Federal Register / Vol. 79, No. 237 / Wednesday, December 10, 2014 / Notices 73359 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

under Section 5(b)(ii) of the Linkage 

Plan. Section 5(b)(ii) of the Linkage 

Plan, the Trading Rotation exception, 

permits a participant exchange to trade 

through a Protected Quotation 

disseminated by an Eligible Exchange 

during a trading rotation. 

The proposed iterative opening 

process will provide market makers and 

other market participants greater 

opportunity to participate at the open 

and provide option classes with an 

increased chance to determine an 

opening price which removes 

impediments to a free and open market 

and benefits all market participants. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe the 

proposed rule change will impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. To the contrary, the 

Exchange’s inability to provide away 

market protection limits competition in 

that other exchanges currently provide 

such protection and therefore are able to 

attract pre-opening order flow. Thus, 

approval of the proposed rule change 

will promote intermarket competition 

because it will allow the Exchange to, 

among other things, provide away 

market price protection at the open and 

thus, compete with other exchanges for 

order flow that market participants do 

not currently send to the ISE. The 

Exchange does not believe the proposed 

rule change will impose any burden on 

intramarket competition. The Exchange 

believes the proposed rule change will 

encourage ISE Members to send their 

pre-open order flow to the Exchange 

rather to a competing exchange and will 

therefore increase competition at the 

open. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the publication date 

of this notice in the Federal Register or 

within such longer period up to 90 days 

(i) as the Commission may designate if 

it finds such longer period to be 

appropriate and publishes its reasons 

for so finding or (ii) as to which the selfregulatory organization consents, the 

Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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 Exchange 

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 No. SR–ISE– 

2014–24 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–ISE–2014–24. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the ISE. 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–ISE– 

2014–24 and should be submitted by 

December 31, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28874 Filed 12–9–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73745; File No. SR–BATS– 

2014–062] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change to Rule 11.1 of BATS 

Exchange, Inc. 

December 4, 2014. 

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 November 

28, 2014, BATS Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BATS’’) 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 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 filed a proposal to 

amend Rule 11.1 to accept orders 

beginning at 6:00 a.m. Eastern Time. 

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 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. 

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73360 Federal Register / Vol. 79, No. 237 / Wednesday, December 10, 2014 / Notices 

3See Securities Exchange Act Release No. 71375 

(January 23, 2014), 79 FR 4771 (January 29, 2014) 

(SR–BATS–2013–059; SR–BYX–2013–039). 

4See EDGX Rule 11.1(a)(1) and EDGA Rule 

11.1(a)(1). 

5The Exchange’s Opening Auction for Exchangelisted securities is described in Rule 11.23. The 

Exchange’s Opening Process for non-Exchangelisted securities is described in Rule 11.24. 

6A BATS Post Only Order is defined in Rule 

11.9(c)(6). 

7A Partial Post Only at Limit Order is defined in 

Rule 11.9(c)(7). 

8An ISO is defined in Rule 11.9(d). 

9A BATS Market Order is defined in Rule 

11.9(a)(2). 

10The Time in Force of Regular Hours Only, or 

RHO, is defined in Rule 11.9(b)(7). 

11A Minimum Quantity Order is defined in Rule 

11.9(c)(5). 

12The Time in Force of Immediate or Cancel, or 

IOC, is defined in Rule 11.9(b)(1) and the Time in 

Force of Fill-or-Kill, or FOK, is defined in Rule 

11.9(b)(6). 

13See Rule 11.24(a). 

14See infra note 17. 

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

16 15 U.S.C. 78f(b)(5). 

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 

Rule 11.1 to accept orders beginning at 

6:00 a.m. Eastern Time. Earlier this year, 

the Exchange and its affiliate, BATS YExchange, Inc. (‘‘BYX’’), received 

approval to effect a merger (the 

‘‘Merger’’) of the Exchange’s parent 

company, BATS Global Markets, Inc., 

with Direct Edge Holdings LLC, the 

indirect parent of EDGX Exchange, Inc. 

(‘‘EDGX’’), and EDGA Exchange, Inc. 

(‘‘EDGA’’) (together with BZX, BYX and 

EDGX, the ‘‘BGM Affiliated 

Exchanges’’).3 In the context of the 

Merger, the BGM Affiliated Exchanges 

are working to align certain system 

functionality, retaining only intended 

differences between the BGM Affiliated 

Exchanges. Thus, the proposal set forth 

below is intended to add certain system 

functionality currently offered by EDGA 

and EDGX in order to provide a 

consistent technology offering for users 

of the BGM Affiliated Exchanges. 

The Exchange currently accepts 

orders commencing at the beginning of 

the Pre-Opening Trading Session, which 

is defined in Rule 1.5(r) as the time 

between 8:00 a.m. and 9:30 a.m. Eastern 

Time. In contrast, EDGA and EDGX 

begin accepting orders starting at 6:00 

a.m. Eastern Time.4 As proposed, the 

Exchange will accept orders into the 

System from 6:00 a.m. until 8:00 p.m. 

Eastern Time. Orders entered between 

6:00 a.m. and 8:00 a.m. Eastern Time 

will not be eligible for execution until 

the start of the Pre-Opening Session or 

Regular Trading Hours, depending on 

the Time in Force selected by the User. 

Orders designated for Regular Trading 

Hours will continue to be queued 

during the Pre-Opening Session and 

queued for the Exchange’s Opening 

Auction for Exchange-listed securities 

or Opening Process for non-Exchangelisted securities.5

The Exchange also proposes to specify 

in Rule 11.1 the order types and order 

modifiers that the Exchange will not 

accept before 8:00 a.m. Eastern Time, 

each of which the Exchange believes is 

inconsistent with an order that is 

queued and awaiting placement on an 

order book as opposed to entered during 

a trading session where continuous 

trading is occurring. Specifically, the 

Exchange will not accept the following 

orders prior to 8:00 a.m. Eastern Time: 

BATS Post Only Orders,6 Partial Post 

Only at Limit Orders,7 intermarket 

sweep orders (‘‘ISOs’’),8 BATS Market 

Orders 9 with a Time in Force other than 

Regular Hours Only (‘‘RHO’’),10

Minimum Quantity Orders 11 with a 

Time in Force of RHO, and all orders 

with a Time in Force of Immediate or 

Cancel (‘‘IOC’’) or Fill-or-Kill 

(‘‘FOK’’).12 The Exchange reiterates that 

it is proposing to reject the order types 

and modifiers described above between 

6:00 a.m. and 8:00 a.m. because each is 

inconsistent with an order designated to 

queue for later entry onto the 

Exchange’s order book. For instance, 

because orders received prior to 8:00 

a.m. are not immediately executable, but 

rather queued for later participation, 

BATS Post Only Orders, Partial Post 

Only at Limit Orders, BATS Market 

Orders that are not designated as RHO 

(i.e., not designated to queue), IOC and 

FOK orders do not make sense in the 

context of the proposed rule change 

and, thus, the Exchange is proposing to 

reject them prior to 8:00 a.m. 

Specifically with respect to BATS Post 

Only Orders and Partial Post Only at 

Limit Orders, although the Exchange 

could accept such orders and place 

them on the BATS Book at 8:00 a.m. in 

the order they were received, as 

described below, the Exchange does not 

believe such orders are consistent with 

the purpose of the amendment given 

that such orders are typically intended 

to provide liquidity and during the time 

period they are queued they will not be 

executable on the BATS Book. 

Similarly, because an order designated 

as an ISO implies that there is currently 

a protected bid or offer and there are no 

protected bids or offers prior to 9:30 

a.m. Eastern Time, the Exchange 

proposes to reject any ISOs entered 

prior to 8:00 a.m. Finally, the Exchange 

proposes to reject Minimum Quantity 

Orders designated as RHO, which are 

also rejected pursuant to the Exchange’s 

Opening Process 13 in order to maintain 

consistency with such process. 

At the commencement of the PreOpening Session, orders entered 

between 6:00 a.m. and 8:00 a.m. Eastern 

Time will be handled in time sequence, 

beginning with the order with the oldest 

time stamp, and will be placed on the 

BATS Book, routed, cancelled, or 

executed in accordance with the terms 

of the order. Thus, although orders are 

queued until 8:00 a.m. Eastern Time, 

orders will be processed sequentially in 

exactly the same way they would be if 

they arrived at the commencement of 

operations of the Exchange. The 

Exchange notes that it does not believe 

that the proposed functionality will be 

used in order to achieve executions with 

latency considerations in mind, as Users 

seeking executions prior to 8:00 a.m. 

have other options available to them, as 

there are several trading venues that are 

fully open for trading prior to 8:00 

a.m.14 Rather, the functionality is 

available to Users that simply want their 

orders entered to the BATS book at the 

start of the trading day or to queue for 

the Exchange’s Opening Auction or 

Opening Process, as applicable. All 

orders queued prior to 8:00 a.m. will be 

processed ahead of orders that are 

received after the commencement of the 

Pre-Opening Session. 

2. Statutory Basis 

The Exchange believes that the rule 

change proposed in this submission 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(b) of the Act.15 Specifically, 

the proposed change is consistent with 

Section 6(b)(5) of the Act,16 because it 

is designed to promote just and 

equitable principles of trade, to remove 

impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The Exchange believes 

that allowing for the entry of orders 

prior to the Pre-Opening Session will 

allow Users to enter orders in an orderly 

fashion prior to the commencement of 

trading on the Exchange, rather than 

requiring such Users to submit orders 

when trading commences at 8:00 a.m. 

Eastern Time. Specifically, the 

implementation of the proposed rule 

change will provide Users with greater 

control and flexibility with respect to 

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Federal Register / Vol. 79, No. 237 / Wednesday, December 10, 2014 / Notices 73361 

17Nasdaq, for instance, begins accepting orders at 

4:00 a.m. Eastern Time. See, Nasdaq Rule 4617. 

NYSE Arca Equities begins accepting and queues 

orders beginning at 3:30 a.m. Eastern Time with its 

first trading session commencing at 4:00 a.m. 

Eastern Time. See ‘‘Holiday Hours—All Markets; 

NYSE Arca Equities,’’ available at https://

www.nyse.com/markets/hours-calendars. 

18 15 U.S.C. 78s(b)(3)(A)(iii). 

19 17 CFR 240.19b–4(f)(6). 

20 17 CFR 240.19b–4(f)(6). As required under Rule 

19b–4(f)(6)(iii), the Exchange provided the 

Commission with written notice of its intent to file 

the proposed rule change, along with a brief 

description and the text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. 

21 15 U.S.C. 78s(b)(2)(B). 22 17 CFR 200.30–3(a)(12). 

entering orders, allowing them to enter 

orders for later participation during the 

Pre-Opening Session or Regular Trading 

Hours, rather than waiting for the 

applicable trading session to begin. This 

simplifies the order entry process for 

Users that have orders that they wish to 

submit to the Exchange prior to 8:00 

a.m. by allowing such Users to send 

rather than hold such orders, which 

removes impediments to a free and open 

market and benefits all Users of the 

Exchange. 

The Exchange also believes that 

rejecting BATS Post Only Orders, Partial 

Post Only at Limit Orders, ISOs, nonRHO BATS Market Orders, Minimum 

Quantity Orders with a Time in Force of 

RHO, IOC and FOK orders prior to 8:00 

a.m. Eastern Time is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest; and is 

not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers because, as 

described above, such order types do 

not make sense in the context of 

queuing orders (as opposed to 

continuous book trading). 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the act. To the 

contrary, allowing the Exchange to 

accept orders prior to 8:00 a.m. Eastern 

Time for participation during the PreOpening Session and/or Regular 

Trading Hours fosters competition in 

that other exchanges 17 are able to begin 

accepting orders in such securities, 

while the Exchange cannot accept such 

orders. Thus, approval of the proposed 

rule change will promote competition 

because it will allow the Exchange to 

offer its Users the ability to enter orders 

prior to the beginning of the PreOpening Session for queuing and thus 

compete more directly with other 

exchanges for order flow that a User 

may not have directed to the Exchange 

if they were not able to enter orders for 

queuing. 

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 Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 18 and Rule 

19b–4(f)(6) thereunder.19 Because the 

proposed rule change does not: (i) 

Significantly affect the protection of 

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) become operative 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and Rule 19b–4(f)(6) 

thereunder.20

At any time within 60 days of the 

filing of such 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. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 21 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the 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– 

BATS–2014–062 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–BATS–2014–062. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room at 100 F Street NE., 

Washington, DC 20549–1090 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–BATS– 

2014–062, and should be submitted on 

or before December 31, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28907 Filed 12–9–14; 8:45 am] 

BILLING CODE 8011–01–P 

mstockstill on DSK4VPTVN1PROD with NOTICES