevent Members attempting to achieve the tier’s criteria when they will be unable to do so because the functionality necessary to achieve the tier will be discontinued before the end of July 2015, thereby avoiding Member or investor confusion. Lastly, the Exchange believes that removal of the MidPoint Match Volume Tier is equitable and non-discriminatory in that they apply uniformly to all Members. 17 See E:\FR\FM\14JYN1.SGM supra notes 7 and 8. 14JYN1 Federal Register / Vol. 80, No. 134 / Tuesday, July 14, 2015 / Notices (B) Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. Physical Connectivity As discussed above, the Exchange believes that fees for connectivity are constrained by the robust competition for order flow among exchanges and non-exchange markets. Further, excessive fees for connectivity, including port fee access, would serve to impair an exchange’s ability to compete for order flow rather than burdening competition. The proposal to increase the fees for physical connectivity would bring the fees charged by the Exchange closer to similar fees charged for physical connectivity by other exchanges.18 In addition, the proposal to pass through cross-connect installation related expenses serves as an alternative to the flat installation fees charged by the Exchange’s primary competitors. Lastly, the proposed rule change does not impose any burden on intramarket competition as the fees are uniform for all Members and non-Members. The Exchange notes that Members and nonMembers also have the ability to obtain access to these services without the need for an independent physical port connection, such as through alternative means of financial extranets and service bureaus that act as a conduit for orders entered by Members and non-Members. asabaliauskas on DSK5VPTVN1PROD with NOTICES MidPoint Match Volume Tier The Exchange does not believe that its proposal to delete the MidPoint Match Tier will impose any burden on competition. As stated above, no Member currently satisfies the tier’s criteria and the Exchange is proposing to remove it to avoid investor confusion as the functionality necessary to achieve the tier is to be discontinued before the end of July 2015. Therefore, the Exchange believes deleting the MidPoint Match Tier will have no impact on competition. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from Members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 19 and paragraph (f) of Rule 19b–4 thereunder.20 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 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– EDGX–2015–29 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–EDGX–2015–29. 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 will also be available for 18 See VerDate Sep<11>2014 19:09 Jul 13, 2015 Jkt 235001 PO 00000 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Brent J. Fields, Secretary. [FR Doc. 2015–17171 Filed 7–13–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–75389; File No. SRNASDAQ–2015–071] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to the Designated Liquidity Provider Program Under Rule 7018(i) July 8, 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, 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, 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 Designated Liquidity Provider (‘‘DLP’’) program under Rule 7018(i). The text of the proposed rule change is available on the Exchange’s Web site at https://nasdaq.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). 20 17 CFR 240.19b–4(f). supra note 16. 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–EDGX– 2015–29 and should be submitted on or before August 4, 2015. 21 17 19 15 Frm 00143 Fmt 4703 1 15 Sfmt 4703 41133 E:\FR\FM\14JYN1.SGM 14JYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 80, Number 134 (Tuesday, July 14, 2015)]
[Notices]
[Pages 41131-41133]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-17171]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75393; File No. SR-EDGX-2015-29]

Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Related to
Fees for Use of EDGX Exchange, Inc.

July 8, 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, EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the Exchange. The
Exchange has designated the proposed rule change as one establishing or
changing a member due, fee, or other charge imposed by the Exchange
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange filed a proposal to amend the fee schedule applicable
to Members \5\ and non-members of the Exchange pursuant to EDGX Rules
15.1(a) and (c). Changes to the fee schedule pursuant to this proposal
are effective upon filing.
---------------------------------------------------------------------------

\5\ The term ``Member'' is defined as ``any registered broker or
dealer that has been admitted to membership in the Exchange.'' See
Exchange Rule 1.5(n).
---------------------------------------------------------------------------

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 its Fee Schedule to: (i) Modify its
fees for physical connectivity; and (ii) delete the MidPoint Match
Volume Tier under footnote 3.
Physical Connectivity
A physical port is utilized by a Member or non-Member to connect to
the Exchange at the data centers where the Exchange's servers are
located. The Exchange currently maintains a presence in two third-party
data centers: (i) The primary data center where the Exchange's business
is primarily conducted on a daily basis, and (ii) a secondary data
center, which is predominantly maintained for business continuity
purposes. The Exchange currently assesses the following physical
connectivity fees for Members and non-Members on a monthly basis: $500
per physical port that connects to the System \6\ via 1 gigabyte copper
circuit; $1,000 per physical port that connects to the System via 1
gigabyte fiber circuit; and $2,000 per physical port that connects to
the System via 10 gigabyte fiber circuit.
---------------------------------------------------------------------------

\6\ The term ``System'' is defined as ``the electronic
communications and trading facility designated by the Board through
which securities orders of Users are consolidated for ranking,
execution and, when applicable, routing away.'' See Exchange Rule
1.5(cc).
---------------------------------------------------------------------------

The Exchange now proposes to amend its physical connectivity fees
to align the Exchange's fees with its affiliates.\7\ First, the
Exchange proposes to amend its Fee Schedule to no longer distinguish
between fiber and copper circuits. Therefore, it proposes to delete the
charge of $500 per month per physical port that connects to the System
via 1 gigabyte copper circuit and to assess a monthly fee of $2,000 per
physical port that connects to the System via 1 gigabyte circuit
regardless of the type of connection. Second, the Exchange proposes to
increase the fee per physical port that connects to the System via 10
gigabyte circuit from $2,000 per month to $4,000 per month. The
Exchange also proposes to replace the reference to ``fiber'' with
``physical port'' within the description of the 1 gigabyte and 10
gigabyte physical connectivity fees as it proposes to no longer
distinguish between fiber and copper circuits within its Fee Schedule.
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\7\ The Exchange's affiliates are EDGA Exchange, Inc.
(``EDGA''), BATS Y-Exchange, Inc. (``BYX'') and BATS Exchange, Inc.
(``BZX'', together with the Exchange, EDGA and BYX, the ``BATS
Exchanges''). The Exchange notes that each of its affiliates will
also file proposed rule changes with Commission to adopt similar
physical connectivity fees to be effective July 1, 2015.
---------------------------------------------------------------------------

Lastly, to further align its physical connectivity fees with its
affiliates, the Exchange proposes to pass through in full any hardware
costs or connectivity fees incurred that are directly related to
completing a cross-connect where the expense to the Exchange billed by
a third party exceeds $1,000.\8\ The Exchange proposes to pass through
the expense as an alternative to the flat installation fees charged by
the Exchange's primary competitors. The Exchange does not anticipate
that passing through these expenses will affect many of the Exchange's
constituents, because the majority of cross-connect completions cost
less than $1,000. For this reason, the Exchange proposes to pass-
through the charges associated with cross-connect completions that cost
more than $1,000 rather than to charge an installation fee for all
completions regardless of their cost.
---------------------------------------------------------------------------

\8\ See BZX fee schedule available at https://batstrading.com/support/fee_schedule/bzx/ and the BYX fee schedule available at
https://batstrading.com/support/fee_schedule/byx/.
---------------------------------------------------------------------------

MidPoint Match Volume Tier
The Exchange proposes to delete the MidPoint Match Volume Tier
under footnote 3 of its Fee Schedule. Under fee code MM, a Member is
currently charged a fee of $0.00120 per share for orders that add
liquidity at midpoint of NBBO using: (1) A MidPoint Match \9\ order;
(2) an order with a Hide Not Slide \10\ instruction; or (3) an order
with a Non-Displayed \11\ instruction. However, under the MidPoint
Match Volume Tier, a Member would pay no

[[Page 41132]]

fee for its orders that yielded fee code MM where that Member added or
removed a combined ADV \12\ of at least 2,500,000 shares yielding fee
codes AA, AM, MM, or MT. Currently, no Member satisfies the tier's
criteria. Therefore, the Exchange proposes to delete the MidPoint Match
Volume Tier.
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\9\ See Exchange Rule 11.8(d).
\10\ See Exchange Rule 11.6(l)(1)(B).
\11\ See Exchange Rule 11.6(e)(2).
\12\ ``ADV'' is defined in the Exchange Fee Schedule available
at https://batstrading.com/support/fee_schedule/edgx/.
---------------------------------------------------------------------------

The Exchange also notes that the MidPoint Match Volume Tier would
no longer be necessary as of July 6, 2015. The Exchange intends to file
with the Commission a separate proposal to amend it Fee Schedule for
July 6, 2015 effectiveness to, among other things: (i) Delete fee codes
AA, AM, and MT; and (ii) amend fee code MM to (a) only apply to orders
that add liquidity at the midpoint of the NBBO using MidPoint Peg
orders; (b) delete references to MidPoint Match orders, orders
utilizing the Hide Not Slide instruction, and orders with a Non-
Displayed instruction. These changes are a result of proposed rule
change to be filed with the Commission to align certain Exchange
functionality with BZX.\13\ Therefore, removing the MidPoint Match
Volume Tier as of July 1, 2015 would avoid Members confusion and
prevent them from attempting to achieve the tier's criteria as the
functionality necessary to achieve the tier may be discontinued before
the end of July 2015.
---------------------------------------------------------------------------

\13\ A description of the changes proposed in this filing may be
found in BATS EDGX Exchange Modifications, Effective July 6, 2015,
available at https://cdn.batstrading.com/resources/release_notes/2015/BATS-EDGX-Exchange-Modifications-Effective-July-6-2015.pdf.
---------------------------------------------------------------------------

Lastly, as a result of the above, the Exchange also proposes to
remove a reference to footnote 3 from fee code MM under the Fee Codes
and Associated Fee table within its Fee Schedule.
Implementation Date
The Exchange proposes to implement these amendments to its Fee
Schedule on July 1, 2015.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\14\ in general, and
furthers the objectives of Section 6(b)(4),\15\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its Members and other persons using its
facilities. The Exchange also notes that it operates in a highly-
competitive market in which market participants can readily direct
order flow to competing venues if they deem fee levels at a particular
venue to be excessive. The proposed rule change reflects a competitive
pricing structure designed to incent market participants to direct
their order flow to the Exchange. The Exchange believes that the
proposed rates are equitable and non-discriminatory in that they apply
uniformly to all Members. The Exchange believes the fees and credits
remain competitive with those charged by other venues and therefore
continue to be reasonable and equitably allocated to Members.
---------------------------------------------------------------------------

\14\ 15 U.S.C. 78f.
\15\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

Physical Connectivity
The Exchange believes that the proposed physical connectivity fees
represent an equitable allocation of reasonable dues, fees, and other
charges as its fees for physical connectivity are reasonably
constrained by competitive alternatives. If a particular exchange
charges excessive fees for connectivity, affected Members and non-
Members may opt to terminate their connectivity arrangements with that
exchange, and adopt a possible range of alternative strategies,
including routing to the applicable exchange through another
participant or market center or taking that exchange's data indirectly.
Accordingly, if the Exchange charges excessive fees, it would stand to
lose not only connectivity revenues but also revenues associated with
the execution of orders routed to it, and, to the extent applicable,
market data revenues. The Exchange believes that this competitive
dynamic imposes powerful restraints on the ability of any exchange to
charge unreasonable fees for connectivity.
Furthermore, the proposed rule change is also an equitable
allocation of reasonable dues, fees, and other charges as the Exchange
believes that the increased fees obtained will enable it to cover its
increased infrastructure costs associated with establishing physical
ports to connect to the Exchange's Systems. The additional revenue from
the increased fees will also enable the Exchange to continue to
maintain and improve its market technology and services. The Exchange
believes that the proposed fees for 1 gigabyte circuit of $2,000 per
month and for 10 gigabyte circuit of $4,000 per month are reasonable in
that they are less than analogous fees charged by the Nasdaq Stock
Market LLC (``Nasdaq''), which are $2,500 per month for 1 gigabyte
connectivity and range from $10,000-$15,000 per month for 10 gigabyte
circuits.\16\ In addition, the Exchange proposed physical connectivity
fees are designed to align the Exchange's fees with its affiliates.\17\
---------------------------------------------------------------------------

\16\ See Nasdaq Rule 7034(b).
\17\ See supra notes 7 and 8.
---------------------------------------------------------------------------

The Exchange also believes that passing through the cross-connect
related expenses in excess of $1,000 as an alternative to the flat
installation fees is equitable and reasonable. The proposed pass
through would be in lieu of the flat installation fees charged by the
Exchange's primary competitors. The Exchange does not anticipate that
passing through these expenses will affect many of the Exchange's
constituents, because the majority of cross-connect completions cost
less than $1,000.
Finally, the Exchange believes that the proposed rates are
equitable and non-discriminatory in that they apply uniformly to all
Members and non-Members. Members and non-Members will continue to
choose whether they want more than one physical port and choose the
method of connectivity based on their specific needs. All Exchange
Members that voluntarily select various service options will be charged
the same amount for the same services. As is true of all physical
connectivity, all Members and non-Members have the option to select any
connectivity option, and there is no differentiation with regard to the
fees charged for the service.
MidPoint Match Volume Tier
The Exchange believes that the proposal to delete the MidPoint
Match Volume Tier represents an equitable allocation of reasonable
dues, fees, and other charges as it would avoid confusion by removing a
tier from its Fee Schedule for which no Member currently qualifies. It
is also reasonable as it would prevent a Member from attempting to
achieve the tier's criteria as the functionality necessary to achieve
the tier is to be discontinued in the near future. Furthermore,
removing the MidPoint Match Volume Tier as of July 1, 2015 would
prevent Members attempting to achieve the tier's criteria when they
will be unable to do so because the functionality necessary to achieve
the tier will be discontinued before the end of July 2015, thereby
avoiding Member or investor confusion. Lastly, the Exchange believes
that removal of the MidPoint Match Volume Tier is equitable and non-
discriminatory in that they apply uniformly to all Members.

[[Page 41133]]

(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.
Physical Connectivity
As discussed above, the Exchange believes that fees for
connectivity are constrained by the robust competition for order flow
among exchanges and non-exchange markets. Further, excessive fees for
connectivity, including port fee access, would serve to impair an
exchange's ability to compete for order flow rather than burdening
competition. The proposal to increase the fees for physical
connectivity would bring the fees charged by the Exchange closer to
similar fees charged for physical connectivity by other exchanges.\18\
In addition, the proposal to pass through cross-connect installation
related expenses serves as an alternative to the flat installation fees
charged by the Exchange's primary competitors.
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\18\ See supra note 16.
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Lastly, the proposed rule change does not impose any burden on
intramarket competition as the fees are uniform for all Members and
non-Members. The Exchange notes that Members and non-Members also have
the ability to obtain access to these services without the need for an
independent physical port connection, such as through alternative means
of financial extranets and service bureaus that act as a conduit for
orders entered by Members and non-Members.
MidPoint Match Volume Tier
The Exchange does not believe that its proposal to delete the
MidPoint Match Tier will impose any burden on competition. As stated
above, no Member currently satisfies the tier's criteria and the
Exchange is proposing to remove it to avoid investor confusion as the
functionality necessary to achieve the tier is to be discontinued
before the end of July 2015. Therefore, the Exchange believes deleting
the MidPoint Match Tier will have no impact on competition.

(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others

The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from Members or other interested
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \19\ and paragraph (f) of Rule 19b-4
thereunder.\20\ At any time within 60 days of the filing of the
proposed rule change, the Commission summarily may temporarily suspend
such rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act.
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\19\ 15 U.S.C. 78s(b)(3)(A).
\20\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-EDGX-2015-29 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-EDGX-2015-29. 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 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 Number SR-EDGX-2015-29 and should be
submitted on or before August 4, 2015.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-17171 Filed 7-13-15; 8:45 am]
BILLING CODE 8011-01-P

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