Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of EDGA Exchange, Inc., 20516-20520 [2015-08701]
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Federal Register / Vol. 80, No. 73 / Thursday, April 16, 2015 / Notices
tkelley on DSK3SPTVN1PROD with NOTICES
Notice is hereby given that, pursuant
to the Paperwork Reduction Act of 1995
(44 U.S.C. 3501 et seq.), the Securities
and Exchange Commission (the
‘‘Commission’’) has submitted to the
Office of Management and Budget
(‘‘OMB’’) a request for extension of the
previously approved collection of
information discussed below.
Rules 8b–1 to 8b–33 (17 CFR 270.8b–
1 to 8b–33) under the Investment
Company Act of 1940 (15 U.S.C. 80a–1
et seq.) (‘‘Investment Company Act’’) set
forth the procedures for preparing and
filing a registration statement under the
Investment Company Act. These
procedures are intended to facilitate the
registration process. These rules
generally do not require respondents to
report information.1
The Commission believes that it is
appropriate to estimate the total
respondent burden associated with
preparing each registration statement
form rather than attempt to isolate the
impact of the procedural instructions
under Section 8(b) of the Investment
Company Act, which impose burdens
only in the context of the preparation of
the various registration statement forms.
Accordingly, the Commission is not
submitting a separate burden estimate
for rules 8b–1 through 8b–33, but
instead will include the burden for
these rules in its estimates of burden for
each of the registration forms under the
Investment Company Act. The
Commission is, however, submitting an
hourly burden estimate of one hour for
administrative purposes.
The collection of information under
rules 8b–1 to 8b–33 is mandatory. The
information provided under rules 8b–1
to 8b–33 is not kept confidential. An
agency may not conduct or sponsor, and
a person is not required to respond to,
a collection of information unless it
displays a currently valid OMB control
number.
The public may view the background
documentation for this information
collection at the following Web site,
www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the
1 Although the rules under Section 8(b) of the
Investment Company Act are generally procedural
in nature, two of the rules require respondents to
disclose some limited information. Rule 8b–3 (17
CFR 270.8b–3) provides that whenever a
registration form requires the title of securities to
be stated, the registrant must indicate the type and
general character of the securities to be issued. Rule
8b–22 (17 CFR 270.8b–22) provides that if the
existence of control is open to reasonable doubt, the
registrant may disclaim the existence of control, but
it must state the material facts pertinent to the
possible existence of control. The information
required by both of these rules is necessary to
ensure that investors have clear and complete
information upon which to base an investment
decision.
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Securities and Exchange Commission,
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503,
or by sending an email to: Shagufta_
Ahmed@omb.eop.gov; and (ii) Pamela
Dyson, Director/Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
100 F Street NE., Washington, DC 20549
or send an email to: PRA_Mailbox@
sec.gov. Comments must be submitted to
OMB within 30 days of this notice.
EDGA Rule 15.1(a) and (c) (‘‘Fee
Schedule’’) to: (i) Amend the fees
charged for and description of the
logical ports 6 offered; (ii) amend the
criteria for the MidPoint Discretionary
Order Add Volume Tier; and (iii) make
a series of immaterial, non-substantive
changes.
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.
Dated: April 10, 2015.
Brent J. Fields,
Secretary.
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.
[FR Doc. 2015–08693 Filed 4–15–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74707; File No. SR–EDGA–
2015–16]
Self-Regulatory Organizations; EDGA
Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Related to Fees for Use
of EDGA Exchange, Inc.
April 10, 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 April 1,
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, II and III
below, which Items have been prepared
by the Exchange. The Exchange has
designated the proposed rule change as
one establishing or changing a member
due, fee, or other charge imposed by the
Exchange under Section 19(b)(3)(A)(ii)
of the Act 3 and Rule 19b–4(f)(2)
thereunder,4 which renders the
proposed rule change 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 filed a proposal to
amend its fees and rebates applicable to
Members 5 of the Exchange pursuant to
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
5 The term ‘‘Member’’ is defined as ‘‘any
registered broker or dealer, or any person associated
2 17
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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: (i) Amend
the fees charged for and description of
the logical ports offered; (ii) amend the
criteria for the MidPoint Discretionary
Order Add Volume Tier; and (iii) make
a series of immaterial, non-substantive
changes.
Logical Ports
Currently, the Exchange maintains
logical ports for order entry, drop
copies, testing, and market data for
which it currently charges $500 per
month per port, with the first two (2)
ports provided free of charge. Ports used
to request a re-transmission of market
data from the Exchange are also
provided free of charge.
In early 2014, the Exchange and its
affiliate, EDGA Exchange, Inc.
with a registered broker or dealer, that has been
admitted to membership in the Exchange. A
Member will have the status of a ‘‘member’’ of the
Exchange as that term is defined in Section 3(a)(3)
of the Act.’’ See Exchange Rule 1.5(n).
6 A logical port is commonly referred to as a TCP/
IP port, and represents a port established by the
Exchange within the Exchange’s system for trading
and billing purposes. Each logical port established
is specific to a Member or non-member and grants
that Member or non-member the ability to operate
a specific application, such as FIX order entry or
Multicast PITCH data receipt.
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tkelley on DSK3SPTVN1PROD with NOTICES
(‘‘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 BZX and BYX (together
with BZX, EDGA, and EDGX, the ‘‘BGM
Affiliated Exchanges’’).7 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.
This includes migrating the BGM
Affiliated Exchanges, which are
currently located in different data
centers, into a single data center. As part
of the data center migration, the
operation and categorization of logical
ports provided to access the Exchange
would be identical to those utilized to
access BZX and BYX. Therefore, the
Exchange proposes to harmonize its
description of logical ports within its
Fee Schedule to align with the
descriptions included in the BZX and
BYX fee schedules.8 As a result, the
Exchange also proposes to no longer
provide free of charge: (i) The first two
(2) logical ports per month; and (ii)
ports used to request a re-transmission
of market data from the Exchange. The
Exchange communicated to Members
and non-Members of [sic] these changes
via a trading notice issued on October
7, 2014.9
First, the Exchange proposes to
harmonize its description of logical
ports within its Fee Schedule to align
with the descriptions included in the
BZX and BYX fee schedules. As part of
the data center migration discussed
above, the operation and categorization
of ports provided to access the Exchange
would be identical to those utilized to
access BZX and BYX. Currently, the
Exchange charges direct session logical
ports fees of $500 per month and
separately categorizes those ports as
FIX, EDGE XPRS (HPI–API), Data,
DROP, EdgeRisk. To harmonize the
description of the logical ports offered
with those of BZX and BYX, the
Exchange proposes to no longer
individually list the available ports
7 See Securities Exchange Act Release No. 71449
(January 30, 2014), 79 FR 6961 (February 5, 2014)
(SR–EDGX–2013–043; SR–EDGA–2013–034).
8 The Exchange notes that EDGA intends to file
a proposal very similar to this proposal that will
align its logical port fees across each of the BGM
Affiliated Exchanges. The Exchange also notes that
BZX and BYX also intend to file a proposal to
increase its port fees from $400 per month per port
to $500 per month per port as well as to change
references to ‘‘GRP Ports’’ to ‘‘Multicast PITCH GRP
Ports’’.
9 See BATS Global Markets Access Fee Changes
for 2015, available at https://cdn.batstrading.com/
resources/fee_schedule/2015/BATS-GlobalMarkets-Access-Services-Fee-Changes-for-2015.pdf
(issued October 7, 2014).
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(other than Multicast PITCH Spin Server
and GRP ports described below) as all
of the above are encompassed under the
term logical ports. In addition, EdgeRisk
ports will also no longer be separately
listed within in [sic] the Fee Schedule.
EdgeRisk ports enable Members, and
non-Member service bureaus that act as
conduits for orders entered by Members
that are their customers, access to a
System 10 test environment through
which they can test their automated
systems that integrate with the
Exchange.11 Under BATS technology,
Members and non-Members would no
longer need a dedicated port to access
the Exchange’s test environment as they
would be able to utilize any of their
existing ports to do so. Therefore, the
Exchange proposes to not individually
list EdgeRisk as a separate logical port.
Second, other than no longer
providing certain ports free of charge as
described below, the Exchange does not
propose to amend the monthly fee [sic]
logical port fees. All logical ports will
continue to be subject to a fee of $500
per month per port. In addition, logical
port fees proposed above would be
limited to logical ports in the
Exchange’s primary data center and no
logical port fees would be assessed for
redundant secondary data center ports.
In addition, the Exchange also proposes
to no longer provide the first two (2)
logical ports free of charge. The
Exchange, like BZX and BYX, will
assess the monthly per logical port fees
for all of a Member and non-Member’s
logical ports.
Currently, the Exchange provides
ports used to request a retransmission of
data free of charge. Going forward, the
Exchange would no longer offer such
ports free of charge, as proposed below.
There are currently two types of logical
ports used to request and receive a
retransmission of data from the
Exchange,12 Multicast PITCH Spin
Server Ports and Multicast PITCH GRP
Ports. The Exchange’s Multicast PITCH
data feed is available from two primary
feeds, identified as the ‘‘A feed’’ and the
‘‘C feed’’, which contain the same
information but differ only in the way
such feeds are received. The Exchange
also offers two redundant fees,
10 The
term ‘‘System’’ is defined in Rule 1.5(cc).
Securities Exchange Act Release Nos.
69670 (May 30, 2013), 78 FR 33871 (June 5, 2013)
(SR–EDGX–2013–18); and 69669 (May 30, 2013), 78
FR 33880 (June 5, 2013) (SR–EDGA–2013–14).
12 FIX and BOE ports are the only ports that may
be used to send orders and related instructions to
the Exchange. All other port types, including the
Multicast PITCH Spin Server Port and GRP Port,
permit Members and non-members to receive
information from the Exchange.
11 See
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20517
identified as the ‘‘B feed’’ and the ‘‘D
feed.’’
The Exchange proposes to offer
Multicast PITCH Spin Server Ports for a
fee of $500 per month for a set of
primary ports (A or C feed) and
Multicast PITCH GRP Ports for a fee of
$500 per month for a primary port (A or
C feed). The Exchange will continue to
offer for free the ports necessary to
receive the Exchange’s redundant
Multicast ‘‘B feed’’ and ‘‘D feed’’, as
well as all ports made available in the
Exchange’s secondary data center.
Accordingly, this proposal only applies
to ports used to receive an Exchange
primary Multicast PITCH feeds at the
Exchange’s primary data center. The
proposed fees for Multicast PITCH Spin
Server Ports and GRP Ports are identical
to those charged by BZX and BYX.
Lastly, the Exchange proposes to
rename this section of its Fee Schedule
entitled ‘‘Port Fees’’ as ‘‘Logical Port
Fees.’’
MidPoint Discretionary Order Add
Volume Tier
The Exchange proposes to amend the
criteria for the MidPoint Discretionary
Order Add Volume Tier. Under the tier,
a Member qualifies for a reduced fee of
$0.0003 per share where that Member:
(i) Adds an ADV of at least 0.25% of the
TCV including non-displayed orders
that add liquidity; and (ii) adds or
removes an ADV of at least 1,500,000
shares yielding fee codes DM or DT. Fee
code DM is applied to Non-Displayed
orders that add liquidity using MidPoint
Discretionary orders 13 and fee code DT
is applied to Non-Displayed orders that
remove liquidity using MidPoint
Discretionary Orders. Orders that yield
fee code DM or fee code DT that do not
meet to the criteria of the MidPoint
Discretionary Order Add Volume Tier
are charged a fee of $0.00050 per share.
The Exchange now proposes to decrease
the ADV requirement to require that a
Member add an ADV of at least 0.20%,
rather than 0.25%, of the TCV including
non-displayed orders that add liquidity.
Easing the criteria of the MidPoint
Discretionary Order Add Volume Tier is
intended to further incentive Members
to submit an increased number of
MidPoint Discretionary orders to the
Exchange, thereby increasing the
liquidity on the Exchange at the
midpoint of the National Best Bid or
Offer (‘‘NBBO’’).
Non-Substantive Changes
The Exchange also proposes to make
a series of immaterial, non-substantive
13 See Exchange Rule 11.8(e) for a description of
MidPoint Discretionary orders.
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changes to its Fee Schedule. None of the
changes proposed are intended to
amend any fee or rebate. These changes
are:
• Remove the word ‘‘the’’ from the
description of fee code D;
• Remove the word ‘‘the’’ from the
description of fee code RN;
• Amend the Market Data Section to
add a colon after BATS One Feedsm; and
• Add a colon after Licensing and
Continuing Education.
Implementation Date
The Exchange proposes to implement
these amendments to its Fee Schedule
on April 1, 2015.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the objectives of Section 6 of the Act,14
in general, and furthers the objectives of
Section 6(b)(4),15 in particular, as it is
designed to provide for the equitable
allocation of reasonable dues, fees and
other charges among its Members and
other persons using its facilities. The
Exchange also notes that it operates in
a highly-competitive market in which
market participants can readily direct
order flow to competing venues if they
deem fee levels at a particular venue to
be excessive. The proposed rule change
reflects a competitive pricing structure
designed to incent market participants
to direct their order flow to the
Exchange. The Exchange believes that
the proposed rates are equitable and
non-discriminatory in that they apply
uniformly to all Members. The
Exchange believes the fees and credits
remain competitive with those charged
by other venues and therefore continue
to be reasonable and equitably allocated
to Members.
tkelley on DSK3SPTVN1PROD with NOTICES
Logical Ports
The Exchange believes that the
proposed rule change is consistent with
Section 6(b)(4) of the Act,16 in that it
provides for the equitable allocation of
reasonable dues, fees and other charges
among members and other persons
using any facility or system which the
Exchange operates or controls. The
Exchange notes that its proposed
changes, combined with the planned
filings for EDGA, BZX and BYX,17
would allow the BGM Affiliated
Exchanges to provide consistent logical
port offerings across each of the BGM
Affiliated Exchanges. Consistent
offerings, in turn, will simplify the
14 15
U.S.C. 78f.
15 15 U.S.C. 78f(b)(4).
16 15 U.S.C. 78f(b)(4).
17 See supra note 8.
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connectivity requirements for Members
of the Exchange that are also
participants on EDGA, BZX and/or BYX.
The proposed rule change would result
in greater uniformity and less
burdensome and more efficient
understanding of Exchange connectivity
requirements.
The Exchange also believes that no
longer providing the first two (2) logical
ports for free as well as ports used to
request a retransmission of market data
also represents an equitable allocation
of reasonable dues, fees and other
charges. The Exchange operates in a
highly competitive market in which
exchanges offer connectivity services as
a means to facilitate the trading
activities of members and other
participants. Accordingly, fees charged
for connectivity are constrained by the
active competition for the order flow of
such participants as well as demand for
market data from the Exchange. If a
particular exchange charges excessive
fees for connectivity, affected members
will opt to terminate their connectivity
arrangements with that exchange, and
adopt a possible range of alternative
strategies, including routing to the
applicable exchange through another
participant or market center or taking
that exchange’s data indirectly.
Accordingly, the exchange charging
excessive fees would stand to lose not
only connectivity revenues but also
revenues associated with the execution
of orders routed to it by affected
members, and, to the extent applicable,
market data revenues. The Exchange
believes that this competitive dynamic
imposes powerful restraints on the
ability of any exchange to charge
unreasonable fees for connectivity.
Lastly, the Exchange believe its
proposed fees are reasonable because
the Nasdaq Stock Market LLC
(‘‘Nasdaq’’) and the NYSE Arca, Inc.
(‘‘NYSE Arca’’) do not provide logical
ports or ports used for the
retransmission of market data free of
charge.18
The Exchange believes that its
proposed changes to logical port fees are
reasonable in light of the benefits to
Exchange participants of direct market
access and receipt of data. In addition,
the Exchange believes that its fees are
equitably allocated among Exchange
constituents based upon the number of
access ports that they require to receive
data from the Exchange. Further, the
Exchange believes that its fees are not
18 See Nasdaq Rule 7015 (providing no FIX or
non-Trading FIX ports free of charge) and the NYSE
Arca fee schedule available at https://
www.nyse.com/publicdocs/nyse/markets/nyse-arca/
NYSE_Arca_Marketplace_Fees.pdf (dated February
26, 2105).
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unreasonably discriminatory because all
market participants are charged
standard fees for port usage. The
Exchange notes that it believes its prior
fee structure, under which two ports
were provided free of charge, was
reasonable, equitably allocated and not
unreasonably discriminatory because it
was available to all market participants
and was intended to encourage
Members and non-members to connect
to the Exchange. However, by moving
towards a more uniform approach to
port descriptions and charges across the
BGM Affiliated Exchanges, the
Exchange believes that its fees are even
more equitably allocated and
nondiscriminatory. The Exchange also
believes that its fees for access services
will enable it to better cover its
infrastructure costs and to improve its
market technology and services.
Lastly, the Exchange also believes that
the proposed amendments to its fee
schedule are non-discriminatory
because they will apply uniformly to all
Members. All Members that voluntarily
select various service options will be
charged the same amount for the same
services. All Members have the option
to select any connectivity option, and
there is no differentiation among
Members with regard to the fees charged
for the services offered by the Exchange.
MidPoint Discretionary Order Add
Volume Tier
The Exchange believes amending the
criteria for the MidPoint Discretionary
Order Add Volume Tier represents an
equitable allocation of reasonable dues,
fees, and other charges among Members
and other persons using its facilities
because it is designed to further
incentivize Members to increase their
use of MidPoint Discretionary orders on
EDGA. MidPoint Discretionary Orders
increase displayed liquidity on the
Exchange while also enhancing
execution opportunities at the midpoint of the NBBO. Promotion of
displayed liquidity at the NBBO
enhances market quality for all
Members. Members utilizing MidPoint
Discretionary orders provide liquidity at
the midpoint of the NBBO increasing
the potential for an order to receive
price improvement, and easing the tier’s
criteria so that Members may be eligible
for a decreased fee is a reasonable
means by which to encourage the use of
such orders. In addition, the Exchange
believes that by encouraging the use of
MidPoint Discretionary orders by easing
the tier’s criteria, Members seeking price
improvement would be more motivated
to direct their orders to EDGA because
they would have a heightened
expectation of the availability of
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liquidity at the midpoint of the NBBO.
The Exchange also believes that the
proposed addition of the MidPoint
Discretionary Order Add Volume Tier is
non-discriminatory because it will be
available to all Members.
Non-Substantive Changes
The Exchange believes that the nonsubstantive clarifying changes to its Fee
Schedule are reasonable because none
of the proposed changes are designed to
amend any fee, nor alter the manner in
which it assesses fees or calculates
rebates. These non-substantive changes
to the Fee Schedule are intended to
make the Fee Schedule clearer and less
confusing for investors and eliminate
potential investor confusion, 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.
tkelley on DSK3SPTVN1PROD with NOTICES
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange believes its proposed
amendments to its Fee Schedule would
not impose any burden on competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
The Exchange does not believe that the
proposed change represents a significant
departure from previous pricing offered
by the Exchange or pricing offered by
the Exchange’s competitors.
Additionally, Members may opt to
disfavor the Exchange’s pricing if they
believe that alternatives offer them
better value. Accordingly, the Exchange
does not believe that the proposed
change will impair the ability of
Members or competing venues to
maintain their competitive standing in
the financial markets.
Logical Ports
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. The
Exchange notes that, other than no
longer providing two (2) ports or ports
used for the retransmission of market
data for free each month, it does not
proposes to alter the fees charged from
their current levels. As discussed above,
the Exchange believes that fees for
connectivity are constrained by the
robust competition for order flow among
exchanges and non-exchange markets.
Further, excessive fees for connectivity,
including logical port fees, would serve
to impair an exchange’s ability to
compete for order flow rather than
burdening competition. In addition,
allowing the Exchange to implement
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substantively identical logical port fees
across each of the BGM Affiliated
Exchanges does not present any
competitive issues, but rather is
designed to provide greater
harmonization among Exchange, BYX,
BZX, and EDGA. Lastly, the Exchange
believes the proposal to no longer
provide two (2) ports or ports used for
the retransmission of market data for
free each month would enhance
intermarket competition because
Nasdaq and NYSE Arca do not provide
logical ports or ports used for the
retransmission of market data free of
charge.19 The Exchange also does not
believe the proposed rule change would
impact intramarket competition as it
would apply to all Members and nonMembers equally.
MidPoint Discretionary Order Add
Volume Tier
The Exchange believes that its
proposal to ease the criteria for the
MidPoint Discretionary Order Add
Volume Tier would increase intermarket
competition because it would further
incentivize Members to send an
increased amount MidPoint
Discretionary orders to the Exchange in
order to qualify for the tier’s decreased
fee. The Exchange believes that its
proposal would neither increase nor
decrease intramarket competition
because the MidPoint Discretionary
Order Add Volume Tier would apply
uniformly to all Members and the ability
of some Members to meet the tier would
only benefit other Members by
contributing to increased liquidity at the
midpoint of the NBBO and better market
quality at the Exchange.
Non-Substantive Changes
The Exchange believes that the nonsubstantive changes to the Fee Schedule
will not affect intermarket nor
intramarket competition because none
of these changes are designed to amend
any fee or alter the manner in which the
Exchange assesses fees or calculates
rebates.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
Members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 20 and paragraph (f) of Rule
19b–4 thereunder.21 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:
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–2015–16 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–2015–16. 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
20 15
19 Id.
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21 17
Fmt 4703
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
16APN1
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Federal Register / Vol. 80, No. 73 / Thursday, April 16, 2015 / Notices
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–
2015–16, and should be submitted on or
before May 7, 2015
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Brent J. Fields,
Secretary.
[FR Doc. 2015–08701 Filed 4–15–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74705; File No. SR–
NYSEArca–2014–117]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Designation of
Longer Period for Commission Action
on Proceedings To Determine Whether
To Approve or Disapprove Proposed
Rule Change To Remove the
Exchange’s Quote Mitigation Plan as
Provided by Commentary .03 to
Exchange Rule 6.86
April 10, 2015.
I. Introduction
tkelley on DSK3SPTVN1PROD with NOTICES
On October 2, 2014, NYSE Arca, Inc.
(‘‘NYSE Arca’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to remove the Exchange’s quote
mitigation plan as provided by
Commentary .03 to NYSE Arca Rule
6.86. The proposed rule change was
published for comment in the Federal
Register on October 21, 2014.3 On
December 2, 2014, the Commission
extended the time period in which to
either approve the proposal, disapprove
the proposal, or to institute proceedings
to determine whether to approve or
disapprove the proposal, to January 19,
2015.4 On January 16, 2015, the
Commission instituted proceedings to
determine whether to approve or
22 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 73362
(October 15, 2014), 79 FR 62983 (‘‘Notice’’).
4 See Securities Exchange Act Release No. 73720
(December 2, 2014), 79 FR 72747 (December 8,
2014).
1 15
VerDate Sep<11>2014
16:48 Apr 15, 2015
Jkt 235001
disapprove the proposal.5 The
Commission received 2 comment letters
in further support of the proposal from
NYSE Arca.6
Section 19(b)(2) of the Act 7 provides
that, after initiating disapproval
proceedings, the Commission shall issue
an order approving or disapproving the
proposed rule change not later than 180
days after the date of publication of
notice of filing of the proposed rule
change.8 The Commission may extend
the period for issuing an order
approving or disapproving the proposed
rule change, however, by not more than
60 days if the Commission determines
that a longer period is appropriate and
publishes the reasons for such
determination.9 The proposed rule
change was published for notice and
comment in the Federal Register on
October 21, 2014. April 19, 2015, is 180
days from that date, and June 18, 2015,
is 240 days from that date.
The Commission finds it appropriate
to designate a longer period within
which to issue an order approving or
disapproving the proposed rule change
so that it has sufficient time to consider
the proposal, and the issues raised in
NYSE Arca’s comment letters.
Accordingly, the Commission,
pursuant to Section 19(b)(2) of the
Act,10 designates June 18, 2015 as the
date by which the Commission shall
either approve or disapprove the
proposed rule change (File No. SR–
NYSEArca–2014–117).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Brent J. Fields,
Secretary.
[FR Doc. 2015–08699 Filed 4–15–15; 8:45 am]
BILLING CODE 8011–01–P
5 See Securities Exchange Act Release No. 74088
(January 16, 2015), 80 FR 3687 (January 23, 2015)
(‘‘Order Instituting Proceedings’’).
6 See letters to Elizabeth M. Murphy, Secretary,
Commission, from Elizabeth King, Secretary &
General Counsel, Exchange, dated January 8, 2015
and February 27, 2015.
7 15 U.S.C. 78s(b)(2).
8 15 U.S.C. 78s(b)(2)(B)(ii)(I).
9 15 U.S.C. 78s(b)(2)(B)(ii)(II).
10 15 U.S.C. 78s(b)(2).
11 17 CFR 200.30–3(a)(57).
PO 00000
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74703; File No. SR–BYX–
2015–21]
Self-Regulatory Organizations; BATS
Y-Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Related to Fees for Use
of BATS Y-Exchange, Inc.
April 10, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 1,
2015, BATS Y-Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BYX’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by the Exchange. The
Exchange has designated the proposed
rule change as one establishing or
changing a member due, fee, or other
charge imposed by the Exchange under
Section 19(b)(3)(A)(ii) of the Act 3 and
Rule 19b–4(f)(2) thereunder,4 which
renders the proposed rule change
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 filed a proposal to
amend the fee schedule applicable to
Members 5 and non-members of the
Exchange pursuant to BYX Rules 15.1(a)
and (c). Changes to the fee schedule
pursuant to this proposal are effective
upon filing.
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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
5 The term ‘‘Member’’ is defined as ‘‘any
registered broker or dealer that has been admitted
to membership in the Exchange.’’ See Exchange
Rule 1.5(n).
2 17
E:\FR\FM\16APN1.SGM
16APN1
]]>Agencies
[Federal Register Volume 80, Number 73 (Thursday, April 16, 2015)]
[Notices]
[Pages 20516-20520]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-08701]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74707; File No. SR-EDGA-2015-16]
Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Related to
Fees for Use of EDGA Exchange, Inc.
April 10, 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 April 1, 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, II
and III below, which Items have been prepared by the Exchange. The
Exchange has designated the proposed rule change as one establishing or
changing a member due, fee, or other charge imposed by the Exchange
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposed rule change 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)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange filed a proposal to amend its fees and rebates
applicable to Members \5\ of the Exchange pursuant to EDGA Rule 15.1(a)
and (c) (``Fee Schedule'') to: (i) Amend the fees charged for and
description of the logical ports \6\ offered; (ii) amend the criteria
for the MidPoint Discretionary Order Add Volume Tier; and (iii) make a
series of immaterial, non-substantive changes.
---------------------------------------------------------------------------
\5\ The term ``Member'' is defined as ``any registered broker or
dealer, or any person associated with a registered broker or dealer,
that has been admitted to membership in the Exchange. A Member will
have the status of a ``member'' of the Exchange as that term is
defined in Section 3(a)(3) of the Act.'' See Exchange Rule 1.5(n).
\6\ A logical port is commonly referred to as a TCP/IP port, and
represents a port established by the Exchange within the Exchange's
system for trading and billing purposes. Each logical port
established is specific to a Member or non-member and grants that
Member or non-member the ability to operate a specific application,
such as FIX order entry or Multicast PITCH data receipt.
---------------------------------------------------------------------------
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to: (i) Amend the fees charged for and
description of the logical ports offered; (ii) amend the criteria for
the MidPoint Discretionary Order Add Volume Tier; and (iii) make a
series of immaterial, non-substantive changes.
Logical Ports
Currently, the Exchange maintains logical ports for order entry,
drop copies, testing, and market data for which it currently charges
$500 per month per port, with the first two (2) ports provided free of
charge. Ports used to request a re-transmission of market data from the
Exchange are also provided free of charge.
In early 2014, the Exchange and its affiliate, EDGA Exchange, Inc.
[[Page 20517]]
(``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 BZX and BYX (together with BZX,
EDGA, and EDGX, the ``BGM Affiliated Exchanges'').\7\ 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. This includes
migrating the BGM Affiliated Exchanges, which are currently located in
different data centers, into a single data center. As part of the data
center migration, the operation and categorization of logical ports
provided to access the Exchange would be identical to those utilized to
access BZX and BYX. Therefore, the Exchange proposes to harmonize its
description of logical ports within its Fee Schedule to align with the
descriptions included in the BZX and BYX fee schedules.\8\ As a result,
the Exchange also proposes to no longer provide free of charge: (i) The
first two (2) logical ports per month; and (ii) ports used to request a
re-transmission of market data from the Exchange. The Exchange
communicated to Members and non-Members of [sic] these changes via a
trading notice issued on October 7, 2014.\9\
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 71449 (January 30,
2014), 79 FR 6961 (February 5, 2014) (SR-EDGX-2013-043; SR-EDGA-
2013-034).
\8\ The Exchange notes that EDGA intends to file a proposal very
similar to this proposal that will align its logical port fees
across each of the BGM Affiliated Exchanges. The Exchange also notes
that BZX and BYX also intend to file a proposal to increase its port
fees from $400 per month per port to $500 per month per port as well
as to change references to ``GRP Ports'' to ``Multicast PITCH GRP
Ports''.
\9\ See BATS Global Markets Access Fee Changes for 2015,
available at https://cdn.batstrading.com/resources/fee_schedule/2015/BATS-Global-Markets-Access-Services-Fee-Changes-for-2015.pdf (issued
October 7, 2014).
---------------------------------------------------------------------------
First, the Exchange proposes to harmonize its description of
logical ports within its Fee Schedule to align with the descriptions
included in the BZX and BYX fee schedules. As part of the data center
migration discussed above, the operation and categorization of ports
provided to access the Exchange would be identical to those utilized to
access BZX and BYX. Currently, the Exchange charges direct session
logical ports fees of $500 per month and separately categorizes those
ports as FIX, EDGE XPRS (HPI-API), Data, DROP, EdgeRisk. To harmonize
the description of the logical ports offered with those of BZX and BYX,
the Exchange proposes to no longer individually list the available
ports (other than Multicast PITCH Spin Server and GRP ports described
below) as all of the above are encompassed under the term logical
ports. In addition, EdgeRisk ports will also no longer be separately
listed within in [sic] the Fee Schedule. EdgeRisk ports enable Members,
and non-Member service bureaus that act as conduits for orders entered
by Members that are their customers, access to a System \10\ test
environment through which they can test their automated systems that
integrate with the Exchange.\11\ Under BATS technology, Members and
non-Members would no longer need a dedicated port to access the
Exchange's test environment as they would be able to utilize any of
their existing ports to do so. Therefore, the Exchange proposes to not
individually list EdgeRisk as a separate logical port.
---------------------------------------------------------------------------
\10\ The term ``System'' is defined in Rule 1.5(cc).
\11\ See Securities Exchange Act Release Nos. 69670 (May 30,
2013), 78 FR 33871 (June 5, 2013) (SR-EDGX-2013-18); and 69669 (May
30, 2013), 78 FR 33880 (June 5, 2013) (SR-EDGA-2013-14).
---------------------------------------------------------------------------
Second, other than no longer providing certain ports free of charge
as described below, the Exchange does not propose to amend the monthly
fee [sic] logical port fees. All logical ports will continue to be
subject to a fee of $500 per month per port. In addition, logical port
fees proposed above would be limited to logical ports in the Exchange's
primary data center and no logical port fees would be assessed for
redundant secondary data center ports. In addition, the Exchange also
proposes to no longer provide the first two (2) logical ports free of
charge. The Exchange, like BZX and BYX, will assess the monthly per
logical port fees for all of a Member and non-Member's logical ports.
Currently, the Exchange provides ports used to request a
retransmission of data free of charge. Going forward, the Exchange
would no longer offer such ports free of charge, as proposed below.
There are currently two types of logical ports used to request and
receive a retransmission of data from the Exchange,\12\ Multicast PITCH
Spin Server Ports and Multicast PITCH GRP Ports. The Exchange's
Multicast PITCH data feed is available from two primary feeds,
identified as the ``A feed'' and the ``C feed'', which contain the same
information but differ only in the way such feeds are received. The
Exchange also offers two redundant fees, identified as the ``B feed''
and the ``D feed.''
---------------------------------------------------------------------------
\12\ FIX and BOE ports are the only ports that may be used to
send orders and related instructions to the Exchange. All other port
types, including the Multicast PITCH Spin Server Port and GRP Port,
permit Members and non-members to receive information from the
Exchange.
---------------------------------------------------------------------------
The Exchange proposes to offer Multicast PITCH Spin Server Ports
for a fee of $500 per month for a set of primary ports (A or C feed)
and Multicast PITCH GRP Ports for a fee of $500 per month for a primary
port (A or C feed). The Exchange will continue to offer for free the
ports necessary to receive the Exchange's redundant Multicast ``B
feed'' and ``D feed'', as well as all ports made available in the
Exchange's secondary data center. Accordingly, this proposal only
applies to ports used to receive an Exchange primary Multicast PITCH
feeds at the Exchange's primary data center. The proposed fees for
Multicast PITCH Spin Server Ports and GRP Ports are identical to those
charged by BZX and BYX.
Lastly, the Exchange proposes to rename this section of its Fee
Schedule entitled ``Port Fees'' as ``Logical Port Fees.''
MidPoint Discretionary Order Add Volume Tier
The Exchange proposes to amend the criteria for the MidPoint
Discretionary Order Add Volume Tier. Under the tier, a Member qualifies
for a reduced fee of $0.0003 per share where that Member: (i) Adds an
ADV of at least 0.25% of the TCV including non-displayed orders that
add liquidity; and (ii) adds or removes an ADV of at least 1,500,000
shares yielding fee codes DM or DT. Fee code DM is applied to Non-
Displayed orders that add liquidity using MidPoint Discretionary orders
\13\ and fee code DT is applied to Non-Displayed orders that remove
liquidity using MidPoint Discretionary Orders. Orders that yield fee
code DM or fee code DT that do not meet to the criteria of the MidPoint
Discretionary Order Add Volume Tier are charged a fee of $0.00050 per
share. The Exchange now proposes to decrease the ADV requirement to
require that a Member add an ADV of at least 0.20%, rather than 0.25%,
of the TCV including non-displayed orders that add liquidity. Easing
the criteria of the MidPoint Discretionary Order Add Volume Tier is
intended to further incentive Members to submit an increased number of
MidPoint Discretionary orders to the Exchange, thereby increasing the
liquidity on the Exchange at the midpoint of the National Best Bid or
Offer (``NBBO'').
---------------------------------------------------------------------------
\13\ See Exchange Rule 11.8(e) for a description of MidPoint
Discretionary orders.
---------------------------------------------------------------------------
Non-Substantive Changes
The Exchange also proposes to make a series of immaterial, non-
substantive
[[Page 20518]]
changes to its Fee Schedule. None of the changes proposed are intended
to amend any fee or rebate. These changes are:
Remove the word ``the'' from the description of fee code
D;
Remove the word ``the'' from the description of fee code
RN;
Amend the Market Data Section to add a colon after BATS
One Feed\sm\; and
Add a colon after Licensing and Continuing Education.
Implementation Date
The Exchange proposes to implement these amendments to its Fee
Schedule on April 1, 2015.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\14\ in general, and
furthers the objectives of Section 6(b)(4),\15\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its Members and other persons using its
facilities. The Exchange also notes that it operates in a highly-
competitive market in which market participants can readily direct
order flow to competing venues if they deem fee levels at a particular
venue to be excessive. The proposed rule change reflects a competitive
pricing structure designed to incent market participants to direct
their order flow to the Exchange. The Exchange believes that the
proposed rates are equitable and non-discriminatory in that they apply
uniformly to all Members. The Exchange believes the fees and credits
remain competitive with those charged by other venues and therefore
continue to be reasonable and equitably allocated to Members.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78f.
\15\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
Logical Ports
The Exchange believes that the proposed rule change is consistent
with Section 6(b)(4) of the Act,\16\ in that it provides for the
equitable allocation of reasonable dues, fees and other charges among
members and other persons using any facility or system which the
Exchange operates or controls. The Exchange notes that its proposed
changes, combined with the planned filings for EDGA, BZX and BYX,\17\
would allow the BGM Affiliated Exchanges to provide consistent logical
port offerings across each of the BGM Affiliated Exchanges. Consistent
offerings, in turn, will simplify the connectivity requirements for
Members of the Exchange that are also participants on EDGA, BZX and/or
BYX. The proposed rule change would result in greater uniformity and
less burdensome and more efficient understanding of Exchange
connectivity requirements.
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78f(b)(4).
\17\ See supra note 8.
---------------------------------------------------------------------------
The Exchange also believes that no longer providing the first two
(2) logical ports for free as well as ports used to request a
retransmission of market data also represents an equitable allocation
of reasonable dues, fees and other charges. The Exchange operates in a
highly competitive market in which exchanges offer connectivity
services as a means to facilitate the trading activities of members and
other participants. Accordingly, fees charged for connectivity are
constrained by the active competition for the order flow of such
participants as well as demand for market data from the Exchange. If a
particular exchange charges excessive fees for connectivity, affected
members will opt to terminate their connectivity arrangements with that
exchange, and adopt a possible range of alternative strategies,
including routing to the applicable exchange through another
participant or market center or taking that exchange's data indirectly.
Accordingly, the exchange charging excessive fees would stand to lose
not only connectivity revenues but also revenues associated with the
execution of orders routed to it by affected members, and, to the
extent applicable, market data revenues. The Exchange believes that
this competitive dynamic imposes powerful restraints on the ability of
any exchange to charge unreasonable fees for connectivity. Lastly, the
Exchange believe its proposed fees are reasonable because the Nasdaq
Stock Market LLC (``Nasdaq'') and the NYSE Arca, Inc. (``NYSE Arca'')
do not provide logical ports or ports used for the retransmission of
market data free of charge.\18\
---------------------------------------------------------------------------
\18\ See Nasdaq Rule 7015 (providing no FIX or non-Trading FIX
ports free of charge) and the NYSE Arca fee schedule available at
https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf (dated February 26, 2105).
---------------------------------------------------------------------------
The Exchange believes that its proposed changes to logical port
fees are reasonable in light of the benefits to Exchange participants
of direct market access and receipt of data. In addition, the Exchange
believes that its fees are equitably allocated among Exchange
constituents based upon the number of access ports that they require to
receive data from the Exchange. Further, the Exchange believes that its
fees are not unreasonably discriminatory because all market
participants are charged standard fees for port usage. The Exchange
notes that it believes its prior fee structure, under which two ports
were provided free of charge, was reasonable, equitably allocated and
not unreasonably discriminatory because it was available to all market
participants and was intended to encourage Members and non-members to
connect to the Exchange. However, by moving towards a more uniform
approach to port descriptions and charges across the BGM Affiliated
Exchanges, the Exchange believes that its fees are even more equitably
allocated and nondiscriminatory. The Exchange also believes that its
fees for access services will enable it to better cover its
infrastructure costs and to improve its market technology and services.
Lastly, the Exchange also believes that the proposed amendments to
its fee schedule are non-discriminatory because they will apply
uniformly to all Members. All Members that voluntarily select various
service options will be charged the same amount for the same services.
All Members have the option to select any connectivity option, and
there is no differentiation among Members with regard to the fees
charged for the services offered by the Exchange.
MidPoint Discretionary Order Add Volume Tier
The Exchange believes amending the criteria for the MidPoint
Discretionary Order Add Volume Tier represents an equitable allocation
of reasonable dues, fees, and other charges among Members and other
persons using its facilities because it is designed to further
incentivize Members to increase their use of MidPoint Discretionary
orders on EDGA. MidPoint Discretionary Orders increase displayed
liquidity on the Exchange while also enhancing execution opportunities
at the mid-point of the NBBO. Promotion of displayed liquidity at the
NBBO enhances market quality for all Members. Members utilizing
MidPoint Discretionary orders provide liquidity at the midpoint of the
NBBO increasing the potential for an order to receive price
improvement, and easing the tier's criteria so that Members may be
eligible for a decreased fee is a reasonable means by which to
encourage the use of such orders. In addition, the Exchange believes
that by encouraging the use of MidPoint Discretionary orders by easing
the tier's criteria, Members seeking price improvement would be more
motivated to direct their orders to EDGA because they would have a
heightened expectation of the availability of
[[Page 20519]]
liquidity at the midpoint of the NBBO. The Exchange also believes that
the proposed addition of the MidPoint Discretionary Order Add Volume
Tier is non-discriminatory because it will be available to all Members.
Non-Substantive Changes
The Exchange believes that the non-substantive clarifying changes
to its Fee Schedule are reasonable because none of the proposed changes
are designed to amend any fee, nor alter the manner in which it
assesses fees or calculates rebates. These non-substantive changes to
the Fee Schedule are intended to make the Fee Schedule clearer and less
confusing for investors and eliminate potential investor confusion,
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.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes its proposed amendments to its Fee Schedule
would not impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act. The Exchange
does not believe that the proposed change represents a significant
departure from previous pricing offered by the Exchange or pricing
offered by the Exchange's competitors. Additionally, Members may opt to
disfavor the Exchange's pricing if they believe that alternatives offer
them better value. Accordingly, the Exchange does not believe that the
proposed change will impair the ability of Members or competing venues
to maintain their competitive standing in the financial markets.
Logical Ports
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. The Exchange notes that, other
than no longer providing two (2) ports or ports used for the
retransmission of market data for free each month, it does not proposes
to alter the fees charged from their current levels. As discussed
above, the Exchange believes that fees for connectivity are constrained
by the robust competition for order flow among exchanges and non-
exchange markets. Further, excessive fees for connectivity, including
logical port fees, would serve to impair an exchange's ability to
compete for order flow rather than burdening competition. In addition,
allowing the Exchange to implement substantively identical logical port
fees across each of the BGM Affiliated Exchanges does not present any
competitive issues, but rather is designed to provide greater
harmonization among Exchange, BYX, BZX, and EDGA. Lastly, the Exchange
believes the proposal to no longer provide two (2) ports or ports used
for the retransmission of market data for free each month would enhance
intermarket competition because Nasdaq and NYSE Arca do not provide
logical ports or ports used for the retransmission of market data free
of charge.\19\ The Exchange also does not believe the proposed rule
change would impact intramarket competition as it would apply to all
Members and non-Members equally.
---------------------------------------------------------------------------
\19\ Id.
---------------------------------------------------------------------------
MidPoint Discretionary Order Add Volume Tier
The Exchange believes that its proposal to ease the criteria for
the MidPoint Discretionary Order Add Volume Tier would increase
intermarket competition because it would further incentivize Members to
send an increased amount MidPoint Discretionary orders to the Exchange
in order to qualify for the tier's decreased fee. The Exchange believes
that its proposal would neither increase nor decrease intramarket
competition because the MidPoint Discretionary Order Add Volume Tier
would apply uniformly to all Members and the ability of some Members to
meet the tier would only benefit other Members by contributing to
increased liquidity at the midpoint of the NBBO and better market
quality at the Exchange.
Non-Substantive Changes
The Exchange believes that the non-substantive changes to the Fee
Schedule will not affect intermarket nor intramarket competition
because none of these changes are designed to amend any fee or alter
the manner in which the Exchange assesses fees or calculates rebates.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from Members or other interested
parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \20\ and paragraph (f) of Rule 19b-4
thereunder.\21\ 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.
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\20\ 15 U.S.C. 78s(b)(3)(A).
\21\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-EDGA-2015-16 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-2015-16. 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
[[Page 20520]]
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-2015-16, and should be
submitted on or before May 7, 2015
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-08701 Filed 4-15-15; 8:45 am]
BILLING CODE 8011-01-P
