Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc.
Federal Register: April 19, 2010 (Volume 75, Number 74)
Notices
Page 20418-20420
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DOCID:fr19ap10-104
SECURITIES AND EXCHANGE COMMISSION
Release No. 34-61883; File No. SR-BATS-2010-007
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.
April 9, 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 March 31, 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.
\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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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 April 1, 2010.
\5\ A Member is any registered broker or dealer that has been admitted to membership in the Exchange.
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.
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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 effective April 1, 2010, in order to: (i) Increase the fee charged by the Exchange for its ``CYCLE'' and ``RECYCLE'' routing strategies from $0.0027 per share to $0.0028 per share; (ii) amend the fees for certain destination specific routing options to continue to offer a ``one under'' pricing model; (iii) adopt pricing for ``BATS +
DART Destination Specific Orders''; and (iv) make other technical changes to the fee schedule.
(i) Increase in Routing Fees for ``CYCLE'' and ``RECYCLE'' Routing
Based on increased fees at various market centers to remove liquidity, the Exchange proposes to modify the fee charged by the
Exchange for its ``CYCLE'' and ``RECYCLE'' routing strategies from
$0.0027 per share to $0.0028 per share. To be consistent with this change, the Exchange proposes to charge 0.28%, rather than 0.27%, of the total dollar value of the execution for any security (all Tapes) priced under $1.00 per share that is routed away from the Exchange through CYCLE or RECYCLE.
(ii) One Under Pricing for Destination Specific Orders
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
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pricing at such market centers, BATS is proposing various changes to its prices for Destination Specific Orders to align its fees so they are $0.0001 less per share for orders routed to such market centers as of April 1, 2010. Specifically, because NASDAQ has eliminated the distinction in its fees between Tape A, B, and C securities the
Exchange proposes to eliminate that same distinction for BATS + NASDAQ
Destination Specific Orders. Thus, the Exchange proposes to normalize the fee charged for BATS + NASDAQ Destination Specific Orders executed at NASDAQ at $0.0029 per share. Also, based on a change to pricing at
NYSE Arca, the Exchange proposes to increase the charge from $0.0027 per share to $0.0028 per share for BATS + NYSE Arca Destination
Specific Orders executed at NYSE Arca in Tape A and C securities. The
Exchange will retain the fee of $0.0027 per share for BATS + NYSE Arca
Destination Specific Orders executed at NYSE Arca in Tape B securities.
Each of the changes described above will result in the Exchange charging $0.0001 less per share for orders routed to certain market centers as Destination Specific Orders.
(iii) Pricing for BATS + DART Destination Specific Orders
Effective April 1, 2010, the Exchange will offer functionality that will permit Users to designate orders to route to various Alternative
Trading Systems selected by the Exchange after first being exposed to the BATS Book (a ``BATS + DART Destination Specific Order''). In conjunction with this new functionality, the Exchange is proposing to amend the fee schedule to include pricing for BATS + DART Destination
Specific Orders. The Exchange currently offers DART routing as part of its general best execution routing. Consistent with the current pricing for the DART best execution routing functionality, the Exchange proposes to charge $0.0020 per share for a BATS + DART Destination
Specific Order executed by an Alternative Trading System.
(iv) Technical Changes to Fee Schedule
The Exchange proposes to correct a typographical error on the fee schedule. Also, the Exchange proposes to add a clarifying parenthetical to its description of physical connection charges, which are charged based on ``pairs.'' As it does within the Equities Pricing/Port Fees section of the fee schedule, the Exchange proposes to make clear that a pair is comprised of one port at site of the Exchange's primary data center and one port at the site of the Exchange's secondary data center. 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.\6\
Specifically, the Exchange believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,\7\ 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. In addition, the Exchange believes that the proposed rates are equitable in that they apply uniformly to all Members.
\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4).
(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.
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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 \8\ and Rule 19b- 4(f)(2) thereunder,\9\ 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.
\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
\9\ 17 CFR 240.19b-4(f)(2).
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.
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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 rule-comments@sec.gov. Please include
File Number SR-BATS-2010-007 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-2010-007. 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 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-BATS-2010-007 and should be submitted on or before May 10, 2010.
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For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\10\
\10\ 17 CFR 200.30-3(a)(12).
Florence E. Harmon,
Deputy Secretary.
FR Doc. 2010-8860 Filed 4-16-10; 8:45 am
BILLING CODE 8011-01-P
