[Federal Register Volume 81, Number 8 (Wednesday, January 13, 2016)]
[Notices]
[Pages 1657-1661]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-00464]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76849; File No. SR-BATS-2015-121]
Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Changes to Rules
11.5, Registration of Market Makers, 11.6, Obligations of Market Maker
Authorized Traders, 11.7, Registration of Market Makers in a Security,
and 11.8, Obligations of Market Makers
January 7, 2016.
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 December 29, 2015, 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
Exchange has designated this proposal as a ``non-controversial''
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and
Rule 19b-4(f)(6)(iii) thereunder,\4\ which renders it 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).
\4\ 17 CFR 240.19b-4(f)(6)(iii).
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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 Rules 11.5, Registration of
Market Makers, 11.6, Obligations of Market Maker Authorized Traders,
11.7, Registration of Market Makers in a Security, and 11.8,
Obligations of Market Makers, in order to update certain provisions and
conform to the rules of EDGA Exchange, Inc. (``EDGA''), EDGX Exchange,
Inc. (``EDGX''), Exchange's equity options trading platform (``BZX
Options''), EDGX's equity options trading platform (``EDGX Options''),
and the Nasdaq Stock Market LLC (``Nasdaq'').\5\
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\5\ See EDGA and EDGX Rules 11.17, 11.18, 11.19, and 11.20; BZX
Options Rule 22.6(d)(4), (5), and (7); EDGX Options Rule 22.6(d)(4),
(5), and (7); and Nasdaq Rules Rule 4613(a)(2)(ii) [sic],
4613(a)(2)(D) and (E).
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The text of the proposed rule change is available at the Exchange's
Web site at 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.
[[Page 1658]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
In early 2014, the Exchange and its affiliate, BATS Y-Exchange,
Inc. (``BYX''), received approval to effect a merger (the ``Merger'')
of the Exchange's parent company, BATS Global Markets, Inc., with
Direct Edge Holdings LLC, the indirect parent of EDGX and EDGA
(together with BZX, BYX and EDGX, the ``BGM Affiliated Exchanges'').\6\
In the context of the Merger, the BGM Affiliated Exchanges are working
to align their rules, retaining only intended differences between the
BGM Affiliated Exchanges. Thus, the Exchange proposes to amend Rules
11.5, Registration of Market Makers, 11.6, Obligations of Market Maker
Authorized Traders, 11.7, Registration of Market Makers in a Security,
and 11.8, Obligations of Market Makers, in order to update certain
provisions and conform to the rules of EDGA and EDGX and provide a
consistent rule set across each of the BGM Affiliated Exchanges.\7\ As
amended, Exchange Rules 11.5, 11.6, 11.7, and 11.8 would be identical
to EDGA and EDGX Rules 11.17, 11.18, 11.19, and 11.20 but for different
cross references to Exchange Rules that are due to the different rule
numbering amongst the Exchange, EDGA and EDGX.\8\
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\6\ See Securities Exchange Act Release No. 71375 (January 23,
2014), 79 FR 4771 (January 29, 2014) (SR-BATS-2013-059; SR-BYX-2013-
039).
\7\ The Exchange notes that BYX intends to file an identical
proposal with the Commission to amend its Rules 11.5, 11.6, 11.7,
and 11.8 to updated certain provisions and conform to EDGA and EDGX
Rules 11.17, 11.18, 11.19, and 11.20. The Exchange also notes that
EDGA and EDGX intend to file proposals with the Commission to amend
Rules 11.17, 11.18, 11.19, and 11.20 to update certain provisions to
harmonize with the changes to Exchange Rules 11.5, 11.6, 11.7, and
11.8 proposed herein.
\8\ The Exchange notes that the substance of the rules that are
cross-referenced in Rule 11.5, 11.6, 11.7 and 11.8 are identical or
substantially similar to the corresponding EDGA and EDGX Rules.
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Rule 11.5, Registration of Market Makers
Like EDGA and EDGX Rule 11.17, Exchange Rule 11.5 governs the
registration of Market Makers on the Exchange. In particular,
paragraphs (a) and (b) of Rule 11.5 sets forth the application process
for Members seeking to register as Market Makers on the Exchange. The
Exchange proposes to amend paragraphs (c) and (d) of Rule 11.5 to
harmonize Rule 11.5 with EDGA and EDGX Rule 11.17.
Paragraph (c) sets for [sic] the scenarios under which the Exchange
may suspend or terminate a Market Maker's registration which include
where the Market Maker has: (i) substantially of [sic] continuously
failed to engage in dealings in accordance with Rule 11.8 (discussed
below); (ii) failed to meet the minimum net capital requirements set
forth under paragraph (a) of the Rule; and [sic] (iii) maintain a fair
and orderly market. Rule 11.5(c) is substantially similar to EDGA and
EDGX Rules 11.17(c)(1) thru (3). EDGA and EDGX contain an additional
provision under Rule 11.17(c)(4) allowing them to suspend or terminate
a Market Maker's registration where it does not have at least one
registered Market Maker Authorized Trader (``MMAT'') qualified to
perform market making activities as set forth in EDGA and EDGX Rule
11.18(b)(5).\9\ Under proposed Rule 11.5(c)(4), a MMAT whose
registration is suspended pursuant to Exchange Rule 11.6(c) shall not
be deemed qualified within the meaning of Exchange Rule 11.6(c). In
order to harmonize the scenarios under which the Exchange may suspend
or terminate a Market Maker's registration under Rule 11.5(c) with EDGA
and EDGX, the Exchange proposes to adopt the provisions under EDGA and
EDGX Rule 11.17(c)(4) as new subparagraph (c)(4) under Rule 11.5. The
Exchange believes it is reasonable to suspend or terminate a Market
Maker's registration where it does not have at least one registered
MMAT qualified to perform market making activities as the absence of a
qualified MMAT would impede its ability to satisfy its market making
obligations. To accommodate the addition of subparagraph (c)(4) under
Rule 11.5, the Exchange also proposes to relocate the ``or'' from the
end of subparagraph (c)(2) to the end of subparagraph (c)(3).
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\9\ Under Exchange Rule 11.6(b)(5), a Market Maker must ensure
that a MMAT is properly qualified to perform market making
activities, including but not limited to ensuring the MMAT has met
the requirements set forth in Exchange Rule 11.6(b)(2). In addition,
the Exchange notes that EDGA and EDGX Rules [sic] Rule 11.17(c)(4)
currently reference EDGA and EDGX Rules 11.19(b)(5). The Exchange
notes that this reference should be to EDGA and EDGX Rules
11.18(b)(5) and that EDGA and EDGX intend to include this correction
in an upcoming rule filing to be submitted to the Commission.
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Lastly, to conform to EDGA and EDGX Rules 11.17(d), the Exchange
proposes to amend paragraph (d) or [sic] Rule 11.5 to remove the letter
``s'' from after the word ``interests''.
Rule 11.6, Obligations of Market Maker Authorized Traders
Like EDGA and EDGX Rules 11.18, Exchange Rule 11.6 governs the
registration of MMATs. The Exchange proposes to amend paragraph (b)(4)
to remove the letter ``s'' from after the word ``interests'' to
harmonize Rule 11.6 with EDGA and EDGX Rule 11.18.
Rule 11.7, Registration of Market Makers in a Security
Like EDGA and EDGX Rules 11.19, Exchange Rule 11.7 sets forth the
process for a Market Maker to become registered in a newly authorized
security or in a security already admitted to dealings on the Exchange.
The Exchange proposes to make the following changes to harmonize Rule
11.7 with EDGA and EDGX Rule 11.19:
Amend paragraph (a) to state that registration in a
security shall become effective on the same day as the Exchange's
approval of the registration, unless otherwise provided by the
Exchange; rather than the day following the following the Exchange's
approval of the registration. This proposed amendment would harmonize
Exchange Rule 11.7(a) with EDGA and EDGX Rules 11.19(a) in order to
provide for consistent timeframes within which a registration may
become effective across each of the BGM Affiliated Exchanges. Also,
allowing for a registration to become effective on the same day as
Exchange approval would enable a Market Maker to immediately provide
liquidity in a security, rather than waiting until the following
trading day. The Exchange would continue to maintain the authority to
delay the effectiveness of the registration due to the Market Maker
satisfying additional procedural requirements, such as the daily
notification to the Exchange of the symbols to which it will make a
market in on a particular trading day;
Amend paragraph (a)(4) to replace the term ``they are''
with ``Market Maker is'';
amend paragraph (a)(5) to add an ``and'' to the end of the
paragraph; and
amend paragraph (b) to remove the letter ``s'' from after
the word ``interests''.
The changes proposed above would harmonize Exchange Rule 11.7 with
EDGA and EDGX Rules 11.19.
Rule 11.8, Obligations of Market Makers
Like EDGA and EDGX Rules 11.20, Exchange Rule 11.8 sets forth the
obligations of Market Makers. In short, Members who are registered as
Market Makers in one or more securities traded on the Exchange must
engage in a course of dealings for their own account to assist in the
maintenance, insofar as reasonably practicable, of fair and orderly
markets on the Exchange in accordance with these Rules. The
[[Page 1659]]
Exchange proposes to make the following changes to harmonize Rule
11.8(a), (c), and (d) with EDGA and EDGX Rule 11.19:
Amend subparagraph (a)(1) to clarify that the Market Maker
must maintain continuous, two-sided quotations; \10\
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\10\ The Exchange does not propose to amend a Market Maker's
quoting obligations. The proposed change is simply intended to make
clear that the obligation is to maintain a continuous, two-sided
quotation.
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amend paragraph (c) to: (i) Replace in the first sentence
``or'' with ``including, but without limitation'' and ``the'' with
``its''; (ii) delete the ``other'' from the second sentence; and (iii)
add an ``s'' to the word ``power'' in the second sentence;
amend paragraph (d)(1) to: (i) Add ``Continuous'' to the
title ``Two-Sided Quote Obligations''; \11\
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\11\ Id.
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amend paragraphs (d)(2) and (d)(2)(C) to replace the word
``under'' with ``of'' before Regulation NMS;
amend paragraph (d)(2)(A) to replace ``from'' with ``as
reported by'' before reference to the responsible single plan
processor; and
amend paragraph (d)(2)(B) to replace ``received from''
with ``reported by'' before reference to the responsible single plan
processor.
The Exchange also proposes to amend Rule 11.8(d)(1) to clarify the
scenarios in which a Market Maker's two-sided quoting obligation may be
temporarily suspended or alleviated. The provisions proposed to be
added are each substantially similar to the rules of BZX Options and
EDGX Options.\12\ Proposed Rule 11.8(d)(1)(A) addresses a Market
Maker's ability to satisfy the quoting standard in the event of a
technical failure or system limitation. In particular, if a technical
failure or limitation of a system of the Exchange prevents the Market
Maker from maintaining or communicating to the Exchange timely and
accurate quotes in each security in which a Member is registered as a
Market Maker, the duration of such failure shall not be considered in
determining whether the Market Maker has satisfied the quoting standard
with respect to that security.\13\
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\12\ See BZX Options Rule 22.6(d)(4), (5), and (7). See also
EDGX Options Rule 22.6(d)(4), (5), and (7).
\13\ See Securities Exchange Act Release No. 71229 [sic]
(December 18, 2013), 78 FR 77736 (December 24, 2013) (SR-BATS-2013-
062) (Notice of Filing and Immediate Effectiveness of a Proposed
Rule Change to Modify BATS Options Market Maker Continuous Quoting
Obligation Rules).
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In addition, proposed Rule 11.8(d)(1)(B) addresses a Market Maker's
ability to satisfy the quoting standard during a halt, suspension or
pause. A Market Maker's quoting obligation under Rule 11.8 would be
suspended during a trading halt, suspension, or pause in the
security.\14\ A Market Maker's quoting obligation would recommence
after the first regular way transaction on the primary listing market
following such halt, suspension, or pause in the security, as reported
by the responsible single plan processor.\15\ A Market Maker's quoting
obligation would also be suspended under Rule 11.8(d)(1)(B) for the
duration that an NMS stock is in a Limit State or a Straddle State
declared pursuant to the Plan to Address Extraordinary Market
Volatility Pursuant to Rule 608 of Regulation NMS under the Act (the
``Limit Up-Limit Down Plan'' or ``Plan'').\16\
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\14\ The Exchange notes that proposed Rule 11.8(d)(B) would
differ from BZX Options and EDGX Options Rules 22.6(d)(5) in so far
as proposed Rule 11.8(d)(B) references ``security'' rather than
``underlying security'' in order to conform to the equities markets.
\15\ See also Nasdaq Stock Market LLC (``Nasdaq'') Rule
4613(a)(2)(ii).
\16\ See BZX and BYX Rules 11.18(e). See also EDGA and EDGX
Rules 11.16(e). See also Securities Exchange Act Release No. 67091
(May 31, 2012), 77 FR 33498 (June 6, 2012) (the ``Limit Up-Limit
Down Release'').
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Under proposed Rule 11.8(d)(1)(C), the Exchange would have the
ability to consider other exceptions to the Two-Sided Obligation based
on demonstrated legal or regulatory requirements or other mitigating
circumstances. For example, a Market Maker must implement the pre-trade
and other risk controls required by Rule 15c3-5 of the Act (the
``Market Access Rule'') with respect to all of their quoting activity.
These pre-trade risk controls must be reasonably designed to
systemically limit financial exposure and ensure compliance with all
regulatory requirements. The risk controls a Market Maker may have in
place to comply with the Market Access Rule may prevent that Market
Maker from satisfying its quoting obligation. In such case, the
Exchange would consider whether the Market Maker's failure to satisfy
its quoting obligation due to its compliance with the Market Access
Rule was proper.
Lastly, the Exchange proposes to amend its definitions of
``Designated Percentage'' and ``Defined Limit'' under Rules
11.8(d)(2)(D) and (E) respectively to be substantially similar to
Nasdaq Rules 4613(a)(2)(D) and (E). The pricing obligations applicable
to quotations of Market Makers are based on the Designated Percentage
and the Defined Limit, which are determined based on the applicable
trigger percentage. The amended definitions would include revised
percentages and updated descriptions of the categories of securities
that are subject to those percentages. The Exchange notes that the
percentages discussed below in the proposed definitions of Designated
Percentage and Defined Limit are currently included in Interpretation
and Policy .01 to Rule 11.8. Therefore, the Exchange is not proposing
new percentages governing a Market Maker's quoting obligations; it is
seeking to adopt revised definitions that are substantially similar to
that of Nasdaq in order to provide consistent rules with regard to
Market Maker's quoting obligations.\17\ The Exchange believes
consistent definitions would avoid confusion amongst market
participants that make markets on multiple venues.
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\17\ The Exchange proposed to categorize securities included in
the S&P 500[supreg] Index, Russell 1000[supreg] Index, and a pilot
list of Exchange Traded Products as Tier 1 NMS Stocks under the
under the Limit Up-Limit Down Plan. Securities not included in the
S&P 500[supreg] Index, Russell 1000[supreg] Index, or in the pilot
list of Exchange Traded Products would be categorized as Tier 2 NMS
Stocks under the under the Limit Up-Limit Down Plan. Nasdaq Rule
4613(a)(2)(D) and (E) references securities as included in the S&P
500[supreg] Index, Russell 1000[supreg] Index, and a pilot list of
Exchange Traded Products as such and those that are not as Tier 2
NMS Stocks. The Exchange notes that EDGA and EDGX also intent [sic]
to amend their definitions of Designated Percentage and Defined
Limit to mirror that proposed herein.
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The Exchange currently defines Designated Percentage under Rule
11.8(d)(2)(D) as the individual stock pause trigger percentage under
the applicable rules of a primary listing market less: Two (2)
percentage points for securities that are included in the S&P
500[supreg] Index, Russell 1000[supreg] Index, and a pilot list of
Exchange Traded Products and for all other NMS stocks with a price
equal to or greater than $1.00 per share; and twenty (20) percentage
points for all NMS stocks with a price less than $1.00 per share that
are not included in the S&P 500[supreg] Index, Russell 1000[supreg]
Index, and a pilot list of Exchange Traded Products. Exchange Rule
11.8(d)(2)(D) also states that for times during Regular Trading Hours
\18\ when stock pause triggers are not in effect under the rules of the
primary listing market, the Designated Percentage will be 20% for
securities included in the S&P 500[supreg] Index, Russell 1000[supreg]
Index, and a pilot list of Exchange Traded Products. The Designated
Percentage will remain the same throughout Regular Trading Hours for
all other NMS stocks.
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\18\ See Exchange Rule 1.5(w).
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As amended, Designated Percentage would be defined as 8% for Tier 1
NMS Stocks under the Limit Up-Limit Down
[[Page 1660]]
Plan,\19\ 28% for Tier 2 NMS Stocks under the Limit Up-Limit Down Plan
\20\ with a price equal to or greater than $1.00, and 30% for Tier 2
NMS Stocks under the Limit Up-Limit Down Plan with a price less than
$1.00, except that between 9:30 a.m. and 9:45 a.m. and between 3:35
p.m. and the close of trading, when Exchange Rule 11.18(b) is not in
effect, the Designated Percentage shall be 20% for Tier 1 NMS Stocks
under the Limit Up-Limit Down Plan, 28% for Tier 2 NMS Stocks under the
Limit Up-Limit Down Plan with a price equal to or greater than $1.00,
and 30% for Tier 2 NMS Stocks under the Limit Up-Limit Down Plan with a
price less than $1.00.
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\19\ Tier 1 NMS Stocks under the Limit Up-Limit Down Plan are
securities that are included in the S&P 500[supreg] Index, Russell
1000[supreg] Index, and a pilot list of Exchange Traded Products.
See the Limit Up-Limit Down Release supra note 16.
\20\ Tier 2 NMS Stocks under the Limit Up-Limit Down Plan are
securities that are not included in the S&P 500[supreg] Index,
Russell 1000[supreg] Index, and a pilot list of Exchange Traded
Products. Id.
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The Exchange currently defines Defined Limit under Rule
11.8(d)(2)(E) as the individual stock pause trigger percentage under
the applicable rules of a primary listing market less one-half (\1/2\)
percentage point for securities that are included in the S&P
500[supreg] Index, Russell 1000[supreg] Index, and a pilot list of
Exchange Traded Products and for all other NMS stocks with a price
equal to or greater than $1.00 per share; and eighteen and one-half
(18.5) percentage points for all NMS stocks with a price less than
$1.00 per share that are not included in the S&P 500[supreg] Index,
Russell 1000[supreg] Index, and a pilot list of Exchange Traded
Products. As amended, Defined Limit would be defined as 9.5% for Tier 1
NMS Stocks under the Limit Up-Limit Down Plan, 29.5% for Tier 2 NMS
Stocks under the Limit Up-Limit Down Plan with a price equal to or
greater than $1.00, and 31.5% for Tier 2 NMS Stocks under the Limit Up-
Limit Down Plan with a price less than $1.00, except that between 9:30
a.m. and 9:45 a.m. and between 3:35 p.m. and the close of trading, when
Exchange Rule 11.18(b) is not in effect, the Defined Limit shall be
21.5% for Tier 1 NMS Stocks under the Limit Up-Limit Down Plan, 29.5%
for Tier 2 NMS Stocks under the Limit Up-Limit Down Plan with a price
equal to or greater than $1.00, and 31.5% for Tier 2 NMS Stocks under
the Limit Up-Limit Down Plan with a price less than $1.00. Exchange
Rule 11.8(d)(2)(E) also states that for times during Regular Trading
Hours when stock pause triggers are not in effect under the rules of
the primary listing market, the Defined Limit will be 21.5% for
securities included in the S&P 500[supreg] Index, Russell 1000[supreg]
Index, and a pilot list of Exchange Traded Products. The Defined Limit
will remain the same throughout Regular Trading Hours for all other NMS
stocks.
The Exchange proposes to delete Interpretation and Policy .01 to
Rule 11.8 as its content would now be duplicative with the definitions
of Designated Percentage and Defined Limit under proposed Rules
11.8(d)(2)(D) and (E).
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(b) of the Act.\21\
Specifically, the proposed change is consistent with Section 6(b)(5) of
the Act,\22\ because it is 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, and,
in general, to protect investors and the public interest. As mentioned
above, the proposed rule changes, combined with the planned filing for
the BYX, EDGA, and EDGX, would allow the BGM Affiliated Exchanges to
provide a consistent set of rules as it relates to the registration and
obligations of Market Makers. Consistent rules, in turn, will simplify
the regulatory requirements for Market Makers on the Exchange that are
also Market Makers on EDGA, EDGX and/or BYX. The proposed rule change
would provide greater harmonization between rules of similar purpose on
the BGM Affiliated Exchanges, resulting in greater uniformity and less
burdensome and more efficient regulatory compliance and understanding
of Exchange Rules. As such, the proposed rule change would foster
cooperation and coordination with persons engaged in facilitating
transactions in securities and would remove impediments to and perfect
the mechanism of a free and open market and a national market system.
Similarly, the Exchange also believes that, by harmonizing the rules
across each BGM Affiliated Exchange, the proposal will enhance the
Exchange's ability to fairly and efficiently regulate its Market Makers
by utilizing a consistent rule set and obligations across each of the
BGM Affiliated Exchanges. Consistent rules would enable the Exchange to
apply identical standards to that of its affiliates, alleviating
confusion by Market Makers on who may also be registered as such on
BYX, EDGA, or EDGX, thereby promoting just and equitable principles of
trade in accordance with Section 6(b)(5) of the Act.\23\
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\21\ 15 U.S.C. 78f(b).
\22\ 15 U.S.C. 78f(b)(5).
\23\ Id.
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The Exchange also believes the proposed amendments to Rule 11.8(d)
are consistent with Section 6(b)(5) of the Act,\24\ 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, and, in general, to protect investors and
the public interest. The proposed amendments to Rule 11.8(d)(1) are
meant to clarify the scenarios in which a Market Maker's two-sided
quoting obligation may be temporarily suspended or alleviated. The
provisions proposed to be added are each substantially similar to the
rules of the BZX Options, EDGX Options and Nasdaq.\25\ The Exchange
believes it is appropriate to have consistent rules across its equities
and options platforms. Consistent rules would aid in alleviating
confusion amongst those that are Members on both platforms. The
Exchange believes it is reasonable to suspend or alleviate a Market
Maker's quoting obligations in the event of a technical or system
limitation, during a trading halt, suspension or pause, as well as
where demonstrated legal or regulatory requirements prevent the Market
Maker from quoting. In each scenario, the Exchange will review the
reasons behind the Market Maker inability to quote for compliance with
the Rule. In addition, the percentages included in the proposed
definitions of Designated Percentage and Defined Limit are currently
included in Interpretation and Policy .01 to Rule 11.8. Therefore, the
Exchange is not proposing to new percentages governing a Market Maker's
quoting obligations; it is seeking to adopt revised definitions that
are substantially similar to that of Nasdaq in order to provide a
consistent rules with regard to Market Makers quoting obligations.
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\24\ 15 U.S.C. 78f(b)(5).
\25\ See supra notes 12 and 15.
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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
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the act. To the contrary, allowing the
Exchange to
[[Page 1661]]
implement substantively identical rules across each of the BGM
Affiliated Exchanges regarding Market Maker registration and their
obligations does not present any competitive issues, but rather is
designed to provide greater harmonization among Exchange, BYX, EDGX,
and EDGA rules of similar purpose. The proposed rule change should,
therefore, result in less burdensome and more efficient regulatory
compliance and understanding of Exchange Rules for common members of
the BGM Affiliated Exchanges and an enhanced ability of the BGM
Affiliated Exchanges to fairly and efficiently regulate Market Makers.
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: (A)
Significantly affect the protection of investors or the public
interest; (B) impose any significant burden on competition; and (C) by
its terms, 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 \26\ and
paragraph (f)(6) of Rule 19b-4 thereunder,\27\ the Exchange has
designated this rule filing as non-controversial. The Exchange has
given the Commission written notice of its intent to file the proposed
rule change, along with a brief description and text of 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.
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\26\ 15 U.S.C. 78s(b)(3)(A).
\27\ 17 CFR 240.19b-4.
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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: (1)
Necessary or appropriate in the public interest; (2) for the protection
of investors; or (3) otherwise in furtherance of the purposes of the
Act. If the Commission takes such action, the Commission shall
institute proceedings to determine whether the proposed rule should be
approved or 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 No. SR-BATS-2015-121 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 No. SR-BATS-2015-121. 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 No. SR-BATS-2015-121, and should be
submitted on or before February 3, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
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\28\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-00464 Filed 1-12-16; 8:45 am]
BILLING CODE 8011-01-P