70326 Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Notices 

10 15 U.S.C. 78s(b)(3)(A)(ii). 

11 17 CFR 240.19b–4(f)(2). 

12 17 CFR 200.30–3(a)(12). 

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). 

5A Member is any registered broker or dealer that 

has been admitted to membership in the Exchange. 

requirements of Section 6 of the Act. 

Specifically, the Exchange believes that 

the proposed rule change is consistent 

with Section 6(b)(4) of the Act, in that 

it provides for the equitable allocation 

of reasonable dues, fees and other 

charges among members and other 

persons using any facility or system 

which the Exchange operates or 

controls. 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 levels at a 

particular venue to be excessive. Also, 

although routing services offered by the 

Exchange are available to all Members, 

Members are not required to use the 

Exchange’s routing services, but instead, 

the Exchange’s routing services are 

completely optional. Members can 

manage their own routing practices or 

can utilize a myriad of other routing 

solutions that are available to market 

participants. Finally, the change to the 

fee will allow the Exchange to continue 

to charge its Members the same fee for 

orders routed to and executed by its 

affiliate, BZX Exchange, as BZX 

Exchange would charge directly if such 

Members routed to BZX Exchange 

directly. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change imposes any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments Regarding the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were solicited 

or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change 

has been designated as a fee change 

pursuant to Section 19(b)(3)(A)(ii) of the 

Act 10 and Rule 19b–4(f)(2) 

thereunder,11 because it establishes or 

changes a due, fee or other charge 

imposed on members by the Exchange. 

Accordingly, the proposal is effective 

upon filing with the Commission. 

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. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/sro.shtml); or 

• Send an e-mail to rule-comments

@sec.gov. Please include File Number 

SR–BYX–2010–005 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–BYX–2010–005. This file 

number should be included on the 

subject line if e-mail 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 

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 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

Exchange. All comments received will 

be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

publicly available. All submissions 

should refer to File Number SR–BYX– 

2010–005 and should be submitted on 

or before December 8, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–28895 Filed 11–16–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63300; File No. SR–BATS– 

2010–031] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to Fees for Use 

of BATS Exchange, Inc. 

November 10, 2010. 

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 October 

29, 2010, BATS Exchange, Inc. (the 

‘‘Exchange,’’ ‘‘BZX 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to modify its 

fee schedule applicable to Members 5 of 

the Exchange pursuant to BZX Rules 

15.1(a) and (c). While changes to the fee 

schedule pursuant to this proposal will 

be effective upon filing, the changes will 

become operative on November 1, 2010. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.batstrading.com, at the 

principal office of the Exchange, on the 

Commission’s Web site at http:// 

www.sec.gov, and at the Commission’s 

Public Reference Room. 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Notices 70327 

6As defined in BZX Rule 11.9(c)(8). 

7As defined in BZX Rule 11.9(c)(9). 

8As defined in BZX Rule 11.9(c)(11). 

9As defined in BZX Rule 11.9(c)(1). 

10As defined in BZX Rule 11.9(c)(10). 

11 15 U.S.C. 78f. 

12 15 U.S.C. 78f(b)(4). 

13 15 U.S.C. 78s(b)(3)(A)(ii). 

14 17 CFR 240.19b–4(f)(2). 

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 modify the 

‘‘Equities Pricing’’ section of its fee 

schedule to increase its standard fee for 

removing liquidity from the Exchange to 

$0.0028 per share and to increase its 

standard rebate for adding displayed 

liquidity to the Exchange to $0.0027 per 

share. The Exchange does not propose 

to charge different fees or grant different 

rebates depending on the amount of 

orders submitted to, and/or trades 

executed on or through, the Exchange. 

Accordingly, all fees and rebates 

described below are applicable to all 

Members, regardless of the overall 

volume of their trading activities on the 

Exchange. 

Consistent with the current fee to 

remove liquidity, the charge per share 

for executions that remove liquidity 

from the Exchange will not apply [sic] 

executions that remove liquidity in 

securities priced under $1.00 per share. 

The fee for such executions will remain 

at 0.10% of the total dollar value of the 

execution. Similarly, as is currently the 

case for the rebate for adding liquidity 

to the Exchange, there will be no 

liquidity rebate for adding liquidity in 

securities priced under $1.00 per share. 

Finally, the rebate paid by the Exchange 

for adding non-displayed liquidity will 

remain at $0.0020 per share. As defined 

on the Exchange’s current fee schedule, 

‘‘non-displayed liquidity’’ includes 

liquidity resulting from all forms of 

Pegged Orders,6 Mid-Point Peg Orders,7

and Non-Displayed Orders,8 but does 

not include liquidity resulting from 

Reserve Orders 9 or Discretionary 

Orders.10

In addition to the changes described 

above, and to differentiate itself from its 

affiliate, BATS Y-Exchange, Inc. (‘‘BYX 

Exchange’’), which recently commenced 

operations, the Exchange proposes to 

use the name ‘‘BZX Exchange’’ and 

‘‘BZX’’ throughout the fee schedule, 

other than when referring to its equity 

options platform, which it will refer to 

as ‘‘BATS Options.’’ Similarly, the 

Exchange proposes defining its affiliate, 

as it has done above, as ‘‘BYX 

Exchange.’’ Also, the Exchange proposes 

to make stylistic changes, including 

referring to its book of orders as its 

‘‘order book,’’ rather than just its ‘‘book.’’ 

Finally, the Exchange proposes to 

remove one heading from its fee 

schedule, ‘‘Options Pricing 

(Continued),’’ which is no longer 

necessary for the printed version of its 

fee schedule. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder that 

are applicable to a national securities 

exchange, and, in particular, with the 

requirements of Section 6 of the Act.11

Specifically, the Exchange believes that 

the proposed rule change is consistent 

with Section 6(b)(4) of the Act,12 in that 

it provides for the equitable allocation 

of reasonable dues, fees and other 

charges among members and other 

persons using any facility or system 

which the Exchange operates or 

controls. 

The impact of the proposed price 

changes upon the net fees paid by a 

particular market participant will 

depend upon a number of variables, 

including the prices of the market 

participant’s quotes and orders relative 

to the national best bid and offer (i.e., 

its propensity to add or remove 

liquidity), the types of securities that it 

trades and its usage of non-displayed 

quotes/orders. While Members that 

generally remove liquidity from the 

Exchange will be paying a higher fee, 

the Exchange believes that such 

Members will benefit to the extent the 

higher rebate paid by the Exchange for 

adding liquidity attracts additional 

liquidity and thus improves the depth of 

liquidity available on the Exchange. 

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 levels at a particular venue to 

be excessive. The Exchange believes 

that its fees and credits are competitive 

with those charged by other venues. 

Finally, the Exchange believes that the 

proposed rates are equitable in that they 

apply uniformly to all Members. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change imposes any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments Regarding the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were solicited 

or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing proposed rule change 

has been designated as a fee change 

pursuant to Section 19(b)(3)(A)(ii) of the 

Act 13 and Rule 19b–4(f)(2) 

thereunder,14 because it establishes or 

changes a due, fee or other charge 

imposed on members by the Exchange. 

Accordingly, the proposal is effective 

upon filing with the Commission. 

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. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–BATS–2010–031 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

mstockstill on DSKH9S0YB1PROD with NOTICES

70328 Federal Register / Vol. 75, No. 221 / Wednesday, November 17, 2010 / Notices 

15 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Commission has modified the text of the 

summaries prepared by FICC. 

4The specific language of the proposed provision 

can be found at http://www.dtcc.com/downloads/ 

legal/rule_filings/2010/ficc/2010-08.pdf. 5 15 U.S.C. 78q–1. 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–BATS–2010–031. This file 

number should be included on the 

subject line if e-mail 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 

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 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

Exchange. All comments received will 

be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

publicly available. All submissions 

should refer to File Number SR–BATS– 

2010–031 and should be submitted on 

or before December 8, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–28896 Filed 11–16–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63301; File No. SR–FICC– 

2010–08] 

Self-Regulatory Organizations; Fixed 

Income Clearing Corporation; Notice of 

Filing of Proposed Rule Change To 

Eliminate Certain Cash Adjustments 

Currently Processed by the MBSD 

November 10, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder 2

notice is hereby given that on October 

28, 2010, the Fixed Income Clearing 

Corporation (‘‘FICC’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

primarily by FICC. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The purpose of the proposed rule 

change is to eliminate cash adjustments 

that are currently processed by the 

Mortgage-Backed Securities Division 

(‘‘MBSD’’). 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FICC 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. FICC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements.3

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

FICC is proposing to eliminate the 

cash adjustments that are currently 

processed by the MBSD.4 FICC is 

proposing to eliminate the cash 

adjustments because they have low 

monetary impact and were originally 

designed to address a clearance event 

(‘‘significant variance’’) that no longer 

applies. Variance was originally 

established when mortgage-backed 

securities were physically settled, and it 

was difficult to organize physical pools 

into $1 million par amounts for 

delivery. 

As a result of the netting of To Be 

Announced (‘‘TBA’’) transactions, a 

participant may have a settlement 

obligation to another participant with 

which it did not trade (‘‘SBON 

Obligations’’). SBON Obligations are 

created in multiples of $1 million par 

amounts and are assigned a uniform 

delivery price. Since the delivery price 

will differ from the participant’s original 

trade price, an adjustment is calculated 

for the difference between the delivery 

price and the trade price. This 

adjustment is referred to as the 

Settlement Balance Order Market 

Differential (‘‘SBOMD’’). 

Participants notify the MBSD when 

they have settled their SBON 

Obligations with their assigned 

counterparties through the Notification 

of Settlement (‘‘NOS’’) process. From the 

information supplied by both the 

delivering and receiving participants in 

their respective NOS, the MBSD 

determines whether the securities 

delivered were in $1 million par 

amounts or in a par amount within 

acceptable variance (plus or minus $100 

per million). In instances where the 

delivery was completed in $1 million 

par amounts, the MBSD takes no 

additional steps. 

If the delivery was cleared for a par 

amount within acceptable variance, the 

MBSD will calculate a cash adjustment 

to reconcile the difference between the 

original SBOMD (based on a $1 million 

par amount) and what the SBOMD 

should have been (based on the par 

amount delivered). As mortgage-backed 

securities migrated from physical to 

electronic settlement, acceptable 

variance has been reduced from an 

initial $50,000 per million to the current 

amount of $100 per million. 

FICC believes the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act 5

and the rules and regulations 

thereunder applicable to FICC because it 

is a deletion of a rule that covers a 

process that is no longer needed and as 

such it provides certainty and clarity of 

the clearance process at MBSD to 

members. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

FICC does not believe that the 

proposed rule change will have any 

impact or impose any burden on 

competition. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments relating to the 

proposed rule change have not been 

solicited or received. FICC will notify 

the Commission of any written 

comments received by FICC. 

mstockstill on DSKH9S0YB1PROD with NOTICES