[Federal Register Volume 75, Number 177 (Tuesday, September 14, 2010)]
[Notices]
[Pages 55838-55840]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-22836]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62858; File No. SR-BATS-2010-023]
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.
September 7, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on August 30, 2010, BATS Exchange, Inc. (``BATS'' or ``Exchange'')
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 September
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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[[Page 55839]]
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 aspects 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: (i) adopt pricing for certain new routing
strategies that the Exchange recently adopted; (ii) modify its pricing
for Destination Specific Orders executed at NYSE Arca; (iii) eliminate
a currently dormant market data product from its fee schedule; and (iv)
change the name of one of its routing strategies. In addition, the
Exchange proposes to modify fees applicable to options trading by
eliminating certain clearing fees that it currently passes on to its
Members.
(i) Adoption of Fees for New Parallel Routing Strategies
The Exchange recently adopted rules permitting it to offer certain
new routing strategies, and plans on offering such routing strategies
in the near future.\6\ Accordingly, the Exchange proposes to adopt fees
applicable to such routing strategies. As proposed, the Exchange will
offer both Parallel D and Parallel 2D routing at the same rate as it
offers its CYCLE and RECYCLE routing strategies.\7\ Specifically, the
Exchange proposes to charge $0.0028 per share for executions that occur
at other trading venues as a result of either Parallel D or Parallel 2D
routing. The Exchange proposes to offer its Parallel T routing strategy
with a charge of $0.0033 per share for executions that occur at other
trading venues as a result of such routing. To be consistent with these
proposed fees and the current fee structure for CYCLE and RECYCLE
routed executions, the Exchange proposes to charge 0.28% of the total
dollar value of the execution for any security priced under $1.00 per
share that is routed away from the Exchange through Parallel D or
Parallel 2D. Similarly, and based on the charge of $0.0033 per share
for Parallel T routing, the Exchange proposes to charge 0.33% of the
total dollar value of the execution for any security priced under $1.00
per share that is routed away from the Exchange through Parallel T.
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\6\ See Securities Exchange Act Release No. 62404 (June 30,
2010), 75 FR 39303 (July 8, 2010) (SR-BATS-2010-017).
\7\ See Rule 11.13(a)(3).
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(ii) NYSE Arca Destination Specific Orders
The Exchange proposes to modify its fee schedule applicable to use
of the Exchange in order to amend the fees for its BATS + NYSE Arca
destination specific routing option to continue to offer a ``one
under'' pricing model. The Exchange has previously provided a
discounted price fee for Destination Specific Orders routed to certain
of the largest market centers measured by volume (NYSE, NYSE Arca and
NASDAQ), which, in each instance has been $0.0001 less per share for
orders routed to such market centers by the Exchange than such market
centers currently charge for removing liquidity (referred to by the
Exchange as ``One Under'' pricing). Based on changes in pricing at NYSE
Arca, BATS is proposing a change to its price for BATS + NYSE Arca
Destination Specific Orders to align its fees so they are $0.0001 less
per share for orders routed to NYSE Arca. Specifically, the Exchange
proposes to increase the fee charged for BATS + NYSE Arca Destination
Specific Orders executed at NYSE Arca in Tape A and C securities from
$0.0028 to $0.0029 per share.
(iii) Deletion of Data Product
In order to avoid confusion, the Exchange proposes to delete a
reference on its fee schedule to a specific data product that it is not
currently offering. Earlier this year, the Exchange proposed and
received approval to offer certain market data products for a fee for
the first time. Market Insight was one such product proposed and
approved to be offered by the Exchange. However, the Exchange has
decided not to offer this product at this time, and thus, proposes
deletion of reference to the product from its fee schedule to avoid
confusion. If the Exchange does decide to offer Market Insight as
approved, it will provide notice to its Members and will file a rule
proposal to reinstate reference to Market Insight on its fee schedule.
(iv) Name Change of Routing Strategy
The Exchange has decided to re-brand one of its routing strategies,
currently referred to as ``DART,'' as the ``Dark Routing Technique'' or
``DRT''. Accordingly, the Exchange proposes modification of the
``DART'' acronym throughout the fee schedule to ``DRT''.
(v) Options Clearing Charges
The Exchange currently 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. Effective June 1, 2010,
the Exchange began passing through to Options Members, in addition to
destination exchange fees, the actual clearing fees billed to the
Exchange for the execution of orders routed from the Exchange. The
Exchange proposes to eliminate the clearing fee pass through charge,
both to simplify pricing of its routing services and to encourage
Options Members to utilize the Exchange's routing services.
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.\8\
Specifically, the Exchange believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\9\ 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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\8\ 15 U.S.C. 78f.
\9\ 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.
[[Page 55840]]
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 \10\ and Rule
19b-4(f)(2) thereunder,\11\ 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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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 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 e-mail to [email protected]. Please include
File Number SR-BATS-2010-023 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-2010-023. 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-2010-023 and should be
submitted on or before October 5, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-22836 Filed 9-13-10; 8:45 am]
BILLING CODE 8010-01-P