[Federal Register Volume 76, Number 28 (Thursday, February 10, 2011)]
[Notices]
[Pages 7608-7610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-2923]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63820; File No. SR-EDGA-2011-02]
Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Amendments to the EDGA Exchange, Inc. Fee Schedule
February 2, 2011.
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 January 25, 2011, 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, II,
and III 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 Substance
of the Proposed Rule Change
The Exchange proposes to amend its fees and rebates applicable to
Members \3\ of the Exchange pursuant to EDGA Rule 15.1(a) and (c). All
of the changes described herein are applicable to EDGA Members. The
text of the proposed rule change is available on the Exchange's
Internet Web site at http://www.directedge.com.
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\3\ A Member is any registered broker or dealer, or any person
associated with a registered broker or dealer, that has been
admitted to membership in the Exchange.
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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.
[[Page 7609]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
In SR-EDGA-2011-01,\4\ the Exchange filed for immediate
effectiveness a rule filing to amend Rule 11.9 to add its routing
strategies, which were contained in its fee schedule, to the rule and
to introduce additional routing strategies to the rule. Two of those
strategies that the Exchange added to Rules 11.9(b)(3)(q) and (r) were
the SWPA/SWPB routing strategies. Under the SWPA strategy, an order
would check the System for available shares and then would be sent to
Protected Quotations and only for displayed size. Under this strategy,
orders would not have to contain sufficient size to execute against all
Protected Quotations (emphasis added). If any shares remain unexecuted,
such remainder will be cancelled back to the User. Under the SWPB
routing strategy, an order would check the System for available shares
and then is sent to Protected Quotations and only for displayed size.
Under this strategy, orders would have to contain sufficient size to
execute against all Protected Quotations. The entire SWPB order will be
cancelled back to the User immediately if at the time of entry there is
insufficient quantity in the SWPB order to fulfill the displayed size
of all Protected Quotations.
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\4\ See SR-EDGA-2010-01 (January 21, 2011).
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In this filing, the Exchange proposes to add the corresponding flag
for the use of the SWPA/SWPB strategies, SW, to its fee schedule and
assign it a fee of $0.0031 per share for removal of liquidity from all
market centers except from the New York Stock Exchange (NYSE). For any
SWPA/SWPB orders that remove liquidity from the NYSE, the Exchange will
continue to assign Flag D and charge a fee of $0.0023 per share. This
is clarified in proposed footnote 8 to the fee schedule. The lower fee
charged for removing liquidity from the NYSE is consistent with the
processing of similar routing strategies by EDGA's competitors.
Secondly, of the major market centers, the NYSE fees for removing
liquidity itself are lower, and EDGA is thus able to pass back such
lower rates to its Members.
EDGA Exchange proposes to implement these amendments to the
Exchange fee schedule on January 25, 2011.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\5\ in general, and
furthers the objectives of Section 6(b)(4),\6\ 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 fee of $0.0031 per share is an equitable allocation of
reasonable dues, fees, and other charges in that this order type is
limited in its interaction with other Member orders as it only executes
to the extent a Member order is at the Protected Quotation. As a
result, compared to other routing strategies that always sweep the EDGA
book before routing out, such as ROBA (fee of $0.0025 per share), the
SWPA/SWPB fees are higher. Secondly, the fee is equitable when compared
to other similar type strategies of EDGA's competitors. As noted in SR-
EDGA-2011-01, the SWPA/SWPB routing strategies are based on Nasdaq's
MOPP strategy and BATS Parallel T routing strategy.\7\ Nasdaq charges
$0.0035 per share for MOPP orders and BATS charges $0.0033 per share
for such orders. EDGA's rate is even more competitive than these. 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 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.
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\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(4).
\7\ See, e.g., NASDAQ Rule 4758 and BATS Rule 11.13.
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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 foregoing rule change has become effective pursuant to Section
19(b)(3) of the Act \8\ and Rule 19b-4(f)(2) \9\ thereunder. At any
time within 60 days of the filing of such 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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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 19b-4(f)(2).
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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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-EDGA-2011-02 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-2011-02. 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,\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
[[Page 7610]]
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-EDGA-2011-02 and should be submitted on or before March
3, 2011.
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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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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-2923 Filed 2-9-11; 8:45 am]
BILLING CODE 8011-01-P