Document ID: SEC-2014-2132-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Y-Exchange, Inc.
Posted Date: 2014-12-17T05:00Z

[Federal Register Volume 79, Number 242 (Wednesday, December 17, 2014)]
[Notices]
[Pages 75206-75207]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29491]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73812; File No. SR-BYX-2014-037

Self-Regulatory Organizations; BATS Y-Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Fees for Use of BATS Y-Exchange, Inc.

December 11, 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 1, 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, 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.
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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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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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 the fee schedule applicable 
to Members \5\ and non-members of the Exchange pursuant to BYX Rules 
15.1(a) and (c). Changes to the fee schedule pursuant to this proposal 
are effective upon filing.
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    \5\ A Member is defined as ``any registered broker or dealer 
that has been admitted to membership in the Exchange.'' See Exchange 
Rule 1.5(n).
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    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
    The Exchange proposes to modify its fee schedule effective 
immediately in order to adopt pricing for ROOC orders and to adopt 
pricing for orders that execute pursuant to Rule 11.23, titled 
``Opening Process.''
ROOC
    The Exchange recently filed a rule change to adopt a new routing 
strategy, ROOC, which provides that orders entered on the Exchange may 
be designated for participation in the opening, re-opening (following a 
halt suspension or pause), or closing process (collectively, an 
``Auction'') of a primary listing market other than the Exchange if 
received before the opening/re-opening/closing time of such market.\6\ 
As such, the Exchange proposes to adopt pricing related to this new 
routing strategy: the Exchange is proposing to charge $0.0015 per share 
for ROOC orders routed and executed in the listing market's opening or 
re-opening cross and charge $0.0010 per share for orders routed and 
executed in the listing market's closing process.
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    \6\ See Securities Exchange Act Release No. 73411 (October 23, 
2014), 79 FR 64452 (October 29, 2014) (SR-BYX-2014-028).
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Opening Process
    The Exchange recently filed and the Commission approved a proposed 
rule change to adopt Rule 11.23, establishing an opening and re-opening 
process on the Exchange in all securities (the ``Opening Process'').\7\ 
The Opening Process is substantially similar to the opening processes 
on EDGA Exchange, Inc. (``EDGA'') and EDGX Exchange, Inc. (``EDGX''). 
The Exchange proposes that securities executed in the new Opening 
Process will be executed free of charge.\8\
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    \7\ See Securities Exchange Act Release No. 73472 (October 30, 
2014), 79 FR 65735 (November 5, 2014) (SR-BYX-2014-018).
    \8\ The Exchange notes that this proposed fee is $0.0010 less 
for executions in the opening process than on EDGX and the same as 
executions in the opening process on EDGA.
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    The Exchange proposes to implement the amendments to its fee 
schedule effective immediately.
2. Statutory Basis
    The Exchange believes that the proposed rule change 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 of the Act.\9\ 
Specifically, the Exchange believes that the proposed rule change is 
consistent with Sections 6(b)(4) of the Act and 6(b)(5) of the Act,\10\ 
in that it provides for the equitable allocation of reasonable dues, 
fees and other charges among members and other persons using any 
facility or system which the Exchange operates or controls. The 
Exchange notes that it operates in a highly competitive market in which 
market participants can readily direct order flow to competing venues 
if they deem fee levels at a particular venue to be excessive.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed changes to the Exchange's 
fee schedule to add fees for the ROOC routing strategy when routed and 
executed in the listing market's Auction represent a reasonable and 
equitable allocation of fees because they are equal to or roughly 
equivalent to the fees that will be charged pursuant to the applicable 
exchange's fee schedule for participation in an Auction. The Exchange 
further believes that the proposed fees for ROOC are non-discriminatory 
because they apply uniformly to all Members and, again, because they 
approximate the fees at the away venue.
    The Exchange also believes that its proposed pricing for the 
Opening Process is reasonable and equitable because the Exchange is 
proposing for executions in the Opening Process to be free of charge, 
which is the same price charged on EDGA for participation in its 
analogous opening process and $0.0005 [sic.] cheaper than such 
analogous opening process on EDGX, as noted above. The Exchange also 
believes that the proposal to provide free executions in the Opening 
Process on the Exchange is non-discriminatory because such proposed 
pricing would apply uniformly to all Members and, again, because other 
venues are providing

[[Page 75207]]

executions without charge in their respective analogous processes.

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, as amended. To 
the contrary, the Exchange believes that the proposed changes will 
allow the Exchange to compete more ably with other execution venues by 
providing additional competitive services at competitive prices, 
including the addition of Opening Process executions free of charge. 
Also, because the market for order execution is extremely competitive, 
Members may readily opt to disfavor the Exchange's routing services if 
they believe that alternatives offer them better value. For orders 
routed through ROOC, the proposed fees approximate the cost to the 
Exchange of executing the orders on away trading venues. As stated 
above, the Exchange notes that it operates in a highly competitive 
market in which market participants can readily direct order flow to 
competing venues if the deem fee structures to be unreasonable or 
excessive.

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 \11\ and paragraph (f)(2) of Rule 19b-4 
thereunder.\12\ 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 to determine whether the proposed rule should be approved 
or disapproved.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(2).
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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-BYX-2014-037 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-BYX-2014-037. 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 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-BYX-2014-037 and should be 
submitted on or before January 7, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-29491 Filed 12-16-14; 8:45 am]
BILLING CODE 8011-01-P