Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees as They Apply to the Equity Options Platform, 46719-46721 [2016-16848]

Download as PDF Federal Register / Vol. 81, No. 137 / Monday, July 18, 2016 / Notices Delivery as a permanent product. ld. at 1–2. The Customized Delivery market test is currently scheduled to expire on October 31, 2016. Id. at 1. In the Request, the Postal Service requests to extend the market test for one additional year, until October 31, 2017, and to expand the market test into other metropolitan areas. Id. at 1–2. The Postal Service represents that all other aspects of the Customized Delivery market test remain unchanged and comply with 39 U.S.C. 3641 and Order No. 2224. ld. at 2. II. Notice of Filing and Designation of Substitute Public Representative The Commission reopens Docket No. MT2014–1 to consider matters raised by the Postal Service’s Request. The Commission invites comments on whether the Request complies with applicable statutory and regulatory requirements, including 39 U.S.C. 3641, 39 CFR part 3035, and Order No. 2224. Comments are due no later than July 27, 2016. The public portions of these filings can be accessed via the Commission’s Web site (https:// www.prc.gov). 39 U.S.C. 505 requires the Commission to designate an officer of the Commission to represent the interests of the general public in all public proceedings (Public Representative). The Public Representative previously designated in Order No. 2197 is no longer able to serve.3 In light of that circumstance, the Commission designates Lauren A. D’Agostino to serve as the substitute Public Representative to represent the interests of the general public in this docket. asabaliauskas on DSK3SPTVN1PROD with NOTICES III. Ordering Paragraphs It is ordered: 1. The Commission reopens Docket No. MT2014–1 to consider matters raised by the Postal Service’s Request. 2. Pursuant to 39 U.S.C. 505, the Commission designates Lauren A. D’Agostino to serve as the substitute Public Representative to represent the interests of the general public in this docket. 3. Comments are due no later than July 27, 2016. 4. The Secretary shall arrange for publication of this order in the Federal Register. 3 See Notice and Order Concerning Market Test of Experimental Product—Customized Delivery, September 25, 2014, at 4 (Order No. 2197). VerDate Sep<11>2014 17:52 Jul 15, 2016 Jkt 238001 By the Commission. Stacy L. Ruble, Secretary. [FR Doc. 2016–16823 Filed 7–15–16; 8:45 am] BILLING CODE 7710–FW–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78304; File No. SRBatsEDGX–2016–27] Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees as They Apply to the Equity Options Platform July 12, 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 July 1, 2016, Bats EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, 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. 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 EDGX Rules 15.1(a) and (c). 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. U.S.C. 78s(b)(1). 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). PO 00000 1 15 2 17 Frm 00080 Fmt 4703 Sfmt 4703 46719 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its fee schedule for its equity options platform (‘‘EDGX Options’’) to: (1) Modify the criteria to qualify for the Customer Volume Tier 1 under footnote 1; and (2) delete the NBBO Setter/Joiner Tier under footnote 3. Customer Volume Tier 1 In addition to the standard rebate provided to all Customer 6 orders, the Exchange offers six separate Customer Volume Tiers under footnote 1, each providing an enhanced rebate ranging from $0.10 to $0.21 [sic] per contract to Customer orders that yield fee codes PC 7 or NC 8 upon satisfying the respective tier’s monthly volume criteria. Pursuant to Customer Volume Tier 1, the lowest volume tier, a Member currently receives a rebate of $0.10 per contract where the Member has an ADV 9 in Customer orders equal to or greater than 0.20% of average TCV.10 In order to further incentive the entry of Customer orders, the Exchange proposes 6 ‘‘Customer’’ applies to any transaction identified by a Member for clearing in the Customer range at the OCC, excluding any transaction for a Broker Dealer or a ‘‘Professional’’ as defined in Exchange Rule 16.1. See the Exchange’s fee schedule. 7 Fee code PC is yielded to Customer orders in Penny Pilot Securities. See the Exchange’s fee schedule. 8 Fee code NC is yielded to Customer orders in Non-Penny Pilot Securities. See the Exchange’s fee schedule. 9 ‘‘ADV’’ means average daily volume calculated as the number of contracts added or removed, combined, per day. See the Exchange’s fee schedule. 10 ‘‘TCV’’ means total consolidated volume calculated as the volume reported by all exchanges to the consolidated transaction reporting plan for the month for which the fees apply, excluding volume on any day that the Exchange experiences an Exchange System Disruption and on any day with a scheduled early market close. See the Exchange’s fee schedule. E:\FR\FM\18JYN1.SGM 18JYN1 46720 Federal Register / Vol. 81, No. 137 / Monday, July 18, 2016 / Notices to ease the criteria necessary to qualify for the Customer Volume Tier 1 by reducing the tier’s ADV requirement. Specifically, to receive an enhanced rebate of $0.10 per contract, Members must have an ADV in Customer orders equal to or greater than 0.15% of average TCV, rather than 0.20% of TCV as required today. NBBO Setter/Joiner Tier The NBBO Setter/Joiner Tier was adopted to incentivize Market Makers on EDGX Options to enter quotations at the National Best Bid and Offer (‘‘NBBO’’) by providing an additional rebate of $0.02 per contract to Market Maker 11 orders that added liquidity and established a new NBBO or joined the existing NBBO when EDGX Options is not already at the NBBO. The Exchange is proposing to eliminate the tier because the rebate has not achieved the desired effect, despite being designed to incentivize Members to add liquidity that sets or joins the Exchange to the NBBO. As such, the Exchange is proposing to eliminate the text in footnote three related to the NBBO Setter and Joiner Tier. In connection with this change the Exchange proposes to remove footnote 3 to fee codes NM 12 and PM.13 Implementation Date The Exchange proposes to implement these amendments to its fee schedule on July 1, 2016. 2. Statutory Basis asabaliauskas on DSK3SPTVN1PROD with NOTICES The Exchange believes that the proposed rule changes are consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of section 6 of the Act.14 Specifically, the Exchange believes that the proposed rule changes are consistent with section 6(b)(4) of the Act,15 in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and other persons using any facility or system 11 ‘‘Market Maker’’ applies to any transaction identified by a Member for clearing in the Market Maker range at the OCC, where such Member is registered with the Exchange as a Market Maker as defined in Rule 16.1(a)(37). See the Exchange’s fee schedule. 12 Fee code NM is yielded to Market Maker orders in Non-Penny Pilot Securities. See the Exchange’s fee schedule. 13 Fee code PM is yielded to Market Maker orders in Non-Penny [sic] Pilot Securities. See the Exchange’s fee schedule. 14 15 U.S.C. 78f. 15 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 17:52 Jul 15, 2016 Jkt 238001 which the Exchange operates or controls. (B) Self-Regulatory Organization’s Statement on Burden on Competition Customer Volume Tier 1 The Exchange believes the proposed amendments to its fee schedule would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed modifications to the Customer Volume Tier 1 is reasonable, fair and equitable, and non-discriminatory. Volume-based rebates such as those currently maintained on the Exchange have been widely adopted by options exchanges and are equitable because they are open to all Members on an equal basis and provide additional benefits or discounts that are reasonably related to the value of an exchange’s market quality associated with higher levels of market activity, such as higher levels of liquidity provision and/or growth patterns, and introduction of higher volumes of orders into the price and volume discovery processes. The proposed modification to ease the criteria required to qualify for current Customer Volume Tier 1 is intended to incentivize Members to send additional Customer orders to the Exchange in an effort to qualify for the enhanced rebate made available by the tier. NBBO Setter and Joiner Tiers The Exchange believes that the proposed elimination of the NBBO Setter and Joiner Tier represents an equitable allocation of reasonable dues, fees, and other charges among Members and other persons using its facilities because, as described above, the additional rebates offered under these tiers are not affecting Members’ behavior in the manner originally conceived by the Exchange. While the Exchange acknowledges the benefit of Members entering orders that set or join the NBBO, the Exchange has generally determined that it is providing additional rebates for liquidity that would be added on the Exchange regardless of whether the tiers existed. By paying these rebates, the Exchange is not only offering rebates for orders that would set or join the NBBO without being incentivized to do so, but also missing out on the opportunity to offer other rebates or reduced fees that could incentivize other behavior that would enhance market quality on the Exchange, which would benefit all Members. As such, the Exchange also believes that the proposed elimination of the NBBO Setter and Joiner Tier would be non-discriminatory in that it currently applies equally to all Members and, upon elimination, would no longer be available to any Members. Further, it will allow the Exchange to explore other ways in which it may enhance market quality for all Members. PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 Customer Volume Tier 1 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. Rather, the proposal is a competitive proposal that is seeking to further the growth of the Exchange. The Exchange has structured the proposed amendment to the tier to attract certain additional volume in Customer orders, however, the Exchange believes that its pricing for all capacities is competitive with that offered by other options exchanges. Additionally, Members may opt to disfavor the Exchange’s pricing if they believe that alternatives offer them better value. 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. NBBO Setter and Joiner Tier The Exchange does not believe that its proposal to eliminate the NBBO Setter and Joiner Tier would burden competition, but, rather, enhance the Exchange’s ability to compete with other market centers. As described above, the Exchange believes that it is offering enhanced rebates for orders that would be submitted to the Exchange without the enhanced rebate, which prevents the Exchange from being able to offer other rebates or reduced fees that might be able to enhance market quality to the benefit of all Members. As such, eliminating the NBBO Setter and Joiner Tier will allow the Exchange other opportunities to enhance market quality on the Exchange and ultimately, better compete with other market centers. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties. E:\FR\FM\18JYN1.SGM 18JYN1 Federal Register / Vol. 81, No. 137 / Monday, July 18, 2016 / Notices 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 16 and paragraph (f) of Rule 19b–4 thereunder.17 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. 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: asabaliauskas on DSK3SPTVN1PROD with NOTICES 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– BatsEDGX–2016–27 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–BatsEDGX–2016–27. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing will also be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– BatsEDGX–2016–27 and should be submitted on or before August 8, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–16848 Filed 7–15–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78292; File No. SR–CBOE– 2016–054] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule July 12, 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 July 1, 2016, Chicago Board Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. 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 text of the proposed rule change is available on the Exchange’s Web site (https://www.cboe.com/AboutCBOE/ CBOELegalRegulatoryHome.aspx), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. 18 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 16 15 U.S.C. 78s(b)(3)(A). 17 17 CFR 240.19b–4(f). VerDate Sep<11>2014 17:52 Jul 15, 2016 Jkt 238001 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 46721 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose On March 21, 2016, the Exchange began offering Asian style settlement and Cliquet style settlement for certain FLEX Broad-Based Index Options (‘‘Exotics’’).3 In conjunction with the adoption of FLEX Broad-Based Index Options with Asian or Cliquet style settlement, the Exchange adopted an Exotic Surcharge of $0.25 to be assessed on all customer (‘‘C’’ origin code) Exotic contracts executed on CBOE. The Exchange proposes to decrease the Exotic Surcharge of $0.25 to $0.03 for all customer XSP Exotic contracts executed on CBOE. Particularly, the Exchange notes that XSP options have 1⁄10 the value of S&P 500 Index (‘‘SPX’’) options. As XSP has a smaller exercise and assignment value due to the reduced number of shares they deliver as compared to standard SPX option contracts, the Exchange is proposing a lower per contract Exotic Surcharge. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ‘‘Act’’) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.4 Specifically, the Exchange believes the proposed rule change is consistent with the Section 3 In general, Asian style settlement provides for payout based on the average of prices of a broadbased index on pre-determined dates over a specified time period, and Cliquet style settlement provides for a payout that is the greater of $0 or the (positive) sum of ‘‘capped’’ monthly returns of a broad-based index on pre-determined dates over a specified period of time. These settlement types are also referred to as ‘‘Exotics’’ due to their untraditional nature. 4 15 U.S.C. 78f(b). E:\FR\FM\18JYN1.SGM 18JYN1

Agencies

[Federal Register Volume 81, Number 137 (Monday, July 18, 2016)]
[Notices]
[Pages 46719-46721]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-16848]


=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78304; File No. SR-BatsEDGX-2016-27]


Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change Related 
to Fees as They Apply to the Equity Options Platform

July 12, 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 July 1, 2016, Bats EDGX Exchange, Inc. (the ``Exchange'' or 
``EDGX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, 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.
---------------------------------------------------------------------------

    \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 EDGX Rules 
15.1(a) and (c).
---------------------------------------------------------------------------

    \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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its fee schedule for its equity 
options platform (``EDGX Options'') to: (1) Modify the criteria to 
qualify for the Customer Volume Tier 1 under footnote 1; and (2) delete 
the NBBO Setter/Joiner Tier under footnote 3.
Customer Volume Tier 1
    In addition to the standard rebate provided to all Customer \6\ 
orders, the Exchange offers six separate Customer Volume Tiers under 
footnote 1, each providing an enhanced rebate ranging from $0.10 to 
$0.21 [sic] per contract to Customer orders that yield fee codes PC \7\ 
or NC \8\ upon satisfying the respective tier's monthly volume 
criteria. Pursuant to Customer Volume Tier 1, the lowest volume tier, a 
Member currently receives a rebate of $0.10 per contract where the 
Member has an ADV \9\ in Customer orders equal to or greater than 0.20% 
of average TCV.\10\ In order to further incentive the entry of Customer 
orders, the Exchange proposes

[[Page 46720]]

to ease the criteria necessary to qualify for the Customer Volume Tier 
1 by reducing the tier's ADV requirement. Specifically, to receive an 
enhanced rebate of $0.10 per contract, Members must have an ADV in 
Customer orders equal to or greater than 0.15% of average TCV, rather 
than 0.20% of TCV as required today.
---------------------------------------------------------------------------

    \6\ ``Customer'' applies to any transaction identified by a 
Member for clearing in the Customer range at the OCC, excluding any 
transaction for a Broker Dealer or a ``Professional'' as defined in 
Exchange Rule 16.1. See the Exchange's fee schedule.
    \7\ Fee code PC is yielded to Customer orders in Penny Pilot 
Securities. See the Exchange's fee schedule.
    \8\ Fee code NC is yielded to Customer orders in Non-Penny Pilot 
Securities. See the Exchange's fee schedule.
    \9\ ``ADV'' means average daily volume calculated as the number 
of contracts added or removed, combined, per day. See the Exchange's 
fee schedule.
    \10\ ``TCV'' means total consolidated volume calculated as the 
volume reported by all exchanges to the consolidated transaction 
reporting plan for the month for which the fees apply, excluding 
volume on any day that the Exchange experiences an Exchange System 
Disruption and on any day with a scheduled early market close. See 
the Exchange's fee schedule.
---------------------------------------------------------------------------

NBBO Setter/Joiner Tier
    The NBBO Setter/Joiner Tier was adopted to incentivize Market 
Makers on EDGX Options to enter quotations at the National Best Bid and 
Offer (``NBBO'') by providing an additional rebate of $0.02 per 
contract to Market Maker \11\ orders that added liquidity and 
established a new NBBO or joined the existing NBBO when EDGX Options is 
not already at the NBBO. The Exchange is proposing to eliminate the 
tier because the rebate has not achieved the desired effect, despite 
being designed to incentivize Members to add liquidity that sets or 
joins the Exchange to the NBBO. As such, the Exchange is proposing to 
eliminate the text in footnote three related to the NBBO Setter and 
Joiner Tier. In connection with this change the Exchange proposes to 
remove footnote 3 to fee codes NM \12\ and PM.\13\
---------------------------------------------------------------------------

    \11\ ``Market Maker'' applies to any transaction identified by a 
Member for clearing in the Market Maker range at the OCC, where such 
Member is registered with the Exchange as a Market Maker as defined 
in Rule 16.1(a)(37). See the Exchange's fee schedule.
    \12\ Fee code NM is yielded to Market Maker orders in Non-Penny 
Pilot Securities. See the Exchange's fee schedule.
    \13\ Fee code PM is yielded to Market Maker orders in Non-Penny 
[sic] Pilot Securities. See the Exchange's fee schedule.
---------------------------------------------------------------------------

Implementation Date
    The Exchange proposes to implement these amendments to its fee 
schedule on July 1, 2016.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with the requirements of the Act and the rules and regulations 
thereunder that are applicable to a national securities exchange, and, 
in particular, with the requirements of section 6 of the Act.\14\ 
Specifically, the Exchange believes that the proposed rule changes are 
consistent with section 6(b)(4) of the Act,\15\ in that it provides for 
the equitable allocation of reasonable dues, fees and other charges 
among members and other persons using any facility or system which the 
Exchange operates or controls.
---------------------------------------------------------------------------

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

Customer Volume Tier 1
    The Exchange believes that the proposed modifications to the 
Customer Volume Tier 1 is reasonable, fair and equitable, and non-
discriminatory. Volume-based rebates such as those currently maintained 
on the Exchange have been widely adopted by options exchanges and are 
equitable because they are open to all Members on an equal basis and 
provide additional benefits or discounts that are reasonably related to 
the value of an exchange's market quality associated with higher levels 
of market activity, such as higher levels of liquidity provision and/or 
growth patterns, and introduction of higher volumes of orders into the 
price and volume discovery processes. The proposed modification to ease 
the criteria required to qualify for current Customer Volume Tier 1 is 
intended to incentivize Members to send additional Customer orders to 
the Exchange in an effort to qualify for the enhanced rebate made 
available by the tier.
NBBO Setter and Joiner Tiers
    The Exchange believes that the proposed elimination of the NBBO 
Setter and Joiner Tier represents an equitable allocation of reasonable 
dues, fees, and other charges among Members and other persons using its 
facilities because, as described above, the additional rebates offered 
under these tiers are not affecting Members' behavior in the manner 
originally conceived by the Exchange. While the Exchange acknowledges 
the benefit of Members entering orders that set or join the NBBO, the 
Exchange has generally determined that it is providing additional 
rebates for liquidity that would be added on the Exchange regardless of 
whether the tiers existed. By paying these rebates, the Exchange is not 
only offering rebates for orders that would set or join the NBBO 
without being incentivized to do so, but also missing out on the 
opportunity to offer other rebates or reduced fees that could 
incentivize other behavior that would enhance market quality on the 
Exchange, which would benefit all Members. As such, the Exchange also 
believes that the proposed elimination of the NBBO Setter and Joiner 
Tier would be non-discriminatory in that it currently applies equally 
to all Members and, upon elimination, would no longer be available to 
any Members. Further, it will allow the Exchange to explore other ways 
in which it may enhance market quality for all Members.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes the proposed amendments to its fee schedule 
would not impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.
Customer Volume Tier 1
    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. Rather, the proposal is 
a competitive proposal that is seeking to further the growth of the 
Exchange. The Exchange has structured the proposed amendment to the 
tier to attract certain additional volume in Customer orders, however, 
the Exchange believes that its pricing for all capacities is 
competitive with that offered by other options exchanges. Additionally, 
Members may opt to disfavor the Exchange's pricing if they believe that 
alternatives offer them better value. 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.
NBBO Setter and Joiner Tier
    The Exchange does not believe that its proposal to eliminate the 
NBBO Setter and Joiner Tier would burden competition, but, rather, 
enhance the Exchange's ability to compete with other market centers. As 
described above, the Exchange believes that it is offering enhanced 
rebates for orders that would be submitted to the Exchange without the 
enhanced rebate, which prevents the Exchange from being able to offer 
other rebates or reduced fees that might be able to enhance market 
quality to the benefit of all Members. As such, eliminating the NBBO 
Setter and Joiner Tier will allow the Exchange other opportunities to 
enhance market quality on the Exchange and ultimately, better compete 
with other market centers.

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

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any written comments from members or other interested parties.

[[Page 46721]]

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 \16\ and paragraph (f) of Rule 19b-4 
thereunder.\17\ 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.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 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-BatsEDGX-2016-27 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-BatsEDGX-2016-27. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing will also be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BatsEDGX-2016-27 and should 
be submitted on or before August 8, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-16848 Filed 7-15-16; 8:45 am]
 BILLING CODE 8011-01-P
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