75194 Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Notices 

exclusive voting rights with respect to 

matters solely related to that Class. 

3. Section 6(c) of the Act provides that 

the Commission may exempt any 

person, security or transaction or any 

class or classes of persons, securities or 

transactions from any provision of the 

Act, or from any rule under the Act, if 

and to the extent such exemption is 

necessary or appropriate in the public 

interest and consistent with the 

protection of investors and the purposes 

fairly intended by the policy and 

provisions of the Act. Applicants 

request an exemption under section 6(c) 

from sections 18(c) and 18(i) to permit 

the Fund to issue multiple Classes. 

4. Applicants submit that the 

proposed allocation of expenses and 

voting rights among multiple classes is 

equitable and will not discriminate 

against any group or class of 

shareholders. Applicants submit that 

the proposed system would permit the 

Fund to facilitate the distribution of 

Classes through diverse distribution 

channels and would provide investors 

with a broader choice of shareholder 

options. Applicants assert that the 

proposed closed-end investment 

company multiple class structure does 

not raise the concerns underlying 

section 18 of the Act to any greater 

degree than open-end investment 

companies’ multiple class structures 

that are permitted by rule 18f–3 under 

the Act. Applicants state the Fund will 

comply with the provisions of rule 18f– 

3 as if it were an open-end investment 

company. 

CDSCs 

5. Applicants believe that the 

requested relief meets the standards of 

section 6(c) of the Act. Rule 6c–10 

under the Act permits open-end 

investment companies to impose 

CDSCs, subject to certain conditions. 

Applicants state that the Fund does not 

anticipate imposing CDSCs and would 

only do so in compliance with rule 6c– 

10 under the Act as if that rule were 

applied to closed-end investment 

companies. The Fund also will make all 

required disclosures in accordance with 

the requirements of Form N–1A 

concerning CDSCs. Applicants further 

state that, in the event the Fund imposes 

CDSCs, the Fund will apply the CDSCs 

(and any waivers or scheduled 

variations of the CDSCs) uniformly to all 

shareholders in a given class and 

consistently with the requirements of 

rule 22d–1 under the Act. 

Asset-Based Service and/or Distribution 

Fees 

6. Section 17(d) of the Act and rule 

17d–1 under the Act prohibit an 

affiliated person of a registered 

investment company or an affiliated 

person of such person, acting as 

principal, from participating in or 

effecting any transaction in which such 

registered company is a joint or a joint 

and several participant unless the 

Commission issues an order permitting 

the transaction. In reviewing 

applications submitted under section 

17(d) and rule 17d–1, the Commission 

considers whether the participation of 

the investment company in a joint 

enterprise or joint arrangement is 

consistent with the provisions, policies 

and purposes of the Act, and the extent 

to which the participation is on a basis 

different from or less advantageous than 

that of other participants. 

7. Rule 17d–3 under the Act provides 

an exemption from section 17(d) and 

rule 17d–1 to permit open-end 

investment companies to enter into 

distribution arrangements pursuant to 

rule 12b–1 under the Act. Applicants 

request an order under section 17(d) and 

rule 17d–1 under the Act to permit the 

Fund to impose Distribution Fees and/ 

or Service Fees. Applicants have agreed 

to comply with rules 12b–1 and 17d–3 

as if those rules applied to closed-end 

investment companies. 

Applicants’ Condition 

Applicants agree that any order 

granting the requested relief will be 

subject to the following condition: 

Applicants will comply with the 

provisions of rules 6c–10, 12b–1, 17d– 

3, 18f–3 and 22d–1 under the Act, as 

amended from time to time or replaced, 

as if those rules applied to closed-end 

management investment companies, 

and will comply with the NASD 

Conduct Rule 2830, as amended from 

time to time, as if that rule applied to 

all closed-end management investment 

companies. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29500 Filed 12–16–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

31372; File No. 812–14333] 

ACAP Strategic Fund and SilverBay 

Capital Management LLC; Notice of 

Application 

December 11, 2014. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’). 

ACTION: Notice of an application under 

section 6(c) of the Investment Company 

Act of 1940 (the ‘‘Act’’) for an 

exemption from sections 18(c) and 18(i) 

of the Act, under sections 6(c) and 

23(c)(3) of the Act for an exemption 

from rule 23c–3 under the Act, and for 

an order pursuant to section 17(d) of the 

Act and rule 17d–1 under the Act. 

SUMMARY: Applicants request an order to 

permit certain registered closed-end 

management investment companies to 

issue multiple classes of shares and to 

impose asset-based distribution fees and 

early withdrawal charges (‘‘EWCs’’). 

Applicants: ACAP Strategic Fund 

(‘‘Initial Fund’’) and SilverBay Capital 

Management LLC (‘‘Adviser’’). 

DATES: Filing Dates: The application was 

filed on July 15, 2014, and amended on 

November 5, 2014 and December 8, 

2014. 

Hearing or Notification of Hearing: An 

order granting the requested relief will 

be issued unless the Commission orders 

a hearing. Interested persons may 

request a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. 

Hearing requests should be received 

by the Commission by 5:30 p.m. on 

January 5, 2015 and should be 

accompanied by proof of service on the 

applicants, in the form of an affidavit, 

or, for lawyers, a certificate of service. 

Pursuant to rule 0–5 under the Act, 

hearing requests should state the nature 

of the writer’s interest, any facts bearing 

upon the desirability of a hearing on the 

matter, the reason for the request, and 

the issues contested. Persons who wish 

to be notified of a hearing may request 

notification by writing to the 

Commission’s Secretary. 

ADDRESSES: Secretary, U.S. Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090; 

Applicants: 350 Madison Avenue, 9th 

Floor, New York, NY 10017. 

FOR FURTHER INFORMATION CONTACT: 

Courtney S. Thornton, Senior Counsel, 

at (202) 551–6812, or David P. Bartels, 

Branch Chief, at (202) 551–6821 

(Division of Investment Management, 

Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm or by 

calling (202) 551–8090. 

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Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Notices 75195 

1A successor in interest is limited to an entity 

that results from a reorganization into another 

jurisdiction or a change in the type of business 

organization. 

2Any Fund relying on this relief in the future will 

do so in a manner consistent with the terms and 

conditions of the application. Applicants represent 

that each entity presently intending to rely on the 

requested relief is listed as an applicant. 

3Applicants submit that rule 23c–3 and 

Regulation M under the Exchange Act permit an 

interval fund to make repurchase offers to 

repurchase its shares while engaging in a 

continuous offering of its shares pursuant to Rule 

415 under the Securities Act of 1933. 

4Any reference to the NASD Sales Charge Rule 

includes any successor or replacement rule that 

may be adopted by the Financial Industry 

Regulatory Authority (‘‘FINRA’’). 

5See Shareholder Reports and Quarterly Portfolio 

Disclosure of Registered Management Investment 

Companies, Investment Company Act Release No. 

26372 (Feb. 27, 2004) (adopting release) (requiring 

open-end investment companies to disclose fund 

expenses in shareholder reports); and Disclosure of 

Breakpoint Discounts by Mutual Funds, Investment 

Company Act Release No. 26464 (June 7, 2004) 

(adopting release) (requiring open-end investment 

companies to provide prospectus disclosure of 

certain sales load information). 

6Fund of Funds Investments, Investment 

Company Act Rel. Nos. 26198 (Oct. 1 2003) 

(proposing release) and 27399 (Jun. 20, 2006) 

(adopting release). See also Rules 12d1–1, et seq. of 

the Act. 

Applicants’ Representations 

1. The Initial Fund is a Delaware 

statutory trust that is registered under 

the Act as a non-diversified, closed-end 

management investment company. The 

Initial Fund’s investment objective is to 

achieve maximum capital appreciation. 

The Initial Fund pursues this objective 

by investing its assets primarily in 

equity securities of U.S. and foreign 

companies that the Adviser believes are 

well positioned to benefit from demand 

for their products or services, including 

companies that can innovate or grow 

rapidly relative to their peers in their 

markets. The Initial Fund also pursues 

its objective by effecting short sales of 

securities when the Adviser believes 

that the market price of a security is 

above its estimated intrinsic or 

fundamental value. 

2. The Adviser is a Delaware limited 

liability company and is registered as an 

investment adviser under the 

Investment Advisers Act of 1940. The 

Adviser serves as investment adviser to 

the Initial Fund. 

3. Applicants seek an order to permit 

the Initial Fund to issue multiple classes 

of shares, each having its own fee and 

expense structure, and to impose EWCs 

and asset-based distribution fees with 

respect to certain classes. 

4. Applicants request that the order 

also apply to any continuously-offered 

registered closed-end management 

investment company that has been 

previously organized or that may be 

organized in the future for which the 

Adviser or any entity controlling, 

controlled by, or under common control 

with the Adviser, or any successor in 

interest to any such entity,1 acts as 

investment adviser and which operates 

as an interval fund pursuant to rule 

23c–3 under the Act or provides 

periodic liquidity with respect to its 

shares pursuant to rule 13e–4 under the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) (each a ‘‘Future 

Fund,’’ and together with the Initial 

Fund, the ‘‘Funds’’).2

5. The Initial Fund is currently 

making a continuous public offering of 

its common shares following the 

effectiveness of its initial registration 

statement. Applicants state that 

additional offerings by any Fund relying 

on the order may be on a private 

placement or public offering basis. 

Shares of the Funds will not be listed on 

any securities exchange nor quoted on 

any inter-dealer quotation system. 

Applicants do not expect there to be a 

secondary trading market for shares of 

the Funds. The minimum initial 

investment in the Initial Fund by an 

investor is $100,000, subject to 

reduction at the discretion of an 

investor’s broker, dealer, or other 

financial intermediary, but not below 

$50,000. Shares of the Initial Fund may 

be purchased only by investors who 

certify to the Initial Fund or its agents 

that they have a net worth (in the case 

of a natural person or with assets held 

jointly with a spouse) of more than $2 

million, excluding the value of the 

primary residence of such person and 

any debt secured by such property (up 

to the current market value of the 

residence). 

6. If the requested relief is granted, the 

Initial Fund intends to redesignate its 

common shares as ‘‘Class A Shares’’ and 

anticipates commencing a continuous 

offering of Class W Shares. The Initial 

Fund’s Class A Shares will be subject to 

a front-end sales load based on the 

amount invested and will also be 

subject to a shareholder servicing fee 

and other expenses. The Initial Fund’s 

Class W Shares will be subject to other 

expenses, but will not be subject to an 

asset-based distribution fee. Currently, 

Class A Shares and Class W Shares will 

not be subject to an EWC. However, 

applicants state that Class A Shares and 

other classes may, in the future, be 

subject to an EWC. Shares that are not 

subject to an EWC when purchased will 

not subsequently be subject to an EWC. 

7. Applicants state that, from time to 

time, the Initial Fund may create 

additional classes of shares, the terms of 

which may differ from the Class A and 

Class W Shares in the following 

respects: (i) The amount of fees 

permitted by different distribution 

plans; (ii) voting rights with respect to 

a distribution plan of a class; (iii) 

different class designations; (iv) the 

impact of any class expenses directly 

attributable to a particular class of 

shares allocated on a class basis as 

described in the application; (v) any 

differences in dividends and net asset 

value resulting from differences in fees 

under a distribution plan or in class 

expenses; (vi) any EWC or other sales 

load structure; and (vii) exchange or 

conversion privileges of the classes as 

permitted under the Act. 

8. Applicants state that the Initial 

Fund has adopted a fundamental policy 

to repurchase a specified percentage of 

its shares (no less than 5%) at net asset 

value on a quarterly basis. Such 

repurchase offers will be conducted 

pursuant to rule 23c–3 under the Act. 

Each of the other Funds will likewise 

adopt fundamental investment policies 

in compliance with rule 23c–3 and 

make quarterly repurchase offers to its 

shareholders or provide periodic 

liquidity with respect to its shares 

pursuant to rule 13e–4 under the 

Exchange Act.3 Any repurchase offers 

made by the Funds will be made to all 

holders of shares of each such Fund. 

9. Applicants represent that any assetbased service and distribution fees for 

each class of shares will comply with 

the provisions of NASD Rule 2830(d) 

(‘‘NASD Sales Charge Rule’’).4

Applicants also represent that each 

Fund will disclose in its prospectus the 

fees, expenses and other characteristics 

of each class of shares offered for sale 

by the prospectus, as is required for 

open-end multiple class funds under 

Form N–1A. As is required for open-end 

funds, each Fund will disclose its 

expenses in shareholder reports, and 

disclose any arrangements that result in 

breakpoints in or elimination of sales 

loads in its prospectus.5 In addition, 

applicants will comply with applicable 

enhanced fee disclosure requirements 

for funds of funds, including registered 

funds of hedge funds.6

10. Each of the Funds will comply 

with any requirements that the 

Commission or FINRA may adopt 

regarding disclosure at the point of sale 

and in transaction confirmations about 

the costs and conflicts of interest arising 

out of the distribution of open-end 

investment company shares, and 

regarding prospectus disclosure of sales 

loads and revenue sharing 

arrangements, as if those requirements 

applied to the Fund. In addition, each 

Fund will contractually require that any 

distributor of the Fund’s shares comply 

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75196 Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Notices 

with such requirements in connection 

with the distribution of such Fund’s 

shares. 

11. Each Fund will allocate all 

expenses incurred by it among the 

various classes of shares based on the 

net assets of the Fund attributable to 

each class, except that the net asset 

value and expenses of each class will 

reflect distribution fees, service fees, 

and any other incremental expenses of 

that class. Expenses of the Fund 

allocated to a particular class of shares 

will be borne on a pro rata basis by each 

outstanding share of that class. 

Applicants state that each Fund will 

comply with the provisions of rule 18f– 

3 under the Act as if it were an openend investment company. 

12. Applicants state that each Fund 

may impose an EWC on shares 

submitted for repurchase that have been 

held less than a specified period and 

may waive the EWC for certain 

categories of shareholders or 

transactions to be established from time 

to time. Applicants state that each of the 

Funds will apply the EWC (and any 

waivers or scheduled variations of the 

EWC) uniformly to all shareholders in a 

given class and consistently with the 

requirements of rule 22d–1 under the 

Act as if the Funds were open-end 

investment companies. 

13. Each Fund operating as an interval 

fund pursuant to rule 23c–3 under the 

Act may offer its shareholders an 

exchange feature under which the 

shareholders of the Fund may, in 

connection with the Fund’s periodic 

repurchase offers, exchange their shares 

of the Fund for shares of the same class 

of (i) registered open-end investment 

companies or (ii) other registered 

closed-end investment companies that 

comply with rule 23c–3 under the Act 

and continuously offer their shares at 

net asset value, that are in the Fund’s 

group of investment companies 

(collectively, ‘‘Other Funds’’). Shares of 

a Fund operating pursuant to rule 23c– 

3 that are exchanged for shares of Other 

Funds will be included as part of the 

amount of the repurchase offer amount 

for such Fund as specified in rule 23c– 

3 under the Act. Any exchange option 

will comply with rule 11a–3 under the 

Act, as if the Fund were an open-end 

investment company subject to rule 

11a–3. In complying with rule 11a–3, 

each Fund will treat an EWC as if it 

were a contingent deferred sales load 

(‘‘CDSL’’). 

Applicants’ Legal Analysis 

Multiple Classes of Shares 

1. Section 18(c) of the Act provides, 

in relevant part, that a closed-end 

investment company may not issue or 

sell any senior security if, immediately 

thereafter, the company has outstanding 

more than one class of senior security. 

Applicants state that the creation of 

multiple classes of shares of the Funds 

may be prohibited by section 18(c), as 

a class may have priority over another 

class as to payment of dividends 

because shareholders of different classes 

would pay different fees and expenses. 

2. Section 18(i) of the Act provides 

that each share of stock issued by a 

registered management investment 

company will be a voting stock and 

have equal voting rights with every 

other outstanding voting stock. 

Applicants state that multiple classes of 

shares of the Funds may violate section 

18(i) of the Act because each class 

would be entitled to exclusive voting 

rights with respect to matters solely 

related to that class. 

3. Section 6(c) of the Act provides that 

the Commission may exempt any 

person, security or transaction or any 

class or classes of persons, securities or 

transactions from any provision of the 

Act, or from any rule thereunder, if and 

to the extent such exemption is 

necessary or appropriate in the public 

interest and consistent with the 

protection of investors and the purposes 

fairly intended by the policy and 

provisions of the Act. Applicants 

request an exemption under section 6(c) 

from sections 18(c) and 18(i) to permit 

the Funds to issue multiple classes of 

shares. 

4. Applicants submit that the 

proposed allocation of expenses and 

voting rights among multiple classes is 

equitable and will not discriminate 

against any group or class of 

shareholders. Applicants submit that 

the proposed arrangements would 

permit a Fund to facilitate the 

distribution of its shares and provide 

investors with a broader choice of 

shareholder services. Applicants assert 

that the proposed closed-end 

investment company multiple class 

structure does not raise the concerns 

underlying section 18 of the Act to any 

greater degree than open-end 

investment companies’ multiple class 

structures that are permitted by rule 

18f–3 under the Act. Applicants state 

that each Fund will comply with the 

provisions of rule 18f–3 as if it were an 

open-end investment company. 

Early Withdrawal Charges 

1. Section 23(c) of the Act provides, 

in relevant part, that no registered 

closed-end investment company will 

purchase securities of which it is the 

issuer, except: (a) On a securities 

exchange or other open market; (b) 

pursuant to tenders, after reasonable 

opportunity to submit tenders given to 

all holders of securities of the class to 

be purchased; or (c) under other 

circumstances as the Commission may 

permit by rules and regulations or 

orders for the protection of investors. 

2. Rule 23c–3 under the Act permits 

a registered closed-end investment 

company (an ‘‘interval fund’’) to make 

repurchase offers of between five and 

twenty-five percent of its outstanding 

shares at net asset value at periodic 

intervals pursuant to a fundamental 

policy of the interval fund. Rule 23c– 

3(b)(1) under the Act provides that an 

interval fund may deduct from 

repurchase proceeds only a repurchase 

fee, not to exceed two percent of the 

proceeds, that is paid to the interval 

fund and is reasonably intended to 

compensate the fund for expenses 

directly related to the repurchase. 

3. Section 23(c)(3) provides that the 

Commission may issue an order that 

would permit a closed-end investment 

company to repurchase its shares in 

circumstances in which the repurchase 

is made in a manner or on a basis that 

does not unfairly discriminate against 

any holders of the class or classes of 

securities to be purchased. 

4. Applicants request relief under 

section 6(c), discussed above, and 

section 23(c)(3) from rule 23c–3 to the 

extent necessary for the Funds to 

impose EWCs on shares of the Funds 

submitted for repurchase that have been 

held for less than a specified period. 

5. Applicants state that the EWCs they 

intend to impose are functionally 

similar to CDSLs imposed by open-end 

investment companies under rule 6c–10 

under the Act. Rule 6c–10 permits openend investment companies to impose 

CDSLs, subject to certain conditions. 

Applicants note that rule 6c–10 is 

grounded in policy considerations 

supporting the employment of CDSLs 

where there are adequate safeguards for 

the investor and state that the same 

policy considerations support 

imposition of EWCs in the interval fund 

context. In addition, applicants state 

that EWCs may be necessary for the 

distributor to recover distribution costs. 

Applicants represent that any EWC 

imposed by the Funds will comply with 

rule 6c–10 under the Act as if the rule 

were applicable to closed-end 

investment companies. The Funds will 

disclose EWCs in accordance with the 

requirements of Form N–1A concerning 

CDSLs. Applicants further state that the 

Funds will apply the EWC (and any 

waivers or scheduled variations of the 

EWC) uniformly to all shareholders in a 

given class and consistently with the 

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Federal Register / Vol. 79, No. 242 / Wednesday, December 17, 2014 / Notices 75197 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5A Member is defined as ‘‘any registered broker 

or dealer that has been admitted to membership in 

the Exchange.’’ See Exchange Rule 1.5(n). 

requirements of rule 22d–1 under the 

Act. 

Asset-Based Distribution Fees 

1. Section 17(d) of the Act prohibits 

an affiliated person of a registered 

investment company or an affiliated 

person of such person, acting as 

principal, from participating in or 

effecting any transaction in connection 

with any joint enterprise or joint 

arrangement in which the investment 

company participates in contravention 

of Commission regulations. Rule 17d–1 

provides that no joint transaction 

covered by the rule may be effected 

unless the Commission issues an order 

permitting the transaction. In reviewing 

applications submitted under section 

17(d) and rule 17d–1, the Commission 

considers whether the participation of 

the investment company in a joint 

enterprise or joint arrangement is 

consistent with the provisions, policies 

and purposes of the Act, and the extent 

to which the participation is on a basis 

different from or less advantageous than 

that of other participants. 

2. Rule 17d–3 under the Act provides 

an exemption from section 17(d) and 

rule 17d–1 to permit open-end 

investment companies to enter into 

distribution arrangements pursuant to 

rule 12b–1 under the Act. Applicants 

request an order under section 17(d) and 

rule 17d–1 under the Act to the extent 

necessary to permit the Fund to impose 

asset-based distribution fees. Applicants 

have agreed to comply with rules 12b– 

1 and 17d–3 as if those rules applied to 

closed-end investment companies, 

which they believe will resolve any 

concerns that might arise in connection 

with a Fund financing the distribution 

of its shares through asset-based 

distribution fees. 

For the reasons stated above, 

applicants submit that the exemptions 

requested under section 6(c) are 

necessary and appropriate in the public 

interest and are consistent with the 

protection of investors and the purposes 

fairly intended by the policy and 

provisions of the Act. Applicants further 

submit that the relief requested 

pursuant to section 23(c)(3) will be 

consistent with the protection of 

investors and will insure that applicants 

do not unfairly discriminate against any 

holders of the class of securities to be 

purchased. Finally, applicants state that 

the Funds’ institution of asset-based 

distribution fees is consistent with the 

provisions, policies and purposes of the 

Act and does not involve participation 

on a basis different from or less 

advantageous than that of other 

participants. Applicants therefore 

believe that the requested relief meets 

the standards of section 6(c) of the Act. 

Applicants’ Condition 

Applicants agree that any order 

granting the requested relief will be 

subject to the following condition: 

Each Fund relying on the order will 

comply with the provisions of rules 6c– 

10, 12b–1, 17d–3, 18f–3, 22d–1, and, 

where applicable, 11a–3 under the Act, 

as amended from time to time, as if 

those rules applied to closed-end 

management investment companies, 

and will comply with the NASD Sales 

Charge Rule, as amended from time to 

time, as if that rule applied to all closedend management investment 

companies. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–29501 Filed 12–16–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73813; File No. SR–BATS– 

2014–063] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Related to Fees for Use 

of BATS Exchange, Inc. 

December 11, 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 December 

1, 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, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Exchange has designated the proposed 

rule change as one establishing or 

changing a member due, fee, or other 

charge imposed by the Exchange under 

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

Rule 19b–4(f)(2) thereunder,4 which 

renders the proposed rule change 

effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange filed a proposal to 

amend the fee schedule applicable to 

Members 5 and non-members of the 

Exchange pursuant to BATS Rules 

15.1(a) and (c). Changes to the fee 

schedule pursuant to this proposal are 

effective upon filing. 

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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to modify its 

fee schedule effective immediately in 

order to adopt pricing for ROOC orders, 

to adopt pricing for orders that execute 

pursuant to Rule 11.24, titled ‘‘Opening 

Process for Non-BATS-Listed 

Securities,’’ to adjust the requirements 

to achieve Tier 3 of the Cross-Asset 

Step-Up Tiers, and to amend pricing for 

and add two additional tiers to the 

NBBO Setter program, as described 

below. 

ROOC 

The Exchange recently filed a rule 

change to adopt a new routing strategy, 

ROOC, which provides that orders 

entered on the Exchange may be 

designated for participation in the 

opening, re-opening (following a halt 

suspension or pause), or closing process 

(collectively, an ‘‘Auction’’) of a primary 

listing market other than the Exchange 

if received before the opening/remstockstill on DSK4VPTVN1PROD with NOTICES