Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 91 

50 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

structure of the Exchange with the result 

that the ownership interest of CBSX will 

terminate and the Exchange will be a 

wholly-owned subsidiary of NSX 

Holdings. Upon completion of the 

Transaction, NSX will move 

expeditiously to obtain all necessary 

regulatory approvals and reopen trading 

on NSX. This will operate to enhance 

rather than burden competition by 

restoring the NSX as an operating 

national securities exchange to which 

investors may direct their order flow, 

thus providing a further competitive 

venue for the trading of equity securities 

and affording market participants and 

the investing public additional 

opportunities to execute orders. As 

such, the Exchange believes that there is 

no burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has not solicited or 

received written comments on the 

proposed rule change from market 

participants or others. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication 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 self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the 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 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– 

NSX–2014–017 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–NSX–2014–017. 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 Number SR–NSX– 

2014–017 and should be submitted on 

or before January 23, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.50

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30703 Filed 12–31–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73939; File No. SR–EDGA– 

2014–34] 

Self-Regulatory Organizations; EDGA 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Rules 2.11, 

2.12, 11.11 and 11.14 To Replace 

References to ‘‘Direct Edge ECN LLC 

d/b/a DE Route’’ and ‘‘DE Route’’ With 

‘‘BATS Trading, Inc.’’ 

December 24, 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 

22, 2014, EDGA Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGA’’) 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 proposed rule 

change to amend Rules 2.11, 2.12, 11.11 

and 11.14 to replace references to 

‘‘Direct Edge ECN LLC d/b/a DE Route’’ 

and ‘‘DE Route’’ with ‘‘BATS Trading, 

Inc.’’ (‘‘BATS Trading’’). The Exchange 

does not propose to amend the 

requirements of any of these rules. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.directedge.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. 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
92 Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 

3See Securities Exchange Act Release No. 71449 

(January 30, 2014), 79 FR 6961 (February 5, 2014) 

(SR–EDGX–2013–43; SR–EDGA–2013–34). 

4Rule 600(b)(78) of Regulation NMS, 17 CFR 

242.600(b)(78), defines a ‘‘Trading Center’’ as ‘‘a 

national securities exchange or national securities 

association that operates an SRO trading facility, an 

alternative trading system, an exchange market 

maker, an OTC market maker, or any other broker 

or dealer that executes orders internally by trading 

as principal or crossing orders as agent.’’ See also 

Exchange Rule 2.11(a). 

5The term ‘‘Member’’ is defined as ‘‘any 

registered broker or dealer, or any person associated 

with a registered broker or dealer, that has been 

admitted to membership in the Exchange. A 

Member will have the status of a ‘‘member’’ of the 

Exchange as that term is defined in Section 3(a)(3) 

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

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Earlier this year, the Exchange and its 

affiliate, EDGX Exchange, Inc. (‘‘EDGX’’) 

received approval to effect a merger (the 

‘‘Merger’’) of the Exchange’s parent 

company, Direct Edge Holdings LLC, 

with BATS Global Markets, Inc., the 

parent of BATS Exchange, Inc. (‘‘BZX’’) 

and BATS Y-Exchange, Inc. (‘‘BYX’’, 

together with BZX, EDGA and EDGX, 

the ‘‘BGM Affiliated Exchanges’’ or 

‘‘BATS Exchange’’).3 As a result, the 

Exchange amended Rule 2.12 to reflect 

that BATS Trading, Inc., the affiliated 

BZX and BYX routing broker dealer, 

would also act as the inbound router for 

routing orders from BYX and BZX to the 

Exchange. In the context of the Merger, 

the BGM Affiliated Exchanges are 

working to migrate EDGX and EDGA 

onto the BATS technology platform, and 

align certain system functionality, 

retaining only intended differences 

between the BGM Affiliated Exchanges. 

As a result of these efforts, the Exchange 

proposes to amend Rules 2.11, 2.12, 

11.11 and 11.14 to replace references to 

‘‘Direct Edge ECN LLC d/b/a DE Route’’ 

and ‘‘DE Route’’ with ‘‘BATS Trading’’ 

to reflect that BATS Trading, Inc. will 

replace DE Route at [sic] the Exchange’s 

routing broker-dealer upon migration of 

the Exchange onto the BATS technology 

platform. Thereafter, BATS Trading will 

serve as the sole inbound and outbound 

routing broker-dealer for the Exchange. 

The Exchange does not propose to 

amend the requirements of any of these 

rules. 

Rule 2.11, BATS Trading as Outbound 

Router 

Pursuant to Exchange Rule 2.11, the 

Exchange relies on DE Route to provide 

outbound routing services from itself to 

other Trading Centers.4 The Exchange 

proposes to amend Rules 2.11 to replace 

all references to DE Route with BATS 

Trading, as BATS Trading will replace 

DE Route as the outbound routing 

service for the Exchange upon migration 

of the Exchange onto the BATS 

technology platform. The Exchange does 

not propose to amend the requirements 

of this rule. Therefore, the conditions 

and limitations set forth in Exchange 

Rule 2.11 will continue to require that: 

• The Exchange will regulate the 

BATS Trading as a facility (as defined 

in Section 3(a)(2) of the Act), subject to 

Section 6 of the Act. The Exchange will 

file with the Commission proposed rule 

changes and fees relating to the BATS 

Trading outbound router function and 

BATS Trading will be subject to the 

Exchange’s non-discrimination 

requirements. 

• FINRA will carry out oversight and 

enforcement responsibilities as the 

designated examining authority 

designated by the Commission pursuant 

to Rule 17d–1 of the Act with the 

responsibility for examining BATS 

Trading for compliance with applicable 

financial responsibility rules. 

• A Member’s 5 use of BATS Trading 

to route orders to another Trading 

Center will be optional. 

• BATS Trading will not engage in 

any business other than (a) its outbound 

router function, (b) its inbound router 

function as described in Rule 2.12, (c) 

its usage of an error account in 

accordance with Exchange Rule 

2.11(a)(7) and (d) any other activities it 

may engage in as approved by the 

Commission. 

• The Exchange shall establish and 

maintain procedures and internal 

controls reasonably designed to 

adequately restrict the flow of 

confidential and proprietary 

information between the Exchange and 

BATS Trading, and any other entity, 

including any affiliate of BATS Trading, 

and, if BATS Trading or any of its 

affiliates engage in any other business 

activities other than providing routing 

services to the Exchange, between the 

segment of BATS Trading or its affiliate 

that provides the other business 

activities and the routing services. 

• The Exchange or BATS Trading 

may cancel orders as either deems to be 

necessary to maintain fair and orderly 

markets if and when systems, technical 

or operational issues occur at the 

Exchange, BATS Trading or a Trading 

Center. The Exchange or BATS Trading 

shall provide notice of the cancellation 

of orders to affected Members as soon as 

practicable. 

• BATS Trading shall maintain an 

error account for the purpose of 

liquidating an error position when such 

position, in the judgment of the 

Exchange or BATS Trading, subject to 

the factors described in Exchange Rule 

2.11, cannot be fairly and practicably 

assigned to one or more Members in its 

entirety. An error position can be 

acquired if it results from a systems, 

technical or operational issue 

experienced by BATS Trading, by the 

Exchange, or by a Trading Center to 

which BATS Trading directed an 

outbound order. 

The books, records, premises, officers, 

agents, directors and employees of 

BATS Trading will be deemed to be the 

books, records, premises, officers, 

agents, directors and employees of the 

Exchange for purposes of, and subject to 

oversight pursuant to, the Act. The 

books and records of BATS Trading 

shall be subject at all times to inspection 

and copying by the Exchange and the 

Commission. Nothing in Rule 2.11 will 

preclude officers, agents, directors or 

employees of the Exchange from also 

serving as officers, agents, directors and 

employees of BATS Trading. 

Rule 2.12, BATS Trading as Inbound 

Router 

DE Route and BATS Trading provide 

Members of the Exchange, EDGX, BZX 

and BYX with optional routing services 

to other Trading Centers. Thus, in 

certain circumstances, DE Route and 

BATS Trading provide inbound routing 

from EDGX, BYX, or BZX to the 

Exchange. Exchange Rule 2.12 governs 

this inbound routing of orders by DE 

Route and BATS Trading to the 

Exchange in DE Route’s and BATS 

Trading’s capacity as a facility of the 

Exchange. The Exchange proposes to 

amend Rule 2.12 to remove all 

references to DE Route as BATS Trading 

will be the sole inbound routing service 

for the Exchange upon migration of the 

Exchange onto the BATS technology 

platform. The Exchange does not 

propose to amend the requirements of 

this rule. Therefore, the conditions and 

limitations set forth in Exchange Rule 

2.12(a) will continue to require that: 

• The Exchange enter into (a) a plan 

pursuant to Rule 17d–2 under the Act 

with a non-affiliated self-regulatory 

organization (‘‘SRO’’) to relieve the 

Exchange of regulatory responsibilities 

for BATS Trading with respect to rules 

that are common rules between the 

Exchange and the non-affiliated SRO, 

and (b) a regulatory services contract 

(‘‘Regulatory Contract’’) with a nonaffiliated SRO to perform regulatory 

responsibilities for BATS Trading for 

unique Exchange rules. 

• The Regulatory Contract require the 

Exchange to provide the non-affiliated 

SRO with information, in an easily 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 93 

6See Exchange Rule 2.12(a)(2). 

7 15 U.S.C. 78f(b). 

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

9 15 U.S.C. 78k–1(a)(1). 

accessible manner, regarding all 

exception reports, alerts, complaints, 

trading errors, cancellations, 

investigations, and enforcement matters 

(collectively ‘‘Exceptions’’) in which 

BATS Trading is identified as a 

participant that has potentially violated 

Exchange or Commission rules, and 

requires that the non-affiliated SRO 

provide a report, at least quarterly, to 

the Exchange quantifying all Exceptions 

in which BATS Trading is identified as 

a participant that has potentially 

violated Exchange or Commission rules. 

• The Exchange, on behalf of its 

parent company, establish and maintain 

procedures and internal controls 

reasonably designed to ensure that 

BATS Trading does not develop or 

implement changes to its system based 

on non-public information obtained as a 

result of its affiliation with the 

Exchange, until such information is 

available generally to similarly situated 

Members of the Exchange. 

• The Exchange furnish to BATS 

Trading only the same information and 

on the same terms as the Exchange 

makes available in the normal course of 

business to other users.6

In addition, Exchange Rule 2.12(b) 

states that, provided the conditions in 

Exchange Rule 2.12(a) are complied 

with, and provided further that DE 

Route operates as an outbound router on 

behalf of EDGX on the same terms and 

conditions as it does for the Exchange, 

and in accordance with the rules of 

EDGX, DE Route may provide inbound 

routing services to the Exchange from 

EDGX. BATS Trading provides members 

of the BGM Affiliated Exchanges 

(including EDGX) with optional routing 

services to other market centers, which 

may include routing from a BGM 

Affiliated Exchange to the Exchange. 

Therefore, the Exchange proposes to 

remove reference to EDGX as BATS 

Trading will be required under 

Exchange Rule 2.12(b) to operate as an 

outbound router on behalf of each BATS 

Exchange on the same terms and 

conditions as it does for the Exchange, 

and in accordance with the rules of each 

BATS Exchange, BATS Trading may 

provide inbound routing services to the 

Exchange from each BATS Exchange. 

The Exchange believes that Rule 2.12 

will continue to adequately manage the 

potential for conflicts of interest that 

could arise from BATS Trading routing 

orders to the Exchange. 

Rule 11.11(i), Market Access 

Rule 11.11(i) states that, in addition to 

the Exchange Rules regarding routing to 

away Trading Centers, DE Route has, 

pursuant to Rule 15c3–5 under the Act, 

implemented certain tests designed to 

mitigate the financial and regulatory 

risks associated with providing the 

Exchange’s Members access to such 

away Trading Centers. Pursuant to the 

policies and procedures developed by 

DE Route to comply with Rule 15c3–5, 

if an order or series of orders are 

deemed to be erroneous or duplicative, 

would cause the entering Member’s 

credit exposure to exceed a preset credit 

threshold, or are non-compliant with 

applicable pre-trade regulatory 

requirements (as defined in Rule 15c3– 

5), DE Route will reject such orders 

prior to routing and/or seek to cancel 

any orders that have been routed. 

The Exchange proposes to amend 

Rules 11.11(i) to replace all references to 

DE Route with BATS Trading, as BATS 

Trading will be the sole inbound routing 

service for the Exchange upon migration 

of the Exchange onto the BATS 

technology platform. The Exchange does 

not propose to amend the requirements 

of this rule. Under Rule 11.11(i) and 

BZX and BYX Rules 11.13(e), BATS 

trading has, pursuant to Rule 15c3–5 

under the Act, implemented certain 

tests designed to mitigate the financial 

and regulatory risks associated with 

providing the Exchange’s Members with 

access to such away Trading Centers. 

BATS Trading also has policies and 

procedures in place to comply with 

Rule 15c3–5, under which BATS 

Trading will reject such orders prior to 

routing and/or seek to cancel any orders 

that have been routed, where an order 

or series of orders are deemed to be 

erroneous or duplicative, would cause 

the entering Member’s credit exposure 

to exceed a preset credit threshold, or 

are non-compliant with applicable pretrade regulatory requirements (as 

defined in Rule 15c3–5). 

Rule 11.14, Limitation of Liability 

The Exchange also proposes to amend 

Exchange Rule 11.14(g) to replace 

references to DE Route with BATS 

Trading. Rule 11.14(g) authorizes the 

Exchange, subject to express conditions 

and limitations, to compensate Members 

for losses relating to orders routed by 

the Exchange through DE Route to 

Trading Centers that the Member claims 

resulted directly from a malfunction of 

the physical equipment, devices and/or 

programming, or the negligent acts or 

omissions of the employees, of such 

Trading Centers (‘‘Trading Center 

Systems Issue’’). Rule 11.14(g), applies 

to Members that experience losses due 

to Trading Center Systems Issues after 

DE Route routed the Members’ orders to 

a Trading Center that experienced such 

issues. Under Rule 11.14(g), as an 

accommodation to Members, the 

Exchange, via DE Route, employs 

reasonable efforts to submit Members’ 

claims for compensation on such 

Members’ behalf to a Trading Center, 

and pass along to such Members the full 

amount of compensation, if any, 

obtained by DE Route from such 

Trading Center. 

Under Rule 11.14(g), the Exchange 

undertakes to accept claims for losses 

submitted by Members, which claims 

must contain representations from such 

Members as to the accuracy of the 

information contained therein and that 

any losses incurred were the direct 

result of a Trading Center Systems Issue. 

Upon migration of the Exchange onto 

BATS technology, BATS Trading will be 

the Exchange’s sole routing brokerdealer and responsible for submitting 

claims under Rule 11.14(g). As 

amended, the Exchange would continue 

to employ reasonable efforts to submit 

such claims, but via BATS Trading 

instead of DE Route, to the Trading 

Center in question. If and to the extent 

that BATS Trading were to receive 

compensation from a Trading Center in 

response to a claim submitted on behalf 

of a Member, the full amount of such 

compensation would be passed through 

to the Member. 

Implementation Date 

The Exchange intends to implement 

the proposed rule change on or about 

January 12, 2015, which is the 

anticipated date upon which the 

migration of the Exchange to the BATS 

technology platform will be complete 

and BATS Trading, Inc. will replace DE 

Route as the Exchange’s routing brokerdealer. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule changes are consistent 

with Section 6(b) of the Act 7 and further 

the objectives of Section 6(b)(5) of the 

Act 8 because they are 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, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, 

and, in general, to protect investors and 

the public interest. The proposed rule 

change also is designed to support the 

principles of Section 11A(a)(1) 9 of the 

Act in that it seeks to assure fair 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
94 Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 

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

11 17 CFR 240.19b–4. 

12 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. 

13 17 CFR 240.19b–4(f)(6). 

14 17 CFR 240.19b–4(f)(6)(iii). 

15For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

16 15 U.S.C. 78s(b)(2)(B). 

competition among brokers and dealers 

and among exchange markets. 

The Exchange does not propose to 

amend the requirements of any of its 

rules and the proposed rule changes are 

intended only to reflect that BATS 

Trading will replace DE Route as the 

Exchange’s routing broker-dealer upon 

migration of the Exchange to the BATS 

technology platform. A consistent 

technology offering through the use of a 

single routing broker-dealer by each of 

the BGM Affiliated Exchange will, in 

turn, simplify the technology 

implementation, changes and 

maintenance by users of the Exchange 

that are also participants on EDGX, 

BZX, and BYX. The proposed rule 

change would provide greater 

harmonization between the rules of the 

BGM Affiliated Exchanges, resulting in 

greater uniformity and less burdensome 

and more efficient regulatory 

compliance. As such, the proposed rule 

change would foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities and 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange reiterates that the proposed 

rule change is being proposed in the 

context of the technology integration of 

the BGM Affiliated Exchanges. Thus, 

the Exchange believes this proposed 

rule change is necessary to permit fair 

competition among national securities 

exchanges. In addition, the Exchange 

believes the proposed rule change will 

benefit Exchange participants in that it 

is one of several changes necessary to 

achieve a consistent technology offering 

by the BGM Affiliated Exchanges. 

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 designated this rule 

filing as non-controversial under 

Section 19(b)(3)(A) of the Act 10 and 

paragraph (f)(6) of Rule 19b–4 

thereunder.11 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.12

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 13 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 14

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange has asked 

the Commission to waive the 30-day 

operative delay in order to permit the 

Exchange to implement the proposed 

rule change on January 12, 2015, which 

is the anticipated date upon which the 

migration of the Exchange to the BATS 

technology platform will be complete 

and BATS Trading will replace DE 

Route as the Exchange’s routing brokerdealer. The Exchange states that waiver 

of the operative delay is consistent with 

the protection of investors and the 

public interest because it will allow the 

Exchange to replace DE Route with 

BATS Trading as the Exchange’s routing 

broker-dealer upon migration of the 

Exchange to the BATS technology 

platform, thereby enabling BATS 

Trading to act as the routing brokerdealer for each of the BGM Affiliated 

Exchanges in a timely manner and 

simplifying the technology integration 

for Members of the Exchange that are 

also participants on EDGX, BZX and 

BYX. In this regard, the Exchange notes 

that, since completion of the Merger, 

both Members and the BGM Affiliated 

Exchanges have made numerous 

systems changes in preparation for the 

technology migration occurring on 

January 12, 2015, the Exchange has 

issued frequent updates to Members 

informing them of the BGM Affiliated 

Exchange technology migration as well 

as its anticipated time line so that 

Members may make the requisite system 

changes, and the Exchange has 

conducted multiple testing 

opportunities for Members to ensure 

that both Members’ and the Exchange’s 

systems will operate in accordance with 

the proposed rule change on January 12, 

2015. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. 

Therefore, the Commission hereby 

waives the operative delay and 

designates the proposed rule change 

operative upon filing.15

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) of the Act 16 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– 

EDGA–2014–34 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–EDGA–2014–34. 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 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 95 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 71375 

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

(SR–BATS–2013–059; SR–BYX–2013–039). 

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–EDGA– 

2014–34, and should be submitted on or 

before January 23, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30698 Filed 12–31–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73936; File No. SR–BYX– 

2014–041] 

Self-Regulatory Organizations; BATS 

Y-Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Rule 2.12 To 

Remove References to ‘‘Direct Edge 

ECN LLC’’ and ‘‘DE Route’’ 

December 24, 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 

22, 2014, BATS Y-Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BYX’’) 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 proposed rule 

change to amend Rule 2.12 to remove 

references to ‘‘Direct Edge ECN LLC’’ 

and ‘‘DE Route.’’ The Exchange does not 

propose to amend the requirements of 

this rule. 

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 

Earlier this year, the Exchange and its 

affiliate BATS Exchange, Inc. (‘‘BZX’’) 

received approval to affect 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’’, and together with BZX, BYX 

and EDGX, the ‘‘BGM Affiliated 

Exchanges’’).3 As a result, the Exchange 

amended Rule 2.12 to reflect that DE 

Route, the affiliated EDGA and EDGX 

routing broker dealer, would also act as 

the inbound router for routing orders 

from EDGA and EDGX to the Exchange. 

In the context of the Merger, the BGM 

Affiliated Exchanges are working to 

migrate EDGX and EDGA onto the BATS 

technology platform, and align certain 

system functionality, retaining only 

intended differences between the BGM 

Affiliated Exchanges. As a result of 

these efforts, the Exchange proposes to 

amend to amend [sic] Rule 2.12 to 

remove references to ‘‘Direct Edge ECN 

LLC’’ and ‘‘DE Route’’ to reflect that 

BATS Trading, Inc. will be the 

Exchange’s sole routing broker-dealer as 

of January 12, 2015. Thereafter, BATS 

Trading will serve as the sole inbound 

routing broker-dealer for the Exchange. 

The Exchange does not propose to 

amend the requirements of the rule. 

DE Route and BATS Trading provide 

Members of the Exchange, EDGA, EDGX 

and BZX with optional routing services 

to other market centers. Thus, in certain 

circumstances, DE Route and BATS 

Trading provides inbound routing from 

EDGA, EDGX, or BZX to the Exchange. 

Exchange Rule 2.12 governs this 

inbound routing of orders by DE Route 

and BATS Trading to the Exchange in 

DE Route’s and BATS Trading’s 

capacity as a facility of the Exchange. 

The Exchange proposes to amend Rule 

2.12 to remove all references to DE 

Route as BATS Trading will be the sole 

inbound routing service for the 

Exchange upon migration of EDGA and 

EDGX onto the BATS technology 

platform. The Exchange does not 

propose to amend the requirements of 

this rule. Therefore, the conditions and 

limitations set forth in Exchange Rule 

2.12(a) will continue to require that: 

• The Exchange enter into (a) a plan 

pursuant to Rule 17d–2 under the Act 

with a non-affiliated self-regulatory 

organization (‘‘SRO’’) to relieve the 

Exchange of regulatory responsibilities 

for BATS Trading with respect to rules 

that are common rules between the 

Exchange and the non-affiliated SRO, 

and (b) a regulatory services contract 

(‘‘Regulatory Contract’’) with a nonaffiliated SRO to perform regulatory 

responsibilities for BATS Trading for 

unique Exchange rules. 

• The Regulatory Contract require the 

Exchange to provide the non-affiliated 

SRO with information, in an easily 

accessible manner, regarding all 

exception reports, alerts, complaints, 

trading errors, cancellations, 

investigations, and enforcement matters 

(collectively ‘‘Exceptions’’) in which 

BATS Trading is identified as a 

participant that has potentially violated 

Exchange or Commission rules, and 

requires that the non-affiliated SRO 

provide a report, at least quarterly, to 

the Exchange quantifying all Exceptions 

in which BATS Trading is identified as 

a participant that has potentially 

violated Exchange or Commission rules. 

• The Exchange, on behalf of holding 

company indirectly owning the 

Exchange, establish and maintain 

procedures and internal controls 

reasonably designed to ensure that 

BATS Trading does not develop or 


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