Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.23, Auctions, To Lengthen the Auction Information Dissemination Periods for the Opening and Closing Auctions in BZX Listed Securities, 12175-12176 [2016-05124]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 81, Number 45 (Tuesday, March 8, 2016)]
[Notices]
[Pages 12175-12176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-05124]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77284; File No. SR-BATS-2016-24]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Rule 11.23, Auctions, To Lengthen the Auction Information Dissemination 
Periods for the Opening and Closing Auctions in BZX Listed Securities

March 3, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on February 25, 2016, Bats BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') (f/k/a BATS Exchange, Inc.) 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\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange filed a proposal to amend paragraphs (b)(2)(A) and 
(c)(2)(A) of Rule 11.23, Auctions, to lengthen the auction information 
dissemination periods for the Opening and Closing Auctions in BZX 
listed securities.\5\
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    \5\ A BZX listed security is a security listed on the Exchange 
pursuant to Chapter 14 of the Exchange's Rules and includes both 
corporate listed securities and Exchange Traded Products (``ETPs'').
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    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 paragraphs (b)(2)(A) and (c)(2)(A) 
of Rule 11.23, Auctions, to lengthen the auction information 
dissemination periods for the Opening and Closing Auctions in BZX 
listed securities. In sum, Users \6\ may begin to enter orders to 
participate in the Opening or Closing Auction at 8:00 a.m. Eastern 
Time, the beginning of the Pre-Opening Session.\7\ Orders designated to 
participate in the Opening Auction will be queued until 9:30 a.m. 
Eastern Time, at which time they will be eligible to execute in the 
Opening Auction. Orders designated to participate in the Closing 
Auction will be queued until 4:00 p.m. Eastern Time, at which time they 
will be eligible to execute in the Closing Auction.
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    \6\ See Exchange Rule 1.5(cc).
    \7\ See Exchange Rule 11.23(b)(1)(A) and (c)(1)(A). The Pre-
Opening Session is defined in Exchange Rule 1.5(r).
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    Currently, the Exchange begins to disseminate at 9:28 a.m. Eastern 
Time the Reference Price,\8\ Indicative Price,\9\ Auction Only 
Price,\10\ and the lesser of Reference Buy Shares \11\ and Reference 
Sell Shares \12\ (collectively, the ``BZX Auction Information'') 
associated with the Opening Auction. The Exchange begins to disseminate 
the BZX Auction Information for the Closing Auction at 3:55 p.m. 
Eastern Time. For both the Opening and Closing Auction, the BZX Auction 
Information is updated and disseminated every five (5) seconds via 
electronic means to subscribers to the BZX Depth \13\ and BZX Auction 
Feed \14\ market data products and is also made available to other 
market participants by market data vendors. The BZX Auction Information 
is also made available on the Bats public Web site.
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    \8\ See Exchange Rule 11.23(a)(19).
    \9\ See Exchange Rule 11.23(a)(10).
    \10\ See Exchange Rule 11.23(a)(2).
    \11\ See Exchange Rule 11.23(a)(18).
    \12\ See Exchange Rule 11.23(a)(21).
    \13\ See Exchange Rule 11.22(a) and (c).
    \14\ See Exchange Rule 11.22(i).
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    The Exchange now propose to lengthen the periods during which it 
disseminates BZX Auction Information for the Opening and Closing 
Auctions in BZX listed securities. As amended, Rule 11.23(b)(2)(A) 
would state that the Exchange will begin to disseminate BZX Auction 
Information for the Opening Auction at 8:00 a.m. Eastern Time, rather 
than 9:28 a.m. Eastern Time. Rule 11.23(c)(2)(A) would be amended to 
state that the Exchange will begin to disseminate BZX Auction 
Information for the Closing Auction at 3:00 p.m. Eastern Time, rather 
than 3:55 p.m. Eastern Time.\15\
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    \15\ The order entry cut off times for the Opening and Closing 
Auctions under Rules 11.23(b)((1)(A) and (c)(1)(A), respectively, 
will remain unchanged.
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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.\16\ 
Specifically, the proposed change is consistent with Section 6(b)(5) of 
the Act,\17\ 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. Specifically, 
the proposal supports the objectives of perfecting the mechanism of a 
free and open market and the national market system because lengthening 
the periods when which BZX Auction Information will be disseminated for 
the Opening and Closing Auctions will provide market participants with 
more information and time for them to evaluate the market for the 
security. The Exchange believes lengthening the dissemination period 
will enable greater participation in the Opening and Closing Auctions 
because it will provide periodic information about the ability of 
investors to execute orders at particular sizes and prices over a 
longer period of

[[Page 12176]]

time in advance of the auction. Finally, having greater knowledge about 
the trading interest in the BZX Book prior to the execution of the 
Opening and Closing Auctions will enable the market participants to 
make more informed decisions regarding their participation in the 
Opening or Closing Auctions. Therefore, the Exchange believes the 
proposed rule change promotes just and equitable principles of trade, 
removes impediments to, and perfects the mechanism of, a free and open 
market and a national market system.
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    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the act. To the contrary, the proposal 
will promote competition because the Exchange believes lengthening the 
dissemination period will enable greater participation in the Opening 
and Closing Auctions by providing market participants with more 
information and time to evaluate the market for the security. The 
proposed rule change is, in effect, pro-competition as it promotes fair 
and orderly markets and protects investors, which, in turn, will 
buttress investor confidence and attract more investors to participate 
in the U.S. equities markets.

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 filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \18\ and Rule 19b-4(f)(6) \19\ thereunder. 
Because the foregoing proposed rule does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate 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 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,\20\ the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \21\ and Rule 19b-4(f)(6) 
thereunder.\22\
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    \18\ 15 U.S.C. 78s(b)(3(A).
    \19\ 17 CFR 240.19b-4(f)(6).
    \20\ The Exchange has fulfilled this requirement.
    \21\ 15 U.S.C. 78s(b)(3)(A).
    \22\ 17 CFR 240.19b-4(f)(6).
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    Under Rule 19b-4(f)(6) of the Act,\23\ a proposal does not become 
operative for 30 days after the date of its filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest. The Exchange has requested that 
the Commission waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Commission believes 
that waiver of the 30-day operative delay is consistent with the 
protection of investors and the public interest because market 
participants will be able to more immediately benefit from the extended 
period for dissemination of BZX Auction Information for the Opening and 
Closing Auctions. Accordingly, the Commission designates the proposal 
operative upon filing.\24\
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    \23\ Id.
    \24\ For purposes only of waiving the operative delay, the 
Commission has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

IV. Solicitation of Comments

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

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-2016-24 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-2016-24. 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-BATS-2016-24, and should be 
submitted on or before March 29, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\25\
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    \25\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-05124 Filed 3-7-16; 8:45 am]
 BILLING CODE 8011-01-P