Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Period of the Inbound Router, as Described in EDGX Rule 2.12(b), 25388-25389 [2011-10807]

Download as PDF 25388 Federal Register / Vol. 76, No. 86 / Wesnesday, May 4, 2011 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Cathy H. Ahn, Deputy Secretary. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64361; File No. SR–EDGX– 2011–12] Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Period of the Inbound Router, as Described in EDGX Rule 2.12(b) April 28, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 20, 2011, EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘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 Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend the pilot period of the Exchange’s inbound router, as described in Rule 2.12(b), so that the Exchange can receive inbound routes of equities orders through DE Route, the Exchange’s routing broker dealer, from EDGA Exchange, Inc. (‘‘EDGA’’). The text of the proposed rule change is attached as Exhibit 5 and is available on the Exchange’s Web site at http://www.directedge.com, at the Exchange’s principal office, and at the Public Reference Room of the Commission. jlentini on DSKJ8SOYB1PROD with NOTICES 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 10 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. VerDate Mar<15>2010 19:51 May 03, 2011 Jkt 223001 B. Self-Regulatory Organization’s Statement on Burden on Competition A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change [FR Doc. 2011–10808 Filed 5–3–11; 8:45 am] 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. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others 1. Purpose 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. Currently, Direct Edge ECN, LLC d/b/a DE Route (‘‘DE Route’’) is the approved outbound order routing facility of EDGA.3 The Exchange, through DE Route, has also been approved to receive inbound routes of equities orders by DE Route from EDGA. The Exchange’s authority to receive inbound routes of equities orders by DE Route from EDGA is subject to a pilot period of twelve months, ending July 1, 2011. The Exchange hereby seeks to extend the previously approved pilot period (with the attendant obligations and conditions outlined in the Commission’s Approval Order) for an additional twelve months, through June 30, 2012. This is reflected in the proposed amendment to EDGX Rule 2.12(b). 2. Statutory Basis The statutory basis for the proposed rule change is Section 6(b)(5) of the Act,4 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, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and, in general, to protect investors and the public interest. Specifically, the proposed rule change will allow the Exchange to continue receiving inbound routes of equities orders from DE Route acting in its capacity as a facility of EDGA, in a manner consistent with prior approvals and established protections. The Exchange believes that extending the previously approved pilot period for twelve months will permit both the Exchange and the Commission to further assess the impact of the Exchange’s authority to receive direct inbound routes of equities orders via DE Route, including the attendant obligations and conditions. 3 See Securities Exchange Act Release No. 61698 (March 12, 2010), 75 FR 13151 (March 18, 2010) (hereinafter referred to as the ‘‘Commission’s Approval Order’’). 4 15 U.S.C. 78f(b)(5). PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 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. 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 5 and Rule 19b–4(f)(6)(iii) thereunder.6 A proposed rule change filed under Rule 19b–4(f)(6) 7 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),8 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. 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. 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 5 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6)(iii). 7 17 CFR 240.19b–4(f)(6). 8 17 CFR 240.19b–4(f)(6)(iii). 6 17 E:\FR\FM\04MYN1.SGM 04MYN1 Federal Register / Vol. 76, No. 86 / Wesnesday, May 4, 2011 / Notices • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–EDGX–2011–12 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. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64360; File No. SR–DTC– 2011–05] Self-Regulatory Organizations; The Depository Trust Company; Notice of Filing of Proposed Rule Change To Amend Rules Relating to the Memo Segregation Function April 28, 2011. All submissions should refer to File Number SR–EDGX–2011–12. 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.9 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– 2011–12 and should be submitted on or before May 25, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder 2 notice is hereby given that on April 15, 2011, The Depository Trust Company (‘‘DTC’’) 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 primarily by DTC.3 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Cathy H. Ahn, Deputy Secretary. (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change Rule 15c3–3 (‘‘Customer Protection Rule’’), which was implemented by the Commission under the Act, requires, [FR Doc. 2011–10807 Filed 5–3–11; 8:45 am] jlentini on DSKJ8SOYB1PROD with NOTICES BILLING CODE 8011–01–P I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The purpose of this proposed rule change is to amend DTC’s rules relating to its Memo Segregation Service to no longer permit stock loan or stock loan return-related turnaround deliveries for a security when there is a deficit in the Memo Segregation account. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, DTC 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. DTC has prepared summaries, set forth in sections (A), (B), and (C) below, of the most significant aspects of these statements.4 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 The text of the proposed rule change is attached as Exhibit 5 to DTC’s filing, which is available at http://www.dtcc.com/downloads/legal/rule_filings/ 2010/dtc/2011-05.pdf. 4 The Commission has modified the text of the summaries prepared by DTC. 2 17 9 The text of the proposed rule change is available on the Commission’s Web site at http:// www.sec.gov. 10 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 17:45 May 03, 2011 Jkt 223001 PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 25389 among other things, that broker-dealers maintain possession or control of fullypaid or excess margin securities they hold for the account of customers.5 DTC’s Memo Segregation Service (‘‘MSEG’’) is an optional service which offers a mechanism for broker-dealer participants to protect fully-paid or excess margin securities by allowing the participant to shield from unintended delivery a designated quantity of securities that are in the participant’s DTC free account or that may be received during the daily processing cycle. In this regard, the participant may set a ‘‘counter’’ for a specified minimum quantity of each security to be held in its account as a threshold to any redelivery intraday. When the counter for a security is greater than the inventory of the participant, MSEG will prevent the delivery of any quantity of the affected security out of the participant’s account unless: (1) The delivery is a permitted delivery (e.g., a free of value ACATS delivery or a ‘‘turnaround’’ as described below) or (2) the participant provides DTC with new instructions to reduce the MSEG counter. The MSEG procedures currently support two optional ‘‘turnaround’’ MSEG indicators which enable participants to make deliveries for certain transaction types (including, but not limited to, stock loans and stock loan returns) from certain positions received intraday regardless of any MSEG-related deficit. Recently, DTC was advised by the Regulatory and Clearance Committee of the Securities Operations Section of SIFMA that several broker-dealer participants had expressed concern that their practices for turnaround of stock loans and stock loan returns (i.e., MSEG overrides) may be deemed by FINRA to be contrary to the Customer Protection Rule. DTC also communicated directly with participants affected through their use of this functionality, and they expressed similar concerns. In order to accommodate its participants in this regard, DTC is therefore proposing to revise its procedures so that MSEG would no longer permit stock loan or stock loan return-related turnaround deliveries for a security when there is an MSEG deficit in the account. In order to effect the proposed change described above, DTC will amend its Settlement Service Guide (‘‘Service Guide’’), which is incorporated into DTC’s procedures, to make existing indicators that allow for the turnaround of stock loans and stock loan returns more restrictive. As a result, the 5 17 CFR 204.15c3–3. E:\FR\FM\04MYN1.SGM 04MYN1

Agencies

[Federal Register Volume 76, Number 86 (Wednesday, May 4, 2011)]
[Notices]
[Pages 25388-25389]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10807]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64361; File No. SR-EDGX-2011-12]


Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Extend 
the Pilot Period of the Inbound Router, as Described in EDGX Rule 
2.12(b)

April 28, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on April 20, 2011, EDGX Exchange, Inc. (the ``Exchange'' or ``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 Exchange. 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 extend the pilot period of the Exchange's 
inbound router, as described in Rule 2.12(b), so that the Exchange can 
receive inbound routes of equities orders through DE Route, the 
Exchange's routing broker dealer, from EDGA Exchange, Inc. (``EDGA''). 
The text of the proposed rule change is attached as Exhibit 5 and is 
available on the Exchange's Web site at http://www.directedge.com, at 
the Exchange's principal office, and at the Public Reference Room of 
the Commission.

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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Currently, Direct Edge ECN, LLC d/b/a DE Route (``DE Route'') is 
the approved outbound order routing facility of EDGA.\3\ The Exchange, 
through DE Route, has also been approved to receive inbound routes of 
equities orders by DE Route from EDGA. The Exchange's authority to 
receive inbound routes of equities orders by DE Route from EDGA is 
subject to a pilot period of twelve months, ending July 1, 2011. The 
Exchange hereby seeks to extend the previously approved pilot period 
(with the attendant obligations and conditions outlined in the 
Commission's Approval Order) for an additional twelve months, through 
June 30, 2012. This is reflected in the proposed amendment to EDGX Rule 
2.12(b).
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    \3\ See Securities Exchange Act Release No. 61698 (March 12, 
2010), 75 FR 13151 (March 18, 2010) (hereinafter referred to as the 
``Commission's Approval Order'').
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2. Statutory Basis
    The statutory basis for the proposed rule change is Section 6(b)(5) 
of the Act,\4\ 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, 
to foster cooperation and coordination with persons engaged in 
facilitating transactions in securities, and, in general, to protect 
investors and the public interest. Specifically, the proposed rule 
change will allow the Exchange to continue receiving inbound routes of 
equities orders from DE Route acting in its capacity as a facility of 
EDGA, in a manner consistent with prior approvals and established 
protections. The Exchange believes that extending the previously 
approved pilot period for twelve months will permit both the Exchange 
and the Commission to further assess the impact of the Exchange's 
authority to receive direct inbound routes of equities orders via DE 
Route, including the attendant obligations and conditions.
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    \4\ 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 \5\ and Rule 19b-
4(f)(6)(iii) thereunder.\6\
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6)(iii).
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    A proposed rule change filed under Rule 19b-4(f)(6) \7\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\8\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
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    \7\ 17 CFR 240.19b-4(f)(6).
    \8\ 17 CFR 240.19b-4(f)(6)(iii).
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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. 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

[[Page 25389]]

     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-EDGX-2011-12 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-2011-12. 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.\9\ 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-2011-12 and should be 
submitted on or before May 25, 2011.
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    \9\ The text of the proposed rule change is available on the 
Commission's Web site at  http://www.sec.gov.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-10807 Filed 5-3-11; 8:45 am]
BILLING CODE 8011-01-P