[Federal Register Volume 82, Number 179 (Monday, September 18, 2017)]
[Notices]
[Pages 43595-43597]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-19803]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81594; File No. SR-BatsBZX-2017-57]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Rule 11.13, Order Execution and Routing, To Account for IEX as a 
Primary Listing Market and To Amend Certain Rules To Reflect the Name 
Change of NYSE MKT to NYSE American

September 13, 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 September 6, 2017, Bats BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') 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 ``non-controversial'' 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.
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    \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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend paragraphs (b)(3)(M) and (N) 
of Rule 11.13, Order Execution and Routing, to expand the ability of 
Users \5\ to designate their orders for participation in the opening, 
re-opening (following a halt, suspension, or pause), or closing process 
of a primary listing market other than the Exchange (NYSE, Nasdaq, NYSE 
MKT, or NYSE Arca) to include the Investors Exchange LLC (``IEX''). The 
Exchange also proposes to amend paragraphs (b)(3)(M) and (N) of Rule 
11.13 as well as Rules 11.24(c)(1) and 11.26(a) to reflect the name 
change of NYSE MKT to NYSE American.
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    \5\ The term ``User'' is defined as ``any Member or Sponsored 
Participant who is authorized to obtain access to the System 
pursuant to Rule 11.3.'' See Exchange Rule 1.5(cc).
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    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
    Exchange Rule 11.13(b)(3)(N) describes the ROOC routing option, 
under which Users may designate their orders for participation in the 
opening or closing process, in addition to the re-opening (following a 
halt, suspension, or pause), of a primary listing market other than the 
Exchange, if received before the opening/re-opening/closing time of 
such market.\6\ Under Exchange Rule 11.13(b)(3)(M), Users may also 
elect that their orders be routed to participate in the primary 
market's re-opening process, and not its opening or closing processes. 
Any remaining shares

[[Page 43596]]

are either posted to the BZX Book,\7\ executed, or routed to 
destinations on the System routing table.\8\
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    \6\ See Exchange Rule 11.13(b)(3)(N).
    \7\ The term ``BZX Book'' is defined as ``the System's 
electronic file of orders.'' See Exchange Rule 1.5(e).
    \8\ The term ``System routing table'' refers to the proprietary 
process for determining the specific options exchanges to which the 
System routes orders and the order in which it routes them. See 
Exchange Rule 11.13(b)(3).
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    IEX announced that it intends to become a primary listing exchange 
and support IEX-listed companies beginning in October 2017.\9\ At that 
time, the Exchange will enable Users to elect that their orders in IEX-
listed securities be routed to IEX to participate in IEX's opening, re-
opening (following a halt, suspension, or pause), or closing process. 
Therefore, the Exchange proposes to amend paragraphs (b)(3)(M) and (N) 
of Rule 11.13 to include IEX as a primary listing market to which Users 
may designate their orders be routed.\10\
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    \9\ See IEX Trading Alert #2017-05, Listing Specifications, 
Testing Opportunities, and Timelines, available at https://iextrading.com/trading/alerts/2017/015/. See also Securities 
Exchange Act Release No. 81316 (August 4, 2017), 82 FR 37474 (August 
10, 2017) (SR-IEX-2017-10) (Order approving proposed rule change 
related in auctions in IEX-listed securities, dissemination of 
auction-related data, and provisions governing trading halts and 
pauses).
    \10\ The Exchange also proposes to amend paragraph (b)(3)(M) of 
Rule 11.13 to replace the term ``Bats'' with ``BZX'' to reflect the 
correct defined term of ``BZX Book''. See Exchange Rule 1.5(e).
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    Lastly, the Exchange also proposes non-substantive amendments to 
paragraphs (b)(3)(M) and (N) of Rule 11.13 as well as Rules 11.24(c)(1) 
and 11.26(a) to reflect the name change of NYSE MKT to NYSE 
American.\11\
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    \11\ See Securities Exchange Act Release No. Securities Exchange 
Act Release No. 80283 (March 21, 2017), 82 FR 15244 (March 27, 2017) 
(SR-NYSEMKT-2017-14).
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \12\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \13\ in particular, in that it is designed to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest. As discussed above, IEX 
announced that it intends to become a primary listing exchange and 
support IEX-listed companies beginning in October 2017.\14\ Certain 
Users whose orders in IEX-listed securities are resting on the BZX Book 
may wish that their order only be routed to participate in IEX's 
opening, closing, or re-opening process. The proposed rule change 
promotes just and equitable principles of trade because it would 
provide such Users with additional flexibility with regard to their 
orders in IEX-listed securities.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ See supra note 9.
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    Lastly, the non-substantive amendments to paragraphs (b)(3)(M) and 
(N) of Rule 11.13 as well as Rules 11.24(c)(1) and 11.26(a) to reflect 
the name change of NYSE MKT to NYSE American also removes impediments 
to and perfects the mechanism of a free and open market and a national 
market system because it updates the rules to reflect the name change 
and does not alter the way in which orders in NYSE American listed 
securities are handled and routed.
(A) Self-Regulatory Organization's Statement on Burden on Competition
    The Exchange does not believe that the proposal will impose any 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act. The Exchange believes that its proposal would 
increase competition because it offers Users an alternative means to 
route orders to participate in IEX's opening, closing, and re-opening 
following a halt, suspension, or pause as if they entered orders on 
that market directly.

B. 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

    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 \15\ and 
paragraph (f)(6) of Rule 19b-4 thereunder,\16\ the Exchange has 
designated this rule filing as non-controversial. The Exchange has 
given the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and 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.
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4.
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    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: (1) 
Necessary or appropriate in the public interest; (2) for the protection 
of investors; or (3) otherwise in furtherance of the purposes of the 
Act. If the Commission takes such action, the Commission shall 
institute proceedings to determine whether the proposed rule 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

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#4d3f382128602e2220202823393e0d3e282e632a223b"><span class="__cf_email__" data-cfemail="bccec9d0d991dfd3d1d1d9d2c8cffccfd9df92dbd3ca">[email protected]</span></a>. Please include 
File Number SR-BatsBZX-2017-57 on the subject line.

Paper Comments

    <bullet> Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BatsBZX-2017-57. 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

[[Page 43597]]

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-BatsBZX-2017-57 and should be submitted on or before 
October 10, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-19803 Filed 9-15-17; 8:45 am]
 BILLING CODE 8011-01-P


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