Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Period for the Exchange's Supplemental Competitive Liquidity Provider Program, 52494-52496 [2016-18697]

Download as PDF 52494 Federal Register / Vol. 81, No. 152 / Monday, August 8, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES will provide the Funds with continuous and comprehensive investment management services subject to the supervision of, and policies established by, each Fund’s board of trustees (‘‘Board’’). The Advisory Agreement permits the Adviser, subject to the approval of the Board, to delegate to one or more sub-advisers (each, a ‘‘SubAdviser’’ and collectively, the ‘‘SubAdvisers’’) the responsibility to provide the day-to-day portfolio investment management of each Fund, subject to the supervision and direction of the Adviser. The primary responsibility for managing the Funds will remain vested in the Adviser. The Adviser will hire, evaluate, allocate assets to and oversee the Sub-Advisers, including determining whether a Sub-Adviser should be terminated, at all times subject to the authority of the Board. 2. Applicants request an exemption to permit the Adviser, subject to Board approval, to hire certain Sub-Advisers pursuant to Sub-Advisory Agreements and materially amend existing SubAdvisory Agreements without obtaining the shareholder approval required under section 15(a) of the Act and rule 18f–2 under the Act.2 Applicants also seek an exemption from the Disclosure Requirements to permit a Fund to disclose (as both a dollar amount and a percentage of the Fund’s net assets): (a) The aggregate fees paid to the Adviser and any Affiliated Sub-Adviser; and (b) the aggregate fees paid to Sub-Advisers other than Affiliated Sub-Advisers (collectively, ‘‘Aggregate Fee Disclosure’’). For any Fund that employs an Affiliated Sub-Adviser, the Fund will provide separate disclosure of any fees paid to the Affiliated SubAdviser. 3. Applicants agree that any order granting the requested relief will be subject to the terms and conditions stated in the Application. Such terms and conditions provide for, among other safeguards, appropriate disclosure to other registered open-end management company or series thereof that: (a) Is advised by RiskX Investments or its successor or by a person controlling, controlled by, or under common control with RiskX Investments or its successor (each, also an ‘‘Adviser’’); (b) uses the manager of managers structure described in the application; and (c) complies with the terms and conditions of the application (any such series, a ‘‘Fund’’ and collectively, the ‘‘Funds’’). For purposes of the requested order, ‘‘successor’’ is limited to an entity that results from a reorganization into another jurisdiction or a change in the type of business organization. 2 The requested relief will not extend to any SubAdviser, other than a ‘‘Wholly-Owned SubAdviser’’ (as defined in the application), that is an affiliated person, as defined in section 2(a)(3) of the Act, of a Fund or the Adviser, other than by reason of serving as a sub-adviser to one or more of the Funds (‘‘Affiliated Sub-Adviser’’). VerDate Sep<11>2014 22:23 Aug 05, 2016 Jkt 238001 Fund shareholders and notification about sub-advisory changes and enhanced Board oversight to protect the interests of the Funds’ shareholders. 4. Section 6(c) of the Act provides that the Commission may exempt any person, security, or transaction or any class or classes of persons, securities, or transactions from any provisions of the Act, or any rule thereunder, if such relief is necessary or appropriate in the public interest and consistent with the protection of investors and purposes fairly intended by the policy and provisions of the Act. Applicants believe that the requested relief meets this standard because, as further explained in the Application, the Advisory Agreements will remain subject to shareholder approval, while the role of the Sub-Advisers is substantially similar to that of individual portfolio managers, so that requiring shareholder approval of SubAdvisory Agreements would impose unnecessary delays and expenses on the Funds. Applicants believe that the requested relief from the Disclosure Requirements meets this standard because it will improve the Adviser’s ability to negotiate fees paid to the SubAdvisers that are more advantageous for the Funds. For the Commission, by the Division of Investment Management, under delegated authority. Robert W. Errett, Deputy Secretary. [FR Doc. 2016–18754 Filed 8–5–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78454; File No. SR– BatsBZX–2016–46] Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Pilot Period for the Exchange’s Supplemental Competitive Liquidity Provider Program August 2, 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 28, 2016, Bats BZX Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00098 Fmt 4703 Sfmt 4703 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 Exchange is proposing to extend the pilot period for the Exchange’s Supplemental Competitive Liquidity Provider Program (the ‘‘Program’’), which is currently set to expire on July 28, 2016, for three months, to expire on October 28, 2016. 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 Background On August 30, 2011, the Exchange received approval of rules applicable to the qualification, listing and delisting of securities of issuers on the Exchange.3 More recently, the Exchange received approval to operate a pilot program that is designed to incentivize certain Market Makers 4 registered with the Exchange as ETP CLPs, as defined in Interpretation and Policy .03 to Rule 11.8, to enhance liquidity on the Exchange in certain ETPs 5 listed on the Exchange and thereby qualify to receive part of a daily rebate as part of the 3 See Securities Exchange Act Release No. 65225 (August 30, 2011), 76 FR 55148 (September 6, 2011) (SR–BATS–2011–018). 4 As defined in BZX Rules, the term ‘‘Market Maker’’ means a Member that acts a as a market maker pursuant to Chapter XI of BZX Rules. 5 ETP is defined in Interpretation and Policy .03(b)(4) to Rule 11.8. E:\FR\FM\08AUN1.SGM 08AUN1 Federal Register / Vol. 81, No. 152 / Monday, August 8, 2016 / Notices Program under Interpretation and Policy .03 to Rule 11.8.6 The Program was approved by the Commission on a pilot basis running one-year from the date of implementation.7 The Commission approved the Program on July 28, 2014.8 The Exchange implemented the Program on July 28, 2014 and the pilot period for the Program was originally scheduled to end on July 28, 2015 until it was extended to end on October 28, 2015,9 later extended to January 28, 2016,10 again extended to April 28, 2016,11 and most recently extended to July 28, 2016.12 Proposal To Extend the Operation of the Program mstockstill on DSK3G9T082PROD with NOTICES The Exchange established the Program in order to enhance liquidity on the Exchange in certain ETPs listed on the Exchange (and thereby enhance the Exchange’s ability to compete as a listing venue) by providing a mechanism by which ETP CLPs compete for part of a daily quoting incentive on the basis of providing the most aggressive quotes with the greatest amount of size. Such competition has the ability to reduce spreads, facilitate the price discovery process, and reduce costs for investors trading in such securities, thereby promoting capital formation and helping the Exchange to compete as a listing venue. The Exchange believes that extending the pilot is appropriate because the Exchange has prepared and is also planning to submit a proposal to make the Program permanent. As part of this proposal, the Exchange has also prepared a report analyzing the Program. As such, the Exchange believes that it is appropriate to extend the current operation of the Program for three months in order to provide enough time for the Program to continue operating while such proposal is under consideration by the Commission. Through this filing, the Exchange seeks to extend the current pilot period of the Program until October 28, 2016. 6 See Securities Exchange Act Release No. 72692 (July 28, 2014), 79 FR 44908 (August 1, 2014) (SR– BATS–2014–022) (‘‘CLP Approval Order’’). 7 See id at 44909. 8 Id. 9 See Securities Exchange Act Release No. 75518 (July 24, 2015), 80 FR 45566 (July 30, 2015 (SR– BATS–2015–55). 10 See Securities Exchange Act Release No. 76293 (October 28, 2015), 80 FR 67808 (November 3, 2015) (SR–BATS–2015–96). 11 See Securities Exchange Act Release No. 77033 (February 2, 2016), 81 FR 6558 (February 8, 2016) (SR–BATS–2016–12). 12 See Securities Exchange Act Release No. 77721 (April 27, 2016), 81 FR 26591 (May 3, 2016) (SR– BatsBZX–2016–11). VerDate Sep<11>2014 22:23 Aug 05, 2016 Jkt 238001 2. Statutory Basis The Exchange believes that its proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.13 In particular, the Exchange believes the proposed change furthers the objectives of Section 6(b)(5) of the Act,14 in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. The Exchange believes that extending the pilot period for the Program is consistent with these principles because the Program is reasonably designed to enhance quote competition, improve liquidity in securities listed on the Exchange, support the quality of price discovery, promote market transparency, and increase competition for listings and trade executions, while reducing spreads and transaction costs in such securities. Maintaining and increasing liquidity in Exchange-listed securities will help raise investors’ confidence in the fairness of the market and their transactions. The extension of the pilot period will allow Exchange to continue to operate the Program while its proposal to make the Program permanent is under consideration by the Commission. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change extends an established pilot program for three months, thus allowing the Program to enhance competition in both the listings market and in competition for market makers. The Program will continue to promote competition in the listings market by providing issuers with a vehicle for paying the Exchange additional fees in exchange for incentivizing tighter spreads and deeper liquidity in listed securities and allow the Exchange to continue to compete with similar programs at Nasdaq Stock 13 15 14 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00099 Fmt 4703 Sfmt 4703 52495 Market LLC 15 and NYSE Arca Equities, Inc.16 The Exchange also believes that extending the pilot program for an additional three months will allow the Program to continue to enhance competition among market participants by creating incentives for market makers to compete to make better quality markets. By continuing to require that market makers both meet the quoting requirements and also compete for the daily financial incentives, the quality of quotes on the Exchange will continue to improve. This, in turn, will attract more liquidity to the Exchange and further improve the quality of trading in exchange-listed securities participating in the Program, which will also act to bolster the Exchange’s listing business. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from Members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the 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) of the Act 17 and paragraph (f)(6) of Rule 19b–4 thereunder.18 A proposed rule change filed under Rule 19b–4(f)(6) normally does not become operative before 30 days from the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),19 the Commission may designate a shorter time if such action is consistent with the 15 See Securities Exchange Act Release No. 69195 (March 20, 2013), 78 FR 18393 (March 26, 2013) (SR–NASDAQ–2012–137). 16 See Securities Exchange Act Release No. 69335 (April 5, 2013), 78 FR 35340 (June 12, 2013) (SR– NYSEARCA–2013–34). 17 15 U.S.C. 78s(b)(3)(A). 18 17 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. 19 17 CFR 240.19b–4(f)(6)(iii). E:\FR\FM\08AUN1.SGM 08AUN1 52496 Federal Register / Vol. 81, No. 152 / Monday, August 8, 2016 / Notices protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay. The Exchange asserts that waiver of the operative delay will allow the Exchange to extend the Program prior to its expiration on July 28, 2016, which will ensure that the Program continues to operate uninterrupted while the Exchange and the Commission continue to analyze data regarding the Program. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposed rule change to be operative upon filing with the Commission.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. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal is consistent with the Act. Comments may be submitted by any of the following methods: mstockstill on DSK3G9T082PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File No. SR–BatsBZX–2016–46 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–BatsBZX–2016–46. 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 20 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Sep<11>2014 22:23 Aug 05, 2016 Jkt 238001 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 No. SR–BatsBZX– 2016–46 and should be submitted on or before August 29, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–18697 Filed 8–5–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78460; File No. SR– BatsEDGX–2016–36] Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Reflect the Dissolution of One of the Exchange’s Intermediate Holding Companies, Direct Edge Holdings LLC August 2, 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 26, 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 this proposal as a ‘‘non-controversial’’ proposed rule CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6)(iii) thereunder,4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to reflect the dissolution of one of the Exchange’s intermediate holding companies, Direct Edge Holdings LLC (‘‘DEH’’), on December 31, 2015, by: (i) Amending the bylaws of the Exchange’s ultimate parent company, Bats Global Markets, Inc. (the ‘‘Corporation’’), to remove reference to DEH, as well as Bats Global Markets Holdings, an intermediate holding company wholly owned by the Corporation (‘‘BGMH’’), (ii) amending the bylaws of the Exchange to remove reference to DEH, (iii) deleting the DEH certificate of formation and operating agreement from the Exchange’s rules, and (iv) amending the operating agreement of the Exchange’s sole stockholder, Direct Edge LLC (‘‘DE LLC’’), to reflect that DE LLC’s sole member is the Corporation rather than DEH and to make other related changes. 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 On December 17, 2015, DEH filed a certificate of cancellation with the State of Delaware, effective December 31, 21 17 1 15 PO 00000 Frm 00100 Fmt 4703 Sfmt 4703 3 15 4 17 E:\FR\FM\08AUN1.SGM U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6)(iii). 08AUN1

Agencies

[Federal Register Volume 81, Number 152 (Monday, August 8, 2016)]
[Notices]
[Pages 52494-52496]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18697]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78454; File No. SR-BatsBZX-2016-46]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Extend 
the Pilot Period for the Exchange's Supplemental Competitive Liquidity 
Provider Program

August 2, 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 28, 2016, Bats BZX Exchange, Inc. (``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The 
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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to extend the pilot period for the 
Exchange's Supplemental Competitive Liquidity Provider Program (the 
``Program''), which is currently set to expire on July 28, 2016, for 
three months, to expire on October 28, 2016.
    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
Background
    On August 30, 2011, the Exchange received approval of rules 
applicable to the qualification, listing and delisting of securities of 
issuers on the Exchange.\3\ More recently, the Exchange received 
approval to operate a pilot program that is designed to incentivize 
certain Market Makers \4\ registered with the Exchange as ETP CLPs, as 
defined in Interpretation and Policy .03 to Rule 11.8, to enhance 
liquidity on the Exchange in certain ETPs \5\ listed on the Exchange 
and thereby qualify to receive part of a daily rebate as part of the

[[Page 52495]]

Program under Interpretation and Policy .03 to Rule 11.8.\6\
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    \3\ See Securities Exchange Act Release No. 65225 (August 30, 
2011), 76 FR 55148 (September 6, 2011) (SR-BATS-2011-018).
    \4\ As defined in BZX Rules, the term ``Market Maker'' means a 
Member that acts a as a market maker pursuant to Chapter XI of BZX 
Rules.
    \5\ ETP is defined in Interpretation and Policy .03(b)(4) to 
Rule 11.8.
    \6\ See Securities Exchange Act Release No. 72692 (July 28, 
2014), 79 FR 44908 (August 1, 2014) (SR-BATS-2014-022) (``CLP 
Approval Order'').
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    The Program was approved by the Commission on a pilot basis running 
one-year from the date of implementation.\7\ The Commission approved 
the Program on July 28, 2014.\8\ The Exchange implemented the Program 
on July 28, 2014 and the pilot period for the Program was originally 
scheduled to end on July 28, 2015 until it was extended to end on 
October 28, 2015,\9\ later extended to January 28, 2016,\10\ again 
extended to April 28, 2016,\11\ and most recently extended to July 28, 
2016.\12\
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    \7\ See id at 44909.
    \8\ Id.
    \9\ See Securities Exchange Act Release No. 75518 (July 24, 
2015), 80 FR 45566 (July 30, 2015 (SR-BATS-2015-55).
    \10\ See Securities Exchange Act Release No. 76293 (October 28, 
2015), 80 FR 67808 (November 3, 2015) (SR-BATS-2015-96).
    \11\ See Securities Exchange Act Release No. 77033 (February 2, 
2016), 81 FR 6558 (February 8, 2016) (SR-BATS-2016-12).
    \12\ See Securities Exchange Act Release No. 77721 (April 27, 
2016), 81 FR 26591 (May 3, 2016) (SR-BatsBZX-2016-11).
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Proposal To Extend the Operation of the Program
    The Exchange established the Program in order to enhance liquidity 
on the Exchange in certain ETPs listed on the Exchange (and thereby 
enhance the Exchange's ability to compete as a listing venue) by 
providing a mechanism by which ETP CLPs compete for part of a daily 
quoting incentive on the basis of providing the most aggressive quotes 
with the greatest amount of size. Such competition has the ability to 
reduce spreads, facilitate the price discovery process, and reduce 
costs for investors trading in such securities, thereby promoting 
capital formation and helping the Exchange to compete as a listing 
venue. The Exchange believes that extending the pilot is appropriate 
because the Exchange has prepared and is also planning to submit a 
proposal to make the Program permanent. As part of this proposal, the 
Exchange has also prepared a report analyzing the Program. As such, the 
Exchange believes that it is appropriate to extend the current 
operation of the Program for three months in order to provide enough 
time for the Program to continue operating while such proposal is under 
consideration by the Commission. Through this filing, the Exchange 
seeks to extend the current pilot period of the Program until October 
28, 2016.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities exchange, and, in particular, 
with the requirements of Section 6(b) of the Act.\13\ In particular, 
the Exchange believes the proposed change furthers the objectives of 
Section 6(b)(5) of the Act,\14\ in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. The Exchange believes that 
extending the pilot period for the Program is consistent with these 
principles because the Program is reasonably designed to enhance quote 
competition, improve liquidity in securities listed on the Exchange, 
support the quality of price discovery, promote market transparency, 
and increase competition for listings and trade executions, while 
reducing spreads and transaction costs in such securities. Maintaining 
and increasing liquidity in Exchange-listed securities will help raise 
investors' confidence in the fairness of the market and their 
transactions. The extension of the pilot period will allow Exchange to 
continue to operate the Program while its proposal to make the Program 
permanent is under consideration by the Commission.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change 
extends an established pilot program for three months, thus allowing 
the Program to enhance competition in both the listings market and in 
competition for market makers. The Program will continue to promote 
competition in the listings market by providing issuers with a vehicle 
for paying the Exchange additional fees in exchange for incentivizing 
tighter spreads and deeper liquidity in listed securities and allow the 
Exchange to continue to compete with similar programs at Nasdaq Stock 
Market LLC \15\ and NYSE Arca Equities, Inc.\16\
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    \15\ See Securities Exchange Act Release No. 69195 (March 20, 
2013), 78 FR 18393 (March 26, 2013) (SR-NASDAQ-2012-137).
    \16\ See Securities Exchange Act Release No. 69335 (April 5, 
2013), 78 FR 35340 (June 12, 2013) (SR-NYSEARCA-2013-34).
---------------------------------------------------------------------------

    The Exchange also believes that extending the pilot program for an 
additional three months will allow the Program to continue to enhance 
competition among market participants by creating incentives for market 
makers to compete to make better quality markets. By continuing to 
require that market makers both meet the quoting requirements and also 
compete for the daily financial incentives, the quality of quotes on 
the Exchange will continue to improve. This, in turn, will attract more 
liquidity to the Exchange and further improve the quality of trading in 
exchange-listed securities participating in the Program, which will 
also act to bolster the Exchange's listing business.

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

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

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the 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) of the Act \17\ and paragraph 
(f)(6) of Rule 19b-4 thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative before 30 days from the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\19\ the Commission may 
designate a shorter time if such action is consistent with the

[[Page 52496]]

protection of investors and the public interest.
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    \19\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The Exchange has asked the Commission to waive the 30-day operative 
delay. The Exchange asserts that waiver of the operative delay will 
allow the Exchange to extend the Program prior to its expiration on 
July 28, 2016, which will ensure that the Program continues to operate 
uninterrupted while the Exchange and the Commission continue to analyze 
data regarding the Program. The Commission believes that waiving the 
30-day operative delay is consistent with the protection of investors 
and the public interest. Therefore, the Commission hereby waives the 
30-day operative delay and designates the proposed rule change to be 
operative upon filing with the Commission.\20\
---------------------------------------------------------------------------

    \20\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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 proposal 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-BatsBZX-2016-46 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-BatsBZX-2016-46. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File No. SR-BatsBZX-2016-46 and should be 
submitted on or before August 29, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-18697 Filed 8-5-16; 8:45 am]
 BILLING CODE 8011-01-P
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