[Federal Register Volume 78, Number 99 (Wednesday, May 22, 2013)]
[Notices]
[Pages 30376-30378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-12161]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69589; File No. SR-BYX-2013-014]


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

May 16, 2013.
    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 3, 2013, 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 the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend the fee schedule applicable to 
Members \5\

[[Page 30377]]

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 fees applicable to Members and non-
members in order to encourage use of connectivity that provides 
redundant access to the Exchange by eliminating any potential fees for 
logical ports \6\ in connection with such redundant access.
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    \6\ A logical port is commonly referred to as a TCP/IP port, and 
represents a port established by the Exchange within the Exchange's 
system for trading and billing purposes. Each logical port 
established is specific to a Member or non-member and grants that 
Member or non-member the ability to operate a specific application, 
such as FIX order entry or Multicast PITCH data receipt.
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    The Exchange currently charges a monthly fee for ports used to 
enter orders in the Exchange's trading system and to receive data from 
the Exchange. The Exchange currently charges $400.00 per month per 
``pair'' of any port type other than a Multicast PITCH Spin Server Port 
or a GRP Port.\7\ Each pair of ports consists of one port at the 
Exchange's primary data center and one port at the Exchange's secondary 
data center. Rather than stating that the fee for logical ports is per 
``pair'', the Exchange proposes to simplify the fee schedule by adding 
a footnote that states that logical port fees are limited to logical 
ports in the Exchange's primary data center and that no logical port 
fees will be assessed for redundant secondary data center ports. 
Although this change to fee schedule language will not result in any 
substantive change to Members or non-members, as the Exchange is 
already providing secondary data center ports free of charge, the 
Exchange believes that this is a simpler way to bill for ports rather 
than billing in pairs. Further, this will allow the Exchange to include 
the concept of a ``primary'' Multicast PITCH data feed, as described 
below, without confusion as related to the Exchange's primary data 
center.
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    \7\ Thus, the charges apply to all Exchange FIX, FIXDROP, BOE, 
DROP, TCP PITCH, and TOP ports.
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    In addition, the Exchange proposes to modify the description of the 
billing for ports related to the Exchange's Multicast PITCH data 
feed.\8\ The Exchange currently provides 32 pairs of Multicast PITCH 
Spin Server Ports free of charge and, if such ports are used, one free 
pair of GRP Ports.\9\ The Exchange charges customers $400.00 per month 
per additional set of 32 Multicast PITCH Spin Server Ports or 
additional pair of GRP Ports. Consistent with the change described 
above, the Exchange proposes to eliminate the concept of port ``pairs'' 
and instead maintain a fee schedule that imposes fees only for logical 
ports at the Exchange's primary data center. Thus, the Exchange will 
continue to provide at the Exchange's primary data center 32 Multicast 
PITCH Spin Server Ports free of charge and, if such ports are used, one 
free GRP Port and all redundant Multicast PITCH Spin Server Ports and 
GRP Ports at the secondary data center will be free of charge. Again, 
although not a substantive change for Members and non-members, the 
Exchange believes that this change simplifies the fee schedule and also 
indicates the Exchange's support for Members and non-members to 
establish sufficient connectivity for business continuity purposes.
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    \8\ The Multicast PITCH data feed is defined in Rule 11.22(c) as 
``an uncompressed data feed that offers depth of book quotations and 
execution information based on equity orders entered into the 
System.''
    \9\ The Exchange notes that its fees for Multicast PITCH 
customers, including the current provision of certain ports free of 
charge, are designed to encourage use of the Exchange's Multicast 
PITCH data feed because the Exchange believes that the feed is its 
most efficient feed, and thus, will reduce infrastructure costs for 
both the Exchange and those who utilize the feed. Any Member or non-
member that has entered into the appropriate agreements with the 
Exchange is permitted to receive Multicast PITCH Spin Server Ports 
and GRP Ports from the Exchange.
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    Similarly, the Exchange proposes to modify its fee schedule in 
order to allow Members and non-members to take redundant Multicast 
PITCH data feeds from the Exchange. The Exchange's Multicast PITCH data 
feed is currently offered through two primary feeds, identified as the 
``A feed'' and the ``C feed'', which contain the same information but 
differ only in the way such feeds are received. The Exchange is in the 
process of commencing to offer redundant versions of the Multicast 
PITCH data feed and does not intend for Members and non-members that 
connect to such feeds to incur additional port fees. As such, the 
Exchange is proposing to modify its description of Multicast PITCH 
logical port fees so that only ports necessary to take a primary feed 
(either A or C), and not redundant versions of such feed, are subject 
to logical port fees. Again, the Exchange wishes to encourage Members 
and non-members to establish connectivity for business continuity 
purposes, including in the event the Exchange's data center is fully 
operational but a specific version of an Exchange data feed becomes 
unavailable.
    Based on the proposal, the change applies to Members that obtain 
ports for direct access to the Exchange, Sponsored Participants 
sponsored by Members to receive direct access to the Exchange, non-
member service bureaus that act as a conduit for orders entered by 
Exchange Members that are their customers, and market data recipients.
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.
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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 its proposed changes to logical port 
fees are reasonable in light of the fact that all such changes are 
intended to ensure that Members and non-members are able to establish 
redundant connections to the Exchange without incurring additional 
logical port fees. In addition, the Exchange believes that the proposed 
changes to fees are equitably allocated among Exchange constituents as 
the cost savings for redundant connectivity will be available to all 
such constituents. The Exchange reiterates that the change

[[Page 30378]]

to limit logical port fess to logical port fees at the primary data 
center is not a substantive change in that Exchange constituents 
currently receive without charge a corresponding port at the secondary 
data center for any port established at the primary data center.
    The Exchange also believes that providing financial incentives to 
use Exchange technology that the Exchange believes is the most 
technologically efficient for the Exchange and its constituents is a 
fair and equitable approach to pricing. Accordingly, the Exchange 
believes that promotion of its Multicast PITCH data feed through the 
continued offering of free logical ports is fair and equitable. The 
Multicast PITCH data feed is available to all Members, and as such, all 
Members have the ability to receive applicable Multicast PITCH ports 
free of charge. Further, the Exchange believes that promoting the use 
of redundant connectivity is reasonable, fair and equitable and not 
unreasonably discriminatory as it is uniform in application amongst 
Members and non-members and should enable such participants to enhance 
their business continuity planning.

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 not necessary or appropriate in 
furtherance of the purposes of the Act. To the contrary, the Exchange 
will not assess new fees as part of the proposal. Instead, the proposal 
is focused on enhancing the clarity of the fee schedule and reducing 
barriers to Exchange Members and non-member constituents that may be 
seeking to establish redundant connections to the Exchange.

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 rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \12\ and paragraph (f) of Rule 19b-4 
thereunder.\13\ 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.
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    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 17 CFR 240.19b-4(f).
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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-2013-014 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-2013-014. 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 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-BYX-2013-014 and should be 
submitted on or before June 12, 2013.

    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. 2013-12161 Filed 5-21-13; 8:45 am]
BILLING CODE 8011-01-P