[Federal Register Volume 81, Number 37 (Thursday, February 25, 2016)]
[Notices]
[Pages 9556-9557]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-03947]
[[Page 9556]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77187; File No. SR-BYX-2016-04]
Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change to Rule
11.13(b)(3)(H), Order Execution and Routing, To Amend the Operation of
Non-Displayed Orders and Reserve Orders
February 19, 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 February 10, 2016, BATS Y-Exchange, Inc. (the ``Exchange'' or
``BYX'') 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 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 Substance
of the Proposed Rule Change
The Exchange filed a proposal to amend the operation of Non-
Displayed Orders \5\ and Reserve Orders \6\ when they are to be routed
away from the Exchange pursuant to the Post to Away routing option set
forth in Rule 11.13(b)(3)(H).
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\5\ See Exchange Rule 11.9(c)(11).
\6\ See Exchange Rule 11.9(c)(1).
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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.
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
A Non-Displayed Order is an order that is not displayed on the
Exchange.\7\ A Reserve Order is a limit order with a portion of the
quantity displayed (``Display Quantity'') and with a reserve portion of
the quantity (``Reserve Quantity'') that is not displayed.\8\ Both the
Display Quantity and the Reserve Quantity are available for execution
against incoming orders. Under the Post to Away routing option, the
remainder of an order that was previously routed away and returned to
the Exchange may be re-routed to and post on the order book of a
destination on the System routing table \9\ as specified by the
User.\10\
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\7\ See Exchange Rule 11.9(c)(11).
\8\ See Exchange Rule 11.9(c)(1).
\9\ The term ``System routing table'' refers to the proprietary
process for determining the specific trading venues to which the
System routes orders and the order in which it routes them. See
Exchange Rule 11.13(b)(3).
\10\ See Exchange Rule 11.13(b)(3)(H). The Post to Away routing
option can be combined with the following routing options: ROUT,
ROUX, ROUZ, INET, RDOT, RDOX, IOCM and ICMT. Id. An order subject to
the ROUT, ROUX, ROUZ, INET, RDOT, RDOX, IOCM and ICMT routing
options will not be posted to the order book of the Trading Center
to which it is routed. The User may elect that the order be
cancelled or post to the BATS Book [sic] upon its initial return to
the Exchange. Id. Alternatively, if the User had selected the Post
to Away routing option, the order would be currently routed to the
away Trading Center as a Displayed Order.
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Currently, Non-Displayed Orders and Reserve Orders that are routed
to an away Trading Center pursuant to the Post to Away routing option
are routed as fully displayed orders. The Exchange proposes to identify
Non-Displayed Orders and Reserve Orders as such when routed to an away
Trading Center. The Exchange believes doing so is consistent with the
original intent of the order, to be not displayed or to include a
Reserve Quantity.\11\
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\11\ Routable Non-Displayed and Reserve Orders would be handled
in accordance with the rules of the Trading Center to which they are
routed.
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The Exchange, therefore, proposes to amend the definition of Non-
Displayed Orders under Exchange Rule 11.9(c)(11) to state that a Non-
Displayed Order that is to be re-routed pursuant to the Post to Away
routing option set forth in Rule 11.13(b)(3)(H) will be identified as a
Non-Displayed Order when routed to an away Trading Center. Similarly,
the Exchange proposes to amend the definition of a Reserve Order under
Exchange Rule 11.9(c)(1) to state that a Reserve Order that is to be
re-routed pursuant to the Post to Away routing option set forth in Rule
11.13(b)(3)(H) will be identified as a Reserve Order when routed to an
away Trading Center.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\12\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\13\ in particular, in that it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, and to remove
impediments to and perfect the mechanism of a free and open market and
a national market system. The proposal promotes just and equitable
principles of trade by enabling Members to continue to identify their
order as a Non-Displayed Order or Reserve Order when they are routed to
an away Trading Center. The proposal also removes impediments to and
perfects the mechanism of a free and open market and a national market
system by providing Users the flexibility with regard to the handling
of their orders by ensuring that the order is not altered and retains
its original instructions from order entry when it is routed to an away
Trading Center. Doing so ensures that such orders that are routed
pursuant to the Post to Away routing option may be posted to the away
Trading Center's order book consistent with the order's original
instructions.
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\12\ 15 U.S.C. 78f.
\13\ 15 U.S.C. 78f(b)(5).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes its proposed rule change would not impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes the
proposal would enhance competition by attracting additional order flow
to the Exchange because it allows Users to ensure that their order is
not altered and retains its original instructions from order entry when
it is routed to an away Trading Center.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
The Exchange has not solicited, and does not intend to solicit,
comments on
[[Page 9557]]
this proposed rule change. The Exchange has not received any
unsolicited written comments from Members or other interested parties.
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)
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 \14\ and paragraph
(f)(6) of Rule 19b-4 thereunder.\15\ 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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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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 proposal 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-2016-04 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-BYX-2016-04. 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 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-2016-04 and should be
submitted on or before March 17, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-03947 Filed 2-24-16; 8:45 am]
BILLING CODE 8011-01-P