Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Fees for Use of Bats EDGX Exchange, Inc., 81828-81830 [2016-27744]
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81828
Federal Register / Vol. 81, No. 223 / Friday, November 18, 2016 / Notices
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 the
filing also will be available for
inspection and copying at the principal
office of DTC and on DTCC’s Web site
(https://dtcc.com/legal/sec-rulefilings.aspx). All comments received
will be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–DTC–
2016–013 and should be submitted on
or before December 9, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
Brent J. Fields,
Secretary.
[FR Doc. 2016–27742 Filed 11–17–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79306; File No. SR–
BatsEDGX–2016–63]
Self-Regulatory Organizations; Bats
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change to Fees for Use
of Bats EDGX Exchange, Inc.
mstockstill on DSK3G9T082PROD with NOTICES
November 14, 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 November
1, 2016, Bats EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
26 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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20:21 Nov 17, 2016
Jkt 241001
by the Exchange. The Exchange has
designated the proposed rule change as
one establishing or changing a member
due, fee, or other charge imposed by the
Exchange under Section 19(b)(3)(A)(ii)
of the Act 3 and Rule 19b–4(f)(2)
thereunder,4 which renders the
proposed rule change effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
amend the fee schedule applicable to
Members 5 and non-members of the
Exchange pursuant to EDGA Rules
15.1(a) and (c).
The text of the proposed rule change
is available at the Exchange’s Web site
at www.batstrading.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
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
Fee Code Z
The Exchange proposes to increase
the fee for orders yielding fee code Z,
which is yielded on orders routed to a
non-exchange destination using ROUZ 6
routing strategy, from $0.00100 to
$0.00120 per share for securities priced
at or above $1.00. The Exchange does
not propose to amend the rate for orders
3 15
U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
5 The term ‘‘Member’’ is defined as ‘‘any
registered broker or dealer that has been admitted
to membership in the Exchange.’’ See Exchange
Rule 1.5(n).
6 See Exchange Rule 11.11(g)(3).
PO 00000
Frm 00110
Fmt 4703
Sfmt 4703
yielding fee code Z in securities priced
below $1.00.
Fee Code O
The Exchange also proposes to amend
footnote 5 of its Fee Schedule to
increase the fee cap for orders yielding
fee code O from $20,000 to $35,000 per
month per Member. Fee code O is
appended to orders that are touted to
participate in the listing market’s
opening or re-opening cross and are
charged a fee of $0.00100 per share for
orders in securities priced at or above
$1.00 and 0.30% of the transaction
dollar value for securities priced below
$1.00. When the Exchange routes to a
listing exchange’s opening cross, such
as the Nasdaq Stock Market LLC
(‘‘Nasdaq’’), the Exchange passes
through the tier saving that Bats
Trading, Inc. (‘‘Bats Trading’’), the
Exchange’s routing broker-dealer,
achieves on an away exchange to its
Members. This tier savings takes the
form of a cap of Member’s fees at
$20,000 per month for using fee code O.
The proposed increase in the fee cap
under footnote 5 is in response to the
September 2016 fee cap change by
Nasdaq for orders that participate in
their opening cross processes.7 Nasdaq’s
September 2016 fee cap increase
requires that members add, at a
minimum, one million shares of
liquidity to Nasdaq, on average per day,
during the month to be eligible for its
existing fee cap of $35,000 for orders
that participate in the opening cross.
When Bats Trading routes to Nasdaq’s
opening cross, it will now be subject to
the increase fee cap and new tier
requirement. The proposed increase to
the fee cap under footnote 5 would
enable the Exchange to equitably
allocate its costs among all Members
utilizing fee code O. Therefore, the
Exchange proposes to amend footnote 5
to increase the fee cap for orders
yielding fee code O from $20,000 to
$35,000 per month per Member in
response to Nasdaq’s September 2016
increased fee cap and related
requirements.
Implementation Date
The Exchange proposes to implement
this amendment to its Fee Schedule
November 1, 2016.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
7 See Securities Exchange Act Release No. 78977
(September 29, 2016), 81 FR 691140 [sic] (October
5, 2016) (SR–Nasdaq–2016–132) (increasing the fee
cap for orders executed in its opening cross from
$30,000 to $35,000).
E:\FR\FM\18NON1.SGM
18NON1
Federal Register / Vol. 81, No. 223 / Friday, November 18, 2016 / Notices
the objectives of Section 6 of the Act,8
in general, and furthers the objectives of
Section 6(b)(4),9 in particular, as it is
designed to provide for the equitable
allocation of reasonable dues, fees and
other charges among its Members and
other persons using its facilities.
mstockstill on DSK3G9T082PROD with NOTICES
Fee Code Z
The Exchange believes that its
proposal to increase the fee for orders
routed to a non-exchange destination
that yield fee code Z represents an
equitable allocation of reasonable dues,
fees, and other charges among Members
and other person using its facilities in
that they are designed in part to cover
the costs of routing. While Members that
route to a non-exchange destination
using ROUZ routing strategy will be
paying higher fees due to the proposal,
the increased revenue received by the
Exchange will be used to fund the
Exchange generally, including the cost
of maintaining and improving the
technology used to handle and route
orders from the Exchange as well as
programs that the Exchange believes
help to attract additional liquidity and
thus improve the depth of liquidity
available on the Exchange. Accordingly,
although the cost of routing is
increasing, the Exchange believes that
the increase is a modest increase and
that higher routing fees will benefit
Members in other ways. Furthermore,
the Exchange notes that routing through
the Exchange is voluntary. Lastly the
Exchange also believes that the
proposed amendment is nondiscriminatory because it applies
uniformly to all Members.
Fee Code O
The Exchange believes that its
proposal to amend footnote 5 to increase
the fee cap for orders yielding fee code
O from $20,000 to $35,000 per month
per Member represents an equitable
allocation of reasonable dues, fees, and
other charges among Members and other
persons using its facilities. The
proposed increase in the fee cap under
footnote 5 is in response to September
2016 fee cap increase by Nasdaq for
orders that participate in their opening
cross process. Prior to Nasdaq’s
September 2016 fee cap increase,
Nasdaq capped Bats Trading monthly
fees for participating in it’s opening
cross at $30,000. Nasdaq capped Bats
Trading monthly fees for participating
in its opining cross at $30,000. Nasdaq
has now increased that cap to $35,000.10
The proposed increase to the fee cap
U.S.C. 78f.
U.S.C. 78f(b)(4).
10 See supra note 7.
under footnote 5 would enable the
Exchange to equitably allocate its costs
among all Member who utilize fee code
O. Therefore, the Exchange believes that
the proposed change to footnote 5 is
equitable and reasonable because it
accounts for the increased Nasdaq fee
cap, which enables the Exchange to
apply to its Member similar fee caps.
The Exchange notes that routing though
Bats Trading is voluntary and believes
that the proposed change is nondiscriminatory because it applies
uniformly to all Members.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
This proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange does not believe that this
change represents a significant
departure from previous pricing offered
by the Exchange or from pricing offered
by the Exchange’s competitors.
Additionally, Members may opt to
disfavor the Exchange’s pricing if they
believe that alternatives offer them
better value. Accordingly, the Exchange
does not believe that the proposed
changes will impair the ability of
Members or competing venues to
maintain their competitive standing in
the financial markets. The Exchange
believes that its proposal would not
burden intramarket competition because
the proposed rates would apply
uniformly to all Members.
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
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 11 and paragraph (f) of Rule
19b–4 thereunder.12 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
8 15
9 15
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20:21 Nov 17, 2016
11 15
12 17
Jkt 241001
PO 00000
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
Frm 00111
Fmt 4703
Sfmt 4703
81829
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
BatsEDGX–2016–63 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–BatsEDGX–2016–63. 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 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 Number SR–
BatsEDGX–2016–63, and should be
submitted on or before December 9,
2016.
E:\FR\FM\18NON1.SGM
18NON1
81830
Federal Register / Vol. 81, No. 223 / Friday, November 18, 2016 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Brent J. Fields,
Secretary.
[FR Doc. 2016–27744 Filed 11–17–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79297; File No. SR–DTC–
2016–012]
Self-Regulatory Organizations; The
Depository Trust Company; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Modify the
DTC Settlement Service Guide With
Respect to Settlement Instructions
Provided to DTC by Matching Utilities
November 14, 2016.
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 November
3, 2016, The Depository Trust Company
(‘‘DTC’’) 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 clearing
agency. DTC filed the proposed rule
change pursuant to Section 19(b)(3)(A) 3
of the Act and Rule 19b–4(f)(4) 4
thereunder. The proposed rule change
was effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change by DTC
would make technical and clarifying
changes to text in the DTC Settlement
Service Guide (‘‘Guide’’) 5 with respect
to settlement instructions provided to
DTC by Matching Utilities (as defined
below) on behalf of Participants.6
13 17
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)(4).
5 Available at https://www.dtcc.com/∼/media/
Files/Downloads/legal/service-guides/
Settlement.pdf.
6 Capitalized Terms not otherwise defined herein
have the meaning set forth in the DTC Rules, Bylaws and Organization Certificate (‘‘DTC Rules’’),
available at https://www.dtcc.com/legal/rules-andprocedures.aspx, and the Guide, supra note 5.
mstockstill on DSK3G9T082PROD with NOTICES
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II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, the
clearing agency 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
clearing agency has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
DTC may accept eligible affirmed
institutional transactions (‘‘Institutional
Transactions’’) 7 from an entity
providing a matching service 8
(‘‘Matching Utility’’) that is (i) a clearing
agency registered pursuant to Section
17A of the Act, (ii) an entity that has
obtained an exemption from such
registration from the Commission, or
(iii) a ‘‘qualified vendor’’ for trade
confirmation/affirmation services as
defined by the rules of a self-regulatory
organization.9 In addition, a Matching
Utility must establish a connection to
DTC in accordance with DTC’s
reasonable requirements in order to be
able to submit Affirmed Transactions.
Currently, Omgeo Global Joint
Venture Matching Services—US, LLC
(hereinafter ‘‘Omgeo’’) 10 is the only
Matching Utility that has established a
connection with DTC. This is reflected
in the text of the Guide which contains
specific references to Omgeo with
respect to DTC functions that are
7 An Institutional Transaction is a securities
transaction between a broker-dealer and its
institutional customer (e.g., sell-side firms, buy-side
institutions, and custodians).
8 A matching service is an electronic service by
which an intermediary matches (i.e., reconciles)
trade information from the counterparties to an
Institutional Transaction, to generate an affirmed
transaction (‘‘Affirmed Transaction’’) which is then
used to provide settlement instructions for the
Affirmed Transactions to the central securities
depository, such as DTC, at which the Affirmed
Transaction settles.
9 See Securities Exchange Act Release No. 39829
(April 6, 1998), 63 FR 17943 (April 13, 1998) at
17946 (providing interpretive guidance on types of
entities that may provide a matching service).
10 See [sic] Securities Exchange Act Release No.
44188 (April 17, 2001), 66 FR 20494 (April 23,
2001) (600–31) for the order of the Commission
granting Omgeo an exemption from registration as
a clearing agency. Omgeo is a global provider of
post-trade, pre-settlement processing services for
the institutional market.
PO 00000
Frm 00112
Fmt 4703
Sfmt 4703
accessible to any Matching Utility that
satisfies the connection requirements.
The Commission recently approved
two applications by two separate
entities, for exemption from registration
as a Clearing Agency to provide posttrade matching services for fixed income
and equity trades (‘‘Approved
Exemptions’’).11 According to the
Commission’s notice of the Approved
Exemptions, these entities each
indicated an intention to offer matching
services that connect to DTC for
settlement.12
DTC proposes to revise the Guide to
generalize references to Matching
Utilities and make other changes, as set
forth below.
First, DTC would replace specific
references to Omgeo in sections
describing procedures for the ID Net
Service (‘‘ID Net’’) and Shareholder
Tracking Service to refer to a ‘‘Matching
Utility’’ and delete provisions
referencing to Omgeo by name.13
Second, text in the ID Net section of
the Guide regarding DTC’s acceptance of
affirmed institutional transactions from
Matching Utilities would be moved to a
new section describing Affirmed
Transactions more generally. The
proposed new section would
incorporate the definition of Affirmed
Transactions, and expressly state DTC’s
current requirement that in order for a
Matching Utility to establish and
maintain a connection with DTC the
Matching Utility must be able to balance
with DTC in an automated way 14 and
11 Securities Exchange Act Release No. 76514
(November 24, 2015), 80 FR 75387 (December 1,
2015) (600–33, 600–34) (Bloomberg STP LLC; SS&C
Technologies, Inc.; Order of the Commission
Approving Applications for an Exemption from
Registration as a Clearing Agency; Notice).
12 Id.
13 In this regard, the term Matching Utility would
be defined in the Guide reflecting the definition
provided above in this Form 19b–4. The
Commission notes that Form 19b–4 is attached to
the filing, not to this Notice. The definition of
Affirming Agency which appears in the ID Net
section of the Guide and is the functional
equivalent of the definition of Matching Utility as
it relates to ID Net would be removed. Consistent
with this change, references in the Guide to the
term Affirming Agency would be replaced to use
the term Matching Utility.
14 For each Matching Utility interfacing with
DTC, DTC would require the Matching Utility to
deliver a daily message on each business day
shortly after noon from the Matching Utility with
their accepted item counts of institutional delivery
and ID Net (defined below) transaction totals for
Settlement Date minus one transactions. DTC’s
system would compare the totals from the Matching
Utility to its accepted item counts. If the totals
match, an ‘‘acknowledged balance’’ balance file
would be sent to the Matching Utility. If the totals
do not match, DTC would respond with the list of
Settlement Date minus one control numbers
received from the Matching Utility, along with their
respective transaction types for the originating
Matching Utility to compare.
E:\FR\FM\18NON1.SGM
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]]>Agencies
[Federal Register Volume 81, Number 223 (Friday, November 18, 2016)]
[Notices]
[Pages 81828-81830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27744]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-79306; File No. SR-BatsEDGX-2016-63]
Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change to Fees
for Use of Bats EDGX Exchange, Inc.
November 14, 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 November 1, 2016, Bats EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the Exchange. The
Exchange has designated the proposed rule change as one establishing or
changing a member due, fee, or other charge imposed by the Exchange
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange filed a proposal to amend the fee schedule applicable
to Members \5\ and non-members of the Exchange pursuant to EDGA Rules
15.1(a) and (c).
---------------------------------------------------------------------------
\5\ The term ``Member'' is defined as ``any registered broker or
dealer that has been admitted to membership in the Exchange.'' See
Exchange Rule 1.5(n).
---------------------------------------------------------------------------
The text of the proposed rule change is available at the Exchange's
Web site at www.batstrading.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Fee Code Z
The Exchange proposes to increase the fee for orders yielding fee
code Z, which is yielded on orders routed to a non-exchange destination
using ROUZ \6\ routing strategy, from $0.00100 to $0.00120 per share
for securities priced at or above $1.00. The Exchange does not propose
to amend the rate for orders yielding fee code Z in securities priced
below $1.00.
---------------------------------------------------------------------------
\6\ See Exchange Rule 11.11(g)(3).
---------------------------------------------------------------------------
Fee Code O
The Exchange also proposes to amend footnote 5 of its Fee Schedule
to increase the fee cap for orders yielding fee code O from $20,000 to
$35,000 per month per Member. Fee code O is appended to orders that are
touted to participate in the listing market's opening or re-opening
cross and are charged a fee of $0.00100 per share for orders in
securities priced at or above $1.00 and 0.30% of the transaction dollar
value for securities priced below $1.00. When the Exchange routes to a
listing exchange's opening cross, such as the Nasdaq Stock Market LLC
(``Nasdaq''), the Exchange passes through the tier saving that Bats
Trading, Inc. (``Bats Trading''), the Exchange's routing broker-dealer,
achieves on an away exchange to its Members. This tier savings takes
the form of a cap of Member's fees at $20,000 per month for using fee
code O. The proposed increase in the fee cap under footnote 5 is in
response to the September 2016 fee cap change by Nasdaq for orders that
participate in their opening cross processes.\7\ Nasdaq's September
2016 fee cap increase requires that members add, at a minimum, one
million shares of liquidity to Nasdaq, on average per day, during the
month to be eligible for its existing fee cap of $35,000 for orders
that participate in the opening cross. When Bats Trading routes to
Nasdaq's opening cross, it will now be subject to the increase fee cap
and new tier requirement. The proposed increase to the fee cap under
footnote 5 would enable the Exchange to equitably allocate its costs
among all Members utilizing fee code O. Therefore, the Exchange
proposes to amend footnote 5 to increase the fee cap for orders
yielding fee code O from $20,000 to $35,000 per month per Member in
response to Nasdaq's September 2016 increased fee cap and related
requirements.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 78977 (September 29,
2016), 81 FR 691140 [sic] (October 5, 2016) (SR-Nasdaq-2016-132)
(increasing the fee cap for orders executed in its opening cross
from $30,000 to $35,000).
---------------------------------------------------------------------------
Implementation Date
The Exchange proposes to implement this amendment to its Fee
Schedule November 1, 2016.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with
[[Page 81829]]
the objectives of Section 6 of the Act,\8\ in general, and furthers the
objectives of Section 6(b)(4),\9\ in particular, as it is designed to
provide for the equitable allocation of reasonable dues, fees and other
charges among its Members and other persons using its facilities.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
Fee Code Z
The Exchange believes that its proposal to increase the fee for
orders routed to a non-exchange destination that yield fee code Z
represents an equitable allocation of reasonable dues, fees, and other
charges among Members and other person using its facilities in that
they are designed in part to cover the costs of routing. While Members
that route to a non-exchange destination using ROUZ routing strategy
will be paying higher fees due to the proposal, the increased revenue
received by the Exchange will be used to fund the Exchange generally,
including the cost of maintaining and improving the technology used to
handle and route orders from the Exchange as well as programs that the
Exchange believes help to attract additional liquidity and thus improve
the depth of liquidity available on the Exchange. Accordingly, although
the cost of routing is increasing, the Exchange believes that the
increase is a modest increase and that higher routing fees will benefit
Members in other ways. Furthermore, the Exchange notes that routing
through the Exchange is voluntary. Lastly the Exchange also believes
that the proposed amendment is non-discriminatory because it applies
uniformly to all Members.
Fee Code O
The Exchange believes that its proposal to amend footnote 5 to
increase the fee cap for orders yielding fee code O from $20,000 to
$35,000 per month per Member represents an equitable allocation of
reasonable dues, fees, and other charges among Members and other
persons using its facilities. The proposed increase in the fee cap
under footnote 5 is in response to September 2016 fee cap increase by
Nasdaq for orders that participate in their opening cross process.
Prior to Nasdaq's September 2016 fee cap increase, Nasdaq capped Bats
Trading monthly fees for participating in it's opening cross at
$30,000. Nasdaq capped Bats Trading monthly fees for participating in
its opining cross at $30,000. Nasdaq has now increased that cap to
$35,000.\10\ The proposed increase to the fee cap under footnote 5
would enable the Exchange to equitably allocate its costs among all
Member who utilize fee code O. Therefore, the Exchange believes that
the proposed change to footnote 5 is equitable and reasonable because
it accounts for the increased Nasdaq fee cap, which enables the
Exchange to apply to its Member similar fee caps. The Exchange notes
that routing though Bats Trading is voluntary and believes that the
proposed change is non-discriminatory because it applies uniformly to
all Members.
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\10\ See supra note 7.
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B. Self-Regulatory Organization's Statement on Burden on Competition
This proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. The Exchange does not believe that this change represents a
significant departure from previous pricing offered by the Exchange or
from pricing offered by the Exchange's competitors. Additionally,
Members may opt to disfavor the Exchange's pricing if they believe that
alternatives offer them better value. Accordingly, the Exchange does
not believe that the proposed changes will impair the ability of
Members or competing venues to maintain their competitive standing in
the financial markets. The Exchange believes that its proposal would
not burden intramarket competition because the proposed rates would
apply uniformly to all Members.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and paragraph (f) of Rule 19b-4
thereunder.\12\ 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.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-BatsEDGX-2016-63 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-BatsEDGX-2016-63. 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 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 Number SR-BatsEDGX-2016-63, and should
be submitted on or before December 9, 2016.
[[Page 81830]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-27744 Filed 11-17-16; 8:45 am]
BILLING CODE 8011-01-P
