[Federal Register Volume 79, Number 78 (Wednesday, April 23, 2014)]
[Notices]
[Pages 22739-22741]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-09207]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71963; File No. SR-EDGX-2014-11]
Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its
ROOC Routing Option Under EDGX Rule 11.9(b)(2)(n)
April 17, 2014.
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 April 14, 2014, EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') 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 amend its ROOC routing option under Rule
11.9(b)(2)(n) to include the ability to route orders to participate in
the listing market's re-opening process following a halt, suspension or
pause. 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.
[[Page 22740]]
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 ROOC routing option under Rule
11.9(b)(2)(n) to include the ability to route orders to participate in
the listing market's re-opening process following a halt, suspension or
pause. The Exchange offers its Users \3\ optional routing functionality
that allows them to use the Exchange's facilities to access liquidity
on other trading centers. The functionality includes a range of defined
routing algorithms that determine the destination or pattern of
routing. Exchange Rule 11.9(b)(2) sets forth the particular pattern of
routing to other trading centers, known as the ``System routing table''
as well as the Exchange's available routing options. All routing is
designed to be conducted in a manner consistent with Regulation NMS.
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\3\ The term ``User'' is defined as ``any Member or Sponsored
Participant who is authorized to obtain access to the System
pursuant to Rule 11.3.'' See Exchange Rule 1.5(ee).
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The Exchange currently offers a routing option, known as ROOC,
which allows Users to route orders to participate in the opening or
closing process of the listing market (New York Stock Exchange
(``NYSE''), Nasdaq, NYSE MKT,\4\ or NYSE Arca). Orders to be routed
pursuant to the ROOC routing option must be received before the
opening/closing time of such market. If shares remain unexecuted after
attempting to execute in the opening or closing process, they are
either posted to the EDGX Book,\5\ executed, or routed like the
Exchange's ROUT routing option.\6\
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\4\ Formally known as NYSE Amex. The Exchange is amending Rule
11.9(b)(2)(n) to reflect the change in this exchange's name.
\5\ The ``EDGX Book'' is defined as the ``System's electronic
file of orders.'' See Exchange Rule 1.5(d).
\6\ See Exchange Rule 11.9(b)(c)(ii).
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The Exchange proposes to amend the ROOC routing option to allow
Users to route orders to participate in the listing market's re-opening
process following a halt, suspension or pause,\7\ in addition to the
listing market's opening or closing process. Orders that the User
wishes to participate in the listing market's re-opening process will
be handled in the same manner as orders that are to participate in the
opening and closing process. Such orders must be received before the
re-opening time on such market. In addition, any shares that remain
unexecuted after attempting to execute in the listing market's re-
opening process will be either posted to the EDGX Book, executed, or
routed pursuant to the Exchange's ROUT routing option.
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\7\ The ROOC routing option would route orders to participate in
the listing market's re-opening process following a halt, suspension
or pause during Regular Trading Hours only. Regular Trading Hours is
defined as the ``time between 9:30 a.m. and 4:00 p.m. Eastern
Time.'' See Exchange Rule 1.5(y).
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \8\ in general, and furthers the objectives of Section
6(b)(5) of the Act \9\ in particular, in that it is designed to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, 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 Exchange believes that
the proposed rule change will increase the flexibility of market
participant's [sic] by expanding the ROOC routing option beyond the
listing market's opening and closing process to also include the
ability to route orders to participate in re-openings following a halt,
suspension or pause. As a result, Users will have access to additional
sources of liquidity, potentially benefiting from improved execution
prices and a more efficient marketplace. Therefore, the Exchange
believes the proposed rule change will provide User with greater
control and flexibility over their routing of orders, thereby
facilitating transactions in securities and perfecting the mechanism of
the national market system.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. To the contrary, the Exchange
believes that the proposal will promote competition by enhancing the
value of the Exchange's available routing options. However, since the
use of the Exchange's routing options is voluntary and Users have
numerous alternative mechanisms for order routing, the changes will not
impair the ability of Users to use other means to access competing
trading venues.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
Because the 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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of 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. The
Exchange has satisfied this requirement.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \14\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6) \15\ 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 asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon
[[Page 22741]]
filing. The Exchange represents that waiver of the 30-day operative
delay would provide Users with greater flexibility and control over
their routed orders by expanding the ROOC routing option to include the
ability to route orders to participate in re-openings in a timely
manner, and, as a result, Users will have access to additional sources
of liquidity, potentially benefiting from improved execution prices and
a more efficient marketplace. The Exchange further represents that
waiving the 30-day operative delay will increase the competitiveness of
its routing functionality. The Commission believes that waiving the 30-
day operative delay is consistent with the protection of investors and
the public interest. Therefore, the Commission designates the proposal
operative upon filing.\16\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6).
\16\ For 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 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.
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-EDGX-2014-11 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-EDGX-2014-11. 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-EDGX-2014-11 and should be
submitted on or before May 14, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-09207 Filed 4-22-14; 8:45 am]
BILLING CODE 8011-01-P