Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to New EDGA Rule 11.22 Requiring Members To Input Accurate Information Into the System, 22020-22022 [2012-8788]

Download as PDF 22020 Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Notices for ICC to be in compliance with the law. The ICE Clear Credit Board, Risk Committee and Risk Management Subcommittee discussed with concern the extreme reduction in the minimum capital requirement from the current ICC requirement of $5,000,000,000 for non-FCM or Broker Dealer Clearing Participants to the minimum capital requirement of $50,000,000 mandated by CFTC Regulation 39.12(a)(2)(iii) and proposed in Commission Rule 17Ad– 22(b)(7). Similarly, the ICE Clear Credit Board, Risk Committee and Risk Management Subcommittee discussed the very significant reduction in the minimum capital requirement initially established by ICC for its FCM or Broker Dealer Clearing Participants of $500,000,000 (subsequently reduced to $100,000,000) to the minimum capital requirement of $50,000,000 mandated by CFTC Regulation 39.12(a)(2)(iii) and proposed in Commission Rule 17Ad–22(b)(7). The concerns raised by the ICE Clear Credit Board, Risk Committee, and Risk Management Subcommittee are mitigated in part by the Risk-Based Capital Requirement ICC is proposing. ICC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act and the rules and regulations thereunder applicable to it. ICC believes that the proposed membership requirements will comply with the Act and the rules and regulations thereunder. B. Self-Regulatory Organization’s Statement on Burden on Competition ICC does not believe that the proposed rule change would impose any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not been solicited or received. ICC will notify the Commission of any written comments received by ICC. mstockstill on DSK4VPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: VerDate Mar<15>2010 16:27 Apr 11, 2012 Jkt 226001 (A) By order approve or disapprove the proposed rule change or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. [FR Doc. 2012–8790 Filed 4–11–12; 8:45 am] IV. Solicitation of Comments BILLING CODE 8011–01–P 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 may be submitted by using 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 No. SR–ICC–2012– 05 on the subject line. • Paper comments should be sent 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–ICC–2012–05. 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 filings will also be available for inspection and copying at the principal office of ICE Clear Credit and on ICE Clear Credit’s Web site at https://www.theice.com/ publicdocs/regulatory_filings/ 032812_SEC_ICEClearCredit.pdf. 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–ICC–2012–05 and should be submitted on or before May 3, 2012. PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.3 Kevin M. O’Neill, Deputy Secretary. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66764; File No. SR–EDGA– 2012–14] Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to New EDGA Rule 11.22 Requiring Members To Input Accurate Information Into the System April 6, 2012. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 2, 2012, EDGA Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGA’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which items have been prepared by the 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 adopt new EDGA Rule 11.22 to require Members to input accurate information into the System,3 including, but not limited to, identifying each order accurately as a principal, agency, or riskless principal order. The text of the proposed rule change is available on the Exchange’s Web site at 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 3 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 The term ‘‘System’’ is defined in EDGA Rule 1.5(cc). 1 15 E:\FR\FM\12APN1.SGM 12APN1 Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Notices 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. mstockstill on DSK4VPTVN1PROD with NOTICES A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to add new EDGA Rule 11.22 for the purpose of increasing transparency and to enhance the surveillance database and audit trail of transaction data used by the Exchange in surveillance of its market. The proposed rule change would require Members to input accurate information into the System, including, but not limited to, identifying the capacity of each order accurately as a principal, agency, or riskless principal order. For purposes of surveillance, the Exchange currently identifies the capacity of each order as principal, agency, or riskless principal; however, several other capacities are accepted upon order entry, including no response, which are thereafter mapped to one of the above-listed order capacities. By requiring Members to accurately submit an order capacity for each order and to otherwise input accurate information into the System, the Exchange will be able to more precisely identify the type of order received and more effectively surveil for abusive trading. EDGA does not currently have a rule that makes an explicit statement regarding a Member’s obligation to input accurate information into the System. However, currently, in FIX tag 47,4 Members are asked to populate their capacity when entering orders into the Exchange’s System; however, if the field is left blank by the Member, it is automatically populated with an ‘‘A’’ value (denoting agency). Notwithstanding, EDGA believes that disciplinary cases against Members entering inaccurate or incomplete information may be brought appropriately under EDGA Rule 3.1, which requires Members to observe high standards of commercial honor and just and equitable principles of trade. Rule 3.1 protects the investing public and the securities industry from dishonest practices that are unfair to investors or 4 Members utilize an industry standard Financial Information eXchange (‘‘FIX’’) protocol to electronically enter orders into the System. Members populate certain FIX fields (i.e., tags) to indicate certain terms of the order. FIX tag 47 is used to identify the Member’s capacity. VerDate Mar<15>2010 16:27 Apr 11, 2012 Jkt 226001 hinder the functioning of a free and open market, even though those practices may not be illegal or violate a specific rule or regulation. Because of the regulatory importance of inputting accurate information into the System, EDGA believes a rule that directly addresses Members’ obligation to provide accurate information is warranted. The proposed rule makes clear Members’ obligation to input accurate information into the System and that failure to do so would be considered a violation of EDGA Rules. In addition, once the rule is effective, if Members do not input the capacity in which they are acting (principal, agent, or riskless principal) into the System, the order will be rejected back to the Member by the Exchange. EDGA notes that both BATS Exchange Inc. (‘‘BATS’’) and BATS–Y Exchange, Inc. (‘‘BYX’’) have adopted rules materially identical to proposed EDGA Rule 11.22.5 Similarly, the Commission has previously approved rules proposed by the NASDAQ Stock Market LLC (‘‘NASDAQ’’) requiring participants to ensure that accurate information is entered into NASDAQ’s system, including, but not limited to, the capacity in which the participant is acting.6 Thus, the proposed rule change would bring EDGA Rules in line with those of other self-regulatory organizations. In order to allow Members sufficient time to review and complete any systems changes necessitated by this filing, the Exchange will notify Members via information circular of an exact implementation date for the proposed rule change, which will be no later than August 31, 2012. 2. Statutory Basis The rule change proposed in this submission is consistent with the requirements of Section 19(b)(1) of the Act 7 and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6(b) of the Act.8 Specifically, for the reasons described above, the proposed change is consistent with Section 6(b)(5) of the Act,9 because it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of 5 See Securities Exchange Act Release No. 63969 (February 25, 2011), 76 FR 12155 (March 4, 2011); and Securities Exchange Act Release No. 63970 (February 25, 2011), 76 FR 12204 (March 4, 2011). 6 See Securities Exchange Act Release No. 59547 (March 10, 2009), 74 FR 11386 (March 17, 2009). 7 15 U.S.C. 78s(b)(1). 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 22021 trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and to protect investors and the public interest. Specifically, the changes proposed herein will serve to promote the accuracy of information input into the Exchange. Accurate information is necessary for the efficient and fair operation of the Exchange, and will assist the Exchange in surveilling the markets for abusive or otherwise violative trading activity. 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 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 neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated this rule filing as non-controversial under Section 19(b)(3)(A) of the Act 10 and paragraph (f)(6) of Rule 19b–4 thereunder.11 The Exchange asserts that the proposed rule change: (1) Will not significantly affect the protection of investors or the public interest, (2) will not impose any significant burden on competition, and (3) will not become operative for 30 days from the date on which it was filed, or such shorter time as designated by the Commission. The Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing, or such shorter time as the Commission may designate.12 In addition, the Exchange believes that the proposal to require Members to identify the capacity of each order as either a principal, agency, or riskless principal order does not present any policy issues that have not previously been considered by the 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 12 17 CFR 240.19b–4(f)(6)(iii). 11 17 E:\FR\FM\12APN1.SGM 12APN1 22022 Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Notices Commission, but rather, is a minor change to the Exchange’s existing rules that is consistent with the rules of other national securities exchanges.13 For the foregoing reasons, this rule filing qualifies for immediate effectiveness as a ‘‘non-controversial’’ rule change under paragraph (f)(6) of Rule 19b–4. 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: mstockstill on DSK4VPTVN1PROD with NOTICES 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–2012–14 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–2012–14. 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., 13 See, e.g., NASDAQ Rule 4611(a)(6), BATS Rule 11.21 and BYX Rule 11.21. VerDate Mar<15>2010 16:27 Apr 11, 2012 Jkt 226001 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– 2012–14 and should be submitted on or before May 3, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–8788 Filed 4–11–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66760; File No. SR–C2– 2012–004] Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Order Approving a Proposed Rule Change Relating To Stock-Option Orders April 6, 2012. I. Introduction On February 7, 2012, the C2 Options Exchange, Incorporated (‘‘Exchange’’ or ‘‘C2’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend C2 Rule 6.13, ‘‘Complex Order Execution,’’ to, among other things, revise C2’s procedures for electronically executing stock-option orders. The proposed rule change was published for comment in the Federal Register on February 21, 2012.3 The Commission received no comment letters regarding the proposed rule change. This order approves the proposed rule change. II. Description of the Proposal C2 proposes to amend C2 Rule 6.13 to adopt definitions of complex order and stock-option order, and to provide procedures for electronically executing stock-option orders. 14 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Securities Exchange Act Release No. 66393 (February 14, 2012), 77 FR 10020 (‘‘Notice’’). 1 15 PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 A. Definitions of Complex Order and Stock-Option Order C2 proposes to amend C2 Rule 6.13(a) to include definitions of complex order 4 and stock-option order.5 C2 notes that its new definitions of complex order and stock-option order are consistent with those of another options exchange,6 and with the definitions used in C2 Chapter VI, Section E, ‘‘Intermarket Linkage,’’ which incorporates by reference Chicago Board Options Exchange, Inc. (‘‘CBOE’’) CBOE Rule 6.80(4). C2 Rule 6.13(b)(2) currently permits only complex orders with no more than four legs to be placed in the Complex Order Book (‘‘COB’’). C2 proposes to remove this limitation and to provide that only complex orders and stockoption orders with no more than the applicable number of legs, as determined by C2 on a class-by-class basis, will be eligible for processing.7 B. Execution of Stock-Option Orders 1. Legging C2 proposes to add Interpretation and Policy .06 to Rule 6.13 to provide that stock-option orders will execute against other stock-option orders through COB and the Complex Order RFR Auction (‘‘COA’’). Stock-option orders will not be legged against the individual component legs, except in one limited circumstance, as described below.8 C2 believes that the proposal will provide for more efficient execution and processing of stock-option orders and will help to mitigate the potential risks associated with legging stock-option orders, including the risk of an 4 C2 proposes to define a complex order as any order involving the execution of two or more different options series in the same underlying security occurring at or near the same time in a ratio that is equal to or greater than one-to-three (.333) and less than or equal to three-to-one (3.00) (or such lower ratio as may be determined by the Exchange on a class-by-class basis) and for the purpose of executing a particular investment strategy. See C2 Rule 6.13(a)(1). 5 C2 proposes to define a ‘‘stock-option order’’ as an order to buy or sell a stated number of units of an underlying stock or a security convertible into the underlying stock (‘‘convertible security’’) coupled with the purchase or sale of options contract(s) on the opposite side of the market representing either (i) the same number of units of the underlying stock or convertible security; or (ii) the number of units of the underlying stock necessary to create a delta neutral position, but in no case in a ratio greater than eight (8) options contracts per unit of trading of the underlying stock or convertible security established for that series by The Options Clearing Corporation (or such lower ratio as may be determined by the Exchange on a class-by-class basis). See C2 Rule 6.13(a)(2). 6 See ISE Rule 722(a)(1) and (2). 7 See C2 Rule 6.13(a)(1) and (2). 8 See C2 Rule 6.13, Interpretation and Policy .06(d). E:\FR\FM\12APN1.SGM 12APN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 77, Number 71 (Thursday, April 12, 2012)]
[Notices]
[Pages 22020-22022]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-8788]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66764; File No. SR-EDGA-2012-14]

Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
New EDGA Rule 11.22 Requiring Members To Input Accurate Information
Into the System

April 6, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on April 2, 2012, EDGA Exchange, Inc. (the ``Exchange'' or
``EDGA'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which items have been prepared by the Exchange. 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 adopt new EDGA Rule 11.22 to require
Members to input accurate information into the System,\3\ including,
but not limited to, identifying each order accurately as a principal,
agency, or riskless principal order. The text of the proposed rule
change is available on the Exchange's Web site at www.directedge.com,
at the Exchange's principal office, and at the Public Reference Room of
the Commission.
---------------------------------------------------------------------------

\3\ The term ``System'' is defined in EDGA Rule 1.5(cc).
---------------------------------------------------------------------------

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

[[Page 22021]]

statements may be examined at the places specified in Item IV below.
The self-regulatory organization has prepared summaries, set forth in
Sections A, B and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
The Exchange proposes to add new EDGA Rule 11.22 for the purpose of
increasing transparency and to enhance the surveillance database and
audit trail of transaction data used by the Exchange in surveillance of
its market. The proposed rule change would require Members to input
accurate information into the System, including, but not limited to,
identifying the capacity of each order accurately as a principal,
agency, or riskless principal order. For purposes of surveillance, the
Exchange currently identifies the capacity of each order as principal,
agency, or riskless principal; however, several other capacities are
accepted upon order entry, including no response, which are thereafter
mapped to one of the above-listed order capacities. By requiring
Members to accurately submit an order capacity for each order and to
otherwise input accurate information into the System, the Exchange will
be able to more precisely identify the type of order received and more
effectively surveil for abusive trading.
EDGA does not currently have a rule that makes an explicit
statement regarding a Member's obligation to input accurate information
into the System. However, currently, in FIX tag 47,\4\ Members are
asked to populate their capacity when entering orders into the
Exchange's System; however, if the field is left blank by the Member,
it is automatically populated with an ``A'' value (denoting agency).
---------------------------------------------------------------------------

\4\ Members utilize an industry standard Financial Information
eXchange (``FIX'') protocol to electronically enter orders into the
System. Members populate certain FIX fields (i.e., tags) to indicate
certain terms of the order. FIX tag 47 is used to identify the
Member's capacity.
---------------------------------------------------------------------------

Notwithstanding, EDGA believes that disciplinary cases against
Members entering inaccurate or incomplete information may be brought
appropriately under EDGA Rule 3.1, which requires Members to observe
high standards of commercial honor and just and equitable principles of
trade. Rule 3.1 protects the investing public and the securities
industry from dishonest practices that are unfair to investors or
hinder the functioning of a free and open market, even though those
practices may not be illegal or violate a specific rule or regulation.
Because of the regulatory importance of inputting accurate information
into the System, EDGA believes a rule that directly addresses Members'
obligation to provide accurate information is warranted. The proposed
rule makes clear Members' obligation to input accurate information into
the System and that failure to do so would be considered a violation of
EDGA Rules. In addition, once the rule is effective, if Members do not
input the capacity in which they are acting (principal, agent, or
riskless principal) into the System, the order will be rejected back to
the Member by the Exchange.
EDGA notes that both BATS Exchange Inc. (``BATS'') and BATS-Y
Exchange, Inc. (``BYX'') have adopted rules materially identical to
proposed EDGA Rule 11.22.\5\ Similarly, the Commission has previously
approved rules proposed by the NASDAQ Stock Market LLC (``NASDAQ'')
requiring participants to ensure that accurate information is entered
into NASDAQ's system, including, but not limited to, the capacity in
which the participant is acting.\6\ Thus, the proposed rule change
would bring EDGA Rules in line with those of other self-regulatory
organizations.
---------------------------------------------------------------------------

\5\ See Securities Exchange Act Release No. 63969 (February 25,
2011), 76 FR 12155 (March 4, 2011); and Securities Exchange Act
Release No. 63970 (February 25, 2011), 76 FR 12204 (March 4, 2011).
\6\ See Securities Exchange Act Release No. 59547 (March 10,
2009), 74 FR 11386 (March 17, 2009).
---------------------------------------------------------------------------

In order to allow Members sufficient time to review and complete
any systems changes necessitated by this filing, the Exchange will
notify Members via information circular of an exact implementation date
for the proposed rule change, which will be no later than August 31,
2012.
2. Statutory Basis
The rule change proposed in this submission is consistent with the
requirements of Section 19(b)(1) of the Act \7\ and the rules and
regulations thereunder that are applicable to a national securities
exchange, and, in particular, with the requirements of Section 6(b) of
the Act.\8\ Specifically, for the reasons described above, the proposed
change is consistent with Section 6(b)(5) of the Act,\9\ because it is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and
to protect investors and the public interest. Specifically, the changes
proposed herein will serve to promote the accuracy of information input
into the Exchange. Accurate information is necessary for the efficient
and fair operation of the Exchange, and will assist the Exchange in
surveilling the markets for abusive or otherwise violative trading
activity.
---------------------------------------------------------------------------

\7\ 15 U.S.C. 78s(b)(1).
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 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 neither solicited nor received written comments on
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

The Exchange has designated this rule filing as non-controversial
under Section 19(b)(3)(A) of the Act \10\ and paragraph (f)(6) of Rule
19b-4 thereunder.\11\ The Exchange asserts that the proposed rule
change: (1) Will not significantly affect the protection of investors
or the public interest, (2) will not impose any significant burden on
competition, and (3) will not become operative for 30 days from the
date on which it was filed, or such shorter time as designated by the
Commission. The Exchange provided the Commission with written notice of
its intent to file the proposed rule change, along with a brief
description and text of the proposed rule change, at least five
business days prior to the date of filing, or such shorter time as the
Commission may designate.\12\ In addition, the Exchange believes that
the proposal to require Members to identify the capacity of each order
as either a principal, agency, or riskless principal order does not
present any policy issues that have not previously been considered by
the

[[Page 22022]]

Commission, but rather, is a minor change to the Exchange's existing
rules that is consistent with the rules of other national securities
exchanges.\13\ For the foregoing reasons, this rule filing qualifies
for immediate effectiveness as a ``non-controversial'' rule change
under paragraph (f)(6) of Rule 19b-4.
---------------------------------------------------------------------------

\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ See, e.g., NASDAQ Rule 4611(a)(6), BATS Rule 11.21 and BYX
Rule 11.21.
---------------------------------------------------------------------------

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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-EDGA-2012-14 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-2012-14. 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-2012-14 and should be
submitted on or before May 3, 2012.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

\14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-8788 Filed 4-11-12; 8:45 am]
BILLING CODE 8011-01-P

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