March 23, 2016
File Number: SR-BatsEDGX-2016-02
The benefits of the proposed rule of Bats EDGX Exchange, Inc. far outweigh any possible negatives to the rule and its effects on shareholders and the like. The Exchange made clear and reasonable points as to their reasoning for initiating the changes. The Exchange wishes to make their Tier structure streamlined and simplified and will do so by the increase in rebate for retail orders, deleting retail order tiers, and amending tiers. Those steps will also favorably mirror the Nasdaq Stock Market, LLC, which the Exchange noted as a priority to their rule. The mirroring would be great advertisement for new potential shareholders and a great incentive for the current shareholders to remain a part of the Exchange. Another point to note is the Exchange's way of implementing the rule without discrimination. The increase in the shareholder fee percentage for retail orders that yield a certain code ensures that the change affects all the shareholders with orders that hit a certain volume and is not dependent on any other factors. A tangent benefit of the change is also the directed order flow mentioned by the Exchange. Not only will the increases and reallocations and deletions make the system more efficient, but will also make the process or retail ordering more accessible. In regards to the competitive aspect of the industry, the Exchange acknowledges that this change will not burden competition but rather encourage "intermarket" competition which would also play into the Nasdaq mirroring. The Exchange's proposed rule should be implemented because of its clear reasoning, its clear benefits, and its clear desire to improve rather than demolish its principles and business practices.