[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62854-62855]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-24554]
[[Page 62854]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70600; File No. SR-EDGA-2013-30]
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
October 2, 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 September 30, 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.
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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 EDGA Rule 15.1(a) and (c)
(``Fee Schedule'') to decrease the rebate for orders yielding Flag RZ.
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.
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\3\ The term ``Member'' is defined as ``any registered broker or
dealer, or any person associated with a registered broker or dealer,
that has been admitted to membership in the Exchange. A Member will
have the status of a ``member'' of the Exchange as that term is
defined in Section 3(a)(3) of the Act.'' See Exchange Rule 1.5(n).
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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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its Fee Schedule to decrease the
rebate for orders yielding Flag RZ. In securities priced at or above
$1.00, the Exchange currently provides a rebate of $0.0025 per share
for Members' orders that yield Flag RZ, which routes to the BATS
Exchange Inc. (``BATS'') and adds liquidity. The Exchange proposes to
amend its Fee Schedule to decrease this rebate to $0.0020 per share for
Members' orders that yield Flag RZ. 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 routing orders to BATS when it does not qualify for a
volume tiered rebate. When DE Route routes to BATS, it is rebated a
standard rate of $0.0020 per share.\4\ DE Route will pass through this
rate on BATS to the Exchange and the Exchange, in turn, will pass
through this rate to its Members. The Exchange notes that the proposed
change is in response to BATS's October 2013 fee change where BATS
decreased the rebate it provides its customers, such as DE Route, from
a rebate of $0.0025 per share to a rebate of $0.0020 per share that are
routed to BATS.\5\
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\4\ The Exchange notes that to the extent DE Route does or does
not achieve any volume tiered discount on BATS, its rate for Flag RZ
will not change.
\5\ See BATS Exchange Pricing Effective October 1, 2013, http://cdn.batstrading.com/resources/fee_schedule/2013/BATS-BZX-Exchange-Pricing-Effective-October-1-2013.pdf (offering a standard, non-
tiered rebate of $0.0020 per share).
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Implementation Date
The Exchange proposes to implement these amendments to its Fee
Schedule on October 1, 2013.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\6\ in general, and
furthers the objectives of Section 6(b)(4),\7\ 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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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that its proposal to decrease the pass
through rebate for Members' orders that yield Flag RZ from $0.0025 to
$0.0020 per share represents an equitable allocation of reasonable
dues, fees, and other charges among 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 BATS through DE Route.
Prior to BATS's October 2013 fee change, BATS provided DE Route a
rebate of $0.0025 per share for orders yielding Flag RZ, which DE Route
passed through to the Exchange and the Exchange passed through to its
Members. In October 2013, BATS decreased the standard rebate it
provides its customers, such as DE Route, from a rebate of $0.0025 per
share to a rebate of $0.0020 per share for orders that are routed to
BATS.\8\ Therefore, the Exchange believes that the proposed change in
Flag RZ from a rebate of $0.0025 per share to a rebate of $0.0020 per
share is equitable and reasonable because it accounts for the pricing
changes on BATS. In addition, the proposal allows the Exchange to
continue to charge its Members a pass-through rate for orders that are
routed to BATS. 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.
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\8\ See BATS Exchange Pricing Effective October 1, 2013, http://cdn.batstrading.com/resources/fee_schedule/2013/BATS-BZX-Exchange-Pricing-Effective-October-1-2013.pdf (offering a standard, non-
tiered rebate of $0.0020 per share).
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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 EDGA's pricing if they
believe that alternatives offer them better value. Accordingly, the
Exchange does not believe that the proposed changes will 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
$0.0020 per share for Members' orders that yield Flag RZ would increase
intermarket competition because it offers customers an alternative
means to route to BATS for the same price as entering orders on BATS
directly. The Exchange believes that its proposal would not burden
intramarket
[[Page 62855]]
competition because the proposed rate would apply uniformly to all
Members.
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 \9\ and Rule 19b-4(f)(2) \10\ 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.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-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 email to [email protected]. Please include
File Number SR-EDGA-2013-30 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-2013-30. 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-2013-30 and should be
submitted on or before November 12, 2013.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24554 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P