Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Changes in Connection With the Operation of the Exchange's Equity Options Platform, 20709-20711 [2016-08044]
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mstockstill on DSK4VPTVN1PROD with NOTICES
Federal Register / Vol. 81, No. 68 / Friday, April 8, 2016 / Notices
whether the amount of securities
purchased by the Fund, or its respective
Master Fund, in Affiliated
Underwritings and the amount
purchased directly from an
Underwriting Affiliate have changed
significantly from prior years. The
Board will take any appropriate actions
based on its review, including, if
appropriate, the institution of
procedures designed to ensure that
purchases of securities in Affiliated
Underwritings are in the best interest of
shareholders of the Fund.
8. Each Fund, or its respective Master
Fund, will maintain and preserve
permanently in an easily accessible
place a written copy of the procedures
described in the preceding condition,
and any modifications to such
procedures, and will maintain and
preserve for a period of not less than six
years from the end of the fiscal year in
which any purchase in an Affiliated
Underwriting occurred, the first two
years in an easily accessible place, a
written record of each purchase of
securities in Affiliated Underwritings
once an investment by a Fund of Funds
in the securities of the Fund exceeds the
limit of section 12(d)(1)(A)(i) of the Act,
setting forth from whom the securities
were acquired, the identity of the
underwriting syndicate’s members, the
terms of the purchase, and the
information or materials upon which
the Board’s determinations were made.
9. Before investing in a Fund in
excess of the limit in section
12(d)(1)(A), a Fund of Funds and the
Trust will execute a FOF Participation
Agreement stating, without limitation,
that their respective boards of directors
or trustees and their investment
advisers, or trustee and Sponsor, as
applicable, understand the terms and
conditions of the order, and agree to
fulfill their responsibilities under the
order. At the time of its investment in
Shares of a Fund in excess of the limit
in section 12(d)(1)(A)(i), a Fund of
Funds will notify the Fund of the
investment. At such time, the Fund of
Funds will also transmit to the Fund a
list of the names of each Fund of Funds
Affiliate and Underwriting Affiliate. The
Fund of Funds will notify the Fund of
any changes to the list of the names as
soon as reasonably practicable after a
change occurs. The Fund and the Fund
of Funds will maintain and preserve a
copy of the order, the FOF Participation
Agreement, and the list with any
updated information for the duration of
the investment and for a period of not
less than six years thereafter, the first
two years in an easily accessible place.
10. Before approving any advisory
contract under section 15 of the Act, the
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board of directors or trustees of each
Investing Management Company
including a majority of the disinterested
directors or trustees, will find that the
advisory fees charged under such
contract are based on services provided
that will be in addition to, rather than
duplicative of, the services provided
under the advisory contract(s) of any
Fund, or its respective Master Fund, in
which the Investing Management
Company may invest. These findings
and their basis will be fully recorded in
the minute books of the appropriate
Investing Management Company.
11. Any sales charges and/or service
fees charged with respect to shares of a
Fund of Funds will not exceed the
limits applicable to a fund of funds as
set forth in NASD Conduct Rule 2830.
12. No Fund, or its respective Master
Fund, will acquire securities of an
investment company or company
relying on section 3(c)(1) or 3(c)(7) of
the Act in excess of the limits contained
in section 12(d)(1)(A) of the Act, except
to the extent (i) the Fund, or its
respective Master Fund, acquires
securities of another investment
company pursuant to exemptive relief
from the Commission permitting the
Fund, or its respective Master Fund, to
acquire securities of one or more
investment companies for short-term
cash management purposes, (ii) the
Fund acquires securities of the Master
Fund pursuant to the Master-Feeder
Relief, or (iii) the Fund invests in a
Wholly-Owned Subsidiary that is a
wholly-owned and controlled
subsidiary of the Fund (or its respective
Master Fund) as described in the
Application. Further, no Wholly-Owned
Subsidiary will acquire securities of any
other investment company or company
relying on section 3(c)(1) or 3(c)(7) of
the Act other than money market funds
that comply with rule 2a–7 for shortterm cash management purposes.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–08047 Filed 4–7–16; 8:45 am]
BILLING CODE 8011–01–P
PO 00000
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77509; File No. SR–
BatsBZX–2016–02]
Self-Regulatory Organizations; Bats
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Changes in Connection
With the Operation of the Exchange’s
Equity Options Platform
April 4, 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 March 24,
2016, Bats BZX 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 ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
amend Rule 21.15, Data Dissemination,
in connection with the operation BZX
Options, as described below. In
connection with this change the
Exchange also proposes to adopt
definitions of ‘‘Priority Customer’’ and
‘‘Priority Customer Order’’ in Rule 16.1.
Finally, the Exchange also proposes a
related change to Rule 20.6.
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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
2 17
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Federal Register / Vol. 81, No. 68 / Friday, April 8, 2016 / Notices
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.
mstockstill on DSK4VPTVN1PROD with NOTICES
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is proposing to modify
Rule 21.15, Data Dissemination, which
sets forth information regarding
quotations and data feeds provided by
BZX Options. Specifically, the Exchange
proposes to adopt new paragraph (c) to
provide information regarding the
existence of Priority Customer interest
on the BZX order book (‘‘BZX Book’’).
In connection with this change the
Exchange also proposes to adopt
definitions of ‘‘Priority Customer’’ and
‘‘Priority Customer Order’’ in Rule 16.1.
Finally, the Exchange also proposes a
related change to Rule 20.6.
As proposed, the Exchange will make
available to all market participants
through the Options Price Reporting
Authority (‘‘OPRA’’) an indication that
there is Priority Customer interest
included in the best bid or offer
(‘‘BBO’’) disseminated by the Exchange.
Further, the Exchange will identify
Priority Customer orders and trades as
such on messages disseminated by the
Exchange through its Multicast PITCH
data feed. The proposed rule is similar
to and based on Rule 21.15(c) of the
Exchange’s affiliated options exchange,
the options platform operated by Bats
EDGX Exchange, Inc. (‘‘EDGX
Options’’).
The Exchange notes that EDGX
Options Rule 21.15(c) is identical to the
proposed rule with the exception that
EDGX Options Rule 21.15(c) currently
refers to Customers, which term also
includes broker-dealers and Public
Customers, rather than Priority
Customers as proposed by the Exchange.
The Exchange notes that simultaneous
with this proposal, Bats EDGX
Exchange, Inc. is filing a proposal to
modify Rule 21.15 to change the
reference in such rule to ‘‘Priority
Customer’’ and to adopt definitions of
‘‘Priority Customer’’ and ‘‘Priority
Customer Order.’’ 5
In addition to the change described
above, the Exchange proposes to adopt
definitions of ‘‘Priority Customer’’ and
‘‘Priority Customer Order’’ in Rule 16.1
and to use such defined terms in
proposed Rule 21.15(c). As proposed, a
5 See SR–BatsEDGX–2016–03, available at: https://
www.batstrading.com/regulation/rule_filings/edgx/.
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Priority Customer would mean any
person or entity that is not: (A) a broker
or dealer in securities; or (B) a
Professional.6 In turn, a Priority
Customer Order would means an order
for the account of a Priority Customer.
The proposed definitions are similar to
and based on the definitions of the same
terms set forth in MIAX Rule 100. The
Exchange proposes to adopt these new
definitions in new paragraph (a)(45) and
to re-number existing paragraphs (a)(45)
through (a)(47) as paragraphs (a)(46)
through (a)(48). In addition, because the
defined term ‘‘Public Customer Order’’
is not currently utilized in Exchange
Rules, the Exchange proposes to delete
this definition, which is currently
contained in paragraph (a)(48).
The Exchange proposes to adopt the
definition of Priority Customer to
exclude both broker-dealers and
Professionals. This change is consistent
with the Exchange’s fee schedule, which
already excludes Professionals from the
definition of the term Customer for
purposes of pricing on the Exchange.7
In addition to the proposed changes
described above, the Exchange also
proposes to modify Rule 20.6(a)(1) to
use the defined term of ‘‘Professional’’
rather than the term ‘‘Professional
Customer,’’ which is not defined in Rule
16.1.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with the
requirements of the Act and the rules
and regulations thereunder that are
applicable to a national securities
exchange, and, in particular, with the
requirements of Section 6(b) of the Act.8
In particular, the proposal is consistent
with Section 6(b)(5) of the Act 9 because
it is designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, 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
6 Pursuant to Rule 16.1(a)(45) (proposed to be
renumbered as 16.1(a)(46)), the Exchange defines a
‘‘Professional’’ as any person or entity that (A) is
not a broker or dealer in securities, and (B) places
more than 390 orders in listed options per day on
average during a calendar month for its own
beneficial account(s).
7 See the BZX Options fee schedule available at:
https://www.batsoptions.com/support/fee_schedule/
bzx. As defined on the fee schedule, a ‘‘Customer’’
is synonymous with the proposed term Priority
Customer in the Exchange’s Rules as the definition
excludes both broker dealers and Professionals as
defined in BZX Rule 16.1.
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
PO 00000
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public interest. The proposed rule
change will allow the Exchange to
provide information that is provided by
other options exchanges.10 Equivalent
information from the Exchange will
enable market participants to participate
on the Exchange in the same way that
they participate on other options
exchanges. In particular, the indication
that Priority Customer interest exists on
the BZX Book might increase the
likelihood of executions for such orders.
As set forth above, proposed Exchange
Rule 21.15(c) is based on EDGX Rule
21.15(c) and will be identical to such
rule following a modification by EDGX
Options to instead use the term Priority
Customer rather than Customer. Further,
the definitions of Priority Customer and
Priority Customer Order are similar to
and based on the definitions of the same
terms set forth in MIAX Rule 100.
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change does not
introduce any burden on competition,
but rather, would allow the Exchange to
provide information provided by other
option exchanges regarding the
existence of customer interest on the
order book.11 Similarly, the proposed
definitions of Priority Customer and
Priority Customer Order would align the
Exchange’s rules more closely with
those of other options exchanges.
(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 written
comments from members or other
interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change
does not: (i) Significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
10 See EDGX Rule 21.15; see also MIAX Rule
506(c); Securities Exchange Act Release No. 62399
(June 28, 2010), 75 FR 38587 (July 2, 2010) (SR–
ISE–2010–34) (Order Approving Proposed Rule
Change to Fees for the ISE Order Feed) (describing
that information is contained on individual limit
orders indicating whether such orders are customer
orders).
11 See id.
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Federal Register / Vol. 81, No. 68 / Friday, April 8, 2016 / Notices
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 12 and Rule 19b–4(f)(6)
thereunder.13
A proposed rule change filed under
Rule 19b–4(f)(6) under the Act 14
normally does not become operative for
30 days after the date of filing. However,
Rule 19b–4(f)(6)(iii) 15 permits the
Commission to designate a shorter time
if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to 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
appropriate because it will allow the
Exchange to immediately begin
providing information regarding the
existence of a Priority Customer on the
order book that is similar to information
provided by other options exchanges.
The Commission also believes that it is
appropriate for the Exchange to adopt
definitions of Priority Customer and
Priority Customer Order as they are
similar to and based on MIAX Rule 100.
Accordingly, the proposed definitions
are similar to existing rules of other
options exchanges and do not raise any
new policy issues. Based on the
foregoing, the Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest.16 The
Commission hereby grants the
Exchange’s request and designates the
proposal operative upon filing.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
12 15
U.S.C. 78s(b)(3)(A).
addition, Rule 19b–4(f)(6)(iii) requires the
Exchange to give the Commission written notice of
the Exchange’s 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. The Exchange has satisfied this
requirement.
14 17 CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6)(iii).
16 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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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–
BatsBZX–2016–02 on the subject line.
• 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–BatsBZX–2016–02. 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 will also be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
BatsBZX–2016–02 and should be
submitted on or before April 29, 2016.
Frm 00106
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For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–08044 Filed 4–7–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77508; File No. SR–
BatsEDGX–2016–03]
Self-Regulatory Organizations; Bats
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Changes in Connection
With the Operation of the Exchange’s
Equity Options Platform
April 4, 2016.
Paper Comments
PO 00000
20711
Sfmt 4703
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 March 24,
2016, Bats EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
make a modification to Rule 21.1
(Definitions) in connection with the
operation of the attribution feature of
EDGX Options, as described below. In
addition, the Exchange proposes to
adopt definitions of ‘‘Priority Customer’’
and ‘‘Priority Customer Order’’ in Rule
16.1 and to use such definitions
throughout Rules 21.8, 21.10 and 21.15.
Finally, the Exchange also proposes
related changes to Rules 20.6 and 21.8.
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.
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
1 15
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]]>Agencies
[Federal Register Volume 81, Number 68 (Friday, April 8, 2016)]
[Notices]
[Pages 20709-20711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-08044]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77509; File No. SR-BatsBZX-2016-02]
Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Changes in
Connection With the Operation of the Exchange's Equity Options Platform
April 4, 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 March 24, 2016, Bats BZX 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange filed a proposal to amend Rule 21.15, Data
Dissemination, in connection with the operation BZX Options, as
described below. In connection with this change the Exchange also
proposes to adopt definitions of ``Priority Customer'' and ``Priority
Customer Order'' in Rule 16.1. Finally, the Exchange also proposes a
related change to Rule 20.6.
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
[[Page 20710]]
statements may be examined at the places specified in Item IV below.
The Exchange has prepared summaries, set forth in Sections A, B, and C
below, of the most significant parts of such statements.
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to modify Rule 21.15, Data Dissemination,
which sets forth information regarding quotations and data feeds
provided by BZX Options. Specifically, the Exchange proposes to adopt
new paragraph (c) to provide information regarding the existence of
Priority Customer interest on the BZX order book (``BZX Book''). In
connection with this change the Exchange also proposes to adopt
definitions of ``Priority Customer'' and ``Priority Customer Order'' in
Rule 16.1. Finally, the Exchange also proposes a related change to Rule
20.6.
As proposed, the Exchange will make available to all market
participants through the Options Price Reporting Authority (``OPRA'')
an indication that there is Priority Customer interest included in the
best bid or offer (``BBO'') disseminated by the Exchange. Further, the
Exchange will identify Priority Customer orders and trades as such on
messages disseminated by the Exchange through its Multicast PITCH data
feed. The proposed rule is similar to and based on Rule 21.15(c) of the
Exchange's affiliated options exchange, the options platform operated
by Bats EDGX Exchange, Inc. (``EDGX Options'').
The Exchange notes that EDGX Options Rule 21.15(c) is identical to
the proposed rule with the exception that EDGX Options Rule 21.15(c)
currently refers to Customers, which term also includes broker-dealers
and Public Customers, rather than Priority Customers as proposed by the
Exchange. The Exchange notes that simultaneous with this proposal, Bats
EDGX Exchange, Inc. is filing a proposal to modify Rule 21.15 to change
the reference in such rule to ``Priority Customer'' and to adopt
definitions of ``Priority Customer'' and ``Priority Customer Order.''
\5\
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\5\ See SR-BatsEDGX-2016-03, available at: https://www.batstrading.com/regulation/rule_filings/edgx/.
---------------------------------------------------------------------------
In addition to the change described above, the Exchange proposes to
adopt definitions of ``Priority Customer'' and ``Priority Customer
Order'' in Rule 16.1 and to use such defined terms in proposed Rule
21.15(c). As proposed, a Priority Customer would mean any person or
entity that is not: (A) a broker or dealer in securities; or (B) a
Professional.\6\ In turn, a Priority Customer Order would means an
order for the account of a Priority Customer. The proposed definitions
are similar to and based on the definitions of the same terms set forth
in MIAX Rule 100. The Exchange proposes to adopt these new definitions
in new paragraph (a)(45) and to re-number existing paragraphs (a)(45)
through (a)(47) as paragraphs (a)(46) through (a)(48). In addition,
because the defined term ``Public Customer Order'' is not currently
utilized in Exchange Rules, the Exchange proposes to delete this
definition, which is currently contained in paragraph (a)(48).
---------------------------------------------------------------------------
\6\ Pursuant to Rule 16.1(a)(45) (proposed to be renumbered as
16.1(a)(46)), the Exchange defines a ``Professional'' as any person
or entity that (A) is not a broker or dealer in securities, and (B)
places more than 390 orders in listed options per day on average
during a calendar month for its own beneficial account(s).
---------------------------------------------------------------------------
The Exchange proposes to adopt the definition of Priority Customer
to exclude both broker-dealers and Professionals. This change is
consistent with the Exchange's fee schedule, which already excludes
Professionals from the definition of the term Customer for purposes of
pricing on the Exchange.\7\
---------------------------------------------------------------------------
\7\ See the BZX Options fee schedule available at: https://www.batsoptions.com/support/fee_schedule/bzx. As defined on the fee
schedule, a ``Customer'' is synonymous with the proposed term
Priority Customer in the Exchange's Rules as the definition excludes
both broker dealers and Professionals as defined in BZX Rule 16.1.
---------------------------------------------------------------------------
In addition to the proposed changes described above, the Exchange
also proposes to modify Rule 20.6(a)(1) to use the defined term of
``Professional'' rather than the term ``Professional Customer,'' which
is not defined in Rule 16.1.
2. Statutory Basis
The Exchange believes that its proposal is consistent with the
requirements of the Act and the rules and regulations thereunder that
are applicable to a national securities exchange, and, in particular,
with the requirements of Section 6(b) of the Act.\8\ In particular, the
proposal is consistent with Section 6(b)(5) of the Act \9\ because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, 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 will allow the Exchange to provide information that is
provided by other options exchanges.\10\ Equivalent information from
the Exchange will enable market participants to participate on the
Exchange in the same way that they participate on other options
exchanges. In particular, the indication that Priority Customer
interest exists on the BZX Book might increase the likelihood of
executions for such orders. As set forth above, proposed Exchange Rule
21.15(c) is based on EDGX Rule 21.15(c) and will be identical to such
rule following a modification by EDGX Options to instead use the term
Priority Customer rather than Customer. Further, the definitions of
Priority Customer and Priority Customer Order are similar to and based
on the definitions of the same terms set forth in MIAX Rule 100.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ See EDGX Rule 21.15; see also MIAX Rule 506(c); Securities
Exchange Act Release No. 62399 (June 28, 2010), 75 FR 38587 (July 2,
2010) (SR-ISE-2010-34) (Order Approving Proposed Rule Change to Fees
for the ISE Order Feed) (describing that information is contained on
individual limit orders indicating whether such orders are customer
orders).
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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 that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change
does not introduce any burden on competition, but rather, would allow
the Exchange to provide information provided by other option exchanges
regarding the existence of customer interest on the order book.\11\
Similarly, the proposed definitions of Priority Customer and Priority
Customer Order would align the Exchange's rules more closely with those
of other options exchanges.
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\11\ See id.
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(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change does not: (i) Significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become
[[Page 20711]]
operative for 30 days from the date on which it was filed, or such
shorter time as the Commission may designate, the proposed rule change
has become effective pursuant to Section 19(b)(3)(A) of the Act \12\
and Rule 19b-4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to
give the Commission written notice of the Exchange's 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. The Exchange has satisfied this
requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) under the Act
\14\ normally does not become operative for 30 days after the date of
filing. However, Rule 19b-4(f)(6)(iii) \15\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to 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 appropriate because it
will allow the Exchange to immediately begin providing information
regarding the existence of a Priority Customer on the order book that
is similar to information provided by other options exchanges. The
Commission also believes that it is appropriate for the Exchange to
adopt definitions of Priority Customer and Priority Customer Order as
they are similar to and based on MIAX Rule 100. Accordingly, the
proposed definitions are similar to existing rules of other options
exchanges and do not raise any new policy issues. Based on the
foregoing, the Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest.\16\ The Commission hereby grants the Exchange's request and
designates the proposal operative upon filing.
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ For purposes only of waiving the 30-day operative delay,
the Commission has also 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 the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission 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-BatsBZX-2016-02 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-BatsBZX-2016-02. 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 will also be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-BatsBZX-2016-02 and should
be submitted on or before April 29, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-08044 Filed 4-7-16; 8:45 am]
BILLING CODE 8011-01-P
