Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Transaction Fees at Rule 7018, 18798-18800 [2017-08063]
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18798
Federal Register / Vol. 82, No. 76 / Friday, April 21, 2017 / Notices
those fees. The Exchange believes it’s
reasonable, equitable and not unfairly
discriminatory because it applies
uniformly to the applicable market
participants (i.e., applies to all Routing
Intermediaries and TPHs that make the
PULSe workstations available to nonTPHs).
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule changes will impose
any burdens on competition that are not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe that the
proposed rule change will impose any
burden on intramarket competition that
is not necessary or appropriate in
furtherance of the purposes of the Act
because the proposed rule change to
eliminate certain PULSe fees applies to
all applicable users of the Pulse [sic]
workstation. The Exchange does not
believe that the proposed change will
cause any unnecessary burden on
intermarket competition because the
proposed relates to use of an Exchangeprovided order entry system. To the
extent that any proposed change makes
the Exchange a more attractive
marketplace for market participants at
other exchanges, such market
participants are welcome to become
Exchange market participants.
sradovich on DSK3GMQ082PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 6 of the Act and
subparagraph (f)(2) of Rule 19b–4 7
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such 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
U.S.C. 78s(b)(3)(A).
7 17 CFR 240.19b–4(f)(2).
under Section 19(b)(2)(B) 8 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
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17:30 Apr 20, 2017
[FR Doc. 2017–08060 Filed 4–20–17; 8:45 am]
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–
CBOE–2017–028 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2017–028. 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–CBOE–
2017–028 and should be submitted on
or before May 12, 2017.
6 15
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Brent J. Fields,
Secretary.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80475; File No. SR–BX–
2017–020]
Self-Regulatory Organizations;
NASDAQ BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the
Exchange’s Transaction Fees at Rule
7018
April 17, 2017.
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 April 11,
2017, NASDAQ BX, Inc. (‘‘BX’’ 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 the
Exchange’s transaction fees at Rule 7018
to limit the availability of credits
provided for removing non-displayed
liquidity.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaqbx.cchwallstreet.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
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
8 15
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PO 00000
U.S.C. 78s(b)(2)(B).
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Federal Register / Vol. 82, No. 76 / Friday, April 21, 2017 / Notices
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
sradovich on DSK3GMQ082PROD with NOTICES
1. Purpose
The purpose of the proposed rule
change is to limit the credits provided
for removing liquidity on BX under Rule
7018(a).3 The Exchange operates on the
‘‘taker-maker’’ model, whereby it pays
rebates to members that take liquidity
and charges fees to members that
provide liquidity. Under Rule 7018(a),
the Exchange assesses fees for adding
liquidity, and provides credits for
removing liquidity, applied to the use of
the Order 4 execution and routing
services of the NASDAQ OMX BX
Equities System by members for all
securities priced at $1 or more per share
that it trades. Currently, the Exchange
will provide a credit under Rule 7018(a)
to a member that removes liquidity
when its Order is priced-improved by
the System. Specifically, an Order
(excluding Orders with Midpoint
pegging 5 and excluding Orders that
receive price improvement and execute
against an Order with Midpoint
pegging) that accesses liquidity may
receive a credit of $0.0006, $0.0015 or
$0.0016 per share executed. Such
Orders include Orders that receive price
improvement, other than those that
execute against an Order with Midpoint
pegging.
The Exchange excludes liquidity
removing Orders that execute against
resting Orders with Midpoint pegging
from receiving a credit because the
member received the benefit of
receiving price improvement from
executing against an Order that is priced
better than the NBBO. Moreover, the
member receiving the price
improvement did not undertake any
additional risk to receive the benefit, but
was rather a beneficiary of the midpoint
liquidity. For similar reasons, the
Exchange is proposing to expand the
applicability of the zero credit tier to
include a liquidity removing Order that
is price improved by other resting
3 The Exchange initially filed the proposed rule
change on April 3, 2017 (SR–BX–2017–019). On
April 11, 2017, the Exchange withdrew that filing
and submitted this filing.
4 As defined by Rule 4702(a).
5 Pegging is an Order Attribute that allows an
Order to have its price automatically set with
reference to the NBBO. Midpoint pegging means
Pegging with reference to the midpoint between the
Inside Bid and the Inside Offer (the ‘‘Midpoint’’).
An Order with Midpoint Pegging is not displayed.
See Rule 4703(d).
VerDate Sep<11>2014
17:30 Apr 20, 2017
Jkt 241001
orders with Non-display prices. Thus, in
addition to Orders with Midpoint
Pegging, other Orders that may have a
non-display price are: Price to Comply
Orders,6 Non-Displayed Orders,7 PostOnly Orders,8 and Orders with a
Reserve Size 9 attribute.
As an example, if the NBBO is $10 ×
$10.02, with Market A showing a bid of
100 shares at $10, Market B showing an
offer of 100 shares at $10.02 and the
Exchange displaying a best bid of $9.99
and offer of $10.03, a member that
enters an Order with a Non-display
attribute to buy 100 shares at $10.01
would not have a marketable Order and
would post to the Exchange book as a
Non-displayed Order at $10.01. If a
second member enters an Order to sell
100 shares at $10, the Order would
execute against the Non-displayed
Order to buy at $10.01 resting on the
Exchange Book. Such an execution
would represent price improvement to
the second member without taking on
any additional risk or market-improving
behavior. Accordingly, the Exchange
does not believe that it is necessary also
to pay a rebate to encourage the
submission of such Orders. Rather, the
execution of such Orders will be free of
charge.
Last, the Exchange is proposing to
make conforming changes to two credits
under Rule 7018(a) that currently
exclude orders that receive price
improvement and execute against an
order with Midpoint pegging from the
eligibility criteria of the credit.
Specifically, under the $0.0016 and
$0.0015 per executed share credits of
Rule 7018(a) the Exchange is proposing
to replace references to orders that
receive price improvement and execute
against an order with Midpoint pegging
to make it clear that orders with a NonDisplayed price are excluded from the
rule. Thus, the exclusion under these
two credits will continue to remain
consistent with the proposed amended
zero credit tier.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,10 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,11 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees and other charges
among members and issuers and other
persons using any facility, and is not
6 See
Rule 4702(b)(1).
Rule 4702(b)(3).
8 See Rule 4702(b)(4).
9 See Rule 4703(h).
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(4) and (5).
7 See
PO 00000
Frm 00072
Fmt 4703
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18799
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange believes that offering
Orders that remove liquidity and receive
price improvement at no cost is
reasonable because the execution of
such Orders is free of charge. Generally,
the Exchange offers reduced transaction
fees and credits in return for marketimproving behavior. The Exchange
determined to not provide a credit to
members for Orders that remove
liquidity when the Order receives price
improvement by executing against a
Mid-point Order, since the member
removing liquidity is benefitting from
the price improvement. Likewise, the
Exchange is expanding the existing
credit tier to include all Orders with a
Non-Displayed price that provide price
improvement.
The Exchange believes that offering
Orders that remove liquidity and receive
price improvement at no cost is
consistent with an equitable allocation
of fees and is not unfairly
discriminatory because such Orders
invariably receive price improvement of
at least $0.005 per share, and therefore
do not need an additional rebate of
$0.0006 to $0.0016 to encourage their
submission to the Exchange. Moreover,
the Exchange believes that the change is
not unfairly discriminatory because the
price improvement provided to these
Orders provides a rational basis for
treating them differently from other
Orders that access liquidity at the
Exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. In terms of
inter-market competition, the Exchange
notes that it operates in a highly
competitive market in which market
participants can readily favor competing
venues if they deem fee levels at a
particular venue to be excessive, or
rebate opportunities available at other
venues to be more favorable. In such an
environment, the Exchange must
continually adjust its fees to remain
competitive with other exchanges and
with alternative trading systems that
have been exempted from compliance
with the statutory standards applicable
to exchanges. Because competitors are
free to modify their own fees in
response, and because market
participants may readily adjust their
Order routing practices, the Exchange
believes that the degree to which fee
changes in this market may impose any
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Federal Register / Vol. 82, No. 76 / Friday, April 21, 2017 / Notices
burden on competition is extremely
limited.
In this instance, the proposed changes
to the charges assessed and credits
available to members for execution of
securities in securities of all three Tapes
do not impose a burden on competition
because the Exchange’s execution
services are completely voluntary and
subject to extensive competition both
from other exchanges and from offexchange venues. The proposed
expansion of the zero credit tier is not
a burden on competition because the
Exchange has limited resources to apply
as credits and such resources must be
applied in a manner that the Exchange
believes will best improve market
quality thereon. The Exchange believes
that providing credits to members that
are already receiving price improvement
is not the most efficient allocation of
such limited resources, since such
Orders do not need to be incentivized.
As a consequence, the Exchange
believes that offering such executions at
no cost will not place a burden on
competition, but rather will allow the
Exchange to apply its limited resources
to other areas wherein it can promote
market-improving behavior by its
participants. Thus, the proposed
changes have the potential to make the
Exchange a more attractive trading
venue, and consequently may promote
competition among markets. In sum, if
the changes proposed herein are
unattractive to market participants, it is
likely that the Exchange will lose
market share as a result. Accordingly,
the Exchange does not believe that the
proposed changes will impair the ability
of members or competing Order
execution venues to maintain their
competitive standing in the financial
markets.
sradovich on DSK3GMQ082PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
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)(ii) of the Act.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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
12 15
U.S.C. 78s(b)(3)(A)(ii).
VerDate Sep<11>2014
17:30 Apr 20, 2017
Jkt 241001
of investors; or (iii) 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
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:
• 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–
BX–2017–020 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–BX–2017–020. 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–BX–
Frm 00073
Fmt 4703
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Brent J. Fields,
Secretary.
[FR Doc. 2017–08063 Filed 4–20–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80467; File No. SR–CHX–
2017–06]
Electronic Comments
PO 00000
2017–020 and should be submitted on
or before May 12, 2017.
Sfmt 4703
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing of Proposed Rule Change To
Shorten the Standard Settlement Cycle
From Three Business Days After the
Trade Date to Two Business Days After
the Trade Date
April 17, 2017.
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 April 6,
2017, the Chicago Stock Exchange, Inc.
(‘‘CHX’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the self-regulatory organization. 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
CHX proposes to amend Articles 1
and 9 of the Rules of the Exchange
(‘‘CHX Rules’’) to conform to an
amendment to Securities Exchange Act
Rule 15c6–1(a) 3 to shorten the standard
settlement cycle from three business
days after the trade date (‘‘T+3’’) to two
business days after the trade date
(‘‘T+2’’). The text of this proposed rule
change is available on the Exchange’s
Web site at https://www.chx.com/
regulatory-operations/rule-filings/, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.15c6–1(a).
1 15
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]]>Agencies
[Federal Register Volume 82, Number 76 (Friday, April 21, 2017)]
[Notices]
[Pages 18798-18800]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-08063]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80475; File No. SR-BX-2017-020]
Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the
Exchange's Transaction Fees at Rule 7018
April 17, 2017.
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 April 11, 2017, NASDAQ BX, Inc. (``BX'' 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's transaction fees at
Rule 7018 to limit the availability of credits provided for removing
non-displayed liquidity.
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqbx.cchwallstreet.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
[[Page 18799]]
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
1. Purpose
The purpose of the proposed rule change is to limit the credits
provided for removing liquidity on BX under Rule 7018(a).\3\ The
Exchange operates on the ``taker-maker'' model, whereby it pays rebates
to members that take liquidity and charges fees to members that provide
liquidity. Under Rule 7018(a), the Exchange assesses fees for adding
liquidity, and provides credits for removing liquidity, applied to the
use of the Order \4\ execution and routing services of the NASDAQ OMX
BX Equities System by members for all securities priced at $1 or more
per share that it trades. Currently, the Exchange will provide a credit
under Rule 7018(a) to a member that removes liquidity when its Order is
priced-improved by the System. Specifically, an Order (excluding Orders
with Midpoint pegging \5\ and excluding Orders that receive price
improvement and execute against an Order with Midpoint pegging) that
accesses liquidity may receive a credit of $0.0006, $0.0015 or $0.0016
per share executed. Such Orders include Orders that receive price
improvement, other than those that execute against an Order with
Midpoint pegging.
---------------------------------------------------------------------------
\3\ The Exchange initially filed the proposed rule change on
April 3, 2017 (SR-BX-2017-019). On April 11, 2017, the Exchange
withdrew that filing and submitted this filing.
\4\ As defined by Rule 4702(a).
\5\ Pegging is an Order Attribute that allows an Order to have
its price automatically set with reference to the NBBO. Midpoint
pegging means Pegging with reference to the midpoint between the
Inside Bid and the Inside Offer (the ``Midpoint''). An Order with
Midpoint Pegging is not displayed. See Rule 4703(d).
---------------------------------------------------------------------------
The Exchange excludes liquidity removing Orders that execute
against resting Orders with Midpoint pegging from receiving a credit
because the member received the benefit of receiving price improvement
from executing against an Order that is priced better than the NBBO.
Moreover, the member receiving the price improvement did not undertake
any additional risk to receive the benefit, but was rather a
beneficiary of the midpoint liquidity. For similar reasons, the
Exchange is proposing to expand the applicability of the zero credit
tier to include a liquidity removing Order that is price improved by
other resting orders with Non-display prices. Thus, in addition to
Orders with Midpoint Pegging, other Orders that may have a non-display
price are: Price to Comply Orders,\6\ Non-Displayed Orders,\7\ Post-
Only Orders,\8\ and Orders with a Reserve Size \9\ attribute.
---------------------------------------------------------------------------
\6\ See Rule 4702(b)(1).
\7\ See Rule 4702(b)(3).
\8\ See Rule 4702(b)(4).
\9\ See Rule 4703(h).
---------------------------------------------------------------------------
As an example, if the NBBO is $10 x $10.02, with Market A showing a
bid of 100 shares at $10, Market B showing an offer of 100 shares at
$10.02 and the Exchange displaying a best bid of $9.99 and offer of
$10.03, a member that enters an Order with a Non-display attribute to
buy 100 shares at $10.01 would not have a marketable Order and would
post to the Exchange book as a Non-displayed Order at $10.01. If a
second member enters an Order to sell 100 shares at $10, the Order
would execute against the Non-displayed Order to buy at $10.01 resting
on the Exchange Book. Such an execution would represent price
improvement to the second member without taking on any additional risk
or market-improving behavior. Accordingly, the Exchange does not
believe that it is necessary also to pay a rebate to encourage the
submission of such Orders. Rather, the execution of such Orders will be
free of charge.
Last, the Exchange is proposing to make conforming changes to two
credits under Rule 7018(a) that currently exclude orders that receive
price improvement and execute against an order with Midpoint pegging
from the eligibility criteria of the credit. Specifically, under the
$0.0016 and $0.0015 per executed share credits of Rule 7018(a) the
Exchange is proposing to replace references to orders that receive
price improvement and execute against an order with Midpoint pegging to
make it clear that orders with a Non-Displayed price are excluded from
the rule. Thus, the exclusion under these two credits will continue to
remain consistent with the proposed amended zero credit tier.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\11\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange believes that offering Orders that remove liquidity
and receive price improvement at no cost is reasonable because the
execution of such Orders is free of charge. Generally, the Exchange
offers reduced transaction fees and credits in return for market-
improving behavior. The Exchange determined to not provide a credit to
members for Orders that remove liquidity when the Order receives price
improvement by executing against a Mid-point Order, since the member
removing liquidity is benefitting from the price improvement. Likewise,
the Exchange is expanding the existing credit tier to include all
Orders with a Non-Displayed price that provide price improvement.
The Exchange believes that offering Orders that remove liquidity
and receive price improvement at no cost is consistent with an
equitable allocation of fees and is not unfairly discriminatory because
such Orders invariably receive price improvement of at least $0.005 per
share, and therefore do not need an additional rebate of $0.0006 to
$0.0016 to encourage their submission to the Exchange. Moreover, the
Exchange believes that the change is not unfairly discriminatory
because the price improvement provided to these Orders provides a
rational basis for treating them differently from other Orders that
access liquidity at the Exchange.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. In terms of inter-market
competition, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive, or rebate opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees to remain competitive with other exchanges and with
alternative trading systems that have been exempted from compliance
with the statutory standards applicable to exchanges. Because
competitors are free to modify their own fees in response, and because
market participants may readily adjust their Order routing practices,
the Exchange believes that the degree to which fee changes in this
market may impose any
[[Page 18800]]
burden on competition is extremely limited.
In this instance, the proposed changes to the charges assessed and
credits available to members for execution of securities in securities
of all three Tapes do not impose a burden on competition because the
Exchange's execution services are completely voluntary and subject to
extensive competition both from other exchanges and from off-exchange
venues. The proposed expansion of the zero credit tier is not a burden
on competition because the Exchange has limited resources to apply as
credits and such resources must be applied in a manner that the
Exchange believes will best improve market quality thereon. The
Exchange believes that providing credits to members that are already
receiving price improvement is not the most efficient allocation of
such limited resources, since such Orders do not need to be
incentivized. As a consequence, the Exchange believes that offering
such executions at no cost will not place a burden on competition, but
rather will allow the Exchange to apply its limited resources to other
areas wherein it can promote market-improving behavior by its
participants. Thus, the proposed changes have the potential to make the
Exchange a more attractive trading venue, and consequently may promote
competition among markets. In sum, if the changes proposed herein are
unattractive to market participants, it is likely that the Exchange
will lose market share as a result. Accordingly, the Exchange does not
believe that the proposed changes will impair the ability of members or
competing Order execution venues to maintain their competitive standing
in the financial markets.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
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)(ii) of the Act.\12\
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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-BX-2017-020 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-BX-2017-020. 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-BX-2017-020 and should be
submitted on or before May 12, 2017.
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. 2017-08063 Filed 4-20-17; 8:45 am]
BILLING CODE 8011-01-P
