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, 36006-36010 [2013-14113]
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and the rules and regulations
thereunder, including Rules 17Ad–
22(d)(1) and (2) because by improving
the precision and clarity of the rights
and obligations specified in the S&P
Agreement, which is prerequisite for a
clearing member to act as an OTC Index
Option Clearing Member, the proposed
modifications would help remove
impediments to and perfect the
mechanism of a national system for the
prompt and accurate clearance and
settlement of securities transactions,13
ensure that OCC’s rules are reasonably
designed to have participation
requirements that are objective and
publicly disclosed and permit fair and
open access,14 and provide for a wellfounded, transparent, and enforceable
legal framework.15 The proposed rule
change is not inconsistent with any
rules of OCC, including any other rules
proposed to be amended.
(B) Clearing Agency’s Statement on
Burden on Competition
OCC does not believe that the
proposed rule change would impact, or
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.16
With respect to any burden on
competition among clearing agencies,
OCC is the only registered clearing
agency that performs central
counterparty services to the options
markets.
Changes to the rules of a clearing
agency may have an impact on the
participants in a clearing agency and the
markets that the clearing agency serves.
This proposed rule change affects all of
OCC’s clearing members desiring to be
an OTC Index Option Clearing Member,
and OCC believes that the proposed
modifications to the S&P Agreement
would not unfairly inhibit access to
OCC’s services or disadvantage or favor
any particular user in relationship to
another user because the proposed
modifications are clarifying and
housekeeping in nature and would not
impose any additional substantive
burden. Any clearing member that seeks
to become an OTC Index Options
Clearing Member would be required to
execute the new version of the S&P
Agreement.
For the foregoing reasons, OCC
believes that the proposed rule change
is in the public interest, would be
consistent with the requirements of the
Act applicable to clearing agencies, and
would not impose a burden on
U.S.C. 78q–1(b)(3)(F).
14 17 CFR 240.17Ad–22(d)(2).
15 17 CFR 240.17Ad–22(d)(1).
16 15 U.S.C. 78q–1(b)(3)(I).
competition that is unnecessary or
inappropriate in furtherance of the
purposes of the Act because the changes
would clarify the meaning of the S&P
Agreement in ways that help to promote
the purposes of the Act and Rule 17Ad–
22 thereunder as described above.
All submissions should refer to File
Number SR–OCC–2013–07. 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
(C) Clearing Agency’s Statement on
Internet Web site (https://www.sec.gov/
Comments on the Proposed Rule
rules/sro.shtml). Copies of the
Change Received From Members,
submission, all subsequent
Participants, or Others
amendments, all written statements
Written comments on the proposed
with respect to the proposed rule
rule change were not and are not
change that are filed with the
intended to be solicited with respect to
Commission, and all written
the proposed rule change and none have communications relating to the
been received.
proposed rule change between the
Commission and any person, other than
III. Date of Effectiveness of the
those that may be withheld from the
Proposed Rule Change and Timing for
public in accordance with the
Commission Action
The foregoing rule change has become provisions of 5 U.S.C. 552, will be
available for Web site viewing and
effective pursuant to Section
19(b)(3)(A)(i) of the Act 17 and paragraph printing in the Commission’s Public
Reference Room, 100 F Street NE.,
(f)(i) of Rule 19b–4 thereunder 18
Washington, DC 20549 on official
because it constitutes a stated policy,
business days between the hours of
practice, or interpretation with respect
10:00 a.m. and 3:00 p.m. Copies of the
to the meaning, administration, or
filing also will be available for
enforcement of an existing rule. OCC
inspection and copying at the principal
states that it will delay the
implementation of the rule change until office of OCC and on OCC’s Web site:
https://www.theocc.com/components/
it is deemed certified under CFTC
docs/legal/rules_and_bylaws/
19 At any time within
Regulation § 40.6.
60 days of the filing of the proposed rule sr_occ_13_07.pdf.
All comments received will be posted
change, the Commission summarily may
temporarily suspend such rule change if without change; the Commission does
not edit personal identifying
it appears to the Commission that such
action is necessary or appropriate in the information from submissions. You
should submit only information that
public interest, for the protection of
investors, or otherwise in furtherance of you wish to make available publicly. All
submissions should refer to File
the purposes of the Act.
Number SR–OCC–2013–07 and should
IV. Solicitation of Comments
be submitted on or before July 5, 2013.
Interested persons are invited to
For the Commission, by the Division of
submit written data, views and
Trading and Markets, pursuant to delegated
arguments concerning the foregoing,
authority.20
including whether the proposed rule
Kevin M. O’Neill,
change is consistent with the Act.
Deputy Secretary.
Comments may be submitted by any of
[FR Doc. 2013–14111 Filed 6–13–13; 8:45 am]
the following methods:
BILLING CODE 8011–01–P
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–OCC–2013–07 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.
13 15
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17 15
U.S.C. 78s(b)(3)(A)(i).
18 17 CFR 240.19b–4(f)(1).
19 17 CFR 40.6.
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69724; File No. SR–EDGA–
2013–15]
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
June 10, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
20 17
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‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 3,
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
of the Exchange pursuant to EDGA Rule
15.1(a) and (c). All of the changes
described herein are applicable to EDGA
Members. The text of the proposed rule
change is available on the Exchange’s
Internet Web site at
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
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1. Purpose
The Exchange proposes to amend its
fees and rebates applicable to Members
of the Exchange pursuant to EDGA Rule
15.1(a) and (c) to (1) lower the default 4
rebate at the top of its fee schedule for
removing liquidity in securities at or
above $1.00 on EDGA from a rebate of
$0.0004 per share to a rebate of $0.0003
per share and make conforming changes
to removal flags N, W, 6, BB, CR, PR,
and XR; (2) make conforming changes to
1 15
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 As defined in Exchange Rule 1.5(n).
4 ‘‘Default’’ refers to the standard rebate provided
to Members for orders that remove liquidity from
the Exchange absent Members qualifying for
additional volume tiered pricing.
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the internalization flags 5, EA and ER;
(3) amend the rates in the tiers in
Footnote 4 to the Exchange’s fee
schedule; 5 (4) increase the fee charged
from $0.0018 per share to $0.0020 per
share for orders that yield Flag RB,
which routes to NASDAQ OMX BX
(‘‘BX’’) and adds liquidity and (5)
decrease the rebate from $0.0026 per
share to $0.0020 per share for orders
that yield Flag RS, which routes to
NASDAQ OMX PSX (‘‘PSX’’) and adds
liquidity.
Lower Default Rebate
The Exchange proposes to lower the
default rebate at the top of its fee
schedule for removing liquidity in
securities at or above $1.00 on EDGA
from a rebate of $0.0004 per share to a
rebate of $0.0003 per share. This change
will also be reflected in the following
removal flags: N, W, 6, BB, CR, PR, and
XR.
Amendments to Customer
Internalization Fees
For customer internalization, which
occurs when two orders presented to the
Exchange from the same Member (i.e.,
MPID) are presented separately and not
in a paired manner, but nonetheless
inadvertently match with one another,6
the Exchange currently charges $0.0001
per share per side of an execution (for
adding liquidity and for removing
liquidity) for flags EA, ER, and 5. This
charge occurs in lieu of the standard or
tiered rebate/removal rates. Therefore,
Members currently incur a total
transaction cost of $0.0002 per share for
both sides of an execution for customer
internalization.
In SR–EDGA–2011–14,7 the Exchange
represented that it ‘‘will continue to
ensure that the internalization fee is no
more favorable than each prevailing
maker/taker spread.’’ In order to ensure
that the internalization fee is no more
favorable than the proposed maker/taker
spread of $0.0003 for the standard add
rate ($0.0006 charge per share) and
standard removal rate (proposed
$0.0003 rebate per share), the Exchange
is proposing to charge $0.00015 per side
for customer internalization (flags EA,
ER and 5). In each case (both tiered and
standard rates), the charge for Members
inadvertently matching with themselves
is no more favorable than each maker/
taker spread. The applicable rate for
5 References herein to ‘‘Footnotes’’ refer only to
footnotes on the Exchange’s fee schedule and not
to footnotes within the current filing.
6 Members are advised to consult Rule 12.2
respecting fictitious trading.
7 See Securities Exchange Release No. 64393 (May
4, 2011), 76 FR 27370, 27372 (May 11, 2011) (SR–
EDGA–2011–14).
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customer internalization thus allows the
Exchange to discourage potential wash
sales.
Amendments to Footnote 4
Currently, Footnote 4 to the
Exchange’s fee schedule lists three tiers
that offer a reduced charge of $0.0005
per share (from the default charge of
$0.0006 per share) for adding liquidity
on EDGA, provided the requirements of
one of the tiers are met. The Exchange
proposes to amend each of the three
tiers in Footnote 4 to further reduce the
charge for adding liquidity on EDGA,
provided the requirements of one of the
three tiers are met, from $0.0005 per
share to $0.0004 per share.
Fee Change for Flag RB
In securities priced at or above $1.00,
the Exchange currently assesses a fee of
$0.0018 per share for Members’ orders
that yield Flag RB, which routes to BX
and adds liquidity. The Exchange
proposes to amend its fee schedule to
increase this fee to $0.0020 per share for
Members’ orders that yield Flag RB. The
proposed change represents a pass
through of the rate that Direct Edge ECN
LLC (d/b/a DE Route) (‘‘DE Route’’), the
Exchange’s affiliated routing brokerdealer, is charged for routing orders to
BX that add liquidity and do not qualify
for a volume tiered discount. When DE
Route routes to BX and adds liquidity,
it is charged a default fee of $0.0020 per
share.8 DE Route will pass through this
rate on BX to the Exchange and the
Exchange, in turn, will pass through this
rate to its Members. The Exchange notes
that the proposed change is in response
to BX’s May 2013 fee filing with the
Securities and Exchange Commission
(the ‘‘Commission’’), wherein BX
increased the rate it charges its
customers, such as DE Route, from a
charge of $0.0018 per share to a charge
of $0.0020 per share for orders that are
routed to BX and add liquidity.9
Rebate Change for Flag RS
In securities priced at $1.00 or above,
the Exchange currently provides a
rebate of $0.0026 per share for Members’
orders that yield Flag RS, which routes
to PSX and adds liquidity. The
Exchange proposes to amend its fee
8 The Exchange notes that to the extent DE Route
does or does not achieve any volume tiered rebate
on BX, its rate for Flag RB will not change. See BX
Fee Schedule, https://www.nasdaqtrader.com/
Trader.aspx?id=bx_pricing (charging a default fee of
$0.0020 per share for adding displayed liquidity to
BX).
9 See Securities Exchange Act Release No. 69522
(May 6, 2013), 78 FR 27464 (May 10, 2013) (SR–
BX–2013–034) (amending the default fee BX
charges for adding liquidity to the BX order book
from $0.0018 per share to $0.0020 per share).
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schedule to decrease the rebate it
provides Members from $0.0026 per
share to $0.0020 per share for Flag RS.
The proposed change represents a pass
through of the rate that DE Route is
rebated for routing orders to PSX that
add liquidity and do not qualify for a
volume tiered discount.10 When DE
Route routes to PSX and adds liquidity,
it is provided a default rebate of $0.0020
per share. DE Route will pass through
this rate on PSX to the Exchange and the
Exchange, in turn, will pass through this
rate to its Members. The Exchange notes
that the proposed change is in response
to PSX’s May 2013 fee filing with the
Commission, wherein PSX decreased
the rebate it provides its customers,
such as DE Route, from a rebate of
$0.0026 per share to a rebate of $0.0020
per share for orders that are routed to
PSX and add liquidity.11
Implementation Date
The Exchange proposes to implement
these amendments to its fee schedule on
June 3, 2013.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the objectives of Section 6 of the Act,12
in general, and furthers the objectives of
Section 6(b)(4),13 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.
Lower Default Rebate
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The Exchange believes that its
proposal to lower the default rebate for
removing liquidity from $0.0004 per
share to $0.0003 per share is an
equitable allocation of reasonable dues,
fees and other charges as it will enable
the Exchange to retain additional funds
to offset increased administrative,
regulatory, and other infrastructure
costs associated with operating an
exchange. The rate is reasonable
because it is comparable to BATS BYX
Exchange, Inc.’s (‘‘BYX’’) similar rebate
of $0.0005 per share for removing
10 The Exchange notes that to the extent DE Route
does or does not achieve any volume tiered rebate
on PSX, its rate for Flag RS will not change. See
PSX Fee Schedule, https://www.nasdaqtrader.com/
Trader.aspx?id=PSX_pricing (providing a default
rebate of $0.0020 per share for adding displayed
liquidity to PSX).
11 See Securities Exchange Act Release No. 69588
(May 15, 2013), 78 FR 29801 (May 21, 2013) (SR–
Phlx–2013–51) (amending the default rebate PSX
provides for adding displayed liquidity to the PSX
order book from $0.0026 per share to $0.0020 per
share).
12 15 U.S.C. 78f.
13 15 U.S.C. 78f(b)(4).
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liquidity.14 The Exchange believes that
the proposed rebate is nondiscriminatory in that it applies
uniformly to all Members.
Amendments to Customer
Internalization Fees
The Exchange believes that the
increased fee for customer
internalization from $0.0002 to $0.0003
per share per side of an execution for
flags EA, ER (regular trading session)
and 5 (pre and post market) represents
an equitable allocation of reasonable
dues, fees, and other charges as it is
designed to discourage Members from
inadvertently matching with one
another, thereby discouraging potential
wash sales. The increased fee also
allows the Exchange to offset its
administrative, clearing, and other
operating costs incurred in executing
such trades. Finally, the fee is equitable
in that it is consistent 15 with the EDGA
fee structure that has a proposed maker/
taker spread of $0.0003 per share (where
the standard charge to add liquidity on
EDGA is $0.0006 per share and the
standard fee to remove liquidity is
proposed to be $0.0003 per share).
This increased fee per side of an
execution on Flags EA, ER, and 5
($0.00015 per side per share instead of
$0.00010 per side per share), yields a
total cost of $0.0003, thus making the
internalization fee consistent with the
current maker/taker spread.16 The
Exchange believes that the proposed
rate is non-discriminatory in that it
applies uniformly to all Members.
Amendments to Footnote 4
The Exchange believes that its
proposal to further reduce the charge for
adding liquidity on EDGA (from $0.0005
per share to $0.0004 per share) provided
by each of the three tiers in Footnote 4
of the Exchange’s fee schedule
represents an equitable allocation of
reasonable dues, fees, and other charges
among Members and other persons
using its facilities because the reduced
14 See BYX, BATS BYX Exchange Fee Schedule,
https://cdn.batstrading.com/resources/regulation/
rule_book/BATS-Exchanges_Fee_Schedules.pdf
(providing a rebate of $0.0005 per share for
removing liquidity for executions by members that
add a daily average volume of at least 50,000 shares
of liquidity on BYX). The Exchange notes that its
default rate for removing liquidity applies only
when Members meet the conditions of Footnote 1
to the Exchange’s fee schedule, which requires
Members to add and/or route a minimum ADV of
50,000 shares on EDGA.
15 In each case, the internalization fee is no more
favorable to the Member than each prevailing
maker/taker spread.
16 The Exchange will continue to ensure that the
internalization fee is no more favorable than each
prevailing maker/taker spread.
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rates are designed to move in lock-step
with the default maker/taker spread.
Currently, Members receive a default
maker/taker spread of $0.0002 ($0.0006
charge for adding liquidity to EDGA and
$0.0004 rebate for removing liquidity
from EDGA). The reduced charges
currently provided by Footnote 4 (rates
of $0.0005 per share for each tier)
provides Members with a more
beneficial maker/taker spread of $0.0001
per share. By amending the reduced
charge provided in Footnote 4 to move
in lock-step with the proposed change
to the default rebate for removing
liquidity from EDGA ($0.0006 charge for
adding liquidity to EDGA and proposed
rebate of $0.0003 for removing liquidity
from EDGA for a spread of $0.0003), the
maker/taker spread provided by such
reduced charge would remain at
$0.0001 (proposed reduced charge of
$0.0004 for adding liquidity to EDGA
and a proposed rebate of $0.0003 for
removing liquidity from EDGA for a
spread of $0.0001 per share).
These proposed rates are designed to
increase volume on the Exchange and
increase potential revenue to the
Exchange, and allows the Exchange to
spread its administrative and
infrastructure costs over a greater
number of shares, leading to lower per
share costs. These lower per share costs
in turn would allow the Exchange to
pass on the savings to Members in the
form of lower fees. The increased
liquidity benefits all investors by
deepening EDGA’s liquidity pool,
offering additional flexibility for all
investors to enjoy cost savings,
supporting the quality of price
discovery, promoting market
transparency and improving investor
protection. Volume-based discounts
such as the ones herein have been
widely adopted in the cash equities
markets, and are equitable because they
are open to all Members on an equal
basis and provide discounts that are
reasonably related to the value to an
exchange’s market quality associated
with higher levels of market activity,
such as higher levels of liquidity
provision and introduction of higher
volumes of orders into the price and
volume discovery processes.
In addition, the reduced rates are
reasonable in that they are comparable
to BYX’s rates for adding liquidity.17
Lastly, the Exchange believes that the
proposed rate is non-discriminatory in
that it applies uniformly to all Members.
17 See BYX, BATS BYX Exchange Fee Schedule,
https://cdn.batstrading.com/resources/regulation/
rule_book/BATS-Exchanges_Fee_Schedules.pdf
(charging a range of rates from $0.00045 to $0.0007
for adding displayed liquidity).
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Fee Change for Flag RB
The Exchange believes that its
proposal to increase the pass through a
charge for Members’ orders that yield
Flag RB from $0.0018 to $0.0020 per
share represents an equitable allocation
of reasonable dues, fees, and other
charges among Members and other
persons using its facilities because the
Exchange does not levy additional fees
or offer additional rebates for orders that
it routes to BX through DE Route. Prior
to BX’s May 2013 fee filing, BX charged
DE Route a fee of $0.0018 per share for
orders yielding Flag RB, which DE
Route passed through to the Exchange
and the Exchange passed through to its
Members. In BX’s May 2013 fee filing,
BX increased the rate it charges its
customers, such as DE Route, from a
charge of $0.0018 per share to a charge
of $0.0020 per share for orders that are
routed to BX and add liquidity.18
Therefore, the Exchange believes that
the proposed change in Flag RB from a
fee of $0.0018 per share to a fee of
$0.0020 per share is equitable and
reasonable because it accounts for the
pricing changes on BX. In addition, the
proposal allows the Exchange to
continue to charge its Members a passthrough rate for orders that are routed to
BX and add liquidity using DE Route.
The Exchange notes that routing
through DE Route is voluntary. Lastly,
the Exchange also believes that the
proposed amendment is nondiscriminatory because it applies
uniformly to all Members.
Rebate Change for Flag RS
The Exchange believes that its
proposal to decrease the pass through
rebate for Members’ orders that yield
Flag RS from $0.0026 to $0.0020 per
share represents an equitable allocation
of reasonable dues, fees, and other
charges among Members and other
persons using its facilities because the
Exchange does not levy additional fees
or offer additional rebates for orders that
it routes to PSX through DE Route. Prior
to PSX’s May 2013 fee filing, PSX
provided DE Route a rebate of $0.0026
per share for orders yielding Flag RS,
which DE Route passed through to the
Exchange and the Exchange passed
through to its Members. In PSX’s May
2013 fee filing, PSX decreased the rebate
it provides its customers, such as DE
Route, from a rebate of $0.0026 per
share to a rebate of $0.0020 per share for
orders that are routed to PSX and add
18 See Securities Exchange Act Release No. 69522
(May 6, 2013), 78 FR 27464 (May 10, 2013) (SR–
BX–2013–034) (amending the default fee BX
charges for adding liquidity to the BX order book
from $0.0018 per share to $0.0020 per share).
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liquidity.19 Therefore, the Exchange
believes that the proposed decrease in
rebate from $0.0026 per share to a rebate
of $0.0020 per share for orders that yield
Flag RS is equitable and reasonable
because it accounts for the pricing
changes on PSX. In addition, the
proposal allows the Exchange to
continue to charge its Members a passthrough rate for orders that are routed to
PSX and add liquidity using DE Route.
The Exchange notes that routing
through DE Route is voluntary. Lastly,
the Exchange also believes that the
proposed amendment is nondiscriminatory because it applies
uniformly to all Members.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
These proposed rule changes do not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange does not believe that any
of these changes represent a significant
departure from previous pricing offered
by the Exchange or pricing offered by
any of the Exchange’s competitors.
Additionally, Members may opt to
disfavor the Exchange’s pricing if they
believe that alternatives offer them
better value. Accordingly, the Exchange
believes that the proposed changes
would not impair the ability of Members
or competing venues to maintain their
competitive standing in the financial
markets.
The Exchange believes that its
proposal to lower the default rebate for
removing liquidity from EDGA from
$0.0004 per share to $0.0003 per share
will also assist in increasing
competition in that its proposed rebate
is comparable to rebates for adding
liquidity offered by BYX’s rebate of
$0.0005 per share for removing
liquidity.20
The Exchange believes that its
internalization rates for securities priced
$1.00 and above will also not burden
intermarket or intramarket competition
as the proposed rates are no more
favorable than Members achieving the
19 See Securities Exchange Act Release No. 69588
(May 15, 2013) (SR–Phlx–2013–51) (amending the
default rebate PSX provides for adding displayed
liquidity to the PSX order book from $0.0026 per
share to $0.0020 per share).
20 See BYX, BATS BYX Exchange Fee Schedule,
https://cdn.batstrading.com/resources/regulation/
rule_book/BATS-Exchanges_Fee_Schedules.pdf
(providing a rebate of $0.0005 per share for
removing liquidity for executions by members that
add a daily average volume of at least 50,000 shares
of liquidity on BYX). The Exchange notes that its
default rate for removing liquidity applies only
when Members meet the conditions of Footnote 1
to the Exchange’s fee schedule, which requires
Members to add and/or route a minimum ADV of
50,000 shares on EDGA.
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36009
maker/taker spreads between the default
add and remove rates on EDGA.
The Exchange believes that its
proposal to amend the reduced rates
provided in the tiers in Footnote 4 of its
fee schedule increases competition
because the proposed rates are
comparable to the rates charged by BYX
for orders that add liquidity.21 The
Exchange believes that its proposal will
have no burden on intramarket
competition as the rates apply
uniformly to all Members.
The Exchange believes that its
proposal to pass through a charge of
$0.0020 per share for Members’ orders
that yield Flag RB would increase
intermarket competition because it
offers customers an alternative means to
route to BX and add liquidity for the
same price as entering orders on BX
directly. The Exchange believes that its
proposal would not burden intramarket
competition because the proposed rate
would apply uniformly to all Members.
The Exchange believes that its
proposal to pass through a rebate of
$0.0020 per share for Members’ orders
that yield Flag RS would increase
intermarket competition because it
offers customers an alternative means to
route to PSX and add liquidity for the
same price as entering orders on PSX
directly. The Exchange believes that its
proposal would not burden intramarket
competition because the proposed rate
would apply uniformly to all Members.
The Exchange believes that its
proposal would increase competition for
routing services because the market for
order execution is competitive and the
Exchange’s proposal provides customers
with another alternative to route their
orders. The Exchange notes that routing
through DE Route is voluntary.
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)
21 See BYX, BATS BYX Exchange Fee Schedule,
https://cdn.batstrading.com/resources/regulation/
rule_book/BATS-Exchanges_Fee_Schedules.pdf
(charging $0.0006 per share for adding displayed
liquidity for all executions other than those that set
the NBBO for members who have an ADV equal to
or greater than 0.25% but less than 0.5% of average
total consolidated volume).
E:\FR\FM\14JNN1.SGM
14JNN1
36010
Federal Register / Vol. 78, No. 115 / Friday, June 14, 2013 / Notices
of the Act 22 and Rule 19b–4(f)(2) 23
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:
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–2013–15 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–2013–15. 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;
22 15
23 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
VerDate Mar<15>2010
17:03 Jun 13, 2013
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–
2013–15 and should be submitted on or
before July 5, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–14113 Filed 6–13–13; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #13614 and #13615]
Illinois Disaster #IL–00042
U.S. Small Business
Administration.
ACTION: Notice.
Jkt 229001
PO 00000
Frm 00163
Fmt 4703
Sfmt 4703
For Physical Damage:
Non-Profit Organizations With
Credit Available Elsewhere ...
Non-Profit Organizations Without Credit Available Elsewhere .....................................
For Economic Injury:
Non-Profit Organizations Without Credit Available Elsewhere .....................................
2.875
2.875
2.875
The number assigned to this disaster
for physical damage is 136146 and for
economic injury is 136156.
James E. Rivera,
Associate Administrator for Disaster
Assistance.
SUMMARY: This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of Illinois (FEMA–4116–DR),
dated 06/06/2013.
Incident: Severe Storms, Straight-line
Winds and Flooding.
Incident Period: 04/16/2013 through
05/05/2013.
Effective Date: 06/06/2013.
Physical Loan Application Deadline
Date: 08/05/2013.
Economic Injury (EIDL) Loan
Application Deadline Date: 03/06/2014.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
06/06/2013, Private Non-Profit
organizations that provide essential
services of governmental nature may file
disaster loan applications at the address
listed above or other locally announced
locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Adams, Bureau,
Clark, Crawford, Dupage, Fulton,
Grundy, Henderson, Kendall, Knox,
CFR 200.30–3(a)(12).
Percent
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
AGENCY:
24 17
La Salle, Lake, Livingston,
Marshall, Mason, Mchenry, Mercer,
Ogle, Pike, Putnam, Rock Island,
Stark, Warren, Woodford.
The Interest Rates are:
[FR Doc. 2013–14084 Filed 6–13–13; 8:45 am]
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #13605 and #13606]
Iowa Disaster #IA–00052
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
SUMMARY: This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of Iowa (FEMA–4119–DR),
dated 05/31/2013.
Incident: Severe Storms, Straight-line
Winds, and Flooding.
Incident Period: 04/17/2013 through
04/30/2013.
Effective Date: 05/31/2013.
Physical Loan Application Deadline
Date: 07/30/2013.
Economic Injury (EIDL) Loan
Application Deadline Date: 03/03/2014.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
05/31/2013, Private Non-Profit
organizations that provide essential
E:\FR\FM\14JNN1.SGM
14JNN1
]]>Agencies
[Federal Register Volume 78, Number 115 (Friday, June 14, 2013)]
[Notices]
[Pages 36006-36010]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-14113]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69724; File No. SR-EDGA-2013-15]
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
June 10, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the
[[Page 36007]]
``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on June 3, 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its fees and rebates applicable to
Members \3\ of the Exchange pursuant to EDGA Rule 15.1(a) and (c). All
of the changes described herein are applicable to EDGA Members. The
text of the proposed rule change is available on the Exchange's
Internet Web site at www.directedge.com, at the Exchange's principal
office, and at the Public Reference Room of the Commission.
---------------------------------------------------------------------------
\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
The Exchange proposes to amend its fees and rebates applicable to
Members of the Exchange pursuant to EDGA Rule 15.1(a) and (c) to (1)
lower the default \4\ rebate at the top of its fee schedule for
removing liquidity in securities at or above $1.00 on EDGA from a
rebate of $0.0004 per share to a rebate of $0.0003 per share and make
conforming changes to removal flags N, W, 6, BB, CR, PR, and XR; (2)
make conforming changes to the internalization flags 5, EA and ER; (3)
amend the rates in the tiers in Footnote 4 to the Exchange's fee
schedule; \5\ (4) increase the fee charged from $0.0018 per share to
$0.0020 per share for orders that yield Flag RB, which routes to NASDAQ
OMX BX (``BX'') and adds liquidity and (5) decrease the rebate from
$0.0026 per share to $0.0020 per share for orders that yield Flag RS,
which routes to NASDAQ OMX PSX (``PSX'') and adds liquidity.
---------------------------------------------------------------------------
\4\ ``Default'' refers to the standard rebate provided to
Members for orders that remove liquidity from the Exchange absent
Members qualifying for additional volume tiered pricing.
\5\ References herein to ``Footnotes'' refer only to footnotes
on the Exchange's fee schedule and not to footnotes within the
current filing.
---------------------------------------------------------------------------
Lower Default Rebate
The Exchange proposes to lower the default rebate at the top of its
fee schedule for removing liquidity in securities at or above $1.00 on
EDGA from a rebate of $0.0004 per share to a rebate of $0.0003 per
share. This change will also be reflected in the following removal
flags: N, W, 6, BB, CR, PR, and XR.
Amendments to Customer Internalization Fees
For customer internalization, which occurs when two orders
presented to the Exchange from the same Member (i.e., MPID) are
presented separately and not in a paired manner, but nonetheless
inadvertently match with one another,\6\ the Exchange currently charges
$0.0001 per share per side of an execution (for adding liquidity and
for removing liquidity) for flags EA, ER, and 5. This charge occurs in
lieu of the standard or tiered rebate/removal rates. Therefore, Members
currently incur a total transaction cost of $0.0002 per share for both
sides of an execution for customer internalization.
---------------------------------------------------------------------------
\6\ Members are advised to consult Rule 12.2 respecting
fictitious trading.
---------------------------------------------------------------------------
In SR-EDGA-2011-14,\7\ the Exchange represented that it ``will
continue to ensure that the internalization fee is no more favorable
than each prevailing maker/taker spread.'' In order to ensure that the
internalization fee is no more favorable than the proposed maker/taker
spread of $0.0003 for the standard add rate ($0.0006 charge per share)
and standard removal rate (proposed $0.0003 rebate per share), the
Exchange is proposing to charge $0.00015 per side for customer
internalization (flags EA, ER and 5). In each case (both tiered and
standard rates), the charge for Members inadvertently matching with
themselves is no more favorable than each maker/taker spread. The
applicable rate for customer internalization thus allows the Exchange
to discourage potential wash sales.
---------------------------------------------------------------------------
\7\ See Securities Exchange Release No. 64393 (May 4, 2011), 76
FR 27370, 27372 (May 11, 2011) (SR-EDGA-2011-14).
---------------------------------------------------------------------------
Amendments to Footnote 4
Currently, Footnote 4 to the Exchange's fee schedule lists three
tiers that offer a reduced charge of $0.0005 per share (from the
default charge of $0.0006 per share) for adding liquidity on EDGA,
provided the requirements of one of the tiers are met. The Exchange
proposes to amend each of the three tiers in Footnote 4 to further
reduce the charge for adding liquidity on EDGA, provided the
requirements of one of the three tiers are met, from $0.0005 per share
to $0.0004 per share.
Fee Change for Flag RB
In securities priced at or above $1.00, the Exchange currently
assesses a fee of $0.0018 per share for Members' orders that yield Flag
RB, which routes to BX and adds liquidity. The Exchange proposes to
amend its fee schedule to increase this fee to $0.0020 per share for
Members' orders that yield Flag RB. The proposed change represents a
pass through of the rate that Direct Edge ECN LLC (d/b/a DE Route)
(``DE Route''), the Exchange's affiliated routing broker-dealer, is
charged for routing orders to BX that add liquidity and do not qualify
for a volume tiered discount. When DE Route routes to BX and adds
liquidity, it is charged a default fee of $0.0020 per share.\8\ DE
Route will pass through this rate on BX to the Exchange and the
Exchange, in turn, will pass through this rate to its Members. The
Exchange notes that the proposed change is in response to BX's May 2013
fee filing with the Securities and Exchange Commission (the
``Commission''), wherein BX increased the rate it charges its
customers, such as DE Route, from a charge of $0.0018 per share to a
charge of $0.0020 per share for orders that are routed to BX and add
liquidity.\9\
---------------------------------------------------------------------------
\8\ The Exchange notes that to the extent DE Route does or does
not achieve any volume tiered rebate on BX, its rate for Flag RB
will not change. See BX Fee Schedule, https://www.nasdaqtrader.com/Trader.aspx?id=bx_pricing (charging a default fee of $0.0020 per
share for adding displayed liquidity to BX).
\9\ See Securities Exchange Act Release No. 69522 (May 6, 2013),
78 FR 27464 (May 10, 2013) (SR-BX-2013-034) (amending the default
fee BX charges for adding liquidity to the BX order book from
$0.0018 per share to $0.0020 per share).
---------------------------------------------------------------------------
Rebate Change for Flag RS
In securities priced at $1.00 or above, the Exchange currently
provides a rebate of $0.0026 per share for Members' orders that yield
Flag RS, which routes to PSX and adds liquidity. The Exchange proposes
to amend its fee
[[Page 36008]]
schedule to decrease the rebate it provides Members from $0.0026 per
share to $0.0020 per share for Flag RS. The proposed change represents
a pass through of the rate that DE Route is rebated for routing orders
to PSX that add liquidity and do not qualify for a volume tiered
discount.\10\ When DE Route routes to PSX and adds liquidity, it is
provided a default rebate of $0.0020 per share. DE Route will pass
through this rate on PSX to the Exchange and the Exchange, in turn,
will pass through this rate to its Members. The Exchange notes that the
proposed change is in response to PSX's May 2013 fee filing with the
Commission, wherein PSX decreased the rebate it provides its customers,
such as DE Route, from a rebate of $0.0026 per share to a rebate of
$0.0020 per share for orders that are routed to PSX and add
liquidity.\11\
---------------------------------------------------------------------------
\10\ The Exchange notes that to the extent DE Route does or does
not achieve any volume tiered rebate on PSX, its rate for Flag RS
will not change. See PSX Fee Schedule, https://www.nasdaqtrader.com/Trader.aspx?id=PSX_pricing (providing a default rebate of $0.0020
per share for adding displayed liquidity to PSX).
\11\ See Securities Exchange Act Release No. 69588 (May 15,
2013), 78 FR 29801 (May 21, 2013) (SR-Phlx-2013-51) (amending the
default rebate PSX provides for adding displayed liquidity to the
PSX order book from $0.0026 per share to $0.0020 per share).
---------------------------------------------------------------------------
Implementation Date
The Exchange proposes to implement these amendments to its fee
schedule on June 3, 2013.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\12\ in general, and
furthers the objectives of Section 6(b)(4),\13\ 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.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f.
\13\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
Lower Default Rebate
The Exchange believes that its proposal to lower the default rebate
for removing liquidity from $0.0004 per share to $0.0003 per share is
an equitable allocation of reasonable dues, fees and other charges as
it will enable the Exchange to retain additional funds to offset
increased administrative, regulatory, and other infrastructure costs
associated with operating an exchange. The rate is reasonable because
it is comparable to BATS BYX Exchange, Inc.'s (``BYX'') similar rebate
of $0.0005 per share for removing liquidity.\14\ The Exchange believes
that the proposed rebate is non-discriminatory in that it applies
uniformly to all Members.
---------------------------------------------------------------------------
\14\ See BYX, BATS BYX Exchange Fee Schedule, https://cdn.batstrading.com/resources/regulation/rule_book/BATS-Exchanges_Fee_Schedules.pdf (providing a rebate of $0.0005 per share for
removing liquidity for executions by members that add a daily
average volume of at least 50,000 shares of liquidity on BYX). The
Exchange notes that its default rate for removing liquidity applies
only when Members meet the conditions of Footnote 1 to the
Exchange's fee schedule, which requires Members to add and/or route
a minimum ADV of 50,000 shares on EDGA.
---------------------------------------------------------------------------
Amendments to Customer Internalization Fees
The Exchange believes that the increased fee for customer
internalization from $0.0002 to $0.0003 per share per side of an
execution for flags EA, ER (regular trading session) and 5 (pre and
post market) represents an equitable allocation of reasonable dues,
fees, and other charges as it is designed to discourage Members from
inadvertently matching with one another, thereby discouraging potential
wash sales. The increased fee also allows the Exchange to offset its
administrative, clearing, and other operating costs incurred in
executing such trades. Finally, the fee is equitable in that it is
consistent \15\ with the EDGA fee structure that has a proposed maker/
taker spread of $0.0003 per share (where the standard charge to add
liquidity on EDGA is $0.0006 per share and the standard fee to remove
liquidity is proposed to be $0.0003 per share).
---------------------------------------------------------------------------
\15\ In each case, the internalization fee is no more favorable
to the Member than each prevailing maker/taker spread.
---------------------------------------------------------------------------
This increased fee per side of an execution on Flags EA, ER, and 5
($0.00015 per side per share instead of $0.00010 per side per share),
yields a total cost of $0.0003, thus making the internalization fee
consistent with the current maker/taker spread.\16\ The Exchange
believes that the proposed rate is non-discriminatory in that it
applies uniformly to all Members.
---------------------------------------------------------------------------
\16\ The Exchange will continue to ensure that the
internalization fee is no more favorable than each prevailing maker/
taker spread.
---------------------------------------------------------------------------
Amendments to Footnote 4
The Exchange believes that its proposal to further reduce the
charge for adding liquidity on EDGA (from $0.0005 per share to $0.0004
per share) provided by each of the three tiers in Footnote 4 of the
Exchange's fee schedule represents an equitable allocation of
reasonable dues, fees, and other charges among Members and other
persons using its facilities because the reduced rates are designed to
move in lock-step with the default maker/taker spread.
Currently, Members receive a default maker/taker spread of $0.0002
($0.0006 charge for adding liquidity to EDGA and $0.0004 rebate for
removing liquidity from EDGA). The reduced charges currently provided
by Footnote 4 (rates of $0.0005 per share for each tier) provides
Members with a more beneficial maker/taker spread of $0.0001 per share.
By amending the reduced charge provided in Footnote 4 to move in lock-
step with the proposed change to the default rebate for removing
liquidity from EDGA ($0.0006 charge for adding liquidity to EDGA and
proposed rebate of $0.0003 for removing liquidity from EDGA for a
spread of $0.0003), the maker/taker spread provided by such reduced
charge would remain at $0.0001 (proposed reduced charge of $0.0004 for
adding liquidity to EDGA and a proposed rebate of $0.0003 for removing
liquidity from EDGA for a spread of $0.0001 per share).
These proposed rates are designed to increase volume on the
Exchange and increase potential revenue to the Exchange, and allows the
Exchange to spread its administrative and infrastructure costs over a
greater number of shares, leading to lower per share costs. These lower
per share costs in turn would allow the Exchange to pass on the savings
to Members in the form of lower fees. The increased liquidity benefits
all investors by deepening EDGA's liquidity pool, offering additional
flexibility for all investors to enjoy cost savings, supporting the
quality of price discovery, promoting market transparency and improving
investor protection. Volume-based discounts such as the ones herein
have been widely adopted in the cash equities markets, and are
equitable because they are open to all Members on an equal basis and
provide discounts that are reasonably related to the value to an
exchange's market quality associated with higher levels of market
activity, such as higher levels of liquidity provision and introduction
of higher volumes of orders into the price and volume discovery
processes.
In addition, the reduced rates are reasonable in that they are
comparable to BYX's rates for adding liquidity.\17\ Lastly, the
Exchange believes that the proposed rate is non-discriminatory in that
it applies uniformly to all Members.
---------------------------------------------------------------------------
\17\ See BYX, BATS BYX Exchange Fee Schedule, https://cdn.batstrading.com/resources/regulation/rule_book/BATS-Exchanges_Fee_Schedules.pdf (charging a range of rates from $0.00045 to
$0.0007 for adding displayed liquidity).
---------------------------------------------------------------------------
[[Page 36009]]
Fee Change for Flag RB
The Exchange believes that its proposal to increase the pass
through a charge for Members' orders that yield Flag RB from $0.0018 to
$0.0020 per share represents an equitable allocation of reasonable
dues, fees, and other charges among Members and other persons using its
facilities because the Exchange does not levy additional fees or offer
additional rebates for orders that it routes to BX through DE Route.
Prior to BX's May 2013 fee filing, BX charged DE Route a fee of $0.0018
per share for orders yielding Flag RB, which DE Route passed through to
the Exchange and the Exchange passed through to its Members. In BX's
May 2013 fee filing, BX increased the rate it charges its customers,
such as DE Route, from a charge of $0.0018 per share to a charge of
$0.0020 per share for orders that are routed to BX and add
liquidity.\18\ Therefore, the Exchange believes that the proposed
change in Flag RB from a fee of $0.0018 per share to a fee of $0.0020
per share is equitable and reasonable because it accounts for the
pricing changes on BX. In addition, the proposal allows the Exchange to
continue to charge its Members a pass-through rate for orders that are
routed to BX and add liquidity using DE Route. The Exchange notes that
routing through DE Route is voluntary. Lastly, the Exchange also
believes that the proposed amendment is non-discriminatory because it
applies uniformly to all Members.
---------------------------------------------------------------------------
\18\ See Securities Exchange Act Release No. 69522 (May 6,
2013), 78 FR 27464 (May 10, 2013) (SR-BX-2013-034) (amending the
default fee BX charges for adding liquidity to the BX order book
from $0.0018 per share to $0.0020 per share).
---------------------------------------------------------------------------
Rebate Change for Flag RS
The Exchange believes that its proposal to decrease the pass
through rebate for Members' orders that yield Flag RS from $0.0026 to
$0.0020 per share represents an equitable allocation of reasonable
dues, fees, and other charges among Members and other persons using its
facilities because the Exchange does not levy additional fees or offer
additional rebates for orders that it routes to PSX through DE Route.
Prior to PSX's May 2013 fee filing, PSX provided DE Route a rebate of
$0.0026 per share for orders yielding Flag RS, which DE Route passed
through to the Exchange and the Exchange passed through to its Members.
In PSX's May 2013 fee filing, PSX decreased the rebate it provides its
customers, such as DE Route, from a rebate of $0.0026 per share to a
rebate of $0.0020 per share for orders that are routed to PSX and add
liquidity.\19\ Therefore, the Exchange believes that the proposed
decrease in rebate from $0.0026 per share to a rebate of $0.0020 per
share for orders that yield Flag RS is equitable and reasonable because
it accounts for the pricing changes on PSX. In addition, the proposal
allows the Exchange to continue to charge its Members a pass-through
rate for orders that are routed to PSX and add liquidity using DE
Route. The Exchange notes that routing through DE Route is voluntary.
Lastly, the Exchange also believes that the proposed amendment is non-
discriminatory because it applies uniformly to all Members.
---------------------------------------------------------------------------
\19\ See Securities Exchange Act Release No. 69588 (May 15,
2013) (SR-Phlx-2013-51) (amending the default rebate PSX provides
for adding displayed liquidity to the PSX order book from $0.0026
per share to $0.0020 per share).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
These proposed rule changes do not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act. The Exchange does not believe that any of these changes
represent a significant departure from previous pricing offered by the
Exchange or pricing offered by any of the Exchange's competitors.
Additionally, Members may opt to disfavor the Exchange's pricing if
they believe that alternatives offer them better value. Accordingly,
the Exchange believes that the proposed changes would not impair the
ability of Members or competing venues to maintain their competitive
standing in the financial markets.
The Exchange believes that its proposal to lower the default rebate
for removing liquidity from EDGA from $0.0004 per share to $0.0003 per
share will also assist in increasing competition in that its proposed
rebate is comparable to rebates for adding liquidity offered by BYX's
rebate of $0.0005 per share for removing liquidity.\20\
---------------------------------------------------------------------------
\20\ See BYX, BATS BYX Exchange Fee Schedule, https://cdn.batstrading.com/resources/regulation/rule_book/BATS-Exchanges_Fee_Schedules.pdf (providing a rebate of $0.0005 per share for
removing liquidity for executions by members that add a daily
average volume of at least 50,000 shares of liquidity on BYX). The
Exchange notes that its default rate for removing liquidity applies
only when Members meet the conditions of Footnote 1 to the
Exchange's fee schedule, which requires Members to add and/or route
a minimum ADV of 50,000 shares on EDGA.
---------------------------------------------------------------------------
The Exchange believes that its internalization rates for securities
priced $1.00 and above will also not burden intermarket or intramarket
competition as the proposed rates are no more favorable than Members
achieving the maker/taker spreads between the default add and remove
rates on EDGA.
The Exchange believes that its proposal to amend the reduced rates
provided in the tiers in Footnote 4 of its fee schedule increases
competition because the proposed rates are comparable to the rates
charged by BYX for orders that add liquidity.\21\ The Exchange believes
that its proposal will have no burden on intramarket competition as the
rates apply uniformly to all Members.
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\21\ See BYX, BATS BYX Exchange Fee Schedule, https://cdn.batstrading.com/resources/regulation/rule_book/BATS-Exchanges_Fee_Schedules.pdf (charging $0.0006 per share for adding displayed
liquidity for all executions other than those that set the NBBO for
members who have an ADV equal to or greater than 0.25% but less than
0.5% of average total consolidated volume).
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The Exchange believes that its proposal to pass through a charge of
$0.0020 per share for Members' orders that yield Flag RB would increase
intermarket competition because it offers customers an alternative
means to route to BX and add liquidity for the same price as entering
orders on BX directly. The Exchange believes that its proposal would
not burden intramarket competition because the proposed rate would
apply uniformly to all Members.
The Exchange believes that its proposal to pass through a rebate of
$0.0020 per share for Members' orders that yield Flag RS would increase
intermarket competition because it offers customers an alternative
means to route to PSX and add liquidity for the same price as entering
orders on PSX directly. The Exchange believes that its proposal would
not burden intramarket competition because the proposed rate would
apply uniformly to all Members.
The Exchange believes that its proposal would increase competition
for routing services because the market for order execution is
competitive and the Exchange's proposal provides customers with another
alternative to route their orders. The Exchange notes that routing
through DE Route is voluntary.
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)
[[Page 36010]]
of the Act \22\ and Rule 19b-4(f)(2) \23\ thereunder. At any time
within 60 days of the filing of such proposed rule change, the
Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.
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\22\ 15 U.S.C. 78s(b)(3)(A).
\23\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-EDGA-2013-15 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-2013-15. 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-2013-15 and should be
submitted on or before July 5, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-14113 Filed 6-13-13; 8:45 am]
BILLING CODE 8011-01-P
