[Federal Register Volume 79, Number 209 (Wednesday, October 29, 2014)]
[Notices]
[Pages 64434-64436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-25668]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73414; File No. SR-BATS-2014-050]
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 23, 2014.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on October 16, 2014, BATS Exchange, Inc. (the ``Exchange'' or ``BATS
'') filed with the Securities and Exchange Commission (``Commission'')
a proposed rule change as described in Items I, II and III below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit
[[Page 64435]]
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.
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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 fees applicable to
securities listed on the Exchange pursuant to BATS Rule 14.13. Changes
to the fee schedule pursuant to this proposal are effective upon
filing.
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
On August 30, 2011, the Exchange received approval of rules
applicable to the qualification, listing, and delisting of companies on
the Exchange,\3\ which it modified on February 8, 2012 in order to
adopt pricing for the listing of exchange traded products (``ETPs'' \4\
on the Exchange,\5\ which it subsequently modified again on June 4,
2014.\6\ The Exchange proposes to modify Rule 14.13, entitled ``Company
Listing Fees'' to eliminate the annual fees for ETPs that are not
participating in the competitive liquidity provider program under
Interpretation and Policy .02 to Rule 11.8 (the ``CLP Program'').\7\
The Exchange is not proposing to eliminate the $5,000 application fee
for ETPs. For ETPs that are participating in the CLP Program, the
Exchange proposes that the annual fees continue to be $35,000. In
conjunction with the proposed elimination of annual fees for ETPs
listed on the Exchange, the Exchange is also planning to file a
separate proposal that will eliminate enhanced rebates for lead market
makers (``LMMs'') in LMM Securities \8\ under the Exchange's LMM
Program,\9\ which was in part subsidized by the annual listing fees.
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\3\ See Securities Exchange Act Release No. 65225 (August 30,
2011) 76 FR 55148 (September 6, 2011) (SR-BATS-2011-018).
\4\ As defined in BATS Rule 11.8(e)(1)(A), the term ``ETP''
means any security listed pursuant to Exchange Rule 14.11.
\5\ See Securities Exchange Act Release No. 66422 (February 17,
2012) 77 FR 11179 (February 24, 2012) (SR-BATS-2012-010).
\6\ See Securities Exchange Act Release No. 72377 (June 12,
2014) 79 FR 34822 (June 18, 2014) (SR-BATS-2014-024).
\7\ The Exchange notes that the CLP Program referenced in this
proposal will be discontinued as of December 31, 2014. The
references to the CLP Program herein do not apply to the Exchange's
Supplemental CLP Program for ETPs, which is defined in
Interpretation and Policy .03 to Rule 11.8.
\8\ As defined in Rule 11.8(e)(1)(C), LMM Security means an ETP
that has an LMM.
\9\ See BATS Rule 11.8(e).
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Currently, Rule 14.13(b)(2)(C) provides that the annual fee for an
ETP that is not participating in the CLP Program is charged quarterly
on a tiered basis based on the ETP's consolidated average daily volume
(the ``CADV''), as defined below, during the quarter preceding the
billing date. Specifically, the Exchange charges issuers of ETPs on a
quarterly basis as follows:
------------------------------------------------------------------------
Quarterly Annual
CADV fee fee
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0-10,000......................................... $1,250 $5,000
10,001-40,000.................................... 2,000 8,000
40,001-80,000.................................... 3,000 12,000
80,001-150,000................................... 3,750 15,000
150,001-400,000.................................. 4,500 18,000
Greater than 400,000............................. (\1\) (\1\)
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\1\ Free.
As mentioned above, the Exchange is proposing to eliminate all
annual fees for ETPs that are not participating in the CLP Program,
which includes the fees associated with each of the CADV tiers above.
Specifically, the Exchange is proposing that issuers of each class of
securities that is a domestic or foreign issue listed on the Exchange
as an ETP that is not currently participating in the CLP Program will
pay no annual fee to the Exchange.
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) and 6(b)(5) of the Act,\11\ in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among issuers and it does not unfairly discriminate
between customers, issuers, brokers or dealers.
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\10\ 15 U.S.C. 78f.
\11\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange is proposing to eliminate all annual listing fees for
ETPs listed on the Exchange, except for those ETPs that are
participating in the CLP Program, which will significantly reduce
listing fees for most new issuers and transfer listings in ETPs (with
the exception of ETPs with a CADV greater than 400,000 for which there
already was no annual listing fee), which the Exchange believes is
equitable, reasonable, and non-discriminatory because the annual fee
for listings will be applied equally to all ETPs newly listed on the
Exchange. Further, there are currently no ETPs listed on the Exchange
that are receiving the pricing for having a CADV of greater than
400,000. The Exchange also believes that continuing to charge $35,000
annually for ETPs that continue to participate in the CLP Program is
equitable and non-discriminatory because the costs associated with
operating the CLP Program are significantly higher than the anticipated
costs associated with the listing of ETPs on the Exchange that are not
participating in the CLP Program and are generally designed to at least
in part offset the costs to the Exchange to operate the CLP Program.
Further, ETPs participating in the CLP Program may opt out of the CLP
Program at any time in order to be eligible for having no annual
listing fees.
Based on the foregoing, the Exchange believes that its proposed
elimination of annual fees for ETPs that are not participating in the
CLP Program is a reasonable, equitable, and non-discriminatory
allocation of fees to issuers.
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. With
respect to the proposed new pricing for the listing of ETPs, the
Exchange does not believe that the changes burden competition, but
instead, enhance competition, as it is intended to increase the
competitiveness of the Exchange's listings program by allowing the
[[Page 64436]]
Exchange to offer ETPs the ability to list on the Exchange without
having to pay any annual fees. As such, the proposal is a competitive
proposal that is intended to attract additional ETP listings, which
will, in turn, benefit the Exchange and all other BATS-listed ETPs.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any written comments from members or other interested parties.
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.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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-2014-050 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-2014-050. 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 offices 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-2014-050,
and should be submitted on or before November 19, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-25668 Filed 10-28-14; 8:45 am]
BILLING CODE 8011-01-P