Document ID: SEC-2014-2174-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc.
Posted Date: 2014-12-24T05:00Z

[Federal Register Volume 79, Number 247 (Wednesday, December 24, 2014)]
[Notices]
[Pages 77576-77577]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-30123]

[[Page 77576]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73880; File No. SR-BATS-2014-071]

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

December 18, 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 17, 2014, 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.
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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 the 
Substance of the Proposed Rule Change

    The Exchange filed a proposal to make several non-substantive 
amendments to the fee schedule applicable to Members \5\ and non-
members of the Exchange pursuant to BATS 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 make a number of clarifying, non-
substantive changes to its fee schedule in order to convert the 
existing fee schedule into a chart format, including eliminating 
certain redundancies from and providing additional clarity to the 
language in the existing fee schedule. The Exchange believes that these 
changes will provide greater transparency to Members about how the 
Exchange assesses fees and calculates rebates, as well as allowing 
Members to more easily validate their bills on a monthly basis. The 
Exchange notes that none of these changes substantively amend any fee 
or rebate, nor do they alter the manner in which the Exchange assesses 
fees or calculates rebates. Specifically, the Exchange is proposing the 
following:

     To make clear that rebates are indicated by 
parentheses.
     To state the following: The rates listed in the 
Standard Rates table apply unless a Member's transaction is assigned 
a fee code other than a standard fee code. If a Member's transaction 
is assigned a fee code other than a standard fee code, the rates 
listed in the Fee Codes table will apply. Footnotes provide further 
explanatory text or, where annotated to fee codes, indicate variable 
rate changes, provided the conditions in the footnote are met. 
Unless otherwise noted, all routing fees or rebates in the Fee Codes 
and Associated Fees table are for removing liquidity from the 
destination venue.
     To add a section and chart titled ``Standard Rates,'' 
which will include the standard fees and rebates for securities 
priced both at or above $1.00 and below $1.00 for adding liquidity, 
removing liquidity, and routing and removing liquidity from another 
venue as well as the standard fee codes associated with these rates.
     To add a section titled ``Fee Codes and Associated 
Fees,'' which will include the fee or rebate, the fee code, and a 
description for each possible execution that could occur on the 
Exchange or on another venue.
     To add a section titled ``Definitions,'' which will 
include definitions that are defined in the current fee schedule. 
These include the definitions listed below, which are identical to 
definitions contained on the Exchange's current fee schedule. All 
references to ``per share'' mean ``per share executed.'' ``ADAV'' 
means average daily added volume calculated as the number of shares 
added and ``ADV'' means average daily volume calculated as the 
number of shares added or removed, combined, per day. ``Step-Up Add 
TCV'' means ADAV as a percentage of TCV in January 2014 subtracted 
from current ADAV as a percentage of TCV. For purposes of Equities 
Pricing, ``Options Step-Up Add TCV'' means ADAV as a percentage of 
TCV in January 2014 subtracted from current ADAV as a percentage of 
TCV, using the definitions of ADAV and TCV as provided under Options 
Pricing. ADAV and ADV are calculated on a monthly basis, excluding 
shares added or removed on any day that the Exchange's system 
experiences a disruption that lasts for more than 60 minutes during 
regular trading hours (``Exchange System Disruption''), on any day 
with a scheduled early market close and on the last Friday in June 
(the ``Russell Reconstitution Day''). Routed shares are not included 
in ADAV or ADV calculation. With prior notice to the Exchange, a 
Member may aggregate ADAV or ADV with other Members that control, 
are controlled by, or are under common control with such Member (as 
evidenced on such Member's Form BD). ``TCV'' means total 
consolidated volume calculated as the volume reported by all 
exchanges and trade reporting facilities to a consolidated 
transaction reporting plan for the month for which the fees apply. 
The Exchange excludes volume on any day that the Exchange 
experiences an Exchange System Disruption, on any day with a 
scheduled early market close and the Russell Reconstitution Day.
     To add a section titled ``General Notes,'' that will 
include the following notes: Unless otherwise indicated, rebates and 
charges for adding, removing or routing liquidity are listed as per 
share rebates and charges; the Exchange notes that to the extent a 
Member does not qualify for any of the tiers listed below, the rates 
listed in the above section titled ``Fee Codes and Associated Fees'' 
will apply; to the extent a Member qualifies for higher rebates and/
or lower fees than those provided by a tier for which such Member 
qualifies, the higher rebates and/or lower fees shall apply; and 
variable rates provided by tiers apply only to executions in 
securities priced at or above $1.00.
     To add a series of footnotes describing already 
existing enhanced rebates including Add Volume Tiers, Step-Up Tiers, 
Cross-Asset Step-Up Tiers, and NBBO Setter and Joiner Tiers (which 
includes one non-substantive typo correction to add parentheses 
around the $0.0001 rebate offered for NBBO Setter Tier 1) that are 
not covered in the Fee Codes and Associated Fees section described 
above.
     To add a series of footnotes describing all fees and 
rebates for securities priced below $1.00 that either execute on the 
Exchange or another venue, to the extent applicable.
     To add new sections and charts titled ``Logical Port 
Fees,'' ``Market Data Fees,'' and ``Physical Connection Fees,'' 
which, other than being in chart form, will be identical to the 
current fee schedule.
     To eliminate the lead-in text that reads ``The 
following is the Schedule of Fees

[[Page 77577]]

(pursuant to Rule 15.1(a) and (c)) for BATS Exchange, Inc. (``BZX 
Exchange'' or ``BZX''). The Schedule of Fees is divided into 
Equities Pricing, Options Pricing and Physical Connection Charges.''

    The Exchange notes that it is not proposing any amendments to the 
Options Pricing section of its fee schedule at this time.
    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.\6\ 
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,\7\ 
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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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed changes are reasonable and 
equitable because they are non-substantive and the Exchange is not 
changing any fees or rebates that apply to trading activity on the 
Exchange or routed executions. Further, the changes are designed to 
make the fee schedule easier to read and for Members to validate the 
bills that they receive from the Exchange. The Exchange also believes 
that the proposal is non-discriminatory because it applies uniformly to 
all Members, and again, the Exchange is not making any changes to 
existing fees and rebates. Finally, the Exchange believes that the 
proposed fee schedule will be clearer and less confusing for investors 
and will eliminate potential investor confusion, thereby removing 
impediments to and perfecting the mechanism of a free and open market 
and a national market system, and, in general, protecting investors and 
the public interest.

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 changes will both make the 
fee schedule easier to read and simultaneously provide Members with an 
easier way to validate their bills on a monthly basis, both of which 
the Exchange believes are important components of customer service and 
which will allow the Exchange to better compete for order flow. The 
Exchange reiterates that the changes are only to the format of the fee 
schedule and are entirely non-substantive. 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 [sic] 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 \8\ and paragraph (f)(2) of Rule 19b-4 
thereunder.\9\ 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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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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-BATS-2014-071 on the subject line.

Paper Comments

     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-BATS-2014-071. 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-BATS-2014-071 and should be 
submitted on or before January 14, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-30123 Filed 12-23-14; 8:45 am]
BILLING CODE 8011-01-P