[Federal Register Volume 76, Number 93 (Friday, May 13, 2011)]
[Notices]
[Pages 28115-28117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11766]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64444; File No. SR-BYX-2011-012]
Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Add BYX
Rule 11.22, Entitled ``Data Products''
May 9, 2011.
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 May 5, 2011, BATS Y-Exchange, Inc. (the ``Exchange'' or
``BYX'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to continue to make available those data
feeds provided by the Exchange to data recipients \3\ without charge
and to start making available the Latency Monitoring feed, which will
also be available without charge. The Exchange also proposes to add
language to its Rules to memorialize those data feeds that have already
been approved by the Commission.\4\
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\3\ Exchange data recipients include Members of the Exchange as
well as non-Members that have entered into an agreement with the
Exchange that permits them to receive Exchange data.
\4\ BATS has separately filed a rule proposal and received
approval to offer certain data products for which it assesses a fee
but, outside of its fee schedule, did not propose written rules
related to such data products. See Securities Exchange Act Release
No. 61885 (April 9, 2010), 75 FR 10332 (April 16, 2010).
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The text of the proposed rule change is available at the Exchange's
Web site
[[Page 28116]]
at http://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 purpose of the proposed rule change is to continue to make
available, without charge, several of the Exchange's data feeds for
receipt by Exchange data recipients. In addition, the Exchange proposes
to introduce a new feed, the Latency Monitoring feed, which will also
be available without charge. The free data feeds offered and proposed
to be offered by the Exchange include: (i) TCP PITCH; (ii) TCP FAST
PITCH; (iii) Multicast PITCH; (iv) TOP; (v) DROP; (vi) Historical Data;
and (vii) Latency Monitoring (collectively, the ``Data Feeds'').
The Exchange provides detailed and up to date technical information
regarding each of the Data Feeds currently offered by the Exchange on
its public Web site.\5\ All orders and executions displayed through the
Data Feeds are anonymous and do not contain the identity of the party
that submitted the order.
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\5\ http://www.batstrading.com/support/#menu-md-docs.
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By making the Data Feeds available free of charge, the Exchange
believes that it enhances market transparency and fosters competition
among orders and markets. At this time, the Exchange does not have
plans to charge any fee associated with the receipt of the Data
Feeds.\6\ Of course, should the Exchange determine to charge fees
associated with the Data Feeds, the Exchange will submit a proposed
rule change to the Commission in order to implement those fees. Below
is a description of each of the Data Feeds.
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\6\ The Exchange does not charge directly for any of the Data
Feeds, nor does it currently charge any connectivity fees.
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(i) TCP PITCH
The BYX TCP PITCH data feed provides Exchange data recipients with
depth of book quotations and execution information based on equity
orders entered into the System \7\ on an uncompressed feed. The PITCH
feeds offered by BYX (including TCP FAST PITCH and Multicast PITCH) are
the data feeds through which Exchange data recipients can receive full,
real-time quotation and execution information. Each PITCH message
reflects the addition, deletion or execution of an order in the System.
TCP PITCH is the data feed used by Exchange data recipients to receive
BYX PITCH information via a TCP/IP connection.
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\7\ As defined in BYX Rule 1.5(aa), the term ``System'' means
``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.''
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(ii) TCP FAST PITCH
The BYX TCP FAST PITCH data feed, like TCP PITCH, offers depth of
book quotations and execution information, however, unlike TCP PITCH,
this data feed is compressed and packaged by BATS prior to transmission
and is translated by the recipient. The Exchange plans to cease
offering TCP FAST PITCH effective July 1, 2011.
(iii) Multicast PITCH
The BYX Multicast PITCH data feed, like TCP PITCH and TCP FAST
PITCH, offers depth of book quotations and execution information,
however, unlike other PITCH data feeds offered by BYX, this data feed
is transmitted in a manner that can be processed more efficiently by
recipients.
(iv) TOP
The BYX TOP data feed offers top of book quotations and last sale
execution information based on equity orders entered into the System.
By only providing top of book quotations and last sale information, TOP
offers data recipients a significant reduction in required bandwidth
and processing when compared to BYX's standard TCP PITCH data feed. The
quotations made available via TOP provide an aggregated size and do not
indicate the size or number of individual orders at the best bid or
ask.
(v) DROP
The BYX DROP data feed offers information regarding the trading
activity of a specific Member. This feed is typically used by Members
or clearing firms to monitor trading activity. DROP information is only
available to the Member to whom the specific data relates and those
recipients expressly authorized by the Member, such as the Member's
clearing firm or a third-party vendor who provides services to the
Member. The Exchange offers two forms of DROP, one of which provides a
record for each execution and the other of which provides a record of
each order and each execution.
(vi) Historical Data
The BYX Historical Data product offers up to three months of BYX
data on a T+1 basis. Such information can be downloaded from the
Exchange's Web site. In addition, upon request, if an Exchange data
recipient provides an external hard drive to the Exchange, the Exchange
will download additional data onto the drive and return it to the
requesting party. Historical data provided by the Exchange can be used
for a variety of purposes. For instance, data recipients that wish to
back-test certain trading strategies can use historical data to do so.
As another example, data recipients that provide market information
through public Web sites or develop dynamic stock tickers, portfolio
trackers, price/time graphs and other visual systems can use historical
data for such purposes.
(vii) Latency Monitoring
The BYX Latency Monitoring data product will offer real-time
latency information based on equity orders entered into the System to
data recipients on an uncompressed feed. This data feed will provide
various statistics to data recipients based on the latency from when an
order enters the BYX network until the time that the order appears on a
particular BYX data feed. The Exchange will initially present various
statistics aggregated across the exchange and also separated by
matching engine unit including minimum latency, maximum latency,
average latency, standard deviation, and the number of samples
observed. The Exchange may add additional aggregate statistics in the
future. In addition, the Exchange may also add other latency measures
to the data feed in the future, to the extent a different method
becomes relevant. The latency data will not be member or port specific.
This data feed does not include any quotation or execution information.
2. Statutory Basis
Approval of the rule change proposed in this submission is
consistent with the requirements of the Act and the rules
[[Page 28117]]
and regulations thereunder that are applicable to a national securities
exchange, and, in particular, with the requirements of Section 6(b) of
the Act.\8\ In particular, the proposed change is consistent with
Section 6(b)(5) of the Act,\9\ because it would promote just and
equitable principles of trade, remove impediments to, and perfect the
mechanism of, a free and open market and a national market system, and,
in general, protect investors and the public interest. Specifically,
the Exchange believes that this proposal is in keeping with those
principles by promoting increased transparency through the
dissemination of BYX data along with information regarding the
Exchange's internal latencies.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change imposes
any burden on competition.
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 foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
BYX has satisfied this requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \12\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6) \13\ permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. BYX requests that the
Commission waive the 30-day operative delay in order to allow BYX to
continue to provide without interruption the Data Feeds that are
already available, voluntary, and free to subscribers. In addition, BYX
requests waiver of the 30-day operative delay for the Latency Feed
because it is ready for distribution, voluntary, free to receive, and
contains only aggregate statistical information related to the latency
of the System. BYX believes that waiver of the operative delay will
allow it to continue providing market participants that use the Data
Feeds with useful real-time and historical data concerning orders that
have been entered, executions that have occurred, and the latency of
the system, consistent with other products provided by other exchanges.
The Commission believes that waiving the 30-day operative delay \14\ is
consistent with the protection of investors and the public interest and
designates the proposal operative upon filing.
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\12\ 17 CFR 240.19b-4(f)(6).
\13\ Id.
\14\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the 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 e-mail to [email protected]. Please include
File Number SR-BYX-2011-012 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BYX-2011-012. This file
number should be included on the subject line if e-mail 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,\15\ 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, on
official business days between the hours of 10 a.m. and 3 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-BYX-2011-012 and should be submitted on or before June
3, 2011.
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\15\ The text of the proposed rule change is available on the
Commission's Web site at http://www.sec.gov/rules/sro.shtml.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-11766 Filed 5-12-11; 8:45 am]
BILLING CODE 8011-01-P