[Federal Register Volume 76, Number 191 (Monday, October 3, 2011)]
[Notices]
[Pages 61125-61127]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-25378]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65406; File No. SR-BYX-2011-023]
Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Related to
Fees for Use of BATS Y-Exchange, Inc.
September 27, 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 September 14, 2011, BATS Y-Exchange, Inc. (the ``Exchange'' or
``BYX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The Exchange
has designated 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the fee schedule applicable to
Members\5\ of the Exchange pursuant to BYX Rules 15.1(a) and (c). While
changes to the fee schedule pursuant to this proposal will be effective
upon filing, the changes will become operative on September 16, 2011.
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\5\ A Member is any registered broker or dealer that has been
admitted to membership in the Exchange.
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The text of the proposed rule change is available at the Exchange's
Web site at http://www.batstrading.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
[[Page 61126]]
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to modify its fee schedule applicable to use
of the Exchange effective September 16, 2011, in order to adopt a fee
for any order subject to price sliding that adds liquidity to the
Exchange and receives price improvement over its ranked price when
executed. Pursuant to Exchange price sliding, an order that would lock
or cross a protected quotation is ranked on the Exchange's order book
at the locked price and then displayed at one minimum price level less
aggressive than the locking price. For bids, this means that a price
slid order is displayed at one minimum price variation less than the
current national best offer (``NBO''), and for offers, this means that
a price slid order is displayed at one minimum price variation more
than the current national best bid (``NBB'').
The Exchange received approval in June of a rule change to allow a
non-displayed order or an order subject to the price sliding process
that is not executable at its most aggressive price to be executed at
one-half minimum price variation less aggressive than the price at
which it is ranked.\6\ The Exchange immediately implemented the change
for non-displayed orders, but delayed the implementation related to
orders subject to price sliding in order to complete development of the
necessary system functionality. On September 16, 2011, the Exchange
plans to implement the systems change to allow an order subject to
price sliding to execute at one-half minimum price variation less
aggressive than the price at which such order is ranked. Specifically,
in the event an order submitted to the Exchange on the side opposite
such a price slid order is a market order or a limit order priced more
aggressively than the locking price, the Exchange will execute the
resting order subject to price sliding at, in the case of a resting
bid, one-half minimum price variation less than the locking price, and,
in the case of a resting offer, at one-half minimum price variation
more than the locking price. Based on the functionality, orders
executed as described above will receive price improvement over the
price at which such orders are ranked. Because price slid orders
subject to the order handling process described above will receive
price improvement, the Exchange proposes to execute the orders subject
to a fee of $0.0030 per share, which is the same fee imposed for
executions of non-displayed orders that receive price improvement when
executed. The Exchange believes that price improvement received for
executions of orders subject to price sliding will offset the
additional fee charged by the Exchange for such orders.
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\6\ See Securities Exchange Act Release No. 64753 (June 27,
2011), 76 FR 38714 (July 1, 2011) (SR-BYX-2011-009) (Order Approving
a Proposed Rule Change to Amend BATS Rule 11.9, entitled ``Orders
and Modifiers'' and BATS Rule 11.13, entitled ``Order Execution'').
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder that are applicable to a national securities exchange, and,
in particular, with the requirements of Section 6 of the Act.\7\
Specifically, the Exchange believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\8\ in that it provides for
the equitable allocation of reasonable dues, fees and other charges
among members and other persons using any facility or system which the
Exchange operates or controls. The Exchange notes that it operates in a
highly competitive market in which market participants can readily
direct order flow to competing venues if they deem fee levels at a
particular venue to be excessive. The Exchange believes that the
proposed fee applicable to any execution of a price slid order that
receives price improvement over its ranked price is competitive, fair
and reasonable, and non-discriminatory in that the fee will apply
uniformly to all Members and because the proposed fee is the same fee
imposed for non-displayed orders that are handled similarly. Finally,
the Exchange believes that the additional fee for executions of orders
subject to price sliding that receive price improvement is appropriate
because the price improvement received will offset the change in the
fee structure for such orders.
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\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(4).
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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
No written comments were solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Pursuant to Section 19(b)(3)(A)(ii) of the Act\9\ and Rule 19b-
4(f)(2) thereunder,\10\ the Exchange has designated this proposal as
establishing or changing a due, fee, or other charge applicable to the
Exchange's Members and non-members, which renders the proposed rule
change effective upon filing.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 17 CFR 240.19b-4(f)(2).
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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 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 e-mail to [email protected]. Please include
File Number SR-BYX-2011-023 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary,
[[Page 61127]]
Securities and Exchange Commission, 100 F Street, NE., Washington, DC
20549-1090.
All submissions should refer to File Number SR-BYX-2011-023. 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, 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 such 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-
2011-023 and should be submitted on or before October 24, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-25378 Filed 9-30-11; 8:45 am]
BILLING CODE 8011-01-P