[Federal Register Volume 75, Number 114 (Tuesday, June 15, 2010)]
[Notices]
[Pages 33875-33876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14363]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62241; File No. SR-BATS-2010-015]
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.
June 8, 2010.
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 28, 2010, 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. BATS 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 Substance
of the Proposed Rule Change
The Exchange proposes to modify its fee schedule applicable to
Members \5\ 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 June 1,
2010.
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\5\ 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, on the Commission's Web site at
http://www.sec.gov, 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 applicable to use
of the Exchange in order to amend the fees for its equity securities
market with respect to Modified Destination Specific Orders routed to a
dark liquidity venue (referred to by the Exchange as ``Dark Scan''
orders). In addition, the Exchange proposes to amend the fees for its
equity options market to make clear that the Exchange passes through
the clearing costs it is charged in connection with options orders that
are routed away
[[Page 33876]]
from the Exchange and executed at another options exchange.
First, the Exchange proposes to change its fee structure for
Modified Destination Specific Orders routed to a dark liquidity venue
(referred to by the Exchange as ``Dark Scan''). In contrast to its
``DART'' routing strategy, which first checks the Exchange's order book
and then routes to one or more dark liquidity venues, Dark Scan orders
do not first check the Exchange's order book but instead route to dark
liquidity venues first.\6\ The Exchange currently provides a rebate of
$0.0001 for Dark Scan orders executed at a dark liquidity venue. The
Exchange proposes eliminating this rebate, and instead facilitating
such executions free of charge. Accordingly, as proposed, the Exchange
will neither provide a rebate nor charge a fee for Dark Scan orders
executed at a dark liquidity venue. The Exchange proposes moving the
reference to ``Dark Scan'' that is currently contained on the fee
schedule to the end of the applicable clause so that it more closely
mirrors the manner that the ``DART'' routing fee is presented. The
Exchange believes this change makes the fee schedule less confusing as
it relates to the distinction between Dark Scan and DART routing.
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\6\ Modified Destination Specific Orders are defined in BATS
Rule 11.9(c)(13).
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Second, the Exchange proposes a clarification to the fees it
charges for routing options orders to away markets. Specifically, the
Exchange's fee schedule currently states that the Exchange charges
$0.05 per contract for its standard options routing service and $0.10
per contract for Directed ISOs routed to away markets, and, in
addition, passes through all destination exchange fees for executions
at away markets. The Exchange proposes to amend its fee schedule to
allow it to pass through to Options Members all destination exchange
fees and the actual clearing fees billed to the Exchange for the
executions of orders routed from the Exchange. The Exchange believes
that its options routing fees are inherently competitive, fair and
reasonable, and non-discriminatory as they replicate the fees actually
charged to the Exchange for routing to away markets, plus an additional
fee to the Exchange for providing the routing service.
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.\7\
Specifically, the Exchange believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\8\ 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 its fees
and credits are competitive with those charged by other venues.
Finally, the Exchange believes that the proposed rates are equitable in
that they apply uniformly to all Members.
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\7\ 15 U.S.C. 78f.
\8\ 15 U.S.C. 78f(b)(4).
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(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
The foregoing proposed rule change has been designated as a fee
change pursuant to Section 19(b)(3)(A)(ii) of the Act \9\ and Rule 19b-
4(f)(2) thereunder,\10\ because it establishes or changes a due, fee or
other charge imposed on members by the Exchange. Accordingly, the
proposal is effective upon filing with the Commission.
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
\10\ 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 may summarily abrogate 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 proposal 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 e-mail to [email protected]. Please include
File No. SR-BATS-2010-015 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 No. SR-BATS-2010-015. This file
number should be included on the subject line if e-mail 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 such filing will also 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 No. SR-BATS-2010-015 and should be
submitted on or before July 6, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-14363 Filed 6-14-10; 8:45 am]
BILLING CODE 8010-01-P