Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend EDGX Rule 11.5 Regarding the Route Peg Order, 26479-26481 [2014-10541]

Download as PDF Federal Register / Vol. 79, No. 89 / Thursday, May 8, 2014 / Notices the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR–NYSEArca–2014–04 and should be submitted on or before May 29, 2014. If comments are received, any rebuttal comments should be submitted by June 12, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.87 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–10535 Filed 5–7–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–72088; File No. SR–EDGX– 2014–14] Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend EDGX Rule 11.5 Regarding the Route Peg Order II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change The Exchange proposes to amend the Route Peg Order under Rule 11.5(c)(17) to permit: (i) Executions against routable orders that are equal to or less than the aggregate size of the Route Peg Order interest available at that price; and (ii) Users 3 to add a minimum execution quantity instruction. All of the changes described herein are applicable to EDGX Members. 1. Purpose The Exchange proposes to amend the Route Peg Order under Rule 11.5(c)(17) to permit: (i) Executions against routable orders that are equal to or less than the aggregate size of the Route Peg Order interest available at that price, which would replace the current requirement that routable orders be equal to or less than the size of an individual Route Peg Order; and (ii) Users to add a minimum execution quantity instruction. A Route Peg Order is a non-displayed limit order that posts to the EDGX Book, and thereafter is eligible for execution at the national best bid (‘‘NBB’’) for buy orders and national best offer (‘‘NBO’’) for sell orders against routable orders that are equal to or less than the size of the Route Peg Order.4 Route Peg Orders are passive, resting orders on the EDGX Book 5 and do not take liquidity. Route Peg Orders may be entered, cancelled, and cancelled/replaced prior to and during Regular Trading Hours.6 Route Peg Orders are eligible for execution in a given security during Regular Trading Hours, except that, even after the commencement of Regular Trading Hours, Route Peg Orders are not eligible for execution (1) in the opening cross, and (2) until such time that regular session orders in that security can be 87 17 CFR 200.30–3(a)(12); 17 CFR 200.30– 3(a)(57). 1 15 U.S.C.78s(b)(1). 2 17 CFR 240.19B–4. 3 The term ‘‘User’’ is defined as ‘‘any Member or Sponsored Participant who is authorized to obtain access to the System pursuant to Rule 11.3.’’ See Exchange Rule 1.5(ee). 4 See Securities Exchange Act Release No. 67726 (August 24, 2012), 77 FR 52771 (August 30, 2012) (Order Approving the Route Peg Order). 5 The ‘‘EDGX Book’’ is defined as ‘‘the System’s electronic file of orders.’’ See Exchange Rule 1.5(d). 6 ‘‘Regular Trading Hours’’ is defined as ‘‘the time between 9:30 a.m. and 4:00 p.m. Eastern Time.’’ See Exchange Rule 1.5(y). May 2, 2014. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 21, 2014, EDGX Exchange, Inc. (‘‘EDGX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change emcdonald on DSK67QTVN1PROD with NOTICES 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. VerDate Mar<15>2010 16:18 May 07, 2014 Jkt 232001 PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 26479 posted to the EDGX Book. A Route Peg Order does not execute at a price that is inferior to a Protected Quotation, and is not permitted to execute if the NBBO is locked or crossed. Any and all remaining, unexecuted Route Peg Orders are cancelled at the conclusion of Regular Trading Hours. Aggregate Size As noted above, Route Peg Orders will currently only trade with routable orders that are equal to or smaller in quantity than the order quantity of an individual Route Peg Order. The Exchange proposes to amend the operation of the Route Peg Order to permit it to execute against routable orders that are equal to or less than the aggregate size of the Route Peg Order interest available at that price. The Exchange believes this change would incentivize Users seeking large size executions to route orders to the Exchange by increasing opportunities for executions against Route Peg Orders. This proposed change to the Route Peg Order is similar to the operation of the Nasdaq Stock Market LLC’s (‘‘Nasdaq’’) Supplemental Order and NYSE Arca, Inc.’s (‘‘NYSE Arca’’) Tracking Order, which both only execute if the size of the incoming order is less than or equal to the aggregate size of Supplemental Order or Tracking Order interest available at that price.7 Minimum Execution Quantity The Exchange also proposes to amend the Route Peg Order under Rule 11.5 to add optional functionality to allow Users to designate a minimum execution quantity. As proposed, a minimum execution quantity on a Route Peg order will no longer apply where the number of shares remaining after a partial execution are less than the minimum execution quantity. This proposed change is similar to the operation of NYSE Arca, Inc.’s Tracking Order, which permits Tracking Orders to include a minimum size requirement.8 The Exchange believes that providing Users with the option to designate a minimum quantity for Route Peg Orders will promote the entry of 7 See Nasdaq Rules 4751(f)(14), 4751(g) and 4757(a)(1)(D); see also NYSE Arca Rule 7.31(f). 8 On NYSE Arca, if the Tracking Order with a minimum size requirement is executed but not exhausted and the remaining portion of the Tracking Order is less than the minimum size requirement, NYSE Arca would cancel the Tracking Order. See NYSE Arca Rule 7.31(f). See also Securities Exchange Act Release No. 71366 (January 22, 2014), 79 FR 4515 (January 28, 2014) (SR– NYSEArca-2014–01) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca Equities Rule 7.31 to Add a Minimum Execution Size Designation for Tracking Orders). E:\FR\FM\08MYN1.SGM 08MYN1 26480 Federal Register / Vol. 79, No. 89 / Thursday, May 8, 2014 / Notices liquidity at the Exchange because Users entering such orders will be assured of obtaining a larger sized execution. The Exchange believes that the proposed rule change could attract Users that are seeking larger executions to enter Route Peg Orders because by designating a minimum quantity, the submitting User would be assured that they are not traded against by smaller-sized interest. the order would otherwise be shipped to an external destination and potentially miss an execution at the NBBO while in transit. Lastly, the Exchange does not believe that this will permit unfair discrimination among customers, brokers, or dealers because it will be available to all Users. Implementation Date The Exchange will announce the effective date of the proposed rule change in a Trading Notice to be published no later than 30 days following publication of the proposed rule change by the Commission. The Exchange also believes its proposal to amend the Route Peg Order under Rule 11.5 to add optional functionality to allow Users to designate a minimum execution quantity removes impediments to and perfects the mechanism of a free and open market and protects investors and the public interest because it would provide an incentive for Members seeking largersized executions both to post liquidity at the Exchange using this feature and to route larger-sized orders to the Exchange because of the potential for an execution against such liquidity. The Exchange further believes that adding an optional minimum quantity would remove impediments to and perfect the mechanism of a free and open market system because the proposed functionality is similar to functionality available at the NYSE Arca.12 The Exchange believes it is appropriate to provide an option for Users seeking to provide such liquidity to not only designate a minimum execution quantity, but for a minimum execution quantity on a Route Peg order to no longer apply where the number of shares remaining after a partial execution are less than the minimum execution quantity. Doing so would permit Users to continue to have their Route Peg Orders eligible for execution in such circumstances. In such case, Users will have the option to cancel their Route Peg Order if they wish. emcdonald on DSK67QTVN1PROD with NOTICES 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 9 in general, and furthers the objectives of Section 6(b)(5) of the Act 10 in particular, in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. Aggregate Size The Exchange believes that the proposal to permit executions against routable orders that are equal to or less than the aggregate size of the Route Peg Order interest available at that price would remove impediments to and perfect the mechanism of a free and open market and protect investors and the public interest because it would incentivize Users seeking large size executions to route orders to the Exchange by increasing opportunities for executions against Route Peg Orders in a manner similar to existing functionality available on Nasdaq and NYSE Arca.11 The proposed rule change also encourages market participants to post liquidity at the NBBO on the Exchange through the use of Route Peg Orders, thereby promoting just and equitable principles of trade and removing impediments to and perfecting the mechanism of a free and open market and national market system. Moreover, the proposed rule changes would protect investors and the public interest by increasing the probability of an execution on the Exchange at the NBBO in the event that 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 11 See supra note 8 and accompanying text. 10 15 VerDate Mar<15>2010 16:18 May 07, 2014 Jkt 232001 Minimum Execution Quantity B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes that the proposal will promote competition by enhancing the value of the Exchange’s Route Peg Order by mirroring the function of similar order types offered by Nasdaq and NYSE Arca.13 supra note 9 [sic] and accompanying text. supra notes 8 [sic] and 9 [sic] and accompanying text. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 14 and Rule 19b–4(f)(6) thereunder.15 Because the proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) 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. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 16 of the Act to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– EDGX–2014–14 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange 12 See 14 15 13 See 15 17 PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 16 15 U.S.C. 78s(b)(2)(B). E:\FR\FM\08MYN1.SGM 08MYN1 Federal Register / Vol. 79, No. 89 / Thursday, May 8, 2014 / Notices Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–EDGX–2014–14. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR–EDGX– 2014–14 and should be submitted on or before May 29, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 22, 2014, Chicago Board Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Chicago Board Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘CBOE’’) proposes to make certain market data available on a delayed basis on its Web site and other Web sites. The text of the proposed rule change is available on the Exchange’s Web site (https://www.cboe.com/AboutCBOE/ CBOELegalRegulatoryHome.aspx), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. BILLING CODE 8011–01–P A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION 1. Purpose [FR Doc. 2014–10541 Filed 5–7–14; 8:45 am] emcdonald on DSK67QTVN1PROD with NOTICES [Release No. 34–72082; File No. SR–CBOE– 2014–038] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Availability of Certain Delayed Market Data on CBOE Web Sites May 2, 2014. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the 17 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 16:18 May 07, 2014 Jkt 232001 The purpose of the proposed rule change is to allow the Exchange to make certain market data available on a delayed basis on its Web site (www.cboe.com) and other Web sites including its social media Web sites and Web sites of CBOE’s affiliates (collectively, ‘‘CBOE Web sites’’). Specifically, the Exchange proposes to publish on CBOE Web sites last sale information3 regarding ‘‘large’’ options 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Last sale information includes price, volume or related information reflecting completed 2 17 PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 26481 trades that occur in open outcry on the CBOE trading floor. A ‘‘large’’ trade for purposes of this proposed rule change is a trade with a quantity of 5,000 contracts or more. Last sale information would be published for executions of both simple orders and multi-part (‘‘complex’’) orders. This last sale information is referred to herein as the ‘‘Data’’. The Data would be published continuously on CBOE Web sites throughout the trading day on a ‘‘delayed’’ basis, i.e., data would not be made available on CBOE Web sites sooner than fifteen (15) minutes after the same information has been made publicly available by the Options Price Reporting Authority (‘‘OPRA’’). The Data would be made publicly available to all users of CBOE Web sites at no charge. 2. Statutory Basis The Exchange believes the proposed rule change is consistent with the Securities Exchange Act of 1934 (the ‘‘Act’’) and the rules and regulations thereunder applicable to the Exchange and, in particular, the requirements of Section 6(b) of the Act.4 Specifically, the Exchange believes the proposed rule change is consistent with the Section 6(b)(5)5 requirement that the rules of an exchange not be designed to permit unfair discrimination between customers, issuers, brokers, or dealers because the Data would be made publicly available to all users of CBOE Web sites on an equivalent basis. In adopting Regulation NMS, the Commission granted self-regulatory organizations and broker-dealers increased authority and flexibility to offer new and unique market data to the public. It was believed that this authority would expand the amount of data available to consumers, and also spur innovation and competition for the provision of market data. The Exchange believes that this proposal is in keeping with those principles by promoting increased transparency through the dissemination of useful data and also by clarifying its availability to market participants. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The transactions. It does not include information regarding the parties to a trade. 4 15 U.S.C. 78f(b). 5 Id. E:\FR\FM\08MYN1.SGM 08MYN1

Agencies

[Federal Register Volume 79, Number 89 (Thursday, May 8, 2014)]
[Notices]
[Pages 26479-26481]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10541]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72088; File No. SR-EDGX-2014-14]


Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
EDGX Rule 11.5 Regarding the Route Peg Order

May 2, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on April 21, 2014, EDGX Exchange, Inc. (``EDGX'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \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 the Route Peg Order under Rule 
11.5(c)(17) to permit: (i) Executions against routable orders that are 
equal to or less than the aggregate size of the Route Peg Order 
interest available at that price; and (ii) Users \3\ to add a minimum 
execution quantity instruction. All of the changes described herein are 
applicable to EDGX Members.
---------------------------------------------------------------------------

    \3\ The term ``User'' is defined as ``any Member or Sponsored 
Participant who is authorized to obtain access to the System 
pursuant to Rule 11.3.'' See Exchange Rule 1.5(ee).
---------------------------------------------------------------------------

    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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Route Peg Order under Rule 
11.5(c)(17) to permit: (i) Executions against routable orders that are 
equal to or less than the aggregate size of the Route Peg Order 
interest available at that price, which would replace the current 
requirement that routable orders be equal to or less than the size of 
an individual Route Peg Order; and (ii) Users to add a minimum 
execution quantity instruction.
    A Route Peg Order is a non-displayed limit order that posts to the 
EDGX Book, and thereafter is eligible for execution at the national 
best bid (``NBB'') for buy orders and national best offer (``NBO'') for 
sell orders against routable orders that are equal to or less than the 
size of the Route Peg Order.\4\ Route Peg Orders are passive, resting 
orders on the EDGX Book \5\ and do not take liquidity. Route Peg Orders 
may be entered, cancelled, and cancelled/replaced prior to and during 
Regular Trading Hours.\6\ Route Peg Orders are eligible for execution 
in a given security during Regular Trading Hours, except that, even 
after the commencement of Regular Trading Hours, Route Peg Orders are 
not eligible for execution (1) in the opening cross, and (2) until such 
time that regular session orders in that security can be posted to the 
EDGX Book. A Route Peg Order does not execute at a price that is 
inferior to a Protected Quotation, and is not permitted to execute if 
the NBBO is locked or crossed. Any and all remaining, unexecuted Route 
Peg Orders are cancelled at the conclusion of Regular Trading Hours.
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    \4\ See Securities Exchange Act Release No. 67726 (August 24, 
2012), 77 FR 52771 (August 30, 2012) (Order Approving the Route Peg 
Order).
    \5\ The ``EDGX Book'' is defined as ``the System's electronic 
file of orders.'' See Exchange Rule 1.5(d).
    \6\ ``Regular Trading Hours'' is defined as ``the time between 
9:30 a.m. and 4:00 p.m. Eastern Time.'' See Exchange Rule 1.5(y).
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Aggregate Size
    As noted above, Route Peg Orders will currently only trade with 
routable orders that are equal to or smaller in quantity than the order 
quantity of an individual Route Peg Order. The Exchange proposes to 
amend the operation of the Route Peg Order to permit it to execute 
against routable orders that are equal to or less than the aggregate 
size of the Route Peg Order interest available at that price. The 
Exchange believes this change would incentivize Users seeking large 
size executions to route orders to the Exchange by increasing 
opportunities for executions against Route Peg Orders. This proposed 
change to the Route Peg Order is similar to the operation of the Nasdaq 
Stock Market LLC's (``Nasdaq'') Supplemental Order and NYSE Arca, 
Inc.'s (``NYSE Arca'') Tracking Order, which both only execute if the 
size of the incoming order is less than or equal to the aggregate size 
of Supplemental Order or Tracking Order interest available at that 
price.\7\
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    \7\ See Nasdaq Rules 4751(f)(14), 4751(g) and 4757(a)(1)(D); see 
also NYSE Arca Rule 7.31(f).
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Minimum Execution Quantity
    The Exchange also proposes to amend the Route Peg Order under Rule 
11.5 to add optional functionality to allow Users to designate a 
minimum execution quantity. As proposed, a minimum execution quantity 
on a Route Peg order will no longer apply where the number of shares 
remaining after a partial execution are less than the minimum execution 
quantity. This proposed change is similar to the operation of NYSE 
Arca, Inc.'s Tracking Order, which permits Tracking Orders to include a 
minimum size requirement.\8\ The Exchange believes that providing Users 
with the option to designate a minimum quantity for Route Peg Orders 
will promote the entry of

[[Page 26480]]

liquidity at the Exchange because Users entering such orders will be 
assured of obtaining a larger sized execution. The Exchange believes 
that the proposed rule change could attract Users that are seeking 
larger executions to enter Route Peg Orders because by designating a 
minimum quantity, the submitting User would be assured that they are 
not traded against by smaller-sized interest.
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    \8\ On NYSE Arca, if the Tracking Order with a minimum size 
requirement is executed but not exhausted and the remaining portion 
of the Tracking Order is less than the minimum size requirement, 
NYSE Arca would cancel the Tracking Order. See NYSE Arca Rule 
7.31(f). See also Securities Exchange Act Release No. 71366 (January 
22, 2014), 79 FR 4515 (January 28, 2014) (SR-NYSEArca-2014-01) 
(Notice of Filing and Immediate Effectiveness of Proposed Rule 
Change Amending NYSE Arca Equities Rule 7.31 to Add a Minimum 
Execution Size Designation for Tracking Orders).
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Implementation Date
    The Exchange will announce the effective date of the proposed rule 
change in a Trading Notice to be published no later than 30 days 
following publication of the proposed rule change by the Commission.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \9\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \10\ in particular, in that it is designed to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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Aggregate Size
    The Exchange believes that the proposal to permit executions 
against routable orders that are equal to or less than the aggregate 
size of the Route Peg Order interest available at that price would 
remove impediments to and perfect the mechanism of a free and open 
market and protect investors and the public interest because it would 
incentivize Users seeking large size executions to route orders to the 
Exchange by increasing opportunities for executions against Route Peg 
Orders in a manner similar to existing functionality available on 
Nasdaq and NYSE Arca.\11\ The proposed rule change also encourages 
market participants to post liquidity at the NBBO on the Exchange 
through the use of Route Peg Orders, thereby promoting just and 
equitable principles of trade and removing impediments to and 
perfecting the mechanism of a free and open market and national market 
system. Moreover, the proposed rule changes would protect investors and 
the public interest by increasing the probability of an execution on 
the Exchange at the NBBO in the event that the order would otherwise be 
shipped to an external destination and potentially miss an execution at 
the NBBO while in transit. Lastly, the Exchange does not believe that 
this will permit unfair discrimination among customers, brokers, or 
dealers because it will be available to all Users.
---------------------------------------------------------------------------

    \11\ See supra note 8 and accompanying text.
---------------------------------------------------------------------------

Minimum Execution Quantity
    The Exchange also believes its proposal to amend the Route Peg 
Order under Rule 11.5 to add optional functionality to allow Users to 
designate a minimum execution quantity removes impediments to and 
perfects the mechanism of a free and open market and protects investors 
and the public interest because it would provide an incentive for 
Members seeking larger-sized executions both to post liquidity at the 
Exchange using this feature and to route larger-sized orders to the 
Exchange because of the potential for an execution against such 
liquidity. The Exchange further believes that adding an optional 
minimum quantity would remove impediments to and perfect the mechanism 
of a free and open market system because the proposed functionality is 
similar to functionality available at the NYSE Arca.\12\ The Exchange 
believes it is appropriate to provide an option for Users seeking to 
provide such liquidity to not only designate a minimum execution 
quantity, but for a minimum execution quantity on a Route Peg order to 
no longer apply where the number of shares remaining after a partial 
execution are less than the minimum execution quantity. Doing so would 
permit Users to continue to have their Route Peg Orders eligible for 
execution in such circumstances. In such case, Users will have the 
option to cancel their Route Peg Order if they wish.
---------------------------------------------------------------------------

    \12\ See supra note 9 [sic] and accompanying text.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. To the contrary, the Exchange 
believes that the proposal will promote competition by enhancing the 
value of the Exchange's Route Peg Order by mirroring the function of 
similar order types offered by Nasdaq and NYSE Arca.\13\
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    \13\ See supra notes 8 [sic] and 9 [sic] and accompanying text.
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

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

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \14\ and Rule 19b-4(f)(6) thereunder.\15\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    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. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \16\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-EDGX-2014-14 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange

[[Page 26481]]

Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-EDGX-2014-14. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make publicly available. All 
submissions should refer to File Number SR-EDGX-2014-14 and should be 
submitted on or before May 29, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-10541 Filed 5-7-14; 8:45 am]
BILLING CODE 8011-01-P
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