[Federal Register Volume 79, Number 54 (Thursday, March 20, 2014)]
[Notices]
[Pages 15616-15618]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-06123]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71726; File No. SR-BYX-2014-002]
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.
March 14, 2014.
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 March 4, 2014, 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, 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 the
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 BYX Rules
15.1(a) and (c). Changes to the fee schedule pursuant to this proposal
are effective upon filing.
---------------------------------------------------------------------------
\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.
[[Page 15617]]
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 effective March 3, 2014, in order to amend the fees
for certain routing strategies based on a change of fees at the New
York Stock Exchange LLC (``NYSE''). The Exchange also proposes to
remove certain unnecessary language from the definition of ``TCV'', or
total consolidated volume.
The Exchange has previously provided a discounted fee for
Destination Specific Orders routed to certain of the largest market
centers measured by volume (NYSE, NYSE Arca and NASDAQ), which, in each
instance has been $0.0001 less per share for orders routed to such
market centers by the Exchange than such market centers currently
charge for removing liquidity (referred to by the Exchange as ``One
Under'' [sic] pricing). NYSE is implementing certain pricing changes
effective March 1, 2014, including modification from a fee to remove
liquidity of $0.0025 per share to a fee of $0.0026 per share.\6\ Based
on the changes in pricing at NYSE, BYX is proposing to increase its fee
for Destination Specific Orders \7\ executed at NYSE so that the fee
remains $0.0001 less per share for orders routed to NYSE. Specifically,
the Exchange proposes to increase the fee charged for BYX + NYSE
Destination Specific Orders executed at NYSE from $0.0024 per share to
$0.0025 per share.
---------------------------------------------------------------------------
\6\ See SR-NYSE-2014-09, filed February 24, 2014, available at:
http://www.nyse.com/nysenotices/nyse/rule-filings/list.
\7\ As defined in Exchange Rule 11.9(c)(12).
---------------------------------------------------------------------------
In addition, the Exchange offers a variety of routing strategies,
including ``SLIM'' and ``TRIM,'' each of which has a specific fee for
an execution that occurs at NYSE.\8\ Consistent with its One Under
[sic] pricing model, the Exchange currently charges $0.0024 per share
for executions that occur at NYSE through SLIM and TRIM. Based on the
increased fee at NYSE, the Exchange proposes to increase the fee
charged for SLIM and TRIM orders executed at NYSE from $0.0024 per
share to $0.0025 per share.
---------------------------------------------------------------------------
\8\ See Exchange Rule 11.13(a)(3)(G) for a description of the
TRIM routing strategy and Exchange Rule 11.13(a)(3)(H) for a
description of the SLIM routing strategy.
---------------------------------------------------------------------------
In addition to the changes described above related to orders routed
to NYSE through certain Exchange routing strategies, the Exchange
proposes to eliminate certain unnecessary language from the fee
schedule. Beginning on December 9, 2013, the Exchange temporarily
excluded odd lot executions from the calculation of average daily TCV,
as defined on the Exchange's fee schedule as it relates to ``Equities
Pricing.'' \9\ Specifically, odd lots were excluded from the
calculation of TCV through January 31, 2014. The Exchange proposes to
remove language regarding the exclusion of odd lots, as such exclusion
has expired and is thus no longer necessary.
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release No. 71138 (December 19,
2013), 78 FR 78445 (December 26, 2013) (SR-BYX-2013-041).
---------------------------------------------------------------------------
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 believes that the
proposed changes to certain of the Exchange's non-standard routing fees
and strategies are equitably allocated, fair and reasonable, and non-
discriminatory in that they are equally applicable to all Members and
are designed to provide a reduced fee for orders routed to NYSE through
Exchange routing strategies as compared to applicable fees for
executions if such routed orders were instead executed directly by the
Member at NYSE.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f.
\11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange also believes that its removal of language from the
definition of TCV regarding the odd lot exclusion that has expired is
consistent with the Act. This change will help to avoid confusion and
does not substantively change the fees imposed by the Exchange.
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.
Because the market for order execution is extremely competitive,
Members may readily opt to disfavor the Exchange's routing services if
they believe that alternatives offer them better value. For an order
routed through the Exchange and executed at NYSE through the applicable
routing strategies, the proposed fee change is designed to maintain a
slight discount compared to the fee the Member would have paid if such
routed order was instead executed directly by a Member at NYSE. The
proposed change to remove the language for the exclusion of odd lots
imposes no burden on competition because such exclusion explicitly
expired on January 31, 2014.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \12\ and paragraph (f) of Rule 19b-4
thereunder.\13\ 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.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing,
[[Page 15618]]
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-BYX-2014-002 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-BYX-2014-002. 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 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-2014-002 and
should be submitted on or before April 10, 2014.
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-06123 Filed 3-19-14; 8:45 am]
BILLING CODE 8011-01-P