Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of Filing of Proposed Rule Change To Amend Rules 1.5(r) and 11.1 and Adopt New Rule 11.1(a)(1), 54631-54634 [2015-22755]

Download as PDF Federal Register / Vol. 80, No. 175 / Thursday, September 10, 2015 / Notices a loss of investor confidence in the integrity of our capital markets. All information is provided to the public for review. The information required is filed on occasion and is mandatory. We estimate that approximately 13,000 issuers make Regulation FD disclosures approximately five times a year for a total of 58,000 submissions annually, not including an estimated 7,000 issuers who file Form 8–K to comply with Regulation FD. We estimate that it takes approximately 5 hours per response (58,000 responses × 5 hours) for a total burden of 290,000 hours annually. In addition, we estimate that 25% of the 5 hours (1.25 hours) is prepared by the filer for an annual reporting burden of 72,500 hours (1.25 hours per response × 58,000 responses). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. The public may view the background documentation for this information collection at the following Web site, www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Shagufta_ Ahmed@omb.eop.gov; and (ii) Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE., Washington, DC 20549 or send an email to: PRA_Mailbox@ sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: September 3, 2015. Robert W. Errett, Deputy Secretary. [FR Doc. 2015–22753 Filed 9–9–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–75831; File No. SR–BYX– 2015–38] ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 1, 2015, BATS Y-Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BYX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend the definition of Pre-Opening Session under Rule 1.5(r) to state that the Pre-Opening Session will start at 7:00 a.m. rather than 8:00 a.m. Eastern Time and Rule 11.1(a) to account for the Pre-Opening Session starting at 7:00 a.m. Eastern Time. The Exchange also proposes to adopt new Rule 11.1(a)(1) to define Effective Start Time, which would be an order instruction enabling Members 3 [sic] indicate a time upon which their order may become eligible for execution. 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 The term ‘‘Member’’ is defined as ‘‘any registered broker or dealer that has been admitted to membership in the Exchange. A Member will have the status of a ‘‘member’’ of the Exchange as that term is defined in Section 3(a)(3) of the Act. Membership may be granted to a sole proprietor, partnership, corporation, limited liability company or other organization which is a registered broker or dealer pursuant to Section 15 of the Act, and which has been approved by the Exchange.’’ See Exchange Rule 1.5(n). mstockstill on DSK4VPTVN1PROD with NOTICES 2 17 Self-Regulatory Organizations; BATS Y–Exchange, Inc.; Notice of Filing of Proposed Rule Change To Amend Rules 1.5(r) and 11.1 and Adopt New Rule 11.1(a)(1) September 3, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the VerDate Sep<11>2014 17:28 Sep 09, 2015 Jkt 235001 PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 54631 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 the definition of Pre-Opening Session under Rule 1.5(r) to state that the Pre-Opening Session will start at 7:00 a.m. rather than 8:00 a.m. Eastern Time and Rule 11.1(a) to account for the Pre-Opening Session starting at 7:00 a.m. Eastern Time. The Exchange also proposes to adopt new Rule 11.1(a)(1) to define Effective Start Time, which would be an order instruction enabling Members indicate a time upon which their order may become eligible for execution. Pre-Opening Session 7:00 a.m. Start The Exchange trading day is currently divided into two sessions: (i) The PreOpening Session which starts at 8:00 a.m. and ends at 9:30 a.m. Eastern Time; and (ii) the Regular Trading Hours which runs from 9:30 a.m. to 4:00 p.m. Eastern Time. The Exchange proposes to amend the definition of ‘‘Pre-Opening Session’’ under Rule 1.5(r) to state that the Pre-Opening Session will start at 7:00 a.m. rather than 8:00 a.m. Eastern Time.4 The Exchange also proposes to amend Rule 11.1(a) to account for the PreOpening Session starting at 7:00 a.m. Eastern Time. Other than the proposal to change the start of the Pre-Opening Session from 8:00 a.m. to 7:00 a.m. Eastern Time discussed above, the Exchange does not propose to amend the substance or operation of Rule 11.1(a). As amended, orders entered between 6:00 a.m. and 7:00 a.m. Eastern Time, rather than 6:00 a.m. and 8:00 a.m. Eastern Time, would not eligible for execution until the start of the PreOpening Session or Regular Trading Hours,5 depending on the Time-in-Force 4 The Exchange notes that NYSE Arca, Inc. (‘‘NYSE Arca’’) operates an Opening Session that starts at 4:00 a.m. Eastern Time (1:00 a.m. Pacific Time) and ends at 9:30 a.m. Eastern Time (6:30 a.m. Pacific Time). See NYSE Arca Rule 7.34(a)(1). The Nasdaq Stock Market LLC (‘‘Nasdaq’’) operates a pre-market session that also opens at 4:00 a.m. and ends at 9:30 a.m. Eastern Time. See Nasdaq Rule 4701(g). See also Securities Exchange Act Release No. 69151 (March 15, 2013), 78 FR 17464 (March 21, 2013) (SR–Nasdaq–2013–033) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Extend the Pre-Market Hours of the Exchange to 4:00 a.m. EST). 5 ‘‘Regular Trading Hours’’ is defined as ‘‘the time between 9:30 a.m. and 4:00 p.m. Eastern Time.’’ See Exchange Rule 1.5(w). E:\FR\FM\10SEN1.SGM 10SEN1 54632 Federal Register / Vol. 80, No. 175 / Thursday, September 10, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES (‘‘TIF’’) 6 selected by the User.7 Rule 11.1(a) will also be amended to state that the Exchange will not accept the following orders prior to 7:00 a.m. Eastern Time, rather than 8:00 a.m.: BATS Post Only Orders,8 Partial Post Only at Limit Orders,9 Intermarket Sweep Orders (‘‘ISOs’’),10 BATS Market Orders 11 with a TIF other than Regular Hours Only,12 Minimum Quantity Orders 13 that also include a TIF of Regular Hours Only, and all orders with a TIF instruction of Immediate-orCancel (‘‘IOC’’) 14 or Fill-or-Kill (‘‘FOK’’).15 At the commencement of the Pre-Opening Session, orders entered between 6:00 a.m. and 7:00 a.m. Eastern Time, rather than 6:00 a.m. and 8:00 a.m. Eastern Time, will be handled in time sequence, beginning with the order with the oldest time stamp, and will be placed on the BATS Book,16 routed, cancelled, or executed in accordance with the terms of the order. Operations. From the Members’ operational perspective, the Exchange’s goal is to permit trading for those that choose to trade, without imposing burdens on those that do not. Thus, for example, the Exchange will not require any Member to participate in the extended session, including not requiring registered market makers to make two-sided markets between 7:00 a.m. and 8:00 a.m. The Exchange will minimize Members’ preparation efforts to the greatest extent possible by allowing Members to trade beginning at 7:00 a.m. with the same equipment, connectivity, order types, and data feeds they currently use from 8:00 a.m. onwards. Opening Process. The Exchange will offer no opening process at 7:00 a.m., just as it offers no opening process at 8:00 a.m. today. Instead, at 7:00 a.m., the System will ‘‘wake up’’ by loading in price/time priority all open trading interest entered after 6:00 a.m. Also at 7:00 a.m., the Exchange will open the execution system and accept new eligible orders, just as it currently does at 8:00 a.m. Members will be permitted to enter orders beginning at 6:00 a.m. Market Makers will be permitted but not 6 The Times-In-Force instructions available on the Exchange are set forth under Exchange Rule 11.9(b). 7 ‘‘User’’ is defined as ‘‘any Member or Sponsored Participant who is authorized to obtain access to the System pursuant to Rule 11.3.’’ See Exchange Rule 1.5(cc). 8 See Exchange Rule 11.9(c)(6). 9 See Exchange Rule 11.9(c)(7). 10 See Exchange Rule 11.9(d). 11 See Exchange Rule 11.9(a)(2). 12 See Exchange Rule 11.9(b)(7). 13 See Exchange Rule 11.9(c)(5). 14 See Exchange Rule 11.9(b)(1). 15 See Exchange Rule 11.9(b)(6). 16 See Exchange Rule 1.5(e). VerDate Sep<11>2014 17:28 Sep 09, 2015 Jkt 235001 required to open their quotes beginning at 7:00 a.m. in the same manner they open their quotes today beginning at 8:00 a.m. Order Types. Every order type that is currently available beginning at 8:00 a.m. will be available beginning at 7:00 a.m. All other order types, and all order type behaviors, will otherwise remain unchanged. The Exchange will not extend the expiration times of any orders. For example, an order that is currently available from 8:00 a.m. to 4:00 p.m. will be modified to be available from 7:00 a.m. to 4:00 p.m. An order that is available from 8:00 a.m. to 9:30 a.m. will be modified to be available from 7:00 a.m. to 9:30 a.m. Routing Services. The Exchange will route orders to away markets between 7:00 a.m. and 8:00 a.m., just as it does today between 8:00 a.m. and 9:30 a.m. All routing strategies set forth in Exchange Rule 11.11 will remain otherwise unchanged, performing the same instructions they perform between 7:00 a.m. and 8:00 a.m. today. Order Processing. Order processing will operate beginning at 7:00 a.m. just as it does today beginning at 8:00 a.m. There will be no changes to the ranking, display, and execution algorithms processes or rules. Data Feeds. The Exchange will report the best bid and offer on the Exchange to the appropriate network processor, as it currently does beginning 8:00 a.m. The Exchange’s proprietary data feeds will be disseminated beginning at 7:00 a.m. using the same formats and delivery mechanisms with which the Exchange currently disseminates them beginning at 8:00 a.m. Trade Reporting. Trades executed between 7:00 a.m. and 8:00 a.m. will be reported to the appropriate network processor with the ‘‘.T’’ modifier, just as they are reported today between at 8:00 a.m. and 9:30 a.m. Fees. The Exchange is not changing any fees in connection with this proposal. Market Surveillance. The Exchange’s commitment to high quality regulation at all times will extend to 7:00 a.m. The Exchange will offer all surveillance coverage currently performed by the Exchange’s surveillance systems, which will launch by the time trading starts at 7:00 a.m. Clearly Erroneous Trade Processing. The Exchange will process trade breaks beginning at 7:00 a.m. pursuant to Exchange Rule 11.13 just as it does today beginning at 8:00 a.m. Effective Start Time The Exchange propose to adopt a new defined term, Effective Start Time, PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 under proposed paragraph (a)(1) to Rule 11.1. Effective Start Time would be defined as an instruction a User may attach to an order to buy or sell which indicates the time upon which the order is to become eligible for execution. Like orders placed on the BATS Book at the start of the Pre-Opening Session under Rule 11.1(a), at the Effective Start Time, the order will be placed on the BATS Book, routed, cancelled, or executed in accordance with the terms of the order. Once received, orders with an Effective Start Time are placed in a suspended state and not placed on the BATS Book until the Effective Start Time selected by the User. Orders with an Effective Start Time are treated like all other orders once placed on the BATS Book and will receive a time stamp at the time the order becomes eligible for execution. Pursuant to Rule 11.12, orders entered with identical Effective Start Times will retain their priority as compared to each other based upon the time such orders were initially received by the System. In general, a User may specify a time between 7:00 a.m. and 4:00 p.m. Eastern Time as the order’s Effective Start Time, subject to the trading sessions that the particular order type is eligible for execution. A Member would not be able to combine an Effective Start Time with BATS Post Only Orders, BATS Market Orders, Minimum Quantity Orders, ISOs, or orders that include a TIF of IOC or FOK. The Effective Start Time instruction would be available for all other order types that include a TIF other than IOC or FOK. This is also consistent with current Rule 11.1(a), under which the Exchange does not accept the following orders prior to the start of the Pre-Opening Session: BATS Post Only Orders, Partial Post Only at Limit Orders, ISO, BATS Market Orders with a TIF other than Regular Hours Only, Minimum Quantity Orders that also include a TIF of Regular Hours Only, and all orders with a TIF instruction of IOC or FOK. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,17 in general, and furthers the objectives of Section 6(b)(5) of the Act,18 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and to remove impediments to and perfect the mechanism of a free and 17 15 18 15 E:\FR\FM\10SEN1.SGM U.S.C. 78f. U.S.C. 78f(b)(5). 10SEN1 Federal Register / Vol. 80, No. 175 / Thursday, September 10, 2015 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES open market and a national market system. Pre-Opening Session 7:00 a.m. Start The Exchange believes its proposal to amend Rule 1.5(r) to state that the PreOpening Session will start at 7:00 a.m. rather than 8:00 a.m. Eastern Time and Rule 11.1(a) to account for the PreOpening Session starting at 7:00 a.m. Eastern Time promote just and equitable principles of trade, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. The Exchange believes that opening its system at 7:00 a.m. will benefit investors, the national market system, Members and the Exchange market. Opening at 7:00 a.m. will benefit investors and the national market system by increasing competition for order flow and executions, and thereby spurring product enhancements and lowering prices. Opening at 7:00 a.m. will benefit Members and the Exchange market by increasing trading opportunities between 7:00 a.m. and 8:00 a.m. without increasing ancillary trading costs (telecommunications, data, connectivity, etc.) and, thereby, decreasing average trading costs per share. Opening the Exchange at 7:00 a.m. will also benefit Members that choose not to participate in the early hours but nonetheless gain the opportunity to interact with liquidity entered by other members during the early session. The proposed rule change promotes just and equitable principles of trade by offering additional trading opportunities to Members that desire them, without imposing burdens on Members that do not. The proposal will facilitate a wellregulated, orderly, and efficient market during a period of time that is currently underserved. The Exchange notes that the proposed trading period has been available on NYSE Arca and Nasdaq.19 The Exchange believes that the availability of trading between 7:00 a.m. and 8:00 a.m. has been beneficial to market participants including investors and issuers on other markets. The Exchange believes that offering a competing trading session will further benefit investors by promoting competition and order interaction, while imposing no added costs on investors or other market participants that choose not avail themselves of these benefits. Effective Start Time The Exchange believes its proposed Effective Start Time instruction also 19 See supra note 4. VerDate Sep<11>2014 17:28 Sep 09, 2015 Jkt 235001 promotes just and equitable principles of trade, and removes impediments to and perfects the mechanism of a free and open market and a national market system. The Exchange believes that the proposed Effective Start Time instruction will provide Users with greater control over their orders by electing a specific time upon which their order may become eligible for execution. The concept of selecting conditions during which an order it [sic] to be eligible for execution is not novel. The operation of the Effective Start Time instruction is similar to functionality available on the Exchange and elsewhere that permits members to elect when their orders are to become eligible for executions. Specifically, on the Exchange, a User may elect a buy (sell) Stop Order or Stop Limit Order indicating that the order become eligible for execution when the consolidated last sale (purchase) in a security occurs at or above (below) a specified Stop Price.20 In addition, a User may elect the trading session(s) during which their order would be eligible for execution. In such case, the User may enter an order during the Pre-Opening Session and select that such order not be eligible for execution until 9:30 a.m., the start of Regular Trading Hours. Conversely, Members also maintain the ability to elect when their order should expire or be cancelled. For example, a User may elect a TIF instruction of Day, GTD, or GTX, all which state that the order cancelled if not executed by a certain time.21 Lastly, similar functionality is currently available on NYSE Arca.22 The Exchange believes it has appropriately limited the availability of the Effective Start Time instruction to exclude its use with order types and order instructions that it may be deemed inconsistent with. Specifically, the Effective Time instruction is not available for ISOs and the use of such an instruction may be considered inconsistent with a Member’s responsibility to comply with the requirements of Regulation NMS relating to ISOs. In addition, the Effective Start Time instruction is not available for BATS Market Orders or orders with a TIF instruction of IOC or FOK as well as orders with BATS Post Only Order or Minimum Quantity 20 See Exchange Rules 11.9(c)(17) and (c)(18). See also New York Stock Exchange, Inc. (‘‘NYSE’’) Rule 13(e)(7). 21 See Exchange Rules 11.9(b)(2),(4), and (5). See also Nasdaq Rule 4703(a), and NYSE Rule 13(b). 22 NYSE Arca permits the selection of an Effective Time (Tag 168), like the Exchange proposes herein, and Expire Time (Tag 126). See NYSE Arca FIX Specifications, available at https://www.nyse.com/ publicdocs/nyse/markets/nyse/FIX_Specification_ and_API.pdf (dated June 8, 2015). PO 00000 Frm 00123 Fmt 4703 Sfmt 4703 54633 Orders. BATS Market Orders and orders with a TIF instruction of IOC and FOK are immediately executable once placed on the BATS Book. Permitting the use of an Effective Start time with such orders appears inconsistent as a User will not know at the time of order entry what the market for such a security would be at the selected Effective Start Time. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes its proposed rule change would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes the proposal to start the Pre-Opening Session at 7:00 a.m. Eastern Time would enhance competition by enabling the Exchange to directly compete with NYSE Arca and Nasdaq for order flow and executions starting at 7:00 a.m., rather than 8:00 a.m. In addition, the proposed Effective Start Time instruction will enable the Exchange to provide similar functionality as NYSE Arca. The fact that the extending the Pre-Opening Session and Effective Start Time are themselves a response to the competition provided by other markets is evidence of its pro-competitive nature. 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 Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, E:\FR\FM\10SEN1.SGM 10SEN1 54634 Federal Register / Vol. 80, No. 175 / Thursday, September 10, 2015 / Notices 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– BYX–2015–38 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. mstockstill on DSK4VPTVN1PROD with NOTICES All submissions should refer to File Number SR–BYX–2015–38. 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–BYX– 2015–38, and should be submitted on or before October 1, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.23 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–22755 Filed 9–9–15; 8:45 am] BILLING CODE 8011–01–P 23 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 17:28 Sep 09, 2015 Jkt 235001 SECURITIES AND EXCHANGE COMMISSION or send an email to: PRA_Mailbox@ sec.gov. Comments must be submitted to OMB within 30 days of this notice. Submission for OMB Review; Comment Request Dated: September 3, 2015. Robert W. Errett, Deputy Secretary. Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 20549–2736. [FR Doc. 2015–22754 Filed 9–9–15; 8:45 am] BILLING CODE 8011–01–P Extension: Form ADV–E, OMB Control No. 3235– 0361, SEC File No. 270–318. SECURITIES AND EXCHANGE COMMISSION Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (the ‘‘Commission’’) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below. Form ADV–E (17 CFR 2799.8) is the cover sheet for certificates of accounting filed pursuant to rule 206(4)–2 under the Investment Advisers Act of 1940 (17 CFR 275.206(4)–2). The rule further requires that the public accountant file with the Commission a Form ADV–E and accompanying statement within four business days of the resignation, dismissal, removal or other termination of its engagement. The annual burden is approximately three minutes per respondent. The estimate of burden hours set forth above is made solely for the purposes of the Paperwork Reduction Act and is not derived from a comprehensive or even representative survey or study of the cost of Commission rules and forms. The information provided on Form ADV–E is mandatory. Responses will not be kept confidential. An agency may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number. The public may view the background documentation for this information collection at the following Web site, www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Shagufta_ Ahmed@omb.eop.gov; and (ii) Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE., Washington, DC 20549 Proposed Collection; Comment Request PO 00000 Frm 00124 Fmt 4703 Sfmt 4703 Upon Written Request Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 20549–2736. Extension: Form T–1, OMB Control No. 3235–0110, SEC File No. 270–121. Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (‘‘Commission’’) is soliciting comments on the collection of information summarized below. The Commission plans to submit this existing collection of information to the Office of Management and Budget for extension and approval. Form T–1 (17 CFR 269.1) is a statement of eligibility and qualification under the Trust Indenture Act of 1939 (15 U.S.C. 77aaa et seq.) of a corporation designated to act as a trustee under an indenture. The information is used to determine whether the corporation is qualified to serve as a trustee. Form T–1 takes approximately 15 hours per response to prepare and is filed by approximately 5 respondents. We estimate that 25% of the 15 hours (4 hours per response) is prepared by the company for a total reporting burden of 20 hours (4 hours per response × 5 responses). Written comments are invited on: (a) Whether this proposed collection of information is necessary for the performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency’s estimate of the burden imposed by the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted E:\FR\FM\10SEN1.SGM 10SEN1

Agencies

[Federal Register Volume 80, Number 175 (Thursday, September 10, 2015)]
[Notices]
[Pages 54631-54634]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-22755]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75831; File No. SR-BYX-2015-38]


Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of 
Filing of Proposed Rule Change To Amend Rules 1.5(r) and 11.1 and Adopt 
New Rule 11.1(a)(1)

September 3, 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 September 1, 2015, BATS Y-Exchange, Inc. (the ``Exchange'' or 
``BYX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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 definition of Pre-
Opening Session under Rule 1.5(r) to state that the Pre-Opening Session 
will start at 7:00 a.m. rather than 8:00 a.m. Eastern Time and Rule 
11.1(a) to account for the Pre-Opening Session starting at 7:00 a.m. 
Eastern Time. The Exchange also proposes to adopt new Rule 11.1(a)(1) 
to define Effective Start Time, which would be an order instruction 
enabling Members \3\ [sic] indicate a time upon which their order may 
become eligible for execution.
---------------------------------------------------------------------------

    \3\ The term ``Member'' is defined as ``any registered broker or 
dealer that has been admitted to membership in the Exchange. A 
Member will have the status of a ``member'' of the Exchange as that 
term is defined in Section 3(a)(3) of the Act. Membership may be 
granted to a sole proprietor, partnership, corporation, limited 
liability company or other organization which is a registered broker 
or dealer pursuant to Section 15 of the Act, and which has been 
approved by the Exchange.'' See Exchange Rule 1.5(n).
---------------------------------------------------------------------------

    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 the definition of Pre-Opening 
Session under Rule 1.5(r) to state that the Pre-Opening Session will 
start at 7:00 a.m. rather than 8:00 a.m. Eastern Time and Rule 11.1(a) 
to account for the Pre-Opening Session starting at 7:00 a.m. Eastern 
Time. The Exchange also proposes to adopt new Rule 11.1(a)(1) to define 
Effective Start Time, which would be an order instruction enabling 
Members indicate a time upon which their order may become eligible for 
execution.
Pre-Opening Session 7:00 a.m. Start
    The Exchange trading day is currently divided into two sessions: 
(i) The Pre-Opening Session which starts at 8:00 a.m. and ends at 9:30 
a.m. Eastern Time; and (ii) the Regular Trading Hours which runs from 
9:30 a.m. to 4:00 p.m. Eastern Time. The Exchange proposes to amend the 
definition of ``Pre-Opening Session'' under Rule 1.5(r) to state that 
the Pre-Opening Session will start at 7:00 a.m. rather than 8:00 a.m. 
Eastern Time.\4\
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    \4\ The Exchange notes that NYSE Arca, Inc. (``NYSE Arca'') 
operates an Opening Session that starts at 4:00 a.m. Eastern Time 
(1:00 a.m. Pacific Time) and ends at 9:30 a.m. Eastern Time (6:30 
a.m. Pacific Time). See NYSE Arca Rule 7.34(a)(1). The Nasdaq Stock 
Market LLC (``Nasdaq'') operates a pre-market session that also 
opens at 4:00 a.m. and ends at 9:30 a.m. Eastern Time. See Nasdaq 
Rule 4701(g). See also Securities Exchange Act Release No. 69151 
(March 15, 2013), 78 FR 17464 (March 21, 2013) (SR-Nasdaq-2013-033) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change to Extend the Pre-Market Hours of the Exchange to 4:00 a.m. 
EST).
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    The Exchange also proposes to amend Rule 11.1(a) to account for the 
Pre-Opening Session starting at 7:00 a.m. Eastern Time. Other than the 
proposal to change the start of the Pre-Opening Session from 8:00 a.m. 
to 7:00 a.m. Eastern Time discussed above, the Exchange does not 
propose to amend the substance or operation of Rule 11.1(a).
    As amended, orders entered between 6:00 a.m. and 7:00 a.m. Eastern 
Time, rather than 6:00 a.m. and 8:00 a.m. Eastern Time, would not 
eligible for execution until the start of the Pre-Opening Session or 
Regular Trading Hours,\5\ depending on the Time-in-Force

[[Page 54632]]

(``TIF'') \6\ selected by the User.\7\ Rule 11.1(a) will also be 
amended to state that the Exchange will not accept the following orders 
prior to 7:00 a.m. Eastern Time, rather than 8:00 a.m.: BATS Post Only 
Orders,\8\ Partial Post Only at Limit Orders,\9\ Intermarket Sweep 
Orders (``ISOs''),\10\ BATS Market Orders \11\ with a TIF other than 
Regular Hours Only,\12\ Minimum Quantity Orders \13\ that also include 
a TIF of Regular Hours Only, and all orders with a TIF instruction of 
Immediate-or-Cancel (``IOC'') \14\ or Fill-or-Kill (``FOK'').\15\ At 
the commencement of the Pre-Opening Session, orders entered between 
6:00 a.m. and 7:00 a.m. Eastern Time, rather than 6:00 a.m. and 8:00 
a.m. Eastern Time, will be handled in time sequence, beginning with the 
order with the oldest time stamp, and will be placed on the BATS 
Book,\16\ routed, cancelled, or executed in accordance with the terms 
of the order.
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    \5\ ``Regular Trading Hours'' is defined as ``the time between 
9:30 a.m. and 4:00 p.m. Eastern Time.'' See Exchange Rule 1.5(w).
    \6\ The Times-In-Force instructions available on the Exchange 
are set forth under Exchange Rule 11.9(b).
    \7\ ``User'' is defined as ``any Member or Sponsored Participant 
who is authorized to obtain access to the System pursuant to Rule 
11.3.'' See Exchange Rule 1.5(cc).
    \8\ See Exchange Rule 11.9(c)(6).
    \9\ See Exchange Rule 11.9(c)(7).
    \10\ See Exchange Rule 11.9(d).
    \11\ See Exchange Rule 11.9(a)(2).
    \12\ See Exchange Rule 11.9(b)(7).
    \13\ See Exchange Rule 11.9(c)(5).
    \14\ See Exchange Rule 11.9(b)(1).
    \15\ See Exchange Rule 11.9(b)(6).
    \16\ See Exchange Rule 1.5(e).
---------------------------------------------------------------------------

    Operations. From the Members' operational perspective, the 
Exchange's goal is to permit trading for those that choose to trade, 
without imposing burdens on those that do not. Thus, for example, the 
Exchange will not require any Member to participate in the extended 
session, including not requiring registered market makers to make two-
sided markets between 7:00 a.m. and 8:00 a.m. The Exchange will 
minimize Members' preparation efforts to the greatest extent possible 
by allowing Members to trade beginning at 7:00 a.m. with the same 
equipment, connectivity, order types, and data feeds they currently use 
from 8:00 a.m. onwards.
    Opening Process. The Exchange will offer no opening process at 7:00 
a.m., just as it offers no opening process at 8:00 a.m. today. Instead, 
at 7:00 a.m., the System will ``wake up'' by loading in price/time 
priority all open trading interest entered after 6:00 a.m. Also at 7:00 
a.m., the Exchange will open the execution system and accept new 
eligible orders, just as it currently does at 8:00 a.m. Members will be 
permitted to enter orders beginning at 6:00 a.m. Market Makers will be 
permitted but not required to open their quotes beginning at 7:00 a.m. 
in the same manner they open their quotes today beginning at 8:00 a.m.
    Order Types. Every order type that is currently available beginning 
at 8:00 a.m. will be available beginning at 7:00 a.m. All other order 
types, and all order type behaviors, will otherwise remain unchanged. 
The Exchange will not extend the expiration times of any orders. For 
example, an order that is currently available from 8:00 a.m. to 4:00 
p.m. will be modified to be available from 7:00 a.m. to 4:00 p.m. An 
order that is available from 8:00 a.m. to 9:30 a.m. will be modified to 
be available from 7:00 a.m. to 9:30 a.m.
    Routing Services. The Exchange will route orders to away markets 
between 7:00 a.m. and 8:00 a.m., just as it does today between 8:00 
a.m. and 9:30 a.m. All routing strategies set forth in Exchange Rule 
11.11 will remain otherwise unchanged, performing the same instructions 
they perform between 7:00 a.m. and 8:00 a.m. today.
    Order Processing. Order processing will operate beginning at 7:00 
a.m. just as it does today beginning at 8:00 a.m. There will be no 
changes to the ranking, display, and execution algorithms processes or 
rules.
    Data Feeds. The Exchange will report the best bid and offer on the 
Exchange to the appropriate network processor, as it currently does 
beginning 8:00 a.m. The Exchange's proprietary data feeds will be 
disseminated beginning at 7:00 a.m. using the same formats and delivery 
mechanisms with which the Exchange currently disseminates them 
beginning at 8:00 a.m.
    Trade Reporting. Trades executed between 7:00 a.m. and 8:00 a.m. 
will be reported to the appropriate network processor with the ``.T'' 
modifier, just as they are reported today between at 8:00 a.m. and 9:30 
a.m.
    Fees. The Exchange is not changing any fees in connection with this 
proposal.
    Market Surveillance. The Exchange's commitment to high quality 
regulation at all times will extend to 7:00 a.m. The Exchange will 
offer all surveillance coverage currently performed by the Exchange's 
surveillance systems, which will launch by the time trading starts at 
7:00 a.m.
    Clearly Erroneous Trade Processing. The Exchange will process trade 
breaks beginning at 7:00 a.m. pursuant to Exchange Rule 11.13 just as 
it does today beginning at 8:00 a.m.
Effective Start Time
    The Exchange propose to adopt a new defined term, Effective Start 
Time, under proposed paragraph (a)(1) to Rule 11.1. Effective Start 
Time would be defined as an instruction a User may attach to an order 
to buy or sell which indicates the time upon which the order is to 
become eligible for execution. Like orders placed on the BATS Book at 
the start of the Pre-Opening Session under Rule 11.1(a), at the 
Effective Start Time, the order will be placed on the BATS Book, 
routed, cancelled, or executed in accordance with the terms of the 
order. Once received, orders with an Effective Start Time are placed in 
a suspended state and not placed on the BATS Book until the Effective 
Start Time selected by the User. Orders with an Effective Start Time 
are treated like all other orders once placed on the BATS Book and will 
receive a time stamp at the time the order becomes eligible for 
execution. Pursuant to Rule 11.12, orders entered with identical 
Effective Start Times will retain their priority as compared to each 
other based upon the time such orders were initially received by the 
System.
    In general, a User may specify a time between 7:00 a.m. and 4:00 
p.m. Eastern Time as the order's Effective Start Time, subject to the 
trading sessions that the particular order type is eligible for 
execution. A Member would not be able to combine an Effective Start 
Time with BATS Post Only Orders, BATS Market Orders, Minimum Quantity 
Orders, ISOs, or orders that include a TIF of IOC or FOK. The Effective 
Start Time instruction would be available for all other order types 
that include a TIF other than IOC or FOK. This is also consistent with 
current Rule 11.1(a), under which the Exchange does not accept the 
following orders prior to the start of the Pre-Opening Session: BATS 
Post Only Orders, Partial Post Only at Limit Orders, ISO, BATS Market 
Orders with a TIF other than Regular Hours Only, Minimum Quantity 
Orders that also include a TIF of Regular Hours Only, and all orders 
with a TIF instruction of IOC or FOK.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\17\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\18\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, and to remove 
impediments to and perfect the mechanism of a free and

[[Page 54633]]

open market and a national market system.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f.
    \18\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Pre-Opening Session 7:00 a.m. Start
    The Exchange believes its proposal to amend Rule 1.5(r) to state 
that the Pre-Opening Session will start at 7:00 a.m. rather than 8:00 
a.m. Eastern Time and Rule 11.1(a) to account for the Pre-Opening 
Session starting at 7:00 a.m. Eastern Time promote just and equitable 
principles of trade, and to remove impediments to and perfect the 
mechanism of a free and open market and a national market system. The 
Exchange believes that opening its system at 7:00 a.m. will benefit 
investors, the national market system, Members and the Exchange market. 
Opening at 7:00 a.m. will benefit investors and the national market 
system by increasing competition for order flow and executions, and 
thereby spurring product enhancements and lowering prices. Opening at 
7:00 a.m. will benefit Members and the Exchange market by increasing 
trading opportunities between 7:00 a.m. and 8:00 a.m. without 
increasing ancillary trading costs (telecommunications, data, 
connectivity, etc.) and, thereby, decreasing average trading costs per 
share. Opening the Exchange at 7:00 a.m. will also benefit Members that 
choose not to participate in the early hours but nonetheless gain the 
opportunity to interact with liquidity entered by other members during 
the early session.
    The proposed rule change promotes just and equitable principles of 
trade by offering additional trading opportunities to Members that 
desire them, without imposing burdens on Members that do not. The 
proposal will facilitate a well-regulated, orderly, and efficient 
market during a period of time that is currently underserved. The 
Exchange notes that the proposed trading period has been available on 
NYSE Arca and Nasdaq.\19\ The Exchange believes that the availability 
of trading between 7:00 a.m. and 8:00 a.m. has been beneficial to 
market participants including investors and issuers on other markets. 
The Exchange believes that offering a competing trading session will 
further benefit investors by promoting competition and order 
interaction, while imposing no added costs on investors or other market 
participants that choose not avail themselves of these benefits.
---------------------------------------------------------------------------

    \19\ See supra note 4.
---------------------------------------------------------------------------

Effective Start Time
    The Exchange believes its proposed Effective Start Time instruction 
also promotes just and equitable principles of trade, and removes 
impediments to and perfects the mechanism of a free and open market and 
a national market system. The Exchange believes that the proposed 
Effective Start Time instruction will provide Users with greater 
control over their orders by electing a specific time upon which their 
order may become eligible for execution. The concept of selecting 
conditions during which an order it [sic] to be eligible for execution 
is not novel. The operation of the Effective Start Time instruction is 
similar to functionality available on the Exchange and elsewhere that 
permits members to elect when their orders are to become eligible for 
executions. Specifically, on the Exchange, a User may elect a buy 
(sell) Stop Order or Stop Limit Order indicating that the order become 
eligible for execution when the consolidated last sale (purchase) in a 
security occurs at or above (below) a specified Stop Price.\20\ In 
addition, a User may elect the trading session(s) during which their 
order would be eligible for execution. In such case, the User may enter 
an order during the Pre-Opening Session and select that such order not 
be eligible for execution until 9:30 a.m., the start of Regular Trading 
Hours. Conversely, Members also maintain the ability to elect when 
their order should expire or be cancelled. For example, a User may 
elect a TIF instruction of Day, GTD, or GTX, all which state that the 
order cancelled if not executed by a certain time.\21\ Lastly, similar 
functionality is currently available on NYSE Arca.\22\
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    \20\ See Exchange Rules 11.9(c)(17) and (c)(18). See also New 
York Stock Exchange, Inc. (``NYSE'') Rule 13(e)(7).
    \21\ See Exchange Rules 11.9(b)(2),(4), and (5). See also Nasdaq 
Rule 4703(a), and NYSE Rule 13(b).
    \22\ NYSE Arca permits the selection of an Effective Time (Tag 
168), like the Exchange proposes herein, and Expire Time (Tag 126). 
See NYSE Arca FIX Specifications, available at https://www.nyse.com/publicdocs/nyse/markets/nyse/FIX_Specification_and_API.pdf (dated 
June 8, 2015).
---------------------------------------------------------------------------

    The Exchange believes it has appropriately limited the availability 
of the Effective Start Time instruction to exclude its use with order 
types and order instructions that it may be deemed inconsistent with. 
Specifically, the Effective Time instruction is not available for ISOs 
and the use of such an instruction may be considered inconsistent with 
a Member's responsibility to comply with the requirements of Regulation 
NMS relating to ISOs. In addition, the Effective Start Time instruction 
is not available for BATS Market Orders or orders with a TIF 
instruction of IOC or FOK as well as orders with BATS Post Only Order 
or Minimum Quantity Orders. BATS Market Orders and orders with a TIF 
instruction of IOC and FOK are immediately executable once placed on 
the BATS Book. Permitting the use of an Effective Start time with such 
orders appears inconsistent as a User will not know at the time of 
order entry what the market for such a security would be at the 
selected Effective Start Time.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes its proposed rule change would not impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange believes the 
proposal to start the Pre-Opening Session at 7:00 a.m. Eastern Time 
would enhance competition by enabling the Exchange to directly compete 
with NYSE Arca and Nasdaq for order flow and executions starting at 
7:00 a.m., rather than 8:00 a.m. In addition, the proposed Effective 
Start Time instruction will enable the Exchange to provide similar 
functionality as NYSE Arca. The fact that the extending the Pre-Opening 
Session and Effective Start Time are themselves a response to the 
competition provided by other markets is evidence of its pro-
competitive nature.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing,

[[Page 54634]]

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-BYX-2015-38 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-BYX-2015-38. 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-BYX-2015-38, and should be 
submitted on or before October 1, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-22755 Filed 9-9-15; 8:45 am]
 BILLING CODE 8011-01-P
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