[Federal Register Volume 77, Number 28 (Friday, February 10, 2012)]
[Notices]
[Pages 7215-7216]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-3093]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66326; File No. SR-BYX-2012-005]


Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Fees for Use of BATS Y-Exchange, Inc.

February 6, 2012.
    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 February 1, 2012, BATS Y-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 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 amend the fee schedule applicable to 
Members \5\ and non-members of the Exchange pursuant to BYX Rules 
15.1(a) and (c). Changes to the fee schedule pursuant to this proposal 
will be effective upon filing.
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    \5\ A Member is any registered broker or dealer that has been 
admitted to membership in the Exchange.
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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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to modify its fee schedule in order to 
accommodate an additional variation of the Exchange's ``TRIM'' routing 
strategy. As defined in BYX Rule 11.13(a)(3)(G), TRIM is a routing 
option under which an order checks the System \6\ for available shares 
and then is sent to destinations on the System routing table. 
Accordingly, the Exchange's current TRIM routing strategy will check 
the Exchange's order book and then route to various venues on the 
Exchange's routing table, including NASDAQ OMX BX, Inc. (``NASDAQ 
BX''), EDGA EXCHANGE, Inc. (``EDGA''), the New York Stock Exchange LLC 
(``NYSE''), BATS Exchange, Inc. (``BZX Exchange'') and certain 
alternative trading systems available through the Exchange's ``DRT'' 
strategy (``DRT Venues'').\7\ In order to provide an additional option 
related to the TRIM routing strategy to Exchange Users,\8\ the Exchange 
is introducing TRIM2, which will route to fewer venues than the full 
list of TRIM routing venues.\9\ Specifically, TRIM2 will limit the 
routing table to NASDAQ BX, EDGA and DRT Venues.
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    \6\ As defined in BYX Rule 1.5(aa), the System is 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.
    \7\ As set forth in BYX Rule 11.13(a)(3)(E), DRT is a routing 
option in which the entering firm instructs the System to route to 
alternative trading systems included in the System routing table. 
Unless otherwise specified, DRT can be combined with and function 
consistent with all other routing options.
    \8\ As defined in BYX Rule 1.5(cc), a User is any Member or 
Sponsored Participant who is authorized to obtain access to the 
System pursuant to Rule 11.3.
    \9\ See also SR-BYX-2012-004, available at www.batstrading.com/regulation.
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    All pricing currently applicable to the TRIM routing strategy will 
apply to TRIM2, with the exception of TRIM2 orders executed at NASDAQ 
BX. In order to fund the development and infrastructure cost of 
creating and maintaining an additional TRIM routing strategy, the 
Exchange proposes to provide a lower rebate for executions pursuant to 
TRIM2 than the rebate actually received for orders executed at NASDAQ 
BX, which are passed on in full for executions resulting from TRIM 
routing. Specifically, the Exchange proposes to provide a rebate of 
$0.0010 per share for executions at NASDAQ BX that result from TRIM2 
routing, rather than the full rebate of $0.0014 per share.
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) of the Act,\11\ 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 also notes that with 
respect to the changes proposed in this filing, although routing 
options are available to all Users, Users are not required to use the 
Exchange's routing services, but instead, the Exchange's routing 
services are completely optional. Members can manage their own routing 
to different venues or can utilize a myriad of other routing solutions 
that are available to market participants.
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    \10\ 15 U.S.C. 78f.
    \11\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed rebates and fees for the 
TRIM2 routing option are reasonable in that they are equivalent to the 
fees charged by the Exchange for the TRIM routing strategy, with the 
exception of executions at NASDAQ BX, as described above. As such, the 
Exchange believes that the proposed non-standard routing fees are 
competitive, fair and reasonable, and non-discriminatory in that they 
are generally designed to mirror the rebate or fee applicable to the 
execution if such routed orders were executed directly by the Member at 
each applicable venue. The Exchange believes that the slightly lower 
rebate provided for TRIM2 executions at NASDAQ BX is reasonable in 
order to help the Exchange cover the cost of developing and maintaining 
an additional routing strategy for Users of the Exchange. The Exchange 
also

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believes that the proposed rebates and fees for TRIM2 are fair and 
equitable and not unreasonably discriminatory in that they apply 
equally to all Exchange Users.

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

    No written comments were solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Pursuant to Section 19(b)(3)(A)(ii) of the Act \12\ and Rule 19b-
4(f)(2) thereunder,\13\ the Exchange has designated this proposal as 
establishing or changing a due, fee, or other charge applicable to the 
Exchange's Members and non-members, which renders the proposed rule 
change effective upon filing.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 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 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.

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-BYX-2012-005 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-BYX-2012-005. 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 
a.m. and 3 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 information that you wish to make available publicly. All 
submissions should refer to File No. SR-BYX-2012-005 and should be 
submitted on or before March 2, 2012.

    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).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-3093 Filed 2-9-12; 8:45 am]
BILLING CODE 8011-01-P