Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 11.7, Opening Process, 35075-35078 [2016-12791]
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Federal Register / Vol. 81, No. 105 / Wednesday, June 1, 2016 / Notices
of the Act 3 in general, and furthers the
objectives of Section 6(b)(5) of the Act 4
in particular, in that it is designed to
protect investors and the public interest
by streamlining various aspects of the
membership process. The Exchange
believes that the provisions identified in
Rule 900.1, 910, and 921 are outdated
and unnecessary. These rules regarding
partnerships and changes to the
partnership rules no longer serves the
needs of the Exchange.
As described above PHLX’s former
ownership required the Exchange to be
vigilant of the ownership structure of its
members in case of financial distress or
bankruptcy as the seat structure was
vital to the financial condition of the
Exchange and the relationships among
members. Before demutualization,
members had an ownership interest in
the Exchange. Today, permits convey no
ownership and therefore such vigilance
as to the ownership structure of
members is no longer warranted.
The removal of Rules 900.1(b) and (d),
Rule 910(j) and part of 921(b) will
promote just and equitable principles of
trade, and foster cooperation and
coordination with persons engaged in
facilitating transactions in securities by
removing burdensome requirements so
that members and member organizations
may properly focus on other relevant
requirements which benefit the
marketplace.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
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The proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange’s proposed amendments
seek to delete certain unnecessary rules
which today burden partnerships over
corporations. The deletions of the Rules
900.1(b) and (d), Rule 910(j) will remove
a current burden on competition which
requires members and member
organizations that are partnerships to
disclose unnecessary information as
compared to other corporate entities not
structured as a partnership.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
3 15
U.S.C. 78f(b).
4 15 U.S.C. 78f(b)(5).
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing 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
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 5 and
subparagraph (f)(6) of Rule 19b–4
thereunder.6
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) 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–
Phlx–2016–38 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–Phlx–2016–38. 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/
5 15
U.S.C. 78s(b)(3)(a)(iii) [sic].
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
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. The Exchange has satisfied this
requirement.
6 17
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35075
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–Phlx–
2016–38 and should be submitted on or
before June 22, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Brent J. Fields,
Secretary.
[FR Doc. 2016–12778 Filed 5–31–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77906; File No. SR–
BatsEDGA–2016–10]
Self-Regulatory Organizations; Bats
EDGA Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change to Rule 11.7,
Opening Process
May 25, 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 May 13,
2016, Bats EDGA Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGA’’) 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
7 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 81, No. 105 / Wednesday, June 1, 2016 / Notices
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 11.7, Opening Process, to
await a two-sided quotation from the
listing exchange prior to opening a
security for trading during Regular
Trading Hours.5
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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Rule 11.7, Opening Process, to await a
two-sided quotation from the listing
exchange prior to opening a security for
trading during Regular Trading Hours.
Exchange Rule 11.7 describes the
Exchange’s current opening process.
Subparagraph (a) to Rule 11.7 states that
prior to the beginning of the Regular
Session,6 Users 7 who wish to
participate in the Opening Process may
enter orders to buy or sell.8
Subparagraph (a)(2) to Rule 11.7
provides that, with certain exceptions,9
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3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii).
5 See Exchange Rule 1.5(y).
6 See Exchange Rule 1.5(hh).
7 See Exchange Rule 1.5(ee).
8 Orders cancelled prior to the Opening Process
will not participate in the Opening Process.
9 The following order types and instruction may
not participate in the opening process: (i) Limit
Orders with a Post Only instruction, (ii) the
4 17
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all orders with a time-in-force
instruction of Regular Hours Only may
participate in the Opening Process.
Subparagraph (b) to Rule 11.7 states that
the Exchange will open by performing
the Opening Process in which the
System will attempt to match buy and
sell orders that are executable at the
midpoint of the National Best Bid and
Offer (‘‘NBBO’’). Subparagraph (c) to
Exchange Rule 11.7 sets forth the
process by which the System sets the
opening price of the Opening Process.
Currently, the System 10 sets the price of
the Opening Process at the midpoint of
the first NBBO after 9:30:00 a.m. Eastern
Time. However, for securities listed on
either the New York Stock Exchange,
Inc. (‘‘NYSE’’) or NYSE MKT LLC
(‘‘NYSE MKT’’), the System currently
sets the price of the Opening Process at
the midpoint of the first NBBO
subsequent to the first reported trade on
the listing exchange after 9:30:00 a.m.
Eastern Time. The Exchange may
alternatively set the price of the
Opening Process for securities listed on
either the NYSE or NYSE MKT at the
midpoint of the then prevailing NBBO
when the first two-sided quotation
published by the relevant listing
exchange after 9:30:00 a.m. Eastern
Time, but before 9:45:00 a.m. Eastern
Time if no first trade is reported by the
listing exchange within one second of
publication of the first two-sided
quotation by the listing exchange. The
System waits to set the price at the
midpoint of the first NBBO as set forth
above because securities listed on the
NYSE or NYSE MKT may not open at
precisely 9:30:00 a.m. Eastern Time.
Pursuant to subparagraph (b) of Rule
11.7, all orders executable at the
midpoint of the NBBO will continue to
be processed in time sequence,
beginning with the order with the oldest
time stamp and not in accordance with
Exchange Rule 11.9(a)(2)(B), which
outlines priority at the midpoint of the
NBBO. Matches occur until there are no
remaining contra-side orders or there is
Discretionary Range of Limit Orders, and (iv)
Intermarket Sweep Orders (‘‘ISOs’’) not modified by
Rule 11.7(a)(1), and (iii) orders with a Minimum
Execution Quantity instruction. See Exchange Rule
11.7(a)(2). Orders that are designated for the Regular
Session that cannot participate in the Opening
Process will not be accepted by the System until the
Opening Process is completed or a Contingent
Opening. Id. Limit Orders with a Reserve Quantity
may participate to the full extent of their displayed
size and Reserve Quantity. Id. Limit Orders with a
Discretionary Range may participate up to their
ranked limit price for buy orders and down to their
ranked limit price for sell orders. Id. All Limit
Orders with a Pegged instruction will be eligible for
execution in the Opening Process based on their
pegged prices at the time the Opening Process is
conducted. Id.
10 See Exchange Rule 1.5(cc).
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an imbalance of orders. An imbalance of
orders may result in orders that cannot
be executed in whole or in part. Any
unexecuted orders may then be placed
by the System on the EDGA Book,11
cancelled, executed, or routed to away
Trading Centers in accordance with the
Users’ instructions pursuant to
Exchange Rule 11.11.
The Exchange proposes to amend
subparagraph (c) to Rule 11.7 to now
await a two-sided quotation from the
listing exchange prior to opening a
security for trading during Regular
Trading Hours. As amended,
subparagraph (c)(2) to Rule 11.7 would
state that the System would set the price
of the Opening Process at the midpoint
of the first NBBO subsequent to the first
two-sided quotation published by the
listing exchange after 9:30:00 a.m.
Eastern Time. For securities listed on
either the NYSE or NYSE MKT,
subparagraph (c)(1)(i) to Rule 11.7
would state that the System would set
the price of the Opening Process at the
midpoint of the first NBBO subsequent
to the first reported trade and first
reported quotation on the listing
exchange after 9:30:00 a.m. Eastern
Time. Pursuant to subparagraph (c)(1)(i)
to Rule 11.7, the Exchange will utilize
the existing NBBO to calculate each
securities’ [sic] opening price once a
trade and two-sided quotation are
received from the listing exchange,
regardless of the order in which the
trade or quotation are received. The
Exchange believes the proposed rule
change will enable the listing market’s
quotation to be incorporated into the
NBBO, which the Exchange would, in
turn, utilize in its calculation of the
midpoint of the NBBO. The Exchange
believes doing so would result in an
opening price that more closely reflect
the opening market prices and
conditions for that security. Under
subparagraph (c)(1)(ii) to Rule 11.7, the
Exchange will continue to alternatively
set the price of the Opening Process for
securities listed on either the NYSE or
NYSE MKT at the midpoint of the then
prevailing NBBO when the first twosided quotation published by the
relevant listing exchange after 9:30:00
a.m. Eastern Time, but before 9:45:00
a.m. Eastern Time if no first trade is
reported by the listing exchange within
one second of publication of the first
two-sided quotation by the listing
exchange.
11 The term ‘‘EDGA Book’’ is defined as ‘‘the
System’s electronic file of orders.’’ See Exchange
Rule 1.5(d).
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Federal Register / Vol. 81, No. 105 / Wednesday, June 1, 2016 / Notices
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 12 in general, and furthers the
objectives of Section 6(b)(5) of the Act 13
in particular, in that it is designed 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 Exchange believes
the proposed rule change will promote
just and equitable principles of trade,
removes impediments to, and perfect
the mechanism of, a free and open
market and a national market system
because it enables the System to execute
the Opening Process at a price that is
objectively established by the market for
the security. The proposal would enable
the listing market’s quotation to be
incorporated into the NBBO, which the
Exchange would, in turn, utilize in its
calculation of the midpoint of the
NBBO. The Exchange believes doing so
would result in an opening price that
more closely reflect the opening market
prices and conditions for that security.
Therefore, the Exchange believes the
proposed rule change promotes just and
equitable principles of trade because it
ensures a midpoint price that the
Exchange believes would accurately
reflect the market for the security.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
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The Exchange does not believe that
the proposal will impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act. The proposed rule
change will enable the Exchange to
incorporate the listing market’s
quotation into its calculation of the
midpoint of the NBBO, resulting in an
opening price that would more closely
reflect the opening market prices and
conditions for that security. Therefore,
the Exchange believes the proposed rule
change will promote competition by
enhancing the quality of the Exchange’s
opening process.
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.
12 15
13 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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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
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 14 and Rule 19b–
4(f)(6) thereunder.15
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 16 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 17
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 Exchange states that waiver
of the 30-day operative delay would
allow market participants to
immediately realize the benefits of what
may be more accurate opening prices.
Based on the foregoing, the Commission
believes the waiver of the operative
delay is consistent with the protection
of investors and the public interest.
Therefore, the Commission hereby
waives the operative delay and
designates the proposal operative upon
filing.18
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
change should be approved or
disapproved.
14 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the 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.
16 17 CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii).
18 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).
15 17
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35077
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 No. SR–
BatsEDGA–2016–10 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
No. SR–BatsEDGA–2016–10. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing 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 No. SR–BatsEDGA–
2016–10, and should be submitted on or
before June 22, 2016.
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Federal Register / Vol. 81, No. 105 / Wednesday, June 1, 2016 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Brent J. Fields,
Secretary.
[FR Doc. 2016–12791 Filed 5–31–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77918; File No. SR–
BatsBYX–2016–10]
Self-Regulatory Organizations; Bats
BYX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change Related to Fees
May 25, 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 May 16,
2016, Bats BYX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BYX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the Exchange. The Exchange has
designated the proposed rule change as
one establishing or changing a member
due, fee, or other charge imposed by the
Exchange under Section 19(b)(3)(A)(ii)
of the Act 3 and Rule 19b–4(f)(2)
thereunder,4 which renders the
proposed rule change effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
sradovich on DSK3TPTVN1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
amend the fee schedule applicable to
Members 5 and non-members of the
Exchange pursuant to BYX Rules 15.1(a)
and (c) (‘‘Fee Schedule’’) to reinsert fee
code PX, which was inadvertently
deleted in its entirety in an earlier
proposed rule change.
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.
19 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
5 The term ‘‘Member’’ is defined as ‘‘any
registered broker or dealer that has been admitted
to membership in the Exchange.’’ See Exchange
Rule 1.5(n).
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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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On May 5, 2016, the Exchange
amended Rule 11.13, Order Execution
and Routing, to delete the IOCM and
ICMT routing options.6 At that time, the
Exchange also amended its Fee
Schedule to delete: (i) References to the
IOCM and ICMT routing options under
footnote 8; and (ii) fee code PX, which
was yielded on orders routed to Bats
EDGX Exchange, Inc. (‘‘EDGX’’) to
execute against MidPoint Peg Orders 7
on EDGX using ICMT or IOCM routing
options. Fee code PX is also yielded on
orders routed using the RMPT routing
option.8 In that filing, the Exchange
inadvertently deleted fee code PX in its
entirety when fee code PX should have
only been amended to delete references
to the IOCM and ICMT routing options.
The Exchange now proposes to
reinsert fee code PX, less the references
to the ICMT and IOCM routing options.
The reinserted langue would state that
fee code PX is yielded on orders routing
using the RMPT routing option. Orders
that yield fee code PX in securities
priced at or above $1.00 are charged a
fee of $0.00120 per share and orders in
securities priced below $1.00 are
changed a fee of 0.29% charge of the
order’s total dollar value. The proposed
rates for fee code PX are identical to that
which was included in the Fee
Schedule prior to May 10, 2016.
6 See Securities Exchange Act Release No. 77790
(May 10, 2016), 81 FR 30360 (May 16, 2016) (SR–
BatsBYX–2016–06).
7 See EDGX Rule 11.8(d).
8 RMPT is a routing option under which a MidPoint Peg Order checks the System for available
shares and any remaining shares are then sent to
destinations on the System routing table that
support midpoint eligible orders. If any shares
remain unexecuted after routing, they are posted on
the BYX Book as a MidPoint Peg Order, unless
otherwise instructed by the User. See Exchange
Rule 11.13(b)(3)(Q).
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The Exchange proposes to implement
the proposed rule change immediately.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the objectives of Section 6 of the Act,9
in general, and furthers the objectives of
Section 6(b)(4),10 in particular, as it is
designed to provide for the equitable
allocation of reasonable dues, fees and
other charges among its Members and
other persons using its facilities. The
Exchange believes that its proposed
rates represent an equitable allocation of
reasonable dues, fees, and other charges
among Members and other persons
using its facilities because it is designed
to reinsert fee code PX, which was
inadvertently deleted in an earlier rule
filing. The Exchange does not believe
that this change represents a significant
departure from previous pricing offered
by the Exchange, as fee code PX will
continue to be yielded on orders that
utilize the RMPT routing option and
will be charged the same rates as set
forth in the Fe Schedule prior to its
mistaken deletion. Furthermore, the
Exchange notes that routing through the
Exchange and utilizing fee code PX is
voluntary. Lastly, the Exchange also
believes that the proposed amendment
is non-discriminatory because it applies
uniformly to all Members.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
This proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange does not believe the
proposed rule change will impose any
burden on competition as it is simply
designed to reinsert fee code PX, which
was that was inadvertently deleted in an
earlier rule filing.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
Members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
9 15
U.S.C. 78f.
U.S.C. 78f(b)(4).
10 15
E:\FR\FM\01JNN1.SGM
01JNN1
]]>Agencies
[Federal Register Volume 81, Number 105 (Wednesday, June 1, 2016)]
[Notices]
[Pages 35075-35078]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-12791]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77906; File No. SR-BatsEDGA-2016-10]
Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule
11.7, Opening Process
May 25, 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 May 13, 2016, Bats EDGA Exchange, Inc. (the ``Exchange'' or
``EDGA'') 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
[[Page 35076]]
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 Substance
of the Proposed Rule Change
The Exchange filed a proposal to amend Rule 11.7, Opening Process,
to await a two-sided quotation from the listing exchange prior to
opening a security for trading during Regular Trading Hours.\5\
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\5\ See Exchange Rule 1.5(y).
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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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 11.7, Opening Process, to await
a two-sided quotation from the listing exchange prior to opening a
security for trading during Regular Trading Hours.
Exchange Rule 11.7 describes the Exchange's current opening
process. Subparagraph (a) to Rule 11.7 states that prior to the
beginning of the Regular Session,\6\ Users \7\ who wish to participate
in the Opening Process may enter orders to buy or sell.\8\ Subparagraph
(a)(2) to Rule 11.7 provides that, with certain exceptions,\9\ all
orders with a time-in-force instruction of Regular Hours Only may
participate in the Opening Process. Subparagraph (b) to Rule 11.7
states that the Exchange will open by performing the Opening Process in
which the System will attempt to match buy and sell orders that are
executable at the midpoint of the National Best Bid and Offer
(``NBBO''). Subparagraph (c) to Exchange Rule 11.7 sets forth the
process by which the System sets the opening price of the Opening
Process. Currently, the System \10\ sets the price of the Opening
Process at the midpoint of the first NBBO after 9:30:00 a.m. Eastern
Time. However, for securities listed on either the New York Stock
Exchange, Inc. (``NYSE'') or NYSE MKT LLC (``NYSE MKT''), the System
currently sets the price of the Opening Process at the midpoint of the
first NBBO subsequent to the first reported trade on the listing
exchange after 9:30:00 a.m. Eastern Time. The Exchange may
alternatively set the price of the Opening Process for securities
listed on either the NYSE or NYSE MKT at the midpoint of the then
prevailing NBBO when the first two-sided quotation published by the
relevant listing exchange after 9:30:00 a.m. Eastern Time, but before
9:45:00 a.m. Eastern Time if no first trade is reported by the listing
exchange within one second of publication of the first two-sided
quotation by the listing exchange. The System waits to set the price at
the midpoint of the first NBBO as set forth above because securities
listed on the NYSE or NYSE MKT may not open at precisely 9:30:00 a.m.
Eastern Time.
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\6\ See Exchange Rule 1.5(hh).
\7\ See Exchange Rule 1.5(ee).
\8\ Orders cancelled prior to the Opening Process will not
participate in the Opening Process.
\9\ The following order types and instruction may not
participate in the opening process: (i) Limit Orders with a Post
Only instruction, (ii) the Discretionary Range of Limit Orders, and
(iv) Intermarket Sweep Orders (``ISOs'') not modified by Rule
11.7(a)(1), and (iii) orders with a Minimum Execution Quantity
instruction. See Exchange Rule 11.7(a)(2). Orders that are
designated for the Regular Session that cannot participate in the
Opening Process will not be accepted by the System until the Opening
Process is completed or a Contingent Opening. Id. Limit Orders with
a Reserve Quantity may participate to the full extent of their
displayed size and Reserve Quantity. Id. Limit Orders with a
Discretionary Range may participate up to their ranked limit price
for buy orders and down to their ranked limit price for sell orders.
Id. All Limit Orders with a Pegged instruction will be eligible for
execution in the Opening Process based on their pegged prices at the
time the Opening Process is conducted. Id.
\10\ See Exchange Rule 1.5(cc).
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Pursuant to subparagraph (b) of Rule 11.7, all orders executable at
the midpoint of the NBBO will continue to be processed in time
sequence, beginning with the order with the oldest time stamp and not
in accordance with Exchange Rule 11.9(a)(2)(B), which outlines priority
at the midpoint of the NBBO. Matches occur until there are no remaining
contra-side orders or there is an imbalance of orders. An imbalance of
orders may result in orders that cannot be executed in whole or in
part. Any unexecuted orders may then be placed by the System on the
EDGA Book,\11\ cancelled, executed, or routed to away Trading Centers
in accordance with the Users' instructions pursuant to Exchange Rule
11.11.
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\11\ The term ``EDGA Book'' is defined as ``the System's
electronic file of orders.'' See Exchange Rule 1.5(d).
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The Exchange proposes to amend subparagraph (c) to Rule 11.7 to now
await a two-sided quotation from the listing exchange prior to opening
a security for trading during Regular Trading Hours. As amended,
subparagraph (c)(2) to Rule 11.7 would state that the System would set
the price of the Opening Process at the midpoint of the first NBBO
subsequent to the first two-sided quotation published by the listing
exchange after 9:30:00 a.m. Eastern Time. For securities listed on
either the NYSE or NYSE MKT, subparagraph (c)(1)(i) to Rule 11.7 would
state that the System would set the price of the Opening Process at the
midpoint of the first NBBO subsequent to the first reported trade and
first reported quotation on the listing exchange after 9:30:00 a.m.
Eastern Time. Pursuant to subparagraph (c)(1)(i) to Rule 11.7, the
Exchange will utilize the existing NBBO to calculate each securities'
[sic] opening price once a trade and two-sided quotation are received
from the listing exchange, regardless of the order in which the trade
or quotation are received. The Exchange believes the proposed rule
change will enable the listing market's quotation to be incorporated
into the NBBO, which the Exchange would, in turn, utilize in its
calculation of the midpoint of the NBBO. The Exchange believes doing so
would result in an opening price that more closely reflect the opening
market prices and conditions for that security. Under subparagraph
(c)(1)(ii) to Rule 11.7, the Exchange will continue to alternatively
set the price of the Opening Process for securities listed on either
the NYSE or NYSE MKT at the midpoint of the then prevailing NBBO when
the first two-sided quotation published by the relevant listing
exchange after 9:30:00 a.m. Eastern Time, but before 9:45:00 a.m.
Eastern Time if no first trade is reported by the listing exchange
within one second of publication of the first two-sided quotation by
the listing exchange.
[[Page 35077]]
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \12\ in general, and furthers the objectives of Section
6(b)(5) of the Act \13\ in particular, in that it is designed 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 Exchange believes the
proposed rule change will promote just and equitable principles of
trade, removes impediments to, and perfect the mechanism of, a free and
open market and a national market system because it enables the System
to execute the Opening Process at a price that is objectively
established by the market for the security. The proposal would enable
the listing market's quotation to be incorporated into the NBBO, which
the Exchange would, in turn, utilize in its calculation of the midpoint
of the NBBO. The Exchange believes doing so would result in an opening
price that more closely reflect the opening market prices and
conditions for that security. Therefore, the Exchange believes the
proposed rule change promotes just and equitable principles of trade
because it ensures a midpoint price that the Exchange believes would
accurately reflect the market for the security.
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\12\ 15 U.S.C. 78f(b).
\13\ 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 proposal will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act. The proposed rule change will enable the
Exchange to incorporate the listing market's quotation into its
calculation of the midpoint of the NBBO, resulting in an opening price
that would more closely reflect the opening market prices and
conditions for that security. Therefore, the Exchange believes the
proposed rule change will promote competition by enhancing the quality
of the Exchange's opening process.
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
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 operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \14\ and Rule 19b-4(f)(6) thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the 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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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \16\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \17\ 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 Exchange
states that waiver of the 30-day operative delay would allow market
participants to immediately realize the benefits of what may be more
accurate opening prices. Based on the foregoing, the Commission
believes the waiver of the operative delay is consistent with the
protection of investors and the public interest. Therefore, the
Commission hereby waives the operative delay and designates the
proposal operative upon filing.\18\
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\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
\18\ 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 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 No. SR-BatsEDGA-2016-10 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 No. SR-BatsEDGA-2016-10. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing 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 No. SR-BatsEDGA-2016-10, and should be
submitted on or before June 22, 2016.
[[Page 35078]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-12791 Filed 5-31-16; 8:45 am]
BILLING CODE 8011-01-P
