Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rules 11.8, 11.9, 11.10, 11.11, and 11.16 Regarding the Limit Up-Limit Down Plan, 19722-19727 [2015-08339]
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19722
Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / Notices
that the proposed rule change will
impose any burden on intermarket
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act because the
proposed change is intended to promote
competition and better improve the
Exchange’s competitive position and
make CBOE a more attractive
marketplace in order to encourage
market participants to bring increased
volume to the Exchange. To the extent
that the proposed changes make CBOE
a more attractive marketplace for market
participants at other exchanges, such
market participants are welcome to
become CBOE market participants.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 7 and paragraph (f) of Rule
19b–4 8 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. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
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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–
CBOE–2015–038 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
7 15
8 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
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20:35 Apr 10, 2015
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CBOE–2015–038. 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–CBOE–
2015–038 and should be submitted on
or before May 4, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Brent J. Fields,
Secretary.
[FR Doc. 2015–08340 Filed 4–10–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74663; File No. SR–EDGA–
2015–15]
Self-Regulatory Organizations; EDGA
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Rules 11.8,
11.9, 11.10, 11.11, and 11.16 Regarding
the Limit Up-Limit Down Plan
April 7, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
9 17
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CFR 200.30–3(a)(12).
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‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 27,
2015, EDGA Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGA’’) 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 the Substance
of the Proposed Rule Change
The Exchange filed a proposal to
amend Rules 11.8, 11.9, 11.10, 11.11,
and 11.16, in order to conform Exchange
Rules to the rules of BATS Exchange,
Inc. (‘‘BZX’’) and BATS Y-Exchange,
Inc. (‘‘BYX’’) as they relate to the Plan
to Address Extraordinary Market
Volatility Pursuant to Rule 608 of
Regulation NMS under the Act (the
‘‘Limit Up-Limit Down Plan’’ or
‘‘Plan’’).3
The text of the proposed rule change
is available at the Exchange’s Web site
at www.batstrading.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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to restructure
and amend various Exchange Rules
related to the applicability of the Plan
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See BZX and BYX Rules 11.18(e). See Securities
Exchange Act Release Nos. 69084 (March 8, 2013),
77 FR 16334 (March 14, 2013) (SR–BATS–2015–
015) [sic]; and 69088 (March 8, 2013), 77 FR 16308
(March 14, 2013) (SR–BYX–2013–010). See also
Securities Exchange Act Release No. 67091 (May
31, 2012), 77 FR 33498 (June 6, 2012) (the ‘‘Limit
Up-Limit Down Release’’).
2 17
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identical to the corresponding rules on
BZX and BYX, as further described
below. In early 2014, the Exchange and
its affiliate, EDGA Exchange, Inc.
(‘‘EDGA’’) [sic], 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 BZX and
BYX (together with BZX, EDGA, and
EDGX, the ‘‘BGM Affiliated
Exchanges’’).4 In the context of the
Merger, the BGM Affiliated Exchanges
are working to align certain system and
regulatory functionality, retaining only
intended differences between the BGM
Affiliated Exchanges. Thus, the proposal
set forth below is intended to amend
Rules 11.8, 11.9, 11.10, 11.11, and 11.16
to make such Rules identical to
corresponding rules on BZX and BYX
related to the Plan. The Exchange does
not propose to alter its current system
functionality with regard to compliance
with the Plan set forth under current
Exchange Rules.5 Rather, the proposed
rule change is designed to provide a
consistent rule set across each of the
BGM Affiliated Exchanges.6
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Background
The Plan is designed to prevent trades
in individual NMS Stocks from
occurring outside of specified Price
Bands.7 As described more fully below,
the requirements of the Plan are coupled
with Trading Pauses to accommodate
more fundamental price moves (as
opposed to erroneous trades or
momentary gaps in liquidity). All
trading centers in NMS Stocks,
including both those operated by
Participants and those operated by
members of Participants, are required to
establish, maintain, and enforce written
policies and procedures that are
reasonably designed to comply with the
requirements specified in the Plan.8 As
set forth in more detail in the Plan, Price
Bands consisting of a Lower Price Band
and an Upper Price Band for each NMS
Stock are calculated by the Processors.9
When the National Best Bid (Offer) is
4 See Securities Exchange Act Release No. 71449
(January 30, 2014), 79 FR 6961 (February 5, 2014)
(SR–EDGX–2013–043; SR–EDGA–2013–034).
5 See Securities Exchange Act Release Nos. 69002
(February 27, 2013), 78 FR 14394 (March 5, 2013)
(SR–EDGA–2013–08); and 69003 (February 27,
2013), 78 FR 14380 (March 5, 2013) (SR–EDGX–
2013–08).
6 See BZX and BYX Rules 11.18(e). The Exchange
notes that EDGA [sic] intends to file a proposal very
similar to this proposal that will align the rules
related to the Plan across each of the BGM
Affiliated Exchanges.
7 Unless otherwise specified, capitalized terms
used in this rule filing are based on the defined
terms of the Plan.
8 The Exchange is a Participant in the Plan.
9 See Section (V)(A) of the Plan.
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20:49 Apr 10, 2015
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below (above) the Lower (Upper) Price
Band, the Processors shall disseminate
such National Best Bid (Offer) with an
appropriate flag identifying it as nonexecutable. When the National Best Bid
(Offer) is equal to the Upper (Lower)
Price Band, the Processors shall
distribute such National Best Bid (Offer)
with an appropriate flag identifying it as
a Limit State Quotation.10 All trading
centers in NMS Stocks must maintain
written policies and procedures that are
reasonably designed to prevent the
display of offers below the Lower Price
Band and bids above the Upper Price
Band for NMS Stocks. Notwithstanding
this requirement, the Processor shall
display an offer below the Lower Price
Band or a bid above the Upper Price
Band, but with a flag that it is nonexecutable. Such bids or offers shall not
be included in the National Best Bid
(‘‘NBB’’) or National Best Offer (‘‘NBO’’)
calculations.11
Trading in an NMS Stock
immediately enters a Limit State if the
National Best Offer (Bid) equals but
does not cross the Lower (Upper) Price
Band.12 Trading for an NMS stock exits
a Limit State if, within 15 seconds of
entering the Limit State, all Limit State
Quotations were executed or canceled
in their entirety. If the market does not
exit a Limit State within 15 seconds,
then the Primary Listing Exchange
would declare a five-minute Trading
Pause pursuant to Section VII of the
Limit Up-Limit Down Plan, which
would be applicable to all markets
trading the security.13 In addition, the
Plan defines a Straddle State as when
the National Best Bid (Offer) is below
(above) the Lower (Upper) Price Band
and the NMS Stock is not in a Limit
State. For example, assume the Lower
Price Band for an NMS Stock is $9.50
and the Upper Price Band is $10.50,
such NMS stock would be in a Straddle
State if the National Best Bid were
below $9.50, and therefore nonexecutable, and the National Best Offer
were above $9.50 (including a National
Best Offer that could be above $10.50).
If an NMS Stock is in a Straddle State
and trading in that stock deviates from
normal trading characteristics, the
Primary Listing Exchange may declare a
Trading Pause for that NMS Stock.
10 See
Section VI(A) of the Plan.
Section VI(A)(3) of the Plan.
12 See Section VI(B)(1) of the Plan.
13 The primary listing market would declare a
trading pause in an NMS Stock; upon notification
by the primary listing market, the Processor would
disseminate this information to the public. No
trades in that NMS Stock could occur during the
trading pause, but all bids and offers may be
displayed. See Section VII(A) of the Plan.
11 See
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19723
Proposed Amendment to Rule 11.9
Currently, Rule 11.9(a)(8) describes
the priority of orders that are re-priced
and displayed in accordance with the
Plan. The Exchange is proposing to
delete this clause and to include this
information in Rule 11.16(e)(5) in order
to adopt a consistent rule set as between
the Exchange and the other BGM
Affiliated Exchanges. The proposed rule
text for Exchange Rule 11.16(e)(5) is
directly based on BZX and BYX Rule
11.18(e)(5), and is described in greater
detail below. The Exchange is not
proposing to alter the priority handling
of orders that are re-priced and
displayed in accordance with the Plan,
but rather, is proposing to adopt rule
text that is identical to that of its
affiliated exchanges to reduce potential
confusion.
Proposed Amendment to Rule 11.10
In sum, Rule 11.10(a)(3) sets forth the
general rule that no executions shall
occur outside the Price Bands during
Regular Trading Hours. The Exchange
proposes to amend Rule 11.10(a)(3) to
further state that the Exchange’s
procedures for handling executing, repricing and displaying orders in
connection with the Plan are further
described in proposed Rule 11.16(e),
which is discussed below.
Current Rule 11.10(a)(3)(A) discusses
how an order priced within the Price
Bands may be executed or posted to the
EDGA Book. Current Rule 11.10(a)(3)(B)
explains how the Exchange will re-price
an order that is priced outside of the
Price Bands. The Exchange proposes to
delete Rules 11.10(a)(3)(A) and (B) and
replace them with Rule 11.16(e)(5). The
proposed rule text for Exchange Rule
11.16(e)(5) is directly based on BZX and
BYX Rule 11.18(e)(5) and is described
more fully below. The Exchange is not
proposing to alter the handling and repricing of orders that [sic] under the
Plan, but rather, is proposing to adopt
rule text that is identical to that of its
affiliated exchanges to reduce potential
confusion.
The Exchange also proposes to delete
Rule 11.10(a)(3)(C) and does not
propose to include it as part of the
amended rule set. Rule 11.10(a)(3)(C)
states that a description of the behavior
of routable market and Limit Orders in
response to the Plan is found in Rule
11.11(b)(1). The Exchange believes this
provision is no longer necessary as the
Exchange’s procedures for handling,
executing, re-pricing, and displaying
orders in connection with the Plan are
proposed to be described in a single
rule, Rule 11.16(e), rather than multiple
rules as is currently the case.
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The Exchange proposes to delete Rule
11.10(a)(3)(D), which discusses the
handling of orders with a Short Sale
instruction 14 under the Plan, and
replace it with Rule 11.16(e)(5)(E). The
proposed rule text for Exchange Rule
11.16(e)(5)(E) is directly based on BZX
and BYX Rule 11.18(e)(5)(E) and is
described more fully below. The
Exchange is not proposing to alter the
handling of orders with a Short Sale
instruction under the Plan, but rather, is
proposing to relocate the text, with
modifications, to Rule 11.16(e)(5)(E) as
discussed below.
The Exchange proposes to delete Rule
11.10(a)(3)(E) and replace it with Rule
11.16(e)(2) thru (4). Current Rule
11.10(a)(3)(E) states that pursuant to
Section IV of the Plan all Trading
Centers in NMS Stocks, including those
operated by Members of the Exchange,
shall establish, maintain, and enforce
written policies and procedures that are
reasonably designed to comply with the
requirements specified in Section VI of
the Plan, and to comply with the
Trading Pauses specified in Section VII
of the Plan. The proposed rule text for
Exchange Rule 11.16(e)(2) thru (4)
expands upon this provision and is
directly based on BZX and BYX Rule
11.18(e)(2) thru (4) described more fully
below.
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Proposed Amendment to Rule 11.11
Rule 11.11 discusses the handling of
orders that are to be routed to away
trading centers. Paragraphs (b) thru (d)
of Rule 11.11 discuss the routing of
orders under the Plan. The Exchange
proposes to delete Rules 11.11(b) thru
(d) and replace them with Rule
11.16(e)(5)(D). The Exchange proposes
to delete in its entirety Rule 11.11(b)(1)
as this provision is no longer necessary
as it is covered succinctly in new Rule
11.16(e)(5)(D). Rule 11.11(c), which
discusses re-routing of orders under the
Plan, will be moved to Rule
11.16(e)(5)(D)(i) with slight
modifications. Rule 11.11(d), which
discusses the operation of certain
routing strategies under the Plan, will be
moved to Rule 11.16(e)(5)(D)(ii) without
change. Each of these changes are
discussed in more detail below.
Proposed Amendment to Rule 11.16
The Exchange is required by the Plan
to establish, maintain, and enforce
written policies and procedures that are
reasonably designed to comply with the
limit up-limit down and trading pause
requirements specified in the Plan. In
14 A ‘‘Short Sale’’ instruction is defined as ‘‘[a]n
instruction on an order which shall have the same
meaning as defined in Rule 200(a) of Regulation
SHO.’’ See Exchange Rule 11.6(o).
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February 2013, the Exchange amended
its Rules in connection with the
implementation of the Plan.15 The
Exchange now proposes to incorporate
the provisions discussed above into
Rule 11.16(e) in order to make the
Exchange’s Rules identical to the
corresponding rules on BZX and BYX.
The proposed amendments to Rule
11.16(e) are based on BZX and BYX
Rules 11.18(e). The Exchange believes
that the provisions proposed below are
reasonably designed to prevent
executions outside the Price Bands as
required by the limit up-limit down and
trading pause requirements specified in
the Plan.
First, the Exchange proposes to add
Rule 11.16(e)(1) to provide that all
capitalized terms not otherwise defined
in paragraph (e) of the Rule shall have
the meanings set forth in the Plan or
Exchange Rules, as applicable. The
Exchange also proposes to add Rules
11.16(e)(2) thru (4) described below.
These provisions are based on BXZ and
BYX Rules 11.18(e)(2) thru (4) and
designed to replace deleted Rule
11.10(a)(3)(E), which states that the
Exchange and its Members must
establish policies and procedures that
are reasonably designed to comply with
the Plan. Specifically, the Exchange
proposes to add Rule 11.16(e)(2) to
provide that the Exchange is a
Participant in, and subject to the
applicable requirements of, the Plan,
which establishes procedures to address
extraordinary volatility in NMS Stocks.
Further, the Exchange proposes to add
Rule 11.16(e)(3) to provide that
Exchange Members shall comply with
the applicable provisions of the Plan.
The Exchange believes the requirements
of current Rule 11.10(a)(3)(E) would be
sufficiently covered in proposed Rules
11.16(e)(2) and (3), which will help
ensure the compliance by its Members
with the provisions of the Plan as
required pursuant to Section II(B) of the
Plan.16
The Exchange also proposes to add
Rule 11.16(e)(4) to replace deleted Rule
11.10(a)(3)(E). Rule 11.16(e)(4) would
provide that the Exchange’s System 17
shall not display or execute buy (sell)
interest above (below) the Upper
(Lower) Price Bands, unless such
interest is specifically exempted under
the Plan. The Exchange believes that
this requirement is reasonably designed
15 See
supra note 7 [sic].
Section II(B) of the Plan.
17 The ‘‘System’’ is defined in Exchange Rule
1.5(cc) as ‘‘the electronic communications and
trading facility designated by the Board through
which securities orders of Users are consolidated
for ranking, execution and, when applicable,
routing away.’’
16 See
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to help ensure the compliance with the
limit up-limit down and trading pause
requirements specified in the Plan by
preventing executions outside the Price
Bands as required pursuant to Section
VI(A)(1) of the Plan.18
As mentioned above, the Exchange
proposes to incorporate the provisions
of current Rules 11.9(a)(8) and
11.10(a)(3)(A) and (B) within Rule
11.16(e)(5) regarding the treatment of
certain trading interest on the Exchange
in order to prevent executions outside
the Price Bands and to comply with the
Plan. The Exchange is proposing to
delete Rules 11.9(a)(8) and
11.10(a)(3)(A) and (B) to include this
information in Rule 11.16(e)(5) in order
to adopt a consistent rule set as between
the Exchange and the other BGM
Affiliated Exchanges. Proposed Rule
11.16(e)(5) is based on BZX and BYX
Rules 11.18(e)(5).
Current Rule 11.9(a)(8) describes the
priority of orders that are re-priced and
displayed in accordance with the Plan.
Specifically, Rule 11.9(a)(8) states that if
the Upper (Lower) Price Band moves so
that the price of a buy (sell) order
resting on the EDGA Book would
consequently be above (below) the
Upper (Lower) Price Band, such order
will be re-priced and displayed at a
price equal to the Upper (Lower) Price
Band, provided a new timestamp, and
prioritized based on its existing
timestamp at the time the new Price
Bands are established. If an order is
resting on the EDGA Book at a price
equal to the Upper (Lower) Price Band,
such order will not be re-priced but will
be provided a new timestamp and
prioritized based on its existing
timestamp at the time the new Price
Bands are established.
Likewise, under proposed Rule
11.16(e)(5), when re-pricing resting
orders because such orders are above
(below) the Upper (Lower) Price Band,
the Exchange will provide new
timestamps to such orders. The
Exchange will also provide new
timestamps to resting orders at the less
aggressive price to which such orders
are re-priced. Any resting interest that is
re-priced pursuant to Rule 11.16(e)(5)
shall maintain priority ahead of interest
that was originally less aggressively
priced, regardless of the original
timestamps for such orders. The
Exchange is not proposing to alter the
priority handling of orders that are repriced and displayed in accordance
with the Plan, but rather, is proposing
to adopt rule text that is identical to that
of its affiliated exchanges to reduce
potential confusion. While the text of
18 See
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Section VI(A)(1) of the Plan.
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current Rule 11.9(a)(8) is not identical to
proposed Rule 11.16(e)(5), the Exchange
proposes to adopt language identical to
BZX and BYX Rules 11.18(e)(5), which
it believes more clearly describes system
functionality.
Current Rules 11.10(a)(3)(A) and (B)
address the handling and re-pricing of
orders under the Plan. Rule
11.10(a)(3)(A) discusses how an order
priced within the Price Bands may be
executed or posted to the EDGA Book by
stating that a non-routable buy (sell)
order that is entered into the System at
a price less (greater) than or equal to the
Upper (Lower) Price Band will be
posted to the EDGA Book or executed,
unless: (i) the order includes a Time-inForce Instruction (‘‘TIF’’) of Immediate
or Cancel (‘‘IOC’’) or Fill-or-Kill
(‘‘FOK’’), in which case it will be
cancelled if not executed; or (ii) the
User has entered instructions to
cancel 19 the order. Rule 11.10(a)(3)(B)
explains how the Exchange will re-price
an order that is priced outside of the
Price Bands by stating that a nonroutable buy (sell) order at a price
greater (less) than the Upper (Lower)
Price Band will be re-priced and
displayed at the price of the Upper
(Lower) Price Band. If the price of the
Upper (Lower) Price Band moves above
(below) the non-routable buy (sell)
order’s displayed price, the buy (sell)
order will not be adjusted further and
will remain posted at the original price
at which it was posted to the EDGA
Book. If the Upper (Lower) Price Band
crosses a non-routable buy (sell) order
resting on the EDGA Book, the buy (sell)
order will be re-priced to the price of
the Upper (Lower) Price Band.
Likewise, proposed Rule 11.16(e)(5)
discusses the re-pricing and
cancellation of interest and specifically
provides that the Exchange systems
shall re-price and/or cancel buy (sell)
interest that is priced or could be
executed 20 above (below) the Upper
(Lower) Price Band. The Exchange is not
proposing to alter the handling or repricing of orders under the Plan, but
rather, is proposing to adopt rule text
that is identical to that of its affiliated
19 Under the Cancel Back instruction, a User may
instruct the System to immediately cancel the order
when, if displayed by the System on the EDGA
Book at the time of entry, or upon return to the
System after being routed away, would create a
violation of Rule 610(d) of Regulation NMS or Rule
201 of Regulation SHO, or the order cannot
otherwise be executed or posted by the System to
the EDGA Book at its limit price. See Exchange Rule
11.6(b).
20 The Exchange notes that this includes any
interest that is displayed and/or resting at a less
aggressive price but executable at a more aggressive
price, such as orders subject to price sliding and
discretionary order types.
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18:02 Apr 10, 2015
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exchanges to reduce potential
confusion. The Exchange notes that
while the format of current Rules
11.10(a)(3)(A) and (B) are not identical
to that of proposed Rule 11.16(e)(5), the
Exchange proposes to include the
following provisions under Rule
11.16(e)(5) regarding the re-pricing or
canceling of certain trading interest that
are similar to BZX and BYX Rule
11.18(e)(5), which if [sic] believes
continue to accurately describe system
functionality and provide additional
specificity, the specifics of which are
described under each subsection of
proposed Rule 11.16(e)(5) set forth
below.
Market Orders and Orders With a TIF of
IOC or FOK
Proposed Rule 11.16(e)(5)(A) would
state that the System will only execute
Market Orders or orders with a TIF
instruction of IOC or FOK at or within
the Price Bands. If a Market Order or
order with a TIF instruction of IOC or
FOK cannot be fully executed at or
within the Price Bands, the System shall
cancel any unexecuted portion of the
order without posting such order to the
EDGA Book. This provision is similar to
current Rule 11.10(a)(3)(A). The Rule
would also state that the display of
Market Orders will be handled in
accordance with Rule 11.8(a)(4).
Limit Orders
The operation of Limit Orders under
the Plan would be set forth in Rule
11.16(e)(5)(B), which would include the
following provisions.
• Orders Not Subject to Re-Pricing.
Limit Orders will be cancelled if a User
has entered instructions not to use the
re-pricing process set forth in Rule
11.16(e)(5) and such interest to buy
(sell) is priced above (below) the Upper
(Lower) Price Band.
• Incoming Orders. If re-pricing is
permitted based on a User’s
instructions, both displayable and nondisplayable incoming Limit Orders to
buy (sell) that are priced above (below)
the Upper (Lower) Price Band shall be
re-priced to the Upper (Lower) Price
Band.
• Resting Orders. The System shall
re-price resting Limit Orders to buy
(sell) to the Upper (Lower) Price Band
if Price Bands move such that the price
of resting Limit Orders to buy (sell)
would be above (below) the Upper
(Lower) Price Band. If the Price Bands
move again and the original limit price
of a displayed and re-priced Limit Order
is at or within the Price Bands and a
User has opted into the Exchange’s
optional multiple re-pricing process, as
described in Rule 11.6(l), the System
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19725
shall re-price such displayed limit
interest to the most aggressive
permissible price up to the order’s limit
price. All other displayed and nondisplayed limit interest re-priced
pursuant to paragraph (e) of Rule 11.16
will remain at its new price unless the
Price Bands move such that the price of
resting Limit Order to buy (sell) would
again be above (below) the Upper
(Lower) Price Band.
Orders With a Pegged Instruction 21
Currently, the operation of orders
with a Pegged instruction under the
Plan is not specifically addressed in the
Exchange’s Rules. Therefore, the
Exchange proposes to adopt Rule
11.16(e)(5)(C) which would state that
orders with a Pegged instruction to buy
(sell) shall peg to the specified pegging
price or the Upper (Lower) Price Band,
whichever is lower (higher). Rule
11.16(e)(5)(c) is similar to BZX and BYX
Rules 11.18(e)(5)(C).
Routable Orders
The Exchange proposes to delete
Rules 11.11(b) thru (d), which discuss
the routing of orders under the Plan,
and replace them with Rule
11.16(e)(5)(D). The Exchange is not
proposing any changes to its routing
functionality in connection with the
implementation of the Plan. The
Exchange proposes to delete in its
entirety Rule 11.11(b)(1), which states
when an order may be routed under the
Plan, as these provisions are no longer
necessary as they are covered succinctly
in new Rule 11.16(e)(5)(D). Rule
11.16(e)(5)(D) would state that if routing
is permitted based on a User’s
instructions, orders shall be routed
away from the Exchange pursuant to
Rule 11.11, provided that the System
shall not route buy (sell) interest at a
price above (below) the Upper (Lower)
Price Band.22 Rule 11.11(c), which
discusses re-routing of orders under the
Plan, will be moved to Rule
11.16(e)(5)(D)(i) with slight
modifications. Current Rule 11.11(c)
states that for routing strategies that
access all Protected Quotations, when
the Upper (Lower) Price Band adjusts
such that the NBO (NBB) becomes
executable, a routable buy (sell) Market
or marketable Limit Order will be
eligible to be re-routed by the Exchange.
Likewise, Rule 11.16(e)(5)(D)(i) would
state that when the Upper (Lower) Price
21 The ‘‘Pegged’’ instruction is described under
Rule 11.6(j).
22 This provision shall also replace current Rule
11.10(a)(3)(C) which states that the description of
the behavior of routable Market Orders and Limit
Orders in response to the Plan is set forth in Rule
11.11(b)(1).
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Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / Notices
Band adjusts such that the NBO (NBB)
becomes executable, a routable buy
(sell) Market or marketable Limit Order
will be eligible to be re-routed by the
Exchange if such order contains an
Aggressive 23 or Super Aggressive 24
instruction.25 Rule 11.11(d), which
discusses the operation of certain
routing strategies under the Plan, will be
moved to Rule 11.16(e)(5)(D)(ii) without
change. Rule 11.16(e)(5)(D)(ii) would
state that routing strategies SWPA and
SWPB (together, ‘‘SWP’’), as described
in Rule 11.11(g), are eligible for routing
in accordance with the Plan as follows:
the System will immediately cancel
orders utilizing an SWP routing strategy
when an order to buy utilizing an SWP
routing strategy has a limit price that is
greater than the Upper Price Band or if
a sell order utilizing an SWP routing
strategy has a limit price that is less
than the Lower Price Band. Proposed
Rule 11.16(e)(5)(D)(ii) is similar to BZX
and BYX Rule 11.13(a)(3)(I).26
mstockstill on DSK4VPTVN1PROD with NOTICES
Orders With a Short Sale Instruction
The Exchange proposes to replace
current Rule 11.10(a)(3)(D), which
discusses the handling of orders with a
Short Sale instruction under the Plan,
with proposed Rule 11.16(e)(5)(E). The
proposed rule text for Exchange Rule
11.16(e)(5)(E) is directly based on BZX
and BYX Rule 11.18(e)(5)(E). Current
Rule 11.10(a)(3)(D) states that where a
short sale order is entered into the
System with a limit price below the
Lower Price Band and a short sale price
test restriction under Rule 201 of
Regulation SHO is in effect, the System
will re-price such order to the Lower
Price Band as long as the Lower Price
Band is at a Permitted Price.27 When an
order with a Short Sale instruction is
entered into the System with a limit
price above the Lower Price Band and
a short sale price test restriction under
Rule 201 of Regulation SHO is in effect,
the System will re-price such order, if
necessary, at a Permitted Price.
Likewise, proposed Rule 11.16(e)(5)(E)
23 The ‘‘Aggressive’’ instruction is described
under Rule 11.6(n)(1).
24 The ‘‘Super Aggressive’’ instruction is
described under Rule 11.6(n)(2).
25 The Exchange notes that this provision is not
included in BZX or BYX Rule 11.18(e), but the
Exchange believes it provides additional detail that
was included in current Exchange Rule 11.11(c)
that is helpful to retain in proposed Rule
11.16(e)(5)(D)(i).
26 The Exchange notes that its proposal to include
current Rule 11.11(d) within proposed Rule
11.16(e)(5)(D)(ii), rather than within its Rule
11.11(g) which describes each of its routing
strategies, differs from the location of the same
provision under BZX and BYX Rule 11.13(a)(3),
which describes BZX and BYX’s routing strategies.
27 The term ‘‘Permitted Price’’ is defined in Rule
11.6(k).
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18:02 Apr 10, 2015
Jkt 235001
would state that where a short sale price
restriction under Rule 201 of Regulation
SHO is in effect, orders with a Short
Sale instruction priced below the Lower
Price Band shall be re-priced to the
higher of the Lower Price Band or the
Permitted Price. The Exchange is not
proposing to alter the handling of orders
with a Short Sale instruction that under
the Plan, but rather, is proposing to
relocate the text, with modifications, to
Rule 11.16(e)(5)(E) discussed above.
Other Amendments to Rule 11.16
The Exchange also proposes to
relocate Rule 11.16(c), which discusses
the re-opening of trading following a
trading halt, to proposed Rule
11.16(e)(6), with minor modifications.
Current Rule 11.16(c) states that the reopening of trading following a trading
halt will be conducted pursuant to
procedures adopted by the Exchange
and communicated by notice to its
Members. The Exchange recently
codified its opening process, including
its re-opening process follow a halt,
suspension or pause, under Rule 11.7.28
Therefore, with respect to the reopening of trading following a Trading
Pause, the Exchange proposes to adopt
Rule 11.16(e)(6) to provide that the
Exchange shall re-open the security as
set forth in Rule 11.7(e), which is the
Exchange’s Rule describing the
Exchange’s re-opening process
following a trading halt, suspension or
pause.
The Exchange also proposes to delete
Rule 11.16(d) which discusses when the
Exchange may resume trading where the
Primary Listing Market issues an
individual stock trading pause and how
individual stock trading pauses are to be
handled during Phase I of the Plan.
Interpretation and Policy .01 to Rule
11.16 states that the provisions of
paragraph (d) of this Rule shall be in
effect during a pilot set to end on the
earlier of the initial date of operations
of the Regulation NMS Plan to Address
Extraordinary Market Volatility or
February 4, 2014. Phase I of the Plan has
expired and the Exchange, therefore,
proposes to delete Rule 11.16(d) as well
as Interpretation and Policy .01 to Rule
11.16 as they are no longer relevant.
Lastly, the Exchange proposes the
following additional amendments to
Rule 11.16: (i) Renumber paragraph (f)
as (d); (ii) delete current Rule 11.16(e)
and replace it with new paragraph (f)
providing that in the event of a trading
halt, all orders will remain on the EDGA
28 See Securities Exchange Act Release Nos.
73468 (October 29, 2014), 79 FR 65450 (November
4, 2014) (SR–EDGX–2014–18); and 73592
(November 13, 2014), 79 FR 68937 (November 19,
2014) (SR–EDGA–2014–20).
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Book unless cancelled by the User; and
(iii) adopt paragraph (g), which would
state that all times referenced in Rule
11.16 shall be Eastern Time.
Ministerial Changes
In light of the above restructuring of
the Exchange Rules, the Exchange
proposes the following ministerial
changes to update cross references to
Rules that are to be deleted or relocated
as described above:
• Amend Rule 11.8(a)(4) regarding
the display of Market Orders to update
a cross-reference to current Rule
11.10(a)(3)(A) to proposed Rule
11.16(e)(5), and
• amend Rule 11.9(a)(2)(C)(ii)
regarding the priority of Market Orders
displayed on the EDGA Book to delete
a cross-reference to current Rule
11.10(a)(3)(A).
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder that
are applicable to a national securities
exchange, and, in particular, with the
requirements of Section 6(b) of the
Act.29 Specifically, the proposed change
is consistent with Section 6(b)(5) of the
Act,30 because it is designed to promote
just and equitable principles of trade, 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. The Exchange does not
propose to alter its current system
functionality with regard to compliance
with the Plan set forth under current
Exchange Rules. Rather, the proposed
rule change is designed to provide a
consistent rule set across each of the
BGM Affiliated Exchanges. As
mentioned above, the proposed rule
changes, combined with the planned
filing for EDGA [sic],31 would allow the
BGM Affiliated Exchanges to provide a
consistent set of rules as it relates to the
compliance with the Plan across each of
the BGM Affiliated Exchanges.
Consistent rules, in turn, will simplify
the regulatory requirements for
Members of the Exchange that are also
participants on EDGX, BZX and/or BYX.
The proposed rule change would
provide greater harmonization between
rules of similar purpose on the BGM
Affiliated Exchanges, resulting in
greater uniformity and less burdensome
and more efficient regulatory
compliance and understanding of
29 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
31 See supra note 8 [sic].
30 15
E:\FR\FM\13APN1.SGM
13APN1
Federal Register / Vol. 80, No. 70 / Monday, April 13, 2015 / Notices
Exchange Rules. As such, the proposed
rule change would foster cooperation
and coordination with persons engaged
in facilitating transactions in securities
and would remove impediments to and
perfect the mechanism of a free and
open market and a national market
system. Similarly, the Exchange also
believes that, by harmonizing the rules
and across each BGM Affiliated
Exchange with respect to the Plan, the
proposal will enhance the Exchange’s
ability to fairly and efficiently regulate
its Members, meaning that the proposed
rule change is equitable and will
promote fairness in the market place.
Finally, the proposal to remove the
references to individual stock trading
pauses promotes just and equitable
principles of trade and removes
impediments to, and perfects the
mechanism of, a free and open market
and a national market system. By
eliminating the reference to trading
pauses outside the scope of the Plan in
its rules, the Exchange will help to
alleviate any potential confusion with
respect to such pauses, particularly in
light of the implementation of the Plan.
The proposed rule change is also
consistent with Section 11A(a)(1) of the
Act 32 in that it seeks to assure fair
competition among brokers and dealers
and exchange markets.
Finally, the Exchange believes that
the non-substantive, ministerial changes
discussed above will contribute to the
protection of investors and the public
interest by helping to avoid confusion
with respect to Exchange Rules.
mstockstill on DSK4VPTVN1PROD with NOTICES
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, allowing the Exchange to
implement substantively identical rules
across each of the BGM Affiliated
Exchanges regarding the Plan does not
present any competitive issues, but
rather is designed to provide greater
harmonization among Exchange, EDGX,
BYX, and BZX rules of similar purpose.
The proposed rule change should,
therefore, resulting in less burdensome
and more efficient regulatory
compliance and understanding of
Exchange Rules for common members of
the BGM Affiliated Exchanges and an
enhanced ability of the BGM Affiliated
Exchanges to fairly and efficiently
regulate Members, which will further
enhance competition.
32 15
U.S.C. 78k–1(a)(1).
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18:02 Apr 10, 2015
Jkt 235001
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 foregoing 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 for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 33 and
subparagraph (f)(6) of Rule 19b–4
thereunder.34
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
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–
EDGA–2015–15 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–EDGA–2015–15. This file
33 15
U.S.C. 78s(b)(3)(a)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
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 satisfied this
requirement.
34 17
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19727
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
available publicly. All submissions
should refer to File Number SR–EDGA–
2015–15, and should be submitted on or
before May 4, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.35
Brent J. Fields,
Secretary.
[FR Doc. 2015–08339 Filed 4–10–15; 8:45 am]
BILLING CODE 8011–01–P
DEPARTMENT OF STATE
[Public Notice 9091]
Certification Related to the
Government of Haiti Under Section
7045(E)(1) of the Department of State,
Foreign Operations, and Related
Programs Appropriations Act, 2015
Pursuant to the authority vested in the
Secretary of State, including under
section 7045(e)(1) of the Department of
State, Foreign Operations, and Related
Programs Appropriations Act, 2015
(Div. J, Pub. L. 113–235), I hereby certify
that Haiti is taking steps to hold free and
fair parliamentary elections and to seat
a new Haitian Parliament; is selecting
judges in a transparent manner and
respecting the independence of the
35 17
E:\FR\FM\13APN1.SGM
CFR 200.30–3(a)(12).
13APN1
]]>Agencies
[Federal Register Volume 80, Number 70 (Monday, April 13, 2015)]
[Notices]
[Pages 19722-19727]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-08339]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74663; File No. SR-EDGA-2015-15]
Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Rules 11.8, 11.9, 11.10, 11.11, and 11.16 Regarding the Limit Up-Limit
Down Plan
April 7, 2015.
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 March 27, 2015, EDGA Exchange, Inc. (the ``Exchange'' or
``EDGA'') 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange filed a proposal to amend Rules 11.8, 11.9, 11.10,
11.11, and 11.16, in order to conform Exchange Rules to the rules of
BATS Exchange, Inc. (``BZX'') and BATS Y-Exchange, Inc. (``BYX'') as
they relate to the Plan to Address Extraordinary Market Volatility
Pursuant to Rule 608 of Regulation NMS under the Act (the ``Limit Up-
Limit Down Plan'' or ``Plan'').\3\
---------------------------------------------------------------------------
\3\ See BZX and BYX Rules 11.18(e). See Securities Exchange Act
Release Nos. 69084 (March 8, 2013), 77 FR 16334 (March 14, 2013)
(SR-BATS-2015-015) [sic]; and 69088 (March 8, 2013), 77 FR 16308
(March 14, 2013) (SR-BYX-2013-010). See also Securities Exchange Act
Release No. 67091 (May 31, 2012), 77 FR 33498 (June 6, 2012) (the
``Limit Up-Limit Down Release'').
---------------------------------------------------------------------------
The text of the proposed rule change is available at the Exchange's
Web site at www.batstrading.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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to restructure and amend various Exchange
Rules related to the applicability of the Plan in order to make the
Exchange's Rules
[[Page 19723]]
identical to the corresponding rules on BZX and BYX, as further
described below. In early 2014, the Exchange and its affiliate, EDGA
Exchange, Inc. (``EDGA'') [sic], 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 BZX and BYX
(together with BZX, EDGA, and EDGX, the ``BGM Affiliated
Exchanges'').\4\ In the context of the Merger, the BGM Affiliated
Exchanges are working to align certain system and regulatory
functionality, retaining only intended differences between the BGM
Affiliated Exchanges. Thus, the proposal set forth below is intended to
amend Rules 11.8, 11.9, 11.10, 11.11, and 11.16 to make such Rules
identical to corresponding rules on BZX and BYX related to the Plan.
The Exchange does not propose to alter its current system functionality
with regard to compliance with the Plan set forth under current
Exchange Rules.\5\ Rather, the proposed rule change is designed to
provide a consistent rule set across each of the BGM Affiliated
Exchanges.\6\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 71449 (January 30,
2014), 79 FR 6961 (February 5, 2014) (SR-EDGX-2013-043; SR-EDGA-
2013-034).
\5\ See Securities Exchange Act Release Nos. 69002 (February 27,
2013), 78 FR 14394 (March 5, 2013) (SR-EDGA-2013-08); and 69003
(February 27, 2013), 78 FR 14380 (March 5, 2013) (SR-EDGX-2013-08).
\6\ See BZX and BYX Rules 11.18(e). The Exchange notes that EDGA
[sic] intends to file a proposal very similar to this proposal that
will align the rules related to the Plan across each of the BGM
Affiliated Exchanges.
---------------------------------------------------------------------------
Background
The Plan is designed to prevent trades in individual NMS Stocks
from occurring outside of specified Price Bands.\7\ As described more
fully below, the requirements of the Plan are coupled with Trading
Pauses to accommodate more fundamental price moves (as opposed to
erroneous trades or momentary gaps in liquidity). All trading centers
in NMS Stocks, including both those operated by Participants and those
operated by members of Participants, are required to establish,
maintain, and enforce written policies and procedures that are
reasonably designed to comply with the requirements specified in the
Plan.\8\ As set forth in more detail in the Plan, Price Bands
consisting of a Lower Price Band and an Upper Price Band for each NMS
Stock are calculated by the Processors.\9\ When the National Best Bid
(Offer) is below (above) the Lower (Upper) Price Band, the Processors
shall disseminate such National Best Bid (Offer) with an appropriate
flag identifying it as non-executable. When the National Best Bid
(Offer) is equal to the Upper (Lower) Price Band, the Processors shall
distribute such National Best Bid (Offer) with an appropriate flag
identifying it as a Limit State Quotation.\10\ All trading centers in
NMS Stocks must maintain written policies and procedures that are
reasonably designed to prevent the display of offers below the Lower
Price Band and bids above the Upper Price Band for NMS Stocks.
Notwithstanding this requirement, the Processor shall display an offer
below the Lower Price Band or a bid above the Upper Price Band, but
with a flag that it is non-executable. Such bids or offers shall not be
included in the National Best Bid (``NBB'') or National Best Offer
(``NBO'') calculations.\11\
---------------------------------------------------------------------------
\7\ Unless otherwise specified, capitalized terms used in this
rule filing are based on the defined terms of the Plan.
\8\ The Exchange is a Participant in the Plan.
\9\ See Section (V)(A) of the Plan.
\10\ See Section VI(A) of the Plan.
\11\ See Section VI(A)(3) of the Plan.
---------------------------------------------------------------------------
Trading in an NMS Stock immediately enters a Limit State if the
National Best Offer (Bid) equals but does not cross the Lower (Upper)
Price Band.\12\ Trading for an NMS stock exits a Limit State if, within
15 seconds of entering the Limit State, all Limit State Quotations were
executed or canceled in their entirety. If the market does not exit a
Limit State within 15 seconds, then the Primary Listing Exchange would
declare a five-minute Trading Pause pursuant to Section VII of the
Limit Up-Limit Down Plan, which would be applicable to all markets
trading the security.\13\ In addition, the Plan defines a Straddle
State as when the National Best Bid (Offer) is below (above) the Lower
(Upper) Price Band and the NMS Stock is not in a Limit State. For
example, assume the Lower Price Band for an NMS Stock is $9.50 and the
Upper Price Band is $10.50, such NMS stock would be in a Straddle State
if the National Best Bid were below $9.50, and therefore non-
executable, and the National Best Offer were above $9.50 (including a
National Best Offer that could be above $10.50). If an NMS Stock is in
a Straddle State and trading in that stock deviates from normal trading
characteristics, the Primary Listing Exchange may declare a Trading
Pause for that NMS Stock.
---------------------------------------------------------------------------
\12\ See Section VI(B)(1) of the Plan.
\13\ The primary listing market would declare a trading pause in
an NMS Stock; upon notification by the primary listing market, the
Processor would disseminate this information to the public. No
trades in that NMS Stock could occur during the trading pause, but
all bids and offers may be displayed. See Section VII(A) of the
Plan.
---------------------------------------------------------------------------
Proposed Amendment to Rule 11.9
Currently, Rule 11.9(a)(8) describes the priority of orders that
are re-priced and displayed in accordance with the Plan. The Exchange
is proposing to delete this clause and to include this information in
Rule 11.16(e)(5) in order to adopt a consistent rule set as between the
Exchange and the other BGM Affiliated Exchanges. The proposed rule text
for Exchange Rule 11.16(e)(5) is directly based on BZX and BYX Rule
11.18(e)(5), and is described in greater detail below. The Exchange is
not proposing to alter the priority handling of orders that are re-
priced and displayed in accordance with the Plan, but rather, is
proposing to adopt rule text that is identical to that of its
affiliated exchanges to reduce potential confusion.
Proposed Amendment to Rule 11.10
In sum, Rule 11.10(a)(3) sets forth the general rule that no
executions shall occur outside the Price Bands during Regular Trading
Hours. The Exchange proposes to amend Rule 11.10(a)(3) to further state
that the Exchange's procedures for handling executing, re-pricing and
displaying orders in connection with the Plan are further described in
proposed Rule 11.16(e), which is discussed below.
Current Rule 11.10(a)(3)(A) discusses how an order priced within
the Price Bands may be executed or posted to the EDGA Book. Current
Rule 11.10(a)(3)(B) explains how the Exchange will re-price an order
that is priced outside of the Price Bands. The Exchange proposes to
delete Rules 11.10(a)(3)(A) and (B) and replace them with Rule
11.16(e)(5). The proposed rule text for Exchange Rule 11.16(e)(5) is
directly based on BZX and BYX Rule 11.18(e)(5) and is described more
fully below. The Exchange is not proposing to alter the handling and
re-pricing of orders that [sic] under the Plan, but rather, is
proposing to adopt rule text that is identical to that of its
affiliated exchanges to reduce potential confusion.
The Exchange also proposes to delete Rule 11.10(a)(3)(C) and does
not propose to include it as part of the amended rule set. Rule
11.10(a)(3)(C) states that a description of the behavior of routable
market and Limit Orders in response to the Plan is found in Rule
11.11(b)(1). The Exchange believes this provision is no longer
necessary as the Exchange's procedures for handling, executing, re-
pricing, and displaying orders in connection with the Plan are proposed
to be described in a single rule, Rule 11.16(e), rather than multiple
rules as is currently the case.
[[Page 19724]]
The Exchange proposes to delete Rule 11.10(a)(3)(D), which
discusses the handling of orders with a Short Sale instruction \14\
under the Plan, and replace it with Rule 11.16(e)(5)(E). The proposed
rule text for Exchange Rule 11.16(e)(5)(E) is directly based on BZX and
BYX Rule 11.18(e)(5)(E) and is described more fully below. The Exchange
is not proposing to alter the handling of orders with a Short Sale
instruction under the Plan, but rather, is proposing to relocate the
text, with modifications, to Rule 11.16(e)(5)(E) as discussed below.
---------------------------------------------------------------------------
\14\ A ``Short Sale'' instruction is defined as ``[a]n
instruction on an order which shall have the same meaning as defined
in Rule 200(a) of Regulation SHO.'' See Exchange Rule 11.6(o).
---------------------------------------------------------------------------
The Exchange proposes to delete Rule 11.10(a)(3)(E) and replace it
with Rule 11.16(e)(2) thru (4). Current Rule 11.10(a)(3)(E) states that
pursuant to Section IV of the Plan all Trading Centers in NMS Stocks,
including those operated by Members of the Exchange, shall establish,
maintain, and enforce written policies and procedures that are
reasonably designed to comply with the requirements specified in
Section VI of the Plan, and to comply with the Trading Pauses specified
in Section VII of the Plan. The proposed rule text for Exchange Rule
11.16(e)(2) thru (4) expands upon this provision and is directly based
on BZX and BYX Rule 11.18(e)(2) thru (4) described more fully below.
Proposed Amendment to Rule 11.11
Rule 11.11 discusses the handling of orders that are to be routed
to away trading centers. Paragraphs (b) thru (d) of Rule 11.11 discuss
the routing of orders under the Plan. The Exchange proposes to delete
Rules 11.11(b) thru (d) and replace them with Rule 11.16(e)(5)(D). The
Exchange proposes to delete in its entirety Rule 11.11(b)(1) as this
provision is no longer necessary as it is covered succinctly in new
Rule 11.16(e)(5)(D). Rule 11.11(c), which discusses re-routing of
orders under the Plan, will be moved to Rule 11.16(e)(5)(D)(i) with
slight modifications. Rule 11.11(d), which discusses the operation of
certain routing strategies under the Plan, will be moved to Rule
11.16(e)(5)(D)(ii) without change. Each of these changes are discussed
in more detail below.
Proposed Amendment to Rule 11.16
The Exchange is required by the Plan to establish, maintain, and
enforce written policies and procedures that are reasonably designed to
comply with the limit up-limit down and trading pause requirements
specified in the Plan. In February 2013, the Exchange amended its Rules
in connection with the implementation of the Plan.\15\ The Exchange now
proposes to incorporate the provisions discussed above into Rule
11.16(e) in order to make the Exchange's Rules identical to the
corresponding rules on BZX and BYX. The proposed amendments to Rule
11.16(e) are based on BZX and BYX Rules 11.18(e). The Exchange believes
that the provisions proposed below are reasonably designed to prevent
executions outside the Price Bands as required by the limit up-limit
down and trading pause requirements specified in the Plan.
---------------------------------------------------------------------------
\15\ See supra note 7 [sic].
---------------------------------------------------------------------------
First, the Exchange proposes to add Rule 11.16(e)(1) to provide
that all capitalized terms not otherwise defined in paragraph (e) of
the Rule shall have the meanings set forth in the Plan or Exchange
Rules, as applicable. The Exchange also proposes to add Rules
11.16(e)(2) thru (4) described below. These provisions are based on BXZ
and BYX Rules 11.18(e)(2) thru (4) and designed to replace deleted Rule
11.10(a)(3)(E), which states that the Exchange and its Members must
establish policies and procedures that are reasonably designed to
comply with the Plan. Specifically, the Exchange proposes to add Rule
11.16(e)(2) to provide that the Exchange is a Participant in, and
subject to the applicable requirements of, the Plan, which establishes
procedures to address extraordinary volatility in NMS Stocks. Further,
the Exchange proposes to add Rule 11.16(e)(3) to provide that Exchange
Members shall comply with the applicable provisions of the Plan. The
Exchange believes the requirements of current Rule 11.10(a)(3)(E) would
be sufficiently covered in proposed Rules 11.16(e)(2) and (3), which
will help ensure the compliance by its Members with the provisions of
the Plan as required pursuant to Section II(B) of the Plan.\16\
---------------------------------------------------------------------------
\16\ See Section II(B) of the Plan.
---------------------------------------------------------------------------
The Exchange also proposes to add Rule 11.16(e)(4) to replace
deleted Rule 11.10(a)(3)(E). Rule 11.16(e)(4) would provide that the
Exchange's System \17\ shall not display or execute buy (sell) interest
above (below) the Upper (Lower) Price Bands, unless such interest is
specifically exempted under the Plan. The Exchange believes that this
requirement is reasonably designed to help ensure the compliance with
the limit up-limit down and trading pause requirements specified in the
Plan by preventing executions outside the Price Bands as required
pursuant to Section VI(A)(1) of the Plan.\18\
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\17\ The ``System'' is defined in Exchange Rule 1.5(cc) as ``the
electronic communications and trading facility designated by the
Board through which securities orders of Users are consolidated for
ranking, execution and, when applicable, routing away.''
\18\ See Section VI(A)(1) of the Plan.
---------------------------------------------------------------------------
As mentioned above, the Exchange proposes to incorporate the
provisions of current Rules 11.9(a)(8) and 11.10(a)(3)(A) and (B)
within Rule 11.16(e)(5) regarding the treatment of certain trading
interest on the Exchange in order to prevent executions outside the
Price Bands and to comply with the Plan. The Exchange is proposing to
delete Rules 11.9(a)(8) and 11.10(a)(3)(A) and (B) to include this
information in Rule 11.16(e)(5) in order to adopt a consistent rule set
as between the Exchange and the other BGM Affiliated Exchanges.
Proposed Rule 11.16(e)(5) is based on BZX and BYX Rules 11.18(e)(5).
Current Rule 11.9(a)(8) describes the priority of orders that are
re-priced and displayed in accordance with the Plan. Specifically, Rule
11.9(a)(8) states that if the Upper (Lower) Price Band moves so that
the price of a buy (sell) order resting on the EDGA Book would
consequently be above (below) the Upper (Lower) Price Band, such order
will be re-priced and displayed at a price equal to the Upper (Lower)
Price Band, provided a new timestamp, and prioritized based on its
existing timestamp at the time the new Price Bands are established. If
an order is resting on the EDGA Book at a price equal to the Upper
(Lower) Price Band, such order will not be re-priced but will be
provided a new timestamp and prioritized based on its existing
timestamp at the time the new Price Bands are established.
Likewise, under proposed Rule 11.16(e)(5), when re-pricing resting
orders because such orders are above (below) the Upper (Lower) Price
Band, the Exchange will provide new timestamps to such orders. The
Exchange will also provide new timestamps to resting orders at the less
aggressive price to which such orders are re-priced. Any resting
interest that is re-priced pursuant to Rule 11.16(e)(5) shall maintain
priority ahead of interest that was originally less aggressively
priced, regardless of the original timestamps for such orders. The
Exchange is not proposing to alter the priority handling of orders that
are re-priced and displayed in accordance with the Plan, but rather, is
proposing to adopt rule text that is identical to that of its
affiliated exchanges to reduce potential confusion. While the text of
[[Page 19725]]
current Rule 11.9(a)(8) is not identical to proposed Rule 11.16(e)(5),
the Exchange proposes to adopt language identical to BZX and BYX Rules
11.18(e)(5), which it believes more clearly describes system
functionality.
Current Rules 11.10(a)(3)(A) and (B) address the handling and re-
pricing of orders under the Plan. Rule 11.10(a)(3)(A) discusses how an
order priced within the Price Bands may be executed or posted to the
EDGA Book by stating that a non-routable buy (sell) order that is
entered into the System at a price less (greater) than or equal to the
Upper (Lower) Price Band will be posted to the EDGA Book or executed,
unless: (i) the order includes a Time-in-Force Instruction (``TIF'') of
Immediate or Cancel (``IOC'') or Fill-or-Kill (``FOK''), in which case
it will be cancelled if not executed; or (ii) the User has entered
instructions to cancel \19\ the order. Rule 11.10(a)(3)(B) explains how
the Exchange will re-price an order that is priced outside of the Price
Bands by stating that a non-routable buy (sell) order at a price
greater (less) than the Upper (Lower) Price Band will be re-priced and
displayed at the price of the Upper (Lower) Price Band. If the price of
the Upper (Lower) Price Band moves above (below) the non-routable buy
(sell) order's displayed price, the buy (sell) order will not be
adjusted further and will remain posted at the original price at which
it was posted to the EDGA Book. If the Upper (Lower) Price Band crosses
a non-routable buy (sell) order resting on the EDGA Book, the buy
(sell) order will be re-priced to the price of the Upper (Lower) Price
Band.
---------------------------------------------------------------------------
\19\ Under the Cancel Back instruction, a User may instruct the
System to immediately cancel the order when, if displayed by the
System on the EDGA Book at the time of entry, or upon return to the
System after being routed away, would create a violation of Rule
610(d) of Regulation NMS or Rule 201 of Regulation SHO, or the order
cannot otherwise be executed or posted by the System to the EDGA
Book at its limit price. See Exchange Rule 11.6(b).
---------------------------------------------------------------------------
Likewise, proposed Rule 11.16(e)(5) discusses the re-pricing and
cancellation of interest and specifically provides that the Exchange
systems shall re-price and/or cancel buy (sell) interest that is priced
or could be executed \20\ above (below) the Upper (Lower) Price Band.
The Exchange is not proposing to alter the handling or re-pricing of
orders under the Plan, but rather, is proposing to adopt rule text that
is identical to that of its affiliated exchanges to reduce potential
confusion. The Exchange notes that while the format of current Rules
11.10(a)(3)(A) and (B) are not identical to that of proposed Rule
11.16(e)(5), the Exchange proposes to include the following provisions
under Rule 11.16(e)(5) regarding the re-pricing or canceling of certain
trading interest that are similar to BZX and BYX Rule 11.18(e)(5),
which if [sic] believes continue to accurately describe system
functionality and provide additional specificity, the specifics of
which are described under each subsection of proposed Rule 11.16(e)(5)
set forth below.
---------------------------------------------------------------------------
\20\ The Exchange notes that this includes any interest that is
displayed and/or resting at a less aggressive price but executable
at a more aggressive price, such as orders subject to price sliding
and discretionary order types.
---------------------------------------------------------------------------
Market Orders and Orders With a TIF of IOC or FOK
Proposed Rule 11.16(e)(5)(A) would state that the System will only
execute Market Orders or orders with a TIF instruction of IOC or FOK at
or within the Price Bands. If a Market Order or order with a TIF
instruction of IOC or FOK cannot be fully executed at or within the
Price Bands, the System shall cancel any unexecuted portion of the
order without posting such order to the EDGA Book. This provision is
similar to current Rule 11.10(a)(3)(A). The Rule would also state that
the display of Market Orders will be handled in accordance with Rule
11.8(a)(4).
Limit Orders
The operation of Limit Orders under the Plan would be set forth in
Rule 11.16(e)(5)(B), which would include the following provisions.
Orders Not Subject to Re-Pricing. Limit Orders will be
cancelled if a User has entered instructions not to use the re-pricing
process set forth in Rule 11.16(e)(5) and such interest to buy (sell)
is priced above (below) the Upper (Lower) Price Band.
Incoming Orders. If re-pricing is permitted based on a
User's instructions, both displayable and non-displayable incoming
Limit Orders to buy (sell) that are priced above (below) the Upper
(Lower) Price Band shall be re-priced to the Upper (Lower) Price Band.
Resting Orders. The System shall re-price resting Limit
Orders to buy (sell) to the Upper (Lower) Price Band if Price Bands
move such that the price of resting Limit Orders to buy (sell) would be
above (below) the Upper (Lower) Price Band. If the Price Bands move
again and the original limit price of a displayed and re-priced Limit
Order is at or within the Price Bands and a User has opted into the
Exchange's optional multiple re-pricing process, as described in Rule
11.6(l), the System shall re-price such displayed limit interest to the
most aggressive permissible price up to the order's limit price. All
other displayed and non-displayed limit interest re-priced pursuant to
paragraph (e) of Rule 11.16 will remain at its new price unless the
Price Bands move such that the price of resting Limit Order to buy
(sell) would again be above (below) the Upper (Lower) Price Band.
Orders With a Pegged Instruction \21\
---------------------------------------------------------------------------
\21\ The ``Pegged'' instruction is described under Rule 11.6(j).
---------------------------------------------------------------------------
Currently, the operation of orders with a Pegged instruction under
the Plan is not specifically addressed in the Exchange's Rules.
Therefore, the Exchange proposes to adopt Rule 11.16(e)(5)(C) which
would state that orders with a Pegged instruction to buy (sell) shall
peg to the specified pegging price or the Upper (Lower) Price Band,
whichever is lower (higher). Rule 11.16(e)(5)(c) is similar to BZX and
BYX Rules 11.18(e)(5)(C).
Routable Orders
The Exchange proposes to delete Rules 11.11(b) thru (d), which
discuss the routing of orders under the Plan, and replace them with
Rule 11.16(e)(5)(D). The Exchange is not proposing any changes to its
routing functionality in connection with the implementation of the
Plan. The Exchange proposes to delete in its entirety Rule 11.11(b)(1),
which states when an order may be routed under the Plan, as these
provisions are no longer necessary as they are covered succinctly in
new Rule 11.16(e)(5)(D). Rule 11.16(e)(5)(D) would state that if
routing is permitted based on a User's instructions, orders shall be
routed away from the Exchange pursuant to Rule 11.11, provided that the
System shall not route buy (sell) interest at a price above (below) the
Upper (Lower) Price Band.\22\ Rule 11.11(c), which discusses re-routing
of orders under the Plan, will be moved to Rule 11.16(e)(5)(D)(i) with
slight modifications. Current Rule 11.11(c) states that for routing
strategies that access all Protected Quotations, when the Upper (Lower)
Price Band adjusts such that the NBO (NBB) becomes executable, a
routable buy (sell) Market or marketable Limit Order will be eligible
to be re-routed by the Exchange. Likewise, Rule 11.16(e)(5)(D)(i) would
state that when the Upper (Lower) Price
[[Page 19726]]
Band adjusts such that the NBO (NBB) becomes executable, a routable buy
(sell) Market or marketable Limit Order will be eligible to be re-
routed by the Exchange if such order contains an Aggressive \23\ or
Super Aggressive \24\ instruction.\25\ Rule 11.11(d), which discusses
the operation of certain routing strategies under the Plan, will be
moved to Rule 11.16(e)(5)(D)(ii) without change. Rule
11.16(e)(5)(D)(ii) would state that routing strategies SWPA and SWPB
(together, ``SWP''), as described in Rule 11.11(g), are eligible for
routing in accordance with the Plan as follows: the System will
immediately cancel orders utilizing an SWP routing strategy when an
order to buy utilizing an SWP routing strategy has a limit price that
is greater than the Upper Price Band or if a sell order utilizing an
SWP routing strategy has a limit price that is less than the Lower
Price Band. Proposed Rule 11.16(e)(5)(D)(ii) is similar to BZX and BYX
Rule 11.13(a)(3)(I).\26\
---------------------------------------------------------------------------
\22\ This provision shall also replace current Rule
11.10(a)(3)(C) which states that the description of the behavior of
routable Market Orders and Limit Orders in response to the Plan is
set forth in Rule 11.11(b)(1).
\23\ The ``Aggressive'' instruction is described under Rule
11.6(n)(1).
\24\ The ``Super Aggressive'' instruction is described under
Rule 11.6(n)(2).
\25\ The Exchange notes that this provision is not included in
BZX or BYX Rule 11.18(e), but the Exchange believes it provides
additional detail that was included in current Exchange Rule
11.11(c) that is helpful to retain in proposed Rule
11.16(e)(5)(D)(i).
\26\ The Exchange notes that its proposal to include current
Rule 11.11(d) within proposed Rule 11.16(e)(5)(D)(ii), rather than
within its Rule 11.11(g) which describes each of its routing
strategies, differs from the location of the same provision under
BZX and BYX Rule 11.13(a)(3), which describes BZX and BYX's routing
strategies.
---------------------------------------------------------------------------
Orders With a Short Sale Instruction
The Exchange proposes to replace current Rule 11.10(a)(3)(D), which
discusses the handling of orders with a Short Sale instruction under
the Plan, with proposed Rule 11.16(e)(5)(E). The proposed rule text for
Exchange Rule 11.16(e)(5)(E) is directly based on BZX and BYX Rule
11.18(e)(5)(E). Current Rule 11.10(a)(3)(D) states that where a short
sale order is entered into the System with a limit price below the
Lower Price Band and a short sale price test restriction under Rule 201
of Regulation SHO is in effect, the System will re-price such order to
the Lower Price Band as long as the Lower Price Band is at a Permitted
Price.\27\ When an order with a Short Sale instruction is entered into
the System with a limit price above the Lower Price Band and a short
sale price test restriction under Rule 201 of Regulation SHO is in
effect, the System will re-price such order, if necessary, at a
Permitted Price. Likewise, proposed Rule 11.16(e)(5)(E) would state
that where a short sale price restriction under Rule 201 of Regulation
SHO is in effect, orders with a Short Sale instruction priced below the
Lower Price Band shall be re-priced to the higher of the Lower Price
Band or the Permitted Price. The Exchange is not proposing to alter the
handling of orders with a Short Sale instruction that under the Plan,
but rather, is proposing to relocate the text, with modifications, to
Rule 11.16(e)(5)(E) discussed above.
---------------------------------------------------------------------------
\27\ The term ``Permitted Price'' is defined in Rule 11.6(k).
---------------------------------------------------------------------------
Other Amendments to Rule 11.16
The Exchange also proposes to relocate Rule 11.16(c), which
discusses the re-opening of trading following a trading halt, to
proposed Rule 11.16(e)(6), with minor modifications. Current Rule
11.16(c) states that the re-opening of trading following a trading halt
will be conducted pursuant to procedures adopted by the Exchange and
communicated by notice to its Members. The Exchange recently codified
its opening process, including its re-opening process follow a halt,
suspension or pause, under Rule 11.7.\28\ Therefore, with respect to
the re-opening of trading following a Trading Pause, the Exchange
proposes to adopt Rule 11.16(e)(6) to provide that the Exchange shall
re-open the security as set forth in Rule 11.7(e), which is the
Exchange's Rule describing the Exchange's re-opening process following
a trading halt, suspension or pause.
---------------------------------------------------------------------------
\28\ See Securities Exchange Act Release Nos. 73468 (October 29,
2014), 79 FR 65450 (November 4, 2014) (SR-EDGX-2014-18); and 73592
(November 13, 2014), 79 FR 68937 (November 19, 2014) (SR-EDGA-2014-
20).
---------------------------------------------------------------------------
The Exchange also proposes to delete Rule 11.16(d) which discusses
when the Exchange may resume trading where the Primary Listing Market
issues an individual stock trading pause and how individual stock
trading pauses are to be handled during Phase I of the Plan.
Interpretation and Policy .01 to Rule 11.16 states that the provisions
of paragraph (d) of this Rule shall be in effect during a pilot set to
end on the earlier of the initial date of operations of the Regulation
NMS Plan to Address Extraordinary Market Volatility or February 4,
2014. Phase I of the Plan has expired and the Exchange, therefore,
proposes to delete Rule 11.16(d) as well as Interpretation and Policy
.01 to Rule 11.16 as they are no longer relevant.
Lastly, the Exchange proposes the following additional amendments
to Rule 11.16: (i) Renumber paragraph (f) as (d); (ii) delete current
Rule 11.16(e) and replace it with new paragraph (f) providing that in
the event of a trading halt, all orders will remain on the EDGA Book
unless cancelled by the User; and (iii) adopt paragraph (g), which
would state that all times referenced in Rule 11.16 shall be Eastern
Time.
Ministerial Changes
In light of the above restructuring of the Exchange Rules, the
Exchange proposes the following ministerial changes to update cross
references to Rules that are to be deleted or relocated as described
above:
Amend Rule 11.8(a)(4) regarding the display of Market
Orders to update a cross-reference to current Rule 11.10(a)(3)(A) to
proposed Rule 11.16(e)(5), and
amend Rule 11.9(a)(2)(C)(ii) regarding the priority of
Market Orders displayed on the EDGA Book to delete a cross-reference to
current Rule 11.10(a)(3)(A).
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder that are applicable to a national securities exchange, and,
in particular, with the requirements of Section 6(b) of the Act.\29\
Specifically, the proposed change is consistent with Section 6(b)(5) of
the Act,\30\ because it is designed to promote just and equitable
principles of trade, 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. The Exchange
does not propose to alter its current system functionality with regard
to compliance with the Plan set forth under current Exchange Rules.
Rather, the proposed rule change is designed to provide a consistent
rule set across each of the BGM Affiliated Exchanges. As mentioned
above, the proposed rule changes, combined with the planned filing for
EDGA [sic],\31\ would allow the BGM Affiliated Exchanges to provide a
consistent set of rules as it relates to the compliance with the Plan
across each of the BGM Affiliated Exchanges. Consistent rules, in turn,
will simplify the regulatory requirements for Members of the Exchange
that are also participants on EDGX, BZX and/or BYX. The proposed rule
change would provide greater harmonization between rules of similar
purpose on the BGM Affiliated Exchanges, resulting in greater
uniformity and less burdensome and more efficient regulatory compliance
and understanding of
[[Page 19727]]
Exchange Rules. As such, the proposed rule change would foster
cooperation and coordination with persons engaged in facilitating
transactions in securities and would remove impediments to and perfect
the mechanism of a free and open market and a national market system.
Similarly, the Exchange also believes that, by harmonizing the rules
and across each BGM Affiliated Exchange with respect to the Plan, the
proposal will enhance the Exchange's ability to fairly and efficiently
regulate its Members, meaning that the proposed rule change is
equitable and will promote fairness in the market place.
---------------------------------------------------------------------------
\29\ 15 U.S.C. 78f(b).
\30\ 15 U.S.C. 78f(b)(5).
\31\ See supra note 8 [sic].
---------------------------------------------------------------------------
Finally, the proposal to remove the references to individual stock
trading pauses promotes just and equitable principles of trade and
removes impediments to, and perfects the mechanism of, a free and open
market and a national market system. By eliminating the reference to
trading pauses outside the scope of the Plan in its rules, the Exchange
will help to alleviate any potential confusion with respect to such
pauses, particularly in light of the implementation of the Plan. The
proposed rule change is also consistent with Section 11A(a)(1) of the
Act \32\ in that it seeks to assure fair competition among brokers and
dealers and exchange markets.
---------------------------------------------------------------------------
\32\ 15 U.S.C. 78k-1(a)(1).
---------------------------------------------------------------------------
Finally, the Exchange believes that the non-substantive,
ministerial changes discussed above will contribute to the protection
of investors and the public interest by helping to avoid confusion with
respect to Exchange Rules.
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, allowing the
Exchange to implement substantively identical rules across each of the
BGM Affiliated Exchanges regarding the Plan does not present any
competitive issues, but rather is designed to provide greater
harmonization among Exchange, EDGX, BYX, and BZX rules of similar
purpose. The proposed rule change should, therefore, resulting in less
burdensome and more efficient regulatory compliance and understanding
of Exchange Rules for common members of the BGM Affiliated Exchanges
and an enhanced ability of the BGM Affiliated Exchanges to fairly and
efficiently regulate Members, which will further enhance 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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing 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 for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \33\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\34\
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\33\ 15 U.S.C. 78s(b)(3)(a)(iii).
\34\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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 satisfied this requirement.
---------------------------------------------------------------------------
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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule 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-EDGA-2015-15 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-EDGA-2015-15. 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 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 available publicly. All
submissions should refer to File Number SR-EDGA-2015-15, and should be
submitted on or before May 4, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\35\
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\35\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-08339 Filed 4-10-15; 8:45 am]
BILLING CODE 8011-01-P
