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, 47283-47285 [2011-19740]
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Federal Register / Vol. 76, No. 150 / Thursday, August 4, 2011 / Notices
III. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,13 that the
proposed rule change (SR–CBOE–2011–
039) is hereby approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–19748 Filed 8–3–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64989; File No. SR–EDGA–
2011–23]
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
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 EDGA Exchange, Inc. (the
‘‘Exchange’’ or the ‘‘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 selfregulatory organization. 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
sroberts on DSK5SPTVN1PROD with NOTICES
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 https://
www.directedge.com.
13 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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.
14 17
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17:29 Aug 03, 2011
Jkt 223001
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
With respect to the category of
securities priced at or above $1.00,
when Members add liquidity, they are
currently assessed a charge of $0.00025
per share. Alternatively, when Members
remove liquidity, they are currently
rebated in the amount of $0.00015 per
share. The Exchange proposes to amend
the fee structure (and related Flags) set
forth in the fee schedule to instead
provide a rebate for Members in the
amount of $0.0005 per share when
adding liquidity and assess a $0.0006
per share charge when removing
liquidity.
The Exchange proposes to make
conforming changes to the relevant
flags, as described below, for adding and
removing liquidity from the EDGA book.
Specifically, the Exchange proposes to:
(a) Discontinue the $0.00025 per share
charge for adding liquidity to EDGA
book in Tape B securities (Flag B) and
instead offer a rebate of $0.0005 per
share; (b) discontinue the rebate of
$0.00015 per share for removing
liquidity from the EDGA book in Tapes
B and C securities (Flag N) and instead
assess a $0.0006 per share charge; (c)
discontinue the $0.00025 per share
charge for adding liquidity to the EDGA
book in Tape A securities (Flag V) and
instead offer a rebate of $0.0005 per
share; (d) discontinue the rebate of
$0.00015 per share for removing
liquidity from the EDGA book in Tape
A securities (Flag W) and instead assess
a $0.0006 per share charge; (e)
discontinue the $0.00025 per share
charge for adding liquidity to the EDGA
book in Tape C securities (Flag Y) and
instead offer a rebate of $0.0005 per
share; (f) discontinue the $0.00025 per
share charge for adding liquidity in the
pre- and post-market trading sessions in
Tapes A and C securities (Flag 3) and
PO 00000
Frm 00144
Fmt 4703
Sfmt 4703
47283
instead offer a rebate of $0.0005 per
share; (g) discontinue the $0.00025 per
share charge for adding liquidity in the
pre- and post-market trading sessions in
Tape B securities (Flag 4) and instead
offer a rebate of $0.0005 per share; and
(h) discontinue the rebate of $0.00015
per share for removing liquidity in the
pre- and post-market trading sessions in
securities on all Tapes (Flag 6) and
instead assess a $0.0006 per share
charge.
The Exchange also proposes to delete,
in its entirety, footnote 12, which
describes a tiered rate ($0.00005 per
share) if Members, measured monthly,
post 0.9% of the Total Consolidated
Volume (‘‘TCV’’) in average daily
volume to EDGA. As a result of the
deletion of footnote 12, current
footnotes 13–14 have been re-numbered
as footnotes 12–13.
Currently, the BY flag is yielded when
an order is routed to BATS BYX
Exchange and removes liquidity using
order types ROUC, ROBY, ROBB, or
ROCO, as defined in Exchange Rules
11.9(b)(3)(a), (c), 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 change is consistent with
the objectives of Section 6 of the
Exchange Act,4 in general, and furthers
4 15
E:\FR\FM\04AUN1.SGM
U.S.C. 78f.
04AUN1
sroberts on DSK5SPTVN1PROD with NOTICES
47284
Federal Register / Vol. 76, No. 150 / Thursday, August 4, 2011 / Notices
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.
The Exchange’s proposal to provide a
rebate of $0.0005 per share for adding
liquidity and assess a charge of $0.0006
per share for removing liquidity is
designed to allow the Exchange to
compete with other market centers, and
at the same time preserve its current
spread of $0.0001 per share. Because the
Exchange’s spread remains at $0.0001
per share under the proposed rate, the
Exchange believes the proposed maker/
taker fee spread to be reasonable. The
proposed maker/taker spread is
competitive with other market centers
maker/taker spreads (BATS BZX
Exchange, $0.0001 per share), Nasdaq
($.001—($.00045) per share), and NYSE
Arca ($0.0009—($0.0002) per share).
The Exchange believes that the
proposed rate is non-discriminatory in
that it applies uniformly to all Members.
Currently, the Exchange has a taker/
maker fee structure whereby the
Exchange assesses a fee of $0.00025 per
share to add liquidity and provides a
rebate of $0.00015 per share to remove
liquidity. By changing its fee structure
to the proposed maker/taker model, the
Exchange will make it less expensive for
Members to post liquidity to EDGA. As
a result, EDGA expects to gain market
share and see its order volume increase.
Such increased volume increases
potential revenue to the Exchange, and
would allow the Exchange to spread its
administrative and infrastructure costs
over a greater number of shares, leading
to lower per share costs. These lower
per share costs would allow the
Exchange to pass on the savings to
Members in the form a rebate. The
increased liquidity also benefits all
investors by deepening EDGA’s
liquidity pool, supporting the quality of
price discovery, promoting market
transparency and improving investor
protection.
The elimination of the tier described
in footnote 12 (posting 0.9% of the TCV
in average daily volume to EDGA)
results from discussions with the
Exchange’s customers whereby the
Exchange has concluded that the tier is
not effective at incenting liquidity.
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 also 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 change reflects 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 equitable and nondiscriminatory 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
action is necessary or appropriate in the
6 15
5 15
U.S.C. 78f(b)(4).
VerDate Mar<15>2010
17:29 Aug 03, 2011
7 17
Jkt 223001
PO 00000
U.S.C. 78s(b)(3)(A).
CFR 19b–4(f)(2).
Frm 00145
Fmt 4703
Sfmt 4703
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–EDGA–2011–23 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–2011–23. 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 (https://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–EDGA–
2011–23 and should be submitted on or
before August 25, 2011.
E:\FR\FM\04AUN1.SGM
04AUN1
Federal Register / Vol. 76, No. 150 / Thursday, August 4, 2011 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Elizabeth M. Murphy,
Secretary.
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.
[FR Doc. 2011–19740 Filed 8–3–11; 8:45 am]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
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 selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
sroberts on DSK5SPTVN1PROD with NOTICES
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 https://
www.directedge.com.
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
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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.
1 15
VerDate Mar<15>2010
17:29 Aug 03, 2011
Jkt 223001
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.
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,
4 15
5 15
PO 00000
U.S.C. 78f.
U.S.C. 78f(b)(4).
Frm 00146
Fmt 4703
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 nondiscriminatory 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
6 15
7 17
Sfmt 4703
47285
E:\FR\FM\04AUN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 19b–4(f)(2).
04AUN1
]]>Agencies
[Federal Register Volume 76, Number 150 (Thursday, August 4, 2011)]
[Notices]
[Pages 47283-47285]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19740]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64989; File No. SR-EDGA-2011-23]
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
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 EDGA Exchange, Inc. (the ``Exchange'' or the
``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 https://www.directedge.com.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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
With respect to the category of securities priced at or above
$1.00, when Members add liquidity, they are currently assessed a charge
of $0.00025 per share. Alternatively, when Members remove liquidity,
they are currently rebated in the amount of $0.00015 per share. The
Exchange proposes to amend the fee structure (and related Flags) set
forth in the fee schedule to instead provide a rebate for Members in
the amount of $0.0005 per share when adding liquidity and assess a
$0.0006 per share charge when removing liquidity.
The Exchange proposes to make conforming changes to the relevant
flags, as described below, for adding and removing liquidity from the
EDGA book. Specifically, the Exchange proposes to: (a) Discontinue the
$0.00025 per share charge for adding liquidity to EDGA book in Tape B
securities (Flag B) and instead offer a rebate of $0.0005 per share;
(b) discontinue the rebate of $0.00015 per share for removing liquidity
from the EDGA book in Tapes B and C securities (Flag N) and instead
assess a $0.0006 per share charge; (c) discontinue the $0.00025 per
share charge for adding liquidity to the EDGA book in Tape A securities
(Flag V) and instead offer a rebate of $0.0005 per share; (d)
discontinue the rebate of $0.00015 per share for removing liquidity
from the EDGA book in Tape A securities (Flag W) and instead assess a
$0.0006 per share charge; (e) discontinue the $0.00025 per share charge
for adding liquidity to the EDGA book in Tape C securities (Flag Y) and
instead offer a rebate of $0.0005 per share; (f) discontinue the
$0.00025 per share charge for adding liquidity in the pre- and post-
market trading sessions in Tapes A and C securities (Flag 3) and
instead offer a rebate of $0.0005 per share; (g) discontinue the
$0.00025 per share charge for adding liquidity in the pre- and post-
market trading sessions in Tape B securities (Flag 4) and instead offer
a rebate of $0.0005 per share; and (h) discontinue the rebate of
$0.00015 per share for removing liquidity in the pre- and post-market
trading sessions in securities on all Tapes (Flag 6) and instead assess
a $0.0006 per share charge.
The Exchange also proposes to delete, in its entirety, footnote 12,
which describes a tiered rate ($0.00005 per share) if Members, measured
monthly, post 0.9% of the Total Consolidated Volume (``TCV'') in
average daily volume to EDGA. As a result of the deletion of footnote
12, current footnotes 13-14 have been re-numbered as footnotes 12-13.
Currently, the BY flag is yielded when an order is routed to BATS
BYX Exchange and removes liquidity using order types ROUC, ROBY, ROBB,
or ROCO, as defined in Exchange Rules 11.9(b)(3)(a), (c), 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 change is consistent
with the objectives of Section 6 of the Exchange Act,\4\ in general,
and furthers
[[Page 47284]]
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's proposal to provide a rebate of $0.0005 per share
for adding liquidity and assess a charge of $0.0006 per share for
removing liquidity is designed to allow the Exchange to compete with
other market centers, and at the same time preserve its current spread
of $0.0001 per share. Because the Exchange's spread remains at $0.0001
per share under the proposed rate, the Exchange believes the proposed
maker/taker fee spread to be reasonable. The proposed maker/taker
spread is competitive with other market centers maker/taker spreads
(BATS BZX Exchange, $0.0001 per share), Nasdaq ($.001--($.00045) per
share), and NYSE Arca ($0.0009--($0.0002) per share). The Exchange
believes that the proposed rate is non-discriminatory in that it
applies uniformly to all Members.
Currently, the Exchange has a taker/maker fee structure whereby the
Exchange assesses a fee of $0.00025 per share to add liquidity and
provides a rebate of $0.00015 per share to remove liquidity. By
changing its fee structure to the proposed maker/taker model, the
Exchange will make it less expensive for Members to post liquidity to
EDGA. As a result, EDGA expects to gain market share and see its order
volume increase. Such increased volume increases potential revenue to
the Exchange, and would allow the Exchange to spread its administrative
and infrastructure costs over a greater number of shares, leading to
lower per share costs. These lower per share costs would allow the
Exchange to pass on the savings to Members in the form a rebate. The
increased liquidity also benefits all investors by deepening EDGA's
liquidity pool, supporting the quality of price discovery, promoting
market transparency and improving investor protection.
The elimination of the tier described in footnote 12 (posting 0.9%
of the TCV in average daily volume to EDGA) results from discussions
with the Exchange's customers whereby the Exchange has concluded that
the tier is not effective at incenting liquidity.
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 also 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 change reflects 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
equitable and 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 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 (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-EDGA-2011-23 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-2011-23. 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 (https://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-EDGA-2011-23 and should be
submitted on or before August 25, 2011.
[[Page 47285]]
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. 2011-19740 Filed 8-3-11; 8:45 am]
BILLING CODE 8011-01-P
