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, 2581-2583 [2012-770]
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tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 11 / Wednesday, January 18, 2012 / Notices
Also, all members are equally eligible to
transact Multiply Listed securities.
The Exchange believes that it
continues to be equitable and not
unfairly discriminatory to pay the rebate
for Floor QCC Orders to Floor Brokers
because it would uniformly apply to all
Floor QCC Orders entered by a Floor
Broker into FBMS for execution based
on volume. The rebate is not unfairly
discriminatory to firms that enter eQCC
Orders directly into PHLX XL II,
because the transaction fees and rebates
are the same whether the order is
entered electronically or through a Floor
Broker. In addition, pursuant to
Exchange Rule 1080(o)(3), only Floor
Brokers may enter a Floor QCC Order
from the floor of the Exchange;
therefore, providing the rebate to Floor
Brokers does not discriminate against
eQCC orders entered into PHLX XL II.
Any participant will be able to engage
a rebate-receiving Floor Broker in a
discussion surrounding the appropriate
level of fees that they may be charged
for entrusting the entry of the Floor QCC
Order to the Floor Broker into FBMS for
execution. The additional order flow
attracted by this rebate should benefit
all participants. The rebate is meant to
assist Floor Brokers to recruit business
on an agency basis. The Floor Broker
may use all or part of the rebate to offset
its fees.
The Exchange believes it is equitable
and not unfairly discriminatory to not
offer a rebate for eQCC Orders and Floor
QCC Orders for Customer-to-Customer
executions and for dividend, merger and
short stock interest strategies and
executions subject to the Reversal and
Conversion Cap because the Exchange
would not offer a rebate for these two
types of transactions for any QCC Order
uniformly. Neither Customer-toCustomer executions nor dividend,
merger and short stock interest
strategies and executions subject to the
Reversal and Conversion Cap will
receive the rebate. Also, Customers are
not assessed a QCC Transaction Fee.
The Exchange believes that the
technical amendments proposed herein
are reasonable, equitable and not
unfairly discriminatory because they
would add clarity to the Fee Schedule
and conform the Fee Schedule.
The Exchange operates in a highly
competitive market comprised of nine
U.S. options exchanges in which
sophisticated and knowledgeable
market participants readily can, and do,
send order flow to competing exchanges
if they deem fee levels at a particular
exchange to be excessive. The Exchange
and for 2,000,000 or more originating contract sides
ISE pays $0.05 per contract.
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believes that the proposed rebates for
eQCC Orders and Floor QCC Orders
must be competitive with rebates
offered at other options exchanges. The
Exchange believes that this competitive
marketplace impacts the rebates and
fees present on the Exchange today and
influences the proposals set forth above.
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.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
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)(ii) of the Act.27 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. If the Commission
takes such action, the Commission shall
institute proceedings to determine
whether the proposed rule should be
approved or disapproved.
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:
2581
All submissions should refer to File
Number SR–Phlx–2011–189. 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 (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 such 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–Phlx–
2011–189 and should be submitted on
or before February 8, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.28
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–818 Filed 1–17–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–Phlx–2011–189 on the
subject line.
[Release No. 34–66130; File No. SR–EDGA–
2011–42]
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
January 11, 2012.
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
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
28 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
27 15
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
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2582
Federal Register / Vol. 77, No. 11 / Wednesday, January 18, 2012 / Notices
notice is hereby given that on December
30, 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
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, 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
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
tkelley on DSK3SPTVN1PROD with NOTICES
Purpose
Footnote 4 of the EDGA fee schedule
currently provides that: If a Member, on
a daily basis, measured monthly, posts
more than 1% of the Total Consolidated
Volume (‘‘TCV’’) in average daily
volume, then the Member will receive a
rebate of $0.0005 per share. TCV is
defined as volume reported by all
exchanges and trade reporting facilities
to the consolidated transaction reporting
plans for Tapes A, B and C securities for
the month prior to the month in which
the fees are calculated.
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.
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If a Member, on a daily basis,
measured monthly, posts more than
.25% of the TCV and removes more than
.25% of TCV in average daily volume,
then the Member will receive a rebate of
$0.0005 per share.
The Exchange proposes to amend the
description in footnote 4 of its fee
schedule to state that all non-displayed
orders (H Flag executions) count toward
added/posting liquidity in both
paragraphs of footnote 4. The Exchange
also proposes to append footnote 4 to
the H Flag on its fee schedule in
connection with this. Similar to the way
that the H Flag counts toward adding/
posting liquidity tiers on the EDGX
Exchange, Inc. (‘‘EDGX’’),4 the H Flag is
another flag that can also add liquidity
on EDGA. Currently, the flags that add
liquidity on EDGA and count toward the
tiers identified in footnote 4 are B, V, Y,
3, and 4.
Furthermore, the Exchange also
proposes to amend the description in
footnote 4 of its fee schedule to state
that a Member has to post liquidity to
EDGA in order to satisfy the tiers
delineated in footnote 4. To do so, the
Exchange proposes to insert the words
‘‘to EDGA’’ after the phrases ‘‘posts
more than 1% of the TCV’’ and ‘‘posts
more than .25% of the TCV’’ in footnote
4.
The Exchange proposes to delete
footnote 13 from its fee schedule, as no
Members have qualified for this tier.
Footnote 13 states that for Members that
route an average daily volume (ADV)
more than 30,000,000 shares per day to
NYSE using the RDOT or RDOX routing
strategy, then their removal rate
decreases to $0.0022 per share.
The Exchange also proposes to amend
its fee schedule to add footnote b to it
to specify that trading activity on days
when the market closes early 5 does not
count toward any volume tiers, which
are currently found in footnotes 1, 2, 4,
6, 13.
The Exchange proposes to implement
these amendments to its fee schedule on
January 1, 2012.
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
4 See, e.g., Securities Exchange Act Release No.
65541 (October 12, 2011), 76 FR 64409 (October 18,
2011) (SR–EDGX–2011–31).
5 In 2012, these days include July 3, 2012,
November 23, 2012, and December 24, 2012.
6 15 U.S.C. 78f.
7 15 U.S.C. 78f(b)(4).
PO 00000
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other charges among its members and
other persons using its facilities.
The Exchange believes that amending
the H Flag’s application toward the tiers
outlined in footnote 4 on the Exchange’s
fee schedule is an equitable allocation of
reasonable dues, fees, and other charges.
The H Flag is another flag that can also
add liquidity on EDGA and counts
towards the tiers identified in footnote
4. The Exchange believes that providing
discounts for adding liquidity to the
Exchange would incent liquidity. In
addition, 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 of
a higher rebate. The increased liquidity
also benefits all investors by deepening
EDGA’s liquidity pool, offering
additional flexibility for all investors to
enjoy cost savings, supporting the
quality of price discovery, promoting
market transparency and improving
investor protection. In addition, by
making this amendment, the Exchange
adds additional transparency to its fee
schedule for Members.
The deletion of the tier in footnote 13
to the fee schedule is an equitable
allocation of reasonable dues, fees, and
other charges, as no Members have
qualified for this tier and the Exchange
generates administrative costs by
maintaining it. In addition, by deleting
this tier, the Exchange adds additional
clarity to its fee schedule for Members.
The Exchange believes that the
proposed amendment is
nondiscriminatory in that it applies
uniformly to all Members.
The Exchange also proposes to amend
its schedule by adding footnote b to
specify that trading activity on days
when the market closes early does not
count toward volume tiers (footnotes 1,
2, 4, 6, 13). Since the Exchange is only
open until 1 p.m. Eastern Time (‘‘ET’’)
on these days (e.g., the day after
Thanksgiving),8 the Exchange believes
that counting volume on these days
towards the tiers would not be
illustrative of typical market activity or
liquidity provision, since the trading
day is shortened. Therefore, the
Exchange proposes to exclude such
shortened trading days from any volume
tier calculations, as presently found in
footnotes numbers 1, 2, 4, 6, and 13. The
Exchange believes that the proposed
amendment is non-discriminatory in
8 In 2012, these days include July 3, 2012,
November 23, 2012, and December 24, 2012.
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Federal Register / Vol. 77, No. 11 / Wednesday, January 18, 2012 / Notices
that it applies uniformly to all Members
and would more accurately represent
their trading volume. In addition, the
proposed amendment is in accordance
with the practices employed by other
Exchanges.9
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
tkelley on DSK3SPTVN1PROD with NOTICES
The foregoing rule change has become
effective pursuant to Section 19(b)(3) of
the Act 10 and Rule 19b–4(f)(2) 11
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.
9 See
fee schedules of Nasdaq and NYSE Arca
found at: https://www.nasdaqtrader.com/
Trader.aspx?id=PriceListTrading2; and https://
usequities.nyx.com/sites/usequities.nyx.com/files/
nyse_arca_marketplace_fees_12_1_2011.pdf
10 15 U.S.C. 78s(b)(3)(A).
11 17 CFR 19b–4(f)(2).
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16:07 Jan 17, 2012
Jkt 226001
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 email to rulecomments@sec.gov. Please include File
Number SR–EDGA–2011–42 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–2011–42. 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 (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–2011–42 and should
be submittedon or before February 8,
2012.
12 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00076
Fmt 4703
Sfmt 4703
2583
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–770 Filed 1–17–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66139; File No. SR–CHX–
2012–01]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Amend
its Fee Schedule To Assess Fees for
Derivative Securities Products
January 11, 2012.
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 January 6,
2012, the Chicago Stock Exchange, Inc.
(‘‘CHX’’ or the ‘‘Exchange’’) 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 CHX. CHX
has filed the proposal pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(2) thereunder,4 which renders
the proposal effective upon filing with
the Commission. 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
CHX proposes to amend its Fee
Schedule, effective January 9, 2012, to
create a separate fee and rebate structure
for Derivative Securities Products and to
remove certain references to Tape A, B
and C securities throughout the Fee
Schedule.
The text of this proposed rule change
is available on the Exchange’s Web site
at (www.chx.com) and in the
Commission’s Public Reference Room.
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
CHX included statements concerning
the purpose of and basis for the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(2).
2 17
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]]>Agencies
[Federal Register Volume 77, Number 11 (Wednesday, January 18, 2012)]
[Notices]
[Pages 2581-2583]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-770]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66130; File No. SR-EDGA-2011-42]
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
January 11, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\
[[Page 2582]]
notice is hereby given that on December 30, 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, at the Exchange's
principal office, and at the Public Reference Room of the Commission.
---------------------------------------------------------------------------
\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
Purpose
Footnote 4 of the EDGA fee schedule currently provides that: If a
Member, on a daily basis, measured monthly, posts more than 1% of the
Total Consolidated Volume (``TCV'') in average daily volume, then the
Member will receive a rebate of $0.0005 per share. TCV is defined as
volume reported by all exchanges and trade reporting facilities to the
consolidated transaction reporting plans for Tapes A, B and C
securities for the month prior to the month in which the fees are
calculated.
If a Member, on a daily basis, measured monthly, posts more than
.25% of the TCV and removes more than .25% of TCV in average daily
volume, then the Member will receive a rebate of $0.0005 per share.
The Exchange proposes to amend the description in footnote 4 of its
fee schedule to state that all non-displayed orders (H Flag executions)
count toward added/posting liquidity in both paragraphs of footnote 4.
The Exchange also proposes to append footnote 4 to the H Flag on its
fee schedule in connection with this. Similar to the way that the H
Flag counts toward adding/posting liquidity tiers on the EDGX Exchange,
Inc. (``EDGX''),\4\ the H Flag is another flag that can also add
liquidity on EDGA. Currently, the flags that add liquidity on EDGA and
count toward the tiers identified in footnote 4 are B, V, Y, 3, and 4.
---------------------------------------------------------------------------
\4\ See, e.g., Securities Exchange Act Release No. 65541
(October 12, 2011), 76 FR 64409 (October 18, 2011) (SR-EDGX-2011-
31).
---------------------------------------------------------------------------
Furthermore, the Exchange also proposes to amend the description in
footnote 4 of its fee schedule to state that a Member has to post
liquidity to EDGA in order to satisfy the tiers delineated in footnote
4. To do so, the Exchange proposes to insert the words ``to EDGA''
after the phrases ``posts more than 1% of the TCV'' and ``posts more
than .25% of the TCV'' in footnote 4.
The Exchange proposes to delete footnote 13 from its fee schedule,
as no Members have qualified for this tier. Footnote 13 states that for
Members that route an average daily volume (ADV) more than 30,000,000
shares per day to NYSE using the RDOT or RDOX routing strategy, then
their removal rate decreases to $0.0022 per share.
The Exchange also proposes to amend its fee schedule to add
footnote b to it to specify that trading activity on days when the
market closes early \5\ does not count toward any volume tiers, which
are currently found in footnotes 1, 2, 4, 6, 13.
---------------------------------------------------------------------------
\5\ In 2012, these days include July 3, 2012, November 23, 2012,
and December 24, 2012.
---------------------------------------------------------------------------
The Exchange proposes to implement these amendments to its fee
schedule on January 1, 2012.
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.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that amending the H Flag's application toward
the tiers outlined in footnote 4 on the Exchange's fee schedule is an
equitable allocation of reasonable dues, fees, and other charges. The H
Flag is another flag that can also add liquidity on EDGA and counts
towards the tiers identified in footnote 4. The Exchange believes that
providing discounts for adding liquidity to the Exchange would incent
liquidity. In addition, 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
of a higher rebate. The increased liquidity also benefits all investors
by deepening EDGA's liquidity pool, offering additional flexibility for
all investors to enjoy cost savings, supporting the quality of price
discovery, promoting market transparency and improving investor
protection. In addition, by making this amendment, the Exchange adds
additional transparency to its fee schedule for Members.
The deletion of the tier in footnote 13 to the fee schedule is an
equitable allocation of reasonable dues, fees, and other charges, as no
Members have qualified for this tier and the Exchange generates
administrative costs by maintaining it. In addition, by deleting this
tier, the Exchange adds additional clarity to its fee schedule for
Members. The Exchange believes that the proposed amendment is
nondiscriminatory in that it applies uniformly to all Members.
The Exchange also proposes to amend its schedule by adding footnote
b to specify that trading activity on days when the market closes early
does not count toward volume tiers (footnotes 1, 2, 4, 6, 13). Since
the Exchange is only open until 1 p.m. Eastern Time (``ET'') on these
days (e.g., the day after Thanksgiving),\8\ the Exchange believes that
counting volume on these days towards the tiers would not be
illustrative of typical market activity or liquidity provision, since
the trading day is shortened. Therefore, the Exchange proposes to
exclude such shortened trading days from any volume tier calculations,
as presently found in footnotes numbers 1, 2, 4, 6, and 13. The
Exchange believes that the proposed amendment is non-discriminatory in
[[Page 2583]]
that it applies uniformly to all Members and would more accurately
represent their trading volume. In addition, the proposed amendment is
in accordance with the practices employed by other Exchanges.\9\
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\8\ In 2012, these days include July 3, 2012, November 23, 2012,
and December 24, 2012.
\9\ See fee schedules of Nasdaq and NYSE Arca found at: https://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2; and https://usequities.nyx.com/sites/usequities.nyx.com/files/nyse_arca_marketplace_fees_12_1_2011.pdf
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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 \10\ and Rule 19b-4(f)(2) \11\ 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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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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 email to rule-comments@sec.gov. Please include
File Number SR-EDGA-2011-42 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-2011-42. 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 (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-2011-42 and
should be submitted on or before February 8, 2012.
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\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-770 Filed 1-17-12; 8:45 am]
BILLING CODE 8011-01-P
