80 FR 50689 - Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 11.6, Definitions; Rule 11.8, Order Types; Rule 11.9, Priority of Orders; Rule 11.10, Order Execution; and Rule 11.11, Routing to Away Trading Centers
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 161 (August 20, 2015)
Federal Register Volume 80, Issue 161 (August 20, 2015)
| Page Range | 50689-50701 | |
| FR Document | 2015-20544 |
[Federal Register Volume 80, Number 161 (Thursday, August 20, 2015)] [Notices] [Pages 50689-50701] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-20544] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75700; File No. SR-EDGA-2015-33] Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 11.6, Definitions; Rule 11.8, Order Types; Rule 11.9, Priority of Orders; Rule 11.10, Order Execution; and Rule 11.11, Routing to Away Trading Centers August 14, 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 August 11, 2015, EDGA Exchange, Inc. (the ``Exchange'' or ``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 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 align certain rules with similar rules of BATS Exchange, Inc. (``BZX''), BATS Y-Exchange, Inc., (``BYX''), and EDGX Exchange, Inc. (``EDGX''). These changes are described in detail below and include amending: (i) Rule 11.6, Definitions; (ii) Rule 11.8, Order Types; (iii) Rule 11.9, Priority of Orders; (iv) Rule 11.10, Order Execution; and (v) Rule 11.11, Routing to Away Trading Centers. The Exchange does not propose to implement new or unique functionality that has not been previously filed with the Commission or is not available on BZX, BYX, or EDGX. The Exchange notes that the proposed rule text is based on BZX, BYX, and EDGX rules and is different only to the extent necessary to conform to the Exchange's current rules. 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 [[Page 50690]] 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 Statutory Basis for, the Proposed Rule Change 1. Purpose On June 5, 2014, Chair Mary Jo White asked all national securities exchanges to conduct a comprehensive review of each order type offered to members and how it operates.\5\ The Exchange notes that a comprehensive rule filing clarifying and updating Exchange rules was approved by the Commission in November 2014.\6\ However, based on the request from Chair White, the Exchange did indeed conduct further review of each order types and its operation. The proposals set forth below are based on this comprehensive review and are intended to clarify and to include additional specificity regarding the current functionality of the Exchange's System,\7\ including the operation of its order types and order instructions. The proposals set forth below are intended to supplement the approved filing based on further review conducted by the Exchange and are intended to clarify and enhance the understandability of the Exchange's rules related to the ranking and execution of orders. --------------------------------------------------------------------------- \5\ See Mary Jo White, Chair, Commission, Speech at the Sandler O'Neill & Partners, L.P. Global Exchange and Brokerage Conference, (June 5, 2014) (available at http://www.sec.gov/News/Speech/Detail/Speech/1370542004312#.VD2HW610w6Y). \6\ Securities Exchange Act Release No. 73592 (November 13, 2014), 79 FR 68937 (November 19, 2014) (SR-EDGA-2014-20). \7\ The term ``System'' is defined 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.'' See Exchange Rule 1.5(cc). --------------------------------------------------------------------------- The proposed amendments are also intended to better align certain Exchange rules and system functionality with that currently offered by BZX, BYX, and EDGX in order to provide a consistent rule set across the exchanges. In early 2014, the Exchange and its affiliate, EDGA received approval to effect a merger (the ``Merger'') of the Exchange's parent company, Direct Edge Holdings LLC, with BATS Global Markets, Inc., the parent of BZX and BYX (together with BZX, EDGA and EDGX, the ``BGM Affiliated Exchanges'').\8\ In order to provide consistent rules and system functionality amongst the Exchange, BZX, BYX, and EDGX, the Exchange proposes to amend: (i) Rule 11.6, Definitions; (ii) Rule 11.8, Order Types; (iii) Rule 11.9, Priority of Orders; (iv) Rule 11.10, Order Execution; and (v) Rule 11.11, Routing to Away Trading Centers. --------------------------------------------------------------------------- \8\ See Securities Exchange Act Release No. 71449 (January 30, 2014), 79 FR 6961 (February 5, 2014) (SR-EDGX-2013-43; SR-EDGA-2013- 34). --------------------------------------------------------------------------- Unless otherwise noted, the proposed rule text is based on BZX, BYX, or EDGX rules and is different only to the extent necessary to conform to the Exchange's current rules.\9\ The proposed amendments do not propose to implement new or unique functionality that has not been previously filed with the Commission or is not available on BZX, BYX, or EDGX.\10\ --------------------------------------------------------------------------- \9\ To the extent a proposed rule change is based on an existing BZX or BYX rule, the language of the BZX, BYX, and Exchange rules may differ to extent necessary to conform with existing Exchange rule text or to account for details or descriptions included in the Exchange Rules but not currently included in BZX or BYX rules based on the current structure of such rules. \10\ The Exchange's affiliate, EDGX, recently filed a proposal making many of the same changes to clarify and enhance EDGX Rules that are proposed in this filing with respect to EDGA Rules. See infra, note 14. In contrast to that filing, however, which also proposed functional changes to the EDGX system so that such system operates more like BZX, this proposal does not propose any changes that would modify the operation of the EDGA System. Rather, all changes proposed herein are intended to clarify and enhance the Exchange's Rules or to align such Rules with the Exchange's affiliates. The Exchange notes that certain of the proposed changes would modify Exchange functionality if all orders with a Post Only instruction, as defined below, did not remove contra-side liquidity on entry based on the Exchange's fee structure. See infra, notes 18 and 19. Because orders with a Post Only instruction do, however, remove liquidity on entry pursuant to the Exchange's fee structure, the Exchange is proposing these changes to maintain rules that are consistent with the other BGM Affiliated Exchanges and in the event the Exchange's fee structure changes in the future. --------------------------------------------------------------------------- Rule 11.6, Definitions Rule 11.6, Definitions, sets forth in one rule current defined terms and order instructions that are utilized in Chapter XI. Rule 11.6 also includes additional defined terms and instructions to aid in describing System\11\ functionality and the operation of the Exchange's order types. The Exchange proposes to amend Rule 11.6 to align certain sections with the rules of BZX, BYX, and EDGX, including additional specificity regarding the operation of Exchange functionality. These changes are described below and include: (i) Amending paragraph (d) regarding Discretionary Range; (ii) amending subparagraph (l)(1)(A) regarding the Price Adjust Re-Pricing instruction; (iii) amending subparagraph (l)(1)(B) regarding the Display-Price Sliding instruction; (iv) amending subparagraph (l)(2) regarding the Short Sale re-pricing instruction; (v) amending subparagraph (l)(3) regarding the re-pricing of non-displayed orders; (vi) amending subparagraph (n)(1), (2) and (4) regarding the Aggressive, Super Aggressive, and Post Only instructions; and (vii) amending subparagraph (q) regarding Immediate-or-Cancel and Fill-or-Kill Time-In-Force instructions. As stated above, the proposed amendments to Rule 11.6 do not propose to implement new or unique functionality that has not been previously filed with the Commission or is not available on BZX, BYX, or EDGX. Each of these amendments are described in more detail below. --------------------------------------------------------------------------- \11\ The term ``System'' is defined 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.'' See Exchange Rule 1.5(cc). --------------------------------------------------------------------------- Discretionary Range (Rule 11.6(d)) Current Functionality. Pursuant to current Rule 11.6(d), Discretionary Range is an instruction the User \12\ may attach to an order to buy (sell) a stated amount of a security at a specified, displayed price with discretion to execute up (down) to a specified, non-displayed price. An order with a Discretionary Range instruction resting on the EDGA Book \13\ will execute at its least aggressive price when matched for execution against an incoming order that also contains a Discretionary Range instruction, as permitted by the terms of both the incoming and resting order. --------------------------------------------------------------------------- \12\ The term ``User'' is defined as ``and Member or Sponsored Participant who is authorized to obtain access to the System pursuant to Rule 11.3.'' See Exchange Rule 1.5(ee). \13\ The ``EDGA Book'' is defined as ``System's electronic file of orders.'' See Exchange Rule 1.5(d). --------------------------------------------------------------------------- Proposed Functionality. The Exchange proposes to amend the Discretionary Range instruction under Rule 11.6(d) to align with BZX Rule [[Page 50691]] 11.9(c)(10) \14\ and EDGX Rule 11.6(d).\15\ As proposed, amended Rule 11.6(d) is substantially similar to BZX and BYX Rule 11.9(c)(10) and identical to EDGX Rule 11.6(d). --------------------------------------------------------------------------- \14\ See Securities Exchange Act Release No. 74738 (April 16, 2015), 80 FR 22600 (April 22, 2015) (SR-BATS-2015-09) (Order Granting Approval of a Proposed Rule Change to Amend Rules 11.9, 11.12, and 11.13). \15\ See Securities Exchange No. 75479 (July 17, 2015), 80 FR 43810 (July 23, 2015) (SR-EDGX-2015-33). --------------------------------------------------------------------------- First, the Exchange proposes to add specificity to the Exchange's rule based on BZX and BYX Rule 11.9(c)(10) to make clear that although an order with a Discretionary Range instruction may be accompanied by a Displayed \16\ instruction, an order with a Discretionary Range instruction may also be accompanied by a Non-Displayed \17\ instruction, and if so, will have a non-displayed ranked price as well as a discretionary price. The Exchange further proposes to adopt language from BZX and Rule 11.9(c)(10) to specifically state that resting orders with a Discretionary Range instruction will be executed at a price that uses the minimum amount of discretion necessary to execute the order against an incoming order. Neither of these proposed changes represent changes to functionality, but rather, additional specificity in Exchange Rules based on BZX and BYX Rule 11.9(c)(10). The Exchange notes that the same changes were recently made to EDGX Rule 11.6(d).\18\ --------------------------------------------------------------------------- \16\ See Exchange Rule 11.6(e)(1). \17\ See Exchange Rule 11.6(e)(2). \18\ See supra note 15. --------------------------------------------------------------------------- Second, the Exchange also proposes to amend its current Rule by adding language to 11.6(d) discussing how an order with a Discretionary Range instruction would interact with an order with a Post Only instruction. Specifically, when an order with a Post Only instruction that is entered at the displayed or non-displayed ranked price of an order with a Discretionary Range instruction that does not remove liquidity on entry pursuant to Rule 11.6(n)(4),\19\ the order with a Discretionary Range instruction would be converted to an executable order and will remove liquidity against such incoming order.\20\ Similar to the proposed amendments to the Aggressive and Super Aggressive instructions described below, due to the fact that an order with a Discretionary Range instruction contains a more aggressive price at which it is willing to execute, the Exchange proposes to treat orders with a Discretionary Range instruction as aggressive orders that would prefer to execute at their displayed or non-displayed ranked price than to forgo an execution due to applicable fees or rebates. Accordingly, in order to facilitate transactions consistent with the instructions of its Users, the Exchange proposes to execute resting orders with a Discretionary Range instruction (and certain orders with an Aggressive or Super Aggressive instruction, as described below) against incoming orders, when such incoming orders would otherwise forego an execution. The Exchange notes that the determination of whether an order should execute on entry against resting interest, including against a resting order with a Discretionary Range instruction, is made prior to determining whether the price of such an incoming order should be adjusted pursuant to the Exchange's price sliding functionality pursuant to Rule 11.6(l). In other words, an execution would have already occurred as set forth above before the Exchange would consider whether an order could be displayed and/or posted to the EDGA Book, and if so, at what price. --------------------------------------------------------------------------- \19\ Under Rule 11.6(n)(4), an order with a Post Only instruction or Price Adjust instruction will remove contra-side liquidity from the EDGA Book if the order is an order to buy or sell a security priced below $1.00 or if the value of such execution when removing liquidity equals or exceeds the value of such execution if the order instead posted to the EDGA Book and subsequently provided liquidity, including the applicable fees charged or rebates provided. To determine at the time of a potential execution whether the value of such execution when removing liquidity equals or exceeds the value of such execution if the order instead posted to the EDGA Book and subsequently provided liquidity, the Exchange will use the highest possible rebate paid and highest possible fee charged for such executions on the Exchange. \20\ The Exchange notes that under its current fee structure all orders with a Post Only instruction remove liquidity on entry. As such, the proposal will not modify the operation of the Exchange at this time. However, if, in the future, the Exchange modifies its fees such that all orders with a Post Only instruction do not remove liquidity then such changes do represent a functional change to the System. --------------------------------------------------------------------------- Examples--Order With a Discretionary Range Instruction Executes Against an Order With a Post Only Instruction Assume that the National Best Bid or Offer (``NBBO'') is $10.00 by $10.05, and the Exchange's BBO is $9.99 by $10.06. Assume that the Exchange receives a non-routable order to buy 100 shares at $10.00 per share designated with discretion to pay up to an additional $0.05 per share. Assume further that an order would not remove any liquidity upon entry pursuant to the Exchange's economic best interest functionality.Assume that the next order received by the Exchange is an order with a Post Only instruction to sell 100 shares of the security priced at $10.03 per share. The order with a Post Only instruction would not remove any liquidity upon entry, and would post to the EDGA Book at $10.03. This would, in turn, trigger the discretion of the resting buy order with a Discretionary Range instruction and an execution would occur at $10.03. The order with a Post Only instruction to sell would be treated as the adder of liquidity and the buy order with discretion would be treated as the remover of liquidity. Assume the same facts as above, but that the incoming order with a Post Only instruction is priced at $10.00 instead of $10.03. As is true in the example above, the order with a Post Only instruction would not remove any liquidity upon entry. Rather than cancelling the incoming order with a Post Only instruction to sell back to the User, particularly when the resting order with a Discretionary Range instruction is willing to buy the security for up to $10.05 per share, the Exchange proposes to execute at $10.00 the order with a Post Only instruction against the resting buy order with a Discretionary Range instruction. As is also true in the example above, the order with a Post Only instruction to sell would be treated as the liquidity adder and the buy order with discretion would be treated as the liquidity remover. As set forth in more detail below, if the incoming order was not an order with a Post Only instruction to sell, the incoming order could be executed at the ranked price of the order with a Discretionary Range instruction without restriction and would therefore be treated as the liquidity remover. Third, the Exchange proposes to modify the description of the process by which it handles incoming orders that interact with Discretionary Orders. The Exchange proposes to specify in Rule 11.6(d) its proposed handling of a contra-side order that executes against a resting Discretionary Order at its displayed or non-displayed ranked price or that contains a time-in-force of IOC or FOK and a price in the discretionary range by stating that such an incoming order will remove liquidity against the Discretionary Order. The Exchange also proposes to specify in Rule 11.6(d) its handling of orders that are intended to post to the EDGA Book at a price within the discretionary range of an order with a Discretionary Range instruction. This includes, but is not limited to, an order with a Post Only instruction. Specifically, the Exchange proposes to specify in Rule 11.6(d) that any contra-side order with a time-in-force other than IOC or FOK and a price within the discretionary range but not at the [[Page 50692]] displayed or non-displayed ranked price of an order with a Discretionary Range instruction will be posted to the EDGA Book and then the order with a Discretionary Range instruction would remove liquidity against such posted order. Examples--Order With a Discretionary Instruction Executes Against an Order Without a Post Only Instruction Assume that the NBBO is $10.00 by $10.05, and the Exchange's BBO is $9.99 by $10.06. Assume that the Exchange receives an order to buy 100 shares of a security at $10.00 per share designated with discretion to pay up to an additional $0.05 per share. Assume that the next order received by the Exchange is an order with a Book Only instruction \21\ to sell 100 shares of the security with a TIF other than IOC or FOK priced at $10.03 per share. The order with a Book Only instruction would not remove any liquidity upon entry and would post to the EDGA Book at $10.03. This would, in turn, trigger the discretion of the resting buy order and an execution would occur at $10.03. The order with a Book Only instruction to sell would be treated as the adder of liquidity and the buy order with discretion would be treated as the remover of liquidity. --------------------------------------------------------------------------- \21\ The term ``Book Only'' is defined as an ``order instruction stating that an order will be matched against an order on the EDGA Book or posted to the EDGA Book, but will not route to an away Trading Center.'' See Exchange Rule 11.6(n)(3). --------------------------------------------------------------------------- Assume the same facts as above, but that the incoming order with a Book Only instruction is priced at $10.00 instead of $10.03. The order with a Book Only instruction would remove liquidity upon entry at $10.00 per share pursuant to the Exchange's order execution rule.\22\ Contrary to the examples set forth above, the order with a Book Only instruction to sell would be treated as the liquidity remover and the resting buy order with discretion would be treated as the liquidity adder. The Exchange notes that this example operates the same whether an order contains a TIF of IOC, FOK or any other TIF. --------------------------------------------------------------------------- \22\ See Exchange Rule 11.10. --------------------------------------------------------------------------- Finally, because orders with a Discretionary Range instruction have both a price at which they will be ranked and an additional discretionary price, the Exchange proposes to expressly state how the Exchange handles a routable order with a Discretionary Range instruction by stating that such an order will be routed away from the Exchange at its full discretionary price. As an example, assume the NBBO is $10.00 by $10.05 and the Exchange's BBO is $9.99 by $10.06. If the Exchange receives a routable order with a Discretionary Range instruction to buy at $10.00 with discretion to pay up to an additional $0.05 per share, the Exchange would route the order as a limit order to buy at $10.05. Any unexecuted portion of the order would be posted to the EDGA Book with a ranked price of $10.00 and discretion to pay up to $10.05. The Exchange notes that it has historically treated orders with a Discretionary Range instruction as relatively passive orders and as orders that, once posted to the EDGA Book, would in all cases be treated as the liquidity provider. The changes proposed above will change the handling of orders with a Discretionary Range instruction such that such orders are more aggressive and, thus, such orders will execute on the Exchange in additional circumstances than they do currently without regard to such orders' status as resting orders. In turn, orders with a Discretionary Range instruction resting on the EDGA Book may be treated as liquidity removers under certain circumstances, as outlined above. Re-Pricing (Rule 11.6(l)) The Exchange currently offers re-pricing instructions which, in all cases, result in the ranking and/or display of an order at a price other than its limit price in order to comply with applicable securities laws and Exchange Rules. Specifically, the Exchange currently offers re-pricing instructions to ensure compliance with Regulation NMS and Regulation SHO. The re-pricing instructions currently offered by the Exchange re-price and display an order upon entry and in certain cases again re-price and re-display an order at a more aggressive price based on changes in the NBBO. Rule 11.6(l) sets forth the re-pricing instructions currently available to Users with regard to Regulation NMS compliance--Price Adjust, and Display-Price Sliding, as well as a separate re-pricing process with regard to Regulation SHO compliance. As described below, the Exchange now proposes to amend its re-pricing instructions to align and streamline Exchange rules with those of BZX, BYX, and EDGX. As above, the Exchange notes that the proposed changes are intended to clarify and enhance Exchange Rules or to align such Rules with the other BGM Affiliated Exchanges but will not modify the current operation of the System because of the Exchange's current fee structure and because all orders with a Post Only instruction currently will remove liquidity from the Exchange if they interact with contra-side liquidity. Re-Pricing Instructions To Comply With Rule 610(d) of Regulation NMS The Exchange proposes to amend its re-pricing instructions to comply with Rule 610(d) of Regulation NMS as follows: (i) Amend the Price Adjust instruction under Rule 11.6(l)(1)(A) to: (A) Divide the rule into subparagraphs (i), (ii), and (iii); (B) clarify the order must be a Locking Quotation \23\ or Crossing Quotation \24\ of an external market; and (C) propose new subparagraph (iv) described below; and (ii) amend the Displayed Price Sliding instruction under Rule 11.6(l)(1)(B) to: (A) Change references from ``Displayed Price Sliding'' to ``Display-Price Sliding''; (B) replace the text of Rule 11.6(l)(1)(B) with text that is substantially similar to BZX and BYX Rules 11.19(g)(1) and identical to EDGX Rule 11.6(l)(1)(B). --------------------------------------------------------------------------- \23\ The term ``Locking Quotation'' is defined as ``[t]he display of a bid for an NMS stock at a price that equals the price of an offer for such NMS stock previously disseminated pursuant to an effective national market system plan, or the display of an offer for an NMS stock at a price that equals the price of a bid for such NMS stock previously disseminated pursuant to an effective national market system plan in violation of Rule 610(d) of Regulation NMS.'' See Exchange Rule 11.6(g). \24\ The term ``Crossing Quotation'' is defined as ``[t]he display of a bid (offer) for an NMS stock at a price that is higher (lower) than the price of an offer (bid) for such NMS stock previously disseminated pursuant to an effective national market system plan in violation of Rule 610(d) of Regulation NMS.'' See Exchange Rule 11.6(c). --------------------------------------------------------------------------- Price Adjust Re-Pricing (Rule 11.6(l)(1)(A)) Under the Price Adjust instruction, where a buy (sell) order would be a Locking Quotation or Crossing Quotation if displayed by the System on the EDGA Book at the time of entry, the order will be displayed and ranked \25\ at a price that is one Minimum Price Variation lower (higher) than the Locking Price.\26\ The Exchange proposes to modify the operation of the Price Adjust instruction such that an order must be a Locking Quotation or Crossing Quotation of an external market, not the EDGA Book, in order be eligible for the re-pricing. This change will provide additional specificity within the Exchange's rules regarding the applicability of the Price Adjust [[Page 50693]] instruction as well as align the description with the Price Adjust process described under BZX and BYX Rules 11.9(g)(2),\27\ and EDGX Rule 11.6(l)(1)(A). This change is also consistent with display-price sliding on BZX and Display-Price Sliding discussed below, under which orders are only re-priced where they are a Locking Quotation or Crossing Quotation of an external market, and not the BZX order book or EDGA Book, as applicable. Other than as described above, these provisions will remain unchanged and be set forth under subparagraph (i), so that the Exchange may renumber the following provisions of Rule 11.6(l)(1)(A) as set forth below. --------------------------------------------------------------------------- \25\ For purposes of the description of the re-pricing instructions under proposed Rule 11.6(l), the terms ``ranked'' and ``priced'' are synonymous and used interchangeably. \26\ The term ``Locking Price'' is defined as ``[t]he price at which an order to buy (sell), that if displayed by the System on the EDGA Book, either upon entry into the System, or upon return to the System after being routed away, would be a Locking Quotation.'' See Exchange Rule 11.6(f). \27\ The description of the Price Adjust process under BATS Rule 11.9(g)(2), states that ``[a]n order eligible for display by the Exchange that, at the time of entry, would create a violation of Rule 610(d) of Regulation NMS by locking or crossing a Protected Quotation of an external market will be ranked and displayed by the System at one minimum price variation below the current NBO (for bids) or to one minimum price variation above the current NBB (for offers) . . .'' (emphasis added). Thus, an order will only be re- priced pursuant to its Price Adjust process where it locks or crosses a Protected Quotation of an external market, and not BATS. The Exchange notes that this reflects a recent change to BATS Rule 11.9(g)(2). See Securities Exchange Act Release No. 75324 (June 29, 2015) (SR-BATS-2015-47) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend Rule 11.9 of BATS Exchange, Inc., to Modify its Price Adjust Functionality). --------------------------------------------------------------------------- The Exchange proposes to restructure the provisions of the current rule by separating rule text and adopting additional subparagraph references, subparagraph (ii) and (iii). The Exchange also proposes to add new subparagraph (iv) to Rule 11.6(l)(1)(A) which would cover where an order with a Price Adjust instruction and a Post Only instruction would be a Locking Quotation or Crossing Quotation of the Exchange. The proposed amendments to Rule 11.6(l)(1)(A) are based on BZX and BYX Rules 11.9(g)(2)(D) and are identical to EDGX Rule 11.6(l)(1)(A)(iv). To the extent the amended text of Exchange Rule 11.6(l)(1)(A) differs from BZX and BYX Rules 11.9(g)(2)(D), such differences are necessary to conform the rule with existing rule text. As noted above, an order subject to the Price Adjust instruction will only be re-priced where it would be a Locking Quotation of Crossing Quotation of an external market, and not the Exchange. In such case, any display-eligible order with a Price Adjust instruction and a Post Only instruction that would be a Locking Quotation or Crossing Quotation of the Exchange upon entry will be executed as set forth in Rule 11.6(n)(4) \28\ or cancelled. For example, assume the NBBO is $10.00 by $10.01 and an order to sell at $10.01 is resting on the EDGA Book. Further assume that no other Trading Center \29\ is displaying an order to sell at $10.01. Assume that the Exchange receives an order to buy with a Post Only instruction and Price Adjust instruction at $10.01. The incoming order to buy will be cancelled unless, pursuant to Rule 11.6(n)(4), the value of such execution when removing liquidity equals or exceeds the value of such execution if the order instead posted to the EDGA Book and subsequently provided liquidity. The incoming order to buy will not be posted to the EDGA Book and re-priced pursuant to the Price Adjust instruction. --------------------------------------------------------------------------- \28\ See supra notes 19 and 20. \29\ The term ``Trading Center'' is defined as ``[o]ther securities exchanges, facilities of securities exchanges, automated trading systems, electronic communications networks or other broker dealers.'' See Exchange Rule 11.6(r). --------------------------------------------------------------------------- Displayed Price Sliding (Rule 11.6(l)(1)(B)) The Exchange proposes to amend the Displayed Price Sliding instruction under Rule 11.6(l)(1)(B) to: (A) change the name from ``Displayed Price Sliding'' to ``Display-Price Sliding''; and (B) replace the text of Rule 11.6(l)(1)(B) with text that is identical to BZX Rule 11.19(g)(1), BYX Rule 11.9(g)(1), and EDGX Rule 11.6(l)(1)(B). The Exchange does not propose to modify the operation of Display-Price Sliding. It simply seeks to replace the rule text with of Rule 11.6(l)(1)(B) with text that is substantially similar to BZX and BYX Rules 11.9(g)(1) and identical to EDGX Rule 11.6(l)(1)(B). The Display- Price Sliding instruction operates in an identical manner as the Display-Price Sliding instruction on EDGX and the display price sliding process on BZX and BYX. To the extent the amended text of Exchange Rule 11.6(l)(1)(B) differs from BZX and BYX Rules 11.9(g)(1), such differences are necessary to conform the rule to existing rule text. The Exchange does not propose to modify the operation of the re-pricing of orders with a Non-Displayed instruction. Replacing the rule text would enable the Exchange to include substantially similar or identical rule text describing processes that operate in the same manner across each of the BGM Affiliated Exchanges, thus avoiding potential confusion. In sum, Display-Price Sliding is an order instruction requiring that where an order would be a Locking Quotation or Crossing Quotation of an external market if displayed by the System on the EDGA Book at the time of entry, such order will be ranked at the Locking Price and displayed by the System at one Minimum Price Variation lower (higher) than the Locking Price for orders to buy (sell). A User may elect for the Display-Price Sliding instruction to only apply where their display-eligible order would be a Locking Quotation of an external market upon entry (``Lock Only''). In such cases, the User's display- eligible order will be cancelled if the order would be a Crossing Quotation of an external market upon entry. For example, assume the Exchange has a posted and displayed bid to buy at $10.10 and a posted and displayed offer to sell $10.13. Assume the NBBO is $10.10 by $10.12. If the Exchange receives an order with a Book Only instruction to buy at $10.12, the Exchange will rank the order to buy at $10.12 and display the order at $10.11 because displaying the bid at $10.12 would cause it to be a Locking Quotation of an external market's Protected Offer to sell for $10.12. If the NBO then moved to $10.13, the Exchange would un-slide the bid to buy and display it at its ranked price (and limit price) of $10.12. As an example of the Lock-Only option for Display-Price Sliding, assume the Exchange has a posted and displayed bid to buy at $10.10 and a posted and displayed offer to sell at $10.14. Assume the NBBO is $10.10 by $10.12. If the Exchange receives an order with a Book Only instruction to buy 100 shares at $10.13 and the User has elected the Lock-Only option for Display-Price Sliding, the Exchange will cancel the order back to the User. To reiterate a basic example of Display- Price Sliding, if instead the User applied Display-Price Sliding (and not the Lock-Only option for Display-Price Sliding), the Exchange would rank the order to buy at $10.12 and display the order at $10.11 because displaying the bid at $10.13 would cause it to be a Crossing Quotation of an external market's Protected Offer to sell for $10.12. If the NBO then moved to $10.13, the Exchange would un-slide the bid to buy and display it at $10.12. An order subject to the Display-Price Sliding instruction retains its original limit price irrespective of the prices at which such order is ranked and displayed. An order subject to the Display-Price Sliding instruction is displayed at the most aggressive price possible and receives a new time stamp should the NBBO change such that the order would no longer be a Locking Quotation or Crossing Quotation of an external market. All orders that are re-ranked and re-displayed pursuant to the Display-Price Sliding instruction retain their priority as compared to other [[Page 50694]] orders subject to the Display-Price Sliding instruction based upon the time such orders were initially received by the Exchange. Following the initial ranking and display of an order subject to the Display-Price Sliding instruction, an order will only be re-ranked and re-displayed to the extent it achieves a more aggressive price, provided, however, that the Exchange will re-rank an order at its displayed price in the event such order's displayed price would be a Locking Quotation or Crossing Quotation. Such event will not result in a change in priority for the order at its displayed price. This will avoid the potential of a ranked price that crosses the Protected Quotation displayed by such external market, which could, in turn, lead to a trade through of such Protected Quotation at such ranked price. The Exchange notes that, as described below, when an external market crosses the Exchange's Protected Quotation and the Exchange's Protected Quotation is a displayed order subject to Display-Price Sliding, the Exchange re-ranks such order at the displayed price. Thus, the order displayed by the Exchange will still be ranked and permitted to execute at a price that is consistent with Rule 611(b)(4) of Regulation NMS.\30\ --------------------------------------------------------------------------- \30\ 17 CFR 242.611(b)(4). See also See also Securities Exchange Act Release Nos. 64475 (May 12, 2011), 76 FR 28830, 28832 (May 18, 2011) (SR-BATS-2011-015); 67657 (August 14, 2012), 77 FR 50199 (August 20, 2012) (SR-BATS-2012-035); 68791 (January 31, 2013), 78 FR 8617 (February 6, 2013) (SR-BATS-2013-007) (``BATS Display-Price Sliding Releases''). --------------------------------------------------------------------------- The ranked and displayed prices of an order subject to the Display- Price Sliding instruction may be adjusted once or multiple times depending upon the instructions of a User and changes to the prevailing NBBO. Multiple re-pricing is optional and must be explicitly selected by a User before it will be applied. The Exchange's default Display- Price Sliding instruction will only adjust the ranked and displayed prices of an order upon entry and then the displayed price one time following a change to the prevailing NBBO, provided however, that if such an order's displayed price becomes a Locking Quotation or Crossing Quotation then the Exchange will adjust the ranked price of such order and it will not be further re-ranked or re-displayed at any other price. Orders subject to the optional multiple price sliding process will be further re-ranked and re-displayed as permissible based on changes to the prevailing NBBO. As an example of the multiple re-pricing option for Display-Price Sliding, assume the Exchange has a posted and displayed bid to buy at $10.10 and a posted and displayed offer to sell at $10.14. Assume the NBBO is $10.10 by $10.12. If the Exchange receives an order with a Book Only instruction to buy at $10.13, the Exchange would rank the order to buy at $10.12 and display the order at $10.11 because displaying the bid at $10.13 would cause it to be a Crossing Quotation of an external market's Protected Offer to sell for $10.12. If the NBO then moved to $10.13, the Exchange would un-slide the bid to buy, rank it at $10.13 and display it at $10.12. Where the User did not elect the multiple re- pricing option for Display-Price Sliding, the Exchange would not further adjust the ranked or displayed price following this un-slide. However, under the multiple re-pricing option, if the NBO then moved to $10.14, the Exchange would un-slide the bid to buy and display it at its full limit price of $10.13. Pursuant to proposed Rule 11.6(l)(1)(B)(iv), any display-eligible order with a Post Only instruction that would be a Locking Quotation or Crossing Quotation of the Exchange upon entry will be executed as set forth in Rule 11.6(n)(4) or cancelled. Consistent with the principle of not re-pricing orders to avoid executions, in the event the NBBO changes such that an order with a Post Only instruction subject to Display-Price Sliding instruction would be ranked at a price at which it could remove displayed liquidity from the EDGA Book, the order will be executed as set forth in Rule 11.6(n)(4) or cancelled.\31\ --------------------------------------------------------------------------- \31\ As noted above, the Exchange will execute an order with a Post Only instruction in certain circumstances where the value of such execution when removing liquidity equals or exceeds the value of such execution if the order instead posted to the EDGA Book and subsequently provided liquidity, including the applicable fees charged or rebates provided. See supra notes 19 and 20. --------------------------------------------------------------------------- Pursuant to proposed Rule 11.6(l)(1)(B)(v), an order with a Post Only instruction will be permitted to post and be displayed opposite the ranked price of orders subject to Display-Price Sliding instruction. In the event an order subject to the Display-Price Sliding instruction is ranked on the EDGA Book with a price equal to an opposite side order displayed by the Exchange, it will be subject to processing as set forth in Rule 11.10(a)(4), which is described in greater detail below. For example, assume the Exchange has a posted and displayed bid to buy at $10.10 and a posted and displayed offer to sell at $10.12. Assume the NBBO (including Protected Quotations of other external markets) is also $10.10 by $10.12. If the Exchange receives an order with a Post Only instruction to buy at $10.12 per share, unless executed pursuant to Rule 11.6(n)(4),\32\ the Exchange would cancel the order back to the User because absent the order with a Post Only instruction, the order to buy at $10.12 would be able to remove the order to sell $10.12, and, as explained above, the Exchange would no longer offer re-pricing to avoid executions against orders displayed by the Exchange. --------------------------------------------------------------------------- \32\ Id. --------------------------------------------------------------------------- If the Exchange did not have a displayed offer to sell at $10.12 in the example above, but instead the best offer on the EDGA Book was $10.13, the Exchange would apply Display-Price Sliding to the incoming order to buy by ranking such order at $10.12 and displaying the order at $10.11. The EDGA Book would now be displayed as $10.11 by $10.13. Assume, however, that after price sliding the incoming order to buy from $10.12 to a display price of $10.11, the Exchange received an order with a Post Only instruction to sell at $10.12, thus joining the NBO. The order with a Post Only instruction would be permitted to post and be displayed opposite the ranked price of orders subject to display-price sliding. Accordingly, the Exchange would allow such incoming order with a Post Only instruction to sell at $10.12 to post and display on the EDGA Book, as described above, with an opposite side order subject to Display-Price Sliding displayed at $10.11. Assume that the next Protected Offer displayed by all external markets other than the Exchange moved to $10.13. In this situation the Exchange would un- slide but then cancel the bid at $10.12 because, as proposed, in the event the NBBO changes such that an order with a Post Only instruction subject to Display-Price Sliding would un-slide and would be ranked at a price at which it could remove displayed liquidity from the EDGA Book (i.e., when the Exchange is at the NBB or NBO) the Exchange proposes to execute \33\ or cancel such order. --------------------------------------------------------------------------- \33\ Id. --------------------------------------------------------------------------- Re-Pricing Instructions To Comply With Rule 201 of Regulation SHO Under Rule 11.6(l)(2), an order to sell with a Short Sale instruction that, at the time of entry, could not be executed or displayed in compliance with Rule 201 of Regulation SHO will be re- priced by the System at the Permitted Price.\34\ The [[Page 50695]] default short sale re-pricing process will only re-price an order upon entry and one additional time to reflect a decline in the NBB. Depending upon the instructions of a User, to reflect declines in the NBB the System will continue to re-price and re-display a short sale order at the Permitted Price down to the order's limit price. In the event the NBB changes such that the price of an order with a Non- Displayed instruction subject to Rule 201 of Regulation SHO would be a Locking Quotation or Crossing Quotation, the order will receive a new time stamp, and will be re-priced by the System to the mid-point of the NBBO. --------------------------------------------------------------------------- \34\ The term ``Permitted Price'' is defined as ``[t]he price at which a sell order will be displayed at one Minimum Price Variation above the NBB.'' See Exchange Rule 11.6(k). --------------------------------------------------------------------------- Rule 11.6(l)(2) states that: (i) When a Short Sale Circuit Breaker is in effect, the System will execute a sell order with a Displayed and Short Sale instruction at the price of the NBB if, at the time of initial display of the sell order with a Short Sale instruction, the order was at a price above the then current NBB; (ii) orders with a Short Exempt instruction will not be subject to re-pricing under amended Rule 11.6(l)(2); and (iii) the re-pricing instructions to comply with Rule 610(d) of Regulation NMS will continue to be ignored for an order to sell with a Short Sale instruction when a Short Sale Circuit Breaker is in effect and the re-pricing instructions to comply with Rule 201 of Regulation SHO under this Rule will apply. The Exchange proposes to make the below changes to align the description of the Exchange's short sale re-pricing process under Rule 11.6(l)(2) with BZX and BYX Rules 11.9(g)(5) and EDGX Rule 11.6(l)(2). Specifically, the Exchange proposed to amend Rule 11.6(l)(2)(A) to remove the last sentence which states that, ``[a]n order to sell with a Short Sale instruction that is re-priced pursuant to this paragraph will be ranked at the Permitted Price.'' No such phrase is included in the BZX and BYX Rules 11.9(g)(5)(A) or EDGX Rule 11.6(l)(2). The Exchange also believes this sentence is superfluous, as the description of the short sale re-pricing process currently references to which prices such orders are to be re-priced and the price of such orders is the equivalent to the price at which the order is to be ranked on the EDGA Book for purposes of Exchange Rule 11.9. The Exchange also proposes to amend Rule 11.6(l)(2)(D) to align with BZX and BYX Rules 11.9(g)(6) and EDGX Rule 11.6(l)(2)(D) to state that where an order is subject to either a Display-Price Sliding instruction or a Price Adjust instruction and also contains a Short Sale instruction when a Short Sale Circuit Breaker is in effect, the re-pricing instructions to comply with Rule 201 of Regulation SHO will apply. The Exchange does not propose this change to alter the meaning of Rule 11.6(l)(2)(D), but rather, to align the language with BZX and BYX Rule 11.9(g) and EDGX Rule 11.6(l)(2)(D) in order to provide consistent rules across the Exchange and BZX. Re-Pricing of Orders With a Non-Displayed Instruction (Rule 11.6(l)(3)) The Exchange proposes to amend Rule 11.6(l)(3) to align with BZX and BYX Rules 11.9(g)(4) and to be identical to EDGX Rule 11.6(l)(3). To the extent the amended text of Exchange Rule 11.6(l)(3) differs from BZX and BYX Rules 11.9(g)(4), such differences are necessary to conform the rule to existing rule text. The Exchange does not propose to modify the operation of the re-pricing of orders with a Non-Displayed instruction. It simply seeks to replace the rule text with of Rule 11.6(l)(3) with text that is substantially similar to BZX and BYX Rules 11.9(g)(4) and identical to EDGX Rule 11.6(l)(3). The re-re-pricing of orders with a Non-Displayed instruction operates in an identical manner as the repricing of non-displayed orders on BZX, BYX, and EDGX. Replacing the rule text would enable the Exchange to include substantially similar or identical rule text describing processes that operate in the same manner across each of the BGM Affiliated Exchanges. In sum, Rule 11.6(l)(2) would state that in order to avoid potentially trading through Protected Quotations of external markets, any order with a Non-Displayed instruction that is subject to the Display-Price Sliding or Price Adjust instruction would be ranked at the Locking Price on entry. In the event the NBBO changes such that an order with a Non-Displayed instruction subject to the Display-Price Sliding or Price Adjust instruction would cross a Protected Quotation of an external market, the order will receive a new time stamp, and will be ranked by the System at the Locking Price. In the event an order with a Non-Displayed instruction has been re-priced by the System, such order with a Non-Displayed instruction is not re-priced by the System unless it again would cross a Protected Quotation of an external market. This functionality is equivalent to the handling of displayable orders pursuant to the Display-Price Sliding instruction except that such orders will not have a displayed price. Aggressive (Rule 11.6(n)(1)) Aggressive is an order instruction that directs the System to route the order if an away Trading Center crosses the limit price of the order resting on the EDGA Book. Based on BZX Rule 11.13(a)(4)(A), the Exchange proposes to also amend Rule 11.6(n)(1) to state that any routable order with a Non-Displayed instruction that is resting on the EDGA Book and is crossed by an away Trading Center will be automatically routed to the Trading Center displaying the Crossing Quotation. To the extent the amended text of Exchange Rule 11.6(n)(1) differs from BZX Rule 11.13(a)(4)(A), such differences are necessary to conform the rule with existing rule text. Lastly, the proposed rule text is identical to EDGX Rule 11.6(l)(1). Super Aggressive (Rule 11.6(n)(2)) Super Aggressive is an order instruction that directs the System to route an order when an away Trading Center locks or crosses the limit price of the order resting on the EDGA Book. A User may designate an order as Super Aggressive solely to routable orders posted to the EDGA Book with remaining size of an Odd Lot. Based on BZX Rule 11.13(b)(4)(C),\35\ the Exchange proposes to amend Rule 11.6(n)(2) to state that when any order with a Super Aggressive instruction is locked by an incoming order with a Post Only instruction that does not remove liquidity pursuant to Rule 11.6(n)(4),\36\ the order with a Super Aggressive instruction would be converted to an executable order and will remove liquidity against such incoming order. Rule 11.6(n)(2) would further state that notwithstanding the foregoing, if an order that does not contain a Super Aggressive instruction maintains higher priority than one or more Super Aggressive eligible orders, the Super Aggressive eligible order(s) with lower priority will not be converted, as described above, and the incoming order with a Post Only instruction will be posted or cancelled in accordance with Rule 11.6(n)(4). To the extent the amended text of Exchange Rule 11.6(n)(2) differs from BZX Rule 11.13(b)(4)(C), such differences are necessary to conform the rule with existing rule text. Lastly, the proposed [[Page 50696]] rule text is identical to EDGX Rule 11.6(l)(2). --------------------------------------------------------------------------- \35\ See supra note 14. \36\ As noted above, the Exchange will execute an order with a Post Only instruction where the value of such execution when removing liquidity equals or exceeds the value of such execution if the order instead posted to the EDGA Book and subsequently provided liquidity, including the applicable fees charged or rebates provided. See supra note 19. As is also noted above, based on the Exchange's current fee structure, currently all orders with a Post Only instruction remove liquidity on entry if there is available contra-side liquidity. See supra note 20. --------------------------------------------------------------------------- The Exchange proposes to apply this logic in order to facilitate executions that would otherwise not occur due to the Post Only instruction requirement to not remove liquidity. Because a Super Aggressive Re-Route eligible order is willing to route to an away Trading Center and remove liquidity (i.e., pay a fee at such Trading Center) when it becomes either a Locking Quotation or Crossing Quotation, the Exchange believes it is reasonable and consistent with the instruction to force an execution between an incoming order with a Post Only instruction and an order that has been posted to the EDGA Book with the Super Aggressive instruction. The Exchange notes that the determination of whether an order should execute on entry against resting interest, including against resting orders with a Super Aggressive instruction, is made prior to determining whether the price of such an incoming order should be adjusted pursuant to the Exchange's re-pricing instructions under Rule 11.6(l). Like BZX Rule 11.13(b)(4)(C), the Exchange has limited the proposed language to orders with a Post Only instruction that would lock the price of an order with a Super Aggressive instruction because orders with a Post Only instruction that cross resting orders will always remove liquidity because it is in their economic best interest to do so.\37\ Also like BZX Rule 11.13(b)(4)(C), the Exchange proposes to make clear that although it will execute an order with a Super Aggressive instruction against an order with a Post Only instruction that would create a Locking Quotation, if an order that does not contain a Super Aggressive instruction maintains higher priority than one or more Super Aggressive eligible orders, the Super Aggressive eligible order(s) with lower priority will not be converted, as described above, and the incoming order with a Post Only instruction will be posted or cancelled in accordance with Rule 11.6(n)(4). The Exchange believes it is necessary to avoid applying the Super Aggressive functionality to routable orders that are resting behind orders that are not eligible for routing to avoid violating the Exchange's priority rule, Rule 11.9. --------------------------------------------------------------------------- \37\ See supra note 19. --------------------------------------------------------------------------- Example--Super Aggressive Re-Route and Orders With a Post Only Instruction Assume that the Exchange receives an order to buy 300 shares of a security at $10.10 per share designated with a Super Aggressive instruction. Assume further that the NBBO is $10.09 by $10.10 when the order is received, and the Exchange's lowest offer is priced at $10.11. The Exchange will route the order away from the Exchange as a bid to buy 300 shares at $10.10. Assume that the order obtains one 100 share execution through the routing process and then returns to the Exchange. The Exchange will post the order as a bid to buy 200 shares at $10.10. If the Exchange subsequently receives an order with a Post Only instruction to sell priced at $10.09 per share, such order will execute against the posted order to buy with an execution price of $10.10. The posted buy order will be treated as the liquidity provider and the incoming order with a Post Only instruction to sell will be treated as the liquidity remover, based on Exchange Rule 11.6(n)(4) that executes orders with a Post Only instruction upon entry if such execution is in their economic interest. However, assuming the same facts as above, if the incoming order with a Post Only instruction to sell is priced at $10.10 and thus does not remove liquidity pursuant to the economic best interest functionality, the posted order with a Super Aggressive instruction will execute against such order at $10.10. In this scenario, the posted order to buy will be treated as the liquidity remover and the incoming order with a Post Only instruction to sell will be treated as the liquidity provider. Finally, assume that the NBBO is $10.10 by $10.11 and that the Exchange has a displayed bid to buy 100 shares of a security at $10.10 and a displayed offer to sell 100 shares of a security at $10.11. Assume that the displayed bid has not been designated with the Super Aggressive instruction. Assume next that the Exchange receives a second displayable bid to buy 100 shares of the same security at $10.10 that has been designated as routable and subject to the Super Aggressive instruction. Because there is no liquidity to which the Exchange can route the order, the second order will post to the EDGA Book as a bid to buy at $10.10 behind the original displayed bid to buy at $10.10. If the Exchange then received an order with a Post Only instruction to sell 100 shares at $10.10 then no execution would occur because the incoming order with a Post Only instruction cannot remove liquidity at $10.10 based on the economic best interest analysis, the first order with priority to buy at $10.10 was not designated with the Super Aggressive instruction and the second booked order to buy at $10.10 is not permitted to bypass the first order as this would result in a violation of the Exchange's priority rule, Rule 11.9. Post Only (Rule 11.6(n)(4)) The Exchange proposes to amend the definition of Post Only under Rule 11.6(n)(4) to replace an erroneous reference to the Hide Not Slide instruction with Display-Price Sliding. In sum, Post Only is an instruction that may be attached to an order that is to be ranked and executed on the Exchange pursuant to Rule 11.9 and Rule 11.10(a)(4) or cancelled, as appropriate, without routing away to another trading center except that the order will not remove liquidity from the EDGA Book, except as described below. As amended, an order with a Post Only instruction and a Display-Price Sliding, rather than Hide Not Slide, or Price Adjust instruction will remove contra-side liquidity from the EDGA Book if the order is an order to buy or sell a security priced below $1.00 or if the value of such execution when removing liquidity equals or exceeds the value of such execution if the order instead posted to the EDGA Book and subsequently provided liquidity, including the applicable fees charged or rebates provided. Time-In-Force (``TIF'') (Rule 11.6(q)) The Exchange proposes to amend its TIF instructions to align with BZX Rule 11.9(b) and EDGX Rule 11.6(q). To the extent the amended text of Exchange Rule 11.6(q) differs from BZX Rule 11.9(b), such differences are necessary to conform the rule with existing Exchange rule text. The amended text is identical to EDGX Rule 11.6(q). First, the Exchange proposes to align the definition of Immediate- or-Cancel (``IOC'') under Rule 11.6(q)(1) with BZX Rule 11.9(b)(1) and EDGX Rule 11.6(q)(1) to make clear that an order with an IOC instruction that does not include a Book Only instruction and that cannot be executed in accordance with Rule 11.10(a)(4) on the System when reaching the Exchange will be eligible for routing away pursuant to Rule 11.11.\38\ Under current rules, the TIF of IOC indicates that an order is to be executed in whole or in part as soon as such order is received and the portion not executed is to be cancelled. Based on BZX Rule 11.9(b)(1) and EDGX Rule 11.6(q)(1), the Exchange proposes to expand upon the description of IOC to specify that an order with such TIF may be routed away from the Exchange but that in no event will an order with such TIF be posted to the EDGA Book. Also like BZX and EDGX, the Exchange [[Page 50697]] notes that an order with an IOC instruction routed away from the Exchange are in turn routed with an IOC instruction. --------------------------------------------------------------------------- \38\ See supra note 14. --------------------------------------------------------------------------- Second, the Exchange proposes to amend the definition of the Fill- or-Kill (``FOK'') under Rule 11.6(q)(3) to align with BZX Rule 11.9(b)(6) and EDGX Rule 11.6(q)(3) to make clear that an order with a TIF instruction of FOK is not eligible for routing away pursuant to Rule 11.11.\39\ Although orders with a TIF of FOK are generally treated the same as order with a TIF of IOC, the Exchange does not permit routing of orders with an order with a TIF of FOK because the Exchange is unable to ensure the instruction of FOK (i.e., execution of an order in its entirety) through the routing process. --------------------------------------------------------------------------- \39\ Id. --------------------------------------------------------------------------- Rule 11.8, Order Types The Exchange proposes to amend the description of Limit Orders under Rule 11.8(b) to align such Rule with existing EDGX and BZX Rules. Each of these changes are described in more detail below. Limit Orders (Rule 11.8(b)). The Exchange proposes to amend Rule 11.8(b) to: (i) Remove language from subparagraph (4) stating a Limit Order that includes both a Post Only instruction and Non-Displayed instruction will be rejected by the System; (ii) update the description of the inclusion of a Discretionary Range instruction on a Limit Order; (iii) amend subparagraph (10) to replace a reference to ``Displayed Price Sliding'' with ``Display-Price Sliding''; and (iv) amend subparagraph (12) to update the description of the re-pricing of orders with a Non-Displayed instruction. First, the Exchange proposes to remove from Rule 11.8(b)(4) language stating a Limit Order that includes both a Post Only instruction and Non-Displayed instruction will be rejected by the System. A similar prohibition against coupling a Post Only instruction and Non-Displayed instruction is not included in EDGX Rule 11.8(b)(4). Removing such language would enable the Exchange to further align its treatment of Limit Orders under Rule 11.8(b) with that of EDGX Rule 11.8(b). Such change also updates Rule 11.8(b)(4) to reflect current system functionality. As proposed, Rule 11.8(b)(4) would no longer prohibit User from including both a Post Only instruction and Non- Displayed instruction on their Limit Orders. Second, the Exchange proposes to re-locate within Rule 11.8(b) and re-word the statement regarding the inclusion of a Discretionary Range on a Limit Order. Current Rule 11.8(b)(8) currently states that a ``User may include a Discretionary Range instruction.'' This ability to include a Discretionary Range instruction on a Limit Order is currently grouped with other functionality that can be elected for Limit Orders that also include a Post Only or Book Only instruction as well as specified time-in-force instructions for orders that can be entered into the System and post to the EDGA Book. However, the System does not allow the combination of a Discretionary Range and a Post Only instruction. Accordingly, the Exchange proposes to re-locate the reference to the Discretionary Range instruction within Rule 11.8(b) so that it is no longer grouped with other orders that can be combined with a Post Only instruction. The Exchange also proposes to state in Rule 11.8(b) that: (i) A Limit Order with a Discretionary Range instruction may also include a Book Only instruction; and (ii) a Limit Order with a Discretionary Range instruction and a Post Only instruction will be rejected. Further, the Exchange proposes to refer to the ability of a Limit Order to include a Discretionary Range instruction, rather than a ``User'' that may include a Discretionary Range instruction. Third, the Exchange proposes to replace a reference to ``Displayed Price Sliding'' with ``Display-Price Sliding''. This proposed rule change is designed to update Rule 11.8(b)(10) to reflect the proposed changes of references from ``Displayed Price Sliding'' to ``Display- Price Sliding'' discussed above. Fourth, the Exchange proposes to amend Rule 11.8(b)(12) regarding the re-pricing of orders with a Non-Displayed instruction to align with to be identical to EDGX Rule 11.8(b)(12). The Exchange does not propose to modify the operation of the re-pricing of Limit Orders with a Non- Displayed instruction. It simply seeks to replace the rule text with of Rule 11.8(b)(12) with text that is identical to EDGX Rule 11.8(b)(12). The re-pricing of Limit Orders with a Non-Displayed instruction operates in an identical manner as the re-pricing of non-displayed limit orders on EDGX. Replacing the rule text would enable the Exchange to include identical rule text describing processes that operate in an identical manner across EDGA and EDGX. MidPoint Peg Order Type (Rule 11.8(d)). The Exchange proposes amend Rule 11.8(d)(4) to correct a reference to the Pre-Opening Session. Currently, Rule 11.8(d)(4) states that MidPoint Peg Orders may be executed during Pre-Opening Sessions, Regular Trading Hours, Regular Session, and the Post-Closing Session. The Exchange proposes to amend Rule 11.8(d)(4) to state ``Pre-Opening Session'' rather than ``Pre- Opening Sessions''. Rule 11.9, Priority of Orders With respect to the Exchange's priority and execution algorithm, the Exchange is proposing various minor and structural to changes based on BZX Rule 11.12 and EDGX Rule 11.9 that are intended to emphasize the processes by which orders are accepted, priced, ranked, displayed and executed, as well as a new provision related to the ability of orders to rest at the Locking Price and the Exchange's handling of orders in such a circumstance. In addition to the changes proposed with respect to Rule 11.9, discussed immediately below, these changes also relate to Rules 11.10 and 11.11. The Exchange proposes modifications to Rule 11.9, Priority of Orders, to make clear that the ranking of orders described in such rule is in turn dependent on Exchange rules related to the execution of orders, primarily Rule 11.10. The Exchange believes that this has always been the case under Exchange rules but there was not previously a description of the cross-reference to Rule 11.10 within such rules. Accordingly, the Exchange proposes to add reference to the execution process in addition to the numeric cross-reference to Rule 11.10. The Exchange also proposes to change certain references within Rule 11.9 to refer to ranking rather than executing equally priced trading interest, as the Rule as a whole is intended to describe the manner in which resting orders are ranked and maintained, specifically in price and time priority, while awaiting execution against incoming orders. The Exchange does not believe that the proposed modifications substantively modify the operation of the rules but the Exchange believes that it is important to make clear that the ranking of orders is a separate process from the execution of orders. The Exchange also proposes changes to Rule 11.9(a)(4) and (a)(5) to specify that orders retain and lose ``time'' priority under certain circumstances as opposed to priority generally because retaining or losing price priority does not require the same descriptions, as price priority will always be retained unless the price of an order changes. Each change proposed above was recently approved with respect to analogous rules of BZX and [[Page 50698]] BYX, specifically amendments to Rule 11.12.\40\ --------------------------------------------------------------------------- \40\ Id. --------------------------------------------------------------------------- Lastly, the Exchange proposes to amend Rule 11.9(a)(2)(B)(ii) to replace a reference to ``Displayed Price Sliding'' with ``Display-Price Sliding''. This proposed rule change is designed to update Rule 11.9(a)(2)(B)(ii) to reflect the proposed change of references from ``Displayed Price Sliding'' to ``Display-Price Sliding'' discussed above. Rule 11.10, Order Execution The Exchange proposes to adopt paragraph (C) of Rule 11.10(a)(4), which would be identical to BZX Rule 11.13(a)(4)(C) \41\ and EDGX Rule 11.10(a)(4). Proposed paragraph (C) would provide further clarity regarding the situations where orders are not executable, which although covered in other rules proposed above and in current rules,\42\ would focus on the incoming order on the same side of an order displayed on the EDGA Book rather than the resting order that is rendered not executable at a specified price because it is opposite such order displayed on the EDGA Book. Proposed paragraph (C) would state that, subject to proposed paragraph (D), described below, if an incoming order is on the same side of the market as an order displayed on the EDGA Book and upon entry would execute against contra-side interest at the same price as such displayed order, such incoming order will be cancelled or posted to the EDGA Book and ranked in accordance with Rule 11.9. The Exchange will suspend the ability of any order to execute at the price of a contra-side order with a Displayed instruction, as described above. The Exchange suspends this the ability of any order to execute in such situations to avoid an apparent priority issue. In particular, in such a situation the Exchange believes a User representing an order that is displayed on the Exchange might believe that an incoming order was received by the Exchange and then bypassed such displayed order, removing some other non-displayed liquidity on the same side of the market as such displayed order. --------------------------------------------------------------------------- \41\ Id. \42\ The Exchange notes that consistent with the proposed changes to Rules 11.6 and 11.8 described above, based on User instructions certain orders are permitted to post and rest on the EDGA Book at prices that lock contra-side liquidity, provided, however, that the System will never display a Locking Quotation. Similar behavior is also in place with respect to the Display-Price Sliding instruction under current rules. --------------------------------------------------------------------------- The Exchange also proposes to adopt Rule 11.10(a)(4)(D), which would be identical to BZX Rule 11.13(a)(4)(D).\43\ Proposed Rule 11.10(a)(4)(D) would govern the price at which an order is executable when it is not displayed on the Exchange and there is a contra-side displayed order at such price. Specifically, for bids or offers equal to or greater than $1.00 per share, in the event that an incoming order is a Market Order or is a Limit Order priced more aggressively than an order displayed on the Exchange, the Exchange will execute the incoming order at, in the case of an incoming sell order, one-half minimum price variation less than the price of the displayed order, and, in the case of an incoming buy order, at one-half minimum price variation more than the price of the displayed order. As is true under existing functionality, this order handling is inapplicable for bids or offers under $1.00 per share. --------------------------------------------------------------------------- \43\ See supra note 14. --------------------------------------------------------------------------- To demonstrate the operation of this provision, again assume the NBBO is $10.10 by $10.11. Assume the Exchange has a posted and displayed bid to buy 100 shares of a security priced at $10.10 per share and a resting non-displayed bid to buy 100 shares of a security priced at $10.11 per share. Assume that the next order received by the Exchange is an order with a Post Only instruction to sell 100 shares of the security priced at $10.11 per share. The order with a Post Only instruction would not remove any liquidity upon entry pursuant to the Exchange's economic best interest functionality, would post to the EDGA Book and would be displayed at $10.11. The display of this order would, in turn, make the resting non-displayed bid not executable at $10.11. If an incoming offer to sell 100 shares at $10.10 is entered into the EDGA Book, the resting non-displayed bid originally priced at $10.11 will be executed at $10.105 per share, thus providing a half-penny of price improvement as compared to the order's limit price of $10.11. The execution at $10.105 per share also provides the incoming offer with a half-penny of price improvement as compared to its limit price of $10.10. The result would be the same for an incoming market order to sell or any other incoming limit order offer priced at $10.10 or below, which would execute against the non-displayed bid at a price of $10.105 per share. As above, an offer at the full price of the resting and displayed $10.11 offer would not execute against the resting non-displayed bid, but would instead either cancel or post to the EDGA Book behind the original $10.11 offer in priority. The Exchange notes that, in addition to the changes described above, it is proposing to add descriptive titles to paragraphs (A) and (B) of Rule 11.10(a)(4), which describe the process by which executable orders are matched within the System. Specifically, so long as it is otherwise executable, an incoming order to buy will be automatically executed to the extent that it is priced at an amount that equals or exceeds any order to sell in the EDGA Book and an incoming order to sell will be automatically executed to the extent that it is priced at an amount that equals or is less than any other order to buy in the EDGA Book. These rules further state that an order to buy shall be executed at the price(s) of the lowest order(s) to sell having priority in the EDGA Book and an order to sell shall be executed at the price(s) of the highest order(s) to buy having priority in the EDGA Book. The Exchange emphasizes these current rules only insofar as to highlight the interconnected nature of the priority rule. The Exchange also proposes to move language contained within Rule 11.10(a)(2) to paragraph (a) of the rule such that the language is more generally applicable to the rules governing execution contained in Rule 11.10(a)(1) through (5). Specifically, the Exchange proposes to relocate language stating that any order falling within the parameters of the paragraph shall be referred to as ``executable'' and that an order will be cancelled back to the User, if based on market conditions, User instructions, applicable Exchange Rules and/or the Act and the rules and regulations thereunder, such order is not executable, cannot be routed to another Trading Center pursuant to Rule 11.11 or cannot be posted to the EDGA Book. Each change proposed above was recently approved with respect to analogous rules of BZX, specifically amendments to Rule 11.13.\44\ --------------------------------------------------------------------------- \44\ Id. --------------------------------------------------------------------------- Rule 11.11, Routing to Away Trading Centers The Exchange also proposes to modify paragraph (h) of Rule 11.11 to clarify the Exchange's rule regarding the priority of routed orders. Paragraph (h) currently sets forth the proposition that a routed order does not retain priority on the Exchange while it is being routed to other markets. The Exchange believes that its proposed clarification to paragraph (h) is appropriate because it more clearly states that a routed order is not ranked and maintained in the EDGA Book pursuant to Rule 11.9(a), and therefore is not available to execute against incoming orders pursuant to [[Page 50699]] Rule 11.10. The change proposed above was recently approved with respect to the analogous rule of BZX, specifically Rule 11.13, as amended.\45\ --------------------------------------------------------------------------- \45\ Id. --------------------------------------------------------------------------- Implementation Date The Exchange intends to implement the proposed rule change immediately.\46\ --------------------------------------------------------------------------- \46\ Id. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule changes are consistent with Section 6(b) of the Act \47\ and further the objectives of Section 6(b)(5) of the Act \48\ because they are designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and, in general, to protect investors and the public interest. The proposed rule change also is designed to support the principles of Section 11A(a)(1) \49\ of the Act in that it seeks to assure fair competition among brokers and dealers and among exchange markets. --------------------------------------------------------------------------- \47\ 15 U.S.C. 78f(b). \48\ 15 U.S.C. 78f(b)(5). \49\ 15 U.S.C. 78k-1(a)(1). --------------------------------------------------------------------------- The proposed rule changes are generally intended to better align certain Exchange rules with those currently in place on EDGX, BZX, and BYX in order to provide a consistent rule set and functionality across the BGM Affiliated Exchanges. As noted above, the proposed changes will not result in any changes to the way the System operates due to the Exchange's current fee structure. However, by making the rule change, the Exchange will be in position to support such functionality immediately in the event the Exchange's fee structure changes in the future. Consistent functionality across the BGM Affiliated Exchanges will reduce complexity and streamline duplicative functionality, thereby resulting in simpler technology implementation, changes and maintenance by Users of the Exchange that are also participants on EDGX, BZX, and BYX. The proposed rule changes do not propose to implement new or unique functionality that has not been previously filed with the Commission or is not available on EDGX, BZX or BYX. The Exchange notes that the proposed rule text is based on applicable BZX and BYX rules and substantially similar to applicable EDGX rules; the proposed language of the Exchange's Rules differs from EDGX rules only to extent necessary to conform to existing Exchange rule text. Where possible, the Exchange has mirrored EDGX, BYX, or BZX rules, because consistent rules will simplify the regulatory requirements and increase the understanding of the Exchange's operations for Members of the Exchange that are also participants on EDGX, BZX, and BYX. As such, the proposed rule change would foster cooperation and coordination with persons engaged in facilitating transactions in securities and would remove impediments to and perfect the mechanism of a free and open market and a national market system. In addition to the specific rules discussed below, the Exchange also believes that the proposed amendments to clarify and re-structure the Exchange's priority, execution and routing rules will contribute to the protection of investors and the public interest by making the Exchange's rules easier to understand. Definitions (Rule 11.6). The modifications related to Discretionary Range, Pegged instructions, Re-Pricing, Aggressive, Super Aggressive, Post Only, as well as TIFs of IOC and FOK, are each designed to better align certain Exchange rules and system functionality with that currently offered by EDGX, BYX and BZX in order to provide a consistent functionality across the BGM Affiliated Exchanges. Specifically, the Exchange believes that the proposed rule changes will provide additional clarity and specificity regarding the functionality of the System and provide Users with consistent rules across the BGM Affiliated Exchanges, and thus would promote just and equitable principles of trade and remove impediments to a free and open market. In particular, the Exchange believes it is consistent with the Act to execute orders with a Discretionary Range instruction and orders with a Super Aggressive instruction against marketable liquidity (i.e., order with a Post Only instruction) when an execution would not otherwise occur is consistent with both: (i) The Act, by facilitating executions, removing impediments and perfecting the mechanism of a free and open market and national market system; and (ii) a User's instructions, which have evidenced a willingness by the User to pay applicable execution fees and/or execute at more aggressive prices than they are currently ranked in favor of an execution. The Exchange also believes that the proposed changes to Rule 11.6(l) are consistent with Section 6(b)(5) of the Act,\50\ as well as Rule 610 of Regulation NMS \51\ and Rule 201 of Regulation SHO.\52\ Rule 610(d) requires exchanges to establish, maintain, and enforce rules that require members reasonably to avoid ``[d]isplaying quotations that lock or cross any protected quotation in an NMS stock.'' \53\ Such rules must be ``reasonably designed to assure the reconciliation of locked or crossed quotations in an NMS stock,'' and must ``prohibit . . . members from engaging in a pattern or practice of displaying quotations that lock or cross any quotation in an NMS stock.'' \54\ These changes will provide additional specificity within the Exchange's rules regarding the operation of the Exchange's re- pricing options The proposed rule change will also align the descriptions of the Exchange's re-repricing options under Rule 11.6(l) with EDGX's re-pricing options under EDGX Rule 11.6(l) and BZX's price sliding processes described under BZX Rule 11.9(g). --------------------------------------------------------------------------- \50\ 15 U.S.C. 78f(b)(5). \51\ 17 CFR 242.610. \52\ 17 CFR 242.201. \53\ 17 CFR 242.610(d). \54\ Id. --------------------------------------------------------------------------- Order Types (Rule 11.8). The Exchange believes that the proposed changes to its order types under Rule 11.8 are consistent with Section 6(b)(5) of the Act,\55\ because they are intended to align their operation with the operation of identical order types on EDGX and BZX, thereby fostering cooperation and coordination with persons engaged in facilitating transactions in securities and removing impediments to and perfecting the mechanism of a free and open market and a national market system. --------------------------------------------------------------------------- \55\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes its proposed amendments to the description of Limit Orders under Rule 11.8(b) is reasonable because it aligns their operation with existing EDGX and BZX rules and functionality as well as to reflect the relevant proposed changes discussed above. Therefore, the proposed rule change promotes just and equitable principles of trade because it will avoid investor confusion by providing the identical default behavior across the Exchange, EDGA and BZX. Priority (Rule 11.9). The Exchange believes its proposed amendments to Rule 11.9 regarding the priority of orders promotes just and equitable principles of trade, remove impediments to, and perfect the mechanism of, a free and open market and a national market system by providing Members, Users, and the [[Page 50700]] investing public with greater transparency regarding how the System operates. The Exchange believes that the proposed rule changes regarding order priority will continue to provide greater transparency and further clarity on how the various order types will be assigned priority under various scenarios, thereby assisting Members, Users and the investing public in understanding the manner in which the System may execute their orders. Order Execution (Rule 11.10). Proposed Rule 11.10(a)(4)(C), which would be identical to EDGX Rule 11.10(a)(4)(C) and BZX Rule 11.13(a)(4)(C),\56\ is consistent with Rules 11.6 and 11.8, as proposed to be amended, and reflects the fact that the Exchange will suspend the ability of an order to execute at the Locking Price when there is a contra-side order with a Displayed instruction in order to avoid an apparent priority issue. In turn, the Exchange believes that adopting Rule 11.10(a)(4)(C) promotes just and equitable principles of trade, fosters cooperation and coordination with persons engaged in facilitating transactions in securities, and removes impediments to, and perfects the mechanism of, a free and open market and a national market system, both with respect to the functionality that prevents executions in such a circumstance and with respect to the addition of the rule text, because it makes clear to Users the operation of the Exchange in conjunction with the proposed changes to the System. The Exchange also believes its proposal to adopt Rule 11.10(a)(4)(D), which would be identical to EDGX Rule 11.10(a)(4)(D) and BZX Rule 11.13(a)(4)(D),\57\ promotes just and equitable principles of trade, fosters cooperation and coordination with persons engaged in facilitating transactions in securities, and removes impediments to, and perfects the mechanism of, a free and open market and a national market system. The proposed change is based on EDGX Rule 11.10(a)(4)(D) and BZX Rule 11.13(a)(4)(D) and sets forth how marketable orders that would otherwise not be executed under specific scenarios will be executed, thereby improving execution quality for participants sending orders to the Exchange. Further, the proposed change will help to provide price improvement to market participants, again, in scenarios that at times, such participants would potentially not receive executions on the Exchange. Thus, the Exchange believes that its proposed order handling process in the scenario described in this filing will benefit market participants and their customers by allowing them greater flexibility in their efforts to fill orders and minimize trading costs. The proposed rule change will also provide consistent handling for orders in such scenarios across the Exchange, EDGX, and BZX, thereby avoiding investor confusion and promoting just and equitable principles of trade. --------------------------------------------------------------------------- \56\ See supra note 14. \57\ Id. --------------------------------------------------------------------------- (B) Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that the proposal will provide consistent functionality across the BGM Affiliated Exchanges, thereby reducing complexity and streamlining duplicative functionality, resulting in simpler technology implementation, changes and maintenance by Users of the Exchange that are also participants on EDGX, BYX and BZX. Thus, the Exchange believes this proposed rule change is necessary to permit fair competition among national securities exchanges. In addition, the Exchange believes the proposed rule change will benefit Exchange participants in that it is designed to achieve a consistent technology offering by the BGM Affiliated Exchanges. 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 proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.\58\ --------------------------------------------------------------------------- \58\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange's 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 satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act normally does not become operative for 30 days after the date of its 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. Waiver of the 30-day operative delay would allow the Exchange to harmonize its rules across BGM Affiliated Exchanges in a timely manner, thereby simplifying the rules available to Members of the Exchange that are also participants on EDGX, BZX and BYX. Based on the foregoing, the Commission believes the waiver of the operative delay is consistent with the protection of investors and the public interest.\59\ The Commission hereby grants the waiver and designates the proposal operative upon filing. --------------------------------------------------------------------------- \59\ 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or 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 email to rule-comments@sec.gov. Please include File Number SR-EDGA-2015-33 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. [[Page 50701]] All submissions should refer to File Number SR-EDGA-2015-33. 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 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-EDGA-2015-33 and should be submitted on or before September 10, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\60\ --------------------------------------------------------------------------- \60\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-20544 Filed 8-19-15; 8:45 am] BILLING CODE P
![Federal Register / Vol. 80, No. 161 / Thursday, August 20, 2015 / Notices 50689
Exchange, as described in the proposal, Commission, 100 F Street NE., SECURITIES AND EXCHANGE
are influenced by these robust market Washington, DC 20549–1090. COMMISSION
forces and therefore must remain
competitive with fees charged and All submissions should refer to File [Release No. 34–75700; File No. SR–EDGA–
Number SR–Phlx–2015–68. This file 2015–33]
rebates paid by other venues and
therefore must continue to be reasonable number should be included on the
Self-Regulatory Organizations; EDGA
and equitably allocated to those subject line if email is used. To help the
Exchange, Inc.; Notice of Filing and
members that opt to direct orders to the Commission process and review your
Immediate Effectiveness of a Proposed
Exchange rather than competing venues. comments more efficiently, please use Rule Change to Rule 11.6, Definitions;
The Exchange believes that its only one method. The Commission will Rule 11.8, Order Types; Rule 11.9,
changes are pro-competitive. The post all comments on the Commission’s Priority of Orders; Rule 11.10, Order
proposed rebate changes, which are part Internet Web site (http://www.sec.gov/ Execution; and Rule 11.11, Routing to
of the Exchange’s overall fee structure, rules/sro.shtml). Away Trading Centers
are designed to ensure a fair and Copies of the submission, all
reasonable use of Exchange resources by August 14, 2015.
subsequent amendments, all written
allowing the Exchange to recoup costs Pursuant to Section 19(b)(1) of the
while continuing to attract liquidity and statements with respect to the proposed
Securities Exchange Act of 1934 (the
offer connectivity at competitive rates to rule change that are filed with the
‘‘Act’’),1 and Rule 19b-4 thereunder,2
Exchange members and member Commission, and all written notice is hereby given that on August
organizations. communications relating to the 11, 2015, EDGA Exchange, Inc. (the
proposed rule change between the ‘‘Exchange’’ or ‘‘EDGA’’) filed with the
C. Self-Regulatory Organization’s Commission and any person, other than
Statement on Comments on the Securities and Exchange Commission
those that may be withheld from the (‘‘Commission’’) the proposed rule
Proposed Rule Change Received From public in accordance with the
Members, Participants, or Others change as described in Items I and II
provisions of 5 U.S.C. 552, will be below, which Items have been prepared
No written comments were either available for Web site viewing and by the Exchange. The Exchange has
solicited or received. printing in the Commission’s Public designated this proposal as a ‘‘non-
III. Date of Effectiveness of the Reference Room, 100 F Street NE., controversial’’ proposed rule change
Proposed Rule Change and Timing for Washington, DC 20549, on official pursuant to Section 19(b)(3)(A) of the
Commission Action business days between the hours of Act 3 and Rule 19b-4(f)(6)(iii)
10:00 a.m. and 3:00 p.m. Copies of the thereunder,4 which renders it effective
The foregoing rule change has become
effective pursuant to section filing also will be available for upon filing with the Commission. The
19(b)(3)(A)(ii) of the Act.23 At any time inspection and copying at the principal Commission is publishing this notice to
within 60 days of the filing of the office of the Exchange. All comments solicit comments on the proposed rule
proposed rule change, the Commission received will be posted without change; change from interested persons.
summarily may temporarily suspend the Commission does not edit personal I. Self-Regulatory Organization’s
such rule change if it appears to the identifying information from Statement of the Terms of Substance of
Commission that such action is submissions. You should submit only the Proposed Rule Change
necessary or appropriate in the public information that you wish to make The Exchange filed a proposal to align
interest, for the protection of investors, available publicly. certain rules with similar rules of BATS
or otherwise in furtherance of the All submissions should refer to File Exchange, Inc. (‘‘BZX’’), BATS Y-
purposes of the Act. If the Commission Number SR–Phlx–2015–68 and should Exchange, Inc., (‘‘BYX’’), and EDGX
takes such action, the Commission shall
be submitted on or before September 10, Exchange, Inc. (‘‘EDGX’’). These
institute proceedings to determine
2015. changes are described in detail below
whether the proposed rule should be
and include amending: (i) Rule 11.6,
approved or disapproved. For the Commission, by the Division of
Trading and Markets, pursuant to delegated
Definitions; (ii) Rule 11.8, Order Types;
IV. Solicitation of Comments authority.24 (iii) Rule 11.9, Priority of Orders; (iv)
Interested persons are invited to Rule 11.10, Order Execution; and (v)
Robert W. Errett,
submit written data, views, and Rule 11.11, Routing to Away Trading
Deputy Secretary. Centers. The Exchange does not propose
arguments concerning the foregoing,
[FR Doc. 2015–20546 Filed 8–19–15; 8:45 am] to implement new or unique
including whether the proposed rule
change is consistent with the Act. BILLING CODE 8011–01–P functionality that has not been
Comments may be submitted by any of previously filed with the Commission or
the following methods: is not available on BZX, BYX, or EDGX.
The Exchange notes that the proposed
Electronic Comments rule text is based on BZX, BYX, and
• Use the Commission’s Internet EDGX rules and is different only to the
comment form (http://www.sec.gov/ extent necessary to conform to the
rules/sro.shtml); or Exchange’s current rules.
• Send an email to rule-comments@ The text of the proposed rule change
sec.gov. Please include File Number SR– is available at the Exchange’s Web site
tkelley on DSK3SPTVN1PROD with NOTICES
Phlx–2015–68 on the subject line. at www.batstrading.com, at the
principal office of the Exchange, and at
Paper Comments
• Send paper comments in triplicate 1 15 U.S.C. 78s(b)(1).
to Secretary, Securities and Exchange 2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
23 15 U.S.C. 78s(b)(3)(A)(ii). 24 17 CFR 200.30–3(a)(12). 4 17 CFR 240.19b–4(f)(6)(iii).
VerDate Sep<11>2014 17:31 Aug 19, 2015 Jkt 235001 PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 E:\FR\FM\20AUN1.SGM 20AUN1](https://thefederalregister.org/doc/80_FR_50850/page/1.svg)
![50692 Federal Register / Vol. 80, No. 161 / Thursday, August 20, 2015 / Notices
displayed or non-displayed ranked price and the Exchange’s BBO is $9.99 by liquidity from the Exchange if they
of an order with a Discretionary Range $10.06. If the Exchange receives a interact with contra-side liquidity.
instruction will be posted to the EDGA routable order with a Discretionary
Re-Pricing Instructions To Comply With
Book and then the order with a Range instruction to buy at $10.00 with
Rule 610(d) of Regulation NMS
Discretionary Range instruction would discretion to pay up to an additional
remove liquidity against such posted $0.05 per share, the Exchange would The Exchange proposes to amend its
order. route the order as a limit order to buy re-pricing instructions to comply with
at $10.05. Any unexecuted portion of Rule 610(d) of Regulation NMS as
Examples—Order With a Discretionary follows: (i) Amend the Price Adjust
the order would be posted to the EDGA
Instruction Executes Against an Order instruction under Rule 11.6(l)(1)(A) to:
Book with a ranked price of $10.00 and
Without a Post Only Instruction (A) Divide the rule into subparagraphs
discretion to pay up to $10.05.
Assume that the NBBO is $10.00 by The Exchange notes that it has (i), (ii), and (iii); (B) clarify the order
$10.05, and the Exchange’s BBO is $9.99 historically treated orders with a must be a Locking Quotation 23 or
by $10.06. Assume that the Exchange Discretionary Range instruction as Crossing Quotation 24 of an external
receives an order to buy 100 shares of relatively passive orders and as orders market; and (C) propose new
a security at $10.00 per share designated that, once posted to the EDGA Book, subparagraph (iv) described below; and
with discretion to pay up to an would in all cases be treated as the (ii) amend the Displayed Price Sliding
additional $0.05 per share. liquidity provider. The changes instruction under Rule 11.6(l)(1)(B) to:
• Assume that the next order received proposed above will change the (A) Change references from ‘‘Displayed
by the Exchange is an order with a Book handling of orders with a Discretionary Price Sliding’’ to ‘‘Display-Price
Only instruction 21 to sell 100 shares of Range instruction such that such orders Sliding’’; (B) replace the text of Rule
the security with a TIF other than IOC are more aggressive and, thus, such 11.6(l)(1)(B) with text that is
or FOK priced at $10.03 per share. The orders will execute on the Exchange in substantially similar to BZX and BYX
order with a Book Only instruction additional circumstances than they do Rules 11.19(g)(1) and identical to EDGX
would not remove any liquidity upon currently without regard to such orders’ Rule 11.6(l)(1)(B).
entry and would post to the EDGA Book status as resting orders. In turn, orders
at $10.03. This would, in turn, trigger Price Adjust Re-Pricing (Rule
with a Discretionary Range instruction 11.6(l)(1)(A))
the discretion of the resting buy order resting on the EDGA Book may be
and an execution would occur at $10.03. treated as liquidity removers under Under the Price Adjust instruction,
The order with a Book Only instruction certain circumstances, as outlined where a buy (sell) order would be a
to sell would be treated as the adder of above. Locking Quotation or Crossing
liquidity and the buy order with Quotation if displayed by the System on
discretion would be treated as the Re-Pricing (Rule 11.6(l)) the EDGA Book at the time of entry, the
remover of liquidity. The Exchange currently offers re- order will be displayed and ranked 25 at
• Assume the same facts as above, but pricing instructions which, in all cases, a price that is one Minimum Price
that the incoming order with a Book result in the ranking and/or display of Variation lower (higher) than the
Only instruction is priced at $10.00 an order at a price other than its limit Locking Price.26 The Exchange proposes
instead of $10.03. The order with a Book price in order to comply with applicable to modify the operation of the Price
Only instruction would remove securities laws and Exchange Rules. Adjust instruction such that an order
liquidity upon entry at $10.00 per share Specifically, the Exchange currently must be a Locking Quotation or Crossing
pursuant to the Exchange’s order offers re-pricing instructions to ensure Quotation of an external market, not the
execution rule.22 Contrary to the compliance with Regulation NMS and EDGA Book, in order be eligible for the
examples set forth above, the order with Regulation SHO. The re-pricing re-pricing. This change will provide
a Book Only instruction to sell would be instructions currently offered by the additional specificity within the
treated as the liquidity remover and the Exchange re-price and display an order Exchange’s rules regarding the
resting buy order with discretion would upon entry and in certain cases again re- applicability of the Price Adjust
be treated as the liquidity adder. The price and re-display an order at a more
Exchange notes that this example aggressive price based on changes in the 23 The term ‘‘Locking Quotation’’ is defined as
operates the same whether an order NBBO. Rule 11.6(l) sets forth the re- ‘‘[t]he display of a bid for an NMS stock at a price
that equals the price of an offer for such NMS stock
contains a TIF of IOC, FOK or any other pricing instructions currently available previously disseminated pursuant to an effective
TIF. to Users with regard to Regulation NMS national market system plan, or the display of an
Finally, because orders with a compliance—Price Adjust, and Display- offer for an NMS stock at a price that equals the
Discretionary Range instruction have Price Sliding, as well as a separate re- price of a bid for such NMS stock previously
disseminated pursuant to an effective national
both a price at which they will be pricing process with regard to market system plan in violation of Rule 610(d) of
ranked and an additional discretionary Regulation SHO compliance. As Regulation NMS.’’ See Exchange Rule 11.6(g).
price, the Exchange proposes to described below, the Exchange now 24 The term ‘‘Crossing Quotation’’ is defined as
expressly state how the Exchange proposes to amend its re-pricing ‘‘[t]he display of a bid (offer) for an NMS stock at
a price that is higher (lower) than the price of an
handles a routable order with a instructions to align and streamline offer (bid) for such NMS stock previously
Discretionary Range instruction by Exchange rules with those of BZX, BYX, disseminated pursuant to an effective national
stating that such an order will be routed and EDGX. As above, the Exchange market system plan in violation of Rule 610(d) of
away from the Exchange at its full notes that the proposed changes are Regulation NMS.’’ See Exchange Rule 11.6(c).
25 For purposes of the description of the re-
discretionary price. As an example, intended to clarify and enhance
pricing instructions under proposed Rule 11.6(l),
tkelley on DSK3SPTVN1PROD with NOTICES
assume the NBBO is $10.00 by $10.05 Exchange Rules or to align such Rules the terms ‘‘ranked’’ and ‘‘priced’’ are synonymous
with the other BGM Affiliated and used interchangeably.
21 The term ‘‘Book Only’’ is defined as an ‘‘order
Exchanges but will not modify the 26 The term ‘‘Locking Price’’ is defined as ‘‘[t]he
instruction stating that an order will be matched current operation of the System because price at which an order to buy (sell), that if
against an order on the EDGA Book or posted to the displayed by the System on the EDGA Book, either
EDGA Book, but will not route to an away Trading of the Exchange’s current fee structure upon entry into the System, or upon return to the
Center.’’ See Exchange Rule 11.6(n)(3). and because all orders with a Post Only System after being routed away, would be a Locking
22 See Exchange Rule 11.10. instruction currently will remove Quotation.’’ See Exchange Rule 11.6(f).
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instruction as well as align the assume the NBBO is $10.00 by $10.01 one Minimum Price Variation lower
description with the Price Adjust and an order to sell at $10.01 is resting (higher) than the Locking Price for
process described under BZX and BYX on the EDGA Book. Further assume that orders to buy (sell). A User may elect for
Rules 11.9(g)(2),27 and EDGX Rule no other Trading Center 29 is displaying the Display-Price Sliding instruction to
11.6(l)(1)(A). This change is also an order to sell at $10.01. Assume that only apply where their display-eligible
consistent with display-price sliding on the Exchange receives an order to buy order would be a Locking Quotation of
BZX and Display-Price Sliding with a Post Only instruction and Price an external market upon entry (‘‘Lock
discussed below, under which orders Adjust instruction at $10.01. The Only’’). In such cases, the User’s
are only re-priced where they are a incoming order to buy will be cancelled display-eligible order will be cancelled
Locking Quotation or Crossing unless, pursuant to Rule 11.6(n)(4), the if the order would be a Crossing
Quotation of an external market, and not value of such execution when removing Quotation of an external market upon
the BZX order book or EDGA Book, as liquidity equals or exceeds the value of entry.
applicable. Other than as described such execution if the order instead For example, assume the Exchange
above, these provisions will remain posted to the EDGA Book and has a posted and displayed bid to buy
unchanged and be set forth under subsequently provided liquidity. The at $10.10 and a posted and displayed
subparagraph (i), so that the Exchange incoming order to buy will not be offer to sell $10.13. Assume the NBBO
may renumber the following provisions posted to the EDGA Book and re-priced is $10.10 by $10.12. If the Exchange
of Rule 11.6(l)(1)(A) as set forth below. pursuant to the Price Adjust instruction. receives an order with a Book Only
The Exchange proposes to restructure instruction to buy at $10.12, the
the provisions of the current rule by Displayed Price Sliding (Rule Exchange will rank the order to buy at
separating rule text and adopting 11.6(l)(1)(B)) $10.12 and display the order at $10.11
additional subparagraph references, The Exchange proposes to amend the because displaying the bid at $10.12
subparagraph (ii) and (iii). Displayed Price Sliding instruction would cause it to be a Locking
The Exchange also proposes to add under Rule 11.6(l)(1)(B) to: (A) change Quotation of an external market’s
new subparagraph (iv) to Rule the name from ‘‘Displayed Price Protected Offer to sell for $10.12. If the
11.6(l)(1)(A) which would cover where Sliding’’ to ‘‘Display-Price Sliding’’; and NBO then moved to $10.13, the
an order with a Price Adjust instruction (B) replace the text of Rule 11.6(l)(1)(B) Exchange would un-slide the bid to buy
and a Post Only instruction would be a with text that is identical to BZX Rule and display it at its ranked price (and
Locking Quotation or Crossing 11.19(g)(1), BYX Rule 11.9(g)(1), and limit price) of $10.12.
Quotation of the Exchange. The EDGX Rule 11.6(l)(1)(B). The Exchange As an example of the Lock-Only
proposed amendments to Rule does not propose to modify the option for Display-Price Sliding, assume
11.6(l)(1)(A) are based on BZX and BYX operation of Display-Price Sliding. It the Exchange has a posted and
Rules 11.9(g)(2)(D) and are identical to simply seeks to replace the rule text displayed bid to buy at $10.10 and a
EDGX Rule 11.6(l)(1)(A)(iv). To the with of Rule 11.6(l)(1)(B) with text that posted and displayed offer to sell at
extent the amended text of Exchange is substantially similar to BZX and BYX $10.14. Assume the NBBO is $10.10 by
Rule 11.6(l)(1)(A) differs from BZX and Rules 11.9(g)(1) and identical to EDGX $10.12. If the Exchange receives an
BYX Rules 11.9(g)(2)(D), such Rule 11.6(l)(1)(B). The Display-Price order with a Book Only instruction to
differences are necessary to conform the Sliding instruction operates in an buy 100 shares at $10.13 and the User
rule with existing rule text. identical manner as the Display-Price has elected the Lock-Only option for
As noted above, an order subject to Sliding instruction on EDGX and the Display-Price Sliding, the Exchange will
the Price Adjust instruction will only be display price sliding process on BZX cancel the order back to the User. To
re-priced where it would be a Locking and BYX. To the extent the amended reiterate a basic example of Display-
Quotation of Crossing Quotation of an text of Exchange Rule 11.6(l)(1)(B) Price Sliding, if instead the User applied
external market, and not the Exchange. differs from BZX and BYX Rules Display-Price Sliding (and not the Lock-
In such case, any display-eligible order 11.9(g)(1), such differences are Only option for Display-Price Sliding),
with a Price Adjust instruction and a necessary to conform the rule to existing the Exchange would rank the order to
Post Only instruction that would be a rule text. The Exchange does not buy at $10.12 and display the order at
Locking Quotation or Crossing propose to modify the operation of the $10.11 because displaying the bid at
Quotation of the Exchange upon entry re-pricing of orders with a Non- $10.13 would cause it to be a Crossing
will be executed as set forth in Rule Displayed instruction. Replacing the Quotation of an external market’s
11.6(n)(4) 28 or cancelled. For example, rule text would enable the Exchange to Protected Offer to sell for $10.12. If the
include substantially similar or NBO then moved to $10.13, the
27 The description of the Price Adjust process
identical rule text describing processes Exchange would un-slide the bid to buy
under BATS Rule 11.9(g)(2), states that ‘‘[a]n order that operate in the same manner across and display it at $10.12.
eligible for display by the Exchange that, at the time
of entry, would create a violation of Rule 610(d) of each of the BGM Affiliated Exchanges, An order subject to the Display-Price
Regulation NMS by locking or crossing a Protected thus avoiding potential confusion. Sliding instruction retains its original
Quotation of an external market will be ranked and In sum, Display-Price Sliding is an limit price irrespective of the prices at
displayed by the System at one minimum price order instruction requiring that where which such order is ranked and
variation below the current NBO (for bids) or to one
minimum price variation above the current NBB
an order would be a Locking Quotation displayed. An order subject to the
(for offers) . . .’’ (emphasis added). Thus, an order or Crossing Quotation of an external Display-Price Sliding instruction is
will only be re-priced pursuant to its Price Adjust market if displayed by the System on displayed at the most aggressive price
process where it locks or crosses a Protected the EDGA Book at the time of entry, possible and receives a new time stamp
Quotation of an external market, and not BATS. The
tkelley on DSK3SPTVN1PROD with NOTICES
Exchange notes that this reflects a recent change to
such order will be ranked at the Locking should the NBBO change such that the
BATS Rule 11.9(g)(2). See Securities Exchange Act Price and displayed by the System at order would no longer be a Locking
Release No. 75324 (June 29, 2015) (SR–BATS– Quotation or Crossing Quotation of an
2015–47) (Notice of Filing and Immediate 29 The term ‘‘Trading Center’’ is defined as
external market. All orders that are re-
Effectiveness of a Proposed Rule Change to Amend ‘‘[o]ther securities exchanges, facilities of securities
Rule 11.9 of BATS Exchange, Inc., to Modify its exchanges, automated trading systems, electronic
ranked and re-displayed pursuant to the
Price Adjust Functionality). communications networks or other broker dealers.’’ Display-Price Sliding instruction retain
28 See supra notes 19 and 20. See Exchange Rule 11.6(r). their priority as compared to other
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![50694 Federal Register / Vol. 80, No. 161 / Thursday, August 20, 2015 / Notices
orders subject to the Display-Price displayed bid to buy at $10.10 and a by $10.12. If the Exchange receives an
Sliding instruction based upon the time posted and displayed offer to sell at order with a Post Only instruction to
such orders were initially received by $10.14. Assume the NBBO is $10.10 by buy at $10.12 per share, unless executed
the Exchange. Following the initial $10.12. If the Exchange receives an pursuant to Rule 11.6(n)(4),32 the
ranking and display of an order subject order with a Book Only instruction to Exchange would cancel the order back
to the Display-Price Sliding instruction, buy at $10.13, the Exchange would rank to the User because absent the order
an order will only be re-ranked and re- the order to buy at $10.12 and display with a Post Only instruction, the order
displayed to the extent it achieves a the order at $10.11 because displaying to buy at $10.12 would be able to
more aggressive price, provided, the bid at $10.13 would cause it to be remove the order to sell $10.12, and, as
however, that the Exchange will re-rank a Crossing Quotation of an external explained above, the Exchange would
an order at its displayed price in the market’s Protected Offer to sell for no longer offer re-pricing to avoid
event such order’s displayed price $10.12. If the NBO then moved to executions against orders displayed by
would be a Locking Quotation or $10.13, the Exchange would un-slide the Exchange.
Crossing Quotation. Such event will not the bid to buy, rank it at $10.13 and If the Exchange did not have a
result in a change in priority for the display it at $10.12. Where the User did displayed offer to sell at $10.12 in the
order at its displayed price. This will not elect the multiple re-pricing option example above, but instead the best
avoid the potential of a ranked price for Display-Price Sliding, the Exchange offer on the EDGA Book was $10.13, the
that crosses the Protected Quotation would not further adjust the ranked or Exchange would apply Display-Price
displayed by such external market, displayed price following this un-slide. Sliding to the incoming order to buy by
which could, in turn, lead to a trade However, under the multiple re-pricing ranking such order at $10.12 and
through of such Protected Quotation at option, if the NBO then moved to displaying the order at $10.11. The
such ranked price. The Exchange notes $10.14, the Exchange would un-slide EDGA Book would now be displayed as
that, as described below, when an the bid to buy and display it at its full $10.11 by $10.13. Assume, however,
external market crosses the Exchange’s limit price of $10.13. that after price sliding the incoming
Protected Quotation and the Exchange’s Pursuant to proposed Rule order to buy from $10.12 to a display
Protected Quotation is a displayed order 11.6(l)(1)(B)(iv), any display-eligible price of $10.11, the Exchange received
subject to Display-Price Sliding, the order with a Post Only instruction that an order with a Post Only instruction to
Exchange re-ranks such order at the would be a Locking Quotation or sell at $10.12, thus joining the NBO. The
displayed price. Thus, the order Crossing Quotation of the Exchange order with a Post Only instruction
displayed by the Exchange will still be upon entry will be executed as set forth would be permitted to post and be
ranked and permitted to execute at a in Rule 11.6(n)(4) or cancelled. displayed opposite the ranked price of
price that is consistent with Rule Consistent with the principle of not re- orders subject to display-price sliding.
611(b)(4) of Regulation NMS.30 pricing orders to avoid executions, in Accordingly, the Exchange would allow
The ranked and displayed prices of an the event the NBBO changes such that such incoming order with a Post Only
order subject to the Display-Price an order with a Post Only instruction instruction to sell at $10.12 to post and
Sliding instruction may be adjusted subject to Display-Price Sliding display on the EDGA Book, as described
once or multiple times depending upon instruction would be ranked at a price above, with an opposite side order
the instructions of a User and changes at which it could remove displayed subject to Display-Price Sliding
to the prevailing NBBO. Multiple re- liquidity from the EDGA Book, the order displayed at $10.11. Assume that the
pricing is optional and must be will be executed as set forth in Rule next Protected Offer displayed by all
explicitly selected by a User before it 11.6(n)(4) or cancelled.31 external markets other than the
will be applied. The Exchange’s default Pursuant to proposed Rule Exchange moved to $10.13. In this
Display-Price Sliding instruction will 11.6(l)(1)(B)(v), an order with a Post situation the Exchange would un-slide
only adjust the ranked and displayed Only instruction will be permitted to but then cancel the bid at $10.12
prices of an order upon entry and then post and be displayed opposite the because, as proposed, in the event the
the displayed price one time following ranked price of orders subject to NBBO changes such that an order with
a change to the prevailing NBBO, Display-Price Sliding instruction. In the a Post Only instruction subject to
provided however, that if such an event an order subject to the Display- Display-Price Sliding would un-slide
order’s displayed price becomes a Price Sliding instruction is ranked on and would be ranked at a price at which
Locking Quotation or Crossing the EDGA Book with a price equal to an it could remove displayed liquidity
Quotation then the Exchange will adjust opposite side order displayed by the from the EDGA Book (i.e., when the
the ranked price of such order and it Exchange, it will be subject to Exchange is at the NBB or NBO) the
will not be further re-ranked or re- processing as set forth in Rule Exchange proposes to execute 33 or
displayed at any other price. Orders 11.10(a)(4), which is described in cancel such order.
subject to the optional multiple price greater detail below. Re-Pricing Instructions To Comply With
sliding process will be further re-ranked For example, assume the Exchange Rule 201 of Regulation SHO
and re-displayed as permissible based has a posted and displayed bid to buy
Under Rule 11.6(l)(2), an order to sell
on changes to the prevailing NBBO. at $10.10 and a posted and displayed
with a Short Sale instruction that, at the
As an example of the multiple re- offer to sell at $10.12. Assume the
time of entry, could not be executed or
pricing option for Display-Price Sliding, NBBO (including Protected Quotations
displayed in compliance with Rule 201
assume the Exchange has a posted and of other external markets) is also $10.10
of Regulation SHO will be re-priced by
tkelley on DSK3SPTVN1PROD with NOTICES
30 17 CFR 242.611(b)(4). See also See also 31 As noted above, the Exchange will execute an
the System at the Permitted Price.34 The
Securities Exchange Act Release Nos. 64475 (May order with a Post Only instruction in certain
32 Id.
12, 2011), 76 FR 28830, 28832 (May 18, 2011) (SR– circumstances where the value of such execution
BATS–2011–015); 67657 (August 14, 2012), 77 FR when removing liquidity equals or exceeds the 33 Id.
50199 (August 20, 2012) (SR–BATS–2012–035); value of such execution if the order instead posted 34 The term ‘‘Permitted Price’’ is defined as ‘‘[t]he
68791 (January 31, 2013), 78 FR 8617 (February 6, to the EDGA Book and subsequently provided price at which a sell order will be displayed at one
2013) (SR–BATS–2013–007) (‘‘BATS Display-Price liquidity, including the applicable fees charged or Minimum Price Variation above the NBB.’’ See
Sliding Releases’’). rebates provided. See supra notes 19 and 20. Exchange Rule 11.6(k).
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![Federal Register / Vol. 80, No. 161 / Thursday, August 20, 2015 / Notices 50695
default short sale re-pricing process will pricing instructions to comply with an away Trading Center crosses the
only re-price an order upon entry and Rule 201 of Regulation SHO will apply. limit price of the order resting on the
one additional time to reflect a decline The Exchange does not propose this EDGA Book. Based on BZX Rule
in the NBB. Depending upon the change to alter the meaning of Rule 11.13(a)(4)(A), the Exchange proposes to
instructions of a User, to reflect declines 11.6(l)(2)(D), but rather, to align the also amend Rule 11.6(n)(1) to state that
in the NBB the System will continue to language with BZX and BYX Rule any routable order with a Non-
re-price and re-display a short sale order 11.9(g) and EDGX Rule 11.6(l)(2)(D) in Displayed instruction that is resting on
at the Permitted Price down to the order to provide consistent rules across the EDGA Book and is crossed by an
order’s limit price. In the event the NBB the Exchange and BZX. away Trading Center will be
changes such that the price of an order automatically routed to the Trading
Re-Pricing of Orders With a Non-
with a Non-Displayed instruction Center displaying the Crossing
Displayed Instruction (Rule 11.6(l)(3))
subject to Rule 201 of Regulation SHO Quotation. To the extent the amended
would be a Locking Quotation or The Exchange proposes to amend text of Exchange Rule 11.6(n)(1) differs
Crossing Quotation, the order will Rule 11.6(l)(3) to align with BZX and from BZX Rule 11.13(a)(4)(A), such
receive a new time stamp, and will be BYX Rules 11.9(g)(4) and to be identical differences are necessary to conform the
re-priced by the System to the mid-point to EDGX Rule 11.6(l)(3). To the extent rule with existing rule text. Lastly, the
of the NBBO. the amended text of Exchange Rule proposed rule text is identical to EDGX
Rule 11.6(l)(2) states that: (i) When a 11.6(l)(3) differs from BZX and BYX Rule 11.6(l)(1).
Short Sale Circuit Breaker is in effect, Rules 11.9(g)(4), such differences are
the System will execute a sell order necessary to conform the rule to existing Super Aggressive (Rule 11.6(n)(2))
with a Displayed and Short Sale rule text. The Exchange does not Super Aggressive is an order
instruction at the price of the NBB if, at propose to modify the operation of the instruction that directs the System to
the time of initial display of the sell re-pricing of orders with a Non- route an order when an away Trading
order with a Short Sale instruction, the Displayed instruction. It simply seeks to Center locks or crosses the limit price of
order was at a price above the then replace the rule text with of Rule the order resting on the EDGA Book. A
current NBB; (ii) orders with a Short 11.6(l)(3) with text that is substantially User may designate an order as Super
Exempt instruction will not be subject similar to BZX and BYX Rules 11.9(g)(4) Aggressive solely to routable orders
to re-pricing under amended Rule and identical to EDGX Rule 11.6(l)(3). posted to the EDGA Book with
11.6(l)(2); and (iii) the re-pricing The re-re-pricing of orders with a Non- remaining size of an Odd Lot. Based on
instructions to comply with Rule 610(d) Displayed instruction operates in an BZX Rule 11.13(b)(4)(C),35 the Exchange
of Regulation NMS will continue to be identical manner as the repricing of proposes to amend Rule 11.6(n)(2) to
ignored for an order to sell with a Short non-displayed orders on BZX, BYX, and state that when any order with a Super
Sale instruction when a Short Sale EDGX. Replacing the rule text would Aggressive instruction is locked by an
Circuit Breaker is in effect and the re- enable the Exchange to include incoming order with a Post Only
pricing instructions to comply with substantially similar or identical rule instruction that does not remove
Rule 201 of Regulation SHO under this text describing processes that operate in liquidity pursuant to Rule 11.6(n)(4),36
Rule will apply. the same manner across each of the the order with a Super Aggressive
The Exchange proposes to make the BGM Affiliated Exchanges. instruction would be converted to an
below changes to align the description In sum, Rule 11.6(l)(2) would state executable order and will remove
of the Exchange’s short sale re-pricing that in order to avoid potentially trading liquidity against such incoming order.
process under Rule 11.6(l)(2) with BZX through Protected Quotations of Rule 11.6(n)(2) would further state that
and BYX Rules 11.9(g)(5) and EDGX external markets, any order with a Non- notwithstanding the foregoing, if an
Rule 11.6(l)(2). Specifically, the Displayed instruction that is subject to order that does not contain a Super
Exchange proposed to amend Rule the Display-Price Sliding or Price Adjust Aggressive instruction maintains higher
11.6(l)(2)(A) to remove the last sentence instruction would be ranked at the priority than one or more Super
which states that, ‘‘[a]n order to sell Locking Price on entry. In the event the Aggressive eligible orders, the Super
with a Short Sale instruction that is re- NBBO changes such that an order with Aggressive eligible order(s) with lower
priced pursuant to this paragraph will a Non-Displayed instruction subject to priority will not be converted, as
be ranked at the Permitted Price.’’ No the Display-Price Sliding or Price Adjust described above, and the incoming
such phrase is included in the BZX and instruction would cross a Protected order with a Post Only instruction will
BYX Rules 11.9(g)(5)(A) or EDGX Rule Quotation of an external market, the be posted or cancelled in accordance
11.6(l)(2). The Exchange also believes order will receive a new time stamp, with Rule 11.6(n)(4). To the extent the
this sentence is superfluous, as the and will be ranked by the System at the amended text of Exchange Rule
description of the short sale re-pricing Locking Price. In the event an order 11.6(n)(2) differs from BZX Rule
process currently references to which with a Non-Displayed instruction has 11.13(b)(4)(C), such differences are
prices such orders are to be re-priced been re-priced by the System, such necessary to conform the rule with
and the price of such orders is the order with a Non-Displayed instruction existing rule text. Lastly, the proposed
equivalent to the price at which the is not re-priced by the System unless it
order is to be ranked on the EDGA Book again would cross a Protected Quotation 35 See supra note 14.
for purposes of Exchange Rule 11.9. The of an external market. This functionality 36 As noted above, the Exchange will execute an
Exchange also proposes to amend Rule is equivalent to the handling of order with a Post Only instruction where the value
11.6(l)(2)(D) to align with BZX and BYX of such execution when removing liquidity equals
displayable orders pursuant to the or exceeds the value of such execution if the order
tkelley on DSK3SPTVN1PROD with NOTICES
Rules 11.9(g)(6) and EDGX Rule Display-Price Sliding instruction except instead posted to the EDGA Book and subsequently
11.6(l)(2)(D) to state that where an order that such orders will not have a provided liquidity, including the applicable fees
is subject to either a Display-Price displayed price. charged or rebates provided. See supra note 19. As
Sliding instruction or a Price Adjust is also noted above, based on the Exchange’s
instruction and also contains a Short Aggressive (Rule 11.6(n)(1)) current fee structure, currently all orders with a
Post Only instruction remove liquidity on entry if
Sale instruction when a Short Sale Aggressive is an order instruction that there is available contra-side liquidity. See supra
Circuit Breaker is in effect, the re- directs the System to route the order if note 20.
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![Federal Register / Vol. 80, No. 161 / Thursday, August 20, 2015 / Notices 50699
Rule 11.10. The change proposed above rules only to extent necessary to Act,50 as well as Rule 610 of Regulation
was recently approved with respect to conform to existing Exchange rule text. NMS 51 and Rule 201 of Regulation
the analogous rule of BZX, specifically Where possible, the Exchange has SHO.52 Rule 610(d) requires exchanges
Rule 11.13, as amended.45 mirrored EDGX, BYX, or BZX rules, to establish, maintain, and enforce rules
because consistent rules will simplify that require members reasonably to
Implementation Date
the regulatory requirements and avoid ‘‘[d]isplaying quotations that lock
The Exchange intends to implement increase the understanding of the or cross any protected quotation in an
the proposed rule change Exchange’s operations for Members of NMS stock.’’ 53 Such rules must be
immediately.46 the Exchange that are also participants ‘‘reasonably designed to assure the
2. Statutory Basis on EDGX, BZX, and BYX. As such, the reconciliation of locked or crossed
proposed rule change would foster quotations in an NMS stock,’’ and must
The Exchange believes that the cooperation and coordination with ‘‘prohibit . . . members from engaging
proposed rule changes are consistent persons engaged in facilitating in a pattern or practice of displaying
with Section 6(b) of the Act 47 and transactions in securities and would quotations that lock or cross any
further the objectives of Section 6(b)(5) remove impediments to and perfect the quotation in an NMS stock.’’ 54 These
of the Act 48 because they are designed mechanism of a free and open market changes will provide additional
to promote just and equitable principles and a national market system. specificity within the Exchange’s rules
of trade, to remove impediments to and In addition to the specific rules regarding the operation of the
perfect the mechanism of a free and discussed below, the Exchange also Exchange’s re-pricing options The
open market and a national market believes that the proposed amendments proposed rule change will also align the
system, to foster cooperation and to clarify and re-structure the descriptions of the Exchange’s re-
coordination with persons engaged in Exchange’s priority, execution and repricing options under Rule 11.6(l)
facilitating transactions in securities, routing rules will contribute to the with EDGX’s re-pricing options under
and, in general, to protect investors and protection of investors and the public EDGX Rule 11.6(l) and BZX’s price
the public interest. The proposed rule interest by making the Exchange’s rules sliding processes described under BZX
change also is designed to support the easier to understand. Rule 11.9(g).
principles of Section 11A(a)(1) 49 of the Definitions (Rule 11.6). The Order Types (Rule 11.8). The
Act in that it seeks to assure fair modifications related to Discretionary Exchange believes that the proposed
competition among brokers and dealers Range, Pegged instructions, Re-Pricing, changes to its order types under Rule
and among exchange markets. Aggressive, Super Aggressive, Post 11.8 are consistent with Section 6(b)(5)
The proposed rule changes are Only, as well as TIFs of IOC and FOK, of the Act,55 because they are intended
generally intended to better align certain are each designed to better align certain to align their operation with the
Exchange rules with those currently in Exchange rules and system functionality operation of identical order types on
place on EDGX, BZX, and BYX in order with that currently offered by EDGX, EDGX and BZX, thereby fostering
to provide a consistent rule set and BYX and BZX in order to provide a cooperation and coordination with
functionality across the BGM Affiliated consistent functionality across the BGM persons engaged in facilitating
Exchanges. As noted above, the Affiliated Exchanges. Specifically, the transactions in securities and removing
proposed changes will not result in any Exchange believes that the proposed impediments to and perfecting the
changes to the way the System operates rule changes will provide additional mechanism of a free and open market
due to the Exchange’s current fee clarity and specificity regarding the and a national market system.
structure. However, by making the rule functionality of the System and provide The Exchange believes its proposed
change, the Exchange will be in position Users with consistent rules across the amendments to the description of Limit
to support such functionality BGM Affiliated Exchanges, and thus Orders under Rule 11.8(b) is reasonable
immediately in the event the Exchange’s would promote just and equitable because it aligns their operation with
fee structure changes in the future. principles of trade and remove existing EDGX and BZX rules and
Consistent functionality across the BGM impediments to a free and open market. functionality as well as to reflect the
Affiliated Exchanges will reduce In particular, the Exchange believes it relevant proposed changes discussed
complexity and streamline duplicative is consistent with the Act to execute above. Therefore, the proposed rule
functionality, thereby resulting in orders with a Discretionary Range change promotes just and equitable
simpler technology implementation, instruction and orders with a Super principles of trade because it will avoid
changes and maintenance by Users of Aggressive instruction against investor confusion by providing the
the Exchange that are also participants marketable liquidity (i.e., order with a identical default behavior across the
on EDGX, BZX, and BYX. The proposed Post Only instruction) when an Exchange, EDGA and BZX.
rule changes do not propose to execution would not otherwise occur is Priority (Rule 11.9). The Exchange
implement new or unique functionality consistent with both: (i) The Act, by believes its proposed amendments to
that has not been previously filed with facilitating executions, removing Rule 11.9 regarding the priority of
the Commission or is not available on impediments and perfecting the orders promotes just and equitable
EDGX, BZX or BYX. The Exchange mechanism of a free and open market principles of trade, remove
notes that the proposed rule text is and national market system; and (ii) a impediments to, and perfect the
based on applicable BZX and BYX rules User’s instructions, which have mechanism of, a free and open market
and substantially similar to applicable evidenced a willingness by the User to and a national market system by
EDGX rules; the proposed language of pay applicable execution fees and/or providing Members, Users, and the
tkelley on DSK3SPTVN1PROD with NOTICES
the Exchange’s Rules differs from EDGX execute at more aggressive prices than
50 15 U.S.C. 78f(b)(5).
45 Id.
they are currently ranked in favor of an 51 17 CFR 242.610.
46 Id.
execution. 52 17 CFR 242.201.
47 15 U.S.C. 78f(b).
The Exchange also believes that the 53 17 CFR 242.610(d).
48 15 U.S.C. 78f(b)(5). proposed changes to Rule 11.6(l) are 54 Id.
49 15 U.S.C. 78k–1(a)(1). consistent with Section 6(b)(5) of the 55 15 U.S.C. 78f(b)(5).
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![Federal Register / Vol. 80, No. 161 / Thursday, August 20, 2015 / Notices 50701
All submissions should refer to File ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 The FXE and FXY hold euros and
Number SR–EDGA–2015–33. This file notice is hereby given that, on July 30, Japanese yen, respectively, and issue
number should be included on the 2015, NYSE Arca, Inc. (the ‘‘Exchange’’ shares in baskets of 50,000 shares
subject line if email is used. To help the or ‘‘NYSE Arca’’) filed with the (‘‘Baskets of Shares’’) in exchange for
Commission process and review your Securities and Exchange Commission deposits of euros or yen, respectively.
comments more efficiently, please use (the ‘‘Commission’’) the proposed rule Each Trust redeems Baskets of Shares
only one method. The Commission will change as described in Items I, II.A, II.B, and distributes euros or yen,
post all comments on the Commission’s and III below, which Items have been respectively. The shares of FXE and
Internet Web site (http://www.sec.gov/ prepared by the Exchange. The FXY (‘‘Shares’’) represent units of
rules/sro.shtml). Copies of the Commission is publishing this notice to fractional undivided beneficial interests
submission, all subsequent solicit comments on the proposed rule in the assets held by the relevant Trust.
amendments, all written statements change from interested persons. The investment objective of each Trust
with respect to the proposed rule I. Self-Regulatory Organization’s is for a Trust’s Shares to reflect the price
change that are filed with the Statement of the Terms of Substance of (in U.S. dollars (‘‘USD’’)) of the foreign
Commission, and all written the Proposed Rule Change currency held by a Trust, plus accrued
communications relating to the interest and less the expenses and
proposed rule change between the The Exchange proposes a rule change liabilities of such Trust. The Shares are
Commission and any person, other than relating to implementation of a fee on intended to provide institutional and
those that may be withheld from the securities lending and repurchase retail investors with a simple, cost-
public in accordance with the transactions with respect to shares of effective means of including in their
provisions of 5 U.S.C. 552, will be the CurrencyShares® Euro Trust and the investment portfolio economic exposure
available for Web site viewing and CurrencyShares® Japanese Yen Trust, to a particular foreign currency to, for
printing in the Commission’s Public which are currently listed and traded on example, hedge foreign currency risk in
Reference Room, 100 F Street NE., the Exchange under NYSE Arca Equities other portfolio assets or against U.S.
Washington, DC 20549, on official Rule 8.202. The text of the proposed dollar fluctuations more generally.
business days between the hours of rule change is available on the As Sponsor of the Trusts, Guggenheim
10:00 a.m. and 3:00 p.m. Copies of the Exchange’s Web site at www.nyse.com, receives a management fee, which is
filing will also be available for at the principal office of the Exchange, intended to compensate Guggenheim for
inspection and copying at the principal and at the Commission’s Public its service as Sponsor and to cover
office of the Exchange. All comments Reference Room. certain Trust expenses. The
received will be posted without change; II. Self-Regulatory Organization’s management fee is paid monthly out of
the Commission does not edit personal Statement of the Purpose of, and a Trust’s assets and calculated as a
identifying information from Statutory Basis for, the Proposed Rule percentage of the currency held by each
submissions. You should submit only Change Trust. With regard to the Euro Trust and
information that you wish to make Yen Trust, Guggenheim’s fee accrues
In its filing with the Commission, the
available publicly. All submissions daily at an annual nominal rate of
self-regulatory organization included
should refer to File Number SR–EDGA– 0.40% of the euros and yen in each
statements concerning the purpose of,
2015–33 and should be submitted on or Trust, respectively. As described below,
and basis for, the proposed rule change
before September 10, 2015. the management fee directly impacts the
and discussed any comments it received
For the Commission, by the Division of net asset value (‘‘NAV’’) of the Shares.
on the proposed rule change. The text To calculate NAV, the trustee adds to
Trading and Markets, pursuant to delegated of those statements may be examined at
authority.60 the amount of euros or yen in a Trust
the places specified in Item IV below. at the end of the preceding business
Robert W. Errett, The Exchange has prepared summaries, day:
Deputy Secretary. set forth in sections A, B, and C below, • Accrued but unpaid interest;
[FR Doc. 2015–20544 Filed 8–19–15; 8:45 am] of the most significant parts of such • euros or yen receivable under
BILLING CODE P statements. pending purchase orders; and
A. Self-Regulatory Organization’s • the value of other Trust assets.
Statement of the Purpose of, and the From this sum, the trustee then
SECURITIES AND EXCHANGE subtracts:
Statutory Basis for, the Proposed Rule
COMMISSION • The accrued but unpaid
Change
management fee,
[Release No. 34–75698; File No. SR–
1. Purpose • euros or yen payable under pending
NYSEArca–2015–68]
The Exchange lists and trades shares redemption orders; and
Self-Regulatory Organizations; NYSE of the CurrencyShares® Euro Trust (the • any other Trust expenses and
Arca, Inc.; Notice of Filing of Proposed ‘‘Euro Trust’’ or ‘‘FXE’’) and the liabilities.
The value of a Trust’s Shares is
Rule Change Relating to CurrencyShares® Japanese Yen Trust
Implementation of a Fee on Securities determined by dividing a Trust’s NAV
(the ‘‘Yen Trust’’ or ‘‘FXY’’ and together
Lending and Repurchase Transactions by the number of Shares outstanding.
with the Euro Trust, the ‘‘Trusts’’) under
With Respect to Shares of the Because the accrued but unpaid
NYSE Arca Equities Rule 8.202.4
CurrencyShares® Euro Trust and the management fee is subtracted from the
CurrencyShares® Japanese Yen Trust 2 15 U.S.C. 78a.
assets in calculating NAV on a daily
tkelley on DSK3SPTVN1PROD with NOTICES
3 17 CFR 240.19b–4. basis,5 the value of the Shares decreases
August 14, 2015. 4 Shares of the Trusts initially were approved for
Pursuant to section 19(b)(1) 1 of the listing and trading on the New York Stock 2007), 72 FR 7793 (February 20, 2007) (SR–NYSE–
Exchange, Inc. See Securities Exchange Act Release 2007–03) (order approving listing and trading of
Securities Exchange Act of 1934 (the Shares of the CurrencyShares® Japanese Yen Trust).
Nos. 52843 (November 28, 2005), 70 FR 72486
(December 5, 2005) (SR–NYSE–2005–65) (order 5 To calculate NAV, the Trustee adds to the
60 17 CFR 200.30–3(a)(12). approving listing and trading of Shares of the amount of euros/yen in the Trusts at the end of the
1 15 U.S.C. 78s(b)(1). CurrencyShares® Euro Trust); 55268 (February 9, Continued
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Document Created: 2015-12-15 11:08:28
Document Modified: 2015-12-15 11:08:28
| 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 50689 |
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