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, 35453-35455 [2012-14341]
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Federal Register / Vol. 77, No. 114 / Wednesday, June 13, 2012 / Notices
reasonable since those Members do not
have a large cumulative effect on the
Exchange’s message traffic and thus the
Exchange’s operational, surveillance,
and administrative costs are lower for
those Members than those Members
with higher message traffic.
Thus, the Exchange believes that the
MEIP’s fees among its Members are
uniform except with respect to
reasonable and well-established
distinctions with respect to market
making and Members with lower
message traffic (those that send less than
1 million messages/day). These
distinctions or analogous versions of
them have been previously filed with
the Commission.23
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 encourage 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, except with
respect to Market Makers for the reasons
cited above. 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
erowe on DSK2VPTVN1PROD with NOTICES
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.
23 Id. See also supra notes 13–15, 18–21 (NYSE
Amex assesses a messages fee if the certain of its
members exceed one billion quotes and/or orders
(‘‘messages’’); Nasdaq assesses its excessive message
fee if a member sends an average of more than
10,000 DOTI Orders per day during the month, and
the ratio between total DOTI Orders and DOTI
Orders that are fully or partially executed (either at
Nasdaq or NYSE) exceeds 300 to 1.)
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14:45 Jun 12, 2012
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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 24 and Rule 19b–4(f)(2) 25
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.
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–2012–19 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–2012–19. 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
24 15
25 17
PO 00000
U.S.C. 78s(b)(3)(A).
CFR 19b–4(f)(2).
Frm 00103
Fmt 4703
Sfmt 4703
35453
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–EDGA–
2012–19 and should be submitted on or
before July 5,2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–14343 Filed 6–12–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67158; File No. SR–EDGX–
2012–19]
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
June 7, 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 May 31,
2012 the EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which items have been prepared
by the self-regulatory 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 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://
26 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
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35454
Federal Register / Vol. 77, No. 114 / Wednesday, June 13, 2012 / Notices
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 the
Statutory Basis for, the Proposed Rule
Change
erowe on DSK2VPTVN1PROD with NOTICES
Purpose
The Exchange proposes to amend the
percentage associated with the ‘‘added
liquidity’’ to ‘‘removed liquidity’’ ratio
in part (ii) of the Investor Tier (Footnote
13) from 70% to 60% and pluralize
‘‘Member.’’ Therefore, Footnote 13, will
read, ‘‘Members can qualify for an
Investor Tier and be provided a rebate
of $0.0030 per share if they meet the
following criteria: (i) On a daily basis,
measured monthly, posts an ADV of at
least 8 million shares on EDGX where
added flags are defined as B, HA, V, Y,
MM, 3, or 4; (ii) have an ‘‘added
liquidity’’ to ‘‘removed liquidity’’ ratio
of at least 60% where added flags are
defined as B, HA, V, Y, MM, 3, or 4 and
removal flags are defined as BB, MT, N,
W, PI, or 6; and (iii) have a message-totrade ratio of less than 6:1.’’
Codification of Late Fees
Currently, the Exchange charges
additional fees to Members that fail to
pay all dues, fees, assessments and
charges owed to the Exchange by the
prescribed due date. Exchange Rule
15.1(a) states that the Exchange may
prescribe such reasonable dues, fees,
assessments or other charges as it may,
in the Exchange discretion, deem
appropriate. In addition, paragraph 13
of the Exchange’s User Agreement,4
which is signed by all Members as part
of their membership in the Exchange,
also provides that the Member agrees to
pay the Exchange a late charge of 1%
per month on all past due amounts that
4 See the User Agreement posted to the
Exchange’s Web site at: https://www.directedge.com/
Portals/0/docs/MembDocs/EDGX%20Complete%20
Exch%20Appl%201%20%28V%202.0%29.pdf.
VerDate Mar<15>2010
14:45 Jun 12, 2012
Jkt 226001
are not the subject of a legitimate and
bona fide dispute. The Exchange
proposes to codify this language in
Footnote d on its fee schedule stating
that the Exchange will assess a charge
of 1% per month on the past due
portion of the balance on a Member’s
account that is past due. This fee will
begin to accrue on a daily basis for items
not paid within the 30 day payment
terms until the item is paid in full. Late
fees incurred will be included as line
items on subsequent invoices.
The Exchange proposes to implement
these amendments to its fee schedule on
June 1, 2012.
Basis
The Exchange believes that the
proposed rule changes are consistent
with the objectives of Section 6 of the
Act,5 in general, and furthers the
objectives of Section 6(b)(4),6 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 proposes to amend the
percentage associated with the ‘‘added
liquidity’’ to ‘‘removed liquidity’’ ratio
in part (ii) of the Investor Tier (Footnote
13) from 70% to 60% because the
Exchange believes that a ratio of at least
60% represents a more appropriate
criterion for Members to qualify for a
rebate of $0.0030 per share associated
with the Investor Tier. The Exchange
believes the proposed ratio incentivizes
Members to direct a high quality order
flow to the Exchange because the
Exchange believes that such high
quality liquidity provisions will
encourage price discovery and market
transparency and improve investor
protection by encouraging growth in
liquidity. In addition, the Exchange also
believes that the proposal is nondiscriminatory because it applies
uniformly to all Members.
In order to provide additional
transparency to Members, the Exchange
proposes to codify its existing policy
regarding late fees in Footnote d of the
fee schedule. The Exchange believes
that by including proposed Footnote d
it will help to promote market
transparency and improve investor
protection by displaying the Exchange’s
policy regarding late fees to Members on
its fee schedule along with the
Exchange’s other rebates and charges.
The Exchange also notes that it is
equitable and reasonable to charge a
Member a late fee on past due balances
because it offsets administrative and
5 15
6 15
PO 00000
U.S.C. 78f.
U.S.C. 78f(b)(4).
Frm 00104
Fmt 4703
Sfmt 4703
collection costs associated with past due
accounts and incentivizes Members to
pay on time in accordance with the
terms of the Member’s User Agreement.
In addition, a late fee of 1% is
reasonable because it is in line with the
late fees assessed by other exchanges.7
The Exchange believes that the proposal
is non-discriminatory because it applies
to all Members.
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 8 and Rule 19b–4(f)(2)9
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
7 See also, the late fees listed on the Chicago
Board Options Exchange’s fee schedule at: https://
www.cboe.com/publish/feeschedule/CBOEFee
Schedule.pdf; and NASDAQ Rule 7032 regarding
late fees.
8 15 U.S.C. 78s(b)(3)(A).
9 17 CFR 19b–4(f)(2).
E:\FR\FM\13JNN1.SGM
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Federal Register / Vol. 77, No. 114 / Wednesday, June 13, 2012 / Notices
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–14341 Filed 6–12–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67154; File No. SR–NYSE–
2012–10]
• 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–EDGX–2012–19 on the
subject line.
Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Granting Approval of Proposed Rule
Change Amending NYSE Rule 107B To
Add a Class of Supplemental Liquidity
Providers That Are Registered as
Market Makers at the Exchange
Paper Comments
June 7, 2012.
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
erowe on DSK2VPTVN1PROD with NOTICES
Electronic Comments
I. Introduction
On April 17, 2012, New York Stock
Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’)
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 NYSE Rule 107B to
add a class of Supplemental Liquidity
Providers (‘‘SLP’’) that are registered as
market makers at the Exchange. The
proposed rule change was published for
comment in the Federal Register on
April 23, 2012.3 The Commission
received no comment letters on the
proposal. This order approves the
proposed rule change.
All submissions should refer to File
Number SR–EDGX–2012–19. 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
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–EDGX–
2012–19 and should be submitted on or
before July 5, 2012.
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14:45 Jun 12, 2012
Jkt 226001
II. Description of the Proposal
NYSE Rule 107B was adopted as a
pilot program in October 2008 and
established a new class of off-floor
market participants referred to as
Supplemental Liquidity Providers or
‘‘SLPs.’’ 4 Approved Exchange member
organizations are eligible to be an SLP.
SLPs supplement the liquidity provided
by Designated Market Makers (‘‘DMM’’).
SLPs have monthly quoting
requirements that may qualify them to
receive SLP rebates, which are larger
than the general rebate available to nonSLP market participants.5
10 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. 66821
(April 17, 2012), 77 FR 24239 (‘‘Notice’’).
4 See Securities Exchange Act Release No. 58877
(October 29, 2008), 73 FR 65904 (November 5, 2008)
(SR–NYSE–2008–108). The pilot is currently
scheduled to end on July 31, 2012.
5 NYSE Rule 107B(a) requires that an SLP
maintain a bid and/or an offer at the national best
bid (‘‘NBB’’) or national best offer (‘‘NBO’’)
1 15
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
35455
To qualify as an SLP under NYSE
Rule 107B(c), a member organization is
subject to a number of conditions,
including adequate trading
infrastructure to support SLP trading
activity, quoting and volume
performance that demonstrates an
ability to meet the 10% ADV
requirement, and use of specified SLP
mnemonics. In addition, the business
unit of the member organization acting
as an SLP must enter proprietary orders
only and have adequate information
barriers between the SLP unit and any
of the member organization’s customer,
research, and investment-banking
business. Pursuant to NYSE Rule
107B(h)(2)(A), a DMM may also be an
SLP, but not in the same securities in
which it is registered as a DMM.
Proposed SLP Market Makers
The Exchange proposes to amend
NYSE Rule 107B to add a category of
SLPs that would be registered as market
makers at the Exchange. As proposed,
the term ‘‘SLP’’ would refer to member
organizations that provide supplemental
liquidity and there would be two classes
of SLP. The existing SLP member
organizations and associated
requirements would continue
unchanged and would be referred to as
‘‘SLP–Prop.’’
The proposed new class of SLP would
be referred to as ‘‘SLMM’’. SLMMs
would have differing qualification
requirements and increased regulatory
obligations as compared to SLP–Props,
but would otherwise be subject to the
existing SLP program.
Under the proposal, an SLP can
choose to be either an SLP–Prop or an
SLMM. The proposed SLMMs would
have different qualification
requirements, specified regulatory
obligations, expanded entry of order
requirements, and a security-by-security
withdrawal ability. SLP–Props and
SLMMs would be subject to the same
application and overall program
withdrawal process, ADV and quoting
requirements, manner by which SLP
securities are assigned, and nonregulatory penalties.
To be approved as an SLMM, an
SLMM must meet specified regulatory
obligations, which are set forth in
proposed NYSE Rule 107B(d). Failure to
comply with these regulatory
obligations could result in disciplinary
averaging at least 10% of the trading day for each
assigned security. In addition, an SLP must provide
an average daily volume (‘‘ADV’’) of more than 10
million shares for all assigned SLP securities on a
monthly basis. Meeting this volume requirement
will enable an SLP to receive the basic SLP rebate
(currently $0.0020 per executed share) on securityby-security basis and to maintain their SLP status.
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]]>Agencies
[Federal Register Volume 77, Number 114 (Wednesday, June 13, 2012)]
[Notices]
[Pages 35453-35455]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14341]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67158; File No. SR-EDGX-2012-19]
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
June 7, 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 May 31, 2012 the EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which items have been prepared by the 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 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://
[[Page 35454]]
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 the
Statutory Basis for, the Proposed Rule Change
Purpose
The Exchange proposes to amend the percentage associated with the
``added liquidity'' to ``removed liquidity'' ratio in part (ii) of the
Investor Tier (Footnote 13) from 70% to 60% and pluralize ``Member.''
Therefore, Footnote 13, will read, ``Members can qualify for an
Investor Tier and be provided a rebate of $0.0030 per share if they
meet the following criteria: (i) On a daily basis, measured monthly,
posts an ADV of at least 8 million shares on EDGX where added flags are
defined as B, HA, V, Y, MM, 3, or 4; (ii) have an ``added liquidity''
to ``removed liquidity'' ratio of at least 60% where added flags are
defined as B, HA, V, Y, MM, 3, or 4 and removal flags are defined as
BB, MT, N, W, PI, or 6; and (iii) have a message-to-trade ratio of less
than 6:1.''
Codification of Late Fees
Currently, the Exchange charges additional fees to Members that
fail to pay all dues, fees, assessments and charges owed to the
Exchange by the prescribed due date. Exchange Rule 15.1(a) states that
the Exchange may prescribe such reasonable dues, fees, assessments or
other charges as it may, in the Exchange discretion, deem appropriate.
In addition, paragraph 13 of the Exchange's User Agreement,\4\ which is
signed by all Members as part of their membership in the Exchange, also
provides that the Member agrees to pay the Exchange a late charge of 1%
per month on all past due amounts that are not the subject of a
legitimate and bona fide dispute. The Exchange proposes to codify this
language in Footnote d on its fee schedule stating that the Exchange
will assess a charge of 1% per month on the past due portion of the
balance on a Member's account that is past due. This fee will begin to
accrue on a daily basis for items not paid within the 30 day payment
terms until the item is paid in full. Late fees incurred will be
included as line items on subsequent invoices.
---------------------------------------------------------------------------
\4\ See the User Agreement posted to the Exchange's Web site at:
https://www.directedge.com/Portals/0/docs/MembDocs/EDGX%20Complete%20Exch%20Appl%201%20%28V%202.0%29.pdf.
---------------------------------------------------------------------------
The Exchange proposes to implement these amendments to its fee
schedule on June 1, 2012.
Basis
The Exchange believes that the proposed rule changes are consistent
with the objectives of Section 6 of the Act,\5\ in general, and
furthers the objectives of Section 6(b)(4),\6\ 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.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange proposes to amend the percentage associated with the
``added liquidity'' to ``removed liquidity'' ratio in part (ii) of the
Investor Tier (Footnote 13) from 70% to 60% because the Exchange
believes that a ratio of at least 60% represents a more appropriate
criterion for Members to qualify for a rebate of $0.0030 per share
associated with the Investor Tier. The Exchange believes the proposed
ratio incentivizes Members to direct a high quality order flow to the
Exchange because the Exchange believes that such high quality liquidity
provisions will encourage price discovery and market transparency and
improve investor protection by encouraging growth in liquidity. In
addition, the Exchange also believes that the proposal is non-
discriminatory because it applies uniformly to all Members.
In order to provide additional transparency to Members, the
Exchange proposes to codify its existing policy regarding late fees in
Footnote d of the fee schedule. The Exchange believes that by including
proposed Footnote d it will help to promote market transparency and
improve investor protection by displaying the Exchange's policy
regarding late fees to Members on its fee schedule along with the
Exchange's other rebates and charges. The Exchange also notes that it
is equitable and reasonable to charge a Member a late fee on past due
balances because it offsets administrative and collection costs
associated with past due accounts and incentivizes Members to pay on
time in accordance with the terms of the Member's User Agreement. In
addition, a late fee of 1% is reasonable because it is in line with the
late fees assessed by other exchanges.\7\ The Exchange believes that
the proposal is non-discriminatory because it applies to all Members.
---------------------------------------------------------------------------
\7\ See also, the late fees listed on the Chicago Board Options
Exchange's fee schedule at: https://www.cboe.com/publish/feeschedule/CBOEFeeSchedule.pdf; and NASDAQ Rule 7032 regarding late fees.
---------------------------------------------------------------------------
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 \8\ and Rule 19b-4(f)(2)\9\ 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
[[Page 35455]]
investors, or otherwise in furtherance of the purposes of the Act.
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 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-EDGX-2012-19 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-EDGX-2012-19. 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
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-EDGX-2012-19 and should be
submitted on or before July 5, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-14341 Filed 6-12-12; 8:45 am]
BILLING CODE 8011-01-P
