Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Eliminate Reference to the EdgeRisk Gateway in Rule 13.10 of EDGX Exchange, Inc., 73656-73658 [2014-29009]
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73656
Federal Register / Vol. 79, No. 238 / Thursday, December 11, 2014 / Notices
19(b)(3)(A)(ii) 11 of the Act and Rule
19b–4(f)(2) 12 thereunder. At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
mstockstill on DSK4VPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CME–2014–55 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CME–2014–55. 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
filings will also be available for
inspection and copying at the principal
office of CME and on CME’s Web site at
https://www.cmegroup.com/marketregulation/rule-filings.html.
11 15
12 17
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
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19:07 Dec 10, 2014
Jkt 235001
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–CME–2014–55 and should
be submitted on or before January 2,
2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–29003 Filed 12–10–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73760; File No. SR–EDGX–
2014–29]
Self-Regulatory Organizations; EDGX
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Eliminate Reference to
the EdgeRisk Gateway in Rule 13.10 of
EDGX Exchange, Inc.
December 5, 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 November
25, 2014, EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) 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 Exchange has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. 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 is proposing to
eliminate reference in Rule 13.10 to the
EdgeRisk GatewaySM, which is a risk
management tool that is to be
discontinued by the Exchange. The
Exchange also proposes to delete the
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
1 15
PO 00000
Frm 00115
Fmt 4703
Sfmt 4703
fees related to EdgeRisk GatewaySM
from its fee schedule.
The text of the proposed rule change
is available at the Exchange’s Web site
at https://www.directedge.com/, at the
principal office of the Exchange, 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 parts 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 delete
reference to the EdgeRisk GatewaySM in
Rule 13.10 as well as its related fees
from the Exchange’s fee schedule. In
sum, the EdgeRisk GatewaySM is an
optional fee-based risk management tool
that provides Members and nonMembers the option to obtain dedicated
primary and backup access gateways 5
in addition to, or in place of, a shared
access gateway.6 The tool was intended
to assist subscribers’ efforts to mitigate
the risks associated with disruptions
caused by excessive message traffic or
programming mistakes experienced via
5 The Exchange currently offers logical ports
through which orders are submitted to the
Exchange, receive drop copies of orders and
execution messages, and receive transmission of
depth of book data (‘‘Logical Ports’’). Each Logical
Port is assigned an access gateway that performs
order validations and manages the cycle of a
submitted order’s flow of information back to the
Member. The access gateway performs functions
such as message validation, acknowledgement
messaging, risk checks, matching engine routing
and execution messaging. The Exchange currently
assigns Members’ and non-Members’ Logical Ports
to the access gateways through a standard method
that accounts for the relative message traffic
expected over the Logical Port as well as
redundancy requirements, where an access gateway
contains assigned Logical Ports for a number of
firms. The Exchange assigns Member and nonMember sessions to multiple access gateways so
that the failure of one gateway may not result in the
loss of access.
6 See Securities Exchange Act Release No. 69855
(June 25, 2013), 78 FR 39386 (SR–EDGX–2013–21)
(Notice of Filing and Immediate Effectiveness of
Proposed Rule Change to Offer and Establish Fees
for a New Exchange Service, EdgeRisk Gateways).
E:\FR\FM\11DEN1.SGM
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Federal Register / Vol. 79, No. 238 / Thursday, December 11, 2014 / Notices
mstockstill on DSK4VPTVN1PROD with NOTICES
a shared access gateway because the
subscriber’s order flow on its dedicated
access gateways would be insulated
from such external disruptions.
Earlier this year, the Exchange and its
affiliate EDGA Exchange, Inc. (‘‘EDGA’’)
received approval to effect a merger (the
‘‘Merger’’) of the Exchange’s parent
company, Direct Edge Holdings LLC,
with BATS Global Markets, Inc., the
parent of BATS Exchange, Inc.
(‘‘BATS’’) and BATS Y-Exchange, Inc.
(‘‘BYX’’, together with BATS, BYX,
EDGA and EDGX, the ‘‘BGM Affiliated
Exchanges’’).7 In the context of the
Merger, the BGM Affiliated Exchanges
are assessing certain system
functionality, retaining only intended
differences between the BGM Affiliated
Exchanges. As part of this effort, the
Exchange proposes to: delete reference
to EdgeRisk GatewaySM in Rule 13.10 as
well as its related fees from the
Exchange’s fee schedule because it
intends to discontinue offering this
product. Therefore, reference to the
product within Exchange’s rules and
applicable fees in its fee schedule would
no longer serve any legitimate purpose
upon the product being retired by the
Exchange. The Exchange has few
subscribers to the EdgeRisk GatewaySM
and has determined that the current
customer demand does not warrant the
infrastructure and ongoing maintenance
expense required to support the product
within the new Exchange environment.
Therefore, the Exchange will terminate
the product on January 12, 2015.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with the
requirements of Section 6(b) of the Act,8
in general, and Section 6(b)(5) of the
Act,9 in particular, in that is promotes
just and equitable principles of trade,
removes impediments to, and perfects
the mechanism of, a free and open
market and a national market system,
and, in general, protects investors and
the public interest. The Exchange also
believes that its proposal is consistent
with Section 6(b)(4) of the Act,10 in that
it provides for the equitable allocation
of reasonable dues, fees and other
charges among members and other
persons using its facilities.
Specifically, the proposal is
consistent with Section 6(b)(5) of the
Act,11 in that it eliminates any investor
confusion by deleting references to a
7 See Securities Exchange Act Release No. 71449
(January 30, 2014), 79 FR 6961 (February 5, 2014)
(SR–EDGX–2013–43; SR–EDGA–2013–34).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
10 15 U.S.C. 78f(b)(4).
11 15 U.S.C. 78f(b)(5).
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19:07 Dec 10, 2014
Jkt 235001
product, and its related fees, that is to
be discontinued by the Exchange,
thereby removing impediments to and
perfecting the mechanism of a free and
open market and a national market
system, and, in general, protecting
investors and the public interest. In
addition, the Exchange has very few
subscribers to EdgeRisk GatewaySM and
has determined that the current
customer demand does not warrant the
infrastructure and ongoing maintenance
expense required to support the product
within the new Exchange environment.
In addition, EdgeRisk GatewaySM is not
a core product offering by the Exchange,
nor is the Exchange required by the Act
to offer such a product. The proposed
rule change will not permit unfair
discrimination among customers,
brokers, or dealers because the EdgeRisk
GatewaySM will no longer be offered by
the Exchange.
In addition, the Exchange believes
that the proposed removal of the fees for
the EdgeRisk GatewaySM from its fee
schedule is consistent with Section
6(b)(4) of the Act 12 because it would
delete fees for a product that is to be
discontinued by the Exchange, thereby
eliminating investor confusion. Lastly,
the Exchange also believes that the
proposed amendment to its fee schedule
is reasonable and non-discriminatory
because it will apply uniformly to all
members.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes the proposal is
consistent with Section 6(b)(8) of the
Act 13 in that it does not impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change will discontinue
ConenctEdge [sic] by removing
references to the service from its rules,
and its related fees from the fee
schedule, and is not designed to have a
competitive impact. Therefore, the
Exchange does not believe the proposed
rule change will have any effect on
competition.
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.
12 15
13 15
PO 00000
U.S.C. 78f(b)(4).
U.S.C. 78f(b)(8).
Frm 00116
Fmt 4703
Sfmt 4703
73657
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the proposed rule change
does not: (1) Significantly affect the
protection of investors or the public
interest; (2) impose any significant
burden on competition; and (3) by its
terms does not become operative for 30
days after the date of this filing, 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 14 and Rule 19b–
4(f)(6) thereunder.15
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest; for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
EDGX–2014–29 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–EDGX–2014–29. 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
14 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
provide the Commission with written notice of its
intent to file the proposed rule change, along with
a brief description and text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission. The
Exchange has met this requirement.
15 17
E:\FR\FM\11DEN1.SGM
11DEN1
73658
Federal Register / Vol. 79, No. 238 / Thursday, December 11, 2014 / Notices
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–EDGX–
2014–29, and should be submitted on or
before January 2, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–29009 Filed 12–10–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73764; File No. SR–MSRB–
2014–07]
19b–4 thereunder,2 a proposed rule
change consisting of Rule G–18, on best
execution of transactions in municipal
securities, and amendments to Rule G–
48, on transactions with SMMPs, and
Rule D–15, on the definition of SMMP
(the ‘‘proposed rule change’’). The
proposed rule change was published for
comment in the Federal Register on
September 8, 2014.3
The Commission received six
comment letters on the proposed rule
change.4 On November 21, 2014, the
MSRB submitted a response to these
comments.5 This order approves the
proposed rule change.
II. Description of the Proposed Rule
Change
According to the MSRB, the
establishment of a requirement that
brokers, dealers and municipal
securities dealers (‘‘dealers’’) seek best
execution of retail customer transactions
in municipal securities will have
benefits for investors, promote fair
competition among dealers, and
improve market efficiency.6 The MSRB
stated that the proposed rule change
reflects the MSRB’s belief that a best
execution rule should be generally
harmonized with the Financial Industry
Regulatory Authority’s (‘‘FINRA’’) bestexecution rule, FINRA Rule 5310 (Best
Execution and Interpositioning), for
purposes of regulatory efficiency but
appropriately tailored to the
characteristics of the municipal
securities market.7 The MSRB further
believes that, unlike FINRA Rule 5310,
it is appropriate to provide an exception
from the requirements of the best2 17
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Order Granting Approval of a
Proposed Rule Change Consisting of
Rule G–18, on Best Execution of
Transactions in Municipal Securities,
and Amendments to Rule G–48, on
Transactions With Sophisticated
Municipal Market Professionals
(‘‘SMMP’’), and Rule D–15, on the
Definition of SMMP
December 5, 2014.
mstockstill on DSK4VPTVN1PROD with NOTICES
I. Introduction
On August 20, 2014, the Municipal
Securities Rulemaking Board (the
‘‘MSRB’’ or ‘‘Board’’) filed with the
Securities and Exchange Commission
(the ‘‘SEC’’ or ‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
16 17
1 15
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
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19:07 Dec 10, 2014
Jkt 235001
CFR 240.19b–4.
Exchange Act Release No. 72956
(September 2, 2014), 79 FR 53236 (September 8,
2014) (the ‘‘Proposing Release’’).
4 See Letters from David L. Cohen, Managing
Director and Associate General Counsel, Securities
Industry and Financial Markets Association
(‘‘SIFMA’’), dated September 29, 2014 (‘‘SIFMA
Letter’’); Michael Nicholas, Chief Executive Officer,
Bond Dealers of America (‘‘BDA’’), dated September
29, 2014 (‘‘BDA Letter No. 1’’) and October 30, 2014
(‘‘BDA Letter No. 2’’); Chris Melton, Executive Vice
President, Coastal Securities (‘‘Coastal’’), dated
September 29, 2014 (‘‘Coastal Letter’’); David T.
Bellaire, Esq., Executive Vice President & General
Counsel, Financial Services Institute (‘‘FSI’’), dated
September 29, 2014 (‘‘FSI Letter’’); and Robert J.
McCarthy, Director of Regulatory Policy, Wells
Fargo Advisors, LLC (‘‘Wells Fargo’’), dated
September 29, 2014 (‘‘Wells Letter’’). Staff from the
Office of Municipal Securities met with
representatives from BDA on October 23, 2014, and
had a telephonic meeting with a representative from
SIFMA on December 3, 2014, to discuss the
proposed rule change.
5 See Letter to Secretary, Commission, from
Michael L. Post, Deputy General
Counsel, MSRB, dated November 21, 2014
(‘‘MSRB Response Letter’’).
6 See supra note 3 at 2.
7 Id. at 7.
3 Securities
PO 00000
Frm 00117
Fmt 4703
Sfmt 4703
execution rule for all transactions with
SMMPs.8 The MSRB represented that
the proposed best-execution
requirement generally would target the
process by which dealers handle orders
and execute transactions, and would
complement and buttress the MSRB’s
existing fair-pricing rules.9
1. Proposed Rule G–18
Proposed Rule G–18(a) requires that,
in any transaction in a municipal
security for or with a customer or a
customer of another dealer, a dealer
must use reasonable diligence to
ascertain the best market for the subject
security and buy or sell in that market
so that the resultant price to the
customer is as favorable as possible
under prevailing market conditions.10
Paragraph (a) provides the following
factors among the factors that will be
considered in determining whether a
dealer has used ‘‘reasonable diligence,’’
with no single factor being
determinative: the character of the
market for the security, the size and
type of transaction, the number of
markets checked, the information
reviewed to determine the current
market for the subject security or similar
securities, the accessibility of
quotations, and the terms and
conditions of the customer’s inquiry or
order, including any bids or offers, that
result in the transaction, as
communicated to the dealer.11
Proposed Rule G–18(b) prohibits a
dealer from interjecting a third party
between itself and the best market for
the subject security in a manner
inconsistent with paragraph (a).12 The
MSRB stated that paragraph (b) would
not prohibit the use of a broker’s broker,
unless it was inconsistent with the bestexecution obligation in paragraph (a).13
Proposed Rule G–18(c) specifies that
the obligations described in paragraphs
(a) and (b) apply to transactions in
which the dealer is acting as agent and
transactions in which the dealer is
acting as principal.14 Paragraph (c)
expressly states that the best-execution
obligations are distinct from the fairness
and reasonableness of commissions,
markups or markdowns, which are
governed by Rule G–30.15
8 Id.
9 Id.
10 See
proposed Rule G–18(a).
11 Id.
12 See
proposed Rule G–18(b).
supra note 3 at 10.
14 See proposed Rule G–18(c).
15 Id.
13 See
E:\FR\FM\11DEN1.SGM
11DEN1
]]>Agencies
[Federal Register Volume 79, Number 238 (Thursday, December 11, 2014)]
[Notices]
[Pages 73656-73658]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-29009]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73760; File No. SR-EDGX-2014-29]
Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To
Eliminate Reference to the EdgeRisk Gateway in Rule 13.10 of EDGX
Exchange, Inc.
December 5, 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 November 25, 2014, EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') 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 Exchange
has designated this proposal as a ``non-controversial'' proposed rule
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with
the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to eliminate reference in Rule 13.10 to
the EdgeRisk Gateway\SM\, which is a risk management tool that is to be
discontinued by the Exchange. The Exchange also proposes to delete the
fees related to EdgeRisk Gateway\SM\ from its fee schedule.
The text of the proposed rule change is available at the Exchange's
Web site at https://www.directedge.com/, at the principal office of the
Exchange, 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 parts 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 delete reference to the EdgeRisk
Gateway\SM\ in Rule 13.10 as well as its related fees from the
Exchange's fee schedule. In sum, the EdgeRisk Gateway\SM\ is an
optional fee-based risk management tool that provides Members and non-
Members the option to obtain dedicated primary and backup access
gateways \5\ in addition to, or in place of, a shared access
gateway.\6\ The tool was intended to assist subscribers' efforts to
mitigate the risks associated with disruptions caused by excessive
message traffic or programming mistakes experienced via
[[Page 73657]]
a shared access gateway because the subscriber's order flow on its
dedicated access gateways would be insulated from such external
disruptions.
---------------------------------------------------------------------------
\5\ The Exchange currently offers logical ports through which
orders are submitted to the Exchange, receive drop copies of orders
and execution messages, and receive transmission of depth of book
data (``Logical Ports''). Each Logical Port is assigned an access
gateway that performs order validations and manages the cycle of a
submitted order's flow of information back to the Member. The access
gateway performs functions such as message validation,
acknowledgement messaging, risk checks, matching engine routing and
execution messaging. The Exchange currently assigns Members' and
non-Members' Logical Ports to the access gateways through a standard
method that accounts for the relative message traffic expected over
the Logical Port as well as redundancy requirements, where an access
gateway contains assigned Logical Ports for a number of firms. The
Exchange assigns Member and non-Member sessions to multiple access
gateways so that the failure of one gateway may not result in the
loss of access.
\6\ See Securities Exchange Act Release No. 69855 (June 25,
2013), 78 FR 39386 (SR-EDGX-2013-21) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change to Offer and Establish Fees
for a New Exchange Service, EdgeRisk Gateways).
---------------------------------------------------------------------------
Earlier this year, the Exchange and its affiliate EDGA Exchange,
Inc. (``EDGA'') received approval to effect a merger (the ``Merger'')
of the Exchange's parent company, Direct Edge Holdings LLC, with BATS
Global Markets, Inc., the parent of BATS Exchange, Inc. (``BATS'') and
BATS Y-Exchange, Inc. (``BYX'', together with BATS, BYX, EDGA and EDGX,
the ``BGM Affiliated Exchanges'').\7\ In the context of the Merger, the
BGM Affiliated Exchanges are assessing certain system functionality,
retaining only intended differences between the BGM Affiliated
Exchanges. As part of this effort, the Exchange proposes to: delete
reference to EdgeRisk Gateway\SM\ in Rule 13.10 as well as its related
fees from the Exchange's fee schedule because it intends to discontinue
offering this product. Therefore, reference to the product within
Exchange's rules and applicable fees in its fee schedule would no
longer serve any legitimate purpose upon the product being retired by
the Exchange. The Exchange has few subscribers to the EdgeRisk
Gateway\SM\ and has determined that the current customer demand does
not warrant the infrastructure and ongoing maintenance expense required
to support the product within the new Exchange environment. Therefore,
the Exchange will terminate the product on January 12, 2015.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 71449 (January 30,
2014), 79 FR 6961 (February 5, 2014) (SR-EDGX-2013-43; SR-EDGA-2013-
34).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with the
requirements of Section 6(b) of the Act,\8\ in general, and Section
6(b)(5) of the Act,\9\ in particular, in that is promotes just and
equitable principles of trade, removes impediments to, and perfects the
mechanism of, a free and open market and a national market system, and,
in general, protects investors and the public interest. The Exchange
also believes that its proposal is consistent with Section 6(b)(4) of
the Act,\10\ in that it provides for the equitable allocation of
reasonable dues, fees and other charges among members and other persons
using its facilities.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ 15 U.S.C. 78f(b)(4).
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Specifically, the proposal is consistent with Section 6(b)(5) of
the Act,\11\ in that it eliminates any investor confusion by deleting
references to a product, and its related fees, that is to be
discontinued by the Exchange, thereby removing impediments to and
perfecting the mechanism of a free and open market and a national
market system, and, in general, protecting investors and the public
interest. In addition, the Exchange has very few subscribers to
EdgeRisk Gateway\SM\ and has determined that the current customer
demand does not warrant the infrastructure and ongoing maintenance
expense required to support the product within the new Exchange
environment. In addition, EdgeRisk Gateway\SM\ is not a core product
offering by the Exchange, nor is the Exchange required by the Act to
offer such a product. The proposed rule change will not permit unfair
discrimination among customers, brokers, or dealers because the
EdgeRisk Gateway\SM\ will no longer be offered by the Exchange.
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\11\ 15 U.S.C. 78f(b)(5).
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In addition, the Exchange believes that the proposed removal of the
fees for the EdgeRisk Gateway\SM\ from its fee schedule is consistent
with Section 6(b)(4) of the Act \12\ because it would delete fees for a
product that is to be discontinued by the Exchange, thereby eliminating
investor confusion. Lastly, the Exchange also believes that the
proposed amendment to its fee schedule is reasonable and non-
discriminatory because it will apply uniformly to all members.
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\12\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes the proposal is consistent with Section
6(b)(8) of the Act \13\ in that it does not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The proposed rule change will discontinue
ConenctEdge [sic] by removing references to the service from its rules,
and its related fees from the fee schedule, and is not designed to have
a competitive impact. Therefore, the Exchange does not believe the
proposed rule change will have any effect on competition.
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\13\ 15 U.S.C. 78f(b)(8).
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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
Because the proposed rule change does not: (1) Significantly affect
the protection of investors or the public interest; (2) impose any
significant burden on competition; and (3) by its terms does not become
operative for 30 days after the date of this filing, 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 \14\ and
Rule 19b-4(f)(6) thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to provide the Commission
with written notice of its intent to file the proposed rule change,
along with a brief description and text of the proposed rule change,
at least five business days prior to the date of filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Exchange has met this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest; for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-EDGX-2014-29 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-EDGX-2014-29. 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
[[Page 73658]]
submission, all subsequent amendments, all written statements with
respect to the proposed rule change that are filed with the Commission,
and all written communications relating to the proposed rule change
between the Commission and any person, other than those that may be
withheld from the public in accordance with the provisions of 5 U.S.C.
552, will be available for Web site viewing and printing in the
Commission's Public Reference Room, 100 F Street NE., Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File Number SR-EDGX-2014-29, and should be
submitted on or before January 2, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-29009 Filed 12-10-14; 8:45 am]
BILLING CODE 8011-01-P
