80 FR 47964 - Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of EDGX Exchange, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 153 (August 10, 2015)

[Federal Register Volume 80, Number 153 (Monday, August 10, 2015)]
[Notices]
[Pages 47964-47966]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-19535]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75594; File No. SR-EDGX-2015-35]


Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Fees for Use of EDGX Exchange, Inc.

August 4, 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 July 28, 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, 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.
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    \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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend its schedule of fees and 
rebates applicable to Members \5\ and non-Members of the Exchange 
pursuant to EDGX Rule 15.1(a) and (c) (``Fee Schedule'') to remove fee 
code 5, which is appended to trades that inadvertently match against 
each other and share the same Market Participant Identifier (``MPID'') 
(``Internalized Trade'') during the Pre-Opening \6\ and Post-Closing 
Sessions.\7\
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    \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).
    \6\ The ``Pre-Opening Session'' is defined as ``the time between 
8:00 a.m. and 9:30 a.m. Eastern Time.'' See Exchange Rule 1.5(r).
    \7\ The ``Post-Closing Session'' is defined as ``the time 
between 4:00 p.m. and 8:00 p.m. Eastern Time.'' See Exchange Rule 
1.5(s).
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    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.

[[Page 47965]]

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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Fee Schedule to remove fee code 
5, which is appended to Internalized Trade that add or remove liquidity 
during the Pre-Opening and Post-Closing Sessions. Orders that yield fee 
code 5 are changed [sic] a fee of $0.00045 per share in securities 
priced at or above $1.00 and 0.15% of the dollar value of the trade in 
securities priced below $1.00. During Regular Trading Hours,\8\ fee 
code EA is appended to side of an Internalized Trade that adds 
liquidity, while fee code ER is appended to the side of an Internalized 
Trade that removes liquidity. Going forward, fee codes EA or ER will 
also be appended to Internalized Trades during the Pre-Opening and 
Post-Closing Sessions. Like fee code 5, orders that yield fee codes EA 
or ER are charged a fee of $0.00045 per share in securities priced at 
or above $1.00 and 0.15% of the dollar value of the trade in securities 
priced below $1.00.
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    \8\ The ``Regular Trading Hours'' is defined as ``the time 
between 9:30 a.m. and 4:00 p.m. Eastern Time.'' See Exchange Rule 
1.5(y).
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    As a result of the proposed removal of fee code 5, the Exchange 
also proposes to: (i) remove reference to fee code 5 from footnote 7 
and; (ii) delete footnote 10. Under footnote 7, if a Member adds an ADV 
of at least 10,000,000 shares, then the Member's rate for fee codes 5, 
EA, or ER decreases to $0.0001 per share per side. Fee codes EA and ER 
would continue to remain eligible for the reduced fee under footnote 7. 
Footnote 10 states that a Member's monthly volume attributed to fee 
code 5 will be allocated accordingly between the added fee codes and 
removal fee codes when determining whether that Member satisfied a 
certain tier. The Exchange proposes to delete footnote 10 as it will no 
longer be necessary once fee code 5 is deleted.
Implementation Date
    The Exchange proposes to implement these amendments to its Fee 
Schedule on August 3, 2015.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\9\ in general, and 
furthers the objectives of Section 6(b)(4),\10\ 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. Specifically, the Exchange believes it is equitable, 
reasonable and non-discriminatory to delete fee code 5 because, going 
forward, fee codes EA and ER will be applied to the applicable side of 
an Internalized Trade. The proposed deletion of fee code 5 does not 
amend the fees charged for Internalized Trades. Members would continue 
to be charged identical fees for Internalized Trades occurring during 
the Pre-Opening and Post-Closing sessions as the fees charged for fee 
codes EA and ER are the same as fee code 5. The charge for Members 
inadvertently matching with themselves will continue to be no more 
favorable than the Exchange's maker/taker spread enabling the Exchange 
to continue to discourage potential wash sales.\11\ In addition, the 
Exchange believes it is equitable and reasonable to remove a reference 
to fee code 5 in footnote 7 and delete footnote 10 as they are no 
longer necessary in light of the deletion of fee code 5 from the 
Exchange's Fee Schedule. Lastly, the Exchange also believes that the 
proposed amendment is non-discriminatory because it applies uniformly 
to all Members.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4).
    \11\ The Exchange will continue to ensure that the fees 
applicable to Internalized Trades are no more favorable than the 
Exchange's prevailing maker/taker spread.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition. The proposed changes do not amend the 
amount or application of any fee or rebate. Members would continue to 
be charged identical fees for Internalized Trades occurring during the 
Pre-Opening and Post-Closing sessions as the fees charged for fee codes 
EA and ER are the same as those fees charged for orders that yielded 
fee code 5.

(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 \12\ and paragraph (f) of Rule 19b-4 
thereunder.\13\ 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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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-EDGX-2015-35 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-EDGX-2015-35. 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

[[Page 47966]]

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 will also 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-2015-35 and should be 
submitted on or before August 31, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Robert W. Errett,
Deputy Secretary.
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    \14\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2015-19535 Filed 8-7-15; 8:45 am]
 BILLING CODE 8011-01-P