Federal Register / Vol. 80, No. 35 / Monday, February 23, 2015 / Notices 9487 

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). 

5See Securities Exchange Act Release No. 73989 

(January 5, 2015) (SR–EDGX–2014–36) (Notice of 

Filing and Immediate Effectiveness of Proposed 

Rule Change to Adopt Top and Last Sale Data 

Feeds). 

6The proposed definition of ‘‘Distributor’’ is 

similar to Nasdaq Rule 7047(d)(1). 

7The proposed definition of ‘‘Internal 

Distributor’’ is similar to Nasdaq Rule 

7047(d)(1)(A). 

8The proposed definition of ‘‘External 

Distributor’’ is similar to Nasdaq Rule 7047(d)(1)(B). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74282; File No. SR–EDGX– 

2015–09] 

Self-Regulatory Organizations; EDGX 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Establish Fees for 

EDGX Top, EDGX Last Sale, and the 

BATS One Feed 

February 17, 2015. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on February 

2, 2015, EDGX Exchange, Inc. (‘‘EDGX’’ 

or the ‘‘Exchange’’) 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 

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 Substance of 

the Proposed Rule Change 

The Exchange filed a proposal to 

amend its fee schedule to establish fees 

for EDGX Top, EDGX Last Sale, and the 

BATS One Feed, as well as add 

definitions for terms that apply to 

market data fees and make certain 

technical, non-substantive changes. 

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, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of, and basis for, 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of those 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

fee schedule to establish fees for EDGX 

Top, EDGX Last Sale, and the BATS 

One Feed, as well as add definitions for 

terms that apply to market data fees and 

make certain technical, non-substantive 

changes. 

Technical, Non-Substantive Changes 

The Exchange proposes the following 

technical, non-substantive amendments 

to its fee schedule regarding its existing 

market data fees. First, the Exchange 

proposes to group all fees for its market 

data products under a section entitled, 

‘‘Market Data Fees.’’ Second, the 

Exchange proposes to rename the 

section entitled ‘‘EdgeBook Depth Fees’’ 

as the ‘‘EDGX Depth’’ to align with a 

name change within Rule 13.8 that was 

recently filed with the Commission.5

Third, the Exchange proposes to amend 

the name of the section entitled 

‘‘EdgeBook Attributed Fees’’ as ‘‘EDGX 

Depth Attributed’’ to align with the 

naming convention of the Exchange’s 

other market data products: EDGX 

Depth, EDGX Top, and EDGX Last Sale. 

Fourth, the Exchange proposes to 

relocate the section entitled ‘‘EDGX 

Historical Depth Data’’ within the new 

section on market data fees. The 

Exchange also proposes to replace 

references to ‘‘EdgeBook Depth X’’ with 

‘‘EDGX Depth’’ to align with the name 

change within Rule 13.8 discussed 

above. 

Definitions Applicable to Market Data 

Fees 

The Exchange proposes to include in 

its fee schedule the following defined 

terms that relate to the Exchange’s 

market data fees. The proposed 

definitions are designed to provide 

greater transparency with regard to how 

the Exchange assesses fees for market 

data. The Exchange notes that none of 

the proposed definitions are designed to 

amend any fee, nor alter the manner in 

which it assesses fees. 

First, the Exchange proposes to 

amend and relocate its current 

definition of a ‘‘Distributor’’ contained 

in its fee schedule. A Distributor is 

currently defined as ‘‘any entity that 

receives a market data feed directly from 

the Exchange or indirectly through 

another entity and then distributes it 

either internally (within that entity) 

(‘‘Internal Distributor’’) or externally 

(outside that entity) (‘‘External 

Distributor’’). All Distributors shall 

execute a Market Data Vendor 

Agreement with Direct Edge, Inc., acting 

on behalf of EDGX Exchange, Inc.’’ As 

amended, a ‘‘Distributor’’ will be 

defined as ‘‘any entity that receives an 

Exchange Market Data product directly 

from the Exchange or indirectly through 

another entity and then distributes it 

internally or externally to a third 

party.’’ 6 In turn, an Internal Distributor 

and External Distributor will be 

separately defined. An Internal 

Distributor will be defined as a 

‘‘Distributor that receives the Exchange 

Market Data product and then 

distributes that data to one or more 

Users within the Distributor’s own 

entity.’’ 7 An External Distributor will be 

defined as a ‘‘Distributor that receives 

the Exchange Market Data product and 

then distributes that data to a third party 

or one or more Users outside the 

Distributor’s own entity.’’ 8

Secondly, the Exchange proposes to 

add a definition of ‘‘User’’ to its fee 

schedule. A User will be defined as a 

‘‘natural person, a proprietorship, 

corporation, partnership, or entity, or 

device (computer or other automated 

service), that is entitled to receive 

Exchange data.’’ For purposes of its 

market data fees, the Exchange will 

distinguish between ‘‘Non-Professional 

Users’’ and ‘‘Professional Users.’’ 

Specifically, a Non-Professional User 

will be defined as ‘‘a natural person 

who is not: (i) Registered or qualified in 

any capacity with the Commission, the 

Commodity Futures Trading 

Commission, any state securities 

agency, any securities exchange or 

association; any commodities or futures 

contract market or association; (ii) 

engaged as an ‘‘investment adviser’’ as 

that term is defined in Section 201(11) 

of the Investment Advisers Act of 1940 

(whether or not registered or qualified 

under that Act); or (iii) employed by a 

bank or other organization exempt from 

registration under federal or state 


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9The proposed definition of ‘‘Professional User’’ 

is similar to Nasdaq Rule 7047(d)(3)(A). 

10The proposed definition of ‘‘Non-Professional 

User’’ is similar to Nasdaq Rule 7047(d)(3)(B). 

11See supra note 5. See also BATS Rule 11.22(d) 

and (g). 

12The 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(cc). 

13See Securities Exchange Act Release No. 73918 

(December 23, 2014), 79 FR 78920 (December 31, 

2014) (File Nos. SR–EDGX–2014–25; SR–EDGA– 

2014–25; SR–BATS–2014–055; SR–BYX–2014–030) 

(Notice of Amendments No. 2 and Order Granting 

Accelerated Approval to Proposed Rule Changes, as 

Modified by Amendments Nos. 1 and 2, to Establish 

a New Market Data Product called the BATS One 

Feed) (‘‘BATS One Approval Order’’). 

14EDGX’s affiliated exchanges are BZX, BYX, and 

EDGA Exchange, Inc. (‘‘EDGA’’, together with 

EDGX, BZX, and BYX, the ‘‘BATS Exchanges’’). On 

January 31, 2014, Direct Edge Holdings LLC (‘‘DE 

Holdings’’), the former parent company of the 

Exchange and EDGA, completed its business 

combination with BATS Global Markets, Inc., the 

parent company of BATS and BYX. See Securities 

Exchange Act Release No. 71449 (January 30, 2014), 

79 FR 6961 (February 5, 2014) (SR–EDGX–2013–43, 

SR–EDGA–2014–34). Upon completion of the 

business combination, DE Holdings and BATS 

Global Markets, Inc. each became intermediate 

holding companies, held under a single new 

holding company. The new holding company, 

formerly named ‘‘BATS Global Markets Holdings, 

Inc.,’’ changed its name to ‘‘BATS Global Markets, 

Inc.’’ 

15The Exchange understands that each of the 

BATS Exchanges will separately file substantially 

similar proposed rule changes with the Commission 

to implement fees for the BATS One Feed. 

16See Securities Exchange Act Release Nos. 

66864 (April 26, 2012), 77 FR 26064 (May 2, 2012) 

(SR–EDGX–2012–14); 66863 (April 26, 2012), 77 FR 

26059 (May 2, 2012) (SR–EDGA–2012–15); 69936 

(July 3, 2013), 78 FR 41483 (July 10, 2013) (SR– 

BATS–2013–39); 69935 (July 3, 2013), 78 FR 47447 

(July 10, 2013) (SR–BYX–2013–023). See EDGA 

Rule 13.8, EDGX Rule 13.8, BZX Rule 11.22(a) and 

(c), and BYX Rule 11.22 (a) and (c) for a description 

of the depth of book feeds offered by each of the 

BATS Exchanges. 

17See supra note 5. See also BZX and BYX Rules 

11.22(d) and (g). 

18See BATS One Approval Order, supra note 13. 

The Exchange notes that a vendor can obtain the 

underlying depth-of-book feeds as well as EDGX 

Top, EDGX Last Sale, EDGA Top, EDGA Last Sale, 

BZX Top, BZX Last Sale, BYX Top and BYX Last 

Sale on the same latency basis as the Exchange 

would receive the underlying depth-of-book feeds 

necessary to create the BATS One Feed, including 

the BATS One Summary Feed. Id. 

securities laws to perform functions that 

will require registration or qualification 

if such functions were performed for an 

organization not so exempt.’’ 9 A 

Professional User will be defined as 

‘‘any User other than a Non-Professional 

User.’’ 10

EDGX Top and EDGX Last Sale 

The Exchange will begin to offer two 

new data feeds that are also identical to 

data feeds currently available on the 

BATS Exchange, Inc. (‘‘BZX’’) and 

BATS Y-Exchange, Inc. (‘‘BYX’’ 

collectively, with BZX, ‘‘BATS’’): EDGX 

Last Sale and EDGX Top.11 EDGX Last 

Sale will provide real-time, intraday 

trade information, including price, 

volume and time of executions based on 

orders entered into the System.12 EDGX 

Last Sale will not include quotation 

information. EDGX Top will include top 

of book quotations and last sale 

execution information based on orders 

entered into the System. The quotations 

made available via EDGX Top will 

provide an aggregated size and do not 

indicate the size or number of 

individual orders at the best bid or ask. 

The proposed cost of EDGX Last Sale 

for an Internal Distributor will be $500 

per month. Likewise, the proposed cost 

of EDGX Top for an Internal Distributor 

will be $500 per month. The Exchange 

does not propose to charge per User fees 

for either EDGX Last Sale or EDGX Top. 

Therefore, the Exchange will not require 

an External Distributor of EDGX Last 

Sale or EDGX Top to count, classify 

(e.g., professional or non-professional) 

or report to the Exchange information 

regarding the customers to which they 

provide the data. Instead, the Exchange 

proposes to charge an External 

Distributor of EDGX Last Sale a flat fee 

of $1,250 per month. The Exchange also 

proposes to charge an External 

Distributor of EDGX Top a flat fee of 

$1,250 per month. End Users will not 

have to pay the Exchange for EDGX Last 

Sale or EDGX Top, nor will end Users 

be required to enter into contracts with 

the Exchange. The Exchange also 

proposes to establish a New External 

Distributor Credit under which new 

External Distributors of EDGX Top or 

EDGX Last Sale will not be charged a 

Distributor Fee for their first three (3) 

months. Subscribers to either EDGX Top 

or EDGX Last Sale may also receive, 

upon request and at no additional cost, 

EDGX Last Sale or EDGX Top, as 

applicable. The Exchange believes that 

the proposed pricing model is simple 

and easy for data recipients to comply 

with, and thus, will result in a minimal 

additional administrative burden for 

data recipients with respect to EDGX 

Last Sale and EDGX Top. 

BATS One Feed 

The Commission recently approved a 

proposed rule change by the Exchange 

to establish a new market data product 

called the BATS One Feed.13 The BATS 

One Feed is a data feed that 

disseminates, on a real-time basis, the 

aggregate best bid and offer (‘‘BBO’’) of 

all displayed orders for securities traded 

on EDGX and its affiliated exchanges14

and for which the BATS Exchanges 

report quotes under the Consolidated 

Tape Association (‘‘CTA’’) Plan or the 

Nasdaq/UTP Plan.15 The BATS One 

Feed also contains the individual last 

sale information for the BATS 

Exchanges (collectively with the 

aggregate BBO, the ‘‘BATS One 

Summary Feed’’). In addition, the BATS 

One Feed contains optional 

functionality which will enable 

recipients to elect to receive aggregated 

two-sided quotations from the BATS 

Exchanges for up to five (5) price levels 

for all securities that are traded on the 

BATS Exchanges in addition to the 

BATS One Summary Feed (‘‘BATS One 

Premium Feed’’). For each price level on 

one of the BATS Exchanges, the BATS 

One Premium Feed will include a twosided quote and the number of shares 

available to buy and sell at that 

particular price level. 

The Exchange uses the following data 

feeds to create the BATS One Summary 

Feed and the BATS One Premium Feed, 

each of which is available to other 

vendors: EDGX Depth, EDGA Depth, 

BYX Depth, and BZX Depth, and each 

of which have been previously 

published by the Commission.16 A 

vendor that wishes to create a product 

like the BATS One Summary Feed 

could instead subscribe to EDGX Top, 

EDGX Last Sale, EDGA Top, EDGA Last 

Sale, BZX Top, BZX Last Sale, BYX 

Top, and BYX Last Sale.17 The BATS 

Exchanges are the exclusive distributors 

of these individual data feeds from 

which certain data elements are taken to 

create the BATS One Feed as well as the 

feeds that a vendor may use to create a 

product like the BATS One Summary 

Feed. By contrast, the Exchange would 

not be the exclusive distributor of the 

aggregated and consolidated 

information that comprises the BATS 

One Feed. Any entity that receives, or 

elects to received [sic], the individual 

data feeds or the feeds that may be used 

to create a product like the BATS One 

Feed would be able to, if it so chooses, 

to create a data feed with the same 

information included in the BATS One 

Feed and sell and distribute it to its 

clients so that it could be received by 

those clients as quickly as the BATS 

One Feed would be received by those 

same clients.18

The Exchange proposes to amend its 

fee schedule to incorporate fees related 

to the BATS One Feed. The Exchange 

proposes to charge different fees to 

vendors depending on whether the 

vendor elects to receive: (i) The BATS 

One Summary Feed; or (ii) the optional 

BATS One Premium Feed. These fees 

include the following, each of which are 

described in detail below: (i) Distributor 


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19The Exchange notes that Distributor Fees as 

well as the distinctions based on external versus 

internal distribution have been previously filed 

with the Commission by Nasdaq, Nasdaq OMX BX, 

and Nasdaq OMX PSX. See Nasdaq Rule 7019(b); 

see also Securities Exchange Act Release No. 62876 

(September 9, 2010), 75 FR 56624 (September 16, 

2010) (SR–PHLX–2010–120); Securities Exchange 

Act Release Nos. 62907 (September 14, 2010), 75 FR 

57314 (September 20, 2010) (SR–NASDAQ–2010– 

110); 59582 (March 16, 2009), 74 FR 12423 (March 

24, 2009) (Order approving SR–NASDAQ–2008– 

102); Securities Exchange Act Release No. 63442 

(December 6, 2010), 75 FR 77029 (December 10, 

2010) (SR–BX–2010–081). 

20The Exchange notes that User fees as well as 

the distinctions based on professional and nonprofessional users have been previously filed with 

or approved by the Commission by Nasdaq and the 

New York Stock Exchange, Inc. (‘‘NYSE’’). See 

Securities Exchange Act Release Nos. 59582 (March 

16, 2009), 74 FR 12423 (March 24, 2009) (Order 

approving SR–NASDAQ–2008–102). 

21The Exchange notes that Enterprise fees have 

been previously filed with or approved by the 

Commission by Nasdaq, NYSE and the CTA/CQ 

Plans. See Nasdaq Rule 7047. Securities Exchange 

Act Release Nos. 71507 (February 7, 2014), 79 FR 

8763 (February 13, 2014) (SR–NASDAQ–20140011); 

70211 (August 15, 2013), 78 FR 51781 (August 21, 

2013) (SR–NYSE–2013–58); 70010 (July 19, 2013) 

(File No. SR–CTA/CQ–2013–04). 

22See EDGA Rule 13.8, EDGX Rule 13.8, BZX 

Rule 11.22(a) and (c), and BYX Rule 11.22 (a) and 

(c) for a description of the depth of book feeds 

offered by each of the BATS Exchanges. 

23Like the Exchange, an External Distributor 

would also be able to create a competing product 

to the BATS One Summary Feed from the data 

received via EDGX Depth, EDGA Depth, BYX 

Depth, and BZX Depth, without having to 

separately purchase the top and last sale feeds from 

each of the BATS Exchanges. 

24The monthly External Distributor fee is $2,500 

per month for EDGX Depth, $2,500 per month for 

EDGA Depth, $2,500 for BYX Depth, and $5,000 for 

BZX Depth. 

25See supra note 5. See also BATS Rule 11.22(d) 

and (g). 

26The monthly External Distributor fee is $1,250 

per month for EDGX Top and EDGX Last Sale (as 

proposed herein), free for EDGA Top and EDGA 

Last Sale, $1,250 for BYX Top and BYX Last Sale, 

and $2,500 for BZX Top and BZX Last Sale. See 

SR–EDGA–2015–09 and SR–BYX–2015–09. See 

also the BZX Fee Schedule available at http://

www.batstrading.com/support/fee_schedule/bzx/. 

27The Exchange notes that just as a third party 

vendor could choose to offer special pricing in 

order to incentivize data recipients to perform 

necessary development and other work in order to 

receive and distribute a new data product, the 

Exchange has proposed pricing to incentivize data 

recipients to take and distribute the BATS One 

Feed. 

28Requiring that every person or device to which 

they provide the data is counted by the Distributor 

receiving the BATS One Feed is similar to the 

NYSE Unit-of-Count Policy. The only difference is 

that the NYSE Unit-of-Count Policy requires the 

counting of users receiving a market data product 

through both internal and external distribution. 

Because the Exchange proposes to charge Usage 

Fees solely to recipient firms who’s Users receive 

data from an external distributor and not through 

internal distribution, it only requires the counting 

of Users by Distributors that disseminate the BATS 

One Feed externally. 

Fees;19 (ii) Usage Fees for both 

Professional and Non-Professional 

Users;20 (iii) Enterprise Fees;21 and (iv) 

a Data Consolidation Fee. The amount 

of each fee may differ depending on 

whether they use the BATS One Feed 

data for internal or external distribution. 

Vendors that distribute the BATS One 

Feed data both internally and externally 

will be subject to the higher of the two 

Distributor Fees. 

Internal Distributor Fees. As 

proposed, each Internal Distributor that 

receives only the BATS One Summary 

Feed shall pay a fee of $10,000 per 

month. The Exchange also proposes that 

each Internal Distributor shall pay a fee 

of $15,000 per month where they elect 

to receive the BATS One Premium Feed. 

The Exchange does not propose to 

charge any User fees for the BATS One 

Feed where the data is received and 

subsequently internally distributed to 

Professional or Non-Professional Users. 

External Distributor Fees. The 

Exchange proposes to charge those firms 

that distribute the BATS One Feed 

externally a fee of $5,000 per month for 

the BATS One Summary Feed. As 

proposed, each External Distributor 

shall pay a fee of $12,500 per month 

where they elect to receive the BATS 

One Premium Feed. 

The BATS One Feed is comprised of 

data included in EDGX Depth, EDGA 

Depth, BYX Depth, and BZX Depth.22

Currently, an External Distributor could 

create a competing product to the BATS 

One Premium Feed23 by purchasing the 

[sic] each of these depth of book 

products from the individual BATS 

Exchanges and then performing its own 

aggregation and consolidation functions. 

The combined External Distributor fees 

for these individual data feeds of the 

BATS Exchanges is $12,500 per 

month,24 equal to the $12,500 per 

month External Distributor Fee 

proposed for the BATS One Premium 

Feed. An External Distributor that seeks 

to create a competing product to the 

BATS One Summary Feed could instead 

subscribe to the following data feeds: 

EDGX Top, EDGX Last Sale, EDGA Top, 

EDGA Last Sale, BZX Top, BZX Last 

Sale, BYX Top, and BYX Last Sale,25

and then perform their own aggregation 

and consolidation function. The 

combined External Distributor fees for 

these individual data feeds of the BATS 

Exchanges is $5,000 per month,26 equal 

to the $5,000 per month External 

Distributor Fee proposed for the BATS 

One Summary Feed. To ensure that 

vendors could compete with the 

Exchange by creating the same product 

as the BATS One Feed and selling it to 

their clients, the Exchange proposes to 

charge External Distributors an External 

Distributor fee that equals the combined 

External Distributor fees for each of the 

individual feeds listed above. 

The Exchange also proposes to 

establish a New External Distributor 

Credit under which new External 

Distributors of the BATS One Summary 

Feed will not be charged a Distributor 

Fee for their first three (3) months in 

order to allow them to enlist new Users 

to receive the BATS One Feed.27 The 

New External Distributor Fee Credit will 

not be available to External Distributors 

of the BATS One Premium Feed. The 

Exchange does not believe the New 

External Distributor Credit would 

inhibit a vendor from creating a 

competing product and offer a similar 

free period as the Exchange. 

Specifically, a vendor seeking to create 

the BATS One Summary Feed could do 

so by subscribing to EDGX Top, EDGX 

Last Sale, EDGA Top, EDGA Last Sale, 

BZX Top, BZX Last Sale, BYX Top and 

BYX Last Sale, all of which are either 

free or also include a New External 

Distributor Credit identical to that 

proposed for the BATS One Summary 

Feed. As a result, a competing vendor 

would incur similar costs as the 

Exchange in offering such free period 

for a competing product and may do so 

on the same terms as the Exchange. 

User Fees 

In addition to Internal and External 

Distributor Fees, the Exchange proposes 

to charge those who receive the BATS 

One Feed from External Distributors 

different fees for both their Professional 

Users and Non-Professional Users. The 

Exchange will assess a monthly fee for 

Professional Users of $10.00 per User for 

receipt of the BATS One Summary Feed 

or $15.00 per User who elects to also 

receive the BATS One Premium Feed. 

Non-Professional Users will be assessed 

a monthly fee of $0.25 per user for the 

BATS One Summary Feed or $0.50 per 

user where they elects to receive the 

BATS One Premium Feed. 

External Distributors must count 

every Professional User and NonProfessional User to which they provide 

BATS One Feed data. Thus, the 

Distributor’s count will include every 

person and device that accesses the data 

regardless of the purpose for which the 

individual or device uses the data.28

Distributors must report all Professional 

and Non-Professional Users in 

accordance with the following: 

• In connection with an External 

Distributor’s distribution of the BATS 

One Feed, the Distributor should count 

as one User each unique User that the 

Distributor has entitled to have access to 

the BATS One Feed. However, where a 

device is dedicated specifically to a 

single individual, the Distributor should 


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29See EDGA Rule 13.8, EDGX Rule 13.8, BZX 

Rule 11.22(a) and (c), and BYX Rule 11.22 (a) and 

(c) for a description of the depth of book feeds 

offered by each of the BATS Exchanges. 

30See supra note 26. 

31See supra note 24. 

32 15 U.S.C. 78f. 

33 15 U.S.C. 78f(b)(4). 

count only the individual and need not 

count the device. 

• The External Distributor should 

identify and report each unique User. If 

a User uses the same unique method to 

gain access to the BATS One Feed, the 

Distributor should count that as one 

User. However, if a unique User uses 

multiple methods to gain access to the 

BATS One Feed (e.g., a single User has 

multiple passwords and user 

identifications), the External Distributor 

should report all of those methods as an 

individual User. 

• External Distributors should report 

each unique individual person who 

receives access through multiple 

devices as one User so long as each 

device is dedicated specifically to that 

individual. 

• If an External Distributor entitles 

one or more individuals to use the same 

device, the External Distributor should 

include only the individuals, and not 

the device, in the count. 

Each External Distributor will receive 

a credit against its monthly Distributor 

Fee for the BATS One Feed equal to the 

amount of its monthly Usage Fees up to 

a maximum of the Distributor Fee for 

the BATS One Feed. For example, an 

External Distributor will be subject to a 

$12,500 monthly Distributor Fee where 

they elect to receive the BATS One 

Premium Feed. If that External 

Distributor reports User quantities 

totaling $12,500 or more of monthly 

usage of the BATS One Premium Feed, 

it will pay no net Distributor Fee, 

whereas if that same External 

Distributor were to report User 

quantities totaling $11,500 of monthly 

usage, it will pay a net of $1,000 for the 

Distributor Fee. External Distributors 

will remain subject to the per User fees 

discussed above. In every case the 

Exchange will receive at least $12,500 in 

connection with the distribution of the 

BATS One Feed (through a combination 

of the External Distribution Fee and per 

User Fees). 

Enterprise Fee. The Exchange also 

proposes to establish a $50,000 per 

month Enterprise Fee that will permit a 

recipient firm who receives the BATS 

Summary Feed portion of the BATS One 

Feed from an External Distributor to 

receive the data for an unlimited 

number of Professional and NonProfessional Users and $100,000 per 

month for recipient firms who elect to 

receive the BATS One Premium Feed. 

For example, if a recipient firm had 

15,000 Professional Users who each 

receive the BATS One Summary Feed 

portion of the BATS One Feed at $10.00 

per month, then that recipient firm will 

pay $150,000 per month in Professional 

Users fees. Under the proposed 

Enterprise Fee, the recipient firm will 

pay a flat fee of $50,000 for an unlimited 

number of Professional and NonProfessional Users for the BATS 

Summary Feed portion of the BATS One 

Feed. A recipient firm must pay a 

separate Enterprise Fee for each 

External Distributor that controls 

display of the BATS One Feed if it 

wishes such User to be covered by an 

Enterprise Fee rather than by per-User 

fees. A recipient firms that pays the 

Enterprise Fee will not have to report its 

number of such Users on a monthly 

basis. However, every six months, a 

recipient firm must provide the 

Exchange with a count of the total 

number of natural person users of each 

product, including both Professional 

and Non-Professional Users. The 

Enterprise Fee would be in addition to 

the applicable Distributor Fee. 

Data Consolidation Fee 

The Exchange also proposes to charge 

External Distributors of the BATS One 

Feed a separate Data Consolidation Fee, 

which reflects the value of the 

aggregation and consolidation function 

the Exchange performs in creating the 

BATS One Feed. As stated above, the 

Exchange creates the BATS One Feed 

from data derived from the EDGX 

Depth, EDGA Depth, BYX Depth, and 

BZX Depth.29 The Exchange notes that 

an External Distributor could create a 

competing product to the BATS One 

Feed based on these individual data 

feeds, or, alternatively, the applicable 

Top and Last Sale products offered by 

the Exchanges, and could charge its 

clients a fee that it believes reflects the 

value of the aggregation and 

consolidation function. The Exchanges 

[sic] believes that the incremental cost 

to a particular vendor for aggregation 

can be supported by the vendor’s 

revenue opportunity and may be 

inconsequential if such vendor already 

has systems in place to perform these 

functions as part of creating its 

proprietary market data products and is 

able to allocate these costs over 

numerous products and customer 

relationships. For these reasons, the 

Exchange believes that vendors could 

readily offer a product similar to the 

BATS One Feed on a competitive basis 

at a similar cost. 

The Exchange does not propose to 

charge Internal Distributors the separate 

Data Consolidation Fee as the proposed 

Internal Distributor Fees are greater than 

the cost of subscribing to each of the 

underlying individual feed. As 

discussed above, each Internal 

Distributor that receives only the BATS 

One Summary Feed shall pay a fee of 

$10,000 per month, as compared to 

$5,000, which is the total of the 

underlying feeds.30 Each Internal 

Distributor shall pay a fee of $15,000 per 

month where they elect to receive the 

BATS One Premium Feed, as compared 

to $12,500, which is the total cost of the 

underlying depth feeds.31 The increased 

cost of the BATS One Feed is designed 

to include the value of the aggregation 

and consolidation function the 

Exchange performs in creating the BATS 

One Feed. Therefore, the Exchange does 

not propose to charge Internal 

Distributors a separate Data 

Consolidation Fee. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,32

in general, and furthers the objectives of 

Section 6(b)(4),33 in particular, as it is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its Members and 

other persons using its facilities. The 

Exchange believes that the proposed 

rates are equitable and nondiscriminatory in that they apply 

uniformly to all Members. The 

Exchange believes the proposed fees are 

competitive with those charged by other 

venues and, therefore, reasonable and 

equitably allocated to Members. 

Technical, Non-Substantive Changes 

The Exchange believes that the nonsubstantive changes to its fee schedule 

are reasonable because they are 

designed to align with a previous name 

change within Rule 13.8 and the naming 

convention of the Exchange’s other 

market data products: EDGX Depth, the 

EDGX Top, and EDGX Last Sale. The 

Exchange notes that none of the 

proposed non-substantive changes are 

designed to amend any fee, nor alter the 

manner in which it assesses fees. These 

non-substantive, technical changes to 

the fee schedule are intended to make 

the fee schedule clearer and less 

confusing for investors and eliminate 

potential investor confusion, thereby 

removing impediments to and 

perfecting the mechanism of a free and 

open market and a national market 

system, and, in general, protecting 

investors and the public interest. 


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34The proposed definition of ‘‘Distributor’’ is 

similar to Nasdaq Rule 7047(d)(1). The proposed 

definition of ‘‘Internal Distributor’’ is similar to 

Nasdaq Rule 7047(d)(1)(A). The proposed definition 

of ‘‘External Distributor’’ is similar to Nasdaq Rule 

7047(d)(1)(B). The proposed definition of 

‘‘Professional User’’ is similar to Nasdaq Rule 

7047(d)(3)(A). The proposed definition of ‘‘NonProfessional User’’ is similar to Nasdaq Rule 

7047(d)(3)(B). 

35 15 U.S.C. 78f(b)(4). 

36 15 U.S.C. 78f. 

37 15 U.S.C. 78f(b)(4). 

38 15 U.S.C. 78k–1. 

39See 17 CFR 242.603. 

40See BATS One Approval Order, supra note 13. 

The Exchange notes that a vendor can obtain the 

underlying depth-of-book feeds as well as EDGX 

Top, EDGX Last Sale, EDGA Top, EDGA Last Sale, 

BZX Top, BZX Last Sale, BYX Top and BYX Last 

Sale on the same latency basis as the Exchange 

would receive the underlying depth-of-book feeds 

necessary to create the BATS One Feed, including 

the BATS One Summary Feed. Id. 

41See infra note 55. 

Definitions Applicable to Market Data 

Fees 

The Exchange believes that the 

proposed definitions are reasonable 

because they are designed to provide 

greater transparency to Members with 

regard to how the Exchange assesses 

fees for market data. The Exchange 

notes that none of the proposed 

definitions are designed to amend any 

fee, nor alter the manner in which it 

assesses fees. The Exchange believes 

that Members would benefit from clear 

guidance in its fee schedule that 

describes the manner in which the 

Exchange would assess fees. These 

definitions are intended to make the fee 

schedule clearer and less confusing for 

investors and eliminate potential 

investor confusion, thereby removing 

impediments to and perfecting the 

mechanism of a free and open market 

and a national market system, and, in 

general, protecting investors and the 

public interest. Lastly, the proposed 

definitions are based on existing rules of 

the Nasdaq Stock Market LLC 

(‘‘Nasdaq’’).34

EDGX Top and EDGX Last Sale 

The Exchange believes that its 

proposed fees for EDGX Last Sale and 

EDGX Top are consistent with Section 

6(b)(4) of the Act 35 because they 

provide for an equitable allocation of 

reasonable dues, fees, and other charges 

among its members and other recipients 

of Exchange data. The Exchange also 

believes the proposed fees for EDGX 

Last Sale and EDGX Top are reasonable 

and equitable in light of the benefits to 

data recipients. To the extent consumers 

do purchase the data products, the 

revenue generated will offset the 

Exchange’s fixed costs of operating and 

regulating a highly efficient and reliable 

platform for the trading of U.S. equities. 

It will also help the Exchange cover its 

costs in developing and running that 

platform, as well as ongoing 

infrastructure costs. EDGX Last Sale and 

EDGX Top would be distributed and 

purchased on a voluntary basis, in that 

neither the Exchanges nor market data 

distributors are required by any rule or 

regulation to make this data available. 

Accordingly, Distributors and Users can 

discontinue use at any time and for any 

reason, including due to an assessment 

of the reasonableness of fees charged. 

Lastly, the Exchange also believes that 

the proposed amendments to its fee 

schedule are reasonable and nondiscriminatory because it [sic] will 

apply uniformly to all Members. 

BATS One Feed 

The Exchange also believes that the 

proposed fees for the BATS One Feed 

are consistent with Section 6(b) of the 

Act,36 in general, and Section 6(b)(4) of 

the Act,37 in particular, in that it [sic] 

they provide for an equitable allocation 

of reasonable fees among Users and 

recipients of the data and are not 

designed to permit unfair 

discrimination among customers, 

brokers, or dealers. The Exchange also 

believes that the proposed rule change 

is consistent with Section 11(A) of the 

Act38 in that it supports (i) fair 

competition among brokers and dealers, 

among exchange markets, and between 

exchange markets and markets other 

than exchange markets and (ii) the 

availability to brokers, dealers, and 

investors of information with respect to 

quotations for and transactions in 

securities. Furthermore, the proposed 

rule change is consistent with Rule 603 

of Regulation NMS,39 which provides 

that any national securities exchange 

that distributes information with respect 

to quotations for or transactions in an 

NMS stock do so on terms that are not 

unreasonably discriminatory. In 

adopting Regulation NMS, the 

Commission granted self-regulatory 

organizations and broker-dealers 

increased authority and flexibility to 

offer new and unique market data to the 

public. It was believed that this 

authority would expand the amount of 

data available to consumers, and also 

spur innovation and competition for the 

provision of market data. 

In addition, the proposed fees would 

not permit unfair discrimination 

because all of the Exchange’s customers 

and market data vendors will be subject 

to the proposed fee structure on an 

equivalent basis. The BATS One Feed 

would be distributed and purchased on 

a voluntary basis, in that neither the 

BATS Exchanges nor market data 

distributors are required by any rule or 

regulation to make this data available. 

Accordingly, Distributors and Users can 

discontinue use at any time and for any 

reason, including due to an assessment 

of the reasonableness of fees charged. In 

addition, any customer that wishes to 

purchase one or more of the individual 

data feeds offered by the BATS 

Exchanges would be able to do so. 

The Exchange has taken into 

consideration its affiliated relationship 

with EDGA, BYX, and BZX in its design 

of the BATS One Feed to assure that 

vendors would be able to offer a similar 

product on the same terms as the 

Exchange from a cost perspective. While 

the BATS Exchanges are the exclusive 

distributors of the individual data feeds 

from which certain data elements may 

be taken to create the BATS One Feed, 

they are not the exclusive distributors of 

the aggregated and consolidated 

information that comprises the BATS 

One Feed. Any entity that receives, or 

elects to receive, the individual data 

feeds would be able to, if it so chooses, 

to create a data feed with the same 

information included in the BATS One 

Feed and sell and distribute it to its 

clients so that it could be received by 

those clients as quickly as the BATS 

One Feed would be received by those 

same clients with no greater cost than 

the Exchange.40

In addition, vendors and subscribers 

that do not wish to purchase the BATS 

One Feed may separately purchase the 

individual underlying products, and if 

they so choose, perform a similar 

aggregation and consolidation function 

that the Exchange performs in creating 

the BATS One Feed. To enable such 

competition, the Exchange is offering 

the BATS One Feed on terms that a 

subscriber of those underlying feeds 

could offer a competing product if it so 

chooses. 

The Exchange notes that the use of the 

BATS One Feed is entirely optional. 

Firms have a wide variety of alternative 

market data products from which to 

choose, including the Exchanges’ own 

underlying data products, the Nasdaq 

and the NYSE proprietary data products 

described in this filing,41 and 

consolidated data. Moreover, the 

Exchange is not required to make any 

proprietary data products available or to 

offer any specific pricing alternatives to 

any customers. 

In addition, the fees that are the 

subject of this rule filing are constrained 

by competition. As explained below in 

the Exchange’s Statement on Burden on 

Competition, the existence of 


Rmajette on DSK2VPTVN1PROD with NOTICES
9492 Federal Register / Vol. 80, No. 35 / Monday, February 23, 2015 / Notices 

42The Exchange believes that cost-based pricing 

would be impractical because it would create 

enormous administrative burdens for all parties, 

including the Commission, to cost-regulate a large 

number of participants and standardize and analyze 

extraordinary amounts of information, accounts, 

and reports. In addition, it is impossible to regulate 

market data prices in isolation from prices charged 

by markets for other services that are joint products. 

Cost-based rate regulation would also lead to 

litigation and may distort incentives, including 

those to minimize costs and to innovate, leading to 

further waste. Under cost-based pricing, the 

Commission would be burdened with determining 

a fair rate of return, and the industry could 

experience frequent rate increases based on 

escalating expense levels. Even in industries 

historically subject to utility regulation, cost-based 

ratemaking has been discredited. As such, the 

Exchange believes that cost-based ratemaking 

would be inappropriate for proprietary market data 

and inconsistent with Congress’s direction that the 

Commission use its authority to foster the 

development of the national market system, and 

that market forces will continue to provide 

appropriate pricing discipline. See Appendix C to 

NYSE’s comments to the Commission’s 2000 

Concept Release on the Regulation of Market 

Information Fees and Revenues, which can be 

found on the Commission’s Web site at http://

www.sec.gov/rules/concept/s72899/buck1.htm. See 

also Securities Exchange Act Release No. 73816 

(December 11, 2014), 79 FR 75200 (December 17, 

2014) (SR–NYSE–2014–64) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

to Establish an Access Fee for the NYSE Best Quote 

and Trades Data Feed, Operative December 1, 

2014). 

43See, e.g., Securities Exchange Act Release No. 

20002, File No. S7–433 (July 22, 1983) (establishing 

nonprofessional fees for CTA data); Nasdaq Rules 

7023(b), 7047. 

44See Nasdaq Rule 7047. 

45See CTA Plan dated September 9, 2013 and CQ 

Plan dated September 9, 2013, available at https:// 

cta.nyxdata.com/CTA. 

alternatives to the BATS One Feed 

further ensures that the Exchange 

cannot set unreasonable fees, or fees 

that are unreasonably discriminatory, 

when vendors and subscribers can elect 

such alternatives. That is, the Exchange 

competes with other exchanges (and 

their affiliates) that provide similar 

market data products. If another 

exchange (or its affiliate) were to charge 

less to consolidate and distribute its 

similar product than the Exchange 

charges to consolidate and distribute the 

BATS One Feed, prospective Users 

likely would not subscribe to, or would 

cease subscribing to, the BATS One 

Feed. In addition, the Exchange would 

compete with unaffiliated market data 

vendors who would be in a position to 

consolidate and distribute the same data 

that comprises the BATS One Feed into 

the vendor’s own comparable market 

data product. If the third-party vendor is 

able to provide the exact same data for 

a lower cost, prospective Users would 

avail themselves of that lower cost and 

elect not to take the BATS One Feed. 

The Exchange notes that the 

Commission is not required to 

undertake a cost-of-service or 

ratemaking approach. The Exchange 

believes that, even if it were possible as 

a matter of economic theory, cost-based 

pricing for non-core market data would 

be so complicated that it could not be 

done practically.42

For these reasons, the Exchange 

believes that the proposed fees are 

reasonable, equitable, and not unfairly 

discriminatory. 

User Fees. The Exchange believes that 

implementing the Professional and NonProfessional User fees for the BATS One 

Feed is reasonable because it will make 

the product more affordable and result 

in greater availability to Professional 

and Non-Professional Users. Moreover, 

introducing a modest Non-Professional 

User fee for the BATS One Feed is 

reasonable because it provides an 

additional method for retail investors to 

access the BATS One Feed data by 

providing the same data that is available 

to Professional Users. The Exchange 

believes that the proposed fees are 

equitable and not unfairly 

discriminatory because they will be 

charged uniformly to recipient firms 

and Users. The fee structure of 

differentiated Professional and NonProfessional fees has long been used by 

other exchanges for their proprietary 

data products, and by the Nasdaq UTP 

and the CTA and CQ Plans in order to 

reduce the price of data to retail 

investors and make it more broadly 

available.43 Offering the BATS One Feed 

to Non-Professional Users with the same 

data available to Professional Users 

results in greater equity among data 

recipients. 

In addition, the proposed fees are 

reasonable when compared to fees for 

comparable products offered by the 

NYSE, Nasdaq, and under the CTA and 

CQ Plans. Specifically, Nasdaq offers 

Nasdaq Basic, which includes best bid 

and offer and last sale data for Nasdaq 

and the FINRA/Nasdaq TRF, for a 

monthly fee of $26 per professional 

subscriber and $1 per non-professional 

subscriber; alternatively, a broker-dealer 

may purchase an enterprise license at a 

rate of $350,000 per month for internal 

distribution to an unlimited number of 

professional users or $365,000 per 

month for external distribution for up to 

16,000 professional users, plus $2 for 

each additional professional user over 

16,000.44 The NYSE offers BQT, which 

provides BBO and last sale information 

for the NYSE, NYSE Arca, and NYSE 

MKT. To obtain BQT, subscribers must 

purchase the [sic] each underlying data 

feed for a monthly fee of $18 per 

professional subscriber and $1 per nonprofessional subscriber; alternatively, a 

broker-dealer may purchase an 

enterprise license at a rate of $365,000 

per month for an unlimited number of 

professional users. The NYSE does not 

offer an enterprise license for nonprofessional users. The Exchange’s 

proposed per-User Fees are lower than 

the NYSE’s and Nasdaq’s fees. In 

addition, the Exchange is proposing 

Professional and Non-Professional User 

fees and Enterprise Fees that are less 

than the fees currently charged by the 

CTA and CQ Plans. Under the CTA and 

CQ Plans, Tape A consolidated last sale 

and bid-ask data are offered together for 

a monthly fee of $20-$50 per device, 

depending on the number of 

professional subscribers, and $1.00 per 

non-professional subscriber, depending 

on the number of non-professional 

subscribers.45 A monthly enterprise fee 

of $686,400 is available under which a 

U.S. registered broker-dealer may 

distribute data to an unlimited number 

of its own employees and its nonprofessional subscriber brokerage 

account customers. Finally, in contrast 

to Nasdaq UTP and the CTA and CQ 

Plans, the Exchange also will permit 

enterprise distribution by a non-brokerdealer. 

Enterprise Fee. The proposed 

Enterprise Fee for the BATS One Feed 

is reasonable as the fee proposed is less 

than the enterprise fees currently 

charged for underlying data feeds for 

NYSE BQT, Nasdaq Basic, and 

consolidated data distributed under the 

Nasdaq UTP and the CTA and CQ Plans. 

In addition, the Enterprise Fee could 

result in a fee reduction for recipient 

firms with a large number of 

Professional and Non-Professional 

Users. If a recipient firm has a smaller 

number of Professional Users of the 

BATS One Feed, then it may continue 

using the per User structure and benefit 

from the per User Fee reductions. By 

reducing prices for recipient firms with 

a large number of Professional and NonProfessional Users, the Exchange 

believes that more firms may choose to 

receive and to distribute the BATS One 

Feed, thereby expanding the 

distribution of this market data for the 

benefit of investors. 

The Exchange further believes that the 

proposed Enterprise Fee is reasonable 

because it will simplify reporting for 

certain recipients that have large 

numbers of Professional and NonProfessional Users. Firms that pay the 

proposed Enterprise Fee will not have to 

report the number of Users on a 

monthly basis as they currently do, but 

rather will only have to count natural 

person users every six months, which is 

a significant reduction in administrative 

burden. Finally, the Exchange believes 


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Federal Register / Vol. 80, No. 35 / Monday, February 23, 2015 / Notices 9493 

46The Exchange notes that distinctions based on 

external versus internal distribution have been 

previously filed with the Commission by Nasdaq, 

Nasdaq OMX BX, and Nasdaq OMX PSX. See 

Nasdaq Rule 019(b); see also Securities Exchange 

Act Release No. 62876 (September 9, 2010), 75 FR 

56624 (September 16, 2010) (SR–PHLX–2010–120); 

Securities Exchange Act Release No. 62907 

(September 14, 2010), 75 FR 57314 (September 20, 

2010) (SR–NASDAQ–2010–110); Securities 

Exchange Act Release No. 63442 (December 6, 

2010), 75 FR 77029 (December 10, 2010) (SR–BX– 

2010–081). 

47See supra notes 15 and 16. 

48Like the Exchange, an External Distributor 

would also be able to create a competing product 

to the BATS One Summary Feed from the data 

received via EDGX Depth, EDGA Depth, BYX 

Depth, and BZX Depth, without having to 

separately purchase the top and last sale feeds from 

each of the BATS Exchanges. 

49As discussed, the Exchange proposes to charge 

External Distributors a separate Data Consolidation 

Fee to reflect the value of the consolidation 

function performed by the Exchange. 

50See supra note 24. 

51See supra note 26. 

52See Securities Exchange Act Release No. 73816 

(December 11, 2014), 79 FR 75200 (December 17, 

2014) (SR–NYSE–2014–64) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

to Establish an Access Fee for the NYSE Best Quote 

and Trades Data Feed, Operative December 1, 

2014). 

53See supra note 26. 

54See supra note 24. 

that it is equitable and not unfairly 

discriminatory to establish an Enterprise 

Fee because it reduces the Exchange’s 

costs and the Distributor’s 

administrative burdens in tracking and 

auditing large numbers of users. 

Distributor Fee. The Exchange 

believes that the proposed Distributor 

Fees are also reasonable, equitably 

allocated, and not unreasonably 

discriminatory. The fees for Members 

and non-Members are uniform except 

with respect to reasonable distinctions 

with respect to internal and external 

distribution.46 The Exchange believes 

that the Distributor Fees for the BATS 

One Feed are reasonable and fair in light 

of alternatives offered by other market 

centers. First, although the Internal 

Distributor fee is higher than those of 

competitor products, there are no User 

fees assessed for Users that receive the 

BATS One Feed data through an 

Internal Distributor, which results in a 

net cost that is lower than competitor 

products for many data recipients and 

will be easier to administer. 

The proposed Distributor Fees for the 

BATS One Feed are also designed to 

ensure that vendors could compete with 

the Exchange by creating a similar 

product as the BATS One Feed. The 

Exchange believes that the proposed 

Distributor Fees are equitable and 

reasonable as it [sic] equals the 

combined fee of subscribing to each 

individual data feed of the BATS 

Exchanges, which have been previously 

published by the Commission.47

Currently, an External Distributor that 

seeks to create a competing product to 

the BATS One Premium Feed 48 would 

need to purchase each of the depth of 

book products from the individual 

BATS Exchanges and then perform its 

own aggregation and consolidation 

functions.49 The combined external 

distributor fees for these individual 

depth of book feeds of the BATS 

Exchanges is $12,500 per month,50

equal to the $12,500 per month External 

Distributor Fee proposed for the BATS 

One Premium Feed. An External 

Distributor that seeks to create a 

competing product to the BATS One 

Summary Feed could alternatively 

subscribe to EDGX Top, EDGX Last Sale, 

EDGA Top, EDGA Last Sale, BZX Top, 

BZX Last Sale, BYX Top, and BYX Last 

Sale, and then perform their own 

aggregation and consolidation function. 

The combined external distributor fees 

for these individual data feeds of the 

BATS Exchanges is $5,000 per month,51

equal to the $5,000 per month External 

Distributor Fee proposed for the BATS 

One Summary Feed. In addition, the 

Exchange believes it is reasonable to not 

charge External Distributors a 

Distribution Fee during their first three 

(3) months and does not believe this 

would inhibit a vendor from creating a 

competing product and offer a similar 

free period as the Exchange. 

Specifically, a vendor seeking to create 

the BATS One Summary Feed could do 

so by subscribing to EDGX Top, EDGX 

Last Sale, EDGA Top, EDGA Last Sale, 

BZX Top, BZX Last Sale, BYX Top and 

BYX Last Sale, all of which are either 

free or also include a New External 

Distributor Credit identical to that 

proposed for the BATS One Summary 

Feed. As a result, a competing vendor 

would incur similar costs as the 

Exchange in offering such free period 

for a competing product and may do so 

on the same terms as the Exchange. 

Data Consolidation Fee 

The Exchange believes that the 

proposed $1,000 per month Data 

Consolidation Fee charged to External 

Distributors who receive the BATS One 

Feed is reasonable because it represents 

the value of the data aggregation and 

consolidation function that the 

Exchange performs. The Exchange also 

notes that its proposed $1,000 per 

month Data Consolidation Fee is 

identical to an access fee charged by the 

NYSE for BQT, which is also designed 

to represent the value of the data 

aggregation function provided by the 

NYSE in constructing it BQT feed.52

The Exchange further believes the 

proposed Data Consolidation Fee is not 

designed to permit unfair 

discrimination because all External 

Distributor who subscribe to the BATS 

One Feed will be charged the same fee. 

The Exchange believes it is reasonable 

and not unfairly discriminatory to not 

charge Internal Distributor a separate 

Data Consolidation Fee as the proposed 

Internal Distributor Fees are greater than 

the cost of subscribing to each of the 

underlying individual feed. As 

discussed above, each Internal 

Distributor that receives only the BATS 

One Summary Feed shall pay a fee of 

$10,000 per month as compared to 

$5,000, which is the total of the 

underlying feeds.53 Each Internal 

Distributor shall pay a fee of $15,000 per 

month where they elect to receive the 

BATS One Premium Feed as compared 

to $12,500, which is the total cost of the 

underlying depth feeds.54 The increased 

cost of the BATS One Feed is designed 

to include the value of the aggregation 

and consolidation function the 

Exchange performs in creating the BATS 

One Feed. Therefore, the Exchange 

believes the proposed application of the 

Data Consolidation Fee is reasonable 

would not permit unfair discrimination. 

In addition, a vendor could create a 

competing product based on the 

individual data feeds and charge its 

clients a fee that it believes reflects the 

value of the aggregation and 

consolidation function that is 

competitive with the BATS One Feed 

pricing. The Exchanges believes that the 

incremental cost to a particular vendor 

for aggregation can be supported by the 

vendor’s revenue opportunity and may 

be inconsequential if such vendor 

already has systems in place to perform 

these functions as part of creating its 

proprietary market data products and is 

able to allocate these costs over 

numerous products and customer 

relationships. Therefore, the Exchange 

believes the proposed pricing would 

enable a vendor to create a competing 

product based on the individual data 

feeds and charge its clients a fee that it 

believes reflects the value of the 

aggregation and consolidation function 

that is competitive with BATS One Feed 

pricing as discussed further below. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 


Rmajette on DSK2VPTVN1PROD with NOTICES
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55See Nasdaq Basic, http://

www.nasdaqtrader.com/

Trader.aspx?id=nasdaqbasic (last visited May 29, 

2014) (data feed offering the BBO and Last Sale 

information for all U.S. exchange-listed securities 

based on liquidity within the Nasdaq market center, 

as well as trades reported to the FINRA/Nasdaq 

Trade Reporting Facility (‘‘TRF’’)); Nasdaq NLS 

Plus, http://www.nasdaqtrader.com/

Trader.aspx?id=NLSplus (last visited July 8, 2014) 

(data feed providing last sale data as well as 

consolidated volume from the following Nasdaq 

OMX markets for U.S. exchange-listed securities: 

Nasdaq, FINRA/Nasdaq TRF, Nasdaq OMX BX, and 

Nasdaq OMX PSX); Securities Exchange Act 

Release No. 73553 (November 6, 2014), 79 FR 67491 

(November 13, 2014) (SR–NYSE–2014–40) (Notice 

of Amendment No. 1 and Order Granting 

Accelerated Approval to a Proposed Rule Change, 

as Modified by Amendment No.1, To Establish the 

NYSE Best Quote & Trades (‘‘BQT’’) Data Feed); 

http://www.nyxdata.com/Data-Products/NYSEBest-Quote-and-Trades (last visited May 27, 2014) 

(data feed providing unified view of BBO and last 

sale information for the NYSE, NYSE Arca, and 

NYSE MKT). 

56See BATS One Approval Order, supra note 13. 

Technical, Non-Substantive Changes 

The proposed name changes to 

EdgeBook and Depth and EdgeBook 

Attributed will not result in any burden 

on competition. The proposed 

amendments are not designed to address 

and competitive issues, but rather 

provide consistency amongst the 

naming conventions used for the 

Exchange market data products, 

resulting in additional clarity and 

transparency to Members, Users, and 

the investing public regarding the 

Exchange’s market data products. The 

Exchange notes that none of the 

proposed non-substantive changes are 

designed to amend any fee, nor alter the 

manner in which it assesses fees. These 

non-substantive, technical changes to 

the fee schedule are intended to make 

the fee schedule clearer and less 

confusing for investors and eliminate 

potential investor confusion. 

Definitions Applicable to Market Data 

Fees 

The proposed definitions applicable 

to market data fees will not result in any 

burden on competition. The proposed 

definitions are not designed to amend 

any fee, nor alter the manner in which 

it assesses fees. The Exchange believes 

that Members would benefit from clear 

guidance in its fee schedule that 

describes the manner in which the 

Exchange would assess fees for market 

data. These definitions are intended to 

make the Fee Schedule clearer and less 

confusing for investors and are not 

designed to have a competitive impact. 

EDGX Top and EDGX Last Sale 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

The Exchange’s ability to price EDGX 

Last Sale and EDGX Top are constrained 

by: (i) Competition among exchanges, 

other trading platforms, and Trade 

Reporting Facilities (‘‘TRF’’) that 

compete with each other in a variety of 

dimensions; (ii) the existence of 

inexpensive real-time consolidated data 

and market-specific data and free 

delayed data; and (iii) the inherent 

contestability of the market for 

proprietary data. 

The Exchange and its market data 

products are subject to significant 

competitive forces and the proposed 

fees represent responses to that 

competition. To start, the Exchange 

competes intensely for order flow. It 

competes with the other national 

securities exchanges that currently trade 

equities, with electronic communication 

networks, with quotes posted in 

FINRA’s Alternative Display Facility, 

with alternative trading systems, and 

with securities firms that primarily 

trade as principal with their customer 

order flow. 

In addition, EDGX Last Sale and 

EDGX Top compete with a number of 

alternative products. For instance, 

EDGX Last Sale and EDGX Top do not 

provide a complete picture of all trading 

activity in a security. Rather, the other 

national securities exchanges, the 

several TRFs of FINRA, and Electronic 

Communication Networks (‘‘ECN’’) that 

produce proprietary data all produce 

trades and trade reports. Each is 

currently permitted to produce last sale 

information products, and many 

currently do, including Nasdaq and 

NYSE. In addition, market participants 

can gain access to EDGX last sale prices 

and top-of-book quotations though 

integrated with the prices of other 

markets on feeds made available 

through the SIPs. 

In sum, the availability of a variety of 

alternative sources of information 

imposes significant competitive 

pressures on Exchange data products 

and the Exchange’s compelling need to 

attract order flow imposes significant 

competitive pressure on the Exchange to 

act equitably, fairly, and reasonably in 

setting the proposed data product fees. 

The proposed data product fees are, in 

part, responses to that pressure. The 

Exchange believes that the proposed 

fees would reflect an equitable 

allocation of its overall costs to users of 

its facilities. 

In addition, when establishing the 

proposed fees, the Exchange considered 

the competitiveness of the market for 

proprietary data and all of the 

implications of that competition. The 

Exchange believes that it has considered 

all relevant factors and has not 

considered irrelevant factors in order to 

establish fair, reasonable, and not 

unreasonably discriminatory fees and an 

equitable allocation of fees among all 

Users. The existence of alternatives to 

EDGX Last Sale and EDGX Top, 

including existing similar feeds by other 

exchanges, consolidated data, and 

proprietary data from other sources, 

ensures that the Exchange cannot set 

unreasonable fees, or fees that are 

unreasonably discriminatory, when 

vendors and subscribers can elect these 

alternatives or choose not to purchase a 

specific proprietary data product if its 

cost to purchase is not justified by the 

returns any particular vendor or 

subscriber would achieve through the 

purchase. 

BATS One Feed 

The BATS One Feed will enhance 

competition because it not only 

provides content that is competitive 

with the similar products offered by 

other exchanges, but will provide 

pricing that is competitive as well. The 

BATS One Feed provides investors with 

an alternative option for receiving 

market data and competes directly with 

similar market data products currently 

offered by the NYSE and Nasdaq.55 As 

previously stated, the fees for the BATS 

One Feed are significantly lower than 

alternative exchange products. The 

BATS One Feed is less expensive per 

professional user and more than 85% 

less expensive for an enterprise license 

for professional users (50% less for nonprofessional users) when compared to a 

similar competitor exchange product, 

offering firms a lower cost alternative 

for similar content. 

Although the BATS Exchanges are the 

exclusive distributors of the individual 

data feeds from which certain data 

elements would be taken to create the 

BATS One Feed, the Exchange would 

not be the exclusive distributor of the 

aggregated and consolidated 

information that would compose the 

proposed BATS One Feed. Any entity 

that receives, or elects to received, the 

underlying data feeds would be able to, 

if it so chooses, to create a data feed 

with the same information included in 

the BATS One Feed and sell and 

distribute it to its clients so that it could 

be received by those clients as quickly 

as the BATS One Feed would be 

received by those same clients and at a 

similar cost.56

The proposed pricing the Exchange 

would charge clients for the BATS One 

Feed compared to the cost of the 


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Federal Register / Vol. 80, No. 35 / Monday, February 23, 2015 / Notices 9495 

57The combined external distribution fee for the 

individual depth of book data feeds of the BATS 

Exchanges is $12,500 per month. The monthly 

External Distributor fee is $2,500 per month for the 

EDGX Depth, $2,500 per month for the EDGA 

Depth, $2,500 for BYX Depth, and $5,000 for BZX 

Depth. The combined external distribution fee for 

the individual top and last sale data feed of the 

BATS Exchanges is $5,000 per month. The monthly 

External Distributor fee is $1,250 per month for 

EDGX Top and EDGX Last Sale, free for EDGA Top 

and EDGA Last Sale, $1,250 for BYX Top and BYX 

Last Sale, and $2,500 for BZX Top and BZX Last 

Sale. See SR–EDGA–2015–09 and SR–BYX–2015– 

09. See also the BZX Fee Schedule available at 

http://www.batstrading.com/support/fee_schedule/

bzx/ 

58See supra note 55. 

59 Id. 

60 15 U.S.C. 78s(b)(3)(A)(ii). 

61 17 CFR 240.19b–4(f)(2). 

individual data feeds from the BATS 

Exchanges would enable a vendor to 

receive the underlying data feeds and 

offer a similar product on a competitive 

basis and with no greater cost than the 

Exchange. The pricing the Exchange 

would charge for the BATS One Feed 

would not be lower than the cost to a 

vendor of receiving the underlying data 

feeds. The pricing the Exchange would 

charge clients for the BATS One Feed 

compared to the cost of the individual 

data feeds from the BATS Exchanges 

would enable a vendor to receive the 

underlying data feeds and offer a similar 

product on a competitive basis and with 

no greater cost than the Exchange. The 

Distributor Fees that the Exchange 

intends to propose for the BATS One 

Feed would not be less than the 

combined fee of subscribing to each 

individual data feed.57 In addition, the 

Exchange believes that not charging 

External Distributors a Distribution Fee 

during their first three (3) months would 

not impede a vendor from creating a 

competing product. Specifically, a 

vendor seeking to create the BATS One 

Summary Feed could do so by 

subscribing to EDGX Top, EDGX Last 

Sale, EDGA Top, EDGA Last Sale, BZX 

Top, BZX Last Sale, BYX Top and BYX 

Last Sale, all of which are either free or 

also include a New External Distributor 

Credit identical to that proposed for the 

BATS One Summary Feed. As a result, 

a competing vendor would incur similar 

costs as the Exchange in offering such 

free period and offer a competing 

product on a similar basis as the 

Exchange. 

The Exchange further believes that its 

proposed monthly Data Consolidation 

Fee would be pro-competitive because it 

is identical to a similar fee charged by 

the NYSE for its BQT feed and a vendor 

could create a competing product, 

perform a similar aggregating and 

consolidating function, and similarly 

charge for such service. The Exchange 

notes that a competing vendor might 

engage in a different analysis of 

assessing the cost of a competing 

product. The Exchanges believes that 

the incremental cost to a particular 

vendor for aggregation can be supported 

by the vendor’s revenue opportunity 

and may be inconsequential if such 

vendor already has systems in place to 

perform these functions as part of 

creating its proprietary market data 

products and is able to allocate these 

costs over numerous products and 

customer relationships. For these 

reasons, the Exchange believes the 

proposed pricing, including the New 

External Distributor Fee Credit, would 

enable a vendor to create a competing 

product based on the individual data 

feeds and charge its clients a fee that it 

believes reflects the value of the 

aggregation and consolidation function 

that is competitive with BATS One Feed 

pricing. 

Finally, the Exchange notes that there 

is already actual competition for 

products similar to the BATS One Feed. 

The NYSE offers BQT which provides 

BBO and last sale information for the 

NYSE, NYSE Arca Equities, Inc. and 

NYSE MKT LLC.58 Nasdaq already 

offers Nasdaq Basic, a filed market data 

product, and through its affiliate, offers 

NLS Plus which provides a unified view 

of last sale information similar to the 

BATS One Feed.59 The existence of 

these competing data products 

demonstrates that there is ample, 

existing competition for products such 

as the BATS One Feed and the fees 

associated by such products is 

constrained by competition. 

In establishing the proposed fees, the 

Exchange considered the 

competitiveness of the market for 

proprietary data and all of the 

implications of that competition. The 

Exchange believes that it has considered 

all relevant factors and has not 

considered irrelevant factors in order to 

establish fair, reasonable, and not 

unreasonably discriminatory fees and an 

equitable allocation of fees among all 

users. The existence of alternatives to 

the BATS One Feed, including the 

existing underlying feeds, consolidated 

data, and proprietary data from other 

sources, ensures that the Exchange 

cannot set unreasonable fees, or fees 

that are unreasonably discriminatory, 

when vendors and subscribers can elect 

these alternatives or choose not to 

purchase a specific proprietary data 

product if its cost to purchase is not 

justified by the returns any particular 

vendor or subscriber would achieve 

through the purchase. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 60 and 

paragraph (f)(2) of Rule 19b–4 

thereunder.61 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 email to rule-comments@

sec.gov. Please include File Number SR– 

EDGX–2015–09 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–EDGX–2015–09. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 


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9496 Federal Register / Vol. 80, No. 35 / Monday, February 23, 2015 / Notices 

62 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Exchange notes that NYSE-listed securities 

with a CADV of 1,000,000 shares or less represent 

approximately 16 percent of the consolidated 

volume of all NYSE-listed securities. 

5See Proposed Rule 124(a)(1). 

6See Proposed Rule 124(a)(3). 

7See Proposed Rule 124(a)(2). 

8See Securities Exchange Act Release No. 67091 

(May 31, 2012), 77 FR 33498 (June 6, 2012) (File 

no. 4–631). 

9The Exchange proposes to specify the time of 

the Midday Auction Pause by Trader Update. 

10See Proposed Rule 124(b). Under Rule 

104(a)(1)(B)(ii), the DMM’s quoting obligations are 

suspended during a trading pause and do not recommence until after the first regular way 

transaction on the primary listing market in the 

security following such pause. The Exchange 

believes that DMMs would also be relieved of their 

quoting obligations pursuant to Rule 104(a)(1)(B)(ii) 

during the Midday Auction Pause. 

11See id. Because the Midday Auction would be 

intended to occur daily at the same time in 

specified securities, the Exchange believes that the 

publication of a zero quote condition would signal 

to the market that the Midday Auction Pause has 

begun. The Exchange therefore does not propose, 

nor does it believe it necessary, to disseminate an 

indication over the Consolidated Quote System or 

Consolidated Tape that a security is in a Midday 

Auction Pause. 

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 the 

filing also will be available for 

inspection and copying at the principal 

office of EDGX. All comments received 

will be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–EDGX– 

2015–09 and should be submitted on or 

before March 16, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.62

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–03538 Filed 2–20–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74281; File No. SR–NYSE– 

2015–06] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change 

Adopting New Rule 124 to Conduct a 

Midday Auction and Amending Rule 

104 to Codify the Obligation of 

Designated Market Makers to Facilitate 

the Midday Auction 

February 17, 2015. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on February 

2, 2015, New York Stock Exchange LLC 

(‘‘NYSE’’ or ‘‘Exchange’’) 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 

by the self-regulatory organization. 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 Exchange proposes to adopt new 

Rule 124 to conduct a daily singlepriced auction at a specified time in 

lower-volume securities (‘‘Midday 

Auction’’) and amend Rule 104 to codify 

the obligation of Designated Market 

Makers (‘‘DMM’’) to facilitate the 

Midday Auction. The text of the 

proposed rule change is available on the 

Exchange’s Web site at www.nyse.com, 

at the principal office of the Exchange, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization 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 those 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to adopt new 

Rule 124 to conduct a daily Midday 

Auction and amend Rule 104 to reflect 

that the DMM’s obligation to facilitate 

reopenings includes the Midday 

Auction. 

The Exchange proposes to adopt new 

Rule 124 to conduct a Midday Auction 

in a subset of NYSE-listed securities that 

have a consolidated average daily 

trading volume (‘‘CADV’’) of 1,000,000 

shares or less and have been designated 

by the Exchange (the ‘‘Midday Auction 

Stocks’’). The Midday Auction is 

intended to consolidate volume, 

including orders of larger blocks of 

stock, for price discovery purposes in 

lower-volume securities to provide 

market participants with a single-priced 

execution intraday to supplement the 

existing opening and closing auctions.4

The Exchange believes the proposed 

parameters for which stocks would be 

eligible to participate is reasonably 

designed to include those stocks that 

would benefit from such price 

discovery. The Exchange further 

believes that providing the Exchange 

with the ability to designate which 

stocks within those parameters are 

eligible for the Midday Auction is 

appropriate because it would provide 

the Exchange with the ability to add or 

remove stocks depending on the 

individual trading characteristics of a 

stock. As proposed, the Exchange would 

update the list of Midday Auction 

Stocks at least quarterly.5

The Exchange proposes to conduct 

one Midday Auction in each Midday 

Auction Stock per trading day.6 The 

Midday Auction would not be 

conducted on trading days the Exchange 

is scheduled to close before 4:00 p.m. 

ET or if the security is halted, paused, 

suspended, or not opened for trading at 

the time of the Midday Auction.7 For 

example, if during the pause preceding 

the Midday Auction (described below), 

a pause pursuant to the Plan to Address 

Extraordinary Market Volatility (‘‘LULD 

Plan’’) 8 or regulatory halt were 

triggered, the Exchange would not 

conduct a Midday Auction and instead 

would reopen the security pursuant to 

the procedures for reopening following 

a LULD Plan pause or regulatory halt. 

Beginning at a time specified by the 

Exchange between 11 a.m. ET and 2 

p.m. ET,9 the Exchange would pause 

trading on the Exchange only in the 

Midday Auction Stocks for five minutes 

in order to provide market participants 

with an opportunity to enter interest 

intended for the auction (the ‘‘Midday 

Auction Pause’’).10 During the Midday 

Auction Pause, the Exchange would 

suspend automatic executions and 

publish a zero quote on both the public 

and proprietary data feeds.11


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