Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees, 41638-41641 [2016-15075]

Download as PDF 41638 Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES qualifying CUSIPs to the NYSE Bonds system would not pay a fee, and Users that do not qualify for the fee waiver would benefit by the proposed fee cap. The proposed rule change will therefore benefit all Users that provide liquidity to the NYSE Bonds system. The Exchange further believes that the proposed rule change is equitable and not unfairly discriminatory in that it will apply uniformly to all Users accessing the NYSE Bonds system. Each User will have the ability to determine the extent to which the Exchange’s proposed structure will provide it with an economic incentive to use the NYSE Bonds system, and model its business accordingly. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,11 the Exchange believes that the proposed rule change would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Debt securities typically trade in a decentralized OTC dealer market that is less liquid and transparent than the equities markets. The Exchange believes that the proposed change would increase competition with these OTC venues by creating additional incentives to engage in bonds transactions on the Exchange and rewarding market participants for actively quoting and providing liquidity in the only transparent bond market, which the Exchange believes will enhance market quality. The Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues that are not transparent. In such an environment, the Exchange must continually review, and consider adjusting its fees and rebates to remain competitive with other exchanges as well as with alternative trading systems and other venues that are not required to comply with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees and credits in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. As a result of all of these considerations, the Exchange does not believe that the proposed change will impair the ability of member organizations or competing order execution venues to maintain their competitive standing in the financial markets. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 12 of the Act and subparagraph (f)(2) of Rule 19b–4 13 thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. 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 under Section 19(b)(2)(B) 14 of the Act 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: 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–NYSE– 2016–42, and should be submitted on or before July 18, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–15072 Filed 6–24–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–78111; File No. SR– BatsBZX–2016–24] • 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– NYSE–2016–42 on the subject line. Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSE–2016–42. 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 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 June 8, 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, II and III below, which Items have been prepared by the Exchange. The Exchange has designated the proposed rule change as U.S.C. 78f(b)(8). VerDate Sep<11>2014 18:52 Jun 24, 2016 Jkt 238001 12 15 15 17 13 17 11 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 14 15 U.S.C. 78s(b)(2)(B). June 21, 2016. 1 15 PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. E:\FR\FM\27JNN1.SGM 27JNN1 Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Notices 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. 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 BZX Rules 15.1(a) and (c) (‘‘Fee Schedule’’) to: (i) Add fee codes NA and NB; and (ii) increase the standard rebate for orders that yield fee code B. 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 its Fee Schedule to: (i) Add fee codes NA and NB; and (ii) increase the standard rebate for orders that yield fee code B. mstockstill on DSK3G9T082PROD with NOTICES Fee Codes NA and NB The Exchange previously filed a proposed rule change with the Commission to identify Non-Displayed Orders 6 as such when routed to an 3 15 U.S.C. 78s(b)(3)(A)(ii). 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). 6 See Exchange Rule 11.9(c)(11). 4 17 VerDate Sep<11>2014 18:52 Jun 24, 2016 Jkt 238001 away Trading Center.7 The Exchange intends to implement this functionality on June 1, 2016.8 Because other Trading Centers typically provide different rebates or fees with respect to nondisplayed liquidity the Exchange proposes to amend its Fee Schedule to add fee codes NA and NB, which would apply to routed Non-Displayed Orders. Proposed fee code NA would be applied to Non-Displayed Orders that are routed to and add liquidity on Bats EDGX Exchange, Inc. (‘‘EDGX’’), the New York Stock Exchange, Inc. (‘‘NYSE’’), NYSE Arca, Inc. (‘‘NYSE Arca’’), NYSE MKT LLC (‘‘NYSE MKT’’), or the Nasdaq Stock Market LLC (‘‘Nasdaq’’).9 Orders that yield fee code NA would not be charged a fee nor receive a rebate in both securities priced at or above $1.00 or below $1.00. Proposed fee code NB would be applied to Non-Displayed Orders that are routed to and add liquidity on any exchange not listed in proposed fee code NA. Orders that yield fee code NB would be charged a fee of $0.0030 per share in securities priced at or above $1.00 and 0.30% of the trade’s total dollar value in securities priced below $1.00. Fee Code B Fee code B is appended to orders that provide liquidity in Tape B securities on the Exchange. Such orders that yield fee code B currently receive a standard rebate of $0.0020 per share. The Exchange proposes to increase this standard rebate applied to orders 7 The Exchange notes that the Exchange also amended its rules to route Reserve Orders (as defined in Rule 11.9(c)(1)) as such to other Trading Centers. See Securities Exchange Act 77187 (February 19, 2016), 81 FR 9556 (February 25, 2016) (SR–BYX–2016–04). Non-Displayed Orders and Reserve Orders would be handled in accordance with the rules of the Trading Center to which they are routed. Id. This proposal does not impact the routing of Reserve Orders. 8 See Bats Announces Support for Hidden Postto-Away Routed Orders, available at https:// cdn.batstrading.com/resources/release_notes/2016/ Bats-Announces-Support-for-Hidden-Post-to-AwayRouted-Orders.pdf. 9 Today, all orders that are routed to post to an away market are routed for display on such market and receive the following rates: (i) Rebate of $0.0015 per share for orders routed to the NYSE; (ii) rebate of $0.0021 per share for Tapes A and C securities and a rebate of $0.0022 per share for Tape B securities for orders routed to NYSE Arca; (iii) rebate of $0.0015 per share for orders routed to NYSE MKT; (iv) rebate of $0.0015 per share for orders routed to Nasdaq; and (v) a rebate of $0.0020 per share for orders routed to EDGX. See the Exchange’s Fee Schedule available at https:// batstrading.com/support/fee_schedule/bzx/. These rates generally represent a pass through of the rate that Bats Trading, Inc. (‘‘Bats Trading’’), the Exchange’s affiliated routing broker-dealer, is provided for adding displayed liquidity at NYSE, NYSE Arca, NYSE MKT, Nasdaq, or EDGX when it does not qualify for a volume tiered reduced fee or enhanced rebate. PO 00000 Frm 00132 Fmt 4703 Sfmt 4703 41639 yielding fee code B to $0.0025 per share. The Exchange believes the increased rebate would incentivize the provision of displayed liquidity in Tape B securities on the Exchange. The Exchange also currently provides two Tape B Volume and Quoting Tiers pursuant to footnote 13 that provide additional step-up rebates based on a member’s Tape B ADAV 10 as a percentage of TCV.11 The ‘‘Tape B Volume Tier’’ provides a step-up rebate of $0.0027 per share if a Member’s Tape B ADAV as a percentage of TCV is equal to or greater than 0.08%. This tier will remain unchanged. ‘‘Tier 1’’ currently provides a step-up rebate of $0.0025 per share if a Member’s Tape B ADAV as a percentage of TCV is equal to or greater than 0.05%. Because the Exchange proposes to increase of the standard rebate applicable to orders that yield fee code B to $0.0025 per share, the Exchange proposes to eliminate Tier 1 in its entirety as tier’s criteria would now be unnecessary to achieve the increased rebate. Finally, the Exchange proposes to update its Standard Rate table to include the proposed $0.0025 rebate with respect to pricing for adding liquidity for securities at or above $1.00. Implementation Date The Exchange proposes to implement these amendments to its Fee Schedule effective immediately.12 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,13 in general, and furthers the objectives of Section 6(b)(4),14 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 also notes that it operates in a highly-competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive. The proposed rule change reflects a competitive pricing structure designed to incent market participants 10 As provided in the Fee Schedule, ‘‘ADAV’’ means average daily added volume calculated as the number of shares added per day. 11 As provided in the Fee Schedule, ‘‘TCV’’ means total consolidated volume calculated as the volume reported by all exchanges and trade reporting facilities to a consolidated transaction reporting plan for the month for which the fees apply. 12 The Exchange initially filed the proposed fee change on May 31, 2016 (SR-BatsBZX–2016–21). On June 8, 2016, the Exchange withdrew SRBatsBZX–2016–21 and submitted this filing. 13 15 U.S.C. 78f. 14 15 U.S.C. 78f(b)(4). E:\FR\FM\27JNN1.SGM 27JNN1 41640 Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES to direct their order flow to the Exchange. The Exchange believes that the proposed rebate increase is equitable and non-discriminatory in that it would apply uniformly to all Members. The Exchange believes the rates remain competitive with those charged by other venues and, therefore, reasonable and equitably allocated to Members. In particular, the Exchange believes that proposed fee codes NA and NB represent an equitable allocation of reasonable dues, fees, and other charges. The proposed fees are similar to and based on the fees and rebates assessed or provided to Bats Trading when routing to away Trading Centers. For instance, like proposed fee code NA, the NYSE, NYSE Arca, and Nasdaq charge no fee nor provide a rebate for nondisplayed orders that add liquidity.15 In addition, the exchanges that would be covered by proposed fee code NB charge a fee of up to $0.0030 per share to add liquidity.16 In addition, the proposed rate for fee code NB is equal to or greater than similar routing fees charged by other exchanges. For example, the NYSE, NYSE MKT, and Nasdaq charge a fee of $0.0030 per share and NYSE Arca charges a fee of $0.0035 per share regardless of which destination the order is routed.17 The Exchange notes that routing through Bats Trading is voluntary. The Exchange is providing a service to allow Members to post Non-Displayed Orders to these destinations and that those Members seeking to post such orders to away destinations may connect to those destinations directly and be charged the fee or provided the rebate from that destination. Therefore, the Exchange 15 See the NYSE fee schedule available at https:// www.nyse.com/publicdocs/nyse/markets/nyse/ NYSE_Price_List.pdf (dated May 23, 2016); the NYSE Arca fee schedule available at https:// www.nyse.com/publicdocs/nyse/markets/nyse-arca/ NYSE_Arca_Marketplace_Fees.pdf (dated May 23, 2016); and the Nasdaq fee schedule available at https://www.nasdaqtrader.com/ Trader.aspx?id=PriceListTrading2. The Exchange notes that NYSE MKT and EDGX provide a rebate of $0.0016 and $ 0.0015 per share respectively for non-displayed orders that add liquidity. See the NYSE MKT fee schedule available at https:// www.nyse.com/publicdocs/nyse/markets/nyse-mkt/ NYSE_MKT_Equities_Price_List.pdf (dated May 23, 2016); and the EDGX fee schedule available at https://batstrading.com/support/fee_schedule/edgx/. 16 See the Bats EDGA Exchange, Inc. fee schedule available at https://batstrading.com/support/fee_ schedule/edga/; and the Nasdaq BX, Inc. fee schedule available at https:// www.nasdaqtrader.com/Trader.aspx?id=bx_pricing. The Exchange notes that it currently does not provide for routing orders to post on the Chicago Stock Exchange, Inc. or the National Stock Exchange, Inc. 17 See supra note 15. Nasdaq charges a fee of $0.0035 per share for routed orders that are directed to another market. See the Nasdaq fee schedule at id. VerDate Sep<11>2014 18:52 Jun 24, 2016 Jkt 238001 believes the rates for proposed fee codes NA and NB are equitable and reasonable because they are related to the rates provided by the away exchange and reasonably account for the routing service provided for by the Exchange. Lastly, the Exchange believes that the proposed amendments are nondiscriminatory because it applies uniformly to all Members and that the proposed rates are directly related to rates provided by the destinations to which the orders may be routed. The Exchange believes the increased rebate for orders adding liquidity yielding Fee Code B is a reasonable means to encourage Members to increase their liquidity on the Exchange in Tape B securities. The Exchange further believes that the rebate increase is an equitable and non-discriminatory allocation of reasonable dues, fees, and other charges because the increased rebate encourages Members to add increased liquidity to the BZX Book 18 in Tape B securities and is applicable equally to all Members. The increased liquidity benefits all investors by deepening the Exchange’s liquidity pool, offering additional flexibility for all investors to enjoy cost savings, supporting the quality of price discovery, promoting market transparency and improving investor protection. intramarket competition as it would apply to all Members uniformly. Accordingly, the Exchange does not believe that the proposed change will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe its proposed amendment to its Fee Schedule would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed change represents a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange’s competitors. Additionally, Members may opt to disfavor the Exchange’s pricing if they believe that alternatives offer them better value. For example, routing through Bats Trading is voluntary and Members seeking to post such orders to away destinations may connect to those destinations directly and be charged the fee or provide the rebate from that destination. The Exchange does not believe that the increased rebate applicable to orders yielding Fee Code B would burden competition, but instead, enhances competition, as it is intended to increase the competitiveness of and draw additional liquidity to the Exchange. The Exchange does not believe the increased rebate would burden 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: 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) of the Act 19 and paragraph (f) of Rule 19b–4 thereunder.20 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. 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 SRBatsBZX–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-BatsBZX–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 19 15 18 See PO 00000 Exchange Rule 1.5(e). Frm 00133 Fmt 4703 Sfmt 4703 20 17 E:\FR\FM\27JNN1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). 27JNN1 Federal Register / Vol. 81, No. 123 / Monday, June 27, 2016 / Notices Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SRBatsBZX–2016–24, and should be submitted on or before July 18, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–15075 Filed 6–24–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [File No. 500–1] In the Matter of Coastal Pacific Mining Corp. and Petaquilla Minerals Ltd.; Order of Suspension of Trading mstockstill on DSK3G9T082PROD with NOTICES June 23, 2016. It appears to the Securities and Exchange Commission (‘‘Commission’’) that there is a lack of current and accurate information concerning the securities of Coastal Pacific Mining Corp. (‘‘CPMCF’’ 1) (CIK No. 1410181), an Alberta corporation located in Calgary, Alberta, Canada with a class of securities registered with the Commission pursuant to Securities Exchange Act of 1934 (‘‘Exchange Act’’) Section 12(g) because it is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 20–F for the period ended April 30, 21 17 CFR 200.30–3(a)(12). short form of each issuer’s name is also its stock symbol. 1 The VerDate Sep<11>2014 18:52 Jun 24, 2016 Jkt 238001 2012. On March 19, 2015, the Commission’s Division of Corporation Finance (‘‘Corporation Finance’’) sent a delinquency letter to CPMCF requesting compliance with its periodic filing requirements but CPMCF did not receive the delinquency letter due to its failure to maintain a valid address on file with the Commission as required by Commission rules (Rule 301 of Regulation S–T, 17 CFR 232.301 and Section 5.4 of EDGAR Filer Manual). As of June 16, 2016, the common stock of CPMCF was quoted on OTC Link operated by OTC Markets Group Inc. (formerly ‘‘Pink Sheets’’) (‘‘OTC Link’’), had six market makers, and was eligible for the ‘‘piggyback’’ exception of Exchange Act Rule 15c2–11(f)(3). It appears to the Commission that there is a lack of current and accurate information concerning the securities of Petaquilla Minerals Ltd. (‘‘PTQMF’’) (CIK No. 947121), a British Columbia corporation located in Vancouver, British Columbia, Canada with a class of securities registered with the Commission pursuant to Exchange Act Section 12(g) because it is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 20–F for the period ended June 30, 2013. On September 30, 2015, Corporation Finance sent a delinquency letter to PTQMF requesting compliance with its periodic filing requirements but PTQMF did not receive the delinquency letter due to its failure to maintain a valid address on file with the Commission as required by Commission rules (Rule 301 of Regulation S–T, 17 CFR 232.301 and Section 5.4 of EDGAR Filer Manual). As of June 16, 2016, the common shares of PTQMF were quoted on OTC Link, had six market makers, and were eligible for the ‘‘piggyback’’ exception of Exchange Act Rule 15c2– 11(f)(3). The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of the above-listed companies. Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the securities of the abovelisted companies is suspended for the period from 9:30 a.m. EDT on June 23, 2016, through 11:59 p.m. EDT on July 7, 2016. By the Commission. Jill M. Peterson, Assistant Secretary. [FR Doc. 2016–15255 Filed 6–23–16; 4:15 pm] BILLING CODE 8011–01–P PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 41641 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78109; File No. SR–CHX– 2016–08] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Fingerprinting June 21, 2016. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’ or ‘‘Act’’),1 and Rule 19b–4 2 thereunder, notice is hereby given that on June 9, 2016, the Chicago Stock Exchange, Inc. (‘‘CHX’’ or the ‘‘Exchange’’) 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 CHX. The Exchange filed the 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) 4 thereunder. 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 CHX proposes to amend the Rules of the Exchange (‘‘CHX Rules’’) to update provisions regarding the fingerprinting of securities industry personnel associated with Participants.5 CHX has designated this proposed rule change as non-controversial pursuant to section 19(b)(3)(A) 6 of the Act and Rule 19b–4(f)(6) 7 thereunder and has provided the Commission with the notice required by Rule 19b– 4(f)(6)(iii).8 The text of this proposed rule change is available on the Exchange’s Web site at (www.chx.com) and in the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and StatutoryBasis for, the Proposed Rule Change In its filing with the Commission, the CHX included statements concerning the purpose of and basis for the 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). 5 A ‘‘Participant’’ is a ‘‘member’’ of the Exchange for purposes of the Act. See CHX Article 1, Rule 1(s). 6 15 U.S.C. 78s(b)(3)(A). 7 17 CFR 240.19b–4(f)(6). 8 17 CFR 240.19b–4(f)(6)(iii). 2 17 E:\FR\FM\27JNN1.SGM 27JNN1

Agencies

[Federal Register Volume 81, Number 123 (Monday, June 27, 2016)]
[Notices]
[Pages 41638-41641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15075]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78111; File No. SR-BatsBZX-2016-24]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Fees

June 21, 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 June 8, 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, II 
and III below, which Items have been prepared by the Exchange. The 
Exchange has designated the proposed rule change as

[[Page 41639]]

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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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 BZX Rules 
15.1(a) and (c) (``Fee Schedule'') to: (i) Add fee codes NA and NB; and 
(ii) increase the standard rebate for orders that yield fee code B.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    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 its Fee Schedule to: (i) Add fee 
codes NA and NB; and (ii) increase the standard rebate for orders that 
yield fee code B.
Fee Codes NA and NB
    The Exchange previously filed a proposed rule change with the 
Commission to identify Non-Displayed Orders \6\ as such when routed to 
an away Trading Center.\7\ The Exchange intends to implement this 
functionality on June 1, 2016.\8\ Because other Trading Centers 
typically provide different rebates or fees with respect to non-
displayed liquidity the Exchange proposes to amend its Fee Schedule to 
add fee codes NA and NB, which would apply to routed Non-Displayed 
Orders. Proposed fee code NA would be applied to Non-Displayed Orders 
that are routed to and add liquidity on Bats EDGX Exchange, Inc. 
(``EDGX''), the New York Stock Exchange, Inc. (``NYSE''), NYSE Arca, 
Inc. (``NYSE Arca''), NYSE MKT LLC (``NYSE MKT''), or the Nasdaq Stock 
Market LLC (``Nasdaq'').\9\ Orders that yield fee code NA would not be 
charged a fee nor receive a rebate in both securities priced at or 
above $1.00 or below $1.00. Proposed fee code NB would be applied to 
Non-Displayed Orders that are routed to and add liquidity on any 
exchange not listed in proposed fee code NA. Orders that yield fee code 
NB would be charged a fee of $0.0030 per share in securities priced at 
or above $1.00 and 0.30% of the trade's total dollar value in 
securities priced below $1.00.
---------------------------------------------------------------------------

    \6\ See Exchange Rule 11.9(c)(11).
    \7\ The Exchange notes that the Exchange also amended its rules 
to route Reserve Orders (as defined in Rule 11.9(c)(1)) as such to 
other Trading Centers. See Securities Exchange Act 77187 (February 
19, 2016), 81 FR 9556 (February 25, 2016) (SR-BYX-2016-04). Non-
Displayed Orders and Reserve Orders would be handled in accordance 
with the rules of the Trading Center to which they are routed. Id. 
This proposal does not impact the routing of Reserve Orders.
    \8\ See Bats Announces Support for Hidden Post-to-Away Routed 
Orders, available at https://cdn.batstrading.com/resources/release_notes/2016/Bats-Announces-Support-for-Hidden-Post-to-Away-Routed-Orders.pdf.
    \9\ Today, all orders that are routed to post to an away market 
are routed for display on such market and receive the following 
rates: (i) Rebate of $0.0015 per share for orders routed to the 
NYSE; (ii) rebate of $0.0021 per share for Tapes A and C securities 
and a rebate of $0.0022 per share for Tape B securities for orders 
routed to NYSE Arca; (iii) rebate of $0.0015 per share for orders 
routed to NYSE MKT; (iv) rebate of $0.0015 per share for orders 
routed to Nasdaq; and (v) a rebate of $0.0020 per share for orders 
routed to EDGX. See the Exchange's Fee Schedule available at https://batstrading.com/support/fee_schedule/bzx/. These rates generally 
represent a pass through of the rate that Bats Trading, Inc. (``Bats 
Trading''), the Exchange's affiliated routing broker-dealer, is 
provided for adding displayed liquidity at NYSE, NYSE Arca, NYSE 
MKT, Nasdaq, or EDGX when it does not qualify for a volume tiered 
reduced fee or enhanced rebate.
---------------------------------------------------------------------------

Fee Code B
    Fee code B is appended to orders that provide liquidity in Tape B 
securities on the Exchange. Such orders that yield fee code B currently 
receive a standard rebate of $0.0020 per share. The Exchange proposes 
to increase this standard rebate applied to orders yielding fee code B 
to $0.0025 per share. The Exchange believes the increased rebate would 
incentivize the provision of displayed liquidity in Tape B securities 
on the Exchange.
    The Exchange also currently provides two Tape B Volume and Quoting 
Tiers pursuant to footnote 13 that provide additional step-up rebates 
based on a member's Tape B ADAV \10\ as a percentage of TCV.\11\ The 
``Tape B Volume Tier'' provides a step-up rebate of $0.0027 per share 
if a Member's Tape B ADAV as a percentage of TCV is equal to or greater 
than 0.08%. This tier will remain unchanged. ``Tier 1'' currently 
provides a step-up rebate of $0.0025 per share if a Member's Tape B 
ADAV as a percentage of TCV is equal to or greater than 0.05%. Because 
the Exchange proposes to increase of the standard rebate applicable to 
orders that yield fee code B to $0.0025 per share, the Exchange 
proposes to eliminate Tier 1 in its entirety as tier's criteria would 
now be unnecessary to achieve the increased rebate.
---------------------------------------------------------------------------

    \10\ As provided in the Fee Schedule, ``ADAV'' means average 
daily added volume calculated as the number of shares added per day.
    \11\ As provided in the Fee Schedule, ``TCV'' means total 
consolidated volume calculated as the volume reported by all 
exchanges and trade reporting facilities to a consolidated 
transaction reporting plan for the month for which the fees apply.
---------------------------------------------------------------------------

    Finally, the Exchange proposes to update its Standard Rate table to 
include the proposed $0.0025 rebate with respect to pricing for adding 
liquidity for securities at or above $1.00.
Implementation Date
    The Exchange proposes to implement these amendments to its Fee 
Schedule effective immediately.\12\
---------------------------------------------------------------------------

    \12\ The Exchange initially filed the proposed fee change on May 
31, 2016 (SR-BatsBZX-2016-21). On June 8, 2016, the Exchange 
withdrew SR-BatsBZX-2016-21 and submitted this filing.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\13\ in general, and 
furthers the objectives of Section 6(b)(4),\14\ 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 also notes that it operates in a highly-
competitive market in which market participants can readily direct 
order flow to competing venues if they deem fee levels at a particular 
venue to be excessive. The proposed rule change reflects a competitive 
pricing structure designed to incent market participants

[[Page 41640]]

to direct their order flow to the Exchange. The Exchange believes that 
the proposed rebate increase is equitable and non-discriminatory in 
that it would apply uniformly to all Members. The Exchange believes the 
rates remain competitive with those charged by other venues and, 
therefore, reasonable and equitably allocated to Members.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    In particular, the Exchange believes that proposed fee codes NA and 
NB represent an equitable allocation of reasonable dues, fees, and 
other charges. The proposed fees are similar to and based on the fees 
and rebates assessed or provided to Bats Trading when routing to away 
Trading Centers. For instance, like proposed fee code NA, the NYSE, 
NYSE Arca, and Nasdaq charge no fee nor provide a rebate for non-
displayed orders that add liquidity.\15\ In addition, the exchanges 
that would be covered by proposed fee code NB charge a fee of up to 
$0.0030 per share to add liquidity.\16\ In addition, the proposed rate 
for fee code NB is equal to or greater than similar routing fees 
charged by other exchanges. For example, the NYSE, NYSE MKT, and Nasdaq 
charge a fee of $0.0030 per share and NYSE Arca charges a fee of 
$0.0035 per share regardless of which destination the order is 
routed.\17\
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    \15\ See the NYSE fee schedule available at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf (dated 
May 23, 2016); the NYSE Arca fee schedule available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf (dated May 23, 2016); and the Nasdaq 
fee schedule available at https://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2. The Exchange notes that NYSE MKT 
and EDGX provide a rebate of $0.0016 and $ 0.0015 per share 
respectively for non-displayed orders that add liquidity. See the 
NYSE MKT fee schedule available at https://www.nyse.com/publicdocs/nyse/markets/nyse-mkt/NYSE_MKT_Equities_Price_List.pdf (dated May 
23, 2016); and the EDGX fee schedule available at https://batstrading.com/support/fee_schedule/edgx/.
    \16\ See the Bats EDGA Exchange, Inc. fee schedule available at 
https://batstrading.com/support/fee_schedule/edga/; and the Nasdaq 
BX, Inc. fee schedule available at https://www.nasdaqtrader.com/Trader.aspx?id=bx_pricing. The Exchange notes that it currently does 
not provide for routing orders to post on the Chicago Stock 
Exchange, Inc. or the National Stock Exchange, Inc.
    \17\ See supra note 15. Nasdaq charges a fee of $0.0035 per 
share for routed orders that are directed to another market. See the 
Nasdaq fee schedule at id.
---------------------------------------------------------------------------

    The Exchange notes that routing through Bats Trading is voluntary. 
The Exchange is providing a service to allow Members to post Non-
Displayed Orders to these destinations and that those Members seeking 
to post such orders to away destinations may connect to those 
destinations directly and be charged the fee or provided the rebate 
from that destination. Therefore, the Exchange believes the rates for 
proposed fee codes NA and NB are equitable and reasonable because they 
are related to the rates provided by the away exchange and reasonably 
account for the routing service provided for by the Exchange. Lastly, 
the Exchange believes that the proposed amendments are non-
discriminatory because it applies uniformly to all Members and that the 
proposed rates are directly related to rates provided by the 
destinations to which the orders may be routed.
    The Exchange believes the increased rebate for orders adding 
liquidity yielding Fee Code B is a reasonable means to encourage 
Members to increase their liquidity on the Exchange in Tape B 
securities. The Exchange further believes that the rebate increase is 
an equitable and non-discriminatory allocation of reasonable dues, 
fees, and other charges because the increased rebate encourages Members 
to add increased liquidity to the BZX Book \18\ in Tape B securities 
and is applicable equally to all Members. The increased liquidity 
benefits all investors by deepening the Exchange's liquidity pool, 
offering additional flexibility for all investors to enjoy cost 
savings, supporting the quality of price discovery, promoting market 
transparency and improving investor protection.
---------------------------------------------------------------------------

    \18\ See Exchange Rule 1.5(e).
---------------------------------------------------------------------------

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

    The Exchange does not believe its proposed amendment to its Fee 
Schedule would impose any burden on competition that is not necessary 
or appropriate in furtherance of the purposes of the Act. The Exchange 
does not believe that the proposed change represents a significant 
departure from previous pricing offered by the Exchange or pricing 
offered by the Exchange's competitors. Additionally, Members may opt to 
disfavor the Exchange's pricing if they believe that alternatives offer 
them better value. For example, routing through Bats Trading is 
voluntary and Members seeking to post such orders to away destinations 
may connect to those destinations directly and be charged the fee or 
provide the rebate from that destination. The Exchange does not believe 
that the increased rebate applicable to orders yielding Fee Code B 
would burden competition, but instead, enhances competition, as it is 
intended to increase the competitiveness of and draw additional 
liquidity to the Exchange. The Exchange does not believe the increased 
rebate would burden intramarket competition as it would apply to all 
Members uniformly. Accordingly, the Exchange does not believe that the 
proposed change will impair the ability of Members or competing venues 
to maintain their competitive standing in the financial markets.

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) of the Act \19\ and paragraph (f) of Rule 19b-4 
thereunder.\20\ 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.
---------------------------------------------------------------------------

    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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-2016-24 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-BatsBZX-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

[[Page 41641]]

Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the 
submission, all subsequent amendments, all written statements with 
respect to the proposed rule change that are filed with the Commission, 
and all written communications relating to the proposed rule change 
between the Commission and any person, other than those that may be 
withheld from the public in accordance with the provisions of 5 U.S.C. 
552, will be available for Web site viewing and printing in the 
Commission's Public Reference Room, 100 F Street NE., Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change; the Commission does not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BatsBZX-2016-24, and should 
be submitted on or before July 18, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-15075 Filed 6-24-16; 8:45 am]
 BILLING CODE 8011-01-P
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