78920 Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Notices 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release Nos. 73594 

(Nov. 14, 2014), 79 FR 69142 (SR–BATS–2014– 

055); 73595 (Nov. 14, 2014) 79 FR 69160 (SR–BYX– 

2014–030); 73596 (Nov. 14, 2014), 79 FR 69148 

(SR–EDGA–2014–25); and 73597 (Nov. 14, 2014), 

79 FR 69180 (SR–EDGX–2014–25). 4See Letter from Chris Solgan, Assistant General 

Counsel, DirectEdge, dated December 12, 2014 (SR– 

BATS–2014–055); Letter from Chris Solgan, 

Assistant General Counsel, DirectEdge, dated 

December 12, 2014 (SR–BYX–2014–030); Letter 

from Chris Solgan, Assistant General Counsel, 

DirectEdge, dated December 12, 2014 (SR–EDGA– 

2014–25); and Letter from Chris Solgan, Assistant 

General Counsel, DirectEdge, dated December 12, 

2014 (SR–EDGX–2014–25). 

5Those proposed rule changes were published for 

comment in the Federal Register on August 1, 2014. 

2. Pursuant to 39 U.S.C. 505, 

Lyudmila Bzhilyanskaya is appointed to 

serve as an officer of the Commission to 

represent the interests of the general 

public in these proceedings (Public 

Representative). 

3. Comments are due no later than 

January 2, 2015. 

4. The Secretary shall arrange for 

publication of this order in the Federal 

Register. 

By the Commission. 

Shoshana M. Grove, 

Secretary. 

[FR Doc. 2014–30577 Filed 12–30–14; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Submission for OMB Review; 

Comment Request 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE., Washington, DC 

20549–2736. 

Extension: 

Rule 15c2–7, SEC File No. 270–420, OMB 

Control No. 3235–0479. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the 

Securities and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for approval of 

extension of the previously approved 

collection of information provided for in 

Rule 15c2–7 (17 CFR 240.15c2–7) under 

the Securities Exchange Act of 1934 (15 

U.S.C. 78a et seq.). 

Rule 15c2–7 places disclosure 

requirements on broker-dealers who 

have correspondent relationships, or 

agreements identified in the rule, with 

other broker-dealers. Whenever any 

such broker-dealer enters a quotation for 

a security through an inter-dealer 

quotation system, Rule 15c2–7 requires 

the broker-dealer to disclose these 

relationships and agreements in the 

manner required by the rule. The interdealer quotation system must also be 

able to make these disclosures public in 

association with the quotation the 

broker-dealer is making. 

When Rule 15c2–7 was adopted in 

1964, the information it requires was 

necessary for execution of the 

Commission’s mandate under the 

Securities Exchange Act of 1934 to 

prevent fraudulent, manipulative and 

deceptive acts by broker-dealers. In the 

absence of the information collection 

required under Rule 15c2–7, investors 

and broker-dealers would have been 

unable to accurately determine the 

market depth of, and demand for, 

securities in an inter-dealer quotation 

system. 

There are approximately 4,342 brokerdealers registered with the Commission. 

Any of these broker-dealers could be 

potential respondents for Rule 15c2–7, 

so the Commission is using that number 

as the number of respondents. Rule 

15c2–7 applies only to quotations 

entered into an inter-dealer quotation 

system, such as the OTC Bulletin Board 

(‘‘OTCBB’’) or OTC Link (formerly 

‘‘Pink Sheets’’), operated by OTC 

Markets Group Inc. (‘‘OTC Link’’). 

According to representatives of both 

OTC Link and the OTCBB, neither 

entity has recently received, or 

anticipates receiving any Rule 15c2–7 

notices. However, because such notices 

could be made, the Commission 

estimates that one filing is made 

annually pursuant to Rule 15c2–7. 

Based on prior industry reports, the 

Commission estimates that the average 

time required to enter a disclosure 

pursuant to the rule is .75 minutes, or 

45 seconds. The Commission sees no 

reason to change this estimate. We 

estimate that impacted respondents 

spend a total of .0125 hours per year to 

comply with the requirements of Rule 

15c2–7 (1 notice (×) 45 seconds/notice). 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

The public may view background 

documentation for this information 

collection at the following Web site: 

www.reginfo.gov. Comments should be 

directed to: (i) Desk Officer for the 

Securities and Exchange Commission, 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503, 

or by sending an email to: Shagufta_

Ahmed@omb.eop.gov; and (ii) Pamela 

Dyson, Acting Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE., Washington, 

DC 20549, or by sending send an email 

to: PRA_Mailbox@sec.gov. Comments 

must be submitted to OMB within 30 

days of this notice. 

Dated: December 23, 2014. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–30590 Filed 12–30–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73918; File Nos. SR–BATS– 

2014–055; SR–BYX–2014–030; SR–EDGA– 

2014–25; SR–EDGX–2014–25] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; BATS Y-Exchange, 

Inc.; EDGA Exchange, Inc.; EDGX 

Exchange, Inc.; 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 

December 23, 2014 

I. Introduction 

On October 30, 2014, BATS Exchange, 

Inc. (‘‘BATS’’), BATS Y-Exchange, Inc. 

(‘‘BYX’’), EDGA Exchange, Inc. 

(‘‘EDGA’’), and EDGX Exchange, Inc.; 

(‘‘EDGX’’) (collectively, the 

‘‘Exchanges’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 proposed rule changes to 

establish a new market data product 

called the ‘‘BATS One Feed.’’ On 

November 13, 2014, each of the 

Exchanges filed an Amendment No. 1 to 

its proposed rule change. The proposed 

rule changes, each as amended by an 

Amendment No. 1, were published for 

comment in the Federal Register on 

November 20, 2014.3 On December 15, 

2014, each of the Exchanges filed an 

Amendment No. 2 to its proposed rule 

change. On December 15, 2014, each of 

the Exchanges submitted a comment 

letter on its proposed rule change, each 

of which included a redline showing the 

changes made by their Amendments No. 

2.4 No other comments on the proposed 

rule changes have been received. 

However, similar proposed rule changes 

were filed with the Commission by the 

Exchanges earlier this year and 

subsequently withdrawn; 5 three 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Notices 78921 

See Securities Exchange Act Release Nos. 72688 

(July 28, 2014), 79 FR 44941 (SR–BATS–2014–028); 

72690 (July 28, 2014), 79 FR 44929 (SR–BYX–2014– 

011); 72689 (July 28, 2014), 79 FR 44917 (SR– 

EDGA–2014–16); and 56415 (July 28, 2014), 79 FR 

44892 (SR–EDGX–2014–19). On September 15, 

2014, the Commission extended its review period 

until October 30, 2014. See Securities Exchange Act 

Release Nos. 73099, 79 FR 56418 (Sept. 19, 2014) 

(SR–BATS–2014–028); 73102, 79 FR 56419 (Sept. 

19, 2014) (SR–BYX–2014–011); 73098, 79 FR 56415 

(Sept. 19, 2014) (SR–EDGA–2014–16); and 73099, 

79 FR 56418 (Sept. 19, 2014) (SR–EDGX–2014–19). 

On October 29, 2014, the Exchanges withdrew these 

proposed rule changes. 

6See Letter from Sal Arnuk and Joe Saluzzi, 

Themis Trading LLC, to Elizabeth M. Murphy, 

Secretary, Commission, dated August 21, 2014 (SR– 

BATS–2014–028) (‘‘Themis Letter’’); Letter from Ira 

D. Hammerman, General Counsel, SIFMA, to Kevin 

O’Neill, Deputy Secretary, Commission, dated 

August 22, 2014 (SR–BATS–2014–028) (‘‘SIFMA 

Letter’’); and Letter from Suzanne Hamlet Shatto to 

the Commission, dated August 19, 2014 (SR– 

EDGA–2014–16) (‘‘Shatto Letter’’). 

7The Exchanges have stated that quotations of 

odd lot size, which is generally less than 100 

shares, would be included in the total size of all 

orders at a particular price level in the BATS One 

Feed but are currently not reported by the 

Exchanges to the consolidated tape. 

8For a description of BYX’s RPI Program, see 

BYX Rule 11.24. See also Securities Exchange Act 

Release No. 68303 (November 27, 2012), 77 FR 

71652 (December 3, 2012) (SR–BYX–2012–019) 

(Order Granting Approval of Proposed Rule Change, 

as Modified by Amendment No. 2, to Adopt a Retail 

Price Improvement Program); Securities Exchange 

Act Release No. 67734 (August 27, 2012), 77 FR 

53242 (August 31, 2012) (SR–BYX–2019–019) 

(Notice of Filing of Proposed Rule Change to Adopt 

a Retail Price Improvement Program). 

9See, e.g., Exchange and EDGA Rule 11.13 

(Clearly Erroneous Executions) and BATS and BYX 

Rule 11.17 (Clearly Erroneous Executions). 

10 17 CFR 242.200(g); 17 CFR 242.201. 

comment letters were received in 

response to two of those proposed rule 

changes.6 The Commission is 

publishing this Notice and Order to 

solicit comment on the Amendments 

No. 2 and to approve each of the 

proposed rule changes, as modified by 

Amendments Nos. 1 and 2, on an 

accelerated basis. 

II. Description of the Proposals 

The Exchanges propose to establish a 

new market data product called the 

BATS One Feed, which would be 

offered by each of the Exchanges. The 

BATS One Feed would be a 

consolidated data feed based on market 

data derived from underlying data feeds 

offered by each of the Exchanges. 

Specifically, the Exchanges would use 

the following data feeds, which are also 

available to other vendors, to create the 

proposed BATS One Feed: the 

EdgeBook Depth feed for EDGX, the 

EdgeBook Depth feed for EDGA, the 

BYX PITCH Feed, and the BATS PITCH 

Feed. The Exchanges have represented 

that they will continue to make these 

individual underlying feeds available 

and that, as a result, the source of the 

market data they would use to create the 

proposed BATS One Feed would be the 

same as the source available to other 

vendors. As described more fully below, 

the BATS One Feed would be 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 the Exchanges and 

for which the Exchanges report quotes 

under the Consolidated Tape 

Association (‘‘CTA’’) Plan or the 

Nasdaq/UTP Plan. The BATS One Feed 

would also contain the individual last 

sale information for each of the 

Exchanges. In addition, the BATS One 

Feed would include messages from the 

Exchanges about trading on their 

markets. Finally, the BATS One Feed 

would contain an optional functionality 

that would enable recipients to elect to 

receive aggregated two-sided quotations 

from the Exchanges for up to five (5) 

price levels. 

Description of the BATS One Feed 

The BATS One Feed would contain 

the aggregate BBO of the Exchanges for 

all securities that are traded on the 

Exchanges and for which the Exchanges 

report quotes under the CTA Plan or the 

Nasdaq/UTP Plan. The aggregate BBO 

would include the total size of all orders 

at the BBO available on all Exchanges.7

The BATS One Feed would also 

disseminate last sale information for 

each of the individual Exchanges. The 

last sale information would include the 

price, size, time of execution, and the 

individual Exchange on which the trade 

was executed. The last sale message 

would also include the cumulative 

number of shares executed on all 

Exchanges for that trading day. The 

Exchanges have represented that they 

would disseminate the aggregate BBO of 

the Exchanges and last sale information 

through the BATS One Feed no earlier 

than each individual Exchange provides 

its BBO and last sale information to the 

processors under the CTA Plan or the 

Nasdaq/UTP Plan. 

The BATS One Feed would also 

include Symbol Summary, Market 

Status, Retail Liquidity Identifier on 

behalf of BYX, Trading Status, and 

Trade Break messages. The Symbol 

Summary message would include the 

total executed volume across all of the 

Exchanges. The Market Status message 

would be disseminated to reflect a 

change in the status of one of the 

Exchanges. For example, the Market 

Status message would indicate whether 

one of the Exchanges is experiencing a 

systems issue or disruption and 

quotation or trade information from that 

market is not currently being 

disseminated via the BATS One Feed as 

part of the aggregated BBO. The Market 

Status message would also indicate 

when an Exchange is no longer 

experiencing a systems issue or 

disruption to properly reflect the status 

of the aggregated BBO. 

The Retail Liquidity Identifier 

indicator message would be 

disseminated via the BATS One Feed on 

behalf of the BYX only pursuant to 

BYX’s Retail Price Improvement (‘‘RPI’’) 

Program.8 The Retail Liquidity Identifier 

indicates when RPI interest priced at 

least $0.001 better than BYX’s Protected 

Bid or Protected Offer for a particular 

security is available in the System. The 

Exchanges propose to disseminate the 

Retail Liquidity Indicator via the BATS 

One Feed in the same manner as it is 

currently disseminated through 

consolidated data streams (i.e., pursuant 

to the Consolidated Tape Association 

Plan/Consolidated Quotation Plan, or 

CTA/CQ, for Tape A and Tape B 

securities, and the Nasdaq UTP Plan for 

Tape C securities) as well as through 

proprietary BYX data feeds. The Retail 

Liquidity Identifier reflects the symbol 

and the side (buy or sell) of the RPI 

interest, but does not include the price 

or size of the RPI interest. In particular, 

like CQ and UTP quoting outputs, the 

BATS One Feed would include a field 

for codes related to the Retail Price 

Improvement Identifier. The codes 

indicate RPI interest that is priced better 

than BYX’s Protected Bid or Protected 

Offer by at least the minimum level of 

price improvement as required by the 

Program. 

The Trade Break message would 

indicate when an execution on one of 

the Exchanges has been broken in 

accordance with the individual 

Exchange’s rules.9 The Trading Status 

message would indicate the current 

trading status of a security on each 

individual Exchange. For example, a 

Trading Status message would be sent 

when a short sale price restriction is in 

effect pursuant to Rule 201 of 

Regulation SHO (‘‘Short Sale Circuit 

Breaker’’),10 or the security is subject to 

a trading halt, suspension or pause 

declared by the listing market. A 

Trading Status message would be sent 

whenever a security’s trading status 

changes. 

Optional Functionality for Aggregate 

Depth of Book. The BATS One Feed 

would also offer an additional, optional 

functionality that would enable 

recipients to receive two-sided 

quotations from the Exchanges for five 

(5) price levels for all securities that are 

traded on the Exchanges. The option for 

mstockstill on DSK4VPTVN1PROD with NOTICES

78922 Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Notices 

11Recipients who do not elect to receive the 

BATS One Premium Feed would receive the 

aggregate BBO of the Exchanges under the BATS 

Summary Feed, which, unlike the BATS Premium 

Feed, would not delineate the size available at the 

BBO on each individual Exchange. 

12Each of the Exchanges intend to file a separate 

proposal establishing the fees for the BATS One 

Feed. 

13See SIFMA Letter, Shatto Letter, and Themis 

Letter, supra note 6. 

receiving the BATS One Feed with this 

depth of book functionality is referred to 

as the ‘‘BATS One Premium Feed;’’ the 

option for receiving the BATS One Feed 

without this functionality is referred to 

as the ‘‘BATS One Summary Feed.’’ For 

each price level on one of the 

Exchanges, the BATS One Premium 

Feed option of the BATS One Feed 

would include a two-sided quote and 

the number of shares available to buy 

and sell at that particular price level.11

Distribution of the BATS One Feed. 

The Exchanges represent that they have 

taken into consideration their affiliated 

relationships in the design of the BATS 

One Feed to assure that vendors would 

be able to offer a similar product on the 

same terms as the Exchanges, both from 

the perspective of latency and cost. The 

Exchanges have stated that they propose 

to offer the BATS One Feed voluntarily 

in response to demand from vendors 

and subscribers that are interested in 

receiving the aggregate BBO and last 

sale information from the Exchanges as 

part of a single data feed. The Exchanges 

assert that the BATS One Feed can be 

used by industry professionals and 

retail investors looking for a cost 

effective, easy-to-administer, high 

quality market data product with the 

characteristics of the BATS One Feed. 

The Exchanges also assert that the BATS 

One Feed would help protect a free and 

open market by providing vendors and 

subscribers additional choices in 

receiving this type of market data, thus 

promoting competition and innovation. 

With respect to latency, the 

Exchanges have represented that the 

path for distribution by the Exchanges 

of BATS One Feed would not be faster 

than the path for distribution that would 

be used by a vendor to distribute an 

independently created a BATS One-like 

product. Accordingly, the Exchanges 

have stated, the proposed BATS One 

data feed is a data product that a 

competing vendor could create and sell 

without being in a disadvantaged 

position relative to the Exchange. In 

recognition that the Exchanges are the 

source of their own market data and 

affiliated with one another, the 

Exchanges have represented that the 

source of the market data they would 

use to create the proposed BATS One 

Feed is available to other vendors. 

Specifically, the Exchanges have 

represented that they would use the 

following data feeds to create the 

proposed BATS One Feed, each of 

which is available to other vendors: the 

EdgeBook Depth feed for EDGX, the 

EdgeBook Depth feed for EDGA, the 

BYX PITCH Feed, and the BATS PITCH 

Feed. The Exchanges have also 

represented that they will continue to 

make available these individual 

underlying feeds and that, as a result, 

the source of the market data they 

would use to create the proposed BATS 

One Feed is the same as the source 

available to competing vendors. 

The Exchanges have also made the 

following representations regarding the 

latency of the BATS One Feed and any 

consolidated feed to be offered by a 

competing vendor. In order to create the 

BATS One Feed, the system creating 

and supporting the BATS One Feed 

would need to receive the individual 

data feeds from each Exchange and, in 

turn, aggregate and summarize that data 

to create the BATS One Feed and then 

distribute it to end users. This is the 

same process a competing vendor would 

undergo should it create a market data 

product similar to the BATS One Feed 

to distribute to its end users. In 

addition, a competing vendor could 

locate its servers in the same facilities as 

the system creating and supporting the 

BATS One Feed and could therefore 

receive the individual data feeds from 

each Exchange at the same time as the 

system creating and supporting the 

BATS One Feed. Thus, the Exchanges 

have stated that they would not have 

any unfair advantage over competing 

vendors with respect to obtaining data 

from the individual Exchanges, because 

the technology supporting the BATS 

One Feed would similarly need to 

obtain the underlying data feeds and 

because this connection would be on a 

level playing field with a competing 

vendor located at the same facility as 

the Exchanges. Likewise, the BATS One 

data feed would not have a speed 

advantage vis-a`-vis competing vendors 

with respect to access to end user 

customers, whether those end users are 

also located in the same data center or 

not. 

With regard to cost, the Exchanges 

have represented that they will file a 

separate rule filing with the 

Commission to establish fees for BATS 

One Feed and that these fees would be 

designed to ensure that vendors could 

compete with the Exchanges by creating 

a similar product. To ensure a vendor 

can compete with the Exchanges by 

creating the same product as the BATS 

One Feed and selling it to their clients, 

the Exchanges have also represented 

that they would charge their clients for 

the BATS One Feed an amount that is 

no less than the cost to a market data 

vendor to obtain all the underlying 

feeds, plus an amount to be determined 

that would reflect the value of the 

aggregation and consolidation function. 

Thus, the pricing for the BATS One 

Feed would enable a vendor to receive 

the underlying data feeds and offer a 

similar product on a competitive basis 

and with no pricing disadvantage 

relative to the Exchanges. 

Implementation Date 

The Exchanges have represented that 

they anticipate making the BATS One 

Feed available as soon as practicable 

after approval of the proposed rule 

changes by the Commission and the 

effectiveness of rule filings to establish 

the fees for the BATS One Feed.12

III. Summary of Comments 

As noted above, the Commission 

received three comment letters on 

previous versions of the proposed 

changes filed by some of the 

Exchanges.13 In their current proposals, 

the Exchanges have responded to the 

points raised by these commenters. 

The three commenters generally 

oppose the proposed BATS One Feed. 

The Shatto Letter expressed general 

concerns about the transparency of 

order flow information to regulators. 

The Themis Letter expressed objections 

to the proposed BATS One Feed on the 

grounds that it would introduce a new 

proprietary data feed and expressed 

concerns generally about the complexity 

arising from the proliferation of new 

data technologies. In their response to 

the commenters, the Exchanges argued 

that the Themis Letter and Shatto Letter 

are not responsive to the issues raised 

in the proposal or are aimed at existing 

elements of U.S. market structure that 

have been previously approved by the 

Commission. 

The SIFMA Letter primarily argues 

that the fees for the proposed BATS One 

Feed do not meet the requirements of 

the Act, including the requirement that 

such fees be ‘‘fair and reasonable’’ under 

section 11A(c)(1)(C) of the Act. SIFMA 

also contends that BATS has 

circumvented the requirement to receive 

Commission approval for this product 

by offering and marketing the BATS 

One Feed since August 1, 2014. In their 

response to the SIFMA Letter, the 

Exchanges noted that the thrust of the 

SIFMA Letter is aimed at the initially 

proposed fees, which have now been 

removed from the proposed rule 

changes and are to be filed with the 

Commission via separate rule filings. 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Notices 78923 

14 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 

15Section 11A(c)(1)(C) of the Act requires, among 

other things, that no self-regulatory organization, 

member thereof, securities information processor, 

broker or dealer make use of the mails or any means 

or instrumentality of interstate commerce to collect, 

process, distribute, publish or prepare for 

distribution or publication any information with 

respect to quotations for or transactions in any 

security other than an exempted security in 

contravention of such rules and regulations as the 

Commission shall prescribe as necessary or 

appropriate in the public interest, for the protection 

of investors, or otherwise in furtherance of the 

purposes of the Act to assure that all securities 

information processors may, for purposes of 

distribution and publication, obtain on fair and 

reasonable terms such information with respect to 

quotations for and transactions in such securities as 

is collected, processed, or prepared for distribution 

or publication by an exclusive processor of such 

information acting in such capacity. 15 U.S.C. 78k– 

1(c)(1)(C). 

16 17 CFR 242.603(a)(2). 

17 15 U.S.C. 78f(b)(5) and (b)(8). 

18The Exchanges have represented that, in order 

to create the BATS One Feed, the system creating 

and supporting the BATS One Feed would need to 

receive the underlying data feeds from each 

Exchange and, in turn, aggregate and summarize 

that data to create the BATS One Feed and then 

distribute it to end users. The Exchanges have 

stated that this is the same process a competing 

vendor would undergo should it create a market 

data product similar to the BATS One Feed to 

distribute to its end users. 

19SIFMA has objected to the BATS One Feed 

primarily over concerns about fees for this product 

being ‘‘fair and reasonable,’’ consistent with section 

11A(c)(1)(C) of the Act. The Commission notes, 

however, that the proposed rule changes do not 

contain proposed fees and that Exchanges have 

represented that they will not offer the BATS One 

Feed until the requisite fee filings under section 

19(b) of the Act have been filed and are effective. 

The Commission will review any such filings when 

they have been submitted. 

SIFMA has also argued that BATS has 

circumvented the process of receiving Commission 

approval and has been actively offering and 

marketing the BATS One Feed for months. The 

Commission notes, however, that the Exchanges 

have represented that, although they have been 

marketing the BATS One Feed, all of their 

marketing materials have included statements that 

the BATS One Feed’s implementation was pending 

to Commission approval and at no point have the 

Exchanges offered the BATS One product for any 

use other than for testing and certification. 

The Exchanges also noted that, while 

the SIFMA Letter correctly states that 

BATS has marketed the BATS One Feed 

since August 1, 2014, the SIFMA Letter 

incorrectly asserts that BATS has 

offered the BATS One Feed since that 

same date. The Exchanges have 

represented that all of their marketing 

materials have included statements that 

the BATS One Feed’s implementation 

was pending to Commission approval, 

and at no point have the Exchanges 

offered the BATS One product for any 

use other than for testing and 

certification. 

IV. Discussion and Commission 

Findings 

After carefully considering the 

proposals and the comments submitted, 

the Commission finds that the proposed 

rule changes, as modified by 

Amendments Nos. 1 and 2, are 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to national 

securities exchanges.14 In particular, the 

Commission finds that the proposed 

rule changes are consistent with the 

requirements of section 11A(c)(1)(C) of 

the Act 15 and with Rule 603(a)(2) of 

Regulation NMS thereunder,16 which 

requires that any national securities 

exchange, national securities 

association, broker, or dealer that 

distributes information with respect to 

quotations for or transactions in an NMS 

stock to a securities information 

processor, broker, dealer, or other 

persons shall do so on terms that are not 

unreasonably discriminatory. The 

Commission also finds that the 

proposed rule changes are consistent 

with section 6(b)(5) of the Act, which 

requires that the rules of an exchange be 

designed to promote just and equitable 

principles of trade, remove 

impediments to and perfect the 

mechanisms of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest, and section 6(b)(8) of the 

Act, which requires that the rules of an 

exchange not impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act.17

The Commission notes that, to create 

the BATS One Feed, the Exchanges 

would use underlying data feeds that 

belong to the Exchanges: the EdgeBook 

Depth feed for EDGX, the EdgeBook 

Depth feed for EDGA, the BYX PITCH 

Feed, and the BATS PITCH Feed. 

Accordingly, the Commission’s review 

of the Exchanges’ proposals has focused, 

in particular, on whether the proposals 

would result in affiliated exchanges— 

which are separate self-regulatory 

organizations under the Act—making 

their data products or services available 

to one another at terms (e.g., content, 

pricing, or latency) that are more 

favorable than those available to 

unaffiliated market participants. 

The Exchanges have represented that 

the BATS One Feed would be created 

using underlying data feeds that are 

available for subscription by vendors. In 

recognition that the Exchanges are the 

source of their own market data and that 

they are affiliated with one another, the 

Exchanges have also represented that 

they will continue to make available all 

of the individual underlying feeds and 

that the source of the market data they 

would use to create the proposed BATS 

One Feed is the same as the source 

available to competing vendors. 

With respect to latency, the 

Exchanges have represented that 

competing vendors could locate their 

servers in the same facilities as the 

system creating and supporting the 

BATS One Feed, and, therefore, could 

receive the underlying data feeds at the 

same time as the system creating and 

supporting the BATS One Feed. 

Therefore, the Exchanges have 

contended that, a competing vendor 

could obtain the underlying data feeds 

from the Exchanges on the same latency 

basis as the system that would be 

performing the aggregation and 

consolidation of the proposed BATS 

One Feed and could provide the same 

kind of product to its customers with 

the same latency they could achieve by 

purchasing the BATS One Feed from the 

Exchanges.18 The Exchanges have also 

represented that they have designed the 

BATS One Feed so that they would have 

no advantages over a competing vendor 

with respect to the speed of access to 

the underlying feeds. 

With respect to pricing, although 

specific fees to be charged for the BATS 

One Feed are not part of the proposed 

rule changes, the Exchanges have 

represented that they will assess a fee 

that is at least equal to the aggregate cost 

of the underlying feeds (i.e., at least as 

much as the cost to a vendor of 

subscribing to each of the underlying 

data feeds), plus an additional amount 

(to be determined) that would reflect the 

value of the aggregation and 

consolidation function performed to 

create the BATS One Feed.19

Based on the Exchange’s 

representations with respect to the 

content, latency, and pricing of the 

BATS One Feed—which are central to 

the Commission’s analysis of the 

proposal—the Commission finds that 

the Exchanges’ proposals are consistent 

with the Act and the rules and 

regulations thereunder applicable to 

national securities exchanges. The 

Commission believes that these 

representations are designed to ensure 

that BATS, BYX, EDGA, and EDGX, 

which are separate self-regulatory 

organizations, do not, because of their 

relationship as affiliates, offer one 

another products or services on a more 

favorable basis than that available to 

other competing market participants. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule changes, as amended, are consistent 

with section 11A(c)(1)(C) of the Act and 

Rule 603(a)(2) of Regulation NMS 

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78924 Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Notices 

20 15 U.S.C. 78k–1(c)(1)(C) and 17 CFR 

242.603(a)(2). 

21 15 U.S.C. 78f(b)(5) and (b)(8). 

22 15 U.S.C. 78s(b)(2). 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3This includes options overlying equities, ETFs, 

ETNs and indexes which are Multiply Listed. 

4A dividend strategy is defined as transactions 

done to achieve a dividend arbitrage involving the 

purchase, sale and exercise of in-the-money options 

of the same class, executed the first business day 

prior to the date on which the underlying stock goes 

ex-dividend. 

5A merger strategy is defined as transactions 

done to achieve a merger arbitrage involving the 

purchase, sale and exercise of options of the same 

class and expiration date, executed the first 

business day prior to the date on which 

thereunder,20 and sections 6(b)(5) and 

(b)(8) of the Act.21

V. Accelerated Approval of Proposed 

Rule Changes, as Modified by 

Amendments No. 2 

The Amendments No. 2 revised the 

proposed rule changes to: (i) Clarify 

how the BATS One Feed would be 

created, (ii) make additional clarifying 

statements with respect to the latency 

and cost of the BATS One Feed, and (iii) 

bring together the discussion of key 

aspects of the description of the 

proposal in the same section. 

Accordingly, the Commission does not 

believe that the Amendments No. 2 

raises any novel regulatory issues and 

therefore finds that good cause exists to 

approve the proposals, as modified by 

Amendments Nos. 1 and 2, on an 

accelerated basis. 

VI. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether Amendments No. 2 

to the proposed rule changes are 

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 Numbers 

SR–BATS–2014–055; SR–BYX–2014– 

030; SR–EDGA–2014–25; or SR–EDGX– 

2014–25 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 

Numbers SR–BATS–2014–055; SR– 

BYX–2014–030; SR–EDGA–2014–25; or 

SR–EDGX–2014–25. 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 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 Numbers SR–BATS– 

2014–055; SR–BYX–2014–030; SR– 

EDGA–2014–25; or SR–EDGX–2014–25 

and should be submitted on or before 

January 21, 2015. 

VII. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act,22 that the 

proposed rule changes, as modified by 

Amendments Nos. 1 and 2, (SR–BATS– 

2014–055; SR–BYX–2014–030; SR– 

EDGA–2014–25; SR–EDGX–2014–25) 

be, and hereby are, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–30586 Filed 12–30–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 73927; File No. SR–Phlx–2014– 

80] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Strategy Fee Caps 

December 23, 2014. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on December 

18, 2014, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III, 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 proposes to amend 

Strategy Fee Caps which are currently 

located in the Exchange Fee Schedule at 

Section II, entitled ‘‘Multiply Listed 

Options.’’ 

While changes to the Pricing 

Schedule pursuant to this proposal are 

effective upon filing, the Exchange has 

designated the proposed amendment to 

be operative on January 2, 2015. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqomxphlx.cchwall

street.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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to amend 

the Strategy Fee Caps which are 

currently located in Section II, entitled 

‘‘Multiply Listed Options.’’ 3 Today, the 

Exchange caps transaction fees for 

certain dividend,4 merger,5 short stock 

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