[Federal Register Volume 78, Number 90 (Thursday, May 9, 2013)]
[Notices]
[Pages 27265-27267]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-11018]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69505; File No. SR-EDGA-2013-12]
Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Amendments to the EDGA Exchange, Inc. Fee Schedule
May 3, 2013.
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 1, 2013, EDGA Exchange, Inc. (the ``Exchange'' or ``EDGA'')
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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
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 EDGA Rule 15.1(a) and (c). All
of the changes described herein are applicable to EDGA Members. The
text of the proposed rule change is available on the Exchange's
Internet Web site at www.directedge.com, at the Exchange's principal
office, and at the Public Reference Room of the Commission.
---------------------------------------------------------------------------
\3\ As defined in Exchange Rule 1.5(n).
---------------------------------------------------------------------------
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
In securities priced at or above $1.00, the Exchange currently
provides a rebate of $0.0002 per share for Members' orders that yield
Flag BY, which routes to BATS BYX (``BYX'') and removes liquidity using
routing strategies ROUC, ROUE, ROBY, ROBB or ROCO.\4\ The Exchange
proposes to amend its fee schedule to increase the rebate it provides
Members from $0.0002 per share to $0.0005 per share for Flag BY. The
proposed change represents a pass through of the rate that Direct Edge
ECN LLC (d/b/a DE Route) (``DE Route''), the Exchange's affiliated
routing broker-dealer, is rebated for adding an average volume of
50,000 shares per day on BYX.\5\ DE Route passes through the rebate to
the Exchange and the Exchange, in turn, passes through the rebate to
its Members. The Exchange notes that the proposed change is in response
to BYX's April 2013 fee filing with the Commission, wherein BYX
increased the rate it rebates its customers, such as DE Route, from
$0.0002 per share to a rebate of $0.0005 per share for orders that are
routed to BYX and add a daily volume of at least 50,000 shares and
remove liquidity.\6\
---------------------------------------------------------------------------
\4\ As defined in Exchange Rule 11.9(b)(2).
\5\ The Exchange notes that to the extent DE Route does or does
not achieve any volume tiered rebate on BYX, its rate for Flag BY
will not change.
\6\ See Securities Exchange Act Release No. 69317 (April 5,
2013), 78 FR 21651 (April 11, 2013) (SR-BYX-2013-012) (amending the
rebate BYX provides for removing liquidity from the BYX order book
for executions by members that add a daily average volume of at
least 50,000 shares from $0.0002 per share to $0.0005 per share).
---------------------------------------------------------------------------
In securities priced at $1.00 or above, the Exchange currently
assesses a charge of $0.0005 per share for Members' orders that yield
Flag RY, which routes to BYX and adds liquidity. The Exchange proposes
to amend its fee schedule to increase the rate it charges Members from
$0.0005 per share to $0.0007 per share for Flag RY. The proposed change
represents a pass through of the rate that DE Route is charged for
routing orders to BYX that do not qualify for additional volume tiered
discounts.\7\ DE Route passes through the charge to the Exchange and
the Exchange, in turn, passes through the charge to its Members. The
Exchange notes that the proposed change is in response to BYX's April
2013 fee filing with the Commission,
[[Page 27266]]
wherein BYX increased the rate it charges its customers, such as DE
Route, from a charge of $0.0005 per share to a charge of $0.0007 per
share for orders that are routed to BYX and add liquidity.\8\
---------------------------------------------------------------------------
\7\ The Exchange notes that to the extent DE Route does or does
not achieve any volume tiered rebate on BYX, its rate for Flag RY
will not change.
\8\ See Securities Exchange Act Release No. 69317 (April 5,
2013), 78 FR 21651 (April 11, 2013) (SR-BYX-2013-012) (amending the
rate BYX charges for adding displayed liquidity to the BYX order
book for executions by members that do not qualify for a reduced
charge from $0.0005 per share to $0.0007 per share).
---------------------------------------------------------------------------
The Exchange proposes to implement these amendments to its fee
schedule on May 1, 2013.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\9\ in general, and
furthers the objectives of Section 6(b)(4),\10\ 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.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that its proposal to pass through the
increased rebate of $0.0005 per share for Members' orders that yield
Flag BY represents an equitable allocation of reasonable dues, fees and
other charges among its Members and other persons using its facilities
because the Exchange does not levy additional fees or offer additional
rebates for orders that it routes to BYX through DE Route. Prior to
BYX's April 2013 fee filing, BYX provided DE Route a rebate of $ 0.0002
per share for orders yielding Flag BY, which DE Route passed through to
the Exchange and the Exchange passed through to its Members. In BYX's
April 2013 fee filing, BYX increased the rebate it provides its
customers, such as DE Route, from $0.0002 per share to a rebate of
$0.0005 per share for orders that are routed to BYX and remove
liquidity.\11\ Therefore, the Exchange's proposal allows the Exchange
to continue to provide its Members a pass-through rate for orders that
are routed to BYX and remove liquidity through DE Route. The Exchange
notes that routing through DE Route is voluntary. Lastly, the Exchange
also believes that the proposed amendment is non-discriminatory because
it applies uniformly to all Members.
---------------------------------------------------------------------------
\11\ See Securities Exchange Act Release No. 69317 (April 5,
2013), 78 FR 21651 (April 11, 2013) (SR-BYX-2013-012) (amending the
rebate BYX provides for removing liquidity from the BYX order book
for executions by members that add a daily average volume of at
least 50,000 shares from $0.0002 per share to $0.0005 per share).
---------------------------------------------------------------------------
The Exchange believes that its proposal to pass through a charge of
$0.0007 for Members' orders that yield Flag RY represents an equitable
allocation of reasonable dues, fees, and other charges among Members of
the Exchange and other persons using its facilities because the
Exchange does not levy additional fees or offer additional rebates for
orders that it routes to BYX through DE Route. Prior to BYX's April
2013 fee filing, BYX charged DE Route a fee of $ 0.0005 per share for
orders yielding Flag RY, which DE Route passed through to the Exchange
and the Exchange passed through to its Members. In BYX's April 2013 fee
filing, BYX increased the rate it charges its customers, such as DE
Route, from $0.0005 per share to a charge of $0.0007 per share for
orders that are routed to BYX and add liquidity. Therefore, the
Exchange believes that the proposed change in Flag RY from a fee of
$0.0005 per share to a fee of $0.0007 per share is equitable and
reasonable because it accounts for the pricing changes on BYX. In
addition, the proposal allows the Exchange to continue to charge its
Members a pass-through rate for orders that are routed to BYX and add
liquidity using DE Route. The Exchange notes that routing through DE
Route is voluntary. Lastly, the Exchange also believes that the
proposed amendment is non-discriminatory because it applies uniformly
to all Members.
B. Self-Regulatory Organization's Statement on Burden on Competition
These proposed rule changes do not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. The Exchange does not believe that any of these changes
represent a significant departure from previous pricing offered by the
Exchange or pricing offered by the Exchange's competitors.
Additionally, Members may opt to disfavor the Exchange's pricing if
they believe that alternatives offer them better value. Accordingly,
the Exchange believes that the proposed changes would not impair the
ability of Members or competing venues to maintain their competitive
standing in the financial markets.
The Exchange believes that its proposal to pass through a rebate of
$0.0005 per share for Members' orders that yield Flag BY would increase
intermarket competition because it offers customers an alternative
means to route to BYX and remove liquidity for the same price as
entering orders on BYX directly. The Exchange believes its proposal
would not burden intramarket competition because the proposed rate
would apply uniformly to all Members.
The Exchange believes that its proposal to pass through a charge of
$0.0007 per share for Members' orders that yield Flag RY would increase
intermarket competition because it offers customers an alternative
means to route to BYX and add liquidity for the same price as entering
orders on BYX directly. The Exchange believes that its proposal would
not burden intramarket competition because the proposed rate would
apply uniformly to all Members.
The Exchange believes that its proposal would increase competition
for routing services because the market for order execution is
competitive and the Exchange's proposal provides customers with another
alternative to route their orders. The Exchange notes that routing
through DE Route is voluntary.
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)(A) of the Act \12\ and Rule 19b-4(f)(2) \13\ 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 action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
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 protected]. Please
include File Number SR-EDGA-2013-12 on the subject line.
[[Page 27267]]
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-2013-12. 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-EDGA-2013-12 and should be
submitted on or before May 30, 2013.
---------------------------------------------------------------------------
\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11018 Filed 5-8-13; 8:45 am]
BILLING CODE 8011-01-P