[Federal Register Volume 82, Number 200 (Wednesday, October 18, 2017)]
[Notices]
[Pages 48545-48550]
[FR Doc No: 2017-22518]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81859; File No. SR-BatsEDGA-2017-26]

Self-Regulatory Organizations; Bats EDGA Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Certain Rules To Add New Optional Functionality to Orders With a
Minimum Quantity Instruction

October 12, 2017.
    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 October 5, 2017, Bats EDGA Exchange, Inc. (``Exchange'' or
``EDGA'') 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.
---------------------------------------------------------------------------

    \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).

---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange filed a proposal to: (i) Add new optional
functionality to orders that include the Minimum Execution Quantity
instruction by amending paragraph (h) of Exchange Rule 11.6,
Definitions; (ii) amend paragraph (b)(3) of Exchange Rule 11.8 to
specify that a Minimum Execution Quantity instruction may be included
on a Limit Order with a time-in-force (``TIF'') of Immediate-or-Cancel
(``IOC''); and (iii) amend paragraph (e)(3) of Exchange Rule 11.10,
Order Execution, to make certain clarifying, non-substantive changes.
The proposed amendments are identical to the rules of Bats EDGX
Exchange, Inc. (``EDGX'') that were recently published by the
Commission for immediate effectiveness.\5\
---------------------------------------------------------------------------

    \5\ See EDGX Rules 11.6(h), 11.8(b)(3), and 11.10(e)(3). See
also Securities Exchange Act Release No. 81457 (August 22, 2017), 82
FR 40812 (August 28, 2017) (SR-BatsEDGX-2017-34).
---------------------------------------------------------------------------

    The text of the proposed rule change is available at the Exchange's
Web site at www.bats.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
    The Exchange proposes to: (i) Add new optional functionality to
orders that include the Minimum Execution Quantity instruction by
amending paragraph (h) of Exchange Rule 11.6, Definitions; (ii) amend
paragraph (b)(3) of Exchange Rule 11.8 to specify that a Minimum
Execution Quantity instruction may be included on a Limit Order with a
TIF of IOC; and (iii) amend paragraph (e)(3) of Exchange Rule 11.10,
Order Execution, to make certain clarifying, non-substantive changes.
These proposed amendments are identical to changes recently proposed by
EDGX that were published by the Commission for immediate
effectiveness.\6\
---------------------------------------------------------------------------

    \6\ See supra note 5.
---------------------------------------------------------------------------

Exchange Rule 11.6(h), Proposed Individual Minimum Size
    The Exchange proposes to add new optional functionality that would
enhance the utility of the Minimum Execution Quantity instruction by
amending paragraph (h) of Exchange Rule 11.6, Definitions. In sum, the
proposal would permit an incoming order with a Minimum Execution
Quantity to forego executions where multiple resting orders could
otherwise be aggregated to satisfy the order's minimum quantity.
    A Minimum Execution Quantity enables a User \7\ to specify a
minimum share amount at which the order will execute. An order with a
Minimum Execution Quantity will not execute unless the volume of
contra-side liquidity available to execute against the order meets or
exceeds the designated minimum. Specifically, Minimum Execution
Quantity is an instruction a User may attach to an order with a Non-
Displayed \8\ instruction or a TIF of IOC \9\ requiring the System \10\
to execute the order only to the extent that a minimum quantity can be
satisfied by execution against a single order or multiple aggregated
orders simultaneously.\11\ Today, an order with a Minimum Execution
Quantity will execute upon entry against a single order or multiple
orders if the sum of those orders is equal to or greater than its
minimum quantity. An order with a Minimum Execution Quantity
instruction may be partially executed upon entry so long as the
execution size is equal to or exceeds the minimum quantity provided in
the instruction. Any shares remaining after a partial execution will
continue to be executed at a size that is equal to or exceeds the
quantity provided in the instruction. Where the number of shares
remaining after a partial execution are [sic] less than the quantity
provided in the instruction, the Minimum Execution Quantity shall be
equal to the number of shares remaining. The Minimum Execution Quantity
instruction may be coupled with Market Orders with a TIF of IOC,\12\
Limit Orders with a Non-Displayed instruction \13\ or TIF of IOC (as
discussed below), Intermarket Sweep Orders (``ISO'') with a TIF of
IOC,\14\ MidPoint Peg Orders,\15\ and Supplemental Peg Orders.\16\
---------------------------------------------------------------------------

    \7\ The term ``User'' is defined as ``any Member or Sponsored
Participant who is authorized to obtain access to the System
pursuant to Rule 11.3.'' See Exchange Rule 1.5(ee).
    \8\ The term ``Non-Displayed'' is defined as ``[a]n instruction
the User may attach to an order stating that the order is not to be
displayed by the System on the EDGA Book.'' See Exchange Rule
11.6(e)(2).
    \9\ As discussed below, the Exchange also proposes to clarify
within Rule 11.6(h) that a Minimum Quantity instruction may also be
added to an order with a TIF of IOC. See e.g., Exchange Rules
11.8(a)(3) and (c)(2) (specifying that the Minimum Quantity
instruction may be included on Market Orders and ISOs with a TIF of
IOC).
    \10\ The term ``System'' is defined as ``the electronic
communications and trading facility designated by the Board through
which securities orders of Users are consolidated for ranking,
execution and, when applicable, routing away.'' See Exchange Rule
1.5(cc).
    \11\ Today, the System will aggregate multiple resting orders to
satisfy the incoming order's minimum quantity and a User cannot
elect the incoming order to execute against a single resting contra-
side order.
    \12\ See Exchange Rule 11.8(a)(3).
    \13\ See Exchange Rule 11.8(b)(3).
    \14\ See Exchange Rule 11.8(c)(2).
    \15\ See Exchange Rule 11.8(d)(2).
    \16\ See Exchange Rule 11.8(f)(2).
---------------------------------------------------------------------------

    The Exchange has observed that some market participants avoid
sending large orders with a Minimum Execution Quantity instruction to
the Exchange out of concern that such orders may interact with small
orders entered by professional traders, possibly adversely impacting
the execution of their larger order. Institutional orders are often
much larger in size than the average order in the marketplace. To
facilitate the liquidation or acquisition of a large position, market
participants tend to submit multiple orders into the market that may
only represent a fraction of the overall institutional position to be
executed. Various strategies used by institutional market participants
to execute large orders are intended to limit price movement of the
security at issue. Executing in small sizes, even if in the aggregate
it meets the order's minimum quantity, may impact the market for that
security such that the additional orders the market participant has yet
to enter into the market may be more costly to execute. If an
institution is able to execute in larger sizes, the contra-party to the
execution is less likely to be a participant that reacts to short term
changes in the stock price, and as such, the price impact to the stock
may be less acute when larger individual executions are obtained.\17\
As

a result, these orders are often executed away from the Exchange in
dark pools or other exchanges that offer the same functionality as
proposed herein,\18\ or via broker-dealer internalization.
---------------------------------------------------------------------------

    \17\ The Commission has long recognized this concern:
``[a]nother type of implicit transaction cost reflected in the price
of a security is short-term price volatility caused by temporary
imbalances in trading interest. For example, a significant implicit
cost for large investors (who often represent the consolidated
investments of many individuals) is the price impact that their
large trades can have on the market. Indeed, disclosure of these
large orders can reduce the likelihood of their being filled.'' See
Securities Exchange Act Release No. 42450 (February 23, 2000), 65 FR
10577, 10581 (February 28, 2000) (SR-NYSE-99-48).
    \18\ See supra note 5.
---------------------------------------------------------------------------

    To attract larger orders with a Minimum Execution Quantity, the
Exchange proposes to add new optional functionality that would enhance
the utility of the Minimum Execution Quantity instruction. In sum, the
proposal would permit a User to elect that its incoming order with a
Minimum Execution Quantity execute solely against one or more resting
individual orders, each of which must satisfy the order's minimum
quantity condition. In such case, the order would forego executions
where multiple resting orders could otherwise be aggregated to satisfy
the order's minimum quantity, but do not individually satisfy the
minimum quantity condition.\19\ As discussed above, under the current
rule an order with a Minimum Execution Quantity will execute upon entry
against any number of smaller contra-side orders that, in aggregate,
meet the minimum quantity set by the User. This default behavior will
remain. For example, assume there are two orders to sell resting on the
EDGA Book \20\--the first for 300 shares and a second for 400 shares,
with the 300 share order having time priority ahead of the 400 share
order. If a User entered an order with a Minimum Execution Quantity to
buy 1,000 shares at $10.00 with a minimum quantity of 500 shares, and
the order was marketable against the two resting sell orders for 300
and 400 shares, the System would aggregate both sell orders for
purposes of meeting the minimum quantity, thus resulting in executions
of 300 shares and then 400 shares respectively with the remaining 300
shares of the an order with a Minimum Execution Quantity being posted
to the EDGA Book with a minimum quantity restriction of 300 shares.
---------------------------------------------------------------------------

    \19\ If no election is made, the System will aggregate multiple
resting orders to satisfy the incoming order's minimum quantity.
    \20\ The term ``EDGA Book'' is defined as ``the System's
electronic file of orders.'' See Exchange Rule 1.5(d).
---------------------------------------------------------------------------

    The proposed new optional functionality will not allow aggregation
of smaller executions to satisfy the minimum quantity of an incoming
order with a Minimum Execution Quantity. Using the same scenario as
above, but with the proposed new functionality and a Minimum Execution
Quantity requirement of 400 shares selected by the User, the order with
a Minimum Execution Quantity would not execute against the two sell
orders because the 300 share order with time priority at the top of the
EDGA Book is less than the incoming order's 400 share Minimum Execution
Quantity. The new functionality will cause the order with a Minimum
Execution Quantity to be cancelled or posted to the EDGA Book, Non-
Displayed, in accordance with the characteristics of the underlying
order type \21\ when encountering an order with time priority that is
of insufficient size to satisfy the minimum execution requirement. If
posted, the order with a Minimum Execution Quantity will operate as it
does currently and will only execute against individual orders that
satisfy its minimum quantity as proposed herein. The Exchange notes
that the User entering the order with a Minimum Execution Quantity has
expressed its intention not to execute against liquidity below a
certain minimum size, and therefore, cedes execution priority when it
would lock an order against which it would otherwise execute if it were
not for the minimum execution size restriction. The Exchange proposes
to add language to paragraph (h) of Rule 11.6 to make clear that the
order would cede execution priority in such in [sic] scenario.
---------------------------------------------------------------------------

    \21\ See supra notes 12 through 16 for a description of the
functionality associated with orders that may include a Minimum
Execution Quantity.
---------------------------------------------------------------------------

    As amended, the description of Minimum Execution Quantity under
paragraph (h) of Exchange Rule 11.6 would set forth the default
behavior of the Minimum Quantity instruction of executing upon entry
against a single order or multiple aggregated orders simultaneously.
Amended Rule 11.6(h) would set forth the proposed optional
functionality where a User may alternatively specify that the incoming
order's minimum quantity condition be satisfied by each order resting
on the EDGA Book that would execute against the order with the Minimum
Execution Quantity instruction. If there are such orders, but there are
also orders that do not satisfy the minimum quantity condition, the
incoming order with the Minimum Execution Quantity instruction will
execute against orders resting on the EDGA Book in accordance with Rule
11.9, Order Priority, until it reaches an order that does not satisfy
the minimum quantity condition at which point it would be posted to the
EDGA Book or cancelled in accordance with the terms of the order. If,
upon entry, there are no orders that satisfy the minimum quantity
condition resting on the EDGA Book, the order will either be posted to
the EDGA Book or cancelled in accordance with the terms of the order.
    The Exchange also proposes to re-price incoming orders with a
Minimum Execution Quantity instruction where that order may cross an
order posted on the EDGA Book. Specifically, where there is
insufficient size to satisfy an incoming order's minimum quantity
condition and that incoming order, if posted at its limit price, would
cross an order(s) resting on the EDGA Book, the order with the minimum
quantity condition will be re-priced to and ranked at the Locking
Price.\22\ For example, an order to buy at $11.00 with a minimum
quantity condition of 500 shares is entered and there is an order
resting on the EDGA Book to sell 200 shares at $10.99. The resting
order to sell does not contain sufficient size to satisfy the incoming
order's minimum quantity condition of 500 shares. The price of the
incoming buy order, if posted to the EDGA Book, would cross the price
of the resting sell order. In such case, to avoid an internally crossed
book, the System will re-price the incoming buy order to $10.99, the
Locking Price. This behavior is similar to how the Exchange currently
reprices Non-Displayed orders that cross the Protected Quotation of an
external market.\23\ In addition, both the Investors Exchange, Inc.
(``IEX'') and the Nasdaq Stock Market LLC (``Nasdaq'') also re-price
similar orders to avoid an internally crossed book.\24\
---------------------------------------------------------------------------

    \22\ ``Locking Price'' is defined as ``[t]he price at which an
order to buy (sell), that if displayed by the System on the EDGA
Book, either upon entry into the System, or upon return to the
System after being routed away, would be a Locking Quotation.'' See
Exchange Rule 11.6(f).
    \23\ See Exchange Rule 11.6(l)(3).
    \24\ See Nasdaq Rule 4703(e). See IEX Rule 11.190(h)(2).
---------------------------------------------------------------------------

    The rule would further be amended to account for the partial
execution against an individual order in accordance with the proposed
rule change. Specifically, paragraph (h) of Exchange Rule 11.6 would
further be amended to state that that an order with a Minimum Execution
Quantity instruction may be partially executed so long as the execution
size of the individual order or aggregate size of multiple orders, as
applicable, are equal to or exceed the minimum quantity provided in the
instruction.
    The Exchange also proposes to amend the description of the Minimum
Execution Quantity instruction to clarify its operation upon order
entry and when the order is posted to the EDGA Book. The Exchange
proposes to clarify that upon entry, and by default, an order with a
Minimum Execution Quantity

will execute against a single order or multiple aggregated orders
simultaneously. A User may also specify that the order only against
[sic] orders that individually satisfy the order's minimum quantity
condition, as proposed herein. Once posted to the EDGA Book,\25\ the
order may only execute against individual incoming orders with a size
that satisfies the minimum quantity condition. The Exchange also
proposed to clarify that an order that includes a Minimum Execution
Quantity instruction is not eligible to be routed to another Trading
Center in accordance with Exchange Rule 11.11, Routing to Away Trading
Centers. These proposed changes would add additional specificity to the
operation of the Minimum Execution Quantity instruction and are
consistent with similar functionality offered by IEX and Nasdaq.\26\
---------------------------------------------------------------------------

    \25\ Orders will only post to the EDGA Book if they are
designated with a TIF instruction that allows for posting. For
example, an order [sic] a TIF of IOC or FOK will never post to the
EDGA Book.
    \26\ See supra note 5.
---------------------------------------------------------------------------

Exchange Rule 11.8(b)(3), Limit Order Clarification
    The Exchange also proposes to amend paragraph (b)(3) of Exchange
Rule 11.8 to specify that a Minimum Execution Quantity instruction may
be included on a Limit Order with a TIF of IOC. Currently, paragraph
(b)(3) of Exchange Rule 11.8 states that Minimum Execution Quantity
instruction may be placed on a Limit Order with a Non-Displayed
instruction. As stated above, the Minimum Execution Quantity
instruction may be coupled with, among other order types, Market Orders
with a TIF of IOC and ISOs with a TIF of IOC. A Limit Order with a TIF
of IOC will never be displayed or posted on the EDGA Book because, by
instruction, it is to only execute upon entry, route or cancel back to
the User and will never be posted to the EDGA Book.\27\ Therefore,
current functionality allows a Minimum Execution Quantity instruction
to be included on a Limit Order with a TIF of IOC, as that order would
not be displayed on the EDGA Book. The Exchange now seeks to add
additional specificity to paragraph (b)(3) of Exchange Rule 11.6 to
expressly state that a Minimum Execution Quantity instruction may be
included on a Limit Order with a TIF of IOC. The Exchange notes that
this is also consistent with the treatment of Minimum Quantity Orders
on Bats BZX Exchange, Inc. (``BZX'').\28\
---------------------------------------------------------------------------

    \27\ See Exchange Rule 11.6(q)(1).
    \28\ See BZX Rule 11.9(c)(5) (stating that BZX will only honor a
specified minimum quantity on BZX Only Orders that are non-displayed
or IOCs).
---------------------------------------------------------------------------

Exchange Rule 11.10(e)(3), Replace Messages
    The Exchange also proposes to amend paragraph (e)(3) of Rule 11.10,
Order Execution, to specify that the Max Floor \29\ is associated with
an order with a Reserve Quantity and to replace the phrase ``and
quantity terms'' with the word ``size''. The rule currently states that
other than changing a Limit Order to a Market Order, only the price,
Stop Price,\30\ the sell long indicator, Short Sale instruction,\31\
Max Floor and quantity terms of the order may be changed with a Replace
message. If a User desires to change any other terms of an existing
order, the existing order must be cancelled and a new order must be
entered. The Exchange believes these changes will add additional
specificity to the rule and ensure the rule uses terminology consistent
with the description of Replace messages and their impact on an order's
priority under Exchange Rule 11.9(a)(4).
---------------------------------------------------------------------------

    \29\ See Exchange Rule 11.6(m)(1).
    \30\ See Exchange Rules 11.8(a)(1) and (b)(1).
    \31\ See Exchange Rule 11.6(o).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \32\ in general, and furthers the objectives of Section
6(b)(5) of the Act \33\ in particular, in that it is designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, 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.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78f(b).
    \33\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Exchange Rule 11.6(h), Proposed Individual Minimum Size
    The proposed rule change would remove impediments to and promote
just and equitable principles of trade because it would provide Users
with optional functionality that enhances the use of the Minimum
Execution Quantity instruction. The proposed change to the functioning
of the Minimum Execution Quantity instruction will provide market
participants, including institutional firms who ultimately represent
individual retail investors in many cases, with better control over
their orders, thereby providing them with greater potential to improve
the quality of their order executions. Currently, the rule allows Users
to designate a minimum acceptable quantity on an order that may
aggregate multiple executions to meet the minimum quantity requirement.
Once posted to the book, however, the minimum quantity requirement is
equivalent to a minimum execution size requirement. The Exchange is now
proposing to provide Users with control over the execution of their
orders with a Minimum Execution Quantity instruction by allowing them
an option to designate the minimum individual execution size upon
entry. The control offered by the proposed change is consistent with
the various types of control currently provided by exchange order
types. For example, the Exchange and other exchanges offer limit
orders, which allow a market participant control over the price it will
pay or receive for a stock.\34\ Similarly, exchanges offer order types
that allow market participants to structure their trading activity in a
manner that is more likely to avoid certain transaction cost related
economic outcomes.\35\
---------------------------------------------------------------------------

    \34\ See Exchange Rule 11.8(b).
    \35\ For example, the Exchange's Post Only instruction. See
Exchange Rule 11.6(n)(4).
---------------------------------------------------------------------------

    As discussed above, the functionality proposed herein would enable
Users to avoid transacting with smaller orders that they believe
ultimately increases the cost of the transaction. Because the Exchange
does not have this functionality, market participants, such as large
institutions that transact a large number of orders on behalf of retail
investors, have avoided sending large orders to the Exchange to avoid
potentially more expensive transactions.\36\ In this regard, the
Exchange notes that the proposed new optional functionality may improve
the Exchange's market by attracting more order flow. Such new order
flow will further enhance the depth and liquidity on the Exchange,
which supports just and equitable principals of trade. Furthermore, the
proposed modification to the Minimum Execution Quantity instruction is
consistent with providing market participants with greater control over
the nature of their executions so that they may achieve their trading
goals and improve the quality of their executions.
---------------------------------------------------------------------------

    \36\ As noted, the proposal is designed to attract liquidity to
the Exchange by allowing market participants to designate a minimum
size of a contra-side order to interact with, thus providing them
with functionality available to them on dark markets.
---------------------------------------------------------------------------

    The Exchange also believes that re-pricing incoming orders with a

Minimum Execution Quantity instruction where that order may cross an
order posted on the EDGA Book promotes just and equitable principles of
trade because it enables the Exchange to avoid an internally crossed
book. The proposed re-pricing is also similar to how the Exchange
currently reprices Non-Displayed orders that cross the Protected
Quotation of an external market.\37\ In addition, both IEX and Nasdaq
also re-price minimum quantity orders to avoid an internally crossed
book. In certain circumstances, Nasdaq re-prices buy (sell) orders to
one minimum price increment below (above) the lowest (highest) price of
such orders.\38\ IEX re-prices non-displayed orders, such as minimum
quantity orders, that include a limit price more aggressive than the
midpoint of the NBBO to the midpoint of the NBBO.\39\
---------------------------------------------------------------------------

    \37\ See Exchange Rule 11.6(l)(3).
    \38\ See Nasdaq Rule 4703(e).
    \39\ See IEX Rule 11.190(h)(2).
---------------------------------------------------------------------------

    These proposed amendments are identical to changes recently
proposed by EDGX that were published by the Commission for immediate
effectiveness.\40\ Moreover, the proposed optional functionality for
the Minimum Execution Quantity instruction is also substantially
similar to that offered by Nasdaq and IEX, both of which have been
recently approved by the Commission.\41\ Lastly, the proposed
clarifications of the handing of orders with a Minimum Execution
Quantity upon entry and once posted to the EDGA Book would add
additional specificity to the operation of the Minimum Execution
Quantity instruction and are consistent with similar functionality
offered by Nasdaq.\42\
---------------------------------------------------------------------------

    \40\ See supra note 5.
    \41\ See Nasdaq Rule 4703(e) (defining Minimum Quantity). See
also Securities Exchange Act Release No. 73959 (December 30, 2014),
80 FR 582 (January 6, 2015) (order approving new optional
functionality for Minimum Quantity Orders). See IEX Rule
11.190(b)(11) and Supplementary Material .03 (defining Minimum
Quantity Orders and MinExec with Cancel Remaining and MinExec with
AON Remaining). See also Securities Exchange Act Release No. 78101
(June 17, 2016), 81 FR 41141 (June 23, 2016) (order approving the
IEX exchange application, which included IEX's Minimum Quantity
Orders). See also IEX Rule 11.190(d)(3) (allowing the minimum
quantity size of an order to be changed via a replace message).
    \42\ See supra note 5.
---------------------------------------------------------------------------

Clarification to Exchange Rules 11.8(b)(3) and 11.10(e)(3)
    The Exchange believes the proposed amendments to paragraph (b)(3)
of Rule 11.8 and paragraph (e)(3) of Rule 11.10 are also consistent
with the Act in that they will add additional specificity to the rules.
In particular, the proposed amendments to paragraph (b)(3) to Rule 11.8
would add additional specificity regarding the order type instructions
that may be coupled with a Limit Order. The Exchange notes that this is
also consistent with the treatment of Minimum Quantity Orders on
BZX,\43\ thereby making the rule clearer and avoiding potential
investor confusion. Also, the amendments to paragraph (e)(3) of Rule
11.10 will ensure the rule uses terminology consistent with the
description of Replace messages and their impact on an order's priority
under Exchange Rule 11.9(a)(4).
---------------------------------------------------------------------------

    \43\ See BZX Rule 11.9(c)(5) (stating that BZX will only honor a
specified minimum quantity on BZX Only Orders that are non-displayed
or IOCs).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended. On
the contrary, the Exchange believes the proposed rule change promotes
competition because it will enable the Exchange to offer functionality
substantially similar to that offered by Nasdaq and IEX.\44\ In
addition, the proposed amendments to paragraph (b)(3) of Rule 11.8 and
paragraph (e)(3) of Rule 11.10 would not have any impact on competition
as they simply add additional details to each rule and do not alter
current System functionality. Therefore, the Exchange does not believe
the proposed rule change will result in any burden on intermarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
---------------------------------------------------------------------------

    \44\ See supra note 41.
---------------------------------------------------------------------------

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

    No comments were solicited or received 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) by
its terms, 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 \45\ and
paragraph (f)(6) of Rule 19b-4 thereunder.\46\ The Exchange has given
the Commission written notice of its intent to file the proposed rule
change, along with a brief description and 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.
---------------------------------------------------------------------------

    \45\ 15 U.S.C. 78s(b)(3)(A).
    \46\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    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<EMAIL_ADDRESS>Please include
File Number SR-BatsEDGA-2017-26 on the subject line.

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-2017-26. 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-2017-26, and should
be submitted on or before November 8, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\47\
---------------------------------------------------------------------------

    \47\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-22518 Filed 10-17-17; 8:45 am]
BILLING CODE 8011-01-P