Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 21.8, Order Display and Book Processing, 59016-59018 [2016-20457]

Download as PDF 59016 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices 19(b)(3)(A) of the Act 18 and Rule 19b– 4(f)(6) thereunder.19 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments Paper Comments mstockstill on DSK3G9T082PROD with NOTICES • 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–2016–50. 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 18 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). As required under Rule 19b–4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. 19 17 21:17 Aug 25, 2016 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–20459 Filed 8–25–16; 8:45 am] BILLING CODE 8011–01–P • 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–2016–50 on the subject line. VerDate Sep<11>2014 available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–BatsBZX– 2016–50, and should be submitted on or before September 16, 2016. Jkt 238001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78630; File No. SR– BatsEDGX–2016–46] Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 21.8, Order Display and Book Processing August 22, 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 August 17, 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 and II below, which Items have been prepared by the Exchange. The Exchange has designated this proposal as a ‘‘noncontroversial’’ proposed rule change pursuant to section 19(b)(3)(A) of the 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. 2017 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6)(iii). 1 15 PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to authorize the Exchange’s equity options platform (‘‘EDGX Options’’) to amend Rule 21.8 (Order Display and Book Processing). 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 is proposing to amend Rule 21.8 (Order Display and Book Processing), which sets forth the priority and order allocation rules applicable to EDGX Options. Rule 21.8 also describes the general priority rules for EDGX Options, including that quotes and orders are prioritized by price and then on a pro-rata basis according to size as well as various priority overlays applicable to the pro-rata allocation method. Specifically, Rule 21.8(g) (Primary Market Maker Participation Entitlements) allows for an exception to the pro-rata basis in cases of small size orders,5 where Primary Market Makers are allocated the full order amount if they have priority quotes at the NBBO. When the Exchange originally proposed rules for EDGX Options, the Exchange proposed to extend the small size order exception to Directed Market Makers as well. This aspect of the Exchange’s Rules was eliminated prior to approval of rules for EDGX Options.6 However, 5 Small size orders are defined as five or fewer contracts. See Exchange Rule 21.8(g)(2). 6 See Securities Exchange Act Release No. 75650 (August 7, 2015), 80 FR 48600 (August 13, 2015) (SR–EDGX–2015–18) (Notice of Filing of Amendment Nos. 1 and 2 and Order Granting E:\FR\FM\26AUN1.SGM 26AUN1 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices there is one remaining reference to Directed Market Makers in Rule 21.8(g)(2), which describes the Exchange’s monitoring of the small size order exception. Because the small size order exception is limited to Primary Makers, the Exchange proposes to eliminate reference to Directed Market Makers in Rule 21.8(g)(2). This amendment will align the Exchange with other option exchanges,7 and will ensure internal consistency of the Exchange’s rulebook, which has been previously amended to delete the proposed rule granting Directed Market Makers participation entitlements to trade against small size orders.8 2. Statutory Basis mstockstill on DSK3G9T082PROD with NOTICES 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.9 Specifically, the proposal is consistent with section 6(b)(5) of the Act 10 because 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, to remove impediments to, and perfect the mechanism of, a free and open market and a national market system and, in general, to protect investors and the public interest. The amended rule will remove reference to Directed Market Makers in the context of the small size order exception. Thus, this amendment will align the Exchange with other options exchanges,11 and will ensure internal consistency of the Exchange’s rulebook, which has been previously amended to delete the proposed rule granting Directed Market Makers participation entitlements to trade against small size orders. Accelerated Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1, 2, and 3 Thereto, To Establish Rules Governing the Trading of Options on the EDGX Options Market). 7 See, e.g., BX Options, chapter VI, section 10(1)(C)(2), ‘‘Orders for 5 contracts or fewer shall be allocated to the LMM. The Exchange will review this provision quarterly and will maintain the small order size at a level that will not allow orders of 5 contracts or less executed by the LMM to account for more than 40% of the volume executed on the Exchange. This provision shall not apply if the order of 5 contracts or fewer is directed to a DMM who is quoting at or better than the NBBO.’’ 8 See supra note 6. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). 11 See supra note 7. VerDate Sep<11>2014 21:17 Aug 25, 2016 Jkt 238001 B. Self-Regulatory Organization’s Statement on Burden on Competition 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.12 Specifically, the proposal is consistent with section 6(b)(5) of the Act 13 because 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, to remove impediments to, and perfect the mechanism of, a free and open market and a national market system and, in general, to protect investors and the public interest. The amended rule will remove reference to Directed Market Makers in the context of the small size order exception. Thus, this amendment will align the Exchange with other options exchanges,14 and will ensure internal consistency of the Exchange’s rulebook, which has been previously amended to delete the proposed rule granting Directed Market Makers participation entitlements to trade against small size orders. 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 15 and subparagraph (f)(6) of Rule 19b–4 thereunder.16 12 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 14 See supra note 7. 15 15 U.S.C. 78s(b)(3)(a). 16 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 13 15 PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 59017 A proposed rule change filed under Rule 19b–4(f)(6) 17 normally does not become operative for 30 days after the date of filing. However, pursuant to Rule 19b–4(f)(6)(iii),18 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange requested that the Commission waive the 30-day operative delay. The Exchange states that the rule change proposed herein is a minor change to ensure internal consistency of the Exchange’s rulebook. Further, the Exchange states that the proposed change is based on an existing rule of another options exchange 19 and does not raise any new policy issues. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest, as the proposed rule change is a nonsubstantive change and will promote internal consistency of the Exchange’s rulebook and avoid potential confusion as to the application of the Exchange’s rules. Therefore, the Commission designates the proposed rule change to be operative as of the date of filing.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: 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– BatsEDGX–2016–46 on the subject line. 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. 17 17 CFR 240.19b–4(f)(6). 18 17 CFR 240.19b–4(f)(6)(iii). 19 See supra note 7. 20 For purposes only of waiving the operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). E:\FR\FM\26AUN1.SGM 26AUN1 59018 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices 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–BatsEDGX–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 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 No. SR–BatsEDGX– 2016–46 and should be submitted on or before September 16, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–20457 Filed 8–25–16; 8:45 am] mstockstill on DSK3G9T082PROD with NOTICES BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION the most significant parts of such statements. [Release No. 34–78631; File No. SR– BatsBYX–2016–21] A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change Self-Regulatory Organizations; Bats BYX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.22, Data Products, To Adopt a New Market Data Product Known as BYX Summary Depth August 22, 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 August 11, 2016, Bats BYX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BYX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange has designated this proposal as a ‘‘noncontroversial’’ proposed rule change pursuant to section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend Rule 11.22 to adopt a new market data product known as BYX Summary Depth. 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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 2 17 21 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 21:17 Aug 25, 2016 Jkt 238001 PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 1. Purpose The Exchange proposes to amend Rule 11.22 to adopt a new market data product known as BYX Summary Depth.5 BYX Summary Depth would be a data feed that offers aggregated twosided quotations for all displayed orders entered into the System 6 for up to five (5) price levels for securities traded on the Exchange and for which the Exchange reports quotes under the Consolidated Tape Association (‘‘CTA’’) Plan or the Nasdaq/UTP Plan. BYX Summary Depth also contains the individual last sale information, Market Status, Retail Liquidity Identifier, Trading Status, and Trade Break messages. The individual last sale information will include the price, size, and time of execution. The last sale message will also include the cumulative number of shares executed on the Exchange for that trading day. The Exchange will disseminate the aggregate Best Bid and Offer (‘‘BBO’’) and last sale information through BYX Summary Depth no earlier than it provides its BBO and last sale information to the processors under the CTA Plan or the Nasdaq/UTP Plan. The Market Status message will reflect a change in the status of the Exchange. For example, the Market Status message would indicate whether the Exchange is experiencing a systems issue or disruption resulting in quotation or trade information not currently being disseminated as part of the aggregated BBO. The Market Status message will also indicate when Exchange has resolved a systems issue or disruption and is properly reflecting the status of the aggregated BBO. The Retail Liquidity Identifier indicator message will be disseminated pursuant to the Exchange’s Retail Price Improvement (‘‘RPI’’) Program.7 The 5 Currently, the paragraphs within Rule 11.22 skip from paragraph (i) to paragraph (k). The Exchange now proposes to renumber current paragraph (k) to Rule 11.22 to as paragraph (j) to ensure the paragraphs within the rule are consecutively numbered. 6 ‘‘System’’ is defined as the ‘‘the electronic communications and trading facility designated by the Board through which securities orders of Users Are consolidated for ranking, execution and, when applicable, routing away.’’ See Exchange Rule 1.5(aa). 7 For a description of the RPI Program, see BYX Rule 11.24. See also Securities Exchange Act Release No. 68303 (November 27, 2012), 77 FR 71652 (December 3, 2012) (SR–BYX–2012–019) E:\FR\FM\26AUN1.SGM 26AUN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 81, Number 166 (Friday, August 26, 2016)]
[Notices]
[Pages 59016-59018]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20457]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78630; File No. SR-BatsEDGX-2016-46]

Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule
21.8, Order Display and Book Processing

August 22, 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 August 17, 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 and
II below, which Items have been prepared by the Exchange. The Exchange
has designated this proposal as a ``non-controversial'' proposed rule
change pursuant to section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with
the Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange filed a proposal to authorize the Exchange's equity
options platform (``EDGX Options'') to amend Rule 21.8 (Order Display
and Book Processing).
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 is proposing to amend Rule 21.8 (Order Display and
Book Processing), which sets forth the priority and order allocation
rules applicable to EDGX Options. Rule 21.8 also describes the general
priority rules for EDGX Options, including that quotes and orders are
prioritized by price and then on a pro-rata basis according to size as
well as various priority overlays applicable to the pro-rata allocation
method. Specifically, Rule 21.8(g) (Primary Market Maker Participation
Entitlements) allows for an exception to the pro-rata basis in cases of
small size orders,\5\ where Primary Market Makers are allocated the
full order amount if they have priority quotes at the NBBO. When the
Exchange originally proposed rules for EDGX Options, the Exchange
proposed to extend the small size order exception to Directed Market
Makers as well. This aspect of the Exchange's Rules was eliminated
prior to approval of rules for EDGX Options.\6\ However,

[[Page 59017]]

there is one remaining reference to Directed Market Makers in Rule
21.8(g)(2), which describes the Exchange's monitoring of the small size
order exception. Because the small size order exception is limited to
Primary Makers, the Exchange proposes to eliminate reference to
Directed Market Makers in Rule 21.8(g)(2). This amendment will align
the Exchange with other option exchanges,\7\ and will ensure internal
consistency of the Exchange's rulebook, which has been previously
amended to delete the proposed rule granting Directed Market Makers
participation entitlements to trade against small size orders.\8\
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\5\ Small size orders are defined as five or fewer contracts.
See Exchange Rule 21.8(g)(2).
\6\ See Securities Exchange Act Release No. 75650 (August 7,
2015), 80 FR 48600 (August 13, 2015) (SR-EDGX-2015-18) (Notice of
Filing of Amendment Nos. 1 and 2 and Order Granting Accelerated
Approval of a Proposed Rule Change, as Modified by Amendment Nos. 1,
2, and 3 Thereto, To Establish Rules Governing the Trading of
Options on the EDGX Options Market).
\7\ See, e.g., BX Options, chapter VI, section 10(1)(C)(2),
``Orders for 5 contracts or fewer shall be allocated to the LMM. The
Exchange will review this provision quarterly and will maintain the
small order size at a level that will not allow orders of 5
contracts or less executed by the LMM to account for more than 40%
of the volume executed on the Exchange. This provision shall not
apply if the order of 5 contracts or fewer is directed to a DMM who
is quoting at or better than the NBBO.''
\8\ See supra note 6.
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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.\9\ Specifically, the
proposal is consistent with section 6(b)(5) of the Act \10\ because 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, to remove impediments to, and perfect the
mechanism of, a free and open market and a national market system and,
in general, to protect investors and the public interest.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

The amended rule will remove reference to Directed Market Makers in
the context of the small size order exception. Thus, this amendment
will align the Exchange with other options exchanges,\11\ and will
ensure internal consistency of the Exchange's rulebook, which has been
previously amended to delete the proposed rule granting Directed Market
Makers participation entitlements to trade against small size orders.
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\11\ See supra note 7.
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B. Self-Regulatory Organization's Statement on Burden on Competition

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.\12\ Specifically, the
proposal is consistent with section 6(b)(5) of the Act \13\ because 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, to remove impediments to, and perfect the
mechanism of, a free and open market and a national market system and,
in general, to protect investors and the public interest.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

The amended rule will remove reference to Directed Market Makers in
the context of the small size order exception. Thus, this amendment
will align the Exchange with other options exchanges,\14\ and will
ensure internal consistency of the Exchange's rulebook, which has been
previously amended to delete the proposed rule granting Directed Market
Makers participation entitlements to trade against small size orders.
---------------------------------------------------------------------------

\14\ See supra note 7.
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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 \15\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\16\
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\15\ 15 U.S.C. 78s(b)(3)(a).
\16\ 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) \17\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\18\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requested
that the Commission waive the 30-day operative delay. The Exchange
states that the rule change proposed herein is a minor change to ensure
internal consistency of the Exchange's rulebook. Further, the Exchange
states that the proposed change is based on an existing rule of another
options exchange \19\ and does not raise any new policy issues.
---------------------------------------------------------------------------

\17\ 17 CFR 240.19b-4(f)(6).
\18\ 17 CFR 240.19b-4(f)(6)(iii).
\19\ See supra note 7.
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest, as
the proposed rule change is a non-substantive change and will promote
internal consistency of the Exchange's rulebook and avoid potential
confusion as to the application of the Exchange's rules. Therefore, the
Commission designates the proposed rule change to be operative as of
the date of filing.\20\
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\20\ For purposes only of waiving the operative delay, 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-BatsEDGX-2016-46 on the subject line.

[[Page 59018]]

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-BatsEDGX-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 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 No. SR-BatsEDGX-2016-46 and should be
submitted on or before September 16, 2016.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
Robert W. Errett,
Deputy Secretary.
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\21\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-20457 Filed 8-25-16; 8:45 am]
BILLING CODE 8011-01-P

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