[Federal Register Volume 79, Number 171 (Thursday, September 4, 2014)]
[Notices]
[Pages 52790-52794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-21002]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72945; File No. SR-BATS-2014-038]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing of a Proposed Rule Change to Rules 11.9 and 21.1 of BATS 
Exchange, Inc.

August 28, 2014
    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 August 26, 2014, BATS Exchange, Inc. (the ``Exchange'' or 
``BATS'') 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 
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 the 
Substance of the Proposed Rule Change

    The Exchange filed a proposal to amend Rule 11.9 to add certain 
functionality to the Exchange's cash equities trading platform (``BATS 
Equities''). Consistent with its practice of offering similar 
functionality for the Exchange's equity options trading platform 
(``BATS Options'') as it does for BATS Equities, the Exchange proposes 
to amend Rule 21.1 to add similar functionality to BATS Options.
    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 currently offers various forms of sliding which, in 
all cases, result in the re-pricing of an order to, or ranking and/or 
display of an order at, a price other than an order's limit price in 
order to comply with applicable securities laws and/or Exchange rules. 
Specifically, the Exchange currently offers price sliding to ensure 
compliance with Regulation NMS and Regulation SHO for BATS Equities, as 
well as price sliding for BATS Options to ensure compliance rules 
analogous to Regulation NMS adopted by the Exchange and other options 
exchanges. Price sliding currently offered by the Exchange re-prices 
and displays an order upon entry and in certain cases again re-prices 
and re-displays an order at a more aggressive price one time if and 
when permissible (``single display-price sliding''), and optionally 
continually re-prices an order (``multiple display-price sliding'') 
based on changes in the national best bid (``NBB'') or national best 
offer (``NBO'', and together with the NBB, the ``NBBO''). The Exchange 
proposes to add another optional process, the Price Adjust process, as 
described below. Price Adjust in all contexts for which it is being 
proposed will have to be

[[Page 52791]]

elected by a User \3\ in order to be applied by the Exchange.
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    \3\ As defined in BATS 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.''
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    In contrast to display-price sliding, which is based solely on 
Protected Quotations \4\ at equities markets and options exchanges 
other than the Exchange, Price Adjust would be based on Protected 
Quotations at external markets and at the Exchange. If the Exchange has 
a Protected Quotation that an incoming order to the Exchange locks or 
crosses then such order executes against the resting order, or, if the 
incoming order is a BATS Post Only Order or Partial Post Only at Limit 
Order, such order would be executed in accordance with Rules 11.9(c)(6) 
and (c)(7), respectively, or adjusted pursuant to the Price Adjust 
process, as described in further detail below. Because the Exchange 
will route orders to external markets with locking or crossing 
quotations, the Exchange notes that the Price Adjust process would only 
be applicable to non-routable orders, including BATS Only Orders, BATS 
Post Only Orders and Partial Post Only at Limit Orders. In turn, 
because BATS Only Orders will execute against locking or crossing 
interest on the Exchange (including both Protected Quotations as well 
as any non-displayed interest), the fact that Price Adjust would be 
based on Protected Quotations at the Exchange is only relevant for BATS 
Post Only Orders and Partial Post Only at Limit Orders.
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    \4\ As defined in BATS Rule 1.5(t), applicable to BATS Equities, 
a ``Protected Quotation'' is ``a quotation that is a Protected Bid 
or Protected Offer.'' In turn, the term ``Protected Bid'' or 
``Protected Offer'' means ``a bid or offer in a stock that is (i) 
displayed by an automated trading center; (ii) disseminated pursuant 
to an effective national market system plan; and (iii) an automated 
quotation that is the best bid or best offer of a national 
securities exchange or association.'' As defined in BATS Rule 27.1, 
applicable to BATS Options, a ``Protected Quotation'' is ``a 
Protected Bid or Protected Offer.'' In turn, the term ``Protected 
Bid'' or ``Protected Offer'' means ``a Bid or Offer in an options 
series, respectively, that: (A) Is disseminated pursuant to the OPRA 
Plan; and (B) Is the Best Bid or Best Offer, respectively, displayed 
by an Eligible Exchange.'' An ``Eligible Exchange'' is defined in 
Rule 27.1 as means ``a national securities exchange registered with 
the SEC in accordance with Section 6(a) of the Exchange Act that: 
(a) Is a Participant Exchange in OCC (as that term is defined in 
Section VII of the OCC by-laws); (b) is a party to the OPRA Plan (as 
that term is described in Section I of the OPRA Plan); and (c) if 
the national securities exchange chooses not to become a party to 
this Plan, is a participant in another plan approved by the 
Commission providing for comparable Trade-Through and Locked and 
Crossed Market protection.''
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BATS Equities--Price Adjust
    With respect to price sliding offered to ensure compliance with 
Regulation NMS (``display-price sliding''), under the Exchange's 
current rules for BATS Equities, if, at the time of entry, a non-
routable order would cross a Protected Quotation displayed by another 
trading center the Exchange re-prices and ranks such order at the 
locking price, and displays such order at one minimum price variation 
below the NBO for bids and above the NBB for offers. Similarly, in the 
event a non-routable order that, at the time of entry, would lock a 
Protected Quotation displayed by another trading center, the Exchange 
ranks such order at the locking price and displays the order at one 
minimum price variation below the NBO for bids and above the NBB for 
offers.
    As proposed, under the Price Adjust process, an order eligible for 
display by the Exchange that, at the time of entry, would create a 
violation of Rule 610(d) of Regulation NMS by locking or crossing a 
Protected Quotation of an external market or the Exchange will be 
ranked and displayed by the System at one minimum price variation below 
the current NBO (for bids) or to one minimum price variation above the 
current NBB (for offers). Thus, in contrast to the display-price 
sliding process, the Price Adjust process would both rank and display 
an order at one minimum price variation below the current NBO or above 
the current NBB (rather than ranking an order at the locking price). 
Further, as noted above, the Price Adjust process would adjust the 
price of a BATS Post Only Order or Partial Post Only at Limit Order 
that would lock or cross an order displayed by the Exchange unless such 
order is permitted to remove liquidity as described in Rules 11.9(c)(6) 
and (c)(7), respectively, whereas the display-price sliding process 
would cancel an order back to the User unless it removed liquidity on 
entry.
    The Exchange also proposes to state that in the event the NBBO 
changes \5\ such that an order subject to Price Adjust would not lock 
or cross a Protected Quotation, the order will receive a new timestamp, 
and will be displayed at the price that originally locked the NBO (for 
bids) or NBB (for offers) on entry.
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    \5\ The Exchange notes that it recently filed a proposal 
clarifying the methodology used by the Exchange to calculate the 
NBBO, including the data feeds used to calculate the NBBO as well as 
various types of feedback that update the Exchange's view of the 
NBBO, such as feedback from receipt of Intermarket Sweep Orders with 
a time-in-force of Day and feedback from the Exchange's routing 
broker-dealer, BATS Trading, Inc. See Securities Exchange Act 
Release No. 72685 (July 28, 2014), 79 FR 44889 (August 1, 2014) (SR-
BATS-2014-029).
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    As an example of the Price Adjust process, assume the Exchange has 
a posted and displayed bid to buy 100 shares of a security priced at 
$10.10 per share and a posted and displayed offer to sell 100 shares at 
$10.13 per share. Assume the NBBO is $10.10 by $10.12. If the Exchange 
receives a non-routable bid to buy 100 shares at $10.12 per share the 
Exchange will rank and display the order to buy at $10.11 because 
displaying the bid at $10.12 would lock an external market's Protected 
Offer to sell for $10.12. If the NBO then moved to $10.13, the Exchange 
would un-slide the bid to buy and rank and display it at its limit 
price of $10.12.
    As an example of an order executed while subject to the Price 
Adjust process before being un-slid by the Exchange, assume the 
Exchange has a posted and displayed bid to buy 100 shares of a security 
priced at $10.10 per share and a posted and displayed offer to sell 100 
shares at $10.13 per share. Assume the NBBO is $10.10 by $10.12. If the 
Exchange receives a non-routable bid to buy 100 shares at $10.12 per 
share the Exchange will rank and display the order to buy at $10.11 
because displaying the bid at $10.12 would lock an external market's 
Protected Offer to sell for $10.12. Assume next that the Exchange 
receives an offer to sell 100 shares at $10.11. The incoming order to 
sell will execute at $10.11 against the resting bid to buy 100 shares 
(originally priced at $10.12) that has been slid pursuant to the Price 
Adjust process. Thus, the order executes at a full penny per share 
better than if it were ranked at the locking price of $10.12 (buying 
for $10.11 rather than $10.12 per share).
    Similarly, assume the Exchange has a posted and displayed bid to 
buy 100 shares of a security priced at $10.10 per share and a posted 
and displayed offer to sell 100 shares at $10.12 per share. Assume the 
NBBO is also $10.10 by $10.12. If the Exchange receives a BATS Post 
Only bid to buy 100 shares at $10.12 per share the Exchange will rank 
and display the order to buy at $10.11 because displaying the bid at 
$10.12 would lock the Exchange's Protected Offer to sell for $10.12 and 
the order would not remove liquidity pursuant to Rule 11.9(c)(6). If 
the NBO, including the Exchange's best offer, then moved to $10.13, the 
Exchange would un-slide the bid to buy and rank and display it at its 
limit price of $10.12.
    The Exchange also proposes to state that all orders that are re-
ranked and re-displayed pursuant to Price Adjust will retain their 
priority as compared to other orders subject to Price Adjust based upon 
the time such orders were initially received by the Exchange. Further, 
as proposed, following the

[[Page 52792]]

initial ranking and display of an order subject to Price Adjust, an 
order will only be re-ranked and re-displayed to the extent it achieves 
a more aggressive price.
    In order to offer multiple price sliding to Exchange Users that 
select Price Adjust, the Exchange proposes to make clear that the 
ranked and displayed prices of an order subject to Price Adjust may be 
adjusted once or multiple times depending upon the instructions of a 
User and changes to the prevailing NBBO. As is true for display-price 
sliding, multiple price sliding pursuant to Price Adjust would be 
optional and would have to be explicitly selected by a User before it 
will be applied. Orders subject to multiple price sliding for Price 
Adjust will be permitted to move all the way back to their most 
aggressive price, whereas orders subject to Price Adjust may not be 
adjusted to their most aggressive price, depending upon market 
conditions and the limit price of the order upon entry.
    As an example of multiple price sliding for Price Adjust assume the 
Exchange has a posted and displayed bid to buy 100 shares of a security 
priced at $10.10 per share and a posted and displayed offer to sell 100 
shares at $10.14 per share. Assume the NBBO is $10.10 by $10.12. If the 
Exchange receives a non-routable bid to buy 100 shares at $10.13 per 
share, the Exchange would rank and display the order to buy at $10.11 
because displaying the bid at $10.13 would cross an external market's 
Protected Offer to sell for $10.12. If the NBO then moved to $10.13, 
the Exchange would un-slide the bid to buy and rank and display it at 
$10.12. Under the proposed single Price Adjust functionality, the 
Exchange would not further adjust the ranked or displayed price 
following this un-slide. However, under multiple price sliding for 
Price Adjust if the NBO then moved to $10.14, the Exchange would un-
slide the bid to buy and rank and display it at its full limit price of 
$10.13.
    The Exchange currently offers display-price sliding functionality 
to avoid locking or crossing other markets' Protected Quotations, but 
does not price slide to avoid executions on the Exchange's order book 
(``BATS Book''). Specifically, when the Exchange receives an incoming 
order that could execute against resting displayed liquidity but an 
execution does not occur because such incoming order is designated as 
an order that will not remove liquidity (i.e., a BATS Post Only 
Order),\6\ then the Exchange will cancel the incoming order. As noted 
above, the Exchange proposes to make clear in the description of Price 
Adjust that any display-eligible BATS Post Only Order that locks or 
crosses a Protected Quotation displayed by the Exchange upon entry will 
be executed as set forth in Rule 11.9(c)(6) or adjusted pursuant to the 
Price Adjust process. Similarly, the Exchange proposes to make clear 
that any display-eligible Partial Post Only at Limit Order that locks 
or crosses a Protected Quotation displayed by the Exchange upon entry 
will be executed as set forth in Rule 11.9(c)(7) or adjusted pursuant 
to the Price Adjust process. The Exchange reiterates that in contrast 
to the proposed operation of Price Adjust, the existing display-price 
sliding process would instead cancel BATS Post Only orders and BATS 
Partial Post Only at Limit orders that would lock or cross a Protected 
Quotation displayed by the Exchange to the extent such orders are not 
executed on entry.
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    \6\ The Exchange again notes that BATS Post Only Orders are 
permitted to remove liquidity from the BATS Book if the value of 
price improvement associated with such execution equals or exceeds 
the sum of fees charged for such execution and the value of any 
rebate that would be provided if the order posted to the BATS Book 
and subsequently provided liquidity. See Rule 11.9(c)(6). Similarly, 
Partial Post Only at Limit Orders are permitted to remove price 
improving liquidity as well as a User-selected percentage of the 
remaining order at the limit price if, following such removal, the 
order can post at its limit price. See Rule 11.9(c)(7).
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    The Exchange currently applies display-price sliding to Non-
Displayed Orders that cross Protected Quotations of external markets. 
The Exchange proposes language that makes clear that this functionality 
will apply to all orders for which a User has selected either display-
price sliding or Price Adjust. The proposed rule states that Non-
Displayed Orders that are subject to display-price sliding or Price 
Adjust are ranked at the locking price on entry. The proposed 
description also makes clear that price sliding for Non-Displayed 
Orders is functionally equivalent to the handling of displayable orders 
except that such orders will not have a displayed price and will not be 
re-priced again unless such orders cross a Protected Quotation of an 
external market (i.e., such orders are not un-slid). Other than 
updating the language of the rule to reflect that Non-Displayed Orders 
for which a User has selected Price Adjust will be handled in the same 
way as orders subject to display-price sliding, the Exchange is not 
proposing to change its handling of Non-Displayed Orders.
    As an example of the Exchange's handling of Non-Displayed Orders in 
the context of Price Adjust, assume the Exchange has a posted and 
displayed bid to buy 100 shares of a security priced at $10.10 per 
share and a posted and displayed offer to sell 100 shares at $10.13 per 
share. Assume the NBBO is $10.10 by $10.11. If the Exchange receives a 
Non-Displayed Order bid to buy 100 shares at $10.12 per share, the 
Exchange would re-price the order to a $10.11 bid to buy to avoid 
potentially trading through the $10.11 offer displayed as the NBO 
(i.e., to ensure the Exchange will not allow the bid to trade at $10.12 
per share). In the event the NBBO moved to $10.09 by $10.10, the 
Exchange would re-price the Non-Displayed bid to buy 100 shares to 
$10.10 per share. If the NBBO then moved to $10.10 by $10.11, the Non-
Displayed bid would not be re-priced to $10.11, but would remain on the 
Exchange's order book at $10.10. This proposed handling is identical to 
handling of a Non-Displayed Order for which a User has selected 
display-price sliding.
    The Exchange also proposes that in the event the NBBO changes such 
that display eligible orders subject to display-price sliding and Price 
Adjust would not lock or cross a Protected Quotation and are eligible 
to be displayed at a more aggressive price, the System will first 
display all orders subject to display-price sliding at their ranked 
price followed by orders subject to Price Adjust, which will be re-
ranked and re-displayed as set forth above. The Exchange believes it is 
reasonable to un-slide orders subject to display-price sliding before 
it un-slides orders subject to Price Adjust because Price Adjust is a 
less aggressive form of price sliding than display-price sliding, in 
that an order submitted by a User that elects Price Adjust will be 
displayed and ranked at the same price rather than ranked at the 
locking price and displayed at a less aggressive price.
    The Exchange also proposes to make clear that if a User elects to 
apply Price Adjust to an order submitted to BATS Equities, price 
sliding will apply short sale price sliding in connection with the 
handling of the order by the Exchange. The Exchange does not propose to 
modify its short sale price sliding functionality.
BATS Options--Price Adjust
    In order to maintain consistency between analogous processes 
offered by BATS Equities and BATS Options, the Exchange proposes to 
modify the rules of BATS Options to conform to the changes described 
above related to Price Adjust.
    BATS Options currently offers display-price sliding (including 
multiple display-price sliding) offered

[[Page 52793]]

to ensure compliance with locked and crossed market rules relevant to 
participation on BATS Options. The proposed Price Adjust functionality 
for BATS Options is similar to the proposed functionality for BATS 
Equities, with the exception of language related to non-displayed 
orders. BATS Options does not have non-displayed orders, and thus, has 
omitted language regarding Price Adjust functionality applicable to 
non-displayed orders.
    As drafted, Rules 21.1(i) and 21.1(j) are identical to the 
description of display-price sliding set forth in proposed Rule 11.9 
and described above with the exception of minor references necessary 
due to the difference between rules applicable to BATS Equities and 
BATS Options and the omission of certain rule text specific to non-
displayed orders, which are applicable to BATS Equities only. Further, 
the examples set forth above are equally applicable to the operation of 
Price Adjust on BATS Options as they are to the operation of Price 
Adjust on BATS Equities.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with Section 6(b) of the Securities Exchange Act of 1934 (the ``Act'') 
\7\ and further the objectives of Section 6(b)(5) of the Act \8\ 
because they are designed to promote just and equitable principles of 
trade, to remove impediments to and perfect the mechanism of a free and 
open market and a national market system, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, and, in general, to protect investors and the public 
interest. The proposed rule change also is designed to support the 
principles of Section 11A(a)(1) \9\ of the Act in that it seeks to 
assure fair competition among brokers and dealers and among exchange 
markets. The Exchange believes that the proposed changes to offer Price 
Adjust are consistent with Section 6(b)(5) of the Act,\10\ as well as 
Rule 610 of Regulation NMS \11\ and Rule 201 of Regulation SHO.\12\ The 
Exchange is not modifying the overall functionality of price sliding, 
which, to avoid locking or crossing quotations of other market centers 
or to comply with applicable short sale restrictions, displays orders 
at permissible prices while retaining a price at which the User is 
willing to buy or sell, in the event display at such price or an 
execution at such price becomes possible. Instead, the Exchange is 
making changes to adopt an optional form of price sliding, Price 
Adjust, which will rank orders at their displayed price rather than the 
locking price, as described above. Thus, while subject to Price Adjust 
sliding, an order is ranked at a less aggressive price, which may be 
preferable to certain Users that wish to provide liquidity but do not 
wish to cross the spread (i.e., if buying, do not wish to trade at the 
NBO or if selling, do not wish to trade at the NBB). The Exchange 
believes it is reasonable to un-slide display-price sliding orders 
before it un-slides Price Adjust orders because Price Adjust is a less 
aggressive form of price sliding than display-price sliding, in that an 
order submitted by a User would be displayed and ranked at the same 
price rather than ranked at the locking price and displayed at a less 
aggressive price. Thus, because orders subject to display-price sliding 
are ranked at and subject to execution at higher prices when buying and 
lower prices when selling, the Exchange believes that such orders 
should be re-displayed before orders subject to Price Adjust orders in 
response to changes to the NBBO.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ 15 U.S.C. 78k-1(a)(1).
    \10\ Id.
    \11\ 17 CFR 242.610.
    \12\ 17 CFR 242.201.
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    Rule 610(d) requires exchanges to establish, maintain, and enforce 
rules that require members reasonably to avoid ``[d]isplaying 
quotations that lock or cross any protected quotation in an NMS 
stock.'' \13\ Such rules must be ``reasonably designed to assure the 
reconciliation of locked or crossed quotations in an NMS stock,'' and 
must ``prohibit . . . members from engaging in a pattern or practice of 
displaying quotations that lock or cross any quotation in an NMS 
stock.'' \14\ Thus, the Price Adjust process proposed by the Exchange, 
including the functionality proposed for BATS Options, will assist 
Users by displaying orders at permissible prices. Similarly, Rule 201 
of Regulation SHO \15\ requires trading centers to establish, maintain, 
and enforce written policies and procedures reasonably designed to 
prevent the execution or display of a short sale order at a price at or 
below the current NBB under certain circumstances. The Exchange's short 
sale price sliding will continue to operate the same for Users of Price 
Adjust as it does for Users that select the display-price sliding 
process offered by the Exchange.
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    \13\ 17 CFR 242.610(d).
    \14\ Id.
    \15\ 17 CFR 242.201.
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    As noted above, in contrast to display-price sliding, which is 
based solely on Protected Quotations at equities markets and options 
exchanges other than the Exchange, the proposed Price Adjust process 
would be based on Protected Quotations at external markets and at the 
Exchange. Thus, if the Exchange has a Protected Quotation that an 
incoming order to the Exchange locks or crosses then such order 
executes against the resting order, or, if the incoming order is a BATS 
Post Only Order or Partial Post Only at Limit Order, such order would 
be executed in accordance with Rules 11.9(c)(6) and (c)(7), 
respectively, or adjusted pursuant to the Price Adjust process. The 
Exchange believes that it is reasonable and consistent with the Act to 
apply the Price Adjust process to orders on entry that cannot executed 
or displayed at their limit price because this will contribute to 
additional displayed liquidity on the Exchange than if such orders were 
cancelled back to the User. Therefore, the Exchange believes the 
proposal to apply the Price Adjust process to orders that cannot be 
displayed because they would lock or cross displayed contra-side 
interest on the Exchange (and not just external markets) will 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. The Exchange also reiterates that the proposed Price Adjust 
process will enable the System to avoid displaying a locking or 
crossing quotation in order to ensure compliance with Rule 610(d) of 
Regulation NMS.
    The Exchange notes that similar functionality was recently proposed 
by the Exchange's affiliate, EDGX Exchange, Inc. and that the proposed 
rules are based on the Price Adjust functionality set forth in such 
proposal.\16\
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    \16\ See Securities Exchange Act Release No. 72676 (July 25, 
2014), 79 FR 44520 (July 31, 2014) (SR-EDGX-2014-18).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The proposed 
rule change is being proposed as an additional option for Users that 
wish to utilize Exchange price sliding functionality and that the 
functionality is consistent with that offered by the Exchange today as 
well as affiliates and

[[Page 52794]]

competitors of the Exchange. Thus, the Exchange believes this proposed 
rule change is necessary to permit fair competition among national 
securities exchanges.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will: (a) By order approve 
or disapprove such proposed rule change, or (b) institute proceedings 
to determine whether the proposed rule change should be disapproved.

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-BATS-2014-038 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-BATS-2014-038. 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 at 100 F Street NE., 
Washington, DC 20549-1090 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-
BATS-2014-038, and should be submitted on or before September 25, 2014.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-21002 Filed 9-3-14; 8:45 am]
BILLING CODE 8011-01-P