[Federal Register Volume 75, Number 149 (Wednesday, August 4, 2010)]
[Notices]
[Pages 47056-47057]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-19218]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62588; File No. SR-EDGA-2010-08]
Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
EDGA Rule 11.12
July 29, 2010.
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 July 22, 2010, the EDGA Exchange, Inc. (the ``Exchange''or the
``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 self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
The Exchange proposes to amend EDGA Rule 11.12 to modify potential
liability caps applicable under the rule. The text of the proposed rule
change is available on the Exchange's Internet Web site at http://www.directedge.com, at the principal office of the Exchange, on the
Commission's Internet Web site at http://www.sec.gov, 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 self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statements may be examined at
the places specified in Item IV below. The self-regulatory organization
has prepared summaries, set forth in sections A, B and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Currently, the Exchange provides a limited exception to its general
limitation of liability rules that allows for the payment of claims to
Users \3\ for order processing failures on the Exchange. The Exchange
proposes to modify its process for allocating such payments and extend
the time period for Users to submit such claims. Under the proposal,
the Exchange will eliminate the $100,000 and $250,000 daily caps on
liability and consider all such claims on a monthly basis subject to
the already existing $500,000 monthly liability cap. If the total
amount of all claims from all Users in calendar month exceeds the
$500,000 monthly liability cap, the $500,000 maximum monthly dollar
amount will be proportionally allocated among all such claims as set
forth in the current rule.
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\3\ Exchange Rule 1.5(cc) defines ``User''as ``any Member or
Sponsored Participant who is authorized to obtain access to the
System pursuant to Rule 11.3.''
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The Exchange is also proposing to extend, until 12 noon ET on the
next business day following the day on which the use of the Exchange
gives rise to the claim, the time period during which claims seeking
compensation must be submitted.
The proposal, in effect, would allow the Exchange an increased
capability to compensate a market participant(s) up to the monthly cap
of $500,000 even though the losses occurred on a single day or were
across multiple days for a single participant. The expansion of time to
make such compensation claims likewise increases the ability of market
participants to submit claims in a timely manner. Finally, the Exchange
notes that other market centers have rules in place to provide limited
compensation for system malfunctions.\4\
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\4\ See Securities Exchange Act Release No. 60794 (October 6,
2009), 74 FR 52522 (October 13, 2009) (SR-NASDAQ-2009-084) (relating
to amendments to NASDAQ Rule 4626); NYSE Arca Equities Rule 13.2;
and International Securities Exchange Rule 705.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\5\ in general, and Section
6(b)(5) of the Act,\6\ in particular, in that the proposal is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and in general, to
protect investors and the public interest. The proposal, in effect,
would allow the Exchange an increased capability to compensate a market
participant(s) up to the monthly cap of $500,000 even though the losses
occurred on a single day or were across multiple days for a single
participant. The expansion of time to make such compensation claims
likewise increases the ability of market participants to submit claims
in a timely manner.
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\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\
Because the proposed rule change does not: (i) Significantly affect the
protection of
[[Page 47057]]
investors or the public interest; (ii) impose any significant burden on
competition; and (iii) become operative prior to 30 days from the date
on which it was filed, or such shorter time as the Commission may
designate, if consistent with the protection of investors and the
public interest, the proposed rule change has become effective pursuant
to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6)(iii) thereunder.
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\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 17 CFR 240.19b-4(f)(6).
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At any time within the 60-day period beginning on the date 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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-EDGA-2010-08 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-EDGA-2010-08. This file
number should be included on the subject line if e-mail 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 (http://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
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make publicly available. All
submissions should refer to File Number SR-EDGA-2010-08 and should be
submitted on or before August 25, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-19218 Filed 8-3-10; 8:45 am]
BILLING CODE 8010-01-P