[Federal Register Volume 81, Number 230 (Wednesday, November 30, 2016)]
[Notices]
[Pages 86346-86348]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28776]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-79386; File No. SR-BatsBYX-2016-35]
Self-Regulatory Organizations; Bats BYX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Make
Ministerial and Corrective Changes to Rules 11.9, 11.13, 11.16, 11.22,
and 11.27
November 23, 2016.
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 November 16, 2016, Bats BYX 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 this proposal as a ``non-controversial''
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(6)(iii) thereunder,\4\ which renders it 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).
\4\ 17 CFR 240.19b-4(f)(6)(iii).
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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 make ministerial and corrective
changes to Exchange Rules 11.9(a)(2), 11.13(b), 11.16(g)(4), 11.22(f),
and 11.27(a)(7)(A)(i)2.
The text of the proposed rule change is available at the Exchange's
Web site at 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 make ministerial and corrective changes to
Exchange Rules 11.9(a)(2), 11.13(b), 11.16(g)(4), 11.22(f), and
11.27(a)(7)(A)(i)2. First, the exchange proposes to harmonize the
description of BYX Market Orders under Exchange Rule 11.9(a)(2) with
the description of an identical order type on the Exchange's affiliate,
Bats BZX Exchange, Inc. (``BZX''). Exchange Rule 11.9(a)(2) currently
states that a BYX Market Order that is designated as BYX Only \5\ with
a time-in-force of Day \6\ will be cancelled if, when reaching the
Exchange, it cannot be executed on the System \7\ in accordance with
Exchange Rule 11.13(a)(4) unless the reason that such BYX Market Order
cannot be executed is because it is entered into the System and the NBO
(NBB) is greater (less) than the Upper (Lower) Price Band, in which
case such order will be posted by the System to the BYX Book, and
priced at the Upper (Lower) Price Band, and re-priced as set forth in
Rule 11.18(e)(5)(B). This mirrors the description of BZX Market Orders
under BZX Rule 11.9(a)(2), but for the BZX rule stating that the BZX
Market Order in the circumstance described in the text would be posted
by the System to the BZX Book, and displayed at the Upper (Lower) Price
Band. Therefore, in order to make the description of market orders
identical under both rules, the Exchange proposes to replace the phrase
``and priced'' with the term ``displayed.\8\
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\5\ See Exchange Rule 11.9(c)(4).
\6\ See Exchange Rule 11.9(b)(2).
\7\ See Exchange Rule 1.5(aa).
\8\ See Securities Exchange Act Release No. 73875 (December 18,
2014), 79 FR 77552 (December 24, 2014) (SR-BATS-2014-068).
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Second, the Exchange proposed to amend Rule 11.13(b) to correct an
incorrect cross reference. Exchange Rule 11.13(b) states that depending
on the instructions set by the User \9\ when the incoming order was
originally entered, if a market or marketable limit order has not been
executed in its entirety pursuant to Exchange Rule 11.13(a) above, the
order shall be eligible for additional processing under one or more of
the routing options listed under paragraph (a)(3) of Rule 11.13. The
reference to paragraph (a)(3) of Rule 11.13 is incorrect as the routing
options
[[Page 86347]]
are listing under paragraph (b)(3) of Rule 11.13. Therefore, the
Exchange proposes to replace reference to paragraph (a)(3) with
paragraph (b)(3).
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\9\ See Exchange Rule 1.5(cc).
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Third, the Exchange proposes to amend Rule 11.16(g)(4) to delete an
unnecessary cross reference. Exchange Rule 11.16(a)(4) states that
``[t]he pass-through of any compensation to a Member in accordance with
this subparagraph (g) is unrelated to any other claims for compensation
that are made in accordance with, and subject to the limits of,
subparagraph (d) of this Rule 11.16.'' The Exchange now proposes to
delete reference to ``11.16'' as a specific reference to the rule is
not integral nor necessary to the meaning or application of Rule 11.16
generally.\10\
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\10\ Removal of the rule reference would also harmonize the rule
language with similar rule of the Exchange's affiliates, Bats EDGA
Exchange, Inc. and Bats EDGX Exchange, Inc. SR-Bats-EDGX-2016-65 and
SR-BatsEDGA-2016-28.
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Fourth, the Exchange proposes to amend Rule 11.22(f) to delete a
description of the Latency Monitoring data product, which the Exchange
ceased to offer in May 2015. The Exchange determined that the customer
demand at that time did not warrant the infrastructure and ongoing
maintenance expense required to support the product.
Lastly, the Exchange proposes to amend Rule 11.27(a)(7)(A)(i)2. to
correct a typographical error by replacing the phrase ``one of more''
with ``one or more''.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \11\ in general, and furthers the objectives of Section
6(b)(5) of the Act \12\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. The Exchange believes the proposed changes promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system
because they seek to correct an incorrect cross-reference and
typographical error, harmonize identical rules with the Exchange's
affiliates, as well as eliminate a reference to a market data product
that is no longer provided. The Exchange notes the changes to Exchange
Rules 11.9(a)(2), 11.13(b), 11.16(a)(4), and 11.27(a)(7)(A)(i)2. are
ministerial and do not alter the applications of each rule. In
addition, the deletion of references to the Latency Monitoring Data
product removes references to a product the Exchange no longer provides
and that the Exchange is not required by any rule or regulation to
offer. As such, the proposed amendments would foster cooperation and
coordination with persons engaged in facilitating transactions in
securities and would remove impediments to and perfect the mechanism of
a free and open market and a national market system.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. On the contrary, the
proposed rule change will have no impact on competition as it is simply
makes ministerial and corrective changes while not altering the meaning
or application of each rule.
(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
Because the foregoing proposed rule change does not: (A)
Significantly affect the protection of investors or the public
interest; (B) impose any significant burden on competition; and (C) by
its terms, become operative for 30 days from the date on which it was
filed or such shorter time as the Commission may designate it has
become effective pursuant to Section 19(b)(3)(A) of the Act \13\ and
paragraph (f)(6) of Rule 19b-4 thereunder,\14\ the Exchange has
designated this rule filing as non-controversial. The Exchange has
given the Commission written notice of its intent to file the proposed
rule change, along with a brief description and text of the proposed
rule change at least five business days prior to the date of filing of
the proposed rule change, or such shorter time as designated by the
Commission.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4.
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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: (1)
Necessary or appropriate in the public interest; (2) for the protection
of investors; or (3) otherwise in furtherance of the purposes of the
Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or disapproved.
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-BatsBYX-2016-35 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 No. SR-BatsBYX-2016-35. 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
[[Page 86348]]
information that you wish to make available publicly. All submissions
should refer to File No. SR-BatsBYX-2016-35 and should be submitted on
or before December 21, 2016.
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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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-28776 Filed 11-29-16; 8:45 am]
BILLING CODE 8011-01-P