[Federal Register Volume 82, Number 163 (Thursday, August 24, 2017)]
[Notices]
[Pages 40202-40212]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17909]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81437; File No. SR-BatsBZX-2017-34]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Order 
Instituting Proceedings To Determine Whether To Approve or Disapprove a 
Proposed Rule Change To Introduce Bats Market Close, a Closing Match 
Process for Non-BZX Listed Securities Under New Exchange Rule 11.28

August 18, 2017.

I. Introduction

    On May 5, 2017, Bats BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (the 
``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to adopt Bats Market Close, a closing match 
process for non-BZX listed securities. The Commission published notice 
of filing of the proposed rule change in the Federal Register on May 
22, 2017.\3\ On July 3, 2017, the Commission designated a longer period 
within which to approve the proposed rule change, disapprove the 
proposed rule change, or institute proceedings to determine whether the 
proposed rule change should be disapproved.\4\ As of August 16, 2017, 
the Commission has received forty-six comment letters on the Exchange's 
proposed rule change, including a response from the Exchange.\5\ This 
order

[[Page 40203]]

institutes proceedings under Section 19(b)(2)(B) of the Exchange Act 
\6\ to determine whether to approve or disapprove the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 80683 (May 16, 
2017), 82 FR 23320 (``Notice'').
    \4\ See Securities Exchange Act Release No. 81072, 82 FR 31792 
(July 10, 2017).
    \5\ See Letters to Brent J. Fields, Secretary, Commission, from: 
(1) Donald K. Ross, Jr., Executive Chairman, PDQ Enterprise, LLC, 
dated June 6, 2017 (``PDQ Letter''); (2) Edward S. Knight, Executive 
Vice President and General Counsel, Nasdaq, Inc., dated June 12, 
2017 (``NASDAQ Letter''); (3) Ray Ross, Chief Technology Officer, 
Clearpool Group, dated June 12, 2017 (``Clearpool Letter''); (4) 
Venu Palaparthi, SVP, Compliance, Regulatory and Government Affairs, 
Virtu Financial, dated June 12, 2017 (``Virtu Letter''); (5) 
Theodore R. Lazo, Managing Director and Associate General Counsel, 
SIFMA, dated June 13, 2017 (``SIFMA Letter''); (6) Elizabeth K. 
King, General Counsel and Corporate Secretary, New York Stock 
Exchange, dated June 13, 2017 (``NYSE Letter 1''); (7) John M. 
Bowers, Bowers Securities, dated June 14, 2017 (``Bowers Letter''); 
(8) Jonathan D. Corpina, Senior Managing Partner, Meridian Equity 
Partners, dated June 16, 2017 (``Meridian Letter''); (9) Fady 
Tanios, Chief Executive Officer, and Brian Fraioli, Chief Compliance 
Officer, Americas Executions, LLC, dated June 16, 2017 (``Americas 
Executions Letter''); (10) Ari M. Rubenstein, Co-Founder and Chief 
Executive Officer, GTS Securities LLC, dated June 22, 2017 (``GTS 
Securities Letter''); (11) John Ramsay, Chief Market Policy Officer, 
Investors Exchange LLC, dated June 23, 2017 (``IEX Letter''); (12) 
Jay S. Sidhu, Chairman, Chief Executive Officer, Customers Bancorp, 
Inc., dated June 27, 2017 (``Customers Bancorp Letter''); (13) 
Joanne Freiberger, Vice President, Treasurer, Masonite International 
Corporation, dated June 27, 2017 (``Masonite International 
Letter''); (14) David B. Griffith, Investor Relations Manager, Orion 
Group Holdings, Inc., dated June 27, 2017 (``Orion Group Letter''); 
(15) Kieran O'Sullivan, Chairman, President and CEO, CTS 
Corporation, dated June 28, 2017 (``CTS Corporation Letter''); (16) 
Sherri Brillon, Executive Vice-President and Chief Financial 
Officer, Encana Corporation, dated June 29, 2017 (``Encana 
Letter''); (17) Steven C. Lilly, Chief Financial Officer, Triangle 
Capital Corporation, dated June 29, 2017 (``Triangle Capital 
Letter''); (18) Robert F. McCadden, Executive Vice President and 
Chief Financial Officer, Pennsylvania Real Estate Investment Trust, 
dated June 29, 2017 (``Pennsylvania REIT Letter''); (19) Andrew 
Stevens, General Counsel, IMC Financial Markets, dated June 30, 2017 
(``IMC Letter''); (20) Daniel S. Tucker, Senior Vice President and 
Treasurer, Southern Company, dated July 5, 2017 (``Southern Company 
Letter''); (21) Cole Stevens, Investor Relations Associate, Nobilis 
Health, dated July 6, 2017 (``Nobilis Health Letter''); (22) Mehmet 
Kinak, Head of Global Equity Market Structure & Electronic Trading, 
et al., T. Rowe Price Associates, Inc., dated July 7, 2017 (``T. 
Rowe Price Letter''); (23) David L. Dragics, Senior Vice President, 
Investor Relations, CACI International Inc., dated July 7, 2017 
(``CACI Letter''); (24) Mark A. Stegeman, Senior Vice President & 
CFO, Turning Point Brands, Inc., dated July 12, 2017 (``Turning 
Point Letter''); (25) Jon R. Moeller, Vice Chair and Chief Financial 
Officer, and Deborah J. Majoras, Chief Legal Officer and Secretary, 
The Proctor & Gamble Company, dated July 12, 2017 (``P&G Letter''); 
(26) Christopher A. Iacovella, Chief Executive Officer, Equity 
Dealers of America, dated July 12, 2017 (``EDA Letter''); (27) Rob 
Bernshteyn, Chief Executive Officer, Chairman Board of Directors, 
Coupa Software, Inc., dated July 12, 2017 (``Coupa Software 
Letter''); (28) Sally J. Curley, Senior Vice President, Investor 
Relations, Cardinal Health, Inc., dated July 14, 2017 (``Cardinal 
Health Letter''); (29) Mickey Foster, Vice President, Investor 
Relations, FedEx Corporation, dated July 14, 2017 (``FedEx 
Letter''); (30) Alexander J. Matturri, CEO, S&P Dow Jones Indices, 
dated July 18, 2017 (``SPDJI Letter''); (31) John L. Killea, Chief 
Legal Officer, Stewart Information Services, dated July 19, 2017 
(``Stewart Letter''); (32) M. Farooq Kathwari, Chairman, President & 
CEO, Ethan Allen Interiors, Inc., dated July 24, 2017 (``Ethan Allen 
Letter''); (33) Jeff Green, Founder, Chief Executive Officer and 
Chairman of the Board of Directors, The Trade Desk Inc., dated July 
26, 2017 (``Trade Desk Letter''); (34) James J. Angel, Associate 
Professor, McDonough School of Business, Georgetown University, 
dated July 30, 2017 (``Angel Letter''); (35) Jon Stonehouse, CEO, 
and Tom Staab, CFO, BioCryst Pharmaceuticals, Inc., dated July 31, 
2017 (``BioCryst Letter''); (36) Peter Campbell, Chief Financial 
Officer, Mimecast, dated July 31, 2017 (``Mimecast Letter''); (37) 
Joanne Moffic-Silver, Executive Vice President, General Counsel, and 
Corporate Secretary, Bats Global Markets, Inc., dated August 2, 2017 
(``BZX Letter''); (38) David M. Weisberger, Head of Equities, 
ViableMkts, dated August 3, 2017 (``ViableMkts Letter''); (39) 
Charles Beck, Chief Financial Officer, Digimarc Corporation, dated 
August 3, 2017 (``Digimarc Letter''); (40) Elizabeth K. King, 
General Counsel and Corporate Secretary, New York Stock Exchange, 
dated August 9, 2017 (``NYSE Letter 2''); (41) Representative Sean 
P. Duffy and Representative Gregory W. Meeks, dated August 9, 2017 
(``Duffy/Meeks Letter''); (42) Michael J. Chewens, Senior Executive 
Vice President & Chief Financial Officer, NBT Bancorp Inc., dated 
August 11, 2017 (``NBT Bancorp Letter''); (43) Barry Zwarenstein, 
Chief Financial Officer, Five9, Inc., dated August 11, 2017 (``Five9 
Letter''); (44) William A. Backus, Chief Financial Officer & 
Treasurer, Balchem Corporation, dated August 15, 2017 (``Balchem 
Letter''); (45) Raiford Garrabrant, Director, Investor Relations, 
Cree, Inc., dated August 15, 2017 (``Cree Letter''); and (46) Steven 
Paladino, Executive Vice President & Chief Financial Officer, Henry 
Schein, Inc., dated August 16, 2017 (``Henry Schein Letter''). All 
comments on the proposed rule change are available at: https://www.sec.gov/comments/sr-batsbzx-2017-34/batsbzx201734.htm.
    \6\ 15 U.S.C. 78s(b)(2)(B).
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II. Summary of the Proposed Rule Change

    As described in more detail in the Notice, the Exchange proposes to 
introduce Bats Market Close, a closing match process for non-BZX listed 
securities. For non-BZX listed securities only, the Exchange's System 
\7\ would seek to match buy and sell Market-On-Close (``MOC'') \8\ 
orders designated for participation in Bats Market Close at the 
official closing price for such security published by the primary 
listing market.
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    \7\ The term ``System'' is defined as ``the electronic 
communications and trading facility designated by the Board through 
which securities orders of Users are consolidated for ranking, 
execution and, when applicable, routing away.'' See Exchange Rule 
1.5(aa).
    \8\ The term ``Market-On-Close'' or ``MOC'' means a BZX market 
order that is designated for execution only in the Closing Auction. 
See Exchange Rule 11.23(a)(15). The Exchange proposed to amend the 
description of Market-On-Close orders to include orders designated 
to execute in the proposed Bats Market Close.
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    Members \9\ would be able to enter, cancel or replace MOC orders 
designated for participation in Bats Market Close beginning at 6:00 
a.m. Eastern Time up until 3:35 p.m. Eastern Time (``MOC Cut-Off 
Time'').\10\ Members would not be able to enter, cancel or replace MOC 
orders designated for participation in the proposed Bats Market Close 
after the MOC Cut-Off Time.
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    \9\ 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).
    \10\ Currently, the NYSE designates the cut-off time for the 
entry of Market At-the-Close Orders as 3:45 p.m. Eastern Time. See 
NYSE Rule 123C. Nasdaq, in turn, designates the ``end of the order 
entry period'' as 3:50 p.m. Eastern Time. See Nasdaq Rule 4754.
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    At the MOC Cut-Off Time, the System would match for execution all 
buy and sell MOC orders entered into the System based on time 
priority.\11\ Any remaining balance of unmatched shares would be 
cancelled back to the Member(s). The System would disseminate, via the 
Bats Auction Feed,\12\ the total size of all buy and sell orders 
matched per security via Bats Market Close. All matched buy and sell 
MOC orders would remain on the System until the publication of the 
official closing price by the primary listing market. Upon publication 
of the official closing price by the primary listing market, the System 
would execute all previously matched buy and sell MOC orders at that 
official closing price.\13\
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    \11\ As set forth in proposed Interpretation and Policy .02, the 
Exchange would cancel all MOC orders designated to participate in 
Bats Market Close in the event the Exchange becomes impaired prior 
to the MOC Cut-Off Time and is unable to recover within 5 minutes 
from the MOC Cut-Off Time. The Exchange states that this would 
provide Members time to route their orders to the primary listing 
market's closing auction. Should the Exchange become impaired after 
the MOC Cut-Off Time, proposed Interpretation and Policy .02 states 
that it would retain all matched MOC orders and execute those orders 
at the official closing price once it is operational.
    \12\ The Bats Auction Feed disseminates information regarding 
the current status of price and size information related to auctions 
conducted by the Exchange and is provided at no charge. See Exchange 
Rule 11.22(i). The Exchange also proposed to amend Exchange Rule 
11.22(i) to reflect that the Bats Auction Feed would also include 
the total size of all buy and sell orders matched via Bats Market 
Close.
    \13\ The Exchange would report the execution of all previously 
matched buy and sell orders to applicable securities information 
processor and will designate such trades as ``.P'', Prior Reference 
Price. See Notice, supra note 3, at 23321.
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    The Exchange would utilize the official closing price published by 
the exchange designated by the primary listing market in the case where 
the primary listing market suffers an impairment and is unable to 
perform its closing auction process.\14\ In addition, proposed 
Interpretation and Policy .03, specifies that up until the closing of 
the applicable securities information processor at 8:00 p.m. Eastern 
Time, the Exchange intends to monitor the initial publication of the 
official closing price, and any subsequent changes to the published 
official closing price, and adjust the price of such trades 
accordingly. If there is no initial official closing price published by 
8:00 p.m. Eastern Time for any security, the Exchange would cancel all 
matched MOC orders in such security.
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    \14\ See proposed Interpretation and Policy .01.
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    The Exchange states that it is proposing to adopt Bats Market Close 
in response to requests from market participants, particularly buy-side 
firms,

[[Page 40204]]

for an alternative to the primary listing markets' closing auctions 
that still provides an execution at a security's official closing 
price.\15\ Moreover, the Exchange contends that the proposal would not 
compromise the price discovery function performed by the primary 
listing markets' closing auctions because Bats Market Close would only 
accept MOC orders, and not limit orders, and the Exchange would only 
execute those matched MOC orders that naturally pair off and 
effectively cancel each other out.\16\
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    \15\ See Notice, supra note 3, at 23321. The Exchange 
represented that should the Commission approve the proposed rule 
change, it would file a separate proposal to offer executions of MOC 
orders at the official closing price, to the extent matched on the 
Exchange, at a rate less than the fee charged by the applicable 
primary listing market. The Exchange also represented that it 
intends for such fee to remain lower than the fee charged by the 
applicable primary listing market. See id.
    \16\ See id.
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III. Summary of the Comments

    As of August 16, 2017, the Commission has received forty-six 
comment letters on the proposal, including a response from the 
Exchange.\17\ Six commenters supported the proposal,\18\ and thirty-six 
commenters opposed the proposal.\19\
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    \17\ See supra note 5.
    \18\ See PDQ Letter, supra note 5; Clearpool Letter, supra note 
5; Virtu Letter, supra note 5; SIFMA Letter, supra note 5; IEX 
Letter, supra note 5; and ViableMkts Letter, supra note 5.
    \19\ See NASDAQ Letter, supra note 5; NYSE Letter 1, supra note 
5; Bowers Letter, supra note 5; Meridian Letter, supra note 5; 
Americas Executions Letter, supra note 5; GTS Securities Letter, 
supra note 5; Customers Bancorp Letter, supra note 5; Masonite 
International Letter, supra note 5; Orion Group Letter, supra note 
5; CTS Corporation Letter, supra note 5; Encana Letter, supra note 
5; Triangle Capital Letter, supra note 5; Pennsylvania REIT Letter, 
supra note 5; IMC Letter, supra note 5; Southern Company Letter, 
supra note 5; Nobilis Health Letter, supra note 5; T. Rowe Price 
Letter, supra note 5; CACI Letter, supra note 5; Turning Point 
Letter, supra note 5; P&G Letter, supra note 5; EDA Letter, supra 
note 5; Coupa Software Letter, supra note 5; Cardinal Health Letter, 
supra note 5; FedEx Letter, supra note 5; SPDJI Letter, supra note 
5; Stewart Letter, supra note 5; Ethan Allen Letter, supra note 5; 
Trade Desk Letter, supra note 5; BioCryst Letter, supra note 5; 
Mimecast Letter, supra note 5; Digimarc Letter, supra note 5; NYSE 
Letter 2, supra note 5; NBT Bancorp Letter, supra note 5; Five9 
Letter, supra note 5; Balchem Letter, supra note 5; Cree Letter, 
supra note 5; and Henry Schein Letter, supra note 5. In addition, 
one commenter urged the Commission to conduct a close analysis of 
the proposal and stated that if the Bats proposal would seriously 
degrade the quality of the closing price, then it should be 
rejected. See Angel Letter, supra note 5. Other commenters expressed 
concern that the proposal could disrupt the closing auction process 
on the primary listing markets and asked the Commission to carefully 
consider the impacts of the proposal and whether such impacts would 
be necessary and helpful to public companies. See Duffy/Meeks 
Letter, supra note 5, at 1-2.
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    Six commenters supported the proposal and stated that it would 
increase competition among exchanges for executions of orders at the 
close.\20\ These commenters asserted that increased competition could 
result in reduced fees for market participants.\21\ Three commenters 
characterized the primary listing markets as maintaining a ``monopoly'' 
on orders seeking a closing price with no market competition, which 
they argued has, and would continue to, result in a continual increase 
in fees for such orders if the proposal were not approved.\22\ In 
addition, IEX argued that the proposal does not unduly burden 
competition as exchanges often attempt to compete by adopting 
functionality or fee schedules developed by competitors.\23\ ViableMkts 
also asserted that the proposal is not fully competitive with closing 
auctions, as it does not accept priced orders or disseminate imbalance 
information.\24\ Rather, the proposal competes with other un-priced 
orders in closing auctions, which in its view, is not destructive to 
the mission of the closing auction.\25\
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    \20\ See PDQ Letter, supra note 5; Clearpool Letter, supra note 
5, at 2; Virtu Letter, supra note 5, at 2; SIFMA Letter, supra note 
5, at 2; IEX Letter, supra note 5, at 1; and ViableMkts Letter, 
supra note 5, at 1-2.
    \21\ See PDQ Letter, supra note 5; Clearpool Letter, supra note 
5, at 2; Virtu Letter, supra note 5, at 2; SIFMA Letter, supra note 
5, at 2; IEX Letter, supra note 5, at 1; and ViableMkts Letter, 
supra note 5, at 1.
    \22\ See IEX Letter, supra note 5, at 3; Clearpool Letter, supra 
note 5, at 2; and ViableMkts Letter, supra note 5, at 1-2. However, 
one commenter also stated that it believes the fees charged by NYSE 
and NASDAQ for participating in their closing auctions are not 
excessive and there is no need for additional fee competition for 
executing orders at the official closing price. See GTS Letter, 
supra note 5, at 5.
    \23\ See IEX Letter, supra note 5, at 3.
    \24\ See ViableMkts Letter, supra note 5, at 5.
    \25\ See id. ViableMkts also argued that the effect of this 
competition will most likely be increased volumes at the closing 
price because of lower marginal costs and the potential to attract 
new types of investors to transact at the closing price. See id.
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    In contrast, other commenters argued that the proposal would impede 
fair competition, including by ``free-riding'' on the investments the 
primary listing markets have made in their closing auctions.\26\ 
Specifically, NYSE asserted that the proposal is an unnecessary and 
inappropriate burden on competition as it would allow BZX to use the 
closing prices established through the auction of a primary listing 
market, without bearing any of the costs or risks associated with 
conducting a closing auction.\27\ NYSE added that the existing exchange 
fees for closing auctions reflect the value created by the primary 
listing exchange's complex procedures and technology to determine the 
official closing price of a security.\28\ NYSE emphasized that it has 
invested significantly in intellectual property and software to 
implement systems that facilitate orderly price discovery in the 
closing auction, as well as surveillance tools necessary to monitor 
activity leading up to, and in, the closing process.\29\ NYSE also 
noted that the proposal differs from the NASDAQ and NYSE Arca competing 
auctions in securities not listed on their exchanges in that such 
auctions compete on a level playing field because they do not rely on 
prices established by the primary listing exchange and they serve as an 
alternative method of establishing an official closing price if a 
primary listing exchange is unable to conduct a closing auction due to 
a technology issue.\30\
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    \26\ See NYSE Letter 1, supra note 5, at 9-10; NASDAQ Letter, 
supra note 5, at 6 & 9; BioCryst Letter, supra note 5, at 2; 
Digimarc Letter, supra note 5, at 1-2; NBT Bancorp Letter, supra 
note 5, at 2; Balchem Letter, supra note 5, at 2; and Cree Letter, 
supra note 5, at 2. See also Angel Letter, supra note 5, at 3 
(calling for a rationalization of intellectual property protection 
in order to foster productive innovation).
    \27\ See NYSE Letter 1, supra note 5, at 9 and NYSE Letter 2, 
supra note 5, at 1-3 (adding that the proposal is anti-competitive 
because it is proposing to sell at a lower price the closing prices 
produced through resources expended by NYSE).
    \28\ See NYSE Letter 1, supra note 5, at 9. NYSE also argued 
that the proposal impacts competition for listings, as issuers 
choose where to list their securities based on how primary listing 
exchanges are able to centralize liquidity and perform closing 
auctions. See infra note 116 and accompanying text.
    \29\ See NYSE Letter 2, supra note 5, at 2. Moreover, NYSE 
stated that it dedicates resources to providing systems to 
designated market makers (``DMMs'') necessary to facilitate the 
closing of trading as well as to floor brokers to enter and manage 
their customers' closing interest. See id.
    \30\ See NYSE Letter 1, supra note 5, at 6 and NYSE Letter 2, 
supra note 5, at 3-4.
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    NASDAQ also argued that the proposal would burden competition. 
Specifically, NASDAQ believed that the proposal undermines intra-market 
competition, by removing orders from NASDAQ's auction book and 
prohibiting those orders from competing on NASDAQ, which NASDAQ argued 
is necessary for the exchange to arrive at the most accurate closing 
price.\31\ NASDAQ also stated that, by diverting orders away from NYSE 
and NASDAQ, the proposal would detract from robust price competition 
and discovery that closing auctions ensure.\32\ NASDAQ further argued 
that in order for BZX to meaningfully enhance competition, it would 
have to generate its own closing price, as opposed to merely utilizing 
the closing price generated by a primary listing market.\33\
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    \31\ See NASDAQ Letter, supra note 5, at 9.
    \32\ See NASDAQ Letter, supra note 5, at 10. See also infra 
notes 45-81 and accompanying text (discussing comments on the 
proposal's impact on price discovery).
    \33\ See id., at 13.

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[[Page 40205]]

    In addition, both NYSE and NASDAQ referenced the Commission's 
disapproval of NASDAQ's proposal to create a Benchmark Order as support 
that BZX has not sufficiently satisfied its obligation to justify that 
the proposal is consistent with the Act and not an inappropriate burden 
on competition. NYSE argued that BZX essentially proposes to compete 
with broker-dealer agency order matching services.\34\ NYSE asserted 
that the Commission disapproved NASDAQ's Benchmark Order, in part 
because it would provide an exchange with an unfair advantage over 
competing broker-dealers, which was not consistent with Section 6(b)(8) 
of the Act.\35\ NASDAQ further argued that the disapproval of its 
Benchmark Order proposal supports the assertion that an exchange must 
articulate how a proposed service is consistent with the policy goals 
of the Act with respect to national securities exchanges.\36\
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    \34\ See NYSE Letter 1, supra note 5, at 8.
    \35\ See id.
    \36\ See NASDAQ Letter, supra note 5, at 5.
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    In response to commenters' contentions that the proposal would 
burden competition, BZX asserted that the proposal would enhance rather 
than burden competition.\37\ In this regard, BZX argued that its 
proposal would promote competition in the use of MOC orders at the 
official closing price.\38\ Further, it asserted that the Commission 
has approved the operation of competing closing auctions, noting in 
particular the closing auctions on NASDAQ, NYSE Arca, and the American 
Stock Exchange.\39\ BZX further argued that there is precedent for an 
exchange to execute orders solely at reference prices while not also 
displaying priced orders for that security.\40\
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    \37\ See BZX Letter, supra note 5, at 10-11.
    \38\ See id., at 10. BZX further argued that NASDAQ's assertion 
that the proposal would undermine competition amongst orders is 
misplaced because BZX believes that paired MOC orders, which are 
beneficiaries of price discovery and not price-setting orders do not 
impact interactions that take place on another exchange. See id., at 
11.
    \39\ See BZX Letter, supra note 5, at 6. In addition, in 
response to NASDAQ's contention that it is aware of no regulator in 
any jurisdiction that has sanctioned a diversion of orders from the 
primary market close, BZX noted the Ontario Securities Commission's 
approval of a similar proposal by Chi-X Canada ATS, which it said is 
currently owned by NASDAQ, to match MOC orders at the closing price 
established by the Toronto Stock Exchange. See NASDAQ Letter, supra 
note 5, at 10; BZX Letter, supra note 5, at 7 (stating that the 
Ontario Securities Commission stated that the proposal would not 
threaten the integrity of the price formation process and would 
pressure the Toronto Stock Exchange to competitively price 
executions during their closing auction).
    \40\ See id. at 6 (describing NYSE's after hours crossing 
sessions which executes orders at the NYSE official closing price 
and the ISE Stock Exchange functionality that only executed orders 
at the midpoint of the NBBO and did not display orders).
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    BZX also argued that, rather than looking to compete with broker-
dealer services, it is seeking to compete on price with the primary 
listing markets' closing auctions.\41\ In addition, BZX argued that, 
contrary to the assertions by NYSE and NASDAQ, its proposal does not 
implicate the same issues as NASDAQ's Benchmark Order proposal.\42\
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    \41\ See BZX Letter, supra note 5, at 10.
    \42\ See id., at 11 (asserting that the disapproval of that 
proposal was primarily because it raised issues under the Market 
Access Rule).
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    BZX also challenged the assertion that it was ``free-riding'' on 
the primary listing exchanges' closing auctions.\43\ In this regard, 
BZX argued that instead it was, on balance, providing a ``a materially 
better value to the marketplace'' in two ways: By not diverting price-
forming limit orders away from the primary listing market; and by 
providing users with the official closing price because any other price 
would be undesirable to market participants and potentially harmful to 
price formation.\44\
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    \43\ See BZX Letter, supra note 5, at 5.
    \44\ See id.
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    The majority of commenters addressed the potential impacts of the 
proposal on price discovery in the closing auctions on the primary 
listing markets. Seven commenters stated that the proposal would not 
negatively impact price discovery in the primary listing markets' 
closing auctions.\45\ These commenters asserted that because Bats 
Market Close would only execute paired MOC orders, and not limit-on-
close orders, it would not impede the price discovery mechanisms of the 
primary listing markets' closing auctions. Three commenters referenced 
the current NASDAQ and NYSE Arca closing auction processes for 
securities listed on other exchanges, stating that these competing 
closing auction processes, which have been permitted by the Commission, 
may attract limit orders from the primary listing market and impede 
price discovery, unlike the BZX proposal which is limited to market 
orders.\46\ In addition, five commenters argued that, because BZX will 
publish the size of matched MOC orders in advance of the primary 
market's cut-off time, market participants would have available 
information needed to make further decisions regarding order execution 
and thus price discovery would not be impaired.\47\ Two commenters also 
asserted that many brokers already provide market-on-close pricing to 
customers through products that match orders internally, and the 
proposal may provide incentives for these brokers to send such orders 
to an exchange, thereby increasing transparency, reliability and price 
discovery at the close.\48\
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    \45\ See PDQ Letter, supra note 5; Clearpool Letter, supra note 
5, at 3; Virtu Letter, supra note 5, at 2; SIFMA Letter, supra note 
5, at 2; IEX Letter, supra note 5, at 1-2; Angel Letter, supra note 
5, at 4; and ViableMkts Letter, supra note 5, at 3-4.
    \46\ See Clearpool, supra note 5, at 3; IEX Letter, supra note 
5, at 2; and Angel Letter, supra note 5, at 4.
    \47\ See Clearpool Letter, supra note 5, at 3; SIFMA Letter, 
supra note 5, at 2; IEX Letter, supra note 5, at 2; Angel Letter, 
supra note 5, at 4; and ViableMkts Letter, supra note 5, at 3.
    \48\ See Clearpool, supra note 5, at 3; and ViableMkts Letter, 
supra note 5, at 4-5. One commenter further argued that to the 
extent BZX accrues market share as a result of the proposal it will 
likely result from less MOC pairing executed off-exchange. See Angel 
Letter, supra note 5, at 4.
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    Thirty-two commenters stated that the proposal would further 
fragment the markets and harm price discovery in the closing auctions 
on the primary listing markets.\49\ For example, NASDAQ argued that 
BZX's MOC orders would be incapable of contributing to price discovery, 
and instead would further fragment the market by drawing orders and 
quotations away from primary closing auctions and undermine the 
mechanisms used to set closing prices.\50\ Specifically, NASDAQ 
expressed concern that the availability of Bats Market Close could 
cause a reduction in the number of limit-on-close orders

[[Page 40206]]

submitted to the primary listing markets' closing auctions, which 
NASDAQ asserted would harm price discovery at the market close.\51\ 
Moreover, NASDAQ argued that even if the proposal only resulted in 
fewer market-on-close orders submitted to NASDAQ closing auctions, 
investors would be harmed because the official closing price could 
potentially represent a stale or undermined price.\52\ NASDAQ asserted 
that its closing cross is designed to maximize the number of shares 
that can be executed at a single price and that the number of market-
on-close orders impacts the number of shares able to execute in a 
closing cross.\53\ Accordingly, NASDAQ argued that any attempt to 
divert trading interest, including market-on-close orders, from its 
closing auction would be detrimental to investors as it would inhibit 
NASDAQ's closing auction from functioning as intended and would 
negatively affect the quality of the official closing price.\54\ In 
addition, NASDAQ stated that it considered, but chose not to, disclose 
segmented information, such as matched MOC or LOC shares, for its 
closing auction in a piece-meal fashion, because NASDAQ believed it 
would lead to unintended consequences and undermine price discovery in 
the closing auction.\55\
---------------------------------------------------------------------------

    \49\ See NASDAQ Letter, supra note 5; NYSE Letter 1, supra note 
5; Bowers Letter, supra note 5; Meridian Letter, supra note 5; 
Americas Executions Letter, supra note 5; GTS Securities Letter, 
supra note 5; Customers Bancorp Letter, supra note 5; Masonite 
International Letter, supra note 5; Orion Group Letter, supra note 
5; CTS Corporation Letter, supra note 5; Encana Letter, supra note 
5; Triangle Capital Letter, supra note 5; Pennsylvania REIT Letter, 
supra note 5; IMC Letter, supra note 5; Southern Company Letter, 
supra note 5; Nobilis Health Letter, supra note 5; T. Rowe Price 
Letter, supra note 5; CACI Letter, supra note 5; Turning Point 
Letter, supra note 5; P&G Letter, supra note 5; EDA Letter, supra 
note 5; Coupa Software Letter, supra note 5; Cardinal Health Letter, 
supra note 5; FedEx Letter, supra note 5; Trade Desk Letter, supra 
note 5; BioCryst Letter, supra note 5; Mimecast Letter, supra note 
5; Digimarc Letter, supra note 5; NBT Bancorp Letter, supra note 5; 
Balchem Letter, supra note 5; Cree Letter, supra note 5; and Henry 
Schein Letter, supra note 5. See also Duffy/Meeks Letter, supra note 
5, at 1 (noting that public companies are expressing concern that 
the proposal will further fragment the market and cause harm to the 
pricing of their companies' shares at the close, and as such, they 
are concerned the proposal may disrupt the process for determining 
the closing price on the primary listing market, which is viewed as 
``an incredibly well-functioning part of the capital markets'').
    \50\ See NASDAQ Letter, supra note 5, at 8 (noting that, for 
this reason NASDAQ did not believe the proposal promotes fair and 
orderly markets in accordance with Sections 6 and 11A of the 
Exchange Act).
    \51\ See NASDAQ Letter, supra note 5, at 5 and 11. NASDAQ 
asserted that the impact of the proposal on the use of limit-on-
close orders that may be submitted to NYSE and NASDAQ should be 
studied and carefully analyzed.
    \52\ See NASDAQ Letter, supra note 5, at 12. NASDAQ also stated 
that a credible independent study of the potential risk to price 
discovery is essential in order to consider whether the proposal is 
consistent with the Act. See id.
    \53\ See id., at 11.
    \54\ See id. NASDAQ also notes that while BZX does not have a 
responsibility to contribute to price discovery in NASDAQ's closing 
auction, it also is obligated to avoid affirmatively undermining 
price discovery. See id., at 5.
    \55\ See id., at 4.
---------------------------------------------------------------------------

    NYSE similarly argued that even though Bats Market Close would only 
accept MOC orders, it could materially impact official closing prices 
determined through a NYSE closing auction.\56\ First, NYSE emphasized 
the importance of the centralization of orders during the closing 
auction on the primary listing exchange, noting that it allows for 
investors to find contra-side liquidity and assess whether to offset 
imbalances, and for orders to be priced based on the true supply and 
demand in the market.\57\ NYSE explained that its designated market 
makers (``DMMs''), which have an obligation to facilitate the close of 
trading in their assigned securities, factor in the size of paired-off 
volume, and the composition of the closing interest, in assessing the 
appropriate closing price.\58\ NYSE asserted that under the proposal, 
DMMs would lose full visibility into the size and composition of MOC 
interest, and thus would likely have to make more risk-adverse closing 
decisions, resulting in inferior price formation.\59\
---------------------------------------------------------------------------

    \56\ See NYSE Letter 1, supra note 5, at 3.
    \57\ See NYSE Letter 1, supra note 5, at 4.
    \58\ See NYSE Letter 1, supra note 5, at 4. In response to this 
assertion, ViableMkts argues that use of Bats Market Close is 
voluntary. Accordingly, if a market participant wanted a DMM to be 
aware of their closing activity they could still send their orders 
to the NYSE closing auction. See ViableMkts Letter, supra note 5, at 
4.
    \59\ See NYSE Letter 1, supra note 5, at 4.
---------------------------------------------------------------------------

    Second, NYSE argued that the proposal would also detrimentally 
impact price discovery on the NYSE Arca and NYSE American automated 
closing auctions. NYSE stated that in the last six months there were 
130 instances where the official closing price determined through a 
NYSE Arca closing auction was based entirely on paired-off market order 
volume.\60\ In those instances, pursuant to NYSE Arca rules, the 
official closing price is the midpoint of the auction NBBO as of the 
time the auction is conducted. NYSE stated that if all market orders 
for a NYSE Arca listed security were sent to BZX, the official closing 
price would instead be the consolidated last sale price, which can 
differ from the midpoint of the auction NBBO by as much as 3.2%.\61\
---------------------------------------------------------------------------

    \60\ See NYSE Letter 1, supra note 5, at 5. NYSE represented 
that once NYSE American transitions to Pillar technology, it will 
conduct a closing auction in an identical manner to NYSE Arca.
    \61\ See id.
---------------------------------------------------------------------------

    Several other commenters similarly explained how the proposal may 
impact the integrity of official closing prices. In particular, GTS, a 
DMM on NYSE, argued that market-on-close orders are a vital component 
of closing prices and, should those orders be diverted away from the 
primary listing markets as a result of the proposal, it could undermine 
the official closing prices.\62\ Multiple commenters stated that one of 
the benefits of a centralized closing auction conducted by the primary 
listing market is that it allows market participants to fairly assess 
supply and demand such that the closing prices reflect both market 
sentiment and total market participation.\63\ Because the proposal may 
cause orders to be diverted away from the primary listing exchanges, 
these commenters argued that it would negatively affect the reliability 
and value of closing auction prices.
---------------------------------------------------------------------------

    \62\ See GTS Securities Letter, supra note 5, at 2-3.
    \63\ See Bowers Letter, supra note 5; Americas Executions 
Letter, supra note 5; and FedEx Letter, supra note 5. See also Coupa 
Software Letter, supra note 5; Trade Desk Letter, supra note 5; and 
Mimecast Letter, supra note 5 (arguing that gathering liquidity in a 
single venue ensures that the market reaches an accurate and 
reliable closing price for their stocks).
---------------------------------------------------------------------------

    Some commenters further argued that because the proposal undermines 
the reliability of the closing process and/or the official closing 
price it also poses a risk to listed companies and its 
shareholders.\64\ In addition, one commenter, SPDJI, argued that the 
proposal may also impact confidence in the pricing of benchmark indices 
as confidence in closing prices is a prerequisite for market 
participants to maintain confidence in the pricing of benchmark 
indices.\65\ Accordingly, SPDJI asserted that because the closing price 
is a critical data point for investors, great caution should be taken 
in any changes to the closing auction.\66\
---------------------------------------------------------------------------

    \64\ See NYSE Letter 1, supra note 5, at 3 (arguing that the 
proposal is indifferent to the potential risks to public companies 
and that the closing is the most important data point for 
shareholders); IMC Financial Letter, supra note 5, at 1-2; Nobilis 
Health Letter, supra note 5; EDA Letter, supra note 5, at 1-2; Coupa 
Software Letter, supra note 5; Ethan Allen Letter, supra note 5; 
Trade Desk Letter, supra note 5; BioCryst Letter, supra note 5; 
Digimarc Letter, supra note 5; Duffy/Meeks Letter, supra note 5, at 
1-2 (stating that public companies are concerned the proposal will 
have an unforeseen effect on the pricing of their companies' shares 
at the close, ultimately harming a critical measure of the company's 
value and harming its shareholders); NBT Bancorp Letter, supra note 
5; Five9 Letter, supra note 5; Balchem Letter, supra note 5; Cree 
Letter, supra note 5; and Henry Schein Letter, supra note 5. Several 
issuers also asserted that decentralizing closing auctions will 
increase volatility, reduce visibility, and negatively impact 
liquidity for equity securities. See e.g., Customers Bancorp Letter, 
supra note 5; Orion Group Letter, supra note 5; Nobilis Health 
Letter, supra note 5; Cardinal Health Letter, supra note 5; and 
Stewart Letter, supra note 5.
    \65\ See SPDJI Letter, supra note 5, at 3 (stating that it 
relies solely on primary market auction prices to calculate the 
official closing index values, and that these closing index values 
play an important role in the markets, including use by portfolio 
managers to measure their funds' value and for use in calculating 
settlement prices for certain products); see also Coupa Software 
Letter, supra note 5; Trade Desk Letter, supra note 5; and Henry 
Schein Letter, supra note 5 (stating that the official closing price 
is used to value their stocks for purposes of various indexes and 
mutual funds).
    \66\ See SPDJI Letter, supra note 5, at 2. In contrast, one 
commenter acknowledged that while impacting the quality of the 
closing price is an objection that deserves close analysis, as the 
closing price is ``the most important price of the day,'' and would 
warrant rejection of the proposal, the commenter does not believe 
the proposal would harm the quality of the closing price. See Angel 
Letter, supra note 5, at 4.
---------------------------------------------------------------------------

    Moreover, some commenters argued that the centralization of 
liquidity at the open and close of trading, and how primary listing 
markets perform during the opening and closing, are important factors 
for issuers in determining where to list their securities, and the 
additional risk posed to listed

[[Page 40207]]

companies from an unreliable or unrepresentative closing price and/or 
process could impact an issuer's decision where to list and/or cause 
companies to forgo going public.\67\
---------------------------------------------------------------------------

    \67\ See NYSE Letter 1, supra note 5, at 3 and 9 (noting that no 
single data point is more important than the closing price to the 
company or its shareholders); GTS Securities Letter, supra note 5, 
at 3-5; EDA Letter, supra note 5, at 1; Duffy/Meeks Letter, supra 
note 5, at 1 (stating that the closing price is a critical measure 
of a company's value and that public companies view the closing 
auction on the listing exchange as a critical aspect of listing). 
See also infra note 116 and accompanying text.
---------------------------------------------------------------------------

    In response to concerns regarding the impact of the proposal on the 
price discovery process, BZX argued that, because the proposal would 
only match MOC orders and would require the Exchange to publish the 
number of matched shares in advance of the primary listing markets' 
cut-off times, BZX believes it would avoid any impact on price 
discovery.\68\ In addition, BZX offered to disseminate more information 
with regard to Bats Market Close and to disseminate such information 
via the applicable securities information processor, in addition to the 
Bats Auction Feed.\69\ BZX further challenged commenters' concerns that 
Bats Market Close could pull all MOC orders away from the primary 
listing markets and alter the calculation of the closing price, noting 
that such a scenario could occur today as a result of competing closing 
auctions and broker-dealers that offer internal MOC order matching 
solutions.\70\ Furthermore, BZX argued that the competing auctions run 
by NASDAQ and NYSE Arca could not only pull all MOC interest away from 
the primary listing markets but could also divert all price-setting 
limit-on-close interest from those markets as well.\71\ BZX also 
asserted that such competing closing auctions often may produce bad 
auction prices on the non-primary market, as compared to the proposed 
Bats Market Close which would ensure that market participants receive 
the official closing price.\72\ Accordingly, BZX contends that the 
proposal would not impose fragmentation on the market at the close that 
does not already exist today.\73\
---------------------------------------------------------------------------

    \68\ See BZX Letter, supra note 5, at 3-4.
    \69\ See id., at 4 and 12. BZX further asserted that it believed 
modern software can easily and simply add this data to data 
disseminated by the primary listing markets. See id., at 4.
    \70\ See id., at 4-5 (noting that neither NYSE nor NASDAQ 
prohibits their members from withholding MOC orders from their 
closing auctions). In response, NYSE stated that it believed such 
broker-dealer services degrade the public price and size discovery 
of the primary listing exchanges' closing auctions, but that such 
activities are not held to the same standards under the Act as 
national securities exchanges and against which the BZX proposal 
must be evaluated. See NYSE Letter 2, supra note 5, at 4.
    \71\ See BZX Letter, supra note 5, at 5. BZX provided evidence 
of 14 instances in June 2017 where a NASDAQ-listed security had no 
volume in NASDAQ's closing auction but did have volume in NYSE 
Arca's closing auction. See id. In response, NYSE argued that it 
believed it was misleading to compare the proposal to the competing 
closing auctions because BZX would be offering neither a competing 
closing auction nor a facility to establish the official closing 
price should a primary listing exchange invoke its closing auction 
contingency plan. See NYSE Letter 2, supra note 5, at 3.
    \72\ See id. at 4. BZX asserted that 86% of closing auctions 
conducted by NASDAQ for NYSE-listed securities in June 2017 resulted 
in closing prices different from the official closing price and 84% 
of competing closing auctions conducted by NYSE Arca for NASDAQ-
listed securities in June 2017 resulted in closing prices different 
from the official closing price.
    \73\ See id. at 7-8.
---------------------------------------------------------------------------

    In response to NYSE's arguments regarding the impact on a DMM's 
ability to price the close, BZX argued that this point highlights what 
it believes to be an additional benefit of allowing it to compete with 
NYSE's closing auction.\74\ Specifically, BZX argued that its proposal 
would provide an alternative liquidity pool that would allow users to 
avoid the ``subjective decision making of the DMMs.'' \75\
---------------------------------------------------------------------------

    \74\ See id. at 10.
    \75\ Id. In response, NYSE argued that BZX's claims regarding 
the role of the DMM were not germane to whether the proposal is 
consistent with the Act and stated that it believed the scale of its 
closing auction and the low levels of volatility observed in the 
auction demonstrate its effectiveness. See NYSE Letter 2, supra note 
5, at 4.
---------------------------------------------------------------------------

    With regard to concerns about the impact of the proposal on issuers 
and their shareholders, BZX reaffirmed that the proposal is designed 
not to impact the trading environment for issuers and their securities 
or the price discovery function of the primary listing markets' closing 
auction.\76\
---------------------------------------------------------------------------

    \76\ See BZX Letter, supra note 5, at 2 and 4.
---------------------------------------------------------------------------

    In arguing that the proposal would cause fragmentation and thus 
impair the closing price, NYSE and NASDAQ also asserted that the 
proposal contradicts the Commission's approval of recent amendments to 
the National Market System Plan to Address Extraordinary Market 
Volatility (the ``LULD Plan'') which, they argue, centralize re-opening 
auction liquidity at the primary listing exchange by prohibiting other 
market centers from re-opening following a trading pause until the 
primary listing exchange conducts a re-opening auction.\77\ 
Specifically, these commenters asserted that it would be inconsistent 
for the Commission to find it in the public interest to consolidate 
trading in a re-opening auction, while sanctioning fragmentation of 
trading in a closing auction.\78\
---------------------------------------------------------------------------

    \77\ See NASDAQ Letter, supra note 5, at 6; NYSE Letter 1, supra 
note 5, at 3.
    \78\ See NYSE Letter 1, supra note 5, at 3.
---------------------------------------------------------------------------

    In response, BZX argued that this comparison is misplaced.\79\ 
Specifically, BZX said the amendment to the LULD Plan cited by NYSE and 
NASDAQ granted the primary listing market the ability set the re-
opening price but did not mandate the consolidation of orders at the 
primary listing market following a trading halt.\80\ Accordingly, BZX 
believes the proposal is consistent with the LULD Plan as it seeks to 
avoid producing a ``bad'' or ``outlier'' closing price and does not 
affect the centralization of price-setting closing auction orders.\81\
---------------------------------------------------------------------------

    \79\ See BZX Letter, supra note 5, at 8-9.
    \80\ See id.
    \81\ See id.
---------------------------------------------------------------------------

    Several commenters addressed the potential impact of the proposal 
on market complexity and operational risk as a result of increased 
market fragmentation. Some of these commenters believed that the 
proposal would not introduce significant additional complexity or 
operational risk. For example, two commenters argued that the proposal 
could enhance the resiliency of the closing auction process by 
providing market participants an additional mechanism through which to 
execute orders at the official closing price in the event of a 
disruption at a primary listing market.\82\ Another commenter argued 
that exchanges already have many market data feeds that firms must 
purchase to ensure that they have all of the information necessary to 
make informed execution decisions and that adding another data feed 
will not add complexity given the small amount of information that goes 
into the closing data feed and the current capabilities of market 
participants to re-aggregate multiple data feeds.\83\
---------------------------------------------------------------------------

    \82\ See SIFMA Letter, supra note 5, at 2 and ViableMkts Letter, 
supra note 5, at 3 (further noting that once BZX is able to process 
MOC orders, they would be in a position to develop the capability to 
offer a full backup closing auction process).
    \83\ See Clearpool Letter, supra note 5, at 2.
---------------------------------------------------------------------------

    In contrast, other commenters argued that the proposal would add 
unnecessary market complexity and operational risk. In particular, two 
commenters noted that the proposal would require market participants to 
monitor an additional data feed, the Bats Auction Feed, one noting that 
if additional exchanges adopted similar functionality to Bats Market 
Close, it would require monitoring of even more data feeds.\84\ These 
commenters argued that monitoring an additional data feed could 
increase operational risk by creating another point of failure at a

[[Page 40208]]

critical time of the trading day.\85\ One commenter also noted the 
increased complexity involved in sending order flow to more than one 
exchange in short periods of time near the close of the trading 
day.\86\ This commenter argued that the proposal increases operational 
risk and complexity at a critical point of the trading day by forcing 
market participants whose orders did not match in Bats Market Close to 
quickly send MOC orders from one exchange to another before the cut-off 
time at the primary market closing auction.\87\ This added complexity, 
GTS argued, puts additional stress on the systems of exchanges and 
increases the potential for disruptions.\88\ Lastly, two commenters 
argued that the proposal could encourage other exchanges, broker-
dealers, and alternative trading systems to offer similar processes, 
which would introduce undesirable fragmentation to the market and lead 
to operational challenges for investors and traders.\89\
---------------------------------------------------------------------------

    \84\ See NYSE Letter 1, supra note 5, at 7; IMC Letter, supra 
note 5, at 1.
    \85\ See IMC Letter, supra note 5, at 1 and NYSE Letter 1, supra 
note 5, at 7. See also Ethan Allen Letter, supra note 5 (arguing the 
proposal would add a layer of complexity).
    \86\ See GTS Letter, supra note 5, at 6.
    \87\ See GTS Letter, supra note 5, at 6. Furthermore, NYSE 
argued that in certain situations, investors may not be able to 
participate in a closing auction on NYSE American or NYSE Arca if 
they wait until after their order was cancelled by BZX to send in a 
market-on-close order to closing auctions on NYSE Arca and NYSE 
American. NYSE explained that in situations where there is an order 
imbalance priced outside the Auction Collars, orders on the side of 
the imbalance are not guaranteed to participate in the closing 
auctions on those two exchanges. Earlier submitted market-on-close 
orders have priority. See NYSE Letter 1, supra note 5, at 8.
    \88\ See GTS Letter, supra note 5, at 6.
    \89\ See T. Rowe Price Letter, supra note 5, at 1-2. See also 
NASDAQ Letter, supra note 5, at 8 (noting that other exchanges may 
propose similar offerings but choose different pairing cut-off times 
which could further complicate investors' decisions and programming 
requirements).
---------------------------------------------------------------------------

    In response, BZX argued that the proposal would not increase 
operational risks, but rather would provide a way to address the single 
point of failure risk that exists for closing auctions conducted on the 
primary listing markets.\90\ BZX argued that despite the current system 
of designated auction backups, market participants can be confused 
about whether an exchange is in fact able to conduct a closing 
auction.\91\ BZX believes Bats Market Close could provide an 
alternative option for market participants to route orders, in the 
event there is an impairment at the primary listing market, and still 
receive the official closing price.\92\
---------------------------------------------------------------------------

    \90\ See BZX Letter, supra note 5, at 12.
    \91\ See id.
    \92\ See id.
---------------------------------------------------------------------------

    In addition, as noted above, BZX stated that it would be willing to 
disseminate information regarding matched MOC orders, not only via the 
Bats Auction Feed, but also via the applicable securities information 
processor, if permissible.\93\ BZX added that modern software can 
easily and simply add volume data disseminated by the primary listing 
markets regarding the closing auction and data regarding matched MOC 
orders from the Bats Market Close.\94\
---------------------------------------------------------------------------

    \93\ See id., at 4 and 12.
    \94\ See id., at 4.
---------------------------------------------------------------------------

    Several commenters addressed the issue of whether the proposal 
would facilitate manipulation of both the closing auctions on the 
primary listing markets, as well as continuous trading during the final 
minutes of the trading day. Some commenters did not believe it would do 
so. For example, one commenter noted that incentives to manipulate the 
closing price already exist and it is unlikely the proposal would 
result in increased manipulation of the market close.\95\ In addition, 
IEX argued that the proposal would make manipulation of closing crosses 
more conspicuous.\96\ IEX also claimed that the Consolidated Audit 
Trail would provide a new tool for detecting any such manipulation.\97\
---------------------------------------------------------------------------

    \95\ See Angel Letter, supra note 5, at 5.
    \96\ See IEX Letter, supra note 5, at 2.
    \97\ See id., at 2-3.
---------------------------------------------------------------------------

    In contrast, several commenters asserted that the proposal raises a 
risk of manipulation, in part due to the asymmetry of information that 
would be disseminated, which would allow market participants to utilize 
informational advantages to their own benefit. For example, NASDAQ 
argued that information concerning the amount of orders matched through 
Bats Market Close, would represent tradable information that market 
participants could use to ``game'' the closing crosses on the primary 
listing markets and undermine fair and orderly markets.\98\ In 
particular, NASDAQ argued that its closing auction was designed to 
carefully balance the amount and timing of data released so as to 
reduce the risk of gaming, but that this new information regarding 
paired MOC orders could be used to gauge the depth of the market, the 
direction of existing imbalances, and the likely depth remaining at 
NASDAQ, creating gaming opportunities.\99\ NYSE similarly argued that 
the proposal would increase potential manipulation.\100\ First, NYSE 
asserted that the potential for manipulative activity at the close 
would increase because primary listing exchange auctions would decrease 
in size and thus be easier to manipulate.\101\ NYSE also argued that 
the proposal facilitates manipulative activity by providing an 
incentive for market participants to inappropriately influence the 
closing price when they know they have been successfully paired-off on 
BZX.\102\ NYSE further asserted that the proposal could potentially 
provide some market participants, such as professional traders, with 
useful information that other market participants do not have, such as 
the direction of an imbalance, which could be used to influence the 
official closing price.\103\
---------------------------------------------------------------------------

    \98\ See NASDAQ Letter, supra note 5, at 8.
    \99\ See NASDAQ Letter, supra note 5, at 8.
    \100\ See NYSE Letter 1, supra note 5, at 6. See also Americas 
Executions Letter, supra note 5 (stating that the proposal creates 
new opportunities to possibly manipulate the close).
    \101\ See NYSE Letter 1, supra note 5, at 6.
    \102\ See NYSE Letter 1, supra note 5, at 6.
    \103\ See id. However, ViableMkts argued that because these 
market participants would not know the full magnitude of the 
imbalance, it does not believe the proposal creates an incremental 
risk of manipulation. See ViableMkts Letter, supra note 5, at 5.
---------------------------------------------------------------------------

    Although not citing concerns regarding manipulation specifically, 
T. Rowe Price similarly argued that the proposal would lead to 
information asymmetries that could result in changes in continuous 
trading behavior leading into the market close as some market 
participants could be trading on information gathered from Bats Market 
Close pairing results.\104\ T. Rowe Price asserted that a market 
participant that is aware of the composition of volume paired through 
Bats Market Close at 3:35 p.m. would be in a position to use that 
information to influence its trading behavior over the next ten to 
fifteen minutes leading in to the closing auction cut-off times on NYSE 
and NASDAQ respectively.\105\ T. Rowe Price argued that, as a result, 
the proposal could not only impact price discovery in closing auctions 
on the primary listing markets it could also impact continuous trading 
behavior.\106\
---------------------------------------------------------------------------

    \104\ See T. Rowe Price Letter, supra note 5, at 2-3.
    \105\ See id.
    \106\ See id.
---------------------------------------------------------------------------

    NYSE also stated that identifying manipulative activity would also 
become more difficult under the proposal due to the time difference 
between the Bats Market Close and primary market closing auctions and 
the cross-market nature of the manipulation.\107\ GTS similarly argued 
that the proposal would make surveillance of the market close more 
difficult and expensive due to

[[Page 40209]]

fragmentation of order flow across multiple markets.\108\
---------------------------------------------------------------------------

    \107\ See NYSE Letter 1, supra note 5, at 6.
    \108\ See GTS Securities Letter, supra note 5, at 6.
---------------------------------------------------------------------------

    In response, BZX argued that it does not believe that the proposal 
creates a potential for increased manipulation.\109\ Should the 
Commission approve the proposal, BZX notes that both it and FINRA as 
well as other exchanges would continue to surveil for manipulative 
activity and ``seek to punish those that engage in such behavior.'' 
\110\ Furthermore, BZX argued that information asymmetries are inherent 
in trading, including the primary listing markets closing 
auctions.\111\ For example, BZX argued that the current operation of d-
Quotes on NYSE carries a risk of manipulation as it provides an 
informational advantage to NYSE DMMs and floor brokers, and allows d-
Quotes to be entered, modified or cancelled up until 3:59:50 p.m. while 
other market participants are prohibited from entering, modifying or 
cancelling on-close orders after 3:45 p.m.\112\ Lastly, BZX argued that 
the information disseminated through the Bats Auction Feed would not 
provide an indication of whether the cancelling of a particular side of 
an order is meaningful, which limits its potential to impact the 
official closing price.\113\
---------------------------------------------------------------------------

    \109\ See BZX Letter, supra note 5, at 11-12.
    \110\ See id., at 11
    \111\ See id., at 11-12.
    \112\ See id., at 12. BZX also requested that the Commission 
review the appropriateness of NYSE's use of the d-Quote and its 
potential for price manipulation of NYSE's closing prices. See id., 
at 9.
    \113\ See id.
---------------------------------------------------------------------------

    Several commenters also addressed the potential impacts of the 
proposal on market participants that they assert play important roles 
in facilitating closing auctions on NYSE. Specifically, three 
commenters asserted that the proposal would have potentially 
detrimental impacts on NYSE floor brokers.\114\ Eighteen commenters 
asserted that the proposal would make it more difficult for Designated 
Market Makers to facilitate an orderly close of NYSE listed securities 
as they would lose the ability to continually assess the composition of 
market-on-close interest.\115\ Many of these commenters that are 
issuers asserted that one of the reasons they chose to list on NYSE was 
the ability to have access to a DMM that is responsible for 
facilitating an orderly closing auction.\116\
---------------------------------------------------------------------------

    \114\ See Bowers Letter, supra note 5; Meridian Letter, supra 
note 5; and Americas Executions Letter, supra note 5.
    \115\ See NYSE Letter 1, supra note 5, at 4; GTS Securities 
Letter, supra note 5, at 2-3; Customers Bancorp Letter, supra note 
5; Masonite International Letter, supra note 5; Orion Group Letter, 
supra note 5; CTS Corporation Letter, supra note 5; Encana Letter, 
supra note 5; Triangle Capital Letter, supra note 5; Pennsylvania 
REIT Letter, supra note 5; IMC Letter, supra note 5, at 1-2; 
Southern Company Letter, supra note 5; Nobilis Health Letter, supra 
note 5; CACI Letter, supra note 5; Turning Point Letter, supra note 
5; P&G Letter, supra note 5; Cardinal Health Letter, supra note 5; 
FedEx Letter, supra note 5; and Stewart Letter, supra note 5. See 
also supra notes 57-59 and accompanying text.
    \116\ See GTS Securities Letter, supra note 5, at 2-3; Masonite 
International Letter, supra note 5; Encana Letter, supra note 5; 
Triangle Capital Letter, supra note 5; Pennsylvania REIT Letter, 
supra note 5; Nobilis Health Letter, supra note 5; CACI Letter, 
supra note 5; Turning Point Letter, supra note 5; P&G Letter, supra 
note 5; Cardinal Health Letter, supra note 5; FedEx Letter, supra 
note 5; and Stewart Letter, supra note 5.
---------------------------------------------------------------------------

    Several commenters stated that the proposal could harm issuers, 
particularly small and mid-cap companies.\117\ Many of these 
commenters, some of which are issuers, stated that the current 
centralized closing auctions on the primary listing markets contribute 
meaningful liquidity to a company's stock, facilitates investment in 
the company, and helps to lower the cost of capital. Accordingly, these 
commenters expressed concern that potential fragmentation caused by the 
proposal could negatively impact liquidity during the closing auction, 
causing detrimental effects to listed issuers.\118\ Several commenters 
further argued that centralized closing auctions provide better 
opportunities to fill large orders with relatively little price 
impact.\119\
---------------------------------------------------------------------------

    \117\ See NASDAQ Letter, supra note 5, at 6-7; NYSE Letter 1, 
supra note 5, at 3; GTS Securities Letter, supra note 5, at 2-5; 
Customers Bancorp Letter, supra note 5; Orion Group Letter, supra 
note 5; CTS Corporation Letter, supra note 5; IMC Financial Letter, 
supra note 5, at 1-2; Southern Company Letter, supra note 5; Nobilis 
Health Letter, supra note 5; EDA Letter, supra note 5, at 1-2; Coupa 
Software Letter, supra note 5; Trade Desk Letter, supra note 5; 
Duffy/Meeks Letter, supra note 5, at 1; and Henry Schein Letter, 
supra note 5.
    \118\ See Customers Bancorp Letter, supra note 5; Orion Group 
Letter, supra note 5; CTS Corporation Letter, supra note 5; Southern 
Company Letter, supra note 5; Duffy/Meeks Letter, supra note 5, at 
1-2 (noting that the proposal could cause a disruption to the 
closing auction process, which could lead to discouraging investors 
from participating in and having confidence in our markets); and 
Five9 Letter, supra note 5.
    \119\ See e.g., Bowers Letter, supra note 5; Americas Executions 
Letter, supra note 5; Customers Bancorp Letter, supra note 5; Orion 
Group Letter, supra note 5; and Southern Company Letter, supra note 
5.
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    In contrast, one commenter argued that the proposal would improve 
aggregate liquidity at the official closing price.\120\ Specifically, 
this commenter asserted that the lower aggregate cost of trading would 
likely spur incremental increases in trading volumes.\121\ In addition, 
this commenter stated that the ability to enter MOC orders into Bats 
Market Close with little risk of information leakage may attract an 
additional source of liquidity.\122\
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    \120\ See ViableMkts Letter, supra note 5, at 2.
    \121\ See id.
    \122\ See id.
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    Finally, some commenters identified areas that they believed were 
not adequately addressed by the proposal and/or made suggestions for 
modifications to the Exchange's proposal. For example, one commenter 
suggested that BZX extend the proposed MOC Cut-Off Time to closer to 
the primary market close.\123\ Another commenter suggested that, as an 
alternative, NYSE and NASDAQ should voluntarily review and reduce their 
auction fee structures, or, alternatively, the Commission should impose 
a cap on transaction fees for closing auctions.\124\ Lastly, NASDAQ 
also noted several areas, or scenarios, that it believed were not 
adequately explained by the proposal.\125\
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    \123\ See Clearpool Letter, supra note 5, at 4.
    \124\ See T. Rowe Price Letter, supra note 5, at 3.
    \125\ See NASDAQ Letter, supra note 5, at 13. Specifically, 
NASDAQ provides several scenarios to illustrate areas in which it 
believes how the Bats Market Close would operate is unclear, 
including where: (1) NASDAQ does not conduct a closing cross; (2) 
the official closing price for a NASDAQ-listed security is the 
consolidated last sale price, which is an inferior price to the NBBO 
at 4:00 p.m.; and (3) the official closing price would trade through 
the Bats resting limit order book. In addition, NASDAQ argues that 
BZX did not adequately explain how it would avoid using a possibly 
``stale'' price if there were no orders and thus no auction on a 
primary listing market, but there were MOC orders in Bats Market 
Close.
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IV. Proceedings To Determine Whether To Approve or Disapprove the BZX 
Proposal

    The Commission hereby institutes proceedings pursuant to Section 
19(b)(2) of the Act \126\ to determine whether the Exchange's proposed 
rule change should be approved or disapproved. Further, pursuant to 
Section 19(b)(2)(B) of the Act,\127\ the Commission is hereby providing 
notice of the grounds for disapproval under consideration. The 
Commission believes it is appropriate to institute proceedings at this 
time in view of the legal and policy issues raised by the proposal. 
Institution of proceedings does not indicate, however, that the 
Commission has reached any

[[Page 40210]]

conclusions with respect to any of the issues involved.
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    \126\ 15 U.S.C. 78s(b)(2).
    \127\ 15 U.S.C. 78s(b)(2)(B). Section 19(b)(2)(B) of the Act 
also provides that proceedings to determine whether to disapprove a 
proposed rule change must be concluded within 180 days of the date 
of publication of notice of the filing of the proposed rule change. 
See id. The time for conclusion of the proceedings may be extended 
for up to 60 days if the Commission finds good cause for such 
extension and publishes its reasons for so finding, or if the 
exchange consents to the longer period. See id.
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    In particular, the Commission is instituting proceedings to allow 
for additional analysis of the proposed rule change's consistency with: 
(1) Section 6(b)(5) of the Act which requires, among other things, that 
the rules of a national securities exchange be designed ``to prevent 
fraudulent and manipulative acts and practices, 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;'' \128\ and (2) Section 6(b)(8) of the Act, which requires 
that the rules of a national securities exchange ``not impose any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of [the Act].'' \129\
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    \128\ 15 U.S.C. 78f(b)(5).
    \129\ 15 U.S.C. 78f(b)(8).
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    As described above, BZX proposes to introduce Bats Market Close, a 
closing match process for non-BZX listed securities that would match 
MOC orders submitted to the Bats Market Close at the official closing 
price for such security published by the primary listing market. Under 
the proposal, Members would be able to submit, cancel, and replace MOC 
orders designated for the Bats Market Close up until the MOC Cut-Off 
Time at 3:35 p.m., after which time orders would be matched for 
execution and any remaining imbalance would be cancelled back to the 
Member(s). BZX would disseminate, via the Bats Auction Feed, the total 
size of all buy and sell orders matched for each security. The Exchange 
asserts that its proposal would increase competition and decrease fees 
for market participants, without impacting the price discovery process.
    The Commission has consistently recognized the importance of 
closing auctions of the primary listing markets. For example, in its 
adoption of Regulation SCI, the Commission identified systems used to 
support closings on the primary market as ``critical SCI systems,'' 
stating that ``reliable . . . closings on the primary listing markets 
are key to the establishment of fair and orderly markets,'' and noting 
that ``closing auctions at the primary listing markets attract 
widespread participation, and the closing prices they establish are 
commonly used as benchmarks.'' \130\ Accordingly, the Commission is 
considering whether the proposal removes impediments to and perfects 
the mechanism of a free and open market and a national market system, 
and what its impact would be on the primary listing markets' closing 
auctions, including their important price discovery functions, or the 
reliability and integrity of the closing prices that they establish. 
Further, the Commission is considering whether the proposal imposes any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act, including the potential competitive burdens 
that may be created when an exchange offers market participants the 
ability to execute orders at a lower cost at the closing price 
established by another exchange, without incurring the costs of 
developing and operating the closing auctions from which the price is 
derived. In addition, the Commission is considering whether the 
proposal is designed to prevent fraudulent and manipulative acts and 
practices and, in particular, whether it would provide increased 
incentives or opportunities for inappropriate utilization of 
information to manipulate the closing price. Finally, the Commission is 
considering whether the proposal would have additional impacts on the 
markets, including increased complexity and operational risk, that 
would be inconsistent with the protection of investors and the public 
interest.
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    \130\ Securities Exchange Act Release No. 73639 (November 19, 
2014), 79 FR 72255, 72278 (December 5, 2014).
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V. Commission's Solicitation of Comments

    The Commission requests that interested persons provide written 
submissions of their views, data, and arguments with respect to the 
issues identified above, as well as any other relevant concerns they 
may have with the proposal. In particular, the Commission invites the 
written views of interested persons concerning whether the proposal is 
consistent with Sections 6(b)(5) and 6(b)(8) of the Act, or any other 
provision of the Act or rule or regulation thereunder. Although there 
do not appear to be any issues relevant to approval or disapproval 
which would be facilitated by an oral presentation of views, data, and 
arguments, the Commission will consider, pursuant to Rule 19b-4, any 
request for an opportunity to make an oral presentation.\131\
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    \131\ Section 19(b)(2) of the Act, as amended by the Securities 
Act Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the 
Commission flexibility to determine what type of proceeding--either 
oral or notice and opportunity for written comments--is appropriate 
for consideration of a particular proposal by a self-regulatory 
organization. See Securities Act Amendments of 1975, Senate Comm. on 
Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st 
Sess. 30 (1975).
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    Such comments should be submitted by September 14, 2017. Rebuttal 
comments should be submitted by September 28, 2017. The Commission asks 
that commenters address the sufficiency and merit of the Exchange's 
statements in support of the proposal, which are set forth in the 
Notice,\132\ in addition to any other comments they may wish to submit 
about the proposed rule change. In particular, the Commission seeks 
comment, including, where relevant, any specific data, statistics, or 
studies, on the following:
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    \132\ See Notice, supra note 3.
---------------------------------------------------------------------------

    1. Would the proposed rule change affect price discovery in the 
closing auction process on each primary listing exchange? If so, how? 
Would any such impact be the same at each of the primary listing 
exchanges? What information do market participants need going into the 
closing auction? Would the proposed rule change affect the information 
available to market participants during the closing auction process? If 
so, how? If commenters believe the proposal would harm price discovery 
in the closing auction process, to the extent possible please provide 
specific data, analyses, or studies for support.
    2. To what extent, if at all, would the availability of the Bats 
Market Close impact market participants' use of limit-on-close orders 
in the closing auction processes on the primary listing exchanges, 
including with respect to size and price? Please explain. Would market 
participants use MOC orders in the Bats Market Close as a substitute 
for using limit orders to participate in the closing auction processes 
at the primary listing exchanges? Would any such impacts be the same 
for each of the primary listing exchanges? Are there differences 
between the closing auction processes at each of the primary listing 
exchanges whereby the proposed Bats Market Close would have differing 
effects on each primary listing exchange? If so, please explain. How 
does information available in the closing auction process affect market 
participants' order submissions and/or determination of the closing 
price? Would the proposed rule change affect market participants' 
trading strategies in closing auctions? If so, how? If commenters 
believe the proposal would impact the use of limit-on-close orders in 
closing auctions, to the extent possible please provide specific data, 
analyses, or studies for support.

[[Page 40211]]

    3. What analyses of available data could provide information about 
relationships between information disseminated during closing auctions, 
trading strategies in closing auctions, and closing prices? How would 
such analyses help estimate the impact, if any, of any changes in the 
availability of information under the proposed rule change on trading 
strategies and closing prices? In this regard, to the extent possible, 
please provide specific data, analyses, or studies in support.
    4. What amount of trading volume at the close occurs on venues 
other than the primary listing exchanges (such as competing closing 
auctions and/or broker-dealer internal matching processes for MOC 
orders) and how does such closing volume compare with that of the 
primary listing exchanges? How does that volume impact the closing 
auction process on each of the primary listing exchanges? If commenters 
believe the proposal would impact volume in the closing auction 
process, to the extent possible please provide specific data, analyses, 
or studies for support. How does the Bats Market Close proposal differ 
from such existing processes (i.e., competing closing auctions and/or 
broker-dealer internal MOC matching processes)? Would the proposal 
affect the existing level of fragmentation in the market? If so, how? 
Please describe. Would the proposal impact the aggregate liquidity at 
the primary listing markets during the closing auctions? If so, how? If 
commenters believe the proposal would impact the existing level of 
fragmentation in the market or aggregate liquidity at the primary 
listing markets during the closing auction, to the extent possible 
please provide specific data, analyses, or studies for support. Would 
the matching of a significant amount of MOC orders at a venue other 
than the primary listing market affect the integrity or reliability of 
the official closing auction and the resulting closing price? If so, 
how? Please describe in detail and provide examples if possible. 
Further, if commenters believe the proposal would affect the integrity 
or reliability of the official closing auction and the resulting 
closing price, to the extent possible please provide specific data, 
analyses, or studies for support.
    5. Would the proposal have a positive, negative, or neutral impact 
on competition? Please explain. How would any impact on competition 
from the proposal benefit or harm the national market system and/or the 
various market participants? Please describe and explain how, if at 
all, aspects of the national market system and/or different market 
participants would be affected. What are the current costs associated 
with a primary listing market developing and operating a closing 
auction, and to what extent (and if so, how) are these costs passed on 
to market participants today? How do the fixed costs associated with 
developing closing auctions compare to the variable costs of conducting 
closing auctions? How do the revenues collected from closing auctions 
compare to these costs? Would the proposal impact the current fees 
charged by the primary listing markets for participation in their 
closing auctions? If so, how? If commenters believe the proposal would 
impact competition, to the extent possible please provide specific 
data, analyses, or studies for support.
    6. What effect would the proposal have on market complexity and/or 
operational risk, if any? If commenters believe the proposal would 
impact market complexity and operational risk, to the extent possible, 
please provide specific data, analyses, or studies for support. Would 
the daily process of cancelling unmatched MOC orders back to members so 
that they can be routed to the primary listing markets before the 
closing auction cut-off times create operational or other risks for the 
markets or market participants? If so, please describe. Would any such 
risks be different than the risks that currently exist now for market 
participants? Are there alternative ways of managing unmatched orders 
that would have different implications for the operational risks of the 
proposal? If so, please describe. Would the monitoring of an additional 
data feed be difficult or increase risk for market participants? Why or 
why not?
    7. Would the proposal affect the potential for manipulation and, if 
so, what types of manipulative activity might result from, or be 
decreased by, the proposal? Would the proposal create informational 
advantages for certain market participants? If so, please detail these 
advantages and describe whether and how such information could be 
utilized to a market participant's own advantage. Would such 
informational advantages differ from information asymmetries that exist 
in the markets today? If so, please describe. Would the proposal affect 
surveillance for manipulation negatively or positively, and are 
existing surveillance tools adequate to monitor any increased risk? 
Please explain. If commenters believe the proposal would increase or 
decrease the potential for manipulative activity, to the extent 
possible please provide specific data, analyses, or studies for 
support.
    8. What are the potential impacts of the proposal for listed 
issuers? For example, would the proposal impact the liquidity of an 
issuer's stock? If so, how? Would the proposal affect an issuer's 
decision as to whether to list their securities on a national 
securities exchange? If so, how? Would any impacts of the proposal 
affect small and mid-sized listed companies differently from larger 
listed companies? If so, please describe how. What other impacts, if 
any, could the proposal have on various other market participants, such 
as market makers and floor brokers, and in particular, their roles in 
the closing? If commenters believe the proposal would impact listed 
issuers or other market participants, to the extent possible please 
provide specific data, analyses, or studies for support.
    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-2017-34 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-2017-34. The 
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

[[Page 40212]]

identifying information from submissions. You should submit only 
information that you wish to make publicly available. All submissions 
should refer to File Number SR-BatsBZX-2017-34 and should be submitted 
on or before September 14, 2017. Rebuttal comments should be submitted 
by September 28, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\133\
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    \133\ 17 CFR 200.30-3(a)(57) and (58).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2017-17909 Filed 8-23-17; 8:45 am]
BILLING CODE 8011-01-P