[Federal Register Volume 74, Number 69 (Monday, April 13, 2009)]
[Notices]
[Pages 16899-16901]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-8323]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59709; File No. SR-BATS-2009-008]
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 6, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the
[[Page 16900]]
``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on March 31, 2009, BATS Exchange, Inc. (``BATS'' or the ``Exchange'')
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. BATS 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 proposes to modify its fee schedule applicable to use
of the Exchange. While changes to the fee schedule pursuant to this
proposal will be effective upon filing, the changes will become
operative on April 1, 2009.
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, 2009, in order to: (i) Reduce the
rebate provided to Members who add liquidity to the Exchange in Tape A
securities and Tape C securities from $0.0024 per share to $0.0023 per
share; (ii) expand the securities for which the Exchange does not pay a
rebate to all securities priced below $5.00, rather than securities
priced below $1.00, and provide a rebate of $0.0001 per share for
trades that remove liquidity in securities priced below $5.00; (iii)
decrease the fee charged by the Exchange for its ``CYCLE'' routing
strategy from $0.0029 per share to $0.0026 per share; and (iv) make
modifications to certain of the Exchange's non-standard routing
charges. In addition to these specific changes, which are discussed in
further detail below, the Exchange has proposed additional
modifications to its fee schedule for clarity. For instance, the
Exchange has proposed re-ordering the list of non-standard routing
changes, added language to certain headings to make clear the
distinction between securities priced at $5.00 or above and below
$5.00, and proposed modified language describing non-displayed
liquidity and Modified Destination Specific Orders to more closely
reflect the language typically used by Members of the Exchange. The
Exchange has also proposed removing a descriptive chart that it
previously included on its fee schedule.
(i) Reduction of Tape A and C Rebates
The Exchange proposes to reduce the rebate provided to Members who
add liquidity to the Exchange in Tape A and Tape C securities from
$0.0024 per share to $0.0023 per share. The Exchange believes that this
proposed fee change is consistent with its long-term goal of providing
access to the Exchange at competitive rates that do not expose the
Exchange to significant losses or capital outlays.
(ii) Securities Priced Below $5.00
The Exchange does not currently charge fees for removing liquidity
nor does the Exchange provide a rebate for adding liquidity in any
securities priced below $1.00. The Exchange proposes to expand the no-
rebate structure for liquidity adders to all securities priced below
$5.00. In addition, the Exchange proposes to provide a rebate of
$0.0001 per share for all orders that remove liquidity in securities
priced below $5.00. The Exchange believes that this proposed fee
structure, which differs depending on whether a security trades below
$5.00 or at or above $5.00, will benefit both the Exchange and Members
of the Exchange by encouraging market participants to send order flow
in lower priced securities to the Exchange for execution, resulting in
higher liquidity and better execution quality. In addition, the
Exchange believes that the fee and rebate rates it proposes are
reasonable.
(iii) Decrease of Standard Routing Fee
The Exchange proposes to decrease the fee charged by the Exchange
for its CYCLE routing strategy \5\ from $0.0029 per share to $0.0026
per share. This proposed change reflects decreases recently made by
certain other protected markets to their access fees.
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\5\ The CYCLE routing strategy routes orders to any market
center or execution venue other than a dark liquidity pool. Orders
are routed to dark liquidity pools through the Exchange's DART
routing strategy. Orders executed through DART cost $0.0020 per
share, which the Exchange has not proposed to change at this time.
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(iv) Changes to Non-Standard Routing Charges
As described below, the Exchange also proposes certain changes to
the non-standard routing charges charged to Members. First, the
Exchange proposes to modify the routing charges applicable to
Destination Specific Orders sent to all market centers that display
Protected Quotations \6\ (each a ``Protected Market Center'') other
than the NYSE, NYSE Arca or NASDAQ, by increasing the standard charge
for all such orders from $0.0029 per share to $0.0030 per share.
Second, for Destination Specific Orders routed to NYSE, the Exchange
proposes providing a discounted price from the NYSE's current removal
fee of $0.0018 per share by charging $0.0017 per share for such orders.
Third, with respect to Destination Specific Orders routed to NYSE Arca
and NASDAQ, the Exchange will charge the lowest transaction fee
currently available at such market centers in each Tape. Specifically,
the Exchange will charge: (A) $0.0028 per share for Destination
Specific orders executed at NYSE Arca; (B) $0.0026 per share for
Destination Specific orders in Tape A securities and Tape C securities
executed at NASDAQ; and (C) $0.0029 per share for Destination Specific
orders in Tape B securities executed at NASDAQ. Finally, to be
consistent with the change to the CYCLE routing fee described above,
the Exchange proposes to charge 0.26%, rather than 0.29%, of the total
dollar value of the execution for any security (all Tapes) priced under
$1.00 per share that is routed away from the Exchange.
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\6\ As defined in BATS Rule 1.5(s).
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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
[[Page 16901]]
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. 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 its fees and credits
are competitive with those charged by other venues and that the various
changes it has proposed to reduce its fees will benefit Members both
due to the obvious economic savings and due to the potential of
increased available liquidity at the Exchange. For those proposed
changes that will result in increased fees charged to Members or lower
rebates received by Members, such as the reduction of the rebate in
Tape A and C securities, the Exchange believes that any additional
revenue it receives will allow the Exchange to devote additional
capital to its operations, which may, in turn, benefit Members of the
Exchange. Finally, the Exchange believes that the proposed rates are
equitable in that they apply uniformly to all Members.
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\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(4).
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(B) Self-Regulatory Organization's Statement of Burden on Competition
The Exchange does not believe that the proposed rule change imposes
any burden on competition.
(C) Self-Regulatory Organization's Statement on Comments Regarding 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 proposed rule change has been designated as a fee
change pursuant to Section 19(b)(3)(A)(ii) of the Act \9\ and Rule 19b-
4(f)(2) thereunder,\10\ because it establishes or changes a due, fee or
other charge imposed on members by the Exchange. Accordingly, the
proposal is effective upon filing with the Commission.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 17 CFR 240.19b-4(f)(6) [sic].
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate 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.
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 e-mail to [email protected]. Please include
File No. SR-BATS--2009-008 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-2009-008. This file
number should be included on the subject line if e-mail 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 changes 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 inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of BATS. 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-2009-008 and should be
submitted on or before May 4, 2009.
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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-8323 Filed 4-10-09; 8:45 am]
BILLING CODE 8010-01-P