Document ID: SEC-2012-0064-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc.
Posted Date: 2012-01-13T05:00Z

[Federal Register Volume 77, Number 9 (Friday, January 13, 2012)]
[Notices]
[Pages 2108-2112]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-528]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66120; File No. SR-BATS-2011-053]

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

January 9, 2012.
    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 December 30, 2011, BATS Exchange, Inc. (the ``Exchange'' or 
``BATS'') 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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes [sic] amend the fee schedule applicable to 
Members \5\ and non-members of the Exchange pursuant to BATS Rules 
15.1(a) and (c). While changes to the fee schedule pursuant to this 
proposal will be effective upon filing, the changes will become 
operative on January 3, 2012.
---------------------------------------------------------------------------

    \5\ A Member is any registered broker or dealer that has been 
admitted to membership in the Exchange.
---------------------------------------------------------------------------

    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 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 Exchange proposes to modify the ``Options Pricing'' section of 
its fee schedule to: (i) Adopt the ``Grow with Us'' pricing program, 
which will provide Members with some of the benefits of the Exchange's 
tiered pricing structure to the extent such Members are increasing 
their activity on the Exchange's options platform (``BATS Options'') 
month over month; (ii) modify the fees charged by the Exchange to 
remove liquidity from BATS Options; (iii) modify the rebates provided 
by the Exchange for Customer \6\ orders that add liquidity to BATS 
Options; (iv) modify the NBBO Setter Program, which is a program 
intended to incentivize aggressive quoting on BATS Options; (v) modify 
the Quoting Incentive Program, which is a program intended to 
incentivize sustained, aggressive quoting on BATS Options; and (vi) 
adopt fees for logical ports used to access BATS Options for order 
entry and receipt of market data. The Exchange also proposes minor 
grammatical changes to conform various sections of the Exchange's 
Options Pricing section.
---------------------------------------------------------------------------

    \6\ As defined on the Exchange's fee schedule, a ``Customer'' 
order is any transaction identified by a Member for clearing in the 
Customer range at the Options Clearing Corporation (``OCC'').
---------------------------------------------------------------------------

(i) Grow With Us Pricing Program
    The Exchange currently has volume tiers in place that provide 
Members that satisfy certain volume thresholds with additional rebates 
on executions for which they have added liquidity to the BATS Options 
order book and reduced fees for executions that remove liquidity from 
the BATS Options order book. Further, as described below, the Exchange 
is proposing to add certain additional tiers to its fee schedule. The 
Exchange's tiered pricing structure includes and will continue to 
include a lower tier applicable to Members with an average daily volume 
(``ADV'') \7\ equal to or greater than 0.30% of average total 
consolidated volume (``TCV'') \8\ and a second tier applicable to 
Members with an ADV equal to or greater than 1% of average TCV. 
Pursuant to the ``Grow with Us'' pricing program, the Exchange proposes 
to provide a Member with one-half of the economic benefit such Member 
would achieve if such Member were in the next highest volume tier to 
the extent such Member shows a minimum of 5 basis points TCV 
improvement over the Member's previous highest monthly TCV on BATS 
Options, or ``High Water Mark.'' The Exchange proposes to define High 
Water Mark as the greater of a Member's fourth quarter 2011 TCV or a 
Member's best monthly TCV on BATS Options thereafter. For example, 
assume that for the fourth quarter of 2011, a Member has an ADV of 
0.10% of average TCV. Such Member would not qualify for volume tier 
pricing applicable to Members with an ADV of 0.30% of average TCV. 
However, if, in January of 2012, such Member achieves an average TCV of 
0.15% on BATS Options, such Member will receive one-half of the 
economic benefit such

[[Page 2109]]

Member would receive if the Member had reached the 0.30% TCV volume 
tier and the Member's new High Water Mark will now be 0.15%. The 
applicability of the Grow with Us pricing program is explained in 
further detail below.
---------------------------------------------------------------------------

    \7\ As defined on the Exchange's fee schedule, ADV is average 
daily volume calculated as the number of contracts added or removed, 
combined, per day on a monthly basis. The fee schedule also provides 
that routed contracts are not included in ADV calculation.
    \8\ As defined on the Exchange's fee schedule, TCV is total 
consolidated volume calculated as the volume reported by all 
exchanges to the consolidated transaction reporting plan for the 
month for which the fees apply.
---------------------------------------------------------------------------

(ii) Fees to Remove Liquidity
    The Exchange currently charges $0.42 per contract for 
Professional,\9\ Firm and Market Maker \10\ orders that remove 
liquidity from the BATS Options order book. The Exchange proposes to 
raise the fee to $0.44 per contract for Professional, Firm and Market 
Maker orders that remove liquidity from the BATS Options order book.
---------------------------------------------------------------------------

    \9\ As defined in Rule 16.1, the term ``Professional'' means any 
person or entity that (i) is not a broker or dealer in securities, 
and (ii) places more than 390 orders in listed options per day on 
average during a calendar month for its own beneficial account(s).
    \10\ As set forth on the Exchange's fee schedule, and consistent 
with the definition of a Customer order, classification as a 
``Firm'' or ``Market Maker'' order depends on the identification by 
a Member of the applicable clearing range at the OCC.
---------------------------------------------------------------------------

    With respect to Customer orders, the Exchange currently charges 
standard fees of $0.30 per contract for Customer orders that remove 
liquidity from BATS Options, subject to potential reduction for any 
Member with an ADV of 0.30% or more of average TCV on BATS Options, as 
described below. Pursuant to the Exchange's tiered pricing structure 
Members can realize lower liquidity removal fees if such Members have 
an ADV equal to or greater than 0.30% of average TCV. For Members 
reaching this volume threshold, the Exchange currently charges a fee of 
$0.27 per contract for Customer orders that remove liquidity from BATS 
Options.
    The Exchange proposes to increase the standard fees for Customer 
orders that remove liquidity from BATS Options and expand the tiered 
pricing structure applicable to Customer orders by adding another level 
at which Customer orders will be subject to a discounted liquidity fee. 
First, the Exchange proposes to increase the standard fee to remove 
liquidity for Customer orders to $0.44 per contract, which is the same 
fee the Exchange proposes to assess for Professional, Firm and Market 
Maker orders. Second, the Exchange proposes to increase the charge per 
contract for a Customer order that removes liquidity from the BATS 
Options order book where the Member has an ADV equal to or greater than 
0.30% of average TCV from $0.27 per contract to $0.36 per contract. 
Third, the Exchange proposes to introduce a new volume tier applicable 
to Members with an ADV equal to or greater than 1% average TCV. As 
proposed, such Members will be charged $0.28 per contract for Customer 
orders that remove liquidity from the BATS Options order book.
    Finally, the Exchange proposes to apply its Grow with Us pricing 
program, as described above, to Customer orders that remove liquidity. 
Accordingly, a Member that does not qualify for the lower tier 
applicable to Members with an ADV equal to or greater than 0.30% of 
average TCV but achieves at least a 5 basis point increase over its 
previous High Water Mark will be assessed a fee of $0.40 per contract 
for Customer orders that remove liquidity from BATS Options (i.e., half 
way between the standard fee of $0.44 per contract and the fee of $0.36 
charged to Members that reach the 0.30% TCV tier). Similarly, a Member 
that qualifies for the lower tier applicable to Members with an ADV 
equal to or greater than 0.30% of average TCV but not the 1% of average 
TCV tier that achieves at least a 5 basis point increase over its 
previous High Water Mark will be assessed a fee of $0.32 per contract 
for Customer orders that remove liquidity from BATS Options (i.e., half 
way between the $0.36 per contract charged to Members that reach the 
0.30% TCV tier and the $0.28 per contract charged to Members that reach 
the 1% TCV tier).
(iii) Customer Rebates for Adding Liquidity
    The Exchange currently provides a rebate of $0.30 per contract for 
Customer orders that add liquidity to the BATS Options order book. The 
Exchange proposes to maintain this standard rebate but to begin to 
provide increased rebates to Members pursuant to volume thresholds 
analogous to those applied to fees for removing liquidity. First, the 
Exchange proposes to adopt a volume tier applicable to Members with an 
ADV equal to or greater than 0.30% of average TCV, for which the 
Exchange will provide a rebate of $0.40 per contract for Customer 
orders that add liquidity to the BATS Options order book. Second, [sic] 
Exchange proposes to adopt a volume tier applicable to Members with an 
ADV equal to or greater than 1% of average TCV, for which the Exchange 
will provide a rebate of $0.42 per contract for Customer orders that 
add liquidity to the BATS Options order book. Finally, the Exchange 
proposes to apply its Grow with Us pricing program to Customer orders 
that add liquidity. Accordingly, a Member that does not qualify for the 
lower tier applicable to Members with an ADV equal to or greater than 
0.30% of average TCV but achieves at least a 5 basis point increase 
over its previous High Water Mark will be provided a rebate of $0.35 
per contract for Customer orders that add liquidity to BATS Options 
(i.e., half way between the standard rebate of $0.30 per contract and 
the rebate of $0.40 per contract provided to Members that reach the 
0.30% TCV tier). Similarly, a Member that qualifies for the lower tier 
applicable to Members with an ADV equal to or greater than 0.30% of 
average TCV but not the 1% of average TCV tier that achieves at least a 
5 basis point increase over its previous High Water Mark will be 
provided a rebate of $0.41 per contract for Customer orders that add 
liquidity to BATS Options (i.e., half way between the $0.40 per 
contract provided to Members that reach the 0.30% TCV tier and the 
$0.42 per contract provided to Members that reach the 1% TCV tier).
    The Exchange is not proposing to modify the rebates provided for 
Professional, Firm and Market Maker orders, other than to move such 
rebates on the fee schedule to clearly delineate from the rebates 
applicable to Customer orders.
(iv) Modification to NBBO Setter Program
    The Exchange currently offers a rebate upon execution for all 
orders that add liquidity that sets either the NBB or NBO (the ``NBBO 
Setter Rebate''),\11\ subject to certain volume requirements. The 
Exchange currently provides an additional $0.06 per contract rebate for 
executions that qualify for the NBBO Setter Rebate by Members with an 
ADV equal to or greater than 0.30% of average TCV but less than 1% of 
average TCV and an additional $0.10 per contract for qualifying 
executions by Members with an ADV equal to or greater than 1% of TCV. 
Given the changes proposed for Customer rebates, as described above, 
the Exchange proposes to modify the NBBO Setter Rebate such that it is 
only applicable to Professional, Firm and Market Maker orders. As 
currently in place, the NBBO Setter Rebate is available only to Members 
that reach one of the Exchange's volume tiers. Because, as proposed, 
such Members will receive enhanced rebates on all Customer orders, and 
not just orders that set a new national best bid or offer, the Exchange 
proposes to apply the program only to

[[Page 2110]]

Professional, Firm and Market Maker orders.
---------------------------------------------------------------------------

    \11\ An order that is entered at the most aggressive price both 
on the BATS Options book and according to then current OPRA data 
will be determined to have set the NBB or NBO for purposes of the 
NBBO Setter Rebate without regard to whether a more aggressive order 
is entered prior to the original order being executed.
---------------------------------------------------------------------------

    The Exchange also proposes to apply its Grow with Us pricing 
program to the NBBO Setter Rebate. Accordingly, a Member that does not 
qualify for NBBO Setter Rebates applicable to Members with an ADV equal 
to or greater than 0.30% of average TCV but achieves at least a 5 basis 
point increase over its previous High Water Mark will receive NBBO 
Setter Rebates of $0.03 per contract for qualifying executions (i.e., 
half of the NBBO Setter Rebate of $0.06 per contract provided to 
Members that reach the 0.30% TCV tier). Similarly, a Member that 
qualifies for the lower tier applicable to Members with an ADV equal to 
or greater than 0.30% of average TCV but not the 1% of average TCV tier 
that achieves at least a 5 basis point increase over its previous High 
Water Mark will be provided a NBBO Setter Rebate of $0.08 per contract 
for qualifying executions (i.e., half way between the $0.06 per 
contract provided to Members that reach the 0.30% TCV tier and the 
$0.10 per contract provided to Members that reach the 1% TCV tier).
(v) Modification to Quoting Incentive Program
    BATS Options offers a Quoting Incentive Program (``QIP''), through 
which Members receive a rebate of $0.05 per contract, in addition to 
any other applicable liquidity rebate, for executions subject to the 
QIP. To qualify for the QIP a BATS Options Market Maker must be at the 
NBB or NBO 60% of the time for series trading between $0.03 and $5.00 
for the front three (3) expiration months in that underlying during the 
current trading month. A Member not registered as a BATS Options Market 
Maker can also qualify for the QIP by quoting at the NBB or NBO 70% of 
the time in the same series. Given the enhancement to Customer rebates 
described above, the Exchange proposes to modify the QIP to 
differentiate between QIP rebates provided for Customer orders and 
Professional, Firm and Market Maker orders. Specifically, as proposed, 
qualifying Customer order executions in products subject to the QIP 
will receive an additional rebate of $0.03 per contract. The Exchange 
proposes to maintain the rebate of $0.05 per contract, in addition to 
any other applicable liquidity rebate, for executions subject to the 
QIP of Professional, Firm and Market Maker orders.
    All other aspects of the QIP currently in place will remain the 
same. As is true under the current operation of the QIP, the Exchange 
will determine whether a Member qualifies for QIP rebates at the end of 
each month by looking back at each Member's (including BATS Options 
Market Makers) quoting statistics during that month. If at the end of 
the month a Market Maker meets the 60% criteria or a Member that is not 
registered as a Market Maker meets the 70% criteria, the Exchange will 
provide the additional rebate for all executions subject to the QIP 
executed by that Member during that month. The Exchange will provide 
Members with a report on a daily basis with quoting statistics so such 
Members can determine whether or not they are meeting the QIP criteria. 
The Exchange is not proposing to impose any ADV requirements in order 
to qualify for the QIP at this time.
(vi) Logical Port Fees
    The Exchange currently charges a fee of $400.00 per month per 
logical port used by Members or non-members to access and receive 
information from the Exchange's equities platform. A logical port is 
also commonly referred to as a TCP/IP port, and represents a port 
established by the Exchange within the Exchange's system for trading 
and billing purposes. Each logical port established is specific to a 
Member or non-member and grants that Member or non-member the ability 
to operate a specific application, such as FIX order entry or Multicast 
PITCH data receipt.
    In contrast to its equities platform, with the exception of logical 
ports with bulk-quoting capabilities, as further described below, the 
Exchange currently provides logical ports free of charge to Members and 
non-members that have access to or receive data from BATS Options. The 
Exchange proposes to begin charging a monthly fee for logical ports 
used to enter orders in the Exchange's trading system for BATS Options 
and to receive BATS Options data from the Exchange. The Exchange 
proposes to charge $400.00 per month of any port type other than a 
Multicast PITCH Spin Server Port, GRP Port or logical port with bulk-
quoting capabilities. Similar to its provision of ports applicable to 
the Exchange's equities platform, the Exchange proposes to provide all 
Exchange constituents that receive the Exchange's Multicast PITCH Feed 
with 32 free Multicast PITCH Spin Server Ports free of charge and, if 
such ports are used, one free GRP Port. The Exchange proposes to charge 
such customers $400.00 per month per additional GRP Port or additional 
set of 32 Multicast PITCH Spin Server Ports. The Exchange's proposal to 
provide certain ports free of charge to Multicast Pitch customers is 
designed to encourage use of the Exchange's Multicast PITCH Feed 
because the Exchange believes that the feed is its most efficient feed, 
and thus, will reduce infrastructure costs for both the Exchange and 
those who utilize the feed. Any Member or non-member that has entered 
into the appropriate agreements with the Exchange is permitted to 
receive Multicast Pitch Spin Server Ports and GRP Ports from the 
Exchange.
    The Exchange recently began offering logical ports with bulk-
quoting capabilities, for which the Exchange charges Members $1,000.00 
per month. The bulk-quoting interface allows Users to provide both a 
bid and an offer in one message as well as bundle several quote updates 
into one bulk message. This is a useful feature for Users that provide 
quotations in many different options. In order to encourage 
participation in the QIP program and the usage of bulk-quoting ports, 
which the Exchange believes provide Users and the Exchange with 
operational efficiencies, the Exchange proposes to waive fees for 
logical ports with bulk-quoting capabilities for any Member that 
satisfies the criteria of the QIP program in more than 25 underlying 
securities.
    Based on the proposal, the change applies to Members that obtain 
ports for direct access to the Exchange, non-member service bureaus 
that act as a conduit for orders entered by Exchange Members that are 
their customers, and market data recipients. Other than logical ports 
with bulk-quoting capabilities, the Exchange has previously provided 
ports free of charge to all Members and non-members that use such ports 
for order entry to BATS Options or for receipt of BATS Options market 
data. However, over time, the Exchange's infrastructure costs have 
continued to increase. In addition, the Exchange believes that 
providing BATS Options logical ports free of charge has not encouraged 
Members and non-members to reserve and maintain ports efficiently, but 
rather, has led to a significant number of ports that are reserved and 
enabled by such market participants but are never used or are under 
used. Accordingly, the Exchange believes that the imposition of port 
fees will help the Exchange to continue to maintain and improve its 
infrastructure, while also encouraging Exchange customers to request 
and enable only the ports that are necessary for their operations 
related to the Exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Act and the

[[Page 2111]]

rules and regulations thereunder that are applicable to a national 
securities exchange, and, in particular, with the requirements of 
Section 6 of the Act.\12\ Specifically, the Exchange believes that the 
proposed rule change is consistent with Section 6(b)(4) of the Act,\13\ 
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.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f.
    \13\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that providing additional financial 
incentives to Members that demonstrate a 5 basis point increase over 
their previous High Water Mark offers an additional, flexible way to 
achieve financial incentives from the Exchange and encourages Members 
to add increasing amounts of liquidity to BATS Options each month. The 
Grow with Us pricing program thereby rewards a Member's growth 
patterns. Such increased volume increases potential revenue to the 
Exchange, and will allow the Exchange to continue to provide and 
potentially expand the incentive programs operated by the Exchange. The 
increased liquidity also benefits all investors by deepening the BATS 
Options liquidity pool, offering additional flexibility for all 
investors to enjoy cost savings, supporting the quality of price 
discovery, promoting market transparency and improving investor 
protection. The Grow with Us program is also fair and equitable in that 
it is available to all Members and will expand the applicability of the 
Exchange's tiered pricing structure, even for Members that do not meet 
the Exchange's volume-based tiers.
    Volume-based rebates such as the ones proposed herein have been 
widely adopted in the cash equities markets, and are equitable because 
they are open to all Members on an equal basis and provide discounts 
that are reasonably related to the value to an exchange's market 
quality associated with higher levels of market activity, such as 
higher levels of liquidity provision and/or growth patterns, and 
introduction of higher volumes of orders into the price and volume 
discovery processes. Accordingly, the Exchange believes that the 
proposal is not unfairly discriminatory because it is consistent with 
the overall goals of enhancing market quality. Similarly, the Exchange 
believes that continuing to base its tiered fee structure and NBBO 
Setter Program based on overall TCV, rather than a static number of 
contracts irrespective of overall volume in the options industry, is a 
fair and equitable approach to pricing.
    Despite the increases in fees for all orders that remove liquidity 
(Customer, Professional, Firm and Market Maker orders), the Exchange 
believes that its proposed fee structure is fair and equitable as the 
Exchange's standard fees generally still remain equivalent to or 
slightly lower than standard fees charged by other markets with similar 
fee structures, such as NYSE Arca and Nasdaq. Further, the Exchange 
believes that the various programs offered by the Exchange to receive 
reduced fees and enhanced rebates provide all Members with several 
different ways to offset the increase in fees or receive a reduction in 
fees. Further, with respect to the increase to Customer fees to remove 
liquidity, the Exchange has expanded its rebate structure to provide 
Customer orders with enhanced rebates, subject to the volume tier 
structure and the Grow with Us pricing program. As noted above, the 
Exchange believes that such volume-based tiers are fair and equitable 
and not unreasonably discriminatory because they are consistent with 
the overall goals of enhancing market quality.
    Furthermore, the Exchange believes that the modification of the 
NBBO Setter Rebate program, to eliminate the applicability of such 
program for Customer orders, is fair and equitable and not unreasonably 
discriminatory because Customer orders from Members that reach at least 
the 0.30% TCV tier can achieve higher rebates than they would under the 
current pricing structure of a standard rebate of $0.30 per contract 
plus either $0.06 or $0.10 per contract. In addition, such higher 
rebates will be available on every order, and not just on orders that 
set a new national best bid or national best offer. Also due to the 
increased levels of rebates for Customer orders, the Exchange believes 
that the proposed modification to the Quoting Incentive Program is fair 
and equitable and not unreasonably discriminatory. Although the 
proposed QIP rebate for qualifying Customer orders is slightly lower 
than is currently offered and will be slightly lower than the QIP 
rebate provided to Professional, Firm and Market Maker orders, the 
Exchange believes that this distinction is reasonable and not 
unreasonably discriminatory because of the significant increase to 
rebates on Customer orders. The Exchange also believes that continuing 
to maintain a slightly lower threshold for meeting the QIP for 
registered BATS Options Market Makers appropriately incentivizes 
Members of BATS Options to register with the Exchange as Options Market 
Makers. While the Exchange does wish to allow participation in the QIP 
by all Members, the Exchange believes that registration by additional 
Members as Market Makers will help to continue to increase the breadth 
and depth of quotations available on the Exchange. The Exchange notes 
that in addition to the fact that the QIP is available to all Members, 
the proposal is not unfairly discriminatory despite a slightly higher 
quotation requirement for non-Market Makers due to the fact that 
registration as a BATS Options Market Maker is equally available to all 
Members.
    The Exchange believes that its proposed logical port fees are 
reasonable in light of the benefits to Members of direct market access 
and receipt of data, which data, other than the proposed logical port 
fee, is currently provided free of charge. In addition, the Exchange 
believes that its fees are equitably allocated among its constituents 
based upon the number of access ports that they require to submit 
orders to the Exchange or receive data from the Exchange. The Exchange 
believes that its fees for access services will enable it to better 
cover its infrastructure costs and to improve its market technology and 
services. The Exchange also believes that providing financial 
incentives to use Exchange technology that the Exchange believes is the 
most technologically efficient for the Exchange and its constituents is 
a fair and equitable approach to pricing. Accordingly, the Exchange 
believes that promotion of its Multicast PITCH data feed through the 
offering of free logical ports as well as the waiver of bulk-quoting 
logical port fees for Members that achieve QIP thresholds in more than 
25 underlying securities are fair and equitable. Participation in the 
QIP is available to all Members, and as such, all Members have the 
ability to qualify for free bulk-quoting ports. Based on the foregoing, 
the Exchange believes that the proposed pricing structure for logical 
ports is not unreasonably discriminatory.

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.

[[Page 2112]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received.

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

    Pursuant to Section 19(b)(3)(A)(ii) of the Act \14\ and Rule 19b-
4(f)(2) thereunder,\15\ the Exchange has designated this proposal as 
establishing or changing a due, fee, or other charge applicable to the 
Exchange's Members and non-members, which renders the proposed rule 
change effective upon filing.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \15\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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-BATS-2011-053 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BATS-2011-053. 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 a.m. and 3 
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-2011-053 and should be submitted on 
or before February 3, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-528 Filed 1-12-12; 8:45 am]
BILLING CODE 8011-01-P