[Federal Register Volume 76, Number 95 (Tuesday, May 17, 2011)]
[Notices]
[Pages 28489-28491]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-11973]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64466; File No. SR-EDGA-2011-16]
Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule To Amend EDGA Rule
11.9 To Introduce Additional Routing Options to the Rule
May 11, 2011.
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 May 5, 2011, the EDGA Exchange, Inc. (the ``Exchange'' or the
``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 self-regulatory
organization. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to introduce additional routing options to
Rule 11.9 and amend existing routing options. The text of the proposed
rule change is available on the Exchange's Web site at http://www.directedge.com, at the Exchange's principal office, 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 self-regulatory organization 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's current list of routing options are codified in Rule
11.9(b)(3). In this filing, the Exchange proposes to amend Rule
11.9(b)(3) to add three new additional strategies and amend other ones.
In Rule 11.9(b)(3), the Exchange describes that its system
(``System'') provides a variety of routing options. Routing options may
be combined with all available order types and times-in-force, with the
exception of order types and times-in-force whose terms are
inconsistent with the terms of a particular routing option. The System
will consider the quotations only of accessible markets. The term
``System routing table'' refers to the proprietary process for
determining the specific trading venues to which the System routes
orders and the order in which it routes them. The Exchange reserves the
right to maintain a different System routing table for different
routing options and to modify the System routing table at any time
without notice. The new System routing options are described in more
detail below.
The Exchange proposes to introduce the ROBB and ROCO routing
strategies and add them to Rules 11.9(b)(3)(c)(vi)-(vii). ROBB/ROCO are
routing options under which an order checks the System for available
shares and then are sent to destinations on the System routing table.
If shares remain unexecuted after routing, they are posted on the book,
unless otherwise
[[Page 28490]]
instructed by the User.\3\ The difference between the latter two
strategies lies in the difference in the System routing tables for the
ROBB/ROCO strategies.
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\3\ As defined in Rule 1.5 (cc).
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The Exchange also proposes to amend the descriptions in
Rules11.9(b)(3)(b) (ROUD), 11.9(b)(3)(l) (IOCX), 11.9(b)(3)(m) (IOCT),
11.9(b)(3)(r), as proposed to be re-lettered as described below (IOCM),
11.9(b)(3)(s), as proposed to be re-lettered as described below (ICMT),
to modify the routing strategies such that if shares remain unexecuted
after routing, they are posted on the book, unless otherwise instructed
by the User. The Exchange proposes to amend the description of the
routing strategies listed in Rule 11.9(b)(3)(c) to state that if shares
remain unexecuted after routing, they are posted on the book, unless
otherwise instructed by the User.
The same revision is also proposed to other routing strategies that
currently cancel back to the User if shares remain unexecuted after
routing. These include Rules 11.9(b)(3)(e) (ROBA), 11.9(b)(3)(f)
(ROBX), 11.9(b)(3)(g) (ROBY) and 11.9(b)(3)(k) (ROPA).
The Exchange also proposes to amend the descriptions of the IOCX
and IOCT routing strategies in Rules 11.9(b)(3)(l)-(m) to describe that
for each strategy, routed orders are sent, as an immediate or cancel
(IOC) order, to EDGX. The IOC designation pertains only to the routed
order. If shares remain unexecuted after routing, the order returns to
its original parent order without the IOC designation and it posts to
the book, unless otherwise instructed by the User. The Exchange also
proposes to amend Rules 11.9(b)(3)(e) (ROBA), (b)(3)(f) (ROBX),
(b)(3)(g) (ROBY), (b)(3)(k) (ROPA), (b)(3)(l)-(m) (IOCX/IOCT), and
(b)(3)(r)-(s)(IOCM/ICMT), as proposed to be re-lettered as described
below, to move the placement of the text of ``immediate or cancel
order'' within these descriptions to clarify this point.
The Exchange also proposes to introduce the SWPC routing strategy
and add it to proposed Rule 11.9(b)(3)(q). SWPC is a routing option
under which an order checks the System for available shares and then is
sent to only Protected Quotations and only for displayed size. To the
extent that any portion of the order is unexecuted, the remainder is
posted on the book at the order's limit price. The entire SWPC order
will not be cancelled back to the User immediately if at the time of
entry there is an insufficient share quantity in the SWPC order to
fulfill the displayed size of all Protected Quotations. The Exchange
believes that the proposed introduction of the SWPC routing option will
provide market participants with greater flexibility in routing orders
consistent with Regulation NMS. This proposed rule change is similar to
NASDAQ Rule 4758(a)(1)(A)(vi) (NASDAQ's ``MOPP'' strategy) and BATS
Exchange, Inc. Rule 11.13(a)(3)(D) (``Parallel T'').\4\
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\4\ See, e.g., NASDAQ Rule 4758, BATS Rule 11.13(a)(3)(D).
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As a result of the insertion of the SWPC routing strategy into Rule
11.9(b)(3)(r), the Exchange also proposes to move the existing
descriptions of IOCM and ICMT from Rules 11.9(b)(3)(c)(q)-(r) into
Rules 11.9(b)(3)(c)(r)-(s), respectively.
The Exchange believes that the proposed introduction of these
routing options, described above, will provide market participants with
greater flexibility in routing orders, without having to develop their
own complicated routing strategies.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b)(5) of the Act,\5\ which requires the rules of an
exchange 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. The proposed change to introduce the routing options
described above will provide market participants with greater
flexibility in routing orders without developing complicated order
routing strategies on their own.
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\5\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
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 \6\ and Rule 19b-
4(f)(6)(iii) thereunder.\7\
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.
EDGA has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.\8\
However, Rule 19b-4(f)(6) \9\ permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay so that the proposal may
become operative upon filing, as the Exchange would like to make the
additional strategies available on or about May 23, 2011. The Exchange
notes that waiver of this requirement will allow the Exchange to
immediately offer Exchange users new routing strategies, and the
inability to immediately offer the new routing strategies would put the
Exchange at a competitive disadvantage. The Commission believes that
waiving the 30-day operative delay is consistent with the protection of
investors and the public interest because such waiver would allow the
new routing strategies to become immediately available to Exchange
users. For this reason, the Commission designates the proposed rule
change to be operative upon filing with the Commission.\10\
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\8\ 17 CFR 240.19b-4(f)(6)(iii).
\9\ Id.
\10\ For the purposes only of waiving the 30-day operative
delay, the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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.
[[Page 28491]]
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-EDGA-2011-16 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-EDGA-2011-16. 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 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-
EDGA-2011-16 and should be submitted on or before June 7, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-11973 Filed 5-16-11; 8:45 am]
BILLING CODE 8011-01-P