[Federal Register Volume 76, Number 150 (Thursday, August 4, 2011)]
[Notices]
[Pages 47285-47286]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-19747]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64990; File No. SR-EDGX-2011-22]
Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Amendments to the EDGX Exchange, Inc. Fee Schedule
July 29, 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 July 27, 2011, the EDGX Exchange, Inc. (the ``Exchange'' or the
``EDGX'') 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 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 amend its fees and rebates applicable to
Members \3\ of the Exchange pursuant to EDGX Rule 15.1(a) and (c). All
of the changes described herein are applicable to EDGX Members. The
text of the proposed rule change is available on the Exchange's
Internet Web site at http://www.directedge.com.
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\3\ A Member is any registered broker or dealer, or any person
associated with a registered broker or dealer, that has been
admitted to membership in the Exchange.
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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 self-regulatory organization
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
Currently, the BY flag is yielded when an order is routed to BATS
BYX Exchange and removes liquidity using order types ROUC and ROBY, as
defined in Exchange Rules 11.9(b)(3)(a) and (g). The Exchange proposes
to decrease the rebate from $0.0004 to $0.0002 when an order is routed
to BATS BYX Exchange and removes liquidity.
The Exchange also proposes to eliminate the text in footnote 7,
which describes the INET tier, and replace it with the words
``intentionally omitted.'' This tier provides that ``Members routing an
average daily volume (``ADV''): (i) Less than 5,000,000 shares will be
charged $0.0030 per share, as described in the schedule; (ii) equal to
or greater than 5,000,000 shares but less than 20,000,000 shares will
be charged Nasdaq's best removal tier rate per share; (iii) equal to or
greater than 20,000,000 shares but less than 30,000,001 shares will be
charged Nasdaq's best removal tier rate--$0.0001 per share; and (iv)
equal to or greater than 30,000,001 shares will be charged Nasdaq's
best removal tier rate--$0.0002 per share. The rates, in all cases, are
calculated for shares removed from Nasdaq.'' Conforming changes have
been made to eliminate the references to footnotes 7 and a on Flags 2
and L, as they are no longer applicable.
The Exchange proposes to implement these amendments to its fee
schedule on August 1, 2011.
2. Statutory Basis
The Exchange believes that the proposed rule changes are consistent
with the objectives of Section 6 of the Exchange Act,\4\ in general,
and furthers the objectives of Section 6(b)(4),\5\ in particular, as it
is designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its members and other persons using its
facilities.
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\4\ 15 U.S.C. 78f.
\5\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed decrease in rebate
associated with the BY flag (from $0.0004 per share to $0.0002 per
share) represents an equitable allocation of reasonable dues, fees, and
other charges since it reflects a pass through of the BATS fee for
removing liquidity. EDGA believes that it is reasonable and equitable
to pass on these fees to its members. The Exchange believes that the
proposed decrease in rebate is non-discriminatory in that it applies
uniformly to all Members.
The Exchange believes that the proposed elimination of the INET
tier in footnote 7 represents an equitable allocation of reasonable
dues, fees, and other charges as the INET tier is not used by any
Members and therefore, its elimination will not impact any Members. The
proposed elimination of the tier also provides more simplicity to the
fee schedule.
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.
The proposed rule changes reflect a competitive pricing structure
designed to incent market participants to direct their order flow to
the Exchange. The Exchange believes that the proposed rates are non-
discriminatory in that they apply uniformly to all Members. The
Exchange believes the fees and credits remain competitive with those
charged by other venues and therefore continue to be reasonable and
equitably allocated to Members.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3) of the Act \6\ and Rule 19b-4(f)(2) \7\ thereunder. At any
time within 60 days of the filing of such proposed rule change, the
Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such
[[Page 47286]]
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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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 19b-4(f)(2).
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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 e-mail to [email protected]. Please include
File Number SR-EDGX-2011-22 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-EDGX-2011-22. 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 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-EDGX-2011-22 and should be
submitted on or before August 25, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-19747 Filed 8-3-11; 8:45 am]
BILLING CODE 8011-01-P