80 FR 11715 - Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.11, Routing to Away Trading Centers, To Delete References to the ROLF Routing Option, Which Routed Orders to LavaFlow ECN
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 42 (March 4, 2015)
Federal Register Volume 80, Issue 42 (March 4, 2015)
| Page Range | 11715-11717 | |
| FR Document | 2015-04421 |
[Federal Register Volume 80, Number 42 (Wednesday, March 4, 2015)] [Notices] [Pages 11715-11717] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-04421] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74381; File No. SR-EDGX-2015-11] Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 11.11, Routing to Away Trading Centers, To Delete References to the ROLF Routing Option, Which Routed Orders to LavaFlow ECN February 26, 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 February 23, 2015, EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange has designated this proposal as a ``non-controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b- 4(f)(6)(iii) thereunder,\4\ which renders it 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). \4\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend Rule 11.11, Routing to Away Trading Centers, to delete references to the ROLF routing option, which routed orders to LavaFlow ECN. 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 amend Rule 11.11, Routing to Away Trading Centers, to delete references under subparagraph (7) to the ROLF routing option, which routed to LavaFlow ECN. These changes are being proposed in response to LavaFlow ECN ceasing market operations on Friday, January 30, 2015. Under Rule 11.11(g)(7), an order utilizing the ROLF routing option first checked the System \5\ for available shares and was then routed to the LavaFlow ECN. If shares remained unexecuted after being routed, they were cancelled, unless otherwise instructed by the User.\6\ As of February [[Page 11716]] 2, 2015, the Exchange, via BATS Trading, the Exchange's affiliated routing broker-dealer, was no longer able to route orders to LavaFlow ECN because it ceased operations. As a result, the Exchange no longer offers the ROLF routing option. Therefore, the Exchange proposes to delete the ROLF Routing Option under Rule 11.11(g)(7). --------------------------------------------------------------------------- \5\ Exchange Rule 1.5(cc) defines ``System'' as ``the electronic communications and trading facility designated by the Board through which securities orders of Users are consolidated for ranking, execution and, when applicable, routing away.'' \6\ The term ``User'' is defined as ``any Member or Sponsored Participant who is authorized to obtain access to the System pursuant to Rule 11.3.'' See Exchange Rule 1.5(ee). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act \7\ in general, and furthers the objectives of Section 6(b)(5) of the Act \8\ in particular, in that it is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in 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 Exchange does not believe that this proposal will permit unfair discrimination among customers, brokers, or dealers because the ROLF routing option will no longer be available to all Users. The proposed change is in response to LavaFlow ECN ceasing market operations on Friday, January 30, 2015. As of February 2, 2015, the Exchange, via BATS Trading, was no longer able to route orders to LavaFlow ECN and, therefore, proposes to delete the ROLF routing option under Rule 11.11(g)(7). The proposal is intended to make the Exchange's rules clearer and less confusing for investors by eliminating a routing option that is no longer available; 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. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78f(b). \8\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposal will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is not designed to address any competitive issues but rather avoid investor confusion by eliminating a routing option that is no longer made available by the Exchange. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (1) Significantly affect the protection of investors or the public interest; (2) impose any significant burden on competition; and (3) by its terms does not become operative for 30 days after the date of this filing, 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 \9\ and Rule 19b-4(f)(6) thereunder.\10\ --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(A). \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires a self-regulatory organization to provide the Commission with written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has met this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative for 30 days after the date of filing. However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30- day operative delay is consistent with the protection of investors and the public interest as it will allow the Exchange to avoid potential investor confusion during the operative delay period by immediately eliminating an exchange rule that accounts for a routing option that the Exchange can no longer provide due to LavaFlow ECN's cessation of operations.\11\ Accordingly, the Commission hereby grants the Exchange's request and designates the proposal operative upon filing. --------------------------------------------------------------------------- \11\ For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to rule-comments@sec.gov. Please include File Number SR-EDGX-2015-11 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-EDGX-2015-11. 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 (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 10:00 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-EDGX-2015-11, and should be submitted on or before March 25, 2015. [[Page 11717]] For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\ --------------------------------------------------------------------------- \12\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Jill M. Peterson, Assistant Secretary. [FR Doc. 2015-04421 Filed 3-3-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 42 / Wednesday, March 4, 2015 / Notices 11715
III. Date of Effectiveness of the proposed rule change between the thereunder,4 which renders it effective
Proposed Rule Change and Timing for Commission and any person, other than upon filing with the Commission. The
Commission Action those that may be withheld from the Commission is publishing this notice to
The foregoing rule change is effective public in accordance with the solicit comments on the proposed rule
upon filing pursuant to Section provisions of 5 U.S.C. 552, will be change from interested persons.
19(b)(3)(A) 9 of the Act and available for Web site viewing and
I. Self-Regulatory Organization’s
subparagraph (f)(2) of Rule 19b–410 printing in the Commission’s Public
Statement of the Terms of Substance of
thereunder, because it establishes a due, Reference Room, 100 F Street NE.,
the Proposed Rule Change
fee, or other charge imposed by the Washington, DC 20549, on official
Exchange. business days between the hours of The Exchange filed a proposal to
At any time within 60 days of the 10:00 a.m. and 3:00 p.m. Copies of the amend Rule 11.11, Routing to Away
filing of such proposed rule change, the filing will also be available for Trading Centers, to delete references to
Commission summarily may inspection and copying at the NYSE’s the ROLF routing option, which routed
temporarily suspend such rule change if principal office and on its Internet Web orders to LavaFlow ECN.
it appears to the Commission that such site at www.nyse.com. All comments The text of the proposed rule change
action is necessary or appropriate in the received will be posted without change; is available at the Exchange’s Web site
public interest, for the protection of the Commission does not edit personal at www.batstrading.com, at the
investors, or otherwise in furtherance of identifying information from principal office of the Exchange, and at
the purposes of the Act. If the submissions. You should submit only the Commission’s Public Reference
Commission takes such action, the information that you wish to make Room.
Commission shall institute proceedings available publicly. All submissions II. Self-Regulatory Organization’s
under Section 19(b)(2)(B) 11 of the Act to should refer to File Number SR– Statement of the Purpose of, and
determine whether the proposed rule NYSEARCA–2015–10, and should be Statutory Basis for, the Proposed Rule
change should be approved or submitted on or before March 25, 2015. Change
disapproved. For the Commission, by the Division of In its filing with the Commission, the
IV. Solicitation of Comments Trading and Markets, pursuant to delegated Exchange included statements
authority.12
Interested persons are invited to concerning the purpose of and basis for
Jill M. Peterson, the proposed rule change and discussed
submit written data, views, and Assistant Secretary.
arguments concerning the foregoing, any comments it received on the
including whether the proposed rule
[FR Doc. 2015–04422 Filed 3–3–15; 8:45 am] proposed rule change. The text of these
change is consistent with the Act. BILLING CODE 8011–01–P statements may be examined at the
Comments may be submitted by any of places specified in Item IV below. The
the following methods: Exchange has prepared summaries, set
SECURITIES AND EXCHANGE forth in Sections A, B, and C below, of
Electronic Comments COMMISSION the most significant parts of such
• Use the Commission’s Internet [Release No. 34–74381; File No. SR–EDGX–
statements.
comment form (http://www.sec.gov/ 2015–11] A. Self-Regulatory Organization’s
rules/sro.shtml); or Statement of the Purpose of, and the
• Send an email to rule-comments@ Self-Regulatory Organizations; EDGX Statutory Basis for, the Proposed Rule
sec.gov. Please include File Number SR– Exchange, Inc.; Notice of Filing and Change
NYSEARCA–2015–10 on the subject Immediate Effectiveness of a Proposed
line. Rule Change To Amend Rule 11.11, 1. Purpose
Paper Comments Routing to Away Trading Centers, To The Exchange proposes to amend
Delete References to the ROLF Rule 11.11, Routing to Away Trading
• Send paper comments in triplicate Routing Option, Which Routed Orders Centers, to delete references under
to Secretary, Securities and Exchange to LavaFlow ECN subparagraph (7) to the ROLF routing
Commission, 100 F Street NE., option, which routed to LavaFlow ECN.
Washington, DC 20549–1090. February 26, 2015.
These changes are being proposed in
All submissions should refer to File Pursuant to Section 19(b)(1) of the response to LavaFlow ECN ceasing
Number SR–NYSEARCA–2015–10. This Securities Exchange Act of 1934 (the market operations on Friday, January
file number should be included on the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 30, 2015. Under Rule 11.11(g)(7), an
subject line if email is used. notice is hereby given that on February order utilizing the ROLF routing option
To help the Commission process and 23, 2015, EDGX Exchange, Inc. (the first checked the System 5 for available
review your comments more efficiently, ‘‘Exchange’’ or ‘‘EDGX’’) filed with the
shares and was then routed to the
please use only one method. The Securities and Exchange Commission
LavaFlow ECN. If shares remained
Commission will post all comments on (‘‘Commission’’) the proposed rule
unexecuted after being routed, they
the Commission’s Internet Web site change as described in Items I and II
were cancelled, unless otherwise
(http://www.sec.gov/rules/sro.shtml). below, which Items have been prepared
instructed by the User.6 As of February
Copies of the submission, all subsequent by the Exchange. The Exchange has
amendments, all written statements designated this proposal as a ‘‘non- 4 17 CFR 240.19b–4(f)(6)(iii).
mstockstill on DSK4VPTVN1PROD with NOTICES
with respect to the proposed rule controversial’’ proposed rule change 5 Exchange Rule 1.5(cc) defines ‘‘System’’ as ‘‘the
change that are filed with the pursuant to Section 19(b)(3)(A) of the electronic communications and trading facility
Commission, and all written Act 3 and Rule 19b–4(f)(6)(iii) designated by the Board through which securities
orders of Users are consolidated for ranking,
communications relating to the execution and, when applicable, routing away.’’
12 17 CFR 200.30–3(a)(12). 6 The term ‘‘User’’ is defined as ‘‘any Member or
9 15 U.S.C. 78s(b)(3)(A). 1 15 U.S.C. 78s(b)(1). Sponsored Participant who is authorized to obtain
10 17 CFR 240.19b–4(f)(2). 2 17 CFR 240.19b–4.
access to the System pursuant to Rule 11.3.’’ See
11 15 U.S.C. 78s(b)(2)(B). 3 15 U.S.C. 78s(b)(3)(A). Exchange Rule 1.5(ee).
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![Federal Register / Vol. 80, No. 42 / Wednesday, March 4, 2015 / Notices 11717
For the Commission, by the Division of applicable) must be entered on a single consistent with the requirements of the
Trading and Markets, pursuant to delegated order ticket at time of systemization to Act and the rules and regulations
authority.12 provide consistency in processing, and thereunder applicable to a national
Jill M. Peterson, to enhance the Exchange’s audit trail.6 securities exchange.13 In particular, the
Assistant Secretary. If permitted by the Exchange via Commission finds that the proposed
[FR Doc. 2015–04421 Filed 3–3–15; 8:45 am] Regulatory Circular, complex orders of rule change is consistent with Section
BILLING CODE 8011–01–P more than twelve (12) legs (one leg of 6(b)(5) of the Act,14 which requires,
which may be for an underlying security among other things, that the rules of a
or security future, as applicable) may be national securities exchange be
SECURITIES AND EXCHANGE split across multiple order tickets, if the designed to prevent fraudulent and
COMMISSION Trading Permit Holder (‘‘TPH’’) manipulative acts and practices, to
[Release No. 34–74389; File No. SR–CBOE– representing the complex order includes promote just and equitable principles of
2015–011] twelve (12) legs on one of the order trade, to remove impediments to and
tickets and identifies for the Exchange perfect the mechanism of a free and
Self-Regulatory Organizations; the order tickets that are part of the open market and a national market
Chicago Board Options Exchange, same complex order (in a form and system, and, in general, to protect
Incorporated; Order Granting manner prescribed by the Exchange).7 investors and the public interest. The
Accelerated Approval of a Proposed The Exchange also proposes to add Commission also finds that the
Rule Change To Amend Exchange Interpretation and Policy .01 to CBOE proposed rule change is consistent with
Rules Related To Order Tickets Rule 24.20 (pertaining to SPX Combo Section 6(b)(1) of the Act,15 which
Orders) to require that an SPX Combo provides that the Exchange be organized
February 26, 2015. Order for twelve (12) legs or less be and have the capacity to be able to carry
I. Introduction entered on a single order ticket at time out the purposes of the Act and to
of systemization.8 An SPX Combo Order enforce compliance by the Exchange’s
On January 23, 2015, the Chicago
that contains more than twelve (12) legs members, and persons associated with
Board Options Exchange, Incorporated may be represented and executed as a
(the ‘‘Exchange’’ or ‘‘CBOE’’) filed with members, with the Act, the rules and
single SPX Combo Order in accordance regulations thereunder and the rules of
the Securities and Exchange with CBOE Rule 24.20 if it is split across
Commission (the ‘‘Commission’’), the Exchange.
multiple order tickets and the TPH The Commission notes that CBOE’s
pursuant to Section 19(b)(1) of the representing the SPX Combo Order
Securities Exchange Act of 1934 (the proposal is designed to help enhance
includes twelve (12) legs on one of the the Exchange’s audit trail with respect
‘‘Act’’)1 and Rule 19b–4 thereunder,2 a order tickets and identifies for the
proposed rule change to amend its rules to open outcry complex order
Exchange the order tickets that are part processing and SPX Combo Orders. The
related to use of order tickets. This of the same SPX Combo Order (in a
proposal was published for comment in Commission believes that the proposal
manner and form prescribed by the will help to protect investors and the
the Federal Register on February 4, Exchange).9 The Exchange will
2015.3 The Commission received no public interest because the Commission
announce by Regulatory Circular believes an audit trail serves to provides
comments regarding the proposal. This whether it will permit SPX Combo
order approves the proposed rule regulators with information that aids
Orders with more than 12 legs and, if so them in surveiling activity on their
change on an accelerated basis. permitted, the form and manner in market.
II. Description of the Proposed Rule which the TPH must link the multiple In addition, the Commission finds
Change order tickets.10 The Exchanges notes good cause, pursuant to Section 19(b)(2)
that a TPH may submit an order that of the Act,16 for approving the proposed
The Exchange proposes to amend its
does not satisfy these ticket rule change prior to the 45th day after
rules governing the use of order tickets.
requirements, but such order may not be publication of notice in the Federal
According to the Exchange, system
represented or executed as a single SPX Register. The Commission notes that the
limitations on CBOE currently may Combo Order in accordance with Rule
prevent a multi-part order with more substance of this proposal was noticed
24.20.11 The Exchange also notes that for comment as part of changes
than a certain number of legs from being Rules 24.20 already specifies an
entered on a single order ticket for proposed in a prior CBOE proposed rule
applicable ratio, and it is proposing no change, which CBOE withdrew.17 The
representation and execution in open changes to the ratio through this rule
outcry as a complex order.4 As a result, filing.12 13 In approving this proposal, the Commission has
complex orders with more than the
III. Discussion and Findings considered the proposed rule’s impact on
applicable leg limitation that are efficiency, competition, and capital formation. See
represented in open outcry must be split After careful review, the Commission 15 U.S.C. 78c(f).
up and entered on multiple order finds that the proposed rule change is 14 15 U.S.C. 78f(b)(5).
tickets.5 15 15 U.S.C. 78f(b)(1).
The Exchange proposes to amend 6 Id.
16 15 U.S.C. 78s(b)(2).
17 See Securities Exchange Act Release No. 72957
CBOE Rule 6.53 to require that complex 7 Id.
(September 2, 2014), 79 FR 53230 (September 8,
orders of twelve (12) legs or less (one leg 8 Id.
2014) (‘‘SR–CBOE–2014–015 Notice’’). CBOE
of which may be for an underlying 9 If an Open outcry complex order or SPX Combo
withdrew SR–CBOE–2014–015 on November 21,
security or security future, as Order with more than twelve legs is split across 2014. The Exchange notes that, unlike the instant
mstockstill on DSK4VPTVN1PROD with NOTICES
multiple order tickets, one of the order tickets must filing, SR–CBOE–2014–015 did not impose
contain twelve legs. For example, a thirteen leg requirements on how a complex order with more
12 17 CFR 200.30–3(a)(12). order cannot have seven legs on one ticket and six than 12 legs should be split across multiple tickets.
1 15 U.S.C. 78s(b)(1). legs on another ticket; rather, one ticket must have While the instant filing imposes such a
2 17 CFR 240.19b–4. twelve legs and the other ticket must have one leg. requirement, the Exchange does not believe TPHs
3 See Securities Exchange Act Release No. 74169 Id. at 6147. will be adversely affected by the proposed
(January 29, 2015), 80 FR 6145 (‘‘Notice’’). 10 Id.
requirement specifying how a complex order with
4 See Notice, supra note 3 at 6147. 11 Id.
more than 12 legs should be split across multiple
5 Id. 12 Id. Continued
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Document Created: 2018-02-21 09:31:56
Document Modified: 2018-02-21 09:31:56
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 11715 |
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