[Federal Register Volume 82, Number 151 (Tuesday, August 8, 2017)]
[Notices]
[Pages 37135-37136]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16635]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81289; File No. SR-BatsBZX-2017-47]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Fees for Use on Bats BZX Exchange, Inc. and Bats BZX Exchange, Inc.'s 
Equity Options Platform

August 2, 2017.
    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 July 24, 2017, Bats BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') 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 filed a proposal to amend the fee schedule applicable 
to Members \5\ and non-Members of the Exchange pursuant to BZX Rules 
15.1(a) and (c).
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    \5\ The term ``Member'' is defined as ``any registered broker or 
dealer that has been admitted to membership in the Exchange.'' See 
Exchange Rule 1.5(n).
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.bats.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 amend its fee schedule applicable to its 
equities trading platform (``BZX Equities'') and its equity options 
trading platform (``BZX Options'') to re-name NYSE MKT as NYSE American 
throughout the fee schedule.
    The Exchange also proposes to modify fees applicable to BZX 
Equities for orders routed to NYSE American in connection with changes 
made by NYSE American to its fee structure. As of July 24, 2017, NYSE 
American transitioned to a fully automated cash equities market. In 
connection with this transition, NYSE American updated its fee 
structure in a variety of ways, including to charge a fee to add non-
displayed liquidity and to provide no rebate (nor charge any fee) to 
add displayed liquidity.\6\
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    \6\ See SR-NYSEMKT-2017-43 (filed July 19, 2017), available at: 
https://www.nyse.com/regulation/rule-filings?market=NYSE.
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    The Exchange proposes to modify the fee structure for orders that 
are routed to and add liquidity at NYSE American, which yielded fee 
code 8 for displayed liquidity and fee code NA for non-displayed 
liquidity. Orders yielding fee code 8 previously received a rebate of 
$0.00150 per share and orders yielding fee code NA were not provided a 
rebate or charged any fee.
    The Exchange proposes to continue to apply fee code 8 to orders 
that add displayed liquidity at NYSE American but to change the rate 
from a rebate to a fee, charging orders that yield fee code 8 a fee of 
$0.00020 per share.
    The Exchange also proposes to remove NYSE American (previously NYSE 
MKT) from the list of venues where an order that adds non-displayed 
liquidity yields fee code NA. The Exchange does not propose to modify 
the rate applied to orders yielding fee code NA, but, as a result of 
this change, orders adding non-displayed liquidity at NYSE American 
will yield fee code NB instead, which is applied to all routed 
executions at an exchange not covered by Fee Code NA that adds non-
displayed liquidity. Similarly, the Exchange does not propose to modify 
the rate applied to orders yielding fee code NB, which is currently a 
fee of $0.00300 per share.
    The Exchange notes that the changes proposed above will not impact 
the current fee structure for orders that add displayed liquidity at 
NYSE American in securities priced below $1.00, which, pursuant to 
footnote 10, are provided without charge and without rebate. However, 
the proposed change to remove NYSE American from fee code NA will 
impact pricing for non-displayed orders routed to NYSE American that 
add liquidity. Specifically, consistent with other orders yielding fee 
code NB, pursuant to footnote 18, orders in securities priced below 
$1.00 will be charged 0.30% of the total dollar value of an execution.
Implementation Date
    The Exchange proposes to implement the above changes to its fee 
schedule immediately.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with the objectives of Section 6 of the Act,\7\ in general, and 
furthers the objectives of Section 6(b)(4),\8\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities. At the outset, the Exchange notes that its proposal to 
refer to NYSE American is consistent with the Act as it will avoid 
confusion with the Exchange's fee schedule by reflecting NYSE MKT's new 
name. The Exchange also 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 or incentives to be insufficient. The proposed rule changes 
are designed to react to pricing changes at NYSE American, to avoid 
subsidizing routing to such venue. Furthermore, the Exchange notes that 
routing through the Exchange's affiliate, Bats Trading, Inc. is 
voluntary.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).

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[[Page 37136]]

    The changes to fee code 8 and to remove NYSE American (NYSE MKT) 
from fee code NA are primarily to designed to react to pricing changes 
at NYSE American, effective July 24, 2017. These changes are necessary 
to avoid providing routing services with pricing that effectively 
subsidizes routing to NYSE American. The Exchange's prior pricing model 
for orders routed to NYSE American was based on a fee structure that 
provided rebates for orders that added liquidity. The Exchange believes 
it is reasonable and fair and equitable to charge fees for orders 
routed to NYSE American that no longer receive a rebate but instead are 
either assessed a fee by NYSE American or are provided free of charge. 
The Exchange also believes the proposed rates are reasonable and not 
unfairly discriminatory in that they are consistent with other rates 
already charged by the Exchange. Finally, the Exchange believes the 
proposed changes are not unfairly discriminatory in that they are 
equally applicable to all Members that use the Exchange's routing 
services to add liquidity at NYSE American.

(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. The Exchange does not believe 
that any of the proposed changes to the Exchange's routing pricing 
burden competition, as they are based on the pricing on other venues. 
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 structures to be unreasonable or excessive. The 
Exchange does not believe the proposed amendments would burden 
intramarket competition as they would be available to all Members 
uniformly.

(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 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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \9\ and paragraph (f) of Rule 19b-4 
thereunder.\10\ 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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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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 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-BatsBZX-2017-47 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-BatsBZX-2017-47. 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 Number SR-BatsBZX-2017-47 and should 
be submitted on or before August 29, 2017.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-16635 Filed 8-7-17; 8:45 am]
 BILLING CODE 8011-01-P