Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delete Rule 2.13, Fidelity Bonds, 60419-60421 [2015-25327]

Download as PDF Federal Register / Vol. 80, No. 193 / Tuesday, October 6, 2015 / Notices Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–FINRA–2015–033 on the subject line. [Release No. 34–76054; File No. SR–BATS– 2015–78] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delete Rule 2.13, Fidelity Bonds Paper Comments • Send paper comments in triplicate to Robert W. Errett, Deputy Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. tkelley on DSK3SPTVN1PROD with NOTICES All submissions should refer to File Number SR–FINRA–2015–033. 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 FINRA. 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–FINRA– 2015–033 and should be submitted on or before October 27, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–25329 Filed 10–5–15; 8:45 am] BILLING CODE 8011–01–P 19 17 18:31 Oct 05, 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 September 24, 2015, BATS Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange has designated this proposal as a ‘‘non-controversial’’ proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6)(iii) thereunder,4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing to delete Rule 2.13, Fidelity Bonds, in order to conform to the rules of EDGA Exchange, Inc. (‘‘EDGA’’) and EDGX Exchange, Inc. (‘‘EDGX’’). 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 aspects of such statements. 1 See 15 U.S.C. 78s(b)(1). 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6)(iii). 2 See CFR 200.30–3(a)(12). VerDate Sep<11>2014 September 30, 2015. Jkt 238001 PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 60419 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose In early 2014, the Exchange and its affiliate, BATS Y-Exchange, Inc. (‘‘BYX’’), received approval to effect a merger (the ‘‘Merger’’) of the Exchange’s parent company, BATS Global Markets, Inc., with Direct Edge Holdings LLC, the indirect parent of EDGX and EDGA (together with BZX, BYX and EDGX, the ‘‘BGM Affiliated Exchanges’’).5 In the context of the Merger, the BGM Affiliated Exchanges are working to align its [sic] rules, retaining only intended differences between the BGM Affiliated Exchanges. Thus, the proposal set forth below is intended to delete Rule 2.13, Fidelity Bonds, in order to conform to the rules of EDGA and EDGX in order to provide a consistent rule set across each of the BGM Affiliated Exchanges.6 In sum, Exchange Rule 2.13(a) states that each Member 7 required to join the Securities Investor Protection Corporation (‘‘SIPC’’) who has employees and who is a member in good standing of another self-regulatory organization shall follow the applicable fidelity bond rule of the self-regulatory organization to which it is designated by the Commission for financial responsibility pursuant to Section 17 of the Act and SEC Rule 17d-1 thereunder (i.e., its Designated Examining Authority or ‘‘DEA’’). Subparagraph (b) to Rule 2.13 simply incorporates by reference NASD Rule 3020 (now FINRA Rule 4360) in to Exchange Rule 2.13. Subparagraph (c) of Rule 2.13 states that references to: (i) An ‘‘Association member’’ shall be construed as references to a ‘‘Member’’; and (ii) Article I, paragraph (q) of the By-Laws shall be construed as references to Exchange Rule 1.5(q). Lastly, subparagraph (d) to Rule 2.13 states that pursuant to Exchange Rule 1.6, any Member subject to paragraph (c) of NASD Rule 3020 (now FINRA Rule 4360), through the application of paragraph (b) of Rule 2.13, may apply to the Exchange for an exemption from such requirements. The exemption may be granted upon a showing of good cause, including a substantial change in 5 See Securities Exchange Act Release No. 71375 (January 23, 2014), 79 FR 4771 (January 29, 2014) (SR–BATS–2013–059; SR–BYX–2013–039). 6 The Exchange notes that BYX intends to file a proposal to delete its identical Rule 2.13, Fidelity Bonds. 7 A Member is defined as ‘‘any registered broker or dealer that has been admitted to membership in the Exchange.’’ See Exchange Rule 1.5(n). E:\FR\FM\06OCN1.SGM 06OCN1 60420 Federal Register / Vol. 80, No. 193 / Tuesday, October 6, 2015 / Notices tkelley on DSK3SPTVN1PROD with NOTICES the circumstances or nature of the Member’s business that results in a lower net capital requirement. The Exchange may issue an exemption subject to any condition or limitation upon a Member’s bonding coverage that is deemed necessary to protect the public and serve the purposes of Rule 2.13. The Exchange does not, nor does it currently intend to, act in the capacity of a DEA. Therefore, Rule 2.13 is obsolete as it does not apply to any of the Exchange’s Members.8 The Exchange believes that eliminating Rule 2.13 would avoid unnecessary confusion with respect to the Exchange’s rules because it does not have a direct nexus to the trading on the Exchange or the relationship between the Exchange and its Members. Deleting Rule 2.13 would not ease any of the requirements on its Members that are required to join SIPC as the Financial Industry Regulatory Authority (‘‘FINRA’’) and the New York Stock Exchange, Inc. (‘‘NYSE’’) serve as a DEA for those Members and include rules with similar requirements as current Exchange Rule 2.13.9 In addition, the Exchange notes that EDGA and EDGX do not contain a similar rule. As a result, eliminating Rule 2.13 would also provide for a consistent rule set across each of the BGM Affiliated Exchanges. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.10 Specifically, the proposed change is consistent with Section 6(b)(5) of the Act,11 because it is designed to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of, a free and open market and a national market system, and, in general, to protect investors and the public interest. The proposed rule change is designed to provide a consistent rule set across each of the BGM Affiliated Exchanges. As mentioned above, the proposed rule changes, combined with the planned filing for BYX, would provide for a consistent set of rules across each of the BGM Affiliated Exchanges. Consistent rules, in turn, will simplify the 8 The Exchange will submit a rule filing to the Commission to adopt requirements similar or identical to current Rule 2.13 should it become a DEA for any of its Members in the future. 9 See FINRA Rule 4360 and NYSE Rule 4360. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(5). VerDate Sep<11>2014 18:31 Oct 05, 2015 Jkt 238001 regulatory requirements for Members of the Exchange that are also participants on EDGA, EDGX and/or BYX as well as result in greater uniformity, less burdensome and more efficient regulatory compliance and understanding of Exchange Rules. As such, the proposed rule change would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and a national market system. In addition, the proposed rule change would eliminate unnecessary confusion with respect to the Exchange’s rules by removing a rule that has never had a direct nexus to the trading on the Exchange or the relationship between the Exchange and its Members. The Exchange believes that Rule 2.13 is obsolete as the Exchange does not, nor does it currently intend to, act in the capacity of a DEA. Deleting Rule 2.13 would not ease any of the requirements on its Members that are required to join SIPC as FINRA and the NYSE serve as a DEA for those Members and include rules containing similar requirements as current Exchange Rule 2.13.12 The Exchange believes that eliminating these rules will reduce any investor confusion regarding a rule the Exchange has never applied, nor intends to apply. Further, eliminating unnecessary and obsolete rules removes impediments to the perfection of the mechanisms for a free and open market system consistent with the requirements of Section 6(b)(5) of the Act.13 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that deleting Rule 2.13 will align Exchange rules with those of the BGM Affiliated Exchanges. The Exchange has never utilized this rule, nor does the Exchange intend to utilize it in the future. Therefore, the Exchange does not believe that eliminating Rule 2.13 will impose any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BATS–2015–78 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–BATS–2015–78. This file number should be included on the 12 See 14 15 13 15 15 17 PO 00000 FINRA Rule 4360 and NYSE Rule 4360. U.S.C. 78f(b)(5). III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated this rule filing as non-controversial under Section 19(b)(3)(A) of the Act 14 and paragraph (f)(6) of Rule 19b–4 thereunder.15 The proposed rule change effects a change that (A) does not significantly affect the protection of investors or the public interest; (B) does not impose any significant burden on competition; and (C) by its terms, does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest; provided that the self-regulatory organization has given the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily temporarily suspend such rule change if it appears to the Commission that such action is: (1) Necessary or appropriate in the public interest; (2) for the protection of investors; or (3) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. Frm 00072 Fmt 4703 Sfmt 4703 E:\FR\FM\06OCN1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4. 06OCN1 Federal Register / Vol. 80, No. 193 / Tuesday, October 6, 2015 / Notices subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for 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–BATS–2015–78 and should be submitted on or before October 27, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–25327 Filed 10–5–15; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76061; File No. SR–FINRA– 2015–035] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Submission of ‘‘Clearing-Only, NonRegulatory Reports’’ to the FINRA Equity Trade Reporting Facilities tkelley on DSK3SPTVN1PROD with NOTICES September 30, 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 16 See 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 18:31 Oct 05, 2015 Jkt 238001 September 22, 2015, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by FINRA. FINRA has designated the proposed rule change as constituting a ‘‘non-controversial’’ rule change under paragraph (f)(6) of Rule 19b–4 under the Act,3 which renders the proposal effective upon receipt of this filing by the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change FINRA is proposing to amend FINRA rules governing the reporting of overthe-counter (‘‘OTC’’) transactions in equity securities to the FINRA Facilities 4 to allow the submission of ‘‘clearing-only, non-regulatory reports,’’ as defined herein, relating to previously executed and reported transactions and exempt such reports from certain reporting requirements under FINRA rules. The text of the proposed rule change is available on FINRA’s Web site at https://www.finra.org, at the principal office of FINRA and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 3 17 CFR 240.19b–4(f)(6). purposes of this filing, the FINRA Facilities are the Alternative Display Facility (‘‘ADF’’) and the Trade Reporting Facilities (‘‘TRF’’), to which members report OTC transactions in NMS stocks, as defined in SEC Rule 600(b) of Regulation NMS; and the OTC Reporting Facility (‘‘ORF’’), to which members report transactions in ‘‘OTC Equity Securities,’’ as defined in Rule 6420 (i.e., non-NMS stocks such as OTC Bulletin Board and OTC Market securities), as well as transactions in Restricted Equity Securities, as defined in Rule 6420, effected pursuant to Securities Act Rule 144A. 4 For PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 60421 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Background With limited exceptions, FINRA trade reporting rules require that members report OTC transactions in equity securities by submitting a ‘‘tape’’ report (the transaction is reported for public dissemination purposes) to FINRA.5 In some instances, members may be required (or may choose) to also submit one or more ‘‘non-tape’’ reports (the transaction is not reported for publication) in connection with the transaction. For example, members executing OTC transactions as riskless principal 6 or agent on behalf of other members are required to submit nontape report(s) to identify other FINRA members that are parties to the trade.7 Non-tape reports can be (1) ‘‘non-tape, non-clearing’’ (the transaction is not reported to the tape and is submitted to FINRA solely for regulatory purposes) or (2) ‘‘clearing-only’’ (the transaction is not reported to the tape and is submitted to FINRA for clearing (and perhaps also regulatory) purposes). FINRA notes that members can elect, but are not required, to have the FINRA Facility submit their trades to the National Securities Clearing Corporation (‘‘NSCC’’) for clearance and settlement, and in such instance, they would designate the submission for clearing.8 Effective February 2, 2015, any member operating an alternative trading system (‘‘ATS’’) must obtain for each such ATS a single, unique market participant identifier (‘‘MPID’’) that is designated for exclusive use for 5 FINRA trade reporting rules require that for transactions between members, the ‘‘executing party’’ report the trade to FINRA. For transactions between a member and a non-member or customer, the member must report the trade. ‘‘Executing party’’ is defined under FINRA rules as the member that receives an order for handling or execution or is presented an order against its quote, does not subsequently re-route the order, and executes the transaction. See Rules 6282(b), 6380A(b), 6380B(b) and 6622(b). 6 For purposes of OTC trade reporting requirements applicable to equity securities, a ‘‘riskless principal’’ transaction is a transaction in which a member, after having received an order to buy (sell) a security, purchases (sells) the security as principal (the initial leg) and satisfies the original order by selling (buying) as principal at the same price. 7 See Rules 6282(d)(4), 6380A(d)(4), 6380B(d)(4) and 6622(d)(4). 8 As noted, FINRA rules do not mandate that members submit OTC transactions for clearing through a FINRA Facility, and for example, members may elect to clear via direct submission to the NSCC by a Qualified Special Representative (‘‘QSR’’). E:\FR\FM\06OCN1.SGM 06OCN1

Agencies

[Federal Register Volume 80, Number 193 (Tuesday, October 6, 2015)]
[Notices]
[Pages 60419-60421]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-25327]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76054; File No. SR-BATS-2015-78]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Delete 
Rule 2.13, Fidelity Bonds

September 30, 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 September 24, 2015, BATS Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with 
the Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ See 15 U.S.C. 78s(b)(1).
    \2\ See 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to delete Rule 2.13, Fidelity Bonds, in 
order to conform to the rules of EDGA Exchange, Inc. (``EDGA'') and 
EDGX Exchange, Inc. (``EDGX'').
    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 aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In early 2014, the Exchange and its affiliate, BATS Y-Exchange, 
Inc. (``BYX''), received approval to effect a merger (the ``Merger'') 
of the Exchange's parent company, BATS Global Markets, Inc., with 
Direct Edge Holdings LLC, the indirect parent of EDGX and EDGA 
(together with BZX, BYX and EDGX, the ``BGM Affiliated Exchanges'').\5\ 
In the context of the Merger, the BGM Affiliated Exchanges are working 
to align its [sic] rules, retaining only intended differences between 
the BGM Affiliated Exchanges. Thus, the proposal set forth below is 
intended to delete Rule 2.13, Fidelity Bonds, in order to conform to 
the rules of EDGA and EDGX in order to provide a consistent rule set 
across each of the BGM Affiliated Exchanges.\6\
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    \5\ See Securities Exchange Act Release No. 71375 (January 23, 
2014), 79 FR 4771 (January 29, 2014) (SR-BATS-2013-059; SR-BYX-2013-
039).
    \6\ The Exchange notes that BYX intends to file a proposal to 
delete its identical Rule 2.13, Fidelity Bonds.
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    In sum, Exchange Rule 2.13(a) states that each Member \7\ required 
to join the Securities Investor Protection Corporation (``SIPC'') who 
has employees and who is a member in good standing of another self-
regulatory organization shall follow the applicable fidelity bond rule 
of the self-regulatory organization to which it is designated by the 
Commission for financial responsibility pursuant to Section 17 of the 
Act and SEC Rule 17d-1 thereunder (i.e., its Designated Examining 
Authority or ``DEA''). Subparagraph (b) to Rule 2.13 simply 
incorporates by reference NASD Rule 3020 (now FINRA Rule 4360) in to 
Exchange Rule 2.13. Subparagraph (c) of Rule 2.13 states that 
references to: (i) An ``Association member'' shall be construed as 
references to a ``Member''; and (ii) Article I, paragraph (q) of the 
By-Laws shall be construed as references to Exchange Rule 1.5(q). 
Lastly, subparagraph (d) to Rule 2.13 states that pursuant to Exchange 
Rule 1.6, any Member subject to paragraph (c) of NASD Rule 3020 (now 
FINRA Rule 4360), through the application of paragraph (b) of Rule 
2.13, may apply to the Exchange for an exemption from such 
requirements. The exemption may be granted upon a showing of good 
cause, including a substantial change in

[[Page 60420]]

the circumstances or nature of the Member's business that results in a 
lower net capital requirement. The Exchange may issue an exemption 
subject to any condition or limitation upon a Member's bonding coverage 
that is deemed necessary to protect the public and serve the purposes 
of Rule 2.13.
---------------------------------------------------------------------------

    \7\ A 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 Exchange does not, nor does it currently intend to, act in the 
capacity of a DEA. Therefore, Rule 2.13 is obsolete as it does not 
apply to any of the Exchange's Members.\8\ The Exchange believes that 
eliminating Rule 2.13 would avoid unnecessary confusion with respect to 
the Exchange's rules because it does not have a direct nexus to the 
trading on the Exchange or the relationship between the Exchange and 
its Members. Deleting Rule 2.13 would not ease any of the requirements 
on its Members that are required to join SIPC as the Financial Industry 
Regulatory Authority (``FINRA'') and the New York Stock Exchange, Inc. 
(``NYSE'') serve as a DEA for those Members and include rules with 
similar requirements as current Exchange Rule 2.13.\9\ In addition, the 
Exchange notes that EDGA and EDGX do not contain a similar rule. As a 
result, eliminating Rule 2.13 would also provide for a consistent rule 
set across each of the BGM Affiliated Exchanges.
---------------------------------------------------------------------------

    \8\ The Exchange will submit a rule filing to the Commission to 
adopt requirements similar or identical to current Rule 2.13 should 
it become a DEA for any of its Members in the future.
    \9\ See FINRA Rule 4360 and NYSE Rule 4360.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder that are applicable to a national securities exchange, and, 
in particular, with the requirements of Section 6(b) of the Act.\10\ 
Specifically, the proposed change is consistent with Section 6(b)(5) of 
the Act,\11\ because it is designed to promote just and equitable 
principles of trade, to remove impediments to, and perfect the 
mechanism of, a free and open market and a national market system, and, 
in general, to protect investors and the public interest. The proposed 
rule change is designed to provide a consistent rule set across each of 
the BGM Affiliated Exchanges. As mentioned above, the proposed rule 
changes, combined with the planned filing for BYX, would provide for a 
consistent set of rules across each of the BGM Affiliated Exchanges. 
Consistent rules, in turn, will simplify the regulatory requirements 
for Members of the Exchange that are also participants on EDGA, EDGX 
and/or BYX as well as result in greater uniformity, less burdensome and 
more efficient regulatory compliance and understanding of Exchange 
Rules. As such, the proposed rule change would foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities and would remove impediments to and perfect the mechanism of 
a free and open market and a national market system.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In addition, the proposed rule change would eliminate unnecessary 
confusion with respect to the Exchange's rules by removing a rule that 
has never had a direct nexus to the trading on the Exchange or the 
relationship between the Exchange and its Members. The Exchange 
believes that Rule 2.13 is obsolete as the Exchange does not, nor does 
it currently intend to, act in the capacity of a DEA. Deleting Rule 
2.13 would not ease any of the requirements on its Members that are 
required to join SIPC as FINRA and the NYSE serve as a DEA for those 
Members and include rules containing similar requirements as current 
Exchange Rule 2.13.\12\ The Exchange believes that eliminating these 
rules will reduce any investor confusion regarding a rule the Exchange 
has never applied, nor intends to apply. Further, eliminating 
unnecessary and obsolete rules removes impediments to the perfection of 
the mechanisms for a free and open market system consistent with the 
requirements of Section 6(b)(5) of the Act.\13\
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    \12\ See FINRA Rule 4360 and NYSE Rule 4360.
    \13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange 
notes that deleting Rule 2.13 will align Exchange rules with those of 
the BGM Affiliated Exchanges. The Exchange has never utilized this 
rule, nor does the Exchange intend to utilize it in the future. 
Therefore, the Exchange does not believe that eliminating Rule 2.13 
will impose any burden on competition.

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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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

    The Exchange has designated this rule filing as non-controversial 
under Section 19(b)(3)(A) of the Act \14\ and paragraph (f)(6) of Rule 
19b-4 thereunder.\15\ The proposed rule change effects a change that 
(A) does not significantly affect the protection of investors or the 
public interest; (B) does not impose any significant burden on 
competition; and (C) by its terms, does not become operative for 30 
days after the date of the filing, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest; provided that the self-regulatory organization 
has given the Commission written notice of its intent to file the 
proposed rule change, along with a brief description and text of the 
proposed rule change, at least five business days prior to the date of 
filing of the proposed rule change, or such shorter time as designated 
by the Commission.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily temporarily suspend such rule 
change if it appears to the Commission that such action is: (1) 
Necessary or appropriate in the public interest; (2) for the protection 
of investors; or (3) otherwise in furtherance of the purposes of the 
Act. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule should be 
approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-BATS-2015-78 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-BATS-2015-78. This file 
number should be included on the

[[Page 60421]]

subject line if email is used. To help the Commission process and 
review your comments more efficiently, please use only one method. The 
Commission will post all comments on the Commission's Internet Web site 
(https://www.sec.gov/rules/sro.shtml).
    Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for 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-BATS-2015-78 and 
should be submitted on or before October 27, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ See 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-25327 Filed 10-5-15; 8:45 am]
 BILLING CODE 8011-01-P
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