[Federal Register Volume 76, Number 93 (Friday, May 13, 2011)]
[Notices]
[Pages 28108-28110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11767]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64445; File No. SR-BATS-2011-017]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Add BATS 
Rule 11.22, Entitled ``Data Products''

May 9, 2011.
    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 May 5, 2011, BATS Exchange, Inc. (``BATS'' or the ``Exchange'') 
filed with the Securities and Exchange Commission (the ``Commission'') 
the proposed rule change as described in Items I and II below, which 
Items have been prepared by the Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to continue to make available those data 
feeds provided by the Exchange to data recipients \3\ without charge 
and to start making available the Latency Monitoring feed, which will 
also be available without charge. The Exchange also proposes to add 
language to its Rules to memorialize those data feeds that have already 
been approved by the Commission.\4\
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    \3\ Exchange data recipients include Members of the Exchange as 
well as non-Members that have entered into an agreement with the 
Exchange that permits them to receive Exchange data.
    \4\ BATS has separately filed a rule proposal and received 
approval to offer certain data products for which it assesses a fee 
but, outside of its fee schedule, did not propose written rules 
related to such data products. See Securities Exchange Act Release 
No. 61885 (April 9, 2010), 75 FR 10332 (April 16, 2010).
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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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to continue to make 
available, without charge, several of the Exchange's data feeds for 
receipt by Exchange data recipients. In addition, the Exchange proposes 
to introduce a new feed, the Latency Monitoring feed, which will also 
be available without charge. The free data feeds offered and proposed 
to be offered by the Exchange include: (i) TCP PITCH; (ii) TCP FAST 
PITCH; (iii) Multicast PITCH; (iv) TOP;

[[Page 28109]]

(v) DROP; (vi) Historical data; and (vii) Latency Monitoring 
(collectively, the ``Data Feeds''). Lastly, the Exchange proposes to 
add language to its Rules to memorialize those data feeds that have 
already been approved by the Commission (specifically, the Last Sale 
Feed and historical data for equities).\5\
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    \5\ See supra note 4.
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    The Exchange provides detailed and up to date technical information 
regarding each of the Data Feeds currently offered by the Exchange on 
its public Web site.\6\ All orders and executions displayed through the 
Data Feeds are anonymous and do not contain the identity of the party 
that submitted the order.
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    \6\ http://www.batstrading.com/support/#menu-md-docs.
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    By making the Data Feeds available free of charge, the Exchange 
believes that it enhances market transparency and fosters competition 
among orders and markets. At this time, the Exchange does not have 
plans to charge any fee associated with the receipt of the Data 
Feeds.\7\ Of course, should the Exchange determine to charge fees 
associated with the Data Feeds, the Exchange will submit a proposed 
rule change to the Commission in order to implement those fees.
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    \7\ The Exchange does not charge directly for any of the Data 
Feeds, though it does charge for ports used for receipt of data from 
the Exchange in order to offset certain infrastructure costs. These 
fees apply to ports associated with receipt of all of the Data Feeds 
except for Multicast PITCH, recipients of which are provided with 12 
pairs of the requisite ports free of charge. See Securities Exchange 
Act Release No. 60586 (August 28, 2009), 74 FR 46256 (September 8, 
2009) (SR-BATS-2009-026) (order approving proposal to impose fees 
for ports used for order entry and receipt of market data); see also 
Securities Exchange Act Release No. 63857 (February 7, 2011), 76 FR 
7891 (February 11, 2011) (SR-BATS-2011-004) (notice of filing and 
immediate effectiveness of proposed rule change related to BATS 
Exchange fees, including modification of port fees).
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    Below is a description of each of the Data Feeds. As specified in 
the descriptions below, the Data Feeds are applicable either to the 
Exchange's equity securities platform (``BATS Equities''), its equity 
options platform (``BATS Options''), or both.
(i) TCP PITCH
    The BATS TCP PITCH data feed is available for BATS Equties only, 
and provides Exchange data recipients with depth of book quotations and 
execution information based on equity orders entered into the System 
\8\ on an uncompressed feed. The PITCH feeds offered by BATS (including 
TCP FAST PITCH and Multicast PITCH) are the data feeds through which 
Exchange data recipients can receive full, real-time quotation and 
execution information. Each PITCH message reflects the addition, 
deletion or execution of an order in the System. TCP PITCH is the data 
feed used by Exchange data recipients to receive BATS PITCH information 
via a TCP/IP connection.
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    \8\ As defined in BATS Rule 1.5(aa), the term ``System'' means 
``the electronic communications and trading facility designated by 
the Board through which securities orders of Users are consolidated 
for ranking, execution and, when applicable, routing away.''
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(ii) TCP FAST PITCH
    The BATS TCP FAST PITCH data feed is available for BATS Equities 
only. The TCP FAST PITCH data feed, like TCP PITCH, offers depth of 
book quotations and execution information, however, unlike TCP PITCH, 
this data feed is compressed and packaged by BATS prior to transmission 
and is translated by the recipient. The Exchange plans to cease 
offering TCP FAST PITCH effective July 1, 2011.
(iii) Multicast PITCH
    The BATS Multicast PITCH data feed is available for BATS Equities 
and BATS Options. The Multicast PITCH data feed, like TCP PITCH and TCP 
FAST PITCH, offers depth of book quotations and execution information, 
however, unlike BATS' other PITCH data feeds, this data feed is 
transmitted in a manner that can be processed more efficiently by 
recipients.
(iv) TOP
    The BATS TOP data feed is available for BATS Equities only, and 
offers top of book quotations and last sale execution information based 
on equity orders entered into the System. By only providing top of book 
quotations and last sale information, TOP offers data recipients a 
significant reduction in required bandwidth and processing when 
compared to BATS' standard TCP PITCH data feed. The quotations made 
available via TOP provide an aggregated size and do not indicate the 
size or number of individual orders at the best bid or ask.
(v) DROP
    The BATS DROP data feed is available for BATS Equities and BATS 
Options. BATS' DROP data feed offers information regarding the trading 
activity of a specific Member. This feed is typically used by Members 
or clearing firms to monitor trading activity. DROP information is only 
available to the Member to whom the specific data relates and those 
recipients expressly authorized by the Member, such as the Member's 
clearing firm or a third-party vendor who provides services to the 
Member. The Exchange offers two forms of DROP, one of which provides a 
record for each execution and the other of which provides a record of 
each order and each execution.
(vi) Historical Multicast PITCH
    The BATS Historical Multicast PITCH data product is available for 
both BATS Equities and BATS Options, and offers up to three months of 
data on a T+1 basis. Such information can be downloaded from the 
Exchange's Web site. In addition, upon request, the Exchange provides 
data recipients with historical data on external hard drives. Although 
the Exchange charges for historical data related to its equity 
securities platform, Historical Multicast PITCH data related to BATS 
Options is made available to Exchange data recipients without charge. 
Historical data provided by the Exchange can be used for a variety of 
purposes. For instance, data recipients that wish to back-test certain 
trading strategies can use historical data for such purpose.
(vii) Latency Monitoring
    The BATS Latency Monitoring data product will initially be 
available for BATS Equities only. The Latency Monitoring data product 
will offer real-time latency information based on equity orders entered 
into the System to data recipients on an uncompressed feed. This data 
feed will provide various statistics to data recipients based on the 
latency from when an order enters the BATS network until the time that 
the order appears on a particular BATS data feed. The Exchange will 
initially present various statistics aggregated across the exchange and 
also separated by matching engine unit including minimum latency, 
maximum latency, average latency, standard deviation, and the number of 
samples observed. The Exchange may add additional aggregate statistics 
in the future. In addition, the Exchange may also add other latency 
measures to the data feed in the future, to the extent a different 
method becomes relevant. The latency data will not be member or port 
specific. This data feed does not include any quotation or execution 
information.
2. Statutory Basis
    Approval of the rule change proposed in this submission 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(b) of 
the Act.\9\ In particular, the proposed change is consistent with 
Section 6(b)(5) of the

[[Page 28110]]

Act,\10\ because it would promote just and equitable principles of 
trade, remove impediments to, and perfect the mechanism of, a free and 
open market and a national market system, and, in general, protect 
investors and the public interest. Specifically, the Exchange believes 
that this proposal is in keeping with those principles by promoting 
increased transparency through the dissemination of BATS equity and 
options market data along with information regarding the Exchange's 
internal latencies.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 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 imposes 
any burden on competition.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
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 \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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. 
BATS has satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \13\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6) \14\ permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. BATS requests that the 
Commission waive the 30-day operative delay in order to allow BATS to 
continue to provide without interruption the Data Feeds that are 
already available, voluntary, and free to subscribers. In addition, 
BATS requests waiver of the 30-day operative delay for the Latency Feed 
because it is ready for distribution, voluntary, free to receive, and 
contains only aggregate statistical information related to the latency 
of the System. BATS believes that waiver of the operative delay will 
allow it to continue providing market participants that use the Data 
Feeds with useful real-time and historical data concerning orders that 
have been entered, executions that have occurred, and the latency of 
the system, consistent with other products provided by other exchanges. 
The Commission believes that waiving the 30-day operative delay \15\ is 
consistent with the protection of investors and the public interest and 
designates the proposal operative upon filing.
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ Id.
    \15\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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 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 e-mail to [email protected]. Please include 
File Number SR-BATS-2011-017 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 Number SR-BATS-2011-017. 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,\16\ 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, on 
official business days between the hours of 10 a.m. and 3 p.m. Copies 
of the 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-2011-017 and should be submitted on or before June 
3, 2011.
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    \16\ The text of the proposed rule change is available on the 
Commission's Web site at http://www.sec.gov/rules/sro.shtml.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-11767 Filed 5-12-11; 8:45 am]
BILLING CODE 8011-01-P