Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 13.8, EDGA Book Feeds, To Adopt a New Market Data Product Known as EDGA Summary Depth, 59020-59023 [2016-20462]

Download as PDF 59020 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices data was a primary goal of the market data amendments adopted by Regulation NMS.17 B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.18 The Exchange believes that the proposal will promote competition by enabling the Exchange to offer a market data product similar to that currently offered by the NYSE and Nasdaq.19 Thus, the Exchange believes this proposed rule change is necessary to permit fair competition among national securities exchanges. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. mstockstill on DSK3G9T082PROD with NOTICES 17 See Regulation NMS Adopting Release, supra note 14. 18 The Bats One Feed is a data feed that disseminates, on a real-time basis, the aggregate BBO of all displayed orders for securities traded on each of the Bats Exchanges and for the Bats Exchanges report quotes under the CTA Plan or the Nasdaq/UTP Plan. The Bats One Feed also contains the individual last sale information for the Bats Exchanges (collectively with the aggregate BBO, the ‘‘Bats One Summary Feed’’). In addition, the Bats One Feed contains optional functionality which enables recipients to receive aggregated two-sided quotations from the Bats Exchanges for up to five (5) price levels (‘‘Bats One Premium Feed’’). See Exchange Rule 11.22(i). See also Securities Exchange Act Release No. 73918 (December 23, 2014), 79 FR 78920 (December 31, 2014) (File Nos. SR–EDGX–2014–25; SR–EDGA–2014–25; SR– BATS–2014–055; SR–BYX–2014–030) (Notice of Amendments No. 2 and Order Granting Accelerated Approval to Proposed Rule Changes, as Modified by Amendments Nos. 1 and 2, to Establish a New Market Data Product called the Bats One Feed) (‘‘Bats One Approval Order’’). The Exchange uses the following data feeds to create the Bats One Feed, each of which are available to vendors: EDGX Depth, EDGA Depth, BYX PITCH Feed, and the BZX PITCH Feed. The Exchange notes that a vendor could utilize the proposed BYX Summary Depth Feed, as well as the summarized depth feeds to be proposed by BZX, EDGA, and EDGX to create a competing product to the Bats One Feed. Supra note 10. The Exchange represents that a competing vendor could obtain these data feeds from each Bats Exchange on the same latency basis as the system that performs the aggregation and consolidation of the Bats One Feed. See Bats One Approval Order. While the proposed BYX Summary Depth Feed does not contain the symbol summary or consolidated volume data included in the Bats One Feed, a vendor could include this information in a competing product as this information is easily derivable from the proposed feeds or can be obtained from the securities information processors on the same terms as the Exchange. 19 See supra note 16. VerDate Sep<11>2014 21:17 Aug 25, 2016 Jkt 238001 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the 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 20 and Rule 19b– 4(f)(6) thereunder.21 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 • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File No. SR– BatsBYX–2016–21 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–BatsBYX–2016–21. 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 (http://www.sec.gov/ 20 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. 21 17 PO 00000 Frm 00119 Fmt 4703 Sfmt 4703 rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File No. SR–BatsBYX– 2016–21, and should be submitted on or before September 16, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.22 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–20458 Filed 8–25–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78636; File No. SR– BatsEDGA–2016–19] Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 13.8, EDGA Book Feeds, To Adopt a New Market Data Product Known as EDGA 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 EDGA Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGA’’) 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 ‘‘non22 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\26AUN1.SGM 26AUN1 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices controversial’’ 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 13.8 to adopt a new market data product known as EDGA 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 the most significant parts of such statements. mstockstill on DSK3G9T082PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 13.8 to adopt a new market data product known as EDGA Summary Depth. EDGA Summary Depth would be a data feed that offers aggregated twosided quotations for all displayed orders entered into the System 5 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. EDGA Summary Depth also contains the individual last sale information, Market Status, Trading Status, and Trade Break messages. The individual last sale 3 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 5 ‘‘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). 4 17 VerDate Sep<11>2014 21:17 Aug 25, 2016 Jkt 238001 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 EDGA 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 Trade Break message will indicate when an execution is broken in accordance with Exchange rules.6 The Trading Status message will indicate the current trading status of a security on the Exchange. For example, a Trading Status message will be sent when a short sale price restriction is in effect pursuant to Rule 201 of Regulation SHO (‘‘Short Sale Circuit Breaker’’),7 or when the security is subject to a trading halt, suspension or pause declared by the listing market. A Trading Status message will be sent whenever a security’s trading status changes. The Exchange intends to offer EDGA Summary Depth as of January 3, 2017. Prior to January 3, 2017, the Exchange will file a separate rule change with the Commission proposing fees to be charged for EDGA Summary Depth.8 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act,9 in general, and furthers the objectives of section 6(b)(5) of the Act,10 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and 6 See, e.g., Exchange Rule 11.15, Clearly Erroneous Executions. 7 17 CFR 242.200(g); 17 CFR 242.201. 8 The Exchange understands that its affiliated exchanges intend to file identical proposed rule changes to adopt rules and fees for the Book Viewer data feed with the Commission. The Exchange’s affiliates are Bats EDGX Exchange, Inc., (‘‘EDGX’’), Bats BYX Exchange, Inc. (‘‘BYX’’), and Bats BZX Exchange, Inc. (‘‘BZX’’) (collectively, the ‘‘Bats Exchanges’’). 9 15 U.S.C. 78f. 10 15 U.S.C. 78f(b)(5). PO 00000 Frm 00120 Fmt 4703 Sfmt 4703 59021 perfect the mechanism of a free and open market and a national market system, and to protect investors and the public interest, and that it is not designed to permit unfair discrimination among customers, brokers, or dealers. This proposal is in keeping with those principles in that it promotes increased transparency through the dissemination of EDGA Summary Depth. The Exchange also believes this proposal is consistent with section 6(b)(5) of the Act because it protects investors and the public interest and promotes just and equitable principles of trade by providing investors with an alternative for receiving market data as requested by market data vendors and purchasers that expressed an interest in exchange-only data for instances where consolidated data is no longer required to be purchased and displayed. The proposed rule change would benefit investors by facilitating their prompt access to realtime depth-of-book information contained in EDGA Summary Depth. The Exchange also believes that the proposed rule change is consistent with section 11(A) of the Act 11 in that it supports (i) fair competition among brokers and dealers, among exchange markets, and between exchange markets and markets other than exchange markets and (ii) the availability of information with respect to quotations for and transactions in securities to brokers, dealers, and investors. Furthermore, the proposed rule change is consistent with Rule 603 of Regulation NMS,12 which provides that any national securities exchange that distributes information with respect to quotations for or transactions in an NMS stock do so on terms that are not unreasonably discriminatory. EDGA Summary Depth would be accessed and subscribed to on a voluntary basis, in that neither the Exchange nor market data distributors are required by any rule or regulation to make this data available. Accordingly, distributors and subscribers can discontinue their use at any time and for any reason. In adopting Regulation NMS, the Commission granted self-regulatory organizations and broker-dealers increased authority and flexibility to offer new and unique market data to consumers of such data. It was believed that this authority would expand the amount of data available to users and consumers of such data and also spur innovation and competition for the provision of market data. The Exchange believes that the data products proposed 11 15 U.S.C. 78k–1. 17 CFR 242.603. 12 See E:\FR\FM\26AUN1.SGM 26AUN1 59022 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices herein are precisely the sort of market data products that the Commission envisioned when it adopted Regulation NMS. The Commission concluded that Regulation NMS—by lessening regulation of the market in proprietary data—would itself further the Act’s goals of facilitating efficiency and competition: [E]fficiency is promoted when brokerdealers who do not need the data beyond the prices, sizes, market center identifications of the NBBO and consolidated last sale information are not required to receive (and pay for) such data. The Commission also believes that efficiency is promoted when broker-dealers may choose to receive (and pay for) additional market data based on their own internal analysis of the need for such data.13 By removing ‘‘unnecessary regulatory restrictions’’ on the ability of exchanges to sell their own data, Regulation NMS advanced the goals of the Act and the principles reflected in its legislative history. In addition, EDGA Summary Depth removes impediments to and perfects the mechanism of a free and open market and a national market system by providing investors with alternative market data and competing with similar market data products currently offered by the New York Stock Exchange, Inc. (‘‘NYSE’’) and the Nasdaq Stock Market LLC (‘‘Nasdaq’’).14 The provision of new options for investors to receive market data was a primary goal of the market data amendments adopted by Regulation NMS.15 mstockstill on DSK3G9T082PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.16 The 13 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496 (June 29, 2005) (File No. S7–10–04) (‘‘Regulation NMS Adopting Release’’). 14 See Nasdaq Rule 7023(a)(1)(C) (describing Nasdaq TotalView as a depth-of-book data feed that includes all orders and quotes from all Nasdaq members displayed in the Nasdaq Market Center as well as the aggregate size of such orders and quotes at each price level in the execution functionality of the Nasdaq Market Center). See NYSE OpenBook available at http://www.nyxdata.com/openbook (last visited July 5, 2016) (providing real-time view of the NYSE limit order book including the aggregated size at each price level). See Securities Exchange Act Release Nos. 46843 (November 18, 2002), 67 FR 70471 (November 22, 2002) (SR– NASD–2002–33) (order approving fees for Nasdaq TotalView); and 45138 (December 7, 2001), 66 FR 64895 (December 14, 2001) (SR–NYSE–2001–42) (order approving fees for NYSE OpenBook). 15 See Regulation NMS Adopting Release, supra note 13. 16 The Bats One Feed is a data feed that disseminates, on a real-time basis, the aggregate VerDate Sep<11>2014 21:17 Aug 25, 2016 Jkt 238001 Exchange believes that the proposal will promote competition by enabling the Exchange to offer a market data product similar to that currently offered by the NYSE and Nasdaq.17 Thus, the Exchange believes this proposed rule change is necessary to permit fair competition among national securities exchanges. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the 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 BBO of all displayed orders for securities traded on each of the Bats Exchanges and for the Bats Exchanges report quotes under the CTA Plan or the Nasdaq/UTP Plan. The Bats One Feed also contains the individual last sale information for the Bats Exchanges (collectively with the aggregate BBO, the ‘‘Bats One Summary Feed’’). In addition, the Bats One Feed contains optional functionality which enables recipients to receive aggregated two-sided quotations from the Bats Exchanges for up to five (5) price levels (‘‘Bats One Premium Feed’’). See Exchange Rule 13.8(b). See also Securities Exchange Act Release No. 73918 (December 23, 2014), 79 FR 78920 (December 31, 2014) (File Nos. SR–EDGX–2014–25; SR–EDGA–2014–25; SR– BATS–2014–055; SR–BYX–2014–030) (Notice of Amendments No. 2 and Order Granting Accelerated Approval to Proposed Rule Changes, as Modified by Amendments Nos. 1 and 2, to Establish a New Market Data Product called the Bats One Feed) (‘‘Bats One Approval Order’’). The Exchange uses the following data feeds to create the Bats One Feed, each of which are available to vendors: EDGX Depth, EDGA Depth, BYX PITCH Feed, and the BZX PITCH Feed. The Exchange notes that a vendor could utilize the proposed EDGA Summary Depth Feed, as well as the summarized depth feeds to be proposed by BYX, BZX, and EDGX to create a competing product to the Bats One Feed. Supra note 8. The Exchange represents that a competing vendor could obtain these data feeds from each Bats Exchange on the same latency basis as the system that performs the aggregation and consolidation of the Bats One Feed. See Bats One Approval Order. While the proposed EDGA Summary Depth Feed does not contain the symbol summary or consolidated volume data included in the Bats One Feed, a vendor could include this information in a competing product as this information is easily derivable from the proposed feeds or can be obtained from the securities information processors on the same terms as the Exchange. 17 See supra note 14. PO 00000 Frm 00121 Fmt 4703 Sfmt 4703 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 • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File No. SR– BatsEDGA–2016–19 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-BatsEDGA–2016–19. 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 (http://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 E:\FR\FM\26AUN1.SGM 26AUN1 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices 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–BatsEDGA– 2016–19, and should be submitted on or before September 16, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–20462 Filed 8–25–16; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–78634; File No. SR– NASDAQ–2016–113] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange’s Options Pricing August 22, 2016. mstockstill on DSK3G9T082PROD with NOTICES Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on August 9, 2016, The NASDAQ Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend chapter XV, entitled ‘‘Options Pricing,’’ at section 2, which governs pricing for Exchange members using the NASDAQ Options Market LLC (‘‘NOM’’), the Exchange’s facility for executing and routing standardized equity and index options. The Exchange proposes to CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 21:17 Aug 25, 2016 Jkt 238001 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION 20 17 amend certain Penny Pilot Options 3 pricing. The text of the proposed rule change is available on the Exchange’s Web site at http://nasdaq.cchwallstreet.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 1. Purpose The Exchange proposes to amend NOM pricing at chapter XV, section 2(1) to increase the Customer 4 or Professional 5 Penny Pilot Options Fee for Removing Liquidity in SPY Options.6 The proposed change is discussed below. 3 The Penny Pilot was established in March 2008 and was last extended in 2016. See Securities Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR 18587 (April 4, 2008) (SR–NASDAQ–2008– 026) (notice of filing and immediate effectiveness establishing Penny Pilot); and 78037 (June 10, 2016), 81 FR 39299 (June 16, 2016) (SR–NASDAQ– 2016–052) (notice of filing and immediate effectiveness extending the Penny Pilot through December 31, 2016). All Penny Pilot Options listed on the Exchange can be found at http:// www.nasdaqtrader.com/ MicroNews.aspx?id=OTA2016-15. 4 The term ‘‘Customer’’ or (‘‘C’’) applies to any transaction that is identified by a Participant for clearing in the Customer range at The Options Clearing Corporation which is not for the account of broker or dealer or for the account of a ‘‘Professional’’ (as that term is defined in Chapter I, Section 1(a)(48)). 5 The term ‘‘Professional’’ or (‘‘P’’) means any person or entity that (i) is not a broker or dealer in securities, and (ii) places more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s) pursuant to Chapter I, Section 1(a)(48). All Professional orders shall be appropriately marked by Participants. 6 Options overlying Standard and Poor’s Depositary Receipts/SPDRs (‘‘SPY’’) are based on the SPDR exchange-traded fund (‘‘ETF’’), which is designed to track the performance of the S&P 500 Index. PO 00000 Frm 00122 Fmt 4703 Sfmt 4703 59023 Change 1—Penny Pilot Options: Change Fee for Removing Customer and Professional Liquidity in SPY Options The Exchange currently assesses Customers, Professionals, Firms,7 NonNOM Market Makers,8 NOM Market Makers,9 and Broker-Dealers 10 a $0.50 per contract Penny Pilot Options Fee for Removing Liquidity in all NOM Penny Pilot Options, except SPY options. Today, the Exchange assesses a Customer or Professional that removes liquidity in SPY options a Penny Pilot Options Fee for Removing Liquidity of $0.47 per contract.11 The Exchange proposes to amend note ‘‘3’’ of chapter XV, section 2(1) to increase the Customer or Professional Penny Pilot Options Fee for Removing Liquidity in SPY options from $0.47 to $0.48 per contract. While the Exchange is proposing to increase this fee, the Exchange believes that the lower fee, as compared to $0.50 per contract in other Penny Pilot Options, will continue to incentivize Participants to send Customer and Professional order flow in SPY.12 2. Statutory Basis The Exchange believes that its proposal is consistent with section 6(b) of the Act,13 in general, and furthers the objectives of sections 6(b)(4) and 6(b)(5) of the Act,14 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among its members and issuers and other persons using its facilities, and is not designed to permit unfair 7 The term ‘‘Firm’’ or (‘‘F’’) applies to any transaction that is identified by a Participant for clearing in the Firm range at The Options Clearing Corporation. 8 The term ‘‘Non-NOM Market Maker’’ or (‘‘O’’) is a registered market maker on another options exchange that is not a NOM Market Maker. A NonNOM Market Maker must append the proper NonNOM Market Maker designation to orders routed to NOM. 9 The term ‘‘NOM Market Maker’’ or (‘‘M’’) is a Participant that has registered as a Market Maker on NOM pursuant to Chapter VII, Section 2, and must also remain in good standing pursuant to Chapter VII, Section 4. In order to receive NOM Market Maker pricing in all securities, the Participant must be registered as a NOM Market Maker in at least one security. 10 The term ‘‘Broker-Dealer’’ or (‘‘B’’) applies to any transaction which is not subject to any of the other transaction fees applicable within a particular category. 11 Firms, Non-NOM Market Makers, NOM Market Makers and Broker-Dealers are assessed a $0.50 per contract Penny Pilot Options Fee for Removing Liquidity in SPY options, similar to other Penny Pilot Options. 12 SPY options are the largest volume Penny Pilot Options traded on the Exchange. 13 15 U.S.C. 78f(b). 14 15 U.S.C. 78f(b)(4) and (5). E:\FR\FM\26AUN1.SGM 26AUN1

Agencies

[Federal Register Volume 81, Number 166 (Friday, August 26, 2016)]
[Notices]
[Pages 59020-59023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-20462]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78636; File No. SR-BatsEDGA-2016-19]


Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Rule 13.8, EDGA Book Feeds, To Adopt a New Market Data Product 
Known as EDGA 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 EDGA Exchange, Inc. (the ``Exchange'' or 
``EDGA'') 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-

[[Page 59021]]

controversial'' 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.
---------------------------------------------------------------------------

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

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend Rule 13.8 to adopt a new 
market data product known as EDGA 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 the most significant parts of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 13.8 to adopt a new market data 
product known as EDGA Summary Depth. EDGA Summary Depth would be a data 
feed that offers aggregated two-sided quotations for all displayed 
orders entered into the System \5\ 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. EDGA Summary Depth also contains the individual last 
sale information, Market Status, 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 EDGA 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.
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    \5\ ``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).
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    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 Trade Break message will indicate when an execution is broken in 
accordance with Exchange rules.\6\ The Trading Status message will 
indicate the current trading status of a security on the Exchange. For 
example, a Trading Status message will be sent when a short sale price 
restriction is in effect pursuant to Rule 201 of Regulation SHO 
(``Short Sale Circuit Breaker''),\7\ or when the security is subject to 
a trading halt, suspension or pause declared by the listing market. A 
Trading Status message will be sent whenever a security's trading 
status changes.
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    \6\ See, e.g., Exchange Rule 11.15, Clearly Erroneous 
Executions.
    \7\ 17 CFR 242.200(g); 17 CFR 242.201.
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    The Exchange intends to offer EDGA Summary Depth as of January 3, 
2017. Prior to January 3, 2017, the Exchange will file a separate rule 
change with the Commission proposing fees to be charged for EDGA 
Summary Depth.\8\
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    \8\ The Exchange understands that its affiliated exchanges 
intend to file identical proposed rule changes to adopt rules and 
fees for the Book Viewer data feed with the Commission. The 
Exchange's affiliates are Bats EDGX Exchange, Inc., (``EDGX''), Bats 
BYX Exchange, Inc. (``BYX''), and Bats BZX Exchange, Inc. (``BZX'') 
(collectively, the ``Bats Exchanges'').
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\9\ in general, and furthers the 
objectives of section 6(b)(5) of the Act,\10\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and to protect investors and the public 
interest, and that it is not designed to permit unfair discrimination 
among customers, brokers, or dealers. This proposal is in keeping with 
those principles in that it promotes increased transparency through the 
dissemination of EDGA Summary Depth. The Exchange also believes this 
proposal is consistent with section 6(b)(5) of the Act because it 
protects investors and the public interest and promotes just and 
equitable principles of trade by providing investors with an 
alternative for receiving market data as requested by market data 
vendors and purchasers that expressed an interest in exchange-only data 
for instances where consolidated data is no longer required to be 
purchased and displayed. The proposed rule change would benefit 
investors by facilitating their prompt access to real-time depth-of-
book information contained in EDGA Summary Depth.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange also believes that the proposed rule change is 
consistent with section 11(A) of the Act \11\ in that it supports (i) 
fair competition among brokers and dealers, among exchange markets, and 
between exchange markets and markets other than exchange markets and 
(ii) the availability of information with respect to quotations for and 
transactions in securities to brokers, dealers, and investors. 
Furthermore, the proposed rule change is consistent with Rule 603 of 
Regulation NMS,\12\ which provides that any national securities 
exchange that distributes information with respect to quotations for or 
transactions in an NMS stock do so on terms that are not unreasonably 
discriminatory. EDGA Summary Depth would be accessed and subscribed to 
on a voluntary basis, in that neither the Exchange nor market data 
distributors are required by any rule or regulation to make this data 
available. Accordingly, distributors and subscribers can discontinue 
their use at any time and for any reason.
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    \11\ 15 U.S.C. 78k-1.
    \12\ See 17 CFR 242.603.
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    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations and broker-dealers increased authority and flexibility to 
offer new and unique market data to consumers of such data. It was 
believed that this authority would expand the amount of data available 
to users and consumers of such data and also spur innovation and 
competition for the provision of market data. The Exchange believes 
that the data products proposed

[[Page 59022]]

herein are precisely the sort of market data products that the 
Commission envisioned when it adopted Regulation NMS. The Commission 
concluded that Regulation NMS--by lessening regulation of the market in 
proprietary data--would itself further the Act's goals of facilitating 
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efficiency and competition:

    [E]fficiency is promoted when broker-dealers who do not need the 
data beyond the prices, sizes, market center identifications of the 
NBBO and consolidated last sale information are not required to 
receive (and pay for) such data. The Commission also believes that 
efficiency is promoted when broker-dealers may choose to receive 
(and pay for) additional market data based on their own internal 
analysis of the need for such data.\13\
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    \13\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005) (File No. S7-10-04) (``Regulation 
NMS Adopting Release'').

By removing ``unnecessary regulatory restrictions'' on the ability of 
exchanges to sell their own data, Regulation NMS advanced the goals of 
the Act and the principles reflected in its legislative history.
    In addition, EDGA Summary Depth removes impediments to and perfects 
the mechanism of a free and open market and a national market system by 
providing investors with alternative market data and competing with 
similar market data products currently offered by the New York Stock 
Exchange, Inc. (``NYSE'') and the Nasdaq Stock Market LLC 
(``Nasdaq'').\14\ The provision of new options for investors to receive 
market data was a primary goal of the market data amendments adopted by 
Regulation NMS.\15\
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    \14\ See Nasdaq Rule 7023(a)(1)(C) (describing Nasdaq TotalView 
as a depth-of-book data feed that includes all orders and quotes 
from all Nasdaq members displayed in the Nasdaq Market Center as 
well as the aggregate size of such orders and quotes at each price 
level in the execution functionality of the Nasdaq Market Center). 
See NYSE OpenBook available at http://www.nyxdata.com/openbook (last 
visited July 5, 2016) (providing real-time view of the NYSE limit 
order book including the aggregated size at each price level). See 
Securities Exchange Act Release Nos. 46843 (November 18, 2002), 67 
FR 70471 (November 22, 2002) (SR-NASD-2002-33) (order approving fees 
for Nasdaq TotalView); and 45138 (December 7, 2001), 66 FR 64895 
(December 14, 2001) (SR-NYSE-2001-42) (order approving fees for NYSE 
OpenBook).
    \15\ See Regulation NMS Adopting Release, supra note 13.
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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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.\16\ The Exchange 
believes that the proposal will promote competition by enabling the 
Exchange to offer a market data product similar to that currently 
offered by the NYSE and Nasdaq.\17\ Thus, the Exchange believes this 
proposed rule change is necessary to permit fair competition among 
national securities exchanges.
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    \16\ The Bats One Feed is a data feed that disseminates, on a 
real-time basis, the aggregate BBO of all displayed orders for 
securities traded on each of the Bats Exchanges and for the Bats 
Exchanges report quotes under the CTA Plan or the Nasdaq/UTP Plan. 
The Bats One Feed also contains the individual last sale information 
for the Bats Exchanges (collectively with the aggregate BBO, the 
``Bats One Summary Feed''). In addition, the Bats One Feed contains 
optional functionality which enables recipients to receive 
aggregated two-sided quotations from the Bats Exchanges for up to 
five (5) price levels (``Bats One Premium Feed''). See Exchange Rule 
13.8(b). See also Securities Exchange Act Release No. 73918 
(December 23, 2014), 79 FR 78920 (December 31, 2014) (File Nos. SR-
EDGX-2014-25; SR-EDGA-2014-25; SR-BATS-2014-055; SR-BYX-2014-030) 
(Notice of Amendments No. 2 and Order Granting Accelerated Approval 
to Proposed Rule Changes, as Modified by Amendments Nos. 1 and 2, to 
Establish a New Market Data Product called the Bats One Feed) 
(``Bats One Approval Order''). The Exchange uses the following data 
feeds to create the Bats One Feed, each of which are available to 
vendors: EDGX Depth, EDGA Depth, BYX PITCH Feed, and the BZX PITCH 
Feed. The Exchange notes that a vendor could utilize the proposed 
EDGA Summary Depth Feed, as well as the summarized depth feeds to be 
proposed by BYX, BZX, and EDGX to create a competing product to the 
Bats One Feed. Supra note 8. The Exchange represents that a 
competing vendor could obtain these data feeds from each Bats 
Exchange on the same latency basis as the system that performs the 
aggregation and consolidation of the Bats One Feed. See Bats One 
Approval Order. While the proposed EDGA Summary Depth Feed does not 
contain the symbol summary or consolidated volume data included in 
the Bats One Feed, a vendor could include this information in a 
competing product as this information is easily derivable from the 
proposed feeds or can be obtained from the securities information 
processors on the same terms as the Exchange.
    \17\ See supra note 14.
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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 neither solicited nor received written comments on 
the proposed rule change.

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

    Because the 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 \18\ and Rule 19b-4(f)(6) thereunder.\19\
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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 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.
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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. 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

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File No. SR-BatsEDGA-2016-19 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-BatsEDGA-2016-19. 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 (http://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

[[Page 59023]]

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-BatsEDGA-2016-19, and should be submitted on or before 
September 16, 2016.
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    \20\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-20462 Filed 8-25-16; 8:45 am]
 BILLING CODE 8011-01-P