Skip to Content

Notice

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

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble November 14, 2016.

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 November 1, 2016, Bats EDGA Exchange, Inc. (the “Exchange” or “EDGA”) 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 EDGA Rules 15.1(a) and (c).

The text of the proposed rule change is available at the Exchange's Web site at 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 the Statutory Basis for, the Proposed Rule Change

1. Purpose

The Exchange proposes to amend its Fee Schedule to: (i) Delete references to the ROOC routing strategy, which was previously, removed from the Exchange's rulebook; [6] and (ii) increase the fees associate for orders in securities priced at or above $1.00 that yield fee codes RT, RX, or Z.

Deletion of References to the ROOC Routing Strategy

The Exchange previously submitted a proposed rule change for immediate effectiveness to discontinue the ROOC routing strategy and to remove references to the ROOC routing strategy from its rulebook.[7] The Exchange now proposes to delete three references to the ROOC routing strategy from its Fee Schedule, as those associated rates and references have not been applicable since the Exchange discontinued the ROOC routing strategy. These changes are to delete:

  • Fee code RN and its associate rates, which is appended to orders routed to the Nasdaq Stock Market LLC using the ROOC routing strategy and add liquidity.
  • a reference to ROOC in fee code RT, which is appended to orders routed using the ROUT or ROOC routing strategy; and
  • a reference to the ROOC routing strategy in footnote 12, which lists the routing strategies eligible for fee code CR.

Fee Codes RT, RX, and Z

The Exchange also proposes to increase the fees associated with orders in securities priced at or above $1.00 that yield fee codes RT, RX, or Z.[8] First the Exchange proposes to increase the fee for orders yielding fee code RT, which are routed using a ROUT [9] or ROOC [10] routing strategy, from $0.00250 to $0.00260 per share. Second, the Exchange proposes to increase the fee for orders yielding fee code RX, which are routed using a ROUX [11] routing strategy, from $0.00270 to $0.00280 per share. Lastly, the Exchange proposes to increase the fee for orders yielding fee code Z, which are routed to a non-exchange destination using ROCO [12] or ROUZ [13] routing strategy, from $0.00100 to $0.00120 per share.

Implementation Date

The Exchange proposes to implement these amendments to its Fee Schedule November 1, 2016.Start Printed Page 81833

2. Statutory Basis

The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,[14] in general, and furthers the objectives of Section 6(b)(4),[15] in particular, as it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its Members and other persons using its facilities.

Deletion of References to the ROOC Routing Strategy

The Exchange believes it is equitable, reasonable, and not unfairly discriminatory to delete references to the ROOC routing strategy from its Fee Schedule because it is removing reference and rates for a product that the Exchange no longer provides.[16] The Exchange believes that the proposed changes will make the Fee Schedule clearer and 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.

Fee Codes RT, RX, and Z

The Exchange believes that its proposal to increase the fee for orders that yield fee codes RT, RX, or Z represents an equitable allocation of reasonable dues, fees, and other charges among Members and other persons using its facilities in that they are designed in part to cover the costs of routing. While the affected Members' orders will be charged higher fees due to the proposal, the increased revenue received by the Exchange will be used to fund the Exchange generally, including the cost of maintaining and improving the technology used to handle and route orders from the Exchange as well as programs that the Exchange believes help to attract additional liquidity and thus improve the depth of liquidity available on the Exchange. Accordingly, although the cost of routing is increasing, the Exchange believes that he increase is modest and that higher routing fees will benefit Members in other ways. Furthermore, the Exchange notes that routing through the Exchange is voluntary. Lastly, the Exchange also believes that the proposed amendment is non-discriminatory because it applies uniformly to all Members.

B. Self-Regulatory Organization's Statement on Burden on Competition

This proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the changes to fee codes RT, RX, and Z represent a significant departure from previous pricing offered by the Exchange or from pricing offered by the Exchange's competitors. Additionally, Members may opt to disfavor the Exchange's pricing if they believe that alternatives offer them better value. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. The Exchange believes that its proposal would not burden intramarket competition because the proposed rates would apply uniformly to all Members.

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 [17] and paragraph (f) of Rule 19b-4 thereunder.[18] 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

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-BatsEDGA-2016-26. 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 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-BatsEDGA-2016-26, and should be submitted on or before December 9, 2016.

Start Signature

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19

Brent J. Fields,

Secretary.

End Signature End Preamble

Footnotes

3.  15 U.S.C. 78s(b)(3)(A)(ii).

Back to Citation

5.  The term “Member” is defined as “any registered broker or dealer that has been admitted to membership in the Exchange.” See Exchange Rule 1.5(n).

Back to Citation

6.  See Securities Exchange Act Release N. 75550 (July 29, 2015), 80 FR 46363 (August 4, 2015) (SR-EDGA-2015-28). See also BATS EDGA Exchange and BYX Exchange Decommissioning ROOC Effective August 10, 2015, available at http://cdn.batstrading.com/​resources/​release_​notes/​2015/​BATS-EDGA-Exchange-and-BYX-Exchange-Decommissioning-ROOC-Effective-August-10-2015.pdf.

Back to Citation

7.  Id. See also Securities Exchange Act Release No. 75550 (July 29, 2015), 80 FR 4636 (August 4, 2015) (SR-EDGA-2015-28).

Back to Citation

8.  The Exchange does not propose to amend the fees for orders yielding fee codes RT, RX, or Z in securities priced below $1.00.

Back to Citation

9.  See Exchange Rule 11.11(g)(3).

Back to Citation

10.  The Exchange notes that it is deleting reference to the ROOC routing strategy in this filing. See also supra note 6.

Back to Citation

11.  See Exchange Rule 11.11(g)(3).

Back to Citation

16.  See supra note 4.

Back to Citation

[FR Doc. 2016-27743 Filed 11-17-16; 8:45 am]

BILLING CODE 8011-01-P