[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62921-62922]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-24677]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70687; File No. SR-BATS-2013-055]
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.
October 15, 2013.
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 October 1, 2013, 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.
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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 filed a proposal to amend the fee schedule applicable
to Members \5\ and non-members of the Exchange pursuant to BATS Rules
15.1(a) and (c). Changes to the fee schedule pursuant to this proposal
will be effective upon filing.
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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.
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 recently filed a proposal to establish a revenue
sharing program with Interactive Data Corporation, acting by and
through its division, Interactive Desktop Solutions, and its
subsidiary, Interactive Data Online Properties, Inc. (collectively,
``IDC''), whereby the Exchange will make available, through IDC,
private labeled versions of IDC's Market-Q and LiveCharts products.\6\
In this proposal, the Exchange proposes to modify its fee schedule
applicable to use of the Exchange effective October 1, 2013, in order
to establish fees for these products.
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\6\ See Securities Exchange Act Release No. 70264 (August 27,
2013), 78 FR 54338 (September 3, 2013) (SR-BATS-2013-045).
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Pursuant to a revenue sharing agreement between IDC and the
Exchange, the private labeled products will be marketed by the Exchange
by featuring and advertising them on the Exchange's Web site. Market-Q
will be marketed under the private label name ``BATS Investor Pro'' and
LiveCharts will be marketed under the private label name ``BATS
Investor RT'' (BATS Investor Pro and BATS Investor RT, collectively,
the ``Private Labeled Products'').
Under the agreement, IDC determines the price schedule for the
Private Labeled Products, and has the right to change the price
schedule at any time in its sole discretion upon prior notice to BATS;
provided, however, that such changes to the price schedule will not
become effective unless and until the applicable fees set forth in the
price schedule have been filed with and/or approved by the Commission
through a proposed rule change submitted by the Exchange in accordance
with the Act.
The current price schedule charges subscribers a $125 monthly fee
for BATS Investor Pro and a $24.95 monthly fee for BATS Investor RT.
Subscribers of BATS Investor Pro and BATS Investor RT may, for an
additional fee, supplement their subscriptions to include market data
in addition to Exchange data. This fee is not included as part of the
Exchange's revenue sharing program with IDC. As
[[Page 62922]]
indicated above, should IDC determine to change the fees for the
Private Labeled Products, the Exchange will submit a proposed rule
change with the Commission in order to reflect those fee changes.
Under the agreement, the Exchange will receive 25% of the total
monthly subscription fees received by IDC from parties who have
registered to use the Private Labeled Products and who first subscribe
as a result of the Exchange's marketing activities under the agreement,
less certain fees and taxes. IDC will operate and maintain the Private
Labeled Products and will provide first line technical support,
accounting and contract administration services for the Private Labeled
Products. The Exchange will not bill or contract with any subscriber
directly.
The Exchange is not proposing any other changes to its market data
fees at this time.
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.
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\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(4).
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In particular, the Exchange will make the Private Labeled Products
uniformly available pursuant to a standard non-discriminatory price
schedule offered by IDC. The Exchange also believes that the proposed
fees for the Private Labeled Products described herein are reasonable
in light of the benefits to data recipients.
Further, the Exchange notes that these products are completely
optional in that no consumer is required to purchase any of them and
only those consumers that deem such products to be of sufficient
overall value and usefulness will purchase them. To the extent
consumers do purchase the Private Labeled Products, the revenue
generated will offset the Exchange's fixed costs of operating and
regulating its trading platforms, including the continued operation of
data feeds that will supply data to be used in the Private Labeled
Products. It will also help the Exchange cover its costs in developing
and running that platform, as well as ongoing infrastructure costs.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended. To
the contrary, the Exchange believes that this proposal will promote
competition through the offering of optional, additional market data
products to similar market data products being offered by IDC
containing data from other exchanges and market centers. In addition,
the Exchange believes that the fees for these products (and, in turn,
the Exchange's revenue share) are constrained by such competitive
market data products offered by IDC, as well as other market data
vendors.
Lastly, the revenue sharing program is not exclusive as between the
Exchange and IDC. Any recipient of BATS data feeds is permitted to
redistribute such data, whether through a revenue sharing arrangement
with BATS or otherwise, or provide products and services similar to
those being offered by IDC, provided that such recipient (including
IDC) has entered into the required contractual arrangements with the
Exchange.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \9\ and paragraph (f) of Rule 19b-4
thereunder.\10\ 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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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 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 proposal 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 No. SR-BATS-2013-055 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 No. SR-BATS-2013-055. 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 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 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-2013-055 and should be
submitted on or before November 12, 2013.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24677 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P