
[Federal Register Volume 80, Number 245 (Tuesday, December 22, 2015)]
[Notices]
[Pages 79636-79638]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32045]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76664; File No. SR-BATS-2015-110]


Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 
13.3, Forwarding of Proxy and Other Issuer Materials; Proxy Voting

December 16, 2015.
    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 2, 2015, BATS Exchange, Inc. (the ``Exchange'' or 
``BATS'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders it 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).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to amend paragraph (a) of Rule 13.3, 
Forwarding or Proxy and other Issuer Materials; Proxy Voting, to 
conform to the rules of EDGA Exchange, Inc. (``EDGA'') and EDGX 
Exchange, Inc. (``EDGX'').\5\
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    \5\ See Securities Exchange Act Release Nos. 76329 (November 3, 
2015), 80 FR 69259 (November 9, 2015); 76330 (November 3, 2015), 80 
FR 69264 (November 9, 2015) (SR-EDGX-2015-51; SR-EDGA-2015-41).
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    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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In early 2014, the Exchange and its affiliate, BATS Y-Exchange, 
Inc. (``BYX''), received approval to effect a merger (the ``Merger'') 
of the Exchange's parent company, BATS Global Markets, Inc., with 
Direct Edge Holdings LLC, the indirect parent of EDGX and EDGA 
(together with BZX, BYX and EDGX, the ``BGM Affiliated Exchanges'').\6\ 
In the context of the Merger, the BGM Affiliated Exchanges are working 
to align their rules, retaining only intended differences between the 
BGM Affiliated Exchanges.
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    \6\ See Securities Exchange Act Release No. 71375 (January 23, 
2014), 79 FR 4771 (January 29, 2014) (SR-BATS-2013-059; SR-BYX-2013-
039).
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    EDGA and EDGX recently filed proposed rule changes with the 
Commission to restructure and amend their Rules 3.22. Proxy Voting, and 
13.3, Forwarding of Proxy and Other Issuer Materials, to conform to BYX 
and BZX Rule 13.3.\7\ In order to provide a consistent rule set across 
each of the

[[Page 79637]]

BGM Affiliated Exchanges, the Exchange proposes to amend paragraph (a) 
of Rule 13.3, Forwarding of Proxy and Other Issuer Materials; Proxy 
Voting, to make two revisions to conform to the recently amended rules 
of EDGA and EDGX.\8\
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    \7\ See supra note 3.
    \8\ The Exchange notes that BYX intends to file an identical 
proposal with the Commission to amend paragraph (a) of Rule 13.3, 
Forwarding of Proxy and Other Issuer Materials; Proxy Voting, to 
conform to the rules of EDGA and EDGX.
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    In sum, paragraph (a) of Rule 13.3 requires Members to transmit 
proxy materials and other communications to beneficial owners of 
securities. The Exchange notes paragraph (a) of Rule 13.3 is 
substantially similar to EDGA and EDGX Rules 13.3(a) which also 
requires Members to transmit proxy materials to beneficial owners of 
securities. Nonetheless, the Exchange proposes two revisions to make 
the rule identical to the corresponding amended EDGA and EDGX Rules 
13.3(a). These revisions to paragraph (a) of Rule 13.3 are: (i) 
Pluralize the reference to ``proxy material'' in the first sentence; 
and (ii) specify that the ``designated investment advisor'' is defined 
in Interpretation and Policy .01 to this Rule 13.3. Otherwise, the 
Exchange does not propose any additional changes to Rule 3.22. As 
amended, Exchange Rule 13.3 would be identical to amended EDGA and EDGX 
Rules 13.3. The Exchange believes that the changes described above will 
help avoid confusion amongst Members of the Exchange that are also 
members of EDGA, BYX, and EDGX by adopting identical rules across the 
BGM Affiliated Exchanges with regard to proxy delivery.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are 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(b) of the Act.\9\ 
Specifically, the proposed changes are consistent with Section 6(b)(5) 
of the Act,\10\ because they are designed to promote just and equitable 
principles of trade, to remove impediments to, and perfect the 
mechanism of, a free and open market and a national market system, and, 
in general, to protect investors and the public interest. None of these 
changes alter the Exchange's current proxy delivery and voting 
requirements. Rather, as mentioned above, the proposed rule changes, 
combined with the planned filing for BYX, would allow the BGM 
Affiliated Exchanges to provide an identical set of rules as it relates 
to proxy delivery and voting. Consistent rules, in turn, will simplify 
the regulatory requirements for Members of the Exchange that are also 
participants on EDGA, BYZ and/or EDGX. The proposed rule change would 
provide greater harmonization between rules of similar purpose on the 
BGM Affiliated Exchanges, resulting in greater uniformity and less 
burdensome and more efficient regulatory compliance and understanding 
of Exchange Rules. As such, the proposed rule change would foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities and would remove impediments to and perfect 
the mechanism of a free and open market and a national market system. 
Similarly, the Exchange also believes that, by harmonizing the rules 
across each BGM Affiliated Exchange, the proposal will enhance the 
Exchange's ability to fairly and efficiently regulate its Members, 
meaning that the proposed rule change would promote just and equitable 
principles of trade in accordance with Section 6(b)(5) of the Act.\11\. 
[sic] Finally, the Exchange believes that the non-substantive changes 
discussed above will contribute to the protection of investors and the 
public interest by helping to avoid confusion with respect to Exchange 
Rules.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ Id.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. To the contrary, allowing the 
Exchange to implement identical rules across each of the BGM Affiliated 
Exchanges does not present any competitive issues, but rather is 
designed to provide greater harmonization among Exchange, EDGX, BYX, 
and EDGA rules of similar purpose. The proposed rule change should, 
therefore, result in less burdensome and more efficient regulatory 
compliance as well as a better understanding of Exchange Rules for 
common members of the BGM Affiliated Exchanges.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (A) 
Significantly affect the protection of investors or the public 
interest; (B) impose any significant burden on competition; and (C) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and paragraph 
(f)(6) of Rule 19b-4 thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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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: (1) 
Necessary or appropriate in the public interest; (2) for the protection 
of investors; or (3) 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

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-BATS-2015-110 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BATS-2015-110. 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

[[Page 79638]]

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-BATS-2015-110, and should be 
submitted on or before January 12, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-32045 Filed 12-21-15; 8:45 am]
BILLING CODE 8011-01-P


