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, 9749-9751 [2013-02950]

Download as PDF Federal Register / Vol. 78, No. 28 / Monday, February 11, 2013 / Notices By the Commission. Shoshana M. Grove, Secretary. [FR Doc. 2013–02963 Filed 2–8–13; 8:45 am] BILLING CODE 7710–FW–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–149, OMB Control No. 3235–0130] erowe on DSK2VPTVN1PROD with NOTICES Submission for OMB Review; Comment Request Upon Written Request Copies Available From: Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549–0213. Extension: Rule 17Ad–2(c), (d), and (h). Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (‘‘PRA’’), the Securities and Exchange Commission (Commission) has submitted to the Office of Management and Budget (‘‘OMB’’) a request for approval of extension of the previously approved collection of information provided for in Rule 17Ad–2(c), (d), and (h), (17 CFR 240.17Ad–2(c), (d), and (h)), under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). Rule 17Ad–2(c), (d) and (h) enumerates the requirements with which registered transfer agents must comply to inform the Commission or the appropriate regulator of a transfer agent’s failure to meet the minimum performance standards set by the Commission rule by filing a notice. While it is estimated there are 477 registered transfer agents, approximately 116 of these transfer agents qualify as small entities under Exchange Act Rule 0.10, 17 CFR 240.0.10 and are thereby exempted from Rule 17Ad–2(c), (d), and (h), leaving approximately 361 transfer agents subject to the rule. Each of these transfer agents annually files about five notices pursuant to Rule 17Ad–2(c), (d), and (h), for an industry-wide total of 1,805 notices per year (361 × 5). The estimated annual cost of these filings to respondents is minimal in view of: (a) the readily available nature of most of the information required to be included in the notice (since that information must be compiled and retained pursuant to other Commission rules); and (b) the summary fashion in which such information must be presented in the notice (most notices are one page or less in length). In light of the above, and based on the experience of the staff regarding the notices, the Commission VerDate Mar<15>2010 14:26 Feb 08, 2013 Jkt 229001 staff estimates that, on average, most notices require approximately one-half hour to prepare. Thus, the Commission staff estimates that each transfer agent subject to the rule spends an average of two and a half hours per year complying with the rule for an industry-wide total of 902.5 hours per year (361 × 2.5). The retention period for the recordkeeping requirement under Rule 17Ad–2(c), (d), and (h) is not less than two years following the date the notice is submitted. The recordkeeping requirement under this rule is mandatory to assist the Commission in monitoring transfer agents who fail to meet the minimum performance standards set by the Commission rule. This rule does not involve the collection of confidential information. A transfer agent is not required to file under the rule unless it does not meet the minimum performance standards for turnaround, processing or forwarding items received for transfer during a month. The Commission may not conduct or sponsor a collection of information unless it displays a currently valid OMB control number. No person shall be subject to any penalty for failing to comply with a collection of information subject to the PRA that does not display a valid OMB control number. Background documentation for this information collection may be viewed at the following Web site: www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Shagufta_Ahmed@omb.eop.gov; and (ii) Thomas Bayer, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way, Alexandria, VA 22312 or send an email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: February 5, 2013. Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–02954 Filed 2–8–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Notice of Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 9749 the Securities and Exchange Commission will hold an Open Meeting on Wednesday, February 13, 2013 at 10:00 a.m., in the Auditorium, Room L– 002. The subject matter of the Open Meeting will be: The Commission will consider whether to approve the 2013 budget of the Public Company Accounting Oversight Board and will consider the related annual accounting support fee for the Board under Section 109 of the Sarbanes-Oxley Act of 2002. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551–5400. Dated: February 6, 2013. Elizabeth M. Murphy, Secretary. [FR Doc. 2013–03072 Filed 2–7–13; 11:15 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–68830; File No. SR–EDGA– 2013–03] 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 February 5, 2013. 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 January 30, 2013, 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 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 and non-Members of the Exchange pursuant to EDGA Rule 15.1(a) and (c). All of the changes described herein are 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 As defined in Exchange Rule 1.5(n). 2 17 E:\FR\FM\11FEN1.SGM 11FEN1 9750 Federal Register / Vol. 78, No. 28 / Monday, February 11, 2013 / Notices applicable to EDGA Members and nonMembers. The text of the proposed rule change is available on the Exchange’s Internet 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 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 1. Purpose In SR–EDGA–2010–06,4 the Exchange proposed to adopt an annual fee per physical port utilized by Members and non-Members to connect to the Exchange’s System 5 for order entry and the receipt of Exchange data, among other reasons. A physical port is a port used by a Member or non-Member to connect into the Exchange at the data centers where Exchange servers are located. Physical port connections can occur either through an external telecommunication circuit or a crossconnection. The Exchange noted at the time of filing that other market centers provided similar services.6 In SR–EDGA–2010–22,7 the Exchange amended its fee schedule, effective January 1, 2011, to allow Members and non-Members the option of paying monthly fees for physical ports used to enter orders in the Exchange’s System. The Exchange proposes to amend its fee schedule to eliminate the option for Members and non-Members to pay for 4 See Securities Exchange Act Release No. 62436 (July 1, 2010), 75 FR 39600 (July 9, 2010) (SR– EDGA–2010–06). 5 As defined in Exchange Rule 1.5(cc). 6 See Securities Exchange Act Release No. 62436 (July 1, 2010), 75 FR 39600, 39601 (July 9, 2010) (SR–EDGA–2010–06) (citing Securities Exchange Act Release No. 61545 (February 19, 2010), 75 FR 8769 (February 25, 2010) (SR–BATS–2009–032) and Securities Exchange Act Release No. 62392 (June 28, 2010), 75 FR 38857 (July 6, 2010) (SR– NASDAQ–2010–077)). 7 See Securities Exchange Act Release No. 63519 (December 10, 2010), 75 FR 78791 (December 16, 2010) (SR–EDGA–2010–22). VerDate Mar<15>2010 14:26 Feb 08, 2013 Jkt 229001 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,9 in general, and furthers the objectives of Section 6(b)(4),10 in particular, as it provides for the equitable allocation of reasonable dues, fees and other charges among its Members and other persons using its facilities. The Exchange believes that the proposal represents an equitable allocation of reasonable dues, fees, and other charges as its billing for port fees is reasonably constrained by competitive alternatives. For example, the change to monthly billing is reasonable because it is consistent with the monthly options offered by other exchanges, such as the BATS Exchange, Inc. (‘‘BATS’’) and NASDAQ Stock Market LLC (‘‘NASDAQ’’).11 Furthermore, Members and other persons using the Exchange facilities also have the ability to obtain access to these services without the need for an independent physical port connection, such as through alternative means of financial extranets and service bureaus that act as a conduit for orders entered by Members and non-Members. Members and non-Members also have the ability to choose lower cost connection service types and still obtain access to all EDGA services. Furthermore, the fees associated with physical ports will continue to be equitably allocated and nondiscriminatory as they will continue to be uniform in application to all Members and non-Members. Members and non-Members will continue to choose whether they want more than one physical port and choose the method of connectivity based on their specific needs. The proposed rule change is also an equitable allocation of reasonable dues, fees, and other charges because, for Members and non-Members, the payment of physical connectivity fees on a monthly basis provides administrative benefits over payments made on an annual basis. For example, payment on a monthly basis allows Members and non-Members to opt-in or opt-out of physical connectivity on thirty (30) days’ notice. Members and non-Members that choose to cancel their physical connectivity within the thirty (30) days’ notice will have no recurring obligation. Finally, the proposed rule change is also an equitable allocation of reasonable dues, fees, and other charges as the Exchange believes that the increased fees obtained through the monthly port fees over the course of a year over annual port fees (an increase of $1,000 per year per port on all 1Gb copper circuits, $1,500 per year per port on all 1Gb Fiber circuits, and $2,000 per year per port on all 10 Gb Fiber circuits) will enable it to cover its increased infrastructure costs associated with allowing Members and non-Members to establish physical ports to connect to the Exchange’s systems and continue to maintain and improve its infrastructure, market technology, and services. The Exchange believes that the proposed 8 For example, Members or non-Members who are currently billed annually will pay $416 per physical port for 1GB copper circuits ($5,000 annual fee/12 months) for the month of January 2013 only and then shift to a monthly billing arrangement and pay $500 per physical port from February 2013– December 2013 (monthly billing). 9 15 U.S.C. 78f. 10 15 U.S.C. 78f(b)(4). 11 The Exchange notes that BATS and NASDAQ only allow for payment of physical port fees on a monthly basis. See BATS Exchange, Inc., BATS BZX and BYX Exchange Fee Schedules, https:// cdn.batstrading.com/resources/regulation/ rule_book/BATS-Exchanges_Fee_Schedules.pdf; NASDAQ Stock Market LLC, Price List—Trading & Connectivity, https://www.nasdaqtrader.com/ trader.aspx?id=pricelisttrading2. physical ports on an annual basis. The Exchange’s current monthly rates that it charges Members and non-Members for physical ports remains unchanged; therefore, the Exchange will assess a monthly fee of $500 per physical port that connects to the Exchange’s System via 1 gigabyte Copper circuits; $750 per physical port that connects to the Exchange’s System via 1 gigabyte Fiber circuits; and $1,000 per physical port that connects to the Exchange’s System via 10 gigabyte Fiber circuits. In addition, the Exchange proposes to prorate for the month of January 2013 only the annual fee paid by Members or nonMembers who currently have annual billing as of January 1, 2013 and then convert those Members or non-Members to monthly billing starting in February 2013, subject to the execution of a new contract that the Exchange has distributed to all Members and nonMembers to reflect this change.8 Furthermore, Direct Edge represents that its Members and non-Members who currently have annual contracts for physical ports have either consented to be converted to a month-to-month contract at the proposed rates, or elected to terminate their contract because they no longer require the service. The Exchange proposes to implement these amendments to its fee schedule on February 1, 2013. Members and NonMembers were notified of the planned changes on November 8, 2012 and through subsequent direct communication. PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 E:\FR\FM\11FEN1.SGM 11FEN1 Federal Register / Vol. 78, No. 28 / Monday, February 11, 2013 / Notices rates are equitable and nondiscriminatory in that they apply uniformly to all Members and nonMembers. The Exchange believes the fees and monthly billing option remain competitive with those charged by other exchanges and therefore continue to be reasonable and equitably allocated to Members and non-Members. B. Self-Regulatory Organization’s Statement on Burden on Competition erowe on DSK2VPTVN1PROD with NOTICES This proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Proposing to eliminate payment for physical connectivity on an annual basis does not introduce a burden on competition as exchanges such as BATS and NASDAQ currently only allow payment for physical connectivity on a monthly basis.12 In addition, the proposed rule change does not impose any burden on intramarket competition as payment on a monthly basis is available to all Members and nonMembers. In addition, Members and non-Members also have the ability to obtain access to these services without the need for an independent physical port connection, such as through alternative means of financial extranets and service bureaus that act as a conduit for orders entered by Members and nonMembers. Fees for market access will be a component of the overall fees charged by the Exchange to execute and route orders through the Exchange. As the Commission has recognized, the market for execution and routing services is extremely competitive.13 Market participants that choose not to connect directly to the Exchange can readily access liquidity available on the Exchange by directing their order flow to other venues that, under Regulation NMS, must route to the Exchange if it has posted the best price. Accordingly, the Exchange must set its fees and billing options, including access service fees, at a level and in such a way that will not deter market participants from connecting to the Exchange; otherwise, potential users of the Exchange’s services will simply direct order flow to the Exchange’s multiple competitors. 12 Id. 13 See Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770 (December 9, 2008) (SR–NYSEArca–2006–21). VerDate Mar<15>2010 14:26 Feb 08, 2013 Jkt 229001 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)(A) of the Act 14 and Rule 19b–4(f)(2) 15 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–2013–03 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–2013–03. 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–EDGA– 2013–03 and should be submitted on or before March 4, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–02950 Filed 2–8–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–68829; File No. SR–NSCC– 2012–10] Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Designation of a Longer Period for Commission Action on Proposed Rule Change To Eliminate the Offset of Its Obligations With Institutional Delivery Transactions That Settle at The Depository Trust Company for the Purpose of Calculating Its Clearing Fund Under Procedure XV of Its Rules & Procedures February 5, 2013. On December 17, 2012, the National Securities Clearing Corporation (‘‘NSCC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change SR–NSCC– 2012–10 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 The proposed rule change was published for comment in the Federal 16 17 14 15 U.S.C. 78s(b)(3)(A). 15 17 CFR 19b–4(f)(2)[sic]. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 9751 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\11FEN1.SGM 11FEN1

Agencies

[Federal Register Volume 78, Number 28 (Monday, February 11, 2013)]
[Notices]
[Pages 9749-9751]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-02950]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68830; File No. SR-EDGA-2013-03]


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

February 5, 2013.
    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 January 30, 2013, 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 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.
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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\ and non-Members of the Exchange pursuant to EDGA Rule 
15.1(a) and (c). All of the changes described herein are

[[Page 9750]]

applicable to EDGA Members and non-Members. The text of the proposed 
rule change is available on the Exchange's Internet Web site at 
www.directedge.com, at the Exchange's principal office, and at the 
Public Reference Room of the Commission.
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    \3\ As defined in Exchange Rule 1.5(n).
---------------------------------------------------------------------------

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

1. Purpose
    In SR-EDGA-2010-06,\4\ the Exchange proposed to adopt an annual fee 
per physical port utilized by Members and non-Members to connect to the 
Exchange's System \5\ for order entry and the receipt of Exchange data, 
among other reasons. A physical port is a port used by a Member or non-
Member to connect into the Exchange at the data centers where Exchange 
servers are located. Physical port connections can occur either through 
an external telecommunication circuit or a cross-connection. The 
Exchange noted at the time of filing that other market centers provided 
similar services.\6\
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    \4\ See Securities Exchange Act Release No. 62436 (July 1, 
2010), 75 FR 39600 (July 9, 2010) (SR-EDGA-2010-06).
    \5\ As defined in Exchange Rule 1.5(cc).
    \6\ See Securities Exchange Act Release No. 62436 (July 1, 
2010), 75 FR 39600, 39601 (July 9, 2010) (SR-EDGA-2010-06) (citing 
Securities Exchange Act Release No. 61545 (February 19, 2010), 75 FR 
8769 (February 25, 2010) (SR-BATS-2009-032) and Securities Exchange 
Act Release No. 62392 (June 28, 2010), 75 FR 38857 (July 6, 2010) 
(SR-NASDAQ-2010-077)).
---------------------------------------------------------------------------

    In SR-EDGA-2010-22,\7\ the Exchange amended its fee schedule, 
effective January 1, 2011, to allow Members and non-Members the option 
of paying monthly fees for physical ports used to enter orders in the 
Exchange's System.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 63519 (December 10, 
2010), 75 FR 78791 (December 16, 2010) (SR-EDGA-2010-22).
---------------------------------------------------------------------------

    The Exchange proposes to amend its fee schedule to eliminate the 
option for Members and non-Members to pay for physical ports on an 
annual basis. The Exchange's current monthly rates that it charges 
Members and non-Members for physical ports remains unchanged; 
therefore, the Exchange will assess a monthly fee of $500 per physical 
port that connects to the Exchange's System via 1 gigabyte Copper 
circuits; $750 per physical port that connects to the Exchange's System 
via 1 gigabyte Fiber circuits; and $1,000 per physical port that 
connects to the Exchange's System via 10 gigabyte Fiber circuits. In 
addition, the Exchange proposes to pro-rate for the month of January 
2013 only the annual fee paid by Members or non-Members who currently 
have annual billing as of January 1, 2013 and then convert those 
Members or non-Members to monthly billing starting in February 2013, 
subject to the execution of a new contract that the Exchange has 
distributed to all Members and non-Members to reflect this change.\8\ 
Furthermore, Direct Edge represents that its Members and non-Members 
who currently have annual contracts for physical ports have either 
consented to be converted to a month-to-month contract at the proposed 
rates, or elected to terminate their contract because they no longer 
require the service.
---------------------------------------------------------------------------

    \8\ For example, Members or non-Members who are currently billed 
annually will pay $416 per physical port for 1GB copper circuits 
($5,000 annual fee/12 months) for the month of January 2013 only and 
then shift to a monthly billing arrangement and pay $500 per 
physical port from February 2013-December 2013 (monthly billing).
---------------------------------------------------------------------------

    The Exchange proposes to implement these amendments to its fee 
schedule on February 1, 2013. Members and Non-Members were notified of 
the planned changes on November 8, 2012 and through subsequent direct 
communication.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\9\ in general, and 
furthers the objectives of Section 6(b)(4),\10\ in particular, as it 
provides for the equitable allocation of reasonable dues, fees and 
other charges among its Members and other persons using its facilities. 
The Exchange believes that the proposal represents an equitable 
allocation of reasonable dues, fees, and other charges as its billing 
for port fees is reasonably constrained by competitive alternatives. 
For example, the change to monthly billing is reasonable because it is 
consistent with the monthly options offered by other exchanges, such as 
the BATS Exchange, Inc. (``BATS'') and NASDAQ Stock Market LLC 
(``NASDAQ'').\11\ Furthermore, Members and other persons using the 
Exchange facilities also have the ability to obtain access to these 
services without the need for an independent physical port connection, 
such as through alternative means of financial extranets and service 
bureaus that act as a conduit for orders entered by Members and non-
Members. Members and non-Members also have the ability to choose lower 
cost connection service types and still obtain access to all EDGA 
services.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4).
    \11\ The Exchange notes that BATS and NASDAQ only allow for 
payment of physical port fees on a monthly basis. See BATS Exchange, 
Inc., BATS BZX and BYX Exchange Fee Schedules, https://cdn.batstrading.com/resources/regulation/rule_book/BATS-Exchanges_Fee_Schedules.pdf; NASDAQ Stock Market LLC, Price List--Trading & 
Connectivity, https://www.nasdaqtrader.com/trader.aspx?id=pricelisttrading2.
---------------------------------------------------------------------------

    Furthermore, the fees associated with physical ports will continue 
to be equitably allocated and non-discriminatory as they will continue 
to be uniform in application to all Members and non-Members. Members 
and non-Members will continue to choose whether they want more than one 
physical port and choose the method of connectivity based on their 
specific needs.
    The proposed rule change is also an equitable allocation of 
reasonable dues, fees, and other charges because, for Members and non-
Members, the payment of physical connectivity fees on a monthly basis 
provides administrative benefits over payments made on an annual basis. 
For example, payment on a monthly basis allows Members and non-Members 
to opt-in or opt-out of physical connectivity on thirty (30) days' 
notice. Members and non-Members that choose to cancel their physical 
connectivity within the thirty (30) days' notice will have no recurring 
obligation.
    Finally, the proposed rule change is also an equitable allocation 
of reasonable dues, fees, and other charges as the Exchange believes 
that the increased fees obtained through the monthly port fees over the 
course of a year over annual port fees (an increase of $1,000 per year 
per port on all 1Gb copper circuits, $1,500 per year per port on all 
1Gb Fiber circuits, and $2,000 per year per port on all 10 Gb Fiber 
circuits) will enable it to cover its increased infrastructure costs 
associated with allowing Members and non-Members to establish physical 
ports to connect to the Exchange's systems and continue to maintain and 
improve its infrastructure, market technology, and services. The 
Exchange believes that the proposed

[[Page 9751]]

rates are equitable and non-discriminatory in that they apply uniformly 
to all Members and non-Members. The Exchange believes the fees and 
monthly billing option remain competitive with those charged by other 
exchanges and therefore continue to be reasonable and equitably 
allocated to Members and non-Members.

B. Self-Regulatory Organization's Statement on Burden on Competition

    This proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act. Proposing to eliminate payment for physical connectivity on an 
annual basis does not introduce a burden on competition as exchanges 
such as BATS and NASDAQ currently only allow payment for physical 
connectivity on a monthly basis.\12\ In addition, the proposed rule 
change does not impose any burden on intramarket competition as payment 
on a monthly basis is available to all Members and non-Members. In 
addition, Members and non-Members also have the ability to obtain 
access to these services without the need for an independent physical 
port connection, such as through alternative means of financial 
extranets and service bureaus that act as a conduit for orders entered 
by Members and non-Members.
---------------------------------------------------------------------------

    \12\ Id.
---------------------------------------------------------------------------

    Fees for market access will be a component of the overall fees 
charged by the Exchange to execute and route orders through the 
Exchange. As the Commission has recognized, the market for execution 
and routing services is extremely competitive.\13\ Market participants 
that choose not to connect directly to the Exchange can readily access 
liquidity available on the Exchange by directing their order flow to 
other venues that, under Regulation NMS, must route to the Exchange if 
it has posted the best price. Accordingly, the Exchange must set its 
fees and billing options, including access service fees, at a level and 
in such a way that will not deter market participants from connecting 
to the Exchange; otherwise, potential users of the Exchange's services 
will simply direct order flow to the Exchange's multiple competitors.
---------------------------------------------------------------------------

    \13\ See Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770 (December 9, 2008) (SR-NYSEArca-2006-21).
---------------------------------------------------------------------------

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)(A) of the Act \14\ and Rule 19b-4(f)(2) \15\ 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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 19b-4(f)(2)[sic].
---------------------------------------------------------------------------

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-2013-03 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-2013-03. 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-EDGA-2013-03 and should be 
submitted on or before March 4, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-02950 Filed 2-8-13; 8:45 am]
BILLING CODE 8011-01-P
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