38960 Federal Register / Vol. 82, No. 157 / Wednesday, August 16, 2017 / Notices 

55 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6)(iii). 

5See Securities Exchange Act Release No. 68303 

(November 27, 2012), 77 FR 71652 (December 3, 

2012) (‘‘RPI Approval Order’’) (SR–BYX–2012–019). 

6A ‘‘User’’ is defined in BYX Rule 1.5(cc) as any 

member or sponsored participant of the Exchange 

who is authorized to obtain access to the System. 

7A ‘‘Retail Order’’ is defined in Rule 11.24(a)(2) 

as an agency order that originates from a natural 

person and is submitted to the Exchange by a RMO, 

provided that no change is made to the terms of the 

order with respect to price or side of market and 

the order does not originate from a trading 

algorithm or any computerized methodology. See 

Rule 11.24(a)(2). 

8The term Protected Quotation is defined in BYX 

Rule 1.5(t) and has the same meaning as is set forth 

in Regulation NMS Rule 600(b)(58). The terms 

Protected NBB and Protected NBO are defined in 

BYX Rule 1.5(s). The Protected NBB is the bestpriced protected bid and the Protected NBO is the 

best-priced protected offer. Generally, the Protected 

NBB and Protected NBO and the national best bid 

(‘‘NBB’’) and national best offer (‘‘NBO’’, together 

with the NBB, the ‘‘NBBO’’) will be the same. 

However, a market center is not required to route 

to the NBB or NBO if that market center is subject 

to an exception under Regulation NMS Rule 

611(b)(1) or if such NBB or NBO is otherwise not 

available for an automatic execution. In such case, 

the Protected NBB or Protected NBO would be the 

best-priced protected bid or offer to which a market 

center must route interest pursuant to Regulation 

NMS Rule 611. 

9See RPI Approval Order, supra note 5 at 71652. 

10 Id. 

11See Securities Exchange Act Release Nos. 

71249 (January 7, 2014), 79 FR 2229 (January 13, 

2014) (SR–BYX–2014–001) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

to Extend the Pilot Period for the Retail Price 

Improvement Program); 74111 (January 22, 2015), 

80 FR 4598 (January 28, 2015) (SR–BYX–2015–05) 

(Notice of Filing and Immediate Effectiveness of a 

Proposed Rule Change to Extend the Pilot Period for 

BATS Y-Exchange, Inc.’s Retail Price Improvement 

(‘‘RPI’’) Program for 12 Months, To Expire on 

January 31, 2016); 76965 (January 22, 2016), 81 FR 

4682 (January 27, 2016) (SR–BYX–2016–01) (Notice 

of Filing and Immediate Effectiveness of a Proposed 

Rule Change to Rule 11.24, Retail Price 

Improvement Program, To Extend the Pilot Period); 

78180 (June 28, 2016), 81 FR 43306 (July 1, 2016) 

(SR–BYX–2016–15) (Notice of Filing and Immediate 

Effectiveness of a Proposed Rule Change to Rule 

11.24, Retail Price Improvement Program, To 

Extend the Pilot Period). 

12A ‘‘Retail Price Improvement Order’’ is defined 

in Rule 11.24(a)(3) as an order that consists of nondisplayed interest on the Exchange that is priced 

better than the Protected NBB or Protected NBO by 

at least $0.001 and that is identified as such. See 

Rule 11.24(a)(3). 

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–MIAX– 

2017–39 and should be submitted on or 

before September 6, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.55

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–17272 Filed 8–15–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81368; File No. SR– 

BatsBYX–2017–18] 

Self-Regulatory Organizations; Bats 

BYX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change to Rule 11.24, 

Retail Price Improvement Program, To 

Extend the Pilot Period 

August 10, 2017. 

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 August 8, 

2017, Bats BYX 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 Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 3 and Rule 19b–4(f)(6)(iii) 

thereunder,4 which renders it effective 

upon filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange filed a proposal to 

extend the pilot period for the 

Exchange’s Retail Price Improvement 

(‘‘RPI’’) Program (the ‘‘Program’’), which 

was set to expire on July 31, 2017, for 

12 months, to expire on July 31, 2018. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at www.bats.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 

In November 2012, the Commission 

approved the RPI Program on a pilot 

basis.5 The Program is designed to 

attract retail order flow to the Exchange, 

and allows such order flow to receive 

potential price improvement. The 

Program is currently limited to trades 

occurring at prices equal to or greater 

than $1.00 per share. Under the 

Program, all Exchange Users 6 are 

permitted to provide potential price 

improvement for Retail Orders 7 in the 

form of non-displayed interest that is 

better than the national best bid that is 

a Protected Quotation (‘‘Protected 

NBB’’) or the national best offer that is 

a Protected Quotation (‘‘Protected 

NBO’’, and together with the Protected 

NBB, the ‘‘Protected NBBO’’).8

The Program was approved by the 

Commission on a pilot basis running 

one-year from the date of 

implementation.9 The Commission 

approved the Program on November 27, 

2012.10 The Exchange implemented the 

Program on January 11, 2013, and has 

extended the pilot period four times.11

The pilot period for the Program expired 

on July 31, 2017. The lapse of the pilot 

was inadvertent and this filing seeks to 

reinstate the pilot under the same terms 

as the original pilot. 

Proposal To Extend the Operation of the 

Program 

The Exchange established the RPI 

Program in an attempt to attract retail 

order flow to the Exchange by 

potentially providing price 

improvement to such order flow. The 

Exchange believes that the Program 

promotes competition for retail order 

flow by allowing Exchange members to 

submit Retail Price Improvement Orders 

(‘‘RPI Orders’’) 12 to interact with Retail 

Orders. Such competition has the ability 


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Federal Register / Vol. 82, No. 157 / Wednesday, August 16, 2017 / Notices 38961 

13See RPI Approval Order, supra note 5 at 71655. 

14Concurrently with this filing, the Exchange has 

submitted a request for an extension of the 

exemption under Regulation NMS Rule 612 

previously granted by the Commission that permits 

it to accept and rank the RPI orders in sub-penny 

increments. See Letter from Anders Franzon, SVP, 

Associate General Counsel, Bats BYX Exchange, 

Inc. to Brent J. Fields, Secretary, Securities and 

Exchange Commission dated August 7, 2017. 

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

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

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4. 

19 17 CFR 240.19b–4(f)(6)(iii). 

20For 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). 

to promote efficiency by facilitating the 

price discovery process and generating 

additional investor interest in trading 

securities, thereby promoting capital 

formation. The Exchange believes that 

extending the pilot is appropriate 

because it will allow the Exchange and 

the Commission additional time to 

gather and analyze data regarding the 

Program that the Exchange has 

committed to provide.13 As such, the 

Exchange believes that it is appropriate 

to extend the current operation of the 

Program.14 Through this filing, the 

Exchange seeks to extend the current 

pilot period of the Program until July 

31, 2018. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with the 

requirements of the Act and the rules 

and regulations thereunder that are 

applicable to a national securities 

exchange, and, in particular, with the 

requirements of Section 6(b) of the 

Act.15 In particular, the Exchange 

believes the proposed change furthers 

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

Act,16 in that it is designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in facilitating transactions in securities, 

and to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system. The Exchange believes that 

extending the pilot period for the RPI 

Program is consistent with these 

principles because the Program is 

reasonably designed to attract retail 

order flow to the exchange environment, 

while helping to ensure that retail 

investors benefit from the better price 

that liquidity providers are willing to 

give their orders. Additionally, as 

previously stated, the competition 

promoted by the Program may facilitate 

the price discovery process and 

potentially generate additional investor 

interest in trading securities. The 

extension of the pilot period will allow 

the Commission and the Exchange to 

continue to monitor the Program for its 

potential effects on public price 

discovery, and on the broader market 

structure. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule change extends an 

established pilot program for 12 months, 

thus allowing the RPI Program to 

enhance competition for retail order 

flow and contribute to the public price 

discovery process. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any written 

comments from Members or other 

interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (A) Significantly affect 

the protection of investors or the public 

interest; (B) impose any significant 

burden on competition; and (C) by its 

terms, become operative for 30 days 

from the date on which it was filed or 

such shorter time as the Commission 

may designate it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 17 and paragraph (f)(6) of Rule 19b– 

4 thereunder,18 the Exchange has 

designated this rule filing as noncontroversial. 

The Exchange has requested the 

Commission waive the standard fiveday pre-filing and 30-day operative 

delay requirements as specified in Rule 

19b–4(f)(6)(iii) 19 so that BatsBYX’s RPI 

Program can continue to operate with 

limited interruption. The Commission 

waives the 5-day pre-filing requirement. 

In addition, the Commission believes 

that waiving the 30-day operative delay 

is consistent with the protection of 

investors and the public interest 

because it will allow the Exchange to 

reinstate the RPI Program on a pilot 

basis immediately. For these reasons, 

the Commission designates the proposal 

to be effective and operative upon filing 

with the Commission.20

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposal 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 No. SR– 

BatsBYX–2017–18 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 No. 

SR-BatsBYX–2017–18. 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 such 

filing will also 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 No. SR–BatsBYX– 

2017–18 and should be submitted on or 

before September 6, 2017 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
38962 Federal Register / Vol. 82, No. 157 / Wednesday, August 16, 2017 / Notices 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3PIXLTM is the Exchange’s price improvement 

mechanism known as Price Improvement XL or 

PIXL. A member or member organization may 

electronically submit for execution an order it 

represents as agent on behalf of a public customer, 

broker-dealer, or any other entity (‘‘PIXL Order’’) 

against principal interest or against any other order 

(except as provided in Rule 1080(n)(i)(E)) it 

represents as agent (‘‘Initiating Order’’), provided it 

submits the PIXL order for electronic execution into 

the PIXL Auction pursuant to Rule 1080. See 

Exchange Rule 1080(n). 

4Options overlying Standard and Poor’s 

Depositary Receipts/SPDRs (‘‘SPY’’) are based on 

the SPDR exchange-traded fund (‘‘ETF’’), which is 

designed to track the performance of the S&P 500 

Index. 

5Section B of the Pricing Schedule contains 

Customer Rebate Tiers which are calculated by 

totaling Customer volume in Multiply Listed 

Options (including SPY) that are electronicallydelivered and executed, except volume associated 

with electronic QCC Orders, as defined in Exchange 

Rule 1080(o). Rebates are paid on Customer Rebate 

Tiers according to certain categories. Members and 

member organizations under Common Ownership 

may aggregate their Customer volume for purposes 

of calculating the Customer Rebate Tiers and 

receiving rebates. Affiliated Entities may aggregate 

their Customer volume for purposes of calculating 

the Customer Rebate Tiers and receiving rebates. 

See Section B of the Pricing Schedule. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(4) and (5). 

8Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

9NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 

2010). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–17273 Filed 8–15–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81370; File No. SR–Phlx– 

2017–64] 

Self-Regulatory Organizations; 

NASDAQ PHLX LLC; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Amend the 

Exchange’s Pricing Schedule 

August 10, 2017. 

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 July 31, 

2017 NASDAQ 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Exchange’s Pricing Schedule at Section 

I, entitled ‘‘Rebates and Fees for Adding 

and Removing Liquidity in SPY,’’ and 

Section IV, Part A entitled ‘‘PIXL 

Pricing’’ to amend pricing related to 

PIXL 3 executions. 

While these amendments are effective 

upon filing, the Exchange has 

designated the proposed amendments to 

be operative on August 1, 2017. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqphlx.cchwallstreet. 

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 the proposed rule 

change is to amend the Exchange’s 

Pricing Schedule at Section I, entitled 

‘‘Rebates and Fees for Adding and 

Removing Liquidity in SPY’’ and 

specifically, the section that pertains to 

PIXL Executions in Standard and Poor’s 

Depositary Receipts/SPDRs (‘‘SPY’’).4

The Exchange also proposes to amend 

PIXL Pricing in Section IV, Part A, 

entitled ‘‘PIXL Pricing’’ for all other 

Multiply-Listed options symbols. 

First, the Exchange proposes to 

increase the SPY Complex PIXL rebate 

it offers Phlx members or member 

organizations that qualify for Section B, 

Customer Rebate Tiers 5 2 through 6 or 

qualify for the Monthly Firm Fee Cap. 

Presently, the Exchange offers a rebate 

of $0.10 per contract for all SPY 

Complex PIXL Orders greater than 499 

contracts, provided the member or 

member organization executes an 

average of 2,500 contracts per day of 

SPY Complex PIXL Orders in a month. 

The Exchange proposes to increase that 

rebate to $0.12 per contract. In doing so, 

the Exchange desires to incentivize 

members or member organizations to 

transact a greater number of SPY 

Complex PIXL Orders while also 

incentivizing members or member 

organizations to submit Customer order 

flow on Phlx. 

Second, the Exchange proposes to 

increase the Complex PIXL (excluding 

SPY Options rebate it offers to Phlx 

members and member organizations that 

qualify for Section B, Customer Rebate 

Tiers 2 through 6 or qualify for the 

Monthly Firm Fee Cap. Presently, the 

Exchange offers a rebate of $0.10 per 

contract for all Complex PIXL Orders 

(excluding SPY Options) greater than 

499 contracts, provided the member or 

member organization executes an 

average of 2,500 contracts per day of 

Complex SPY PIXL Orders in a month. 

The Exchange proposes to increase that 

rebate to $0.12 per contract. In doing so, 

the Exchange desires to incentivize 

members and member organizations to 

transact a greater number of Complex 

PIXL Orders while also incentivizing 

members and member organizations to 

submit Customer order flow on Phlx to 

obtain the $0.12 rebate on all Complex 

PIXL Orders (excluding SPY Options). 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,6 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,7 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 8

Likewise, in NetCoalition v. Securities 

and Exchange Commission 9

(‘‘NetCoalition’’) the D.C. Circuit upheld 


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