Document ID: SEC-2016-0434-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc.
Posted Date: 2016-03-11T05:00Z

[Federal Register Volume 81, Number 48 (Friday, March 11, 2016)]
[Notices]
[Pages 12996-12998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-05438]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77307; File No. SR-BATS-2016-25]

Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Its Rules as Well as Certain Corporate Documents of the Exchange To 
Reflect a Legal Name Change by BATS Global Markets, Inc. and the Legal 
Names of Certain Subsidiaries

March 7, 2016.
    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 February 26, 2016, Bats BZX Exchange, Inc. f/k/a BATS 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 this proposal as one being 
concerned solely with the administration of the Exchange pursuant to 
section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(3) 
thereunder,\4\ which renders the proposal 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)(iii).
    \4\ 17 CFR 240.19b-4(f)(3).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing a rule change to amend its rules as well 
as certain corporate documents of the Exchange to reflect a legal name 
change by the Exchange's ultimate parent entity, BATS Global Markets, 
Inc. (the ``Parent'') to Bats Global Markets, Inc., and the legal names 
of certain of the Parent's subsidiaries. As a result of this change, 
the Exchange also proposes to amend its rules to change its name from 
BATS Exchange, Inc. to Bats BZX Exchange, Inc.
    The text of the proposed rule change is available at the Exchange's 
Web site at 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange, on behalf of its Parent, recently filed to change the 
Parent's legal name from ``BATS Global Markets, Inc.'' to ``Bats Global 
Markets, Inc.'' \5\ For the purposes of consistency, certain of the 
Parent's subsidiaries have also undertaken to change their legal names. 
As a result, the Exchange also proposes to change its name from BATS 
Exchange, Inc. to Bats BZX Exchange, Inc. throughout its rules and 
corporate documents (collectively, with the other legal name changes 
for the Parent and certain of its subsidiaries, the ``name 
changes'').\6\ Therefore, the Exchange proposes to amend its: (i) 
Rulebook; (ii) fee schedules applicable to its equity and options 
platforms issued pursuant to Exchange Rules 15.1(a) and (c) (``Fee 
Schedules''); (iii) Certificate of Incorporation (``Certificate''); and 
(iv) Third Amended and Restated Bylaws of the Exchange (``Bylaws'') 
(collectively, the ``Operative Documents'') to reflect the name change 
and to replace all references to ``BATS'' with ``Bats''.
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    \5\ See Securities Exchange Act Release No. 77155 (February 17, 
2016) (SR-BATS-2016-10).
    \6\ The Exchange initially filed the proposed fee [sic] change 
on February 19, 2016 (SR-BATS-2016-21). On February 26, 2016, the 
Exchange withdrew that filing and submitted this filing.
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    The Exchange proposes to replace all references to BATS with Bats 
throughout the Exchange's Rulebook and Fee Schedule. The Exchange 
understands that its affiliated Exchanges also intend to file similar 
proposed rule changes with the Commission to amend their exchange 
names.\7\ Therefore, the

[[Page 12997]]

Exchange proposes to amend the following rules to reflect the name 
changes, including the expected filings by its affiliates to amend 
their names: Rule 1.5 (Definitions), Rule 2.3 (Member Eligibility), 
Rule 2.10 (Affiliation Between Exchange and a Member), Rule 2.11 (BATS 
Trading, Inc. as Outbound Router), Rule 2.12 (BATS Trading, Inc. as 
Inbound Router), Rule 8.15 (Imposition of Fines for Minor Violation(s) 
of Rules), Rule 11.1 (Hours of Trading and Trading Days), Rule 11.8 
(Obligations of Market Makers), Rule 11.9 (Orders and Modifiers), Rule 
11.12 (Priority of Orders), Rule 11.13 (Order Execution and Routing), 
Rule 11.14 (Trade Execution and Reporting), Rule 11.18 (Trading Halts 
Due to Extraordinary Market Volatility), Rule 11.22 (Data Products), 
Rule 11.23 (Auctions), Rule 11.24 (Opening Process for Non-BATS-Listed 
Securities), Rule 11.26 (Usage of Data Feeds), Rule 13.8 (BATS 
Connect), Rule 14.3 (General Procedures and Prerequisites for Initial 
and Continued Listing on the Exchange), Rule 14.11 (Other Securities), 
Rule 16.1 (Definitions), Rule 16.2 (Applicability), Rule 17.1 (Options 
Participation), Rule 17.2 (Requirements for Options Participation), 
Rule 17.4 (Good Standing For Options Members), Rule 18.2 (Conduct and 
Compliance with the Rules), Rule 18.4 (Prevention of the Misuse of 
Material Nonpublic Information), Rule 18.6 (Other Restrictions on 
Members), Rule 18.7 (Position Limits), Rule 18.8 (Exemptions from 
Position Limits), Rule 18.9 (Exercise Limits), Rule 18.11 (Liquidation 
Positions), Rule 18.12 (Other Restrictions on Options Transactions and 
Exercises), Rule 18.14 Limit on Outstanding Uncovered Short Positions), 
Rule 19.1 (Designation of Securities), Rule 19.3 (Criteria for 
Underlying Securities), Rule 19.4 (Withdrawal of Approval of Underlying 
Securities), Rule 19.6 (Series of Options Contracts Open for Trading), 
Rule 20.1 (Access to and Conduct on the BATS Options Market), Rule 20.2 
(Surveillance), Rule 20.3 (Trading Halts), Rule 20.5 (Unusual Market 
Conditions), Rule 20.6 (Nullification and Adjustment of Options 
Transactions including Obvious Errors), Rule 20.7 (Audit Trail), Rule 
20.8 (Failure to Pay Premium), Rule 21.1 (Definitions), Rule 21.2 (Days 
and Hours of Business), Rule 21.3 (Units of Trading), Rule 21.4 
(Meaning of Premium Quotes and Orders), Rule 21.5 (Minimum Increments), 
Rule 21.7 (Market Opening Procedures), Rule 21.8 (Order Display and 
Booking Process), Rule 21.9 (Order Routing), Rule 21.12 (Clearing 
Member Give Up), Rule 21.13 (Submission for Clearance), Rule 21.14 
(Message Traffic Mitigation), Rule 22.1 (Customer Orders and Order 
Entry Firms), Rule 22.2 (Options Market Maker Registration), Rule 22.5 
(Obligations of Market Makers), Rule 22.6 (Market Maker Quotations), 
Rule 22.7 (Securities Accounts and Orders of Market Makers), Rule 22.8 
(Letters of Guarantee), Rule 22.12 (Order Exposure Requirements), Rule 
23.1 (Exercise of Options Contracts), Rule 24.2 (Reports of Uncovered 
Short Positions), Rule 25.1 (Suspensions), Rule 25.2 (Contracts of 
Suspended Members), Rule 25.3 (Penalty for Minor Rule Violations), Rule 
26.5 (Discretionary Accounts), Rule 28.1 (General Rule), Rule 28.4 
(Margin Required is Minimum), Rule 29.2 (Definitions), Rule 29.3 
(Designation of a Broad-Based Index), Rule 29.4 (Dissemination of 
Information), Rule 29.5 (Position Limits for Broad-Based Index 
Options), Rule 29.6 (Designation of Narrow-Based and Micro-Narrow-Based 
Index Options), Rule 29.7 (Position Limits for Narrow-Based and Micro-
Narrow-Based Index Options), Rule 29.8 (Exemptions from Position 
Limits), Rule 29.10 (Trading Sessions), Rule 29.11 (Terms of Index 
Options Contracts), and Rule 29.12 (Debit Put Spread Cash Account 
Transactions). Throughout these rules, the Exchange proposes the 
following changes:
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    \7\ The Exchange's affiliates are EDGA Exchange, Inc., BATS Y-
Exchange, Inc. and EDGX Exchange, Inc. The Exchange understands that 
proposed rule changes are to be filed by each of its affiliates to 
amend their names as follows: EDGA Exchange, Inc. would be changed 
to Bats EDGA Exchange, Inc., BATS Y-Exchange, Inc. would be amended 
to Bats BYX Exchange, Inc., and EDGX Exchange, Inc. would be amended 
to Bats EDGX Exchange, Inc.
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     All references to ``BATS Exchange'', ``BATS EXCHANGE'' and 
``BATS EXCHANGE, INC.'' are proposed to be changed to ``Bats BZX 
Exchange, Inc.'';
     All references to ``BATS'' are proposed to be changed to 
``Bats'' or ``Exchange'';
     All references to ``BATS Y-Exchange, Inc.'' are proposed 
to be changed to ``Bats BYX Exchange, Inc.'';
     All references to ``EDGX Exchange, Inc.'' are proposed to 
be changed to ``Bats EDGX Exchange, Inc.'';
     All references to ``EDGA Exchange, Inc.'' are proposed to 
be changed to ``Bats EDGA Exchange, Inc.'';
     All references to ``BATS Options'' are proposed to be 
changed to ``BZX Options''.
     All references to ``BATS Book'', ``BATS market orders'', 
``BATS Post Only Orders'', ``BATS Only Orders'', and ``BATS-listed 
securities'' are proposed to be changed to ``BZX Book'', ``BZX market 
orders'', ``BZX Post Only Orders'', ``BZX Only Orders'', and ``BZX-
listed securities'', respectively.\8\
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    \8\ The Exchange notes that ``BATS'' is synonymous with ``BZX''. 
For example, Rule 11.22(k) is titled ``BZX Book Viewer'' and 
described a market data product offered by the Exchange. In 
addition, the Fee Schedule also includes BZX in the title of the 
Exchange's market data products. The Exchange does not propose to 
amend the names of these products.
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    In addition to these changes, the Exchange proposes to modify its 
Fee Schedules to reflect the name change of the Exchange to Bats BZX 
Exchange \9\ and to change all references to ``BATS'' to instead refer 
to ``Bats''. The Exchange also proposes on its Fee Schedule to refer to 
its affiliate, Bats BYX Exchange, Inc. (as proposed to be re-named), 
simply as ``BYX''. The Exchange believes that this is more consistent 
with other references on the Fee Schedule, such as the general 
references to ``EDGA'', which refer to the Exchange's affiliate, Bats 
EDGA Exchange, Inc. (as proposed to be re-named). Finally, the Exchange 
proposes to replace the term ``Non-BATS Market Maker'' with ``Away 
Market Maker'' (rather than changing the capitalization of ``Non-BATS'' 
to ``Non-Bats''), which is consistent with the terminology used on the 
fee schedule of EDGX Options, which is the options platform operated by 
Bats EDGX Exchange, Inc. (as proposed to be renamed).\10\
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    \9\ The Exchange notes that the Exchange will continue to be 
referred to as ``BZX'' in certain areas of the Fee Schedules. These 
areas of the Fee Schedules are: (i) The Fee Codes and Associated 
Fees table; (ii) footnote 6; (ii) footnote 7; (iii) the Bats Connect 
pricing table; and (iv) in the Unicast Access--Order Entry section 
of its Fee Schedule.
    \10\ See EDGX Options fee schedule, available at: http://www.batsoptions.com/support/fee_schedule/edgx/.
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    The Exchange also proposes to amend Article First of the 
Certificate to change the name of the Exchange to Bats BZX Exchange, 
Inc. and make conforming changes throughout, including the title of the 
Certificate. The Exchange proposes to amend the Bylaws to amend the 
title to reflect that the Bylaws will be titled the ``FOURTH AMENDED 
AND RESTATED BYLAWS OF BATS BZX EXCHANGE, INC.'' The Exchange also 
proposes to amend Article I, paragraph (f) and Article XI, section 2 to 
reflect the name changes.
    The name change from BATS Exchange, Inc. to Bats BZX Exchange, Inc. 
is a non-substantive change. No changes to the ownership or structure 
of the Exchange or BATS Global Markets, Inc. have taken place.
2. Statutory Basis

[[Page 12998]]

    The Exchange believes that its proposal is consistent with section 
6(b) of the Act,\11\ in general, and furthers the objectives of section 
6(b)(5) of the Act,\12\ in particular, in that it is 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, and, in general to protect investors and the public 
interest. The Exchange also believes that the proposed rule change is 
consistent with section 6(b)(1) of the Act \13\ in that it is designed 
to continue to ensure that the Exchange is so organized and has the 
capacity to carry out the purposes of Act and to comply, and enforce 
compliance by its members with the provisions of the Act and the rules 
and regulations thereunder, and rules of the Exchange. The Exchange is 
proposing amendments to the Operative Documents to effectuate its name 
change to Bats BZX Exchange, Inc. and to reflect the name changes of 
its affiliates. These changes are limited to capitalization and 
ministerial name changes and to reflect similar proposed rule changes 
to be submitted to the Commission by the Exchange's affiliates. The 
Exchange believes that the changes will protect investors and the 
public interest by eliminating confusion that may exist because of 
differences between its corporate name and the new naming conventions 
of the Parent and its subsidiaries, including the Exchange.
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    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(5).
    \13\ 15 U.S.C. 78f(b)(1).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Because the rule change proposes ministerial changes related to the 
administration, and not the governance or operation, of the Exchange, 
the Exchange does not believe that the proposed rule change will impose 
any burden on competition 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, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from Members or other interested 
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because it is concerned solely with the administration of the 
Exchange, the foregoing proposed rule change has become effective 
pursuant to section 19(b)(3)(A)(iii) of the Ac \14\ and Rule 19b-
4(f)(3) thereunder.\15\
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    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(3).
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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

     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-BATS-2016-25 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 Number SR-BATS-2016-25. 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 Number SR-BATS-2016-25, and should be 
submitted on or before April 1, 2016.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-05438 Filed 3-10-16; 8:45 am]
 BILLING CODE 8011-01-P