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Notice

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.

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Start Preamble 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.

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.

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.

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]

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.

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 Start Printed Page 75207executions 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.

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

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.

Start Signature

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[13]

Kevin M. O'Neill,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  15 U.S.C. 78s(b)(3)(A)(ii).

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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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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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7.  See Securities Exchange Act Release No. 73472 (October 30, 2014), 79 FR 65735 (November 5, 2014) (SR-BYX-2014-018).

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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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10.  15 U.S.C. 78f(b)(4) and (5).

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[FR Doc. 2014-29491 Filed 12-16-14; 8:45 am]

BILLING CODE 8011-01-P