[Federal Register Volume 75, Number 157 (Monday, August 16, 2010)]
[Notices]
[Pages 50017-50019]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-20105]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62683; File No. SR-EDGA-2010-09]
Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of
Filing of Proposed Rule Change Relating to a Revenue Sharing Program
With Correlix, Inc.
August 10, 2010.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, July 28, 2010, EDGA Exchange, Inc. (the ``Exchange'' or
``EDGA'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
EDGA proposes to establish a revenue sharing program with Correlix,
Inc. (``Correlix''). There is no new proposed rule text.
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 self-regulatory organization has prepared summaries,
set forth in Sections A, B and C below, of the most significant aspects
of such statements.
[[Page 50018]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is filing a proposed rule change to establish a
revenue sharing program with Correlix effective upon filing with the
Commission. Pursuant to an agreement with Correlix, Correlix will
provide to users of the Exchange real-time analytical tools to measure
the latency of orders to and from that System. Under the agreement, the
Exchange will receive 30% of the total monthly subscription fees
received by Correlix from parties who have contracted directly with
Correlix to use their RaceTeam latency measurement service for the
Exchange. The Exchange will not bill or contract with any Correlix
RaceTeam customer directly.
Pricing for the Correlix RaceTeam product for the Exchange varies
depending on the depth of latency information requested, the number of
unique MPIDs subscribed by the customer, and the number of ports
available for monitoring by Correlix. For boundary-level Exchange
latency information,\4\ the fee will be an initial $1,500 monthly base
fee for the first 25 ports associated in aggregate with any of the
MPIDs selected by the Member for latency monitoring. For each
additional 25 ports associated in aggregate with any of the MPIDs
selected by the Member for latency monitoring, an additional monthly
charge of $750 will be assessed. For match-level Exchange latency
information,\5\ the fee will be an initial $2,000 monthly base fee for
the first 25 ports associated in aggregate with any of the MPIDs
selected for latency monitoring, and an additional $1000 per month for
each additional 25 ports associated in aggregate with any of the MPIDs
selected for latency monitoring.
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\4\ The time that elapses from an order message's receipt by an
Exchange device until the time that a matching engine
acknowledgement with respect to such order message is transmitted
from the Exchange device back to the user. For market data, the time
measurement will be from the time that the market data engine
receives a market data update until the time that the market data
update is transmitted from the Exchange device back to the user.
\5\ In addition to the boundary-level Exchange latency
information, match level information will also provide further
elapsed time detail for messaging between Exchange internal systems.
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Under the program, Correlix will see an individualized unique
Exchange-generated identifier that will allow Correlix RaceTeam to
determine round trip order time,\6\ from the time the order reaches the
Exchange extranet, through the Exchange matching engine, and back out
of the Exchange extranet. The RaceTeam product offering does not
measure latency outside of the Exchange extranet. The unique identifier
serves as a technological information barrier so that the RaceTeam data
collector will only be able to view data for Correlix RaceTeam
subscriber firms related to latency. Correlix will not see subscriber's
individual order detail such as security, price or size. Individual
RaceTeam subscribers' logins will restrict access to only their own
latency data. Correlix will see no specific information regarding the
trading activity of non-subscribers.
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\6\ The product measures latency of orders whether the orders
are rejected, executed, or partially executed.
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The Exchange believes that above arrangement will provide users of
the Exchange greater transparency into the processing of their trading
activity and allow them to make more efficient trading decisions.
2. Statutory Basis
The statutory basis for the proposed rule change is Section 6(b)(5)
of the Act,\7\ which requires the rules of an exchange 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. In particular, the proposal
will provide greater transparency into trade and information processing
and thus allow market participants to make better-informed and more
efficient trading decisions.
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\7\ 15 U.S.C. 78f(b)(5).
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In addition, the Exchange believes that the proposed rule change is
consistent with the provisions of Section 6 of the Act,\8\ in general,
and with Section 6(b)(4) of the Act,\9\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility or system which the Exchange operates or controls. In
particular, the Exchange notes that it operates in a highly competitive
market in which market participants can readily direct orders to
competing venues and that use of the Correlix RaceTeam product is
completely voluntary. Further, the Exchange makes the RaceTeam product
uniformly available pursuant to a standard non-discriminatory pricing
schedule offered by Correlix.
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4).
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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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period up to 90 days (i) as the
Commission may designate if it finds such longer period to be
appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve or disapprove the proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be 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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-EDGA-2010-09 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-2010-09. This file
number should be included on the
[[Page 50019]]
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,\10\ 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 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-EDGA-2010-09 and should be submitted on or before
September 7, 2010.
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\10\ The text of the proposed rule change is available on
Exchange's Web site at http://www.directedge.com, on the
Commission's Web site at http://www.sec.gov, at EDGA, and at the
Commission's Public Reference Room.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-20105 Filed 8-13-10; 8:45 am]
BILLING CODE 8010-01-P