80 FR 80832 - Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for EDGX Options
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 248 (December 28, 2015)
Federal Register Volume 80, Issue 248 (December 28, 2015)
| Page Range | 80832-80834 | |
| FR Document | 2015-32536 |
[Federal Register Volume 80, Number 248 (Monday, December 28, 2015)] [Notices] [Pages 80832-80834] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-32536] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76708; File No. SR-EDGX-2015-63] Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for EDGX Options December 21, 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 December 10, 2015, EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II and III below, which Items have been prepared by the Exchange. The Exchange has designated the proposed rule change as one establishing or changing a member due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A)(ii). \4\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to amend the fee schedule applicable to Members \5\ and non-members of the Exchange pursuant to EDGX Rules 15.1(a) and (c). --------------------------------------------------------------------------- \5\ The term ``Member'' is defined as ``any registered broker or dealer that has been admitted to membership in the Exchange.'' See Exchange Rule 1.5(n). --------------------------------------------------------------------------- The text of the proposed rule change is available at the Exchange's Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. (A) Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to modify the ``Options Pricing'' section of its fee schedule effective immediately, to modify pricing for orders routed away from the Exchange and executed at various away options exchanges. The Exchange currently charges the following rates for orders routed to certain other options exchanges: (i) Non-Customer \6\ orders in non-Penny Pilot Securities.\7\ routed to NYSE Arca, Inc. (``Arca''), which yield fee code AG, are charged $0.95 per contract; (ii) Intermarket Sweep Orders (``ISOs'') in non-Penny Pilot Securities that are directed to Nasdaq Options Market LLC (``NOM''), Arca, or ISE Gemini, LLC (``ISE Gemini'') are charged $0.95 per contract; (iii) ISOs directed to other options exchanges are charged $0.65 per contract; \8\ (iv) Customer orders routed to the International Securities Exchange, LLC (``ISE'') in non-Penny Pilot Securities which yield fee code ID and are charged $0.12 per contract; (v) Customer orders routed to the Miami International Securities Exchange LLC (``MIAX'') which yield fee code MC are charged $0.12 per contract; (vi) Non-Customer orders routed to MIAX which yield fee code MF are charged $0.65 per contract; (vii) Customer orders routed to the BOX Options Exchange LLC (``BOX'') which yield fee code OC are charged no fee; (viii) Non-Customer orders routed to BOX which yield fee code OF are charged $0.99 per contract; (ix) Non-Customer orders routed to NOM in Penny Pilot Securities which yield fee code QF are charged $0.65 per contract; (x) Non-Customer orders routed to NOM in non-Penny Pilot Securities which yield fee code QG are charged $0.95 per contract; and (xi) Customer orders routed to NYSE MKT LLC (``NYSE MKT'' f/k/a AMEX) which yield fee code XC are charged $0.12 per contract. --------------------------------------------------------------------------- \6\ ``Non-Customer'' applies to any transaction that is not a Customer Order. ``Customer'' applies to any transaction identified by a Member for clearing in the Customer range at the OCC, excluding any transaction for a Broker Dealer or a ``Professional'' as defined in Exchange Rule 16.1. \7\ ``Penny Pilot Securities'' are those issues quoted pursuant to Exchange Rule 21.5, Interpretation and Policy .01. \8\ ISOs directed to Nasdaq OMX BX LLC (``Nasdaq BX'') in non- Penny Pilot Securities which yield fee code D2 and ISOs directed to the C2 Options Exchange, Inc. (``C2'') and Nasdaq OMX PHLX LLC (``Nasdaq PHLX'') which yield fee code D3 are charged $0.95 per contract. --------------------------------------------------------------------------- In an effort to continue to offer routing services to its Members at prices that approximate the cost to the Exchange, the Exchange is proposing to amend those rates as follows: (i) the fee for Customer orders routed to ISE in non-Penny Pilot Securities and any Customer orders routed to MIAX, BOX or NYSE MKT (fee codes ID, MC, OC and XC, respectively) would be increased to $0.15 per contract; (ii) the fee for Non-Customer Orders in non-Penny Pilot Securities routed to Arca would be increased to $1.15 per contract (fee code AG); (iii) the fee for ISOs directed to NOM, Arca, or ISE Gemini would be increased to $1.25 per contract for Non-Penny Pilot Securities (fee code D1); (iv) the fee for ISOs directed to other options exchanges would be increased to $0.75 per contract (fee code D4); \9\ (v) the fee for Non-Customer orders routed to MIAX would be increased to $0.85 per contract (fee code MF); (vi) the fee for Non-Customer orders routed to BOX would be increased to $1.20 (fee code OF); (vii) the fee for Non-Customer orders routed to NOM in Penny Pilot Securities would be increased to $0.70 (fee code QF); and (viii) the fee for Non-Customer orders routed to NOM in non-Penny Pilot Securities would be increased to $1.25 (fee code QG). --------------------------------------------------------------------------- \9\ The Exchange does not propose to amend the fees charged for ISOs directed to Nasdaq BX in non-Penny Pilot Securities which yield fee code D2 and ISOs directed to the C2 and Nasdaq PHLX which yield fee code D3. --------------------------------------------------------------------------- As noted previously and as set forth above, the Exchange's current approach to routing fees is to set forth in a simple manner certain sub-categories of fees that approximate the cost of routing to other options exchanges based on the cost of transaction fees assessed by each venue as well as costs to the Exchange for routing (i.e., clearing fees, connectivity and other infrastructure costs, membership fees, etc.) (collectively, ``Routing Costs''). The Exchange then monitors the fees charged as compared to the costs of its routing services and adjusts its routing [[Page 80833]] fees and/or sub-categories to ensure that the Exchange's fees do indeed result in a rough approximation of overall Routing Costs, and are not significantly higher or lower in any area. In performing this analysis, the Exchange has concluded that certain orders that it was routing to other options exchanges were costing more than it was charging, and in one case, were costing significantly less than it was charging. As a result, and in order to avoid subsidizing routing to away options exchanges and to continue providing quality routing services, the Exchange proposes relatively modest increases and adjustments to the charges assessed for the orders described above. Implementation Date The Exchange proposes to implement these amendments to its fee schedule immediately.\10\ --------------------------------------------------------------------------- \10\ The Exchange initially filed the proposed fee change on December 1, 2015 (SR-EDGX-2015-57). On December 10, 2015, the Exchange withdrew that filing and submitted filing SR-BATS-2015-63 [sic]. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6 of the Act.\11\ Specifically, the Exchange believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,\12\ in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and other persons using any facility or system which the Exchange operates or controls. The Exchange notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues or providers of routing services if they deem fee levels to be excessive. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78f. \12\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- As explained above, the Exchange generally attempts to approximate the cost of routing to other options exchanges, including other applicable costs to the Exchange for routing. The Exchange believes that a pricing model based on approximate Routing Costs is a reasonable, fair and equitable approach to pricing. Specifically, the Exchange believes that its proposal to modify fees is fair, equitable and reasonable because the fees are generally an approximation of the cost to the Exchange for routing orders to such exchanges. Absent the proposed changes, the Exchange has concluded that certain orders that it was routing to other options exchanges would cost more than its current fees. Accordingly, the Exchange believes that the proposed increases are fair, equitable and reasonable because they will help the Exchange to avoid subsidizing routing to away options exchanges and to continue providing quality routing services. The Exchange believes that its fee structure for orders routed to various venues is a fair and equitable approach to pricing, as it provides certainty with respect to execution fees at away options exchanges. Under its straightforward fee structure, taking all costs to the Exchange into account, the Exchange may operate at a slight gain or slight loss for orders routed to and executed at away options exchanges. As a general matter, the Exchange believes that the proposed fees will allow it to recoup and cover its costs of providing routing services to such exchanges. The Exchange notes that routing through the Exchange is voluntary. The Exchange also believes that the proposed fee structure for orders routed to and executed at these away options exchanges is fair and equitable and not unreasonably discriminatory in that it applies equally to all Members. The Exchange reiterates that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels to be excessive or providers of routing services if they deem fee levels to be excessive. Finally, the Exchange notes that it constantly evaluates its routing fees, including profit and loss attributable to routing, as applicable, in connection with the operation of a flat fee routing service, and would consider future adjustments to the proposed pricing structure to the extent it was recouping a significant profit or loss from routing to away options exchanges. (B) Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As it relates to the proposed changes to routing fees, the proposed changes will assist the Exchange in recouping costs for routing orders to other options exchanges on behalf of its participants in a manner that is a better approximation of actual costs than is currently in place and that reflects pricing changes by various options exchanges as well as increases to other Routing Costs incurred by the Exchange. The Exchange also notes that Members may choose to mark their orders as ineligible for routing to avoid incurring routing fees.\13\ --------------------------------------------------------------------------- \13\ See Exchange Rule 21.1(d)(8) (describing ``Post Only Orders'') and Exchange Rule 21.9(a)(1) (describing the routing process, which requires orders to be designated as available for routing). --------------------------------------------------------------------------- (C) Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act \14\ and paragraph (f) of Rule 19b-4 thereunder.\15\ 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. --------------------------------------------------------------------------- \14\ 15 U.S.C. 78s(b)(3)(A). \15\ 17 CFR 240.19b-4(f). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File No. SR-EDGX-2015-63 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-EDGX-2015-63. 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 [[Page 80834]] 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 such filing will also be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-EDGX-2015-63 and should be submitted on or before January 19, 2016. --------------------------------------------------------------------------- \16\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\ Brent J. Fields, Secretary. [FR Doc. 2015-32536 Filed 12-24-15; 8:45 am] BILLING CODE 8011-01-P
![80832 Federal Register / Vol. 80, No. 248 / Monday, December 28, 2015 / Notices
For the Commission, by the Division of II. Self-Regulatory Organization’s (‘‘BOX’’) which yield fee code OC are
Trading and Markets, pursuant to delegated Statement of the Purpose of, and charged no fee; (viii) Non-Customer
authority.10 Statutory Basis for, the Proposed Rule orders routed to BOX which yield fee
Brent J. Fields, Change code OF are charged $0.99 per contract;
Secretary. In its filing with the Commission, the (ix) Non-Customer orders routed to
[FR Doc. 2015–32525 Filed 12–24–15; 8:45 am] Exchange included statements NOM in Penny Pilot Securities which
concerning the purpose of and basis for yield fee code QF are charged $0.65 per
BILLING CODE 8011–01–P
the proposed rule change and discussed contract; (x) Non-Customer orders
any comments it received on the routed to NOM in non-Penny Pilot
SECURITIES AND EXCHANGE proposed rule change. The text of these Securities which yield fee code QG are
COMMISSION statements may be examined at the charged $0.95 per contract; and (xi)
places specified in Item IV below. The Customer orders routed to NYSE MKT
Exchange has prepared summaries, set LLC (‘‘NYSE MKT’’ f/k/a AMEX) which
[Release No. 34–76708; File No. SR–EDGX– yield fee code XC are charged $0.12 per
2015–63] forth in Sections A, B, and C below, of
the most significant parts of such contract.
statements. In an effort to continue to offer
Self-Regulatory Organizations; EDGX routing services to its Members at prices
Exchange, Inc.; Notice of Filing and (A) Self-Regulatory Organization’s that approximate the cost to the
Immediate Effectiveness of a Proposed Statement of the Purpose of, and Exchange, the Exchange is proposing to
Rule Change Related to Fees for EDGX Statutory Basis for, the Proposed Rule amend those rates as follows: (i) the fee
Options Change for Customer orders routed to ISE in
December 21, 2015. 1. Purpose non-Penny Pilot Securities and any
Customer orders routed to MIAX, BOX
Pursuant to Section 19(b)(1) of the The Exchange proposes to modify the or NYSE MKT (fee codes ID, MC, OC
Securities Exchange Act of 1934 (the ‘‘Options Pricing’’ section of its fee and XC, respectively) would be
‘‘Act’’),1 and Rule 19b–4 thereunder,2 schedule effective immediately, to increased to $0.15 per contract; (ii) the
notice is hereby given that on December modify pricing for orders routed away fee for Non-Customer Orders in non-
10, 2015, EDGX Exchange, Inc. (the from the Exchange and executed at Penny Pilot Securities routed to Arca
‘‘Exchange’’ or ‘‘EDGX’’) filed with the various away options exchanges. The would be increased to $1.15 per contract
Securities and Exchange Commission Exchange currently charges the (fee code AG); (iii) the fee for ISOs
(‘‘Commission’’) the proposed rule following rates for orders routed to directed to NOM, Arca, or ISE Gemini
change as described in Items I, II and III certain other options exchanges: (i) Non- would be increased to $1.25 per contract
below, which Items have been prepared Customer 6 orders in non-Penny Pilot for Non-Penny Pilot Securities (fee code
by the Exchange. The Exchange has Securities.7 routed to NYSE Arca, Inc. D1); (iv) the fee for ISOs directed to
designated the proposed rule change as (‘‘Arca’’), which yield fee code AG, are other options exchanges would be
one establishing or changing a member charged $0.95 per contract; (ii) increased to $0.75 per contract (fee code
due, fee, or other charge imposed by the Intermarket Sweep Orders (‘‘ISOs’’) in D4); 9 (v) the fee for Non-Customer
Exchange under Section 19(b)(3)(A)(ii) non-Penny Pilot Securities that are orders routed to MIAX would be
of the Act 3 and Rule 19b–4(f)(2) directed to Nasdaq Options Market LLC increased to $0.85 per contract (fee code
thereunder,4 which renders the (‘‘NOM’’), Arca, or ISE Gemini, LLC MF); (vi) the fee for Non-Customer
proposed rule change effective upon (‘‘ISE Gemini’’) are charged $0.95 per orders routed to BOX would be
filing with the Commission. The contract; (iii) ISOs directed to other increased to $1.20 (fee code OF); (vii)
Commission is publishing this notice to options exchanges are charged $0.65 per the fee for Non-Customer orders routed
solicit comments on the proposed rule contract; 8 (iv) Customer orders routed to NOM in Penny Pilot Securities would
change from interested persons. to the International Securities Exchange, be increased to $0.70 (fee code QF); and
LLC (‘‘ISE’’) in non-Penny Pilot (viii) the fee for Non-Customer orders
I. Self-Regulatory Organization’s Securities which yield fee code ID and routed to NOM in non-Penny Pilot
Statement of the Terms of Substance of are charged $0.12 per contract; (v) Securities would be increased to $1.25
the Proposed Rule Change Customer orders routed to the Miami (fee code QG).
International Securities Exchange LLC As noted previously and as set forth
The Exchange filed a proposal to (‘‘MIAX’’) which yield fee code MC are
amend the fee schedule applicable to above, the Exchange’s current approach
charged $0.12 per contract; (vi) Non- to routing fees is to set forth in a simple
Members 5 and non-members of the Customer orders routed to MIAX which
Exchange pursuant to EDGX Rules manner certain sub-categories of fees
yield fee code MF are charged $0.65 per that approximate the cost of routing to
15.1(a) and (c). contract; (vii) Customer orders routed to other options exchanges based on the
The text of the proposed rule change the BOX Options Exchange LLC cost of transaction fees assessed by each
is available at the Exchange’s Web site venue as well as costs to the Exchange
at www.batstrading.com, at the 6 ‘‘Non-Customer’’ applies to any transaction that
for routing (i.e., clearing fees,
principal office of the Exchange, and at is not a Customer Order. ‘‘Customer’’ applies to any
transaction identified by a Member for clearing in connectivity and other infrastructure
the Commission’s Public Reference the Customer range at the OCC, excluding any costs, membership fees, etc.)
Room. transaction for a Broker Dealer or a ‘‘Professional’’ (collectively, ‘‘Routing Costs’’). The
as defined in Exchange Rule 16.1.
mstockstill on DSK4VPTVN1PROD with NOTICES
7 ‘‘Penny Pilot Securities’’ are those issues quoted
Exchange then monitors the fees
1 15 U.S.C. 78s(b)(1).
pursuant to Exchange Rule 21.5, Interpretation and
charged as compared to the costs of its
2 17 CFR 240.19b–4. Policy .01. routing services and adjusts its routing
3 15 U.S.C. 78s(b)(3)(A)(ii).
8 ISOs directed to Nasdaq OMX BX LLC (‘‘Nasdaq
4 17 CFR 240.19b–4(f)(2).
BX’’) in non-Penny Pilot Securities which yield fee 9 The Exchange does not propose to amend the
5 The term ‘‘Member’’ is defined as ‘‘any code D2 and ISOs directed to the C2 Options fees charged for ISOs directed to Nasdaq BX in non-
registered broker or dealer that has been admitted Exchange, Inc. (‘‘C2’’) and Nasdaq OMX PHLX LLC Penny Pilot Securities which yield fee code D2 and
to membership in the Exchange.’’ See Exchange (‘‘Nasdaq PHLX’’) which yield fee code D3 are ISOs directed to the C2 and Nasdaq PHLX which
Rule 1.5(n). charged $0.95 per contract. yield fee code D3.
VerDate Sep<11>2014 13:31 Dec 24, 2015 Jkt 238001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 E:\FR\FM\28DEN1.SGM 28DEN1](https://thefederalregister.org/doc/80_FR_81080/page/1.svg)
![Federal Register / Vol. 80, No. 248 / Monday, December 28, 2015 / Notices 80833
fees and/or sub-categories to ensure that other options exchanges would cost orders as ineligible for routing to avoid
the Exchange’s fees do indeed result in more than its current fees. Accordingly, incurring routing fees.13
a rough approximation of overall the Exchange believes that the proposed
(C) Self-Regulatory Organization’s
Routing Costs, and are not significantly increases are fair, equitable and
Statement on Comments on the
higher or lower in any area. In reasonable because they will help the
Proposed Rule Change Received From
performing this analysis, the Exchange Exchange to avoid subsidizing routing
Members, Participants or Others
has concluded that certain orders that it to away options exchanges and to
was routing to other options exchanges continue providing quality routing The Exchange has not solicited, and
were costing more than it was charging, services. The Exchange believes that its does not intend to solicit, comments on
and in one case, were costing fee structure for orders routed to various this proposed rule change. The
significantly less than it was charging. venues is a fair and equitable approach Exchange has not received any written
As a result, and in order to avoid to pricing, as it provides certainty with comments from members or other
subsidizing routing to away options respect to execution fees at away interested parties.
exchanges and to continue providing options exchanges. Under its III. Date of Effectiveness of the
quality routing services, the Exchange straightforward fee structure, taking all Proposed Rule Change and Timing for
proposes relatively modest increases costs to the Exchange into account, the Commission Action
and adjustments to the charges assessed Exchange may operate at a slight gain or
for the orders described above. slight loss for orders routed to and The foregoing rule change has become
executed at away options exchanges. As effective pursuant to Section 19(b)(3)(A)
Implementation Date of the Act 14 and paragraph (f) of Rule
a general matter, the Exchange believes
The Exchange proposes to implement that the proposed fees will allow it to 19b–4 thereunder.15 At any time within
these amendments to its fee schedule recoup and cover its costs of providing 60 days of the filing of the proposed rule
immediately.10 routing services to such exchanges. The change, the Commission summarily may
Exchange notes that routing through the temporarily suspend such rule change if
2. Statutory Basis
Exchange is voluntary. The Exchange it appears to the Commission that such
The Exchange believes that the action is necessary or appropriate in the
proposed rule change is consistent with also believes that the proposed fee
structure for orders routed to and public interest, for the protection of
the requirements of the Act and the investors, or otherwise in furtherance of
rules and regulations thereunder that executed at these away options
exchanges is fair and equitable and not the purposes of the Act.
are applicable to a national securities
exchange, and, in particular, with the unreasonably discriminatory in that it IV. Solicitation of Comments
requirements of Section 6 of the Act.11 applies equally to all Members. Interested persons are invited to
Specifically, the Exchange believes that The Exchange reiterates that it submit written data, views and
the proposed rule change is consistent operates in a highly competitive market arguments concerning the foregoing,
with Section 6(b)(4) of the Act,12 in that in which market participants can including whether the proposal is
it provides for the equitable allocation readily direct order flow to competing consistent with the Act. Comments may
of reasonable dues, fees and other venues if they deem fee levels to be be submitted by any of the following
charges among members and other excessive or providers of routing methods:
persons using any facility or system services if they deem fee levels to be
which the Exchange operates or excessive. Finally, the Exchange notes Electronic Comments
controls. The Exchange notes that it that it constantly evaluates its routing • Use the Commission’s Internet
operates in a highly competitive market fees, including profit and loss comment form (http://www.sec.gov/
in which market participants can attributable to routing, as applicable, in rules/sro.shtml); or
readily direct order flow to competing connection with the operation of a flat • Send an email to rule-
venues or providers of routing services fee routing service, and would consider comments@sec.gov. Please include File
if they deem fee levels to be excessive. future adjustments to the proposed No. SR–EDGX–2015–63 on the subject
As explained above, the Exchange pricing structure to the extent it was line.
generally attempts to approximate the recouping a significant profit or loss
from routing to away options exchanges. Paper Comments
cost of routing to other options
exchanges, including other applicable • Send paper comments in triplicate
(B) Self-Regulatory Organization’s to Secretary, Securities and Exchange
costs to the Exchange for routing. The
Statement on Burden on Competition Commission, 100 F Street NE.,
Exchange believes that a pricing model
based on approximate Routing Costs is The Exchange does not believe that Washington, DC 20549–1090.
a reasonable, fair and equitable the proposed rule change will impose All submissions should refer to File
approach to pricing. Specifically, the any burden on competition not Number SR–EDGX–2015–63. This file
Exchange believes that its proposal to necessary or appropriate in furtherance number should be included on the
modify fees is fair, equitable and of the purposes of the Act. As it relates subject line if email is used. To help the
reasonable because the fees are to the proposed changes to routing fees, Commission process and review your
generally an approximation of the cost the proposed changes will assist the comments more efficiently, please use
to the Exchange for routing orders to Exchange in recouping costs for routing only one method. The Commission will
such exchanges. Absent the proposed orders to other options exchanges on post all comments on the Commission’s
changes, the Exchange has concluded behalf of its participants in a manner Internet Web site (http://www.sec.gov/
mstockstill on DSK4VPTVN1PROD with NOTICES
that certain orders that it was routing to that is a better approximation of actual rules/sro.shtml). Copies of the
costs than is currently in place and that
10 The Exchange initially filed the proposed fee reflects pricing changes by various 13 See Exchange Rule 21.1(d)(8) (describing ‘‘Post
change on December 1, 2015 (SR–EDGX–2015–57). options exchanges as well as increases Only Orders’’) and Exchange Rule 21.9(a)(1)
On December 10, 2015, the Exchange withdrew that (describing the routing process, which requires
filing and submitted filing SR–BATS–2015–63 [sic].
to other Routing Costs incurred by the orders to be designated as available for routing).
11 15 U.S.C. 78f. Exchange. The Exchange also notes that 14 15 U.S.C. 78s(b)(3)(A).
12 15 U.S.C. 78f(b)(4). Members may choose to mark their 15 17 CFR 240.19b–4(f).
VerDate Sep<11>2014 13:31 Dec 24, 2015 Jkt 238001 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 E:\FR\FM\28DEN1.SGM 28DEN1](https://thefederalregister.org/doc/80_FR_81080/page/2.svg)
![80834 Federal Register / Vol. 80, No. 248 / Monday, December 28, 2015 / Notices
submission, all subsequent large aggregations only (‘‘Creation FOR FURTHER INFORMATION CONTACT:
amendments, all written statements Units’’); (b) secondary market Christine Y. Greenlees, Senior Counsel,
with respect to the proposed rule transactions in Shares to occur at at (202) 551–6879, or David P. Bartels,
change that are filed with the negotiated market prices rather than at Branch Chief, at (202) 551–6821
Commission, and all written net asset value (‘‘NAV’’); (c) certain (Division of Investment Management,
communications relating to the series to pay redemption proceeds, Chief Counsel’s Office).
proposed rule change between the under certain circumstances, more than SUPPLEMENTARY INFORMATION: The
Commission and any person, other than seven days after the tender of Shares for following is a summary of the
those that may be withheld from the redemption; (d) certain affiliated application. The complete application
public in accordance with the persons of the series to deposit may be obtained via the Commission’s
provisions of 5 U.S.C. 552, will be securities into, and receive securities Web site by searching for the file
available for Web site viewing and from, the series in connection with the number, or for an applicant using the
printing in the Commission’s Public purchase and redemption of Creation Company name box, at http://
Reference Room, 100 F Street NE., Units; (e) certain registered management www.sec.gov/search/search.htm or by
Washington, DC 20549, on official investment companies and unit calling (202) 551–8090.
business days between the hours of investment trusts outside of the same
10:00 a.m. and 3:00 p.m. Copies of such group of investment companies as the Applicants’ Representations
filing will also be available for series to acquire Shares; and (f) certain 1. The Trust is a Delaware statutory
inspection and copying at the principal series to perform creations and trust that has registered under the Act
office of the Exchange. All comments redemptions of Creation Units in-kind as an open-end management investment
received will be posted without change; in a master-feeder structure. The order company with multiple series. The
the Commission does not edit personal would supersede a prior order.1 Trust currently offers a number of
identifying information from Applicants: Recon Capital Series exchange traded funds, each of which
submissions. You should submit only Trust (the ‘‘Trust’’), Recon Capital has a distinct investment objective,
information that you wish to make Advisors, LLC (the ‘‘Current Adviser’’), tracks a particular index and utilizes
available publicly. All submissions Recon Capital Partners, LLC, and either a replication or representative
should refer to File Number SR–EDGX– Foreside Fund Services, LLC (the sampling strategy (the ‘‘Current
2015–63 and should be submitted on or ‘‘Current Distributor’’). Funds’’). Each Fund (as defined below)
before January 19,2016. DATES: Filing Dates: The application was will operate as an exchange traded fund
For the Commission, by the Division of filed on May 15, 2015, and amended on (‘‘ETF’’).
Trading and Markets, pursuant to delegated October 13, 2015. 2. The Current Adviser is the
authority.16 Hearing or Notification of Hearing: An investment adviser to the Current Funds
Brent J. Fields, order granting the requested relief will and an Adviser (as defined below) will
Secretary. be issued unless the Commission orders be the investment adviser to the Funds.
a hearing. Interested persons may The Current Adviser is, and any other
[FR Doc. 2015–32536 Filed 12–24–15; 8:45 am]
request a hearing by writing to the Adviser will be, registered as an
BILLING CODE 8011–01–P
Commission’s Secretary and serving investment adviser under the
applicants with a copy of the request, Investment Advisers Act of 1940
SECURITIES AND EXCHANGE personally or by mail. Hearing requests (‘‘Advisers Act’’). The Current Adviser
COMMISSION should be received by the Commission is a wholly owned subsidiary of Recon
by 5:30 p.m. on January 15, 2016, and Capital Partners, LLC, which is also
[Investment Company Act Release No. should be accompanied by proof of registered as an investment adviser
31945; 812–14461] service on applicants, in the form of an under the Advisers Act. The Adviser
affidavit, or for lawyers, a certificate of may enter into sub-advisory agreements
Recon Capital Series Trust, et al.; with one or more investment advisers to
Notice of Application service. Pursuant to rule 0–5 under the
Act, hearing requests should state the act as sub-advisers (each, a ‘‘Sub-
December 21, 2015. nature of the writer’s interest, any facts Adviser’’) to particular Funds, or their
AGENCY: Securities and Exchange bearing upon the desirability of a respective Master Fund (as defined
Commission (‘‘Commission’’). hearing on the matter, the reason for the below). Any Sub-Adviser will either be
ACTION: Notice of an application for an request, and the issues contested. registered under the Advisers Act or
order under section 6(c) of the Persons who wish to be notified of a will not be required to register
Investment Company Act of 1940 (the hearing may request notification by thereunder.
‘‘Act’’) for an exemption from sections writing to the Commission’s Secretary. 3. The Current Distributor serves as
2(a)(32), 5(a)(1), 22(d), and 22(e) of the ADDRESSES: Secretary, Securities and the principal underwriter and
Act and rule 22c–1 under the Act, under Exchange Commission, 100 F Street NE., distributor for the Current Funds.
sections 6(c) and 17(b) of the Act for an Washington, DC 20549–1090; Applicants request that the order also
exemption from sections 17(a)(1) and Applicants: the Trust, the Current apply to any future distributor of Shares
17(a)(2) of the Act, and under section Adviser, and Recon Capital Advisors, (‘‘Future Distributor’’ and, together with
12(d)(1)(J) for an exemption from LLC, 145 Mason Street, 2nd Floor, the Current Distributor, the
sections 12(d)(1)(A) and 12(d)(1)(B) of Greenwich, CT 08830; and the Current ‘‘Distributor’’), provided that any such
the Act. Distributor, Three Canal Plaza, Suite Future Distributor complies with the
mstockstill on DSK4VPTVN1PROD with NOTICES
100, Portland, ME 04101. terms and conditions of the application.
SUMMARY: Summary of Application: The Distributor may be an affiliated
Applicants request an order that would 1 Certain of the applicants previously received an person or an affiliated person of an
permit (a) Series of certain open-end order of exemption from the Commission with affiliated person of that Fund’s Adviser
management investment companies to respect to the offering of indexed based funds. See and/or Sub-Advisers.
Sage Quant Management LLC, et al., Investment
issue shares (‘‘Shares’’) redeemable in Company Act Release Nos. 30439 (Mar. 28, 2013)
4. Applicants request that the order
(notice) and 30476 (Apr. 23, 2013) (order) (the apply to the Current Funds and any
16 17 CFR 200.30–3(a)(12). ‘‘Existing Funds Order’’). additional series of the Trust and any
VerDate Sep<11>2014 13:31 Dec 24, 2015 Jkt 238001 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 E:\FR\FM\28DEN1.SGM 28DEN1](https://thefederalregister.org/doc/80_FR_81080/page/3.svg)
Document Created: 2018-03-02 09:24:20
Document Modified: 2018-03-02 09:24:20
| 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 80832 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR