[Federal Register Volume 74, Number 92 (Thursday, May 14, 2009)]
[Notices]
[Pages 22786-22788]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-11264]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59890; File No. SR-BATS-2009-010]


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.

 May 7, 2009.
    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 30, 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 May 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 May 1, 2009, in order to: (i) Charge a 
consistent fee of $0.0025 per share for trades that remove liquidity in 
securities priced $1.00 or above and provide a consistent rebate of 
$0.0024 per share to Members who add displayed liquidity in securities 
priced $1.00 or above; (ii) change the securities for which the 
Exchange does not pay a rebate for adding liquidity to all securities 
priced below $1.00, rather than securities priced below $5.00, and 
eliminate the 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 $0.0026 
per share to $0.0025 per share and modify the routing fee for 
securities priced below $1.00; and (iv) change from a fee of $0.0005 
per share to a rebate of $0.0001 per share for Modified Destination 
Specific Orders routed to a dark liquidity venue. Each of these 
proposed changes is described in further detail below.
(i) Fees and Rebates for Securities Priced $1.00 or Above
    The Exchange currently charges a fee of $0.0025 per share for 
trades that remove liquidity in securities priced $5.00 or above, and 
proposes to change this fee so that it instead applies to trades that 
remove liquidity in securities priced $1.00 or above.
    The Exchange currently provides rebates for securities priced $5.00 
or above of $0.0023 per share to Members who add displayed liquidity in 
Tape A and C securities, and $0.0028 per share to Members who add 
displayed in Tape B securities. The Exchange proposes to

[[Page 22787]]

change this structure so that it instead provides a consistent rebate 
of $0.0024 per share to Members who add displayed liquidity in all 
securities priced $1.00 or above. The Exchange does not propose to 
change the rebate provided for non-displayed liquidity added to the 
BATS Book, which is currently $0.0020 per share for Tapes A, B, and C. 
However, because the rebate for displayed liquidity, as proposed, will 
now apply to all securities rather than having a different rebate for 
Tape B securities, the Exchange proposes eliminating the reference to 
Tapes A, B, and C in connection with non-displayed liquidity as such 
reference is no longer necessary.
(ii) Securities Priced Below $1.00
    Currently, the Exchange does not pay a rebate to Members who add 
liquidity in securities priced below $5.00. The Exchange proposes to 
increase the number of securities to which a rebate applies by changing 
to a no-rebate structure for liquidity adders in securities priced 
below $1.00. The Exchange also proposes to eliminate the rebate of 
$0.0001 per share for trades that remove liquidity in securities priced 
below $5.00, and instead, to allow Members to remove liquidity in 
securities priced below $1.00 without a charge.
(iii) Standard Routing Fee and Routing Fee for Securities Priced Below 
$1.00
    The Exchange proposes to decrease the fee charged by the Exchange 
for its CYCLE routing strategy \5\ from $0.0026 per share to $0.0025 
per share. To be consistent with this change, the Exchange proposes to 
charge 0.25%, rather than 0.26%, 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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    \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) Dark Scan Rebate
    Finally, the Exchange proposes to change its fee structure for 
Modified Destination Specific Orders routed to a dark liquidity venue 
(referred to by the Exchange as ``Dark Scan''). Rather than charging a 
fee for Dark Scan orders, which is currently $0.0005, the Exchange 
proposes to provide a rebate of $0.0001. Because this change is a 
change from a fee to a rebate, the Exchange proposes changing the 
heading of the applicable section to ``Other Non-Standard Routing 
Options,'' rather than referring to ``Other Non-Standard Routing 
Charges''.
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.\6\ 
Specifically, the Exchange believes that the proposed rule change is 
consistent with Section 6(b)(4) of the Act,\7\ 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 rebates are competitive with those charged by other venues and that 
the changes it has proposed will simplify the Exchange's pricing model. 
Finally, the Exchange believes that the proposed rates are equitable in 
that they apply uniformly to all Members.
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    \6\ 15 U.S.C. 78f.
    \7\ 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 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 proposed rule change has been designated as a fee 
change pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and Rule 19b-
4(f)(2) thereunder,\9\ 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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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
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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-2009-010 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-2009-010. 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-2009-010 and should be submitted on or 
before June 4, 2009.


[[Page 22788]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-11264 Filed 5-13-09; 8:45 am]
BILLING CODE 8010-01-P