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]
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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’’).
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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.
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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).
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22:23 Aug 05, 2016
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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).
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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).
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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
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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]
-----------------------------------------------------------------------
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.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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'').
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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.
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\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the 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).
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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).
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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\
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\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).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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