48552 Federal Register / Vol. 82, No. 200 / Wednesday, October 18, 2017 / Notices 

9 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)(ii). 

4 17 CFR 240.19b–4(f)(2). 

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

registered broker or dealer that has been admitted 

to membership in the Exchange.’’ See Exchange 

Rule 1.5(n). 

6 ‘‘Firm’’ applies to any transaction identified by 

a Member for clearing in the Firm range at the OCC, 

excluding any Joint Back Office transaction. See the 

Exchange’s fee schedule available at http://

www.bats.com/us/options/membership/fee_

schedule/bzx/. 

7 ‘‘Broker Dealer’’ applies to any order for the 

account of a broker dealer, including a foreign 

broker dealer, that clears in the Customer range at 

the Options Clearing Corporation (‘‘OCC’’). Id. 

8 ‘‘Joint Back Office’’ applies to any transaction 

identified by a Member for clearing in the Firm 

range at the OCC that is identified with an origin 

code as Joint Back Office. A Joint Back Office 

participant is a Member that maintains a Joint Back 

Office arrangement with a clearing broker-dealer. 

Id. 

9 ‘‘Penny Pilot Securities’’ are those issues quoted 

pursuant to Exchange Rule 21.5, Interpretation and 

Policy .01. Id. ‘‘Non-Penny Pilot’’ refers to all other 

issues. 

10Fee code NF is appended to Firm, Broker 

Dealer and Joint Back Office orders in Non-Penny 

Pilot Securities that add liquidity. Orders that yield 

fee code NF are provided a standard rebate of $0.30 

per contract. Id. 

11 ‘‘ADV’’ means average daily volume calculated 

as the number of contracts added or removed, 

combined, per day. Id. 

12 ‘‘OCV’’ means the total equity and ETF options 

volume that clears in the Customer range at the 

Options Clearing Corporation (‘‘OCC’’) for the 

month for which the fees apply, excluding volume 

on any day that the Exchange experiences an 

Exchange System Disruption and on any day with 

a scheduled early market close. Id. 

13 ‘‘ADAV’’ means average daily added volume 

calculated as the number of contracts added per 

day. See the Exchange’s fee schedule available at 

http://www.bats.com/us/options/membership/fee_

schedule/bzx/. 

14 ‘‘Away Market Maker’’ applies to any 

transaction identified by a Member for clearing in 

the Market Maker range at the OCC, where such 

Member is not registered with the Exchange as a 

Market Maker, but is registered as a market maker 

on another options exchange. Id. 

15 ‘‘Non-Customer’’ applies to any transaction 

identified by a Member for clearing which is not in 

the Customer range at the OCC, excluding any 

transaction for a Broker Dealer or a ‘‘Professional’’ 

as defined in Exchange Rule 16.1. Id. 

16 ‘‘Penny Pilot Securities’’ are those issues 

quoted pursuant to Exchange Rule 21.5, 

Interpretation and Policy .01. Id. Non-Penny 

securities are all other securities. 

2017–064 and should be submitted on 

or before November 8, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–22537 Filed 10–17–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81866; File No. SR– 

BatsBZX–2017–65] 

Self-Regulatory Organizations; Bats 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change Related to Fees 

for Use on the Exchange’s Equity 

Options Platform 

October 12, 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 October 

2, 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, II and III 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated the proposed rule change as 

one establishing or changing a member 

due, fee, or other charge imposed by the 

Exchange under Section 19(b)(3)(A)(ii) 

of the Act 3 and Rule 19b–4(f)(2) 

thereunder,4 which renders the 

proposed rule change effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange filed a proposal to 

amend the fee schedule applicable to 

Members 5 and non-Members of the 

Exchange pursuant to BZX Rules 15.1(a) 

and (c). 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

fee schedule for its equity options 

platform (‘‘BZX Options’’) to adopt a 

new Firm,6 Broker Dealer 7 and Joint 

Back Office 8 Non-Penny Pilot 9 Add 

Volume Tier under footnote 8. 

The Exchange currently offers three 

Firm, Broker Dealer and Joint Back 

Office Non-Penny Add Volume Tiers 

under footnote 8, which provide an 

enhanced rebate ranging from $0.33 to 

$0.82 per contract for qualifying orders 

that add liquidity in Non Penny Pilot 

Securities and yield fee code NF.10 The 

Exchange now proposes to add a new 

Tier 3 and to re-number current Tier 3 

as Tier 4. 

Currently under Tier 3, to be renumbered as Tier 4, a Member’s orders 

that yield fee code NF receive an 

enhanced rebate of $0.82 per contract 

where the Member has an: (i) ADV 11

greater than or equal to 2.30% of 

average OCV; 12 (ii) ADAV 13 in Away 

Market Maker,14 Firm, Broker Dealer 

and Joint Back Office orders greater than 

or equal to 1.65% of average OCV; and 

(iii) ADAV in Non-Customer 15 NonPenny 16 orders greater than or equal to 

0.20% of average OCV. The Exchange 

proposes to adopt new Tier 3, which 

would be similar to re-numbered Tier 4 

but would have lower criteria and a 

lower rebate. Specifically, pursuant to 

new Tier 3 a Member’s orders that yield 

fee code NF would receive an enhanced 

rebate of $0.53 per contract where the 

Member has an: (i) ADV greater than or 

equal to 2.30% of average OCV; (ii) 

ADAV in Away Market Maker, Firm, 

Broker Dealer and Joint Back Office 

orders greater than or equal to 1.45% of 

average OCV; and (iii) ADAV in NonCustomer Non-Penny orders greater 

than or equal to 0.20% of average OCV. 

Thus, the second criterion is lower, 

requiring an ADAV in applicable orders 

greater than or equal to 1.45% of 

average OCV rather than 1.65% of 

average OCV. Otherwise the criteria of 

Tier 3 are the same as Tier 4. The 

Exchange also notes that the proposed 

enhanced rebate of $0.53 is also the 

same as the enhanced rebate provided 

pursuant to Tier 2. 

Implementation Date 

The Exchange proposes to implement 

the above changes to its fee schedule on 

October 2, 2017. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule changes are consistent 


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Federal Register / Vol. 82, No. 200 / Wednesday, October 18, 2017 / Notices 48553 

17 15 U.S.C. 78f. 

18 15 U.S.C. 78f(b)(4). 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f). 21 17 CFR 200.30–3(a)(12). 

with the objectives of Section 6 of the 

Act,17 in general, and furthers the 

objectives of Section 6(b)(4),18 in 

particular, as it is designed to provide 

for the equitable allocation of reasonable 

dues, fees and other charges among its 

Members and other persons using its 

facilities. The Exchange believes that 

the proposed modification to the 

Exchange’s tiered pricing structure is 

reasonable, fair and equitable, and nondiscriminatory. The Exchange operates 

in a highly competitive market in which 

market participants may readily send 

order flow to many competing venues if 

they deem fees at the Exchange to be 

excessive or incentives provided to be 

insufficient. The proposed structure 

remains intended to attract order flow to 

the Exchange by offering market 

participants a competitive pricing 

structure. The Exchange believes it is 

reasonable to offer and incrementally 

modify incentives intended to help to 

contribute to the growth of the 

Exchange. 

Volume-based pricing structures such 

as that maintained by the Exchange 

have been widely adopted by 

exchanges, including the Exchange, and 

are equitable because they are open to 

all Members on an equal basis and 

provide additional benefits or discounts 

that are reasonably related to: (i) The 

value to an exchange’s market quality; 

(ii) associated higher levels of market 

activity, such as higher levels of 

liquidity provisions and/or growth 

patterns; and (iii) introduction of higher 

volumes of orders into the price and 

volume discovery processes. In 

particular, the proposed change to 

footnote 8 is a minor change intended 

to provide an incentive similar to an 

existing incentive but that is more 

attainable. The proposed incentive, in 

turn, is intended to incentivize 

Members to send increased order flow 

to the Exchange in an effort to qualify 

for the enhanced rebates made available 

by the tier. This increased order flow, in 

turn, contributes to the growth of the 

Exchange. The Exchange also believes 

the rebate associated with the tier is 

reasonable as it reflects the difficulty in 

achieving the tier and is the same as that 

provided under a different volume tier 

(Tier 2). These incentives remain 

reasonably related to the value to the 

Exchange’s market quality associated 

with higher levels of market activity, 

including liquidity provision and the 

introduction of higher volumes of orders 

into the price and volume discovery 

processes. The proposed change to the 

tiered pricing structure is not unfairly 

discriminatory because it will apply 

equally to all Members. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange believes the proposed 

amendment to its fee schedule would 

not impose any burden on competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The Exchange does not believe that the 

proposed change represents a significant 

departure from previous pricing offered 

by the Exchange or pricing offered by 

the Exchange’s competitors. 

Additionally, Members may opt to 

disfavor the Exchange’s pricing if they 

believe that alternatives offer them 

better value. Accordingly, the Exchange 

does not believe that the proposed 

change will impair the ability of 

Members or competing venues to 

maintain their competitive standing in 

the financial markets. The Exchange 

does not believe that the proposed 

change to the Exchange’s tiered pricing 

structure burdens competition, but 

instead, enhances competition, as it is 

intended to increase the 

competitiveness of the Exchange. 

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 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 19 and paragraph (f) of Rule 

19b–4 thereunder.20 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. 

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– 

BatsBZX–2017–65 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–BatsBZX–2017–65. 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– 

BatsBZX–2017–65, and should be 

submitted on or before November 8, 

2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–22540 Filed 10–17–17; 8:45 am] 

BILLING CODE 8011–01–P 


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