[Federal Register Volume 77, Number 28 (Friday, February 10, 2012)]
[Notices]
[Pages 7216-7218]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3094]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66327; File No. SR-BATS-2012-008]
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Related to
Fees for Use of BATS Exchange, Inc.
February 6, 2012.
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 February 1, 2012, BATS Exchange, Inc. (the ``Exchange'' or
``BATS'') 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 proposes amend the fee schedule applicable to Members
\5\ and non-members of the Exchange pursuant to BATS 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 February
1, 2012.
---------------------------------------------------------------------------
\5\ A Member is any registered broker or dealer that has been
admitted to membership in the Exchange.
---------------------------------------------------------------------------
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.
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 the ``Equities Pricing'' section of
its fee schedule in order to accommodate two additional variations of
the Exchange's ``TRIM'' routing strategy. As defined in BATS Rule
11.13(a)(3)(G), TRIM is a routing option under which an order
[[Page 7217]]
checks the System \6\ for available shares if so instructed by the
entering User \7\ and then is sent to destinations on the System
routing table. Accordingly, the Exchange's current TRIM routing
strategy will optionally check the Exchange's order book and then route
to various venues on the Exchange's routing table, including NASDAQ OMX
BX, Inc. (``NASDAQ BX''), BATS Y-Exchange, Inc. (``BYX Exchange''),
EDGA EXCHANGE, Inc. (``EDGA''), the New York Stock Exchange LLC
(``NYSE'') and certain alternative trading systems available through
the Exchange's ``DRT'' strategy (``DRT Venues'').\8\ In order to
provide additional options related to the TRIM routing strategy to
Exchange Users, the Exchange is introducing TRIM2 and TRIM3, both of
which will route to fewer venues than the full list of TRIM routing
venues.\9\ Specifically, TRIM2 will limit the routing table to NASDAQ
BX, BYX Exchange, EDGA and DRT Venues. TRIM3 will further limit the
routing table to NASDAQ BX, BYX Exchange and DRT Venues.
---------------------------------------------------------------------------
\6\ As defined in BATS Rule 1.5(aa), the System is 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.
\7\ As defined in BATS Rule 1.5(cc), a User is any Member or
Sponsored Participant who is authorized to obtain access to the
System pursuant to Rule 11.3.
\8\ As set forth in BATS Rule 11.13(a)(3)(E), DRT is a routing
option in which the entering firm instructs the System to route to
alternative trading systems included in the System routing table.
Unless otherwise specified, DRT can be combined with and function
consistent with all other routing options.
\9\ See also SR-BATS-2012-007, available at www.batstrading.com/regulation.
---------------------------------------------------------------------------
All pricing currently applicable to the TRIM routing strategy will
apply to TRIM2 and TRIM3, with the exception of TRIM2 and TRIM3 orders
executed at NASDAQ BX. In order to fund the development and
infrastructure cost of creating and maintaining additional TRIM routing
strategies, the Exchange proposes to provide a lower rebate for
executions pursuant to TRIM2 and TRIM3 than the rebate actually
received for orders executed at NASDAQ BX, which are passed on in full
for executions resulting from TRIM routing. Specifically, the Exchange
proposes to provide a rebate of $0.0010 per share for executions at
NASDAQ BX that result from TRIM2 or TRIM3 routing, rather than the full
rebate of $0.0014 per share.
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.\10\
Specifically, the Exchange believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\11\ 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 also notes that with
respect to the changes proposed in this filing, although routing
options are available to all Users, Users are not required to use the
Exchange's routing services, but instead, the Exchange's routing
services are completely optional. Members can manage their own routing
to different venues or can utilize a myriad of other routing solutions
that are available to market participants.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f.
\11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that the proposed rebates and fees for the
TRIM2 and TRIM3 routing options for the Exchange are reasonable in that
they are equivalent to the fees charged by the Exchange for the TRIM
routing strategy, with the exception of executions at NASDAQ BX, as
described above. As such, the Exchange believes that the proposed non-
standard routing fees are competitive, fair and reasonable, and non-
discriminatory in that they are generally designed to mirror the rebate
or fee applicable to the execution if such routed orders were executed
directly by the Member at each applicable venue. The Exchange believes
that the slightly lower rebate provided for TRIM2 and TRIM3 executions
at NASDAQ BX is reasonable in order to help the Exchange cover the cost
of developing and maintaining additional routing strategies for Users
of the Exchange. The Exchange also believes that the proposed rebates
and fees for TRIM2 and TRIM3 are fair and equitable and not
unreasonably discriminatory in that they apply equally to all Exchange
Users.
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 \12\ and Rule 19b-
4(f)(2) thereunder,\13\ 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.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
\13\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-BATS-2012-008 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-BATS-2012-008. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro/shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule
[[Page 7218]]
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 a.m. and 3 p.m. Copies of such
filing will also be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File No. SR-BATS-2012-008 and should be submitted on or before March 2,
2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-3094 Filed 2-9-12; 8:45 am]
BILLING CODE 8011-01-P