[Federal Register Volume 79, Number 75 (Friday, April 18, 2014)]
[Notices]
[Pages 21986-21988]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-08822]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71941; File No. SR-BATS-2014-011]
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Related to
Fees for Use of BATS Exchange, Inc.
April 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 April 1, 2014, 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
[[Page 21987]]
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 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 BATS Rules
15.1(a) and (c). Changes to the fee schedule pursuant to this proposal
are 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 proposes to modify its fee schedule applicable to use
of the Exchange effective April 1, 2014, in order to modify the fees
applicable to executions occurring through certain routing strategies
at the Exchange's affiliate, BATS Y-Exchange, Inc. (``BYX'').
BYX currently provides a base rebate of $0.0001 per share when
removing liquidity. To create a direct pass through of the applicable
economics of executions at BYX through the Destination Specific,\6\
TRIM (including TRIM2 and TRIM3),\7\ and SLIM \8\ routing strategies,
the Exchange proposes to increase the rebate to $0.0016 per share for
orders routed through such strategies and executed on BYX. The proposed
change represents a pass through of the rate BATS Trading, Inc., the
Exchange's affiliated routing broker-dealer, is provided for routing
orders that remove liquidity from BYX. The proposed change is in
response to BYX's April 2014 fee change where BYX increased its rebate
from $0.0001 per share to $0.0016 per share for orders in securities
priced at or above $1.00.\9\ Accordingly, when BATS Trading, Inc.
routes to and removes liquidity on BYX, it will now receive a standard
rebate of $0.0016 per share.\10\ The Exchange is not proposing any
other changes to its routing fees at this time.
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\6\ As defined in BATS Rule 11.9(c)(12).
\7\ As defined in BATS Rule 11.13(a)(3)(G).
\8\ As defined in BATS Rule 11.13(a)(3)(H).
\9\ See the BYX Fee Schedule available at http://www.batstrading.com/resources/regulation/rule_book/BYX_Fee_Schedule.pdf.
\10\ The Exchange notes that to the extent DE Route does or does
not achieve any volume tiered rebates on BYX, its rebate for Flag BY
will not change.
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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.\11\
Specifically, the Exchange believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\12\ 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.
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\11\ 15 U.S.C. 78f.
\12\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed changes to the Exchange's
rebate for TRIM (including TRIM2 and TRIM3), SLIM and Destination
Specific Orders executed on BYX are equitably allocated, fair and
reasonable, and non-discriminatory in that they are equally applicable
to all Members and are designed to mirror the rebate applicable to the
execution if such routed orders were executed directly by the Member at
BYX.
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 orders
routed through the Exchange and executed at BYX through the TRIM
(including TRIM2 and TRIM3), SLIM and Destination Specific Order
strategies, the proposed fee change is designed to equal the rebate
that a Member would have received if such routed orders would have been
executed directly by a Member at BYX. As stated above, the Exchange
notes that it operates in a highly competitive market in which market
participants can readily direct order flow to competing venues if the
deem fee structures to be unreasonable or excessive.
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 \13\ and paragraph (f) of Rule 19b-4
thereunder.\14\ 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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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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 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-2014-011 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-BATS-2014-011. This
file number should be included on the
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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-BATS-2014-011 and should be submitted on or before May
9, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014-08822 Filed 4-17-14; 8:45 am]
BILLING CODE 8011-01-P