Document ID: SEC-2012-0823-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc.
Posted Date: 2012-05-24T04:00Z

[Federal Register Volume 77, Number 101 (Thursday, May 24, 2012)]
[Notices]
[Pages 31059-31060]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-12617]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67017; File No. SR-BATS-2012-017]

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.

May 18, 2012.
    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 May 11, 2012, 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 
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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the fee schedule applicable to 
Members \3\ 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 May 14, 2012.
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    \3\ A Member is any registered broker or dealer that has been 
admitted to membership in the Exchange.
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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, on the Commission's Web site at www.sec.gov, 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 the ``Equities Pricing'' section of 
its fee schedule to update the number of ports provided in connection 
with the Exchange's Multicast PITCH data feed. As described in further 
detail below, there is no change to the fee structure for logical ports 
used to receive Multicast PITCH data from the Exchange, but rather, 
simply an update necessary due to an increase to the number of matching 
engines used to operate the Exchange's platform for cash equities 
(``BATS Equities''). This increase, in turn, requires an update to the 
number of logical ports necessary to receive Multicast PITCH data from 
the Exchange, which is reflected on the Exchange's fee schedule.
    Specifically, the Exchange currently operates BATS Equities with 12 
matching engines, which in turn requires the use of 12 Multicast PITCH 
logical ports in order to receive Multicast PITCH data. The Exchange 
provides all Exchange constituents that receive the Exchange's 
Multicast PITCH Feed with 12 free pairs \4\ of Multicast PITCH Spin 
Server Ports free of charge and, if such ports are used, one free pair 
of GRP Ports. The Exchange also charges such customers $400.00 per 
month per additional pair of GRP Ports or additional set of 12 pairs of 
Multicast PITCH Spin Server Ports.
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    \4\ A pair includes one port at the Exchange's primary data 
center and another port at the Exchange's secondary data center.
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    As of May 14, 2012, BATS Equities will operate with 32 matching 
engines.

[[Page 31060]]

Accordingly, the Exchange proposes to update its fee schedule to 
provide Exchange constituents that receive the Exchange's Multicast 
PITCH Feed with 32 free pairs of Multicast PITCH Spin Server Ports free 
of charge and, if such ports are used, one free pair of GRP Ports. The 
Exchange also proposes to charge such customers $400.00 per month per 
additional pair of GRP Ports or additional set of 32 pairs of Multicast 
PITCH Spin Server Ports.
    The Exchange's proposal to continue 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.
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.\5\ 
Specifically, the Exchange believes that the proposed rule change is 
consistent with Section 6(b)(4) of the Act,\6\ 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.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(4).
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    As noted above, the Exchange is not changing the fee structure for 
logical ports necessary to receive Multicast PITCH data from the 
Exchange, but rather, is increasing the number of ports that comprise a 
set of ports for the receipt of Multicast PITCH data. The Exchange 
continues to believe that its logical port fees are reasonable in light 
of the benefits to Members of direct market access and receipt of data. 
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 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 
continued offering of free logical ports is fair and equitable. 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 imposes 
any burden on competition.

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 \7\ and Rule 19b-
4(f)(2) thereunder,\8\ 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.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19b-4(f)(2).
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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 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-2012-017 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-2012-017. 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 offices 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-2012-017, 
and should be submitted on or before June 14, 2012.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-12617 Filed 5-23-12; 8:45 am]
BILLING CODE 8011-01-P