[Federal Register Volume 76, Number 130 (Thursday, July 7, 2011)]
[Notices]
[Pages 39944-39946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-17033]



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SECURITIES AND EXCHANGE COMMISSION



[Release No. 34-64791; File No. SR-EDGX-2011-18]




Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of 

Filing and Immediate Effectiveness of Proposed Rule Change To Make 

Available Without Charge the EDGX Book Feed and To Add a Description of 

the EDGX Book Feed to New Rule 13.8



July 1, 2011.

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 

(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 

that on June 29, 2011, EDGX Exchange, Inc. (the ``Exchange'' or 

``EDGX'') filed with the Securities and Exchange Commission 

(``Commission'') the proposed rule change as described in Items I and 

II below, which items have been prepared by the Exchange. The 

Commission is publishing this notice to solicit comments on the 

proposed rule change from interested persons.

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    \1\ 15 U.S.C. 78s(b)(1).

    \2\ 17 CFR 240.19b-4.

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I. Self-Regulatory Organization's Statement of the Terms of the 

Substance of the Proposed Rule Change



    The Exchange proposes to make available without charge the EDGX 

book feed (``EDGX Book Feed''), an EDGX data feed that displays depth 

of book information. The Exchange also proposes to add a description of 

the EDGX Book Feed to new Rule 13.8. The text of the proposed rule 

change is attached as Exhibit 5 and is available on the Exchange's Web 

site at http://www.directedge.com, at the Exchange's principal office, 

and at the Public Reference Room of the Commission.



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 self-regulatory organization has prepared summaries, 

set forth in Sections A, B and C below, of the most significant aspects 

of such statements.



A. Self-Regulatory Organization's Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule Change



1. Purpose

    The purpose of the proposed rule change is to describe the 

availability of the EDGX Book Feed, a data feed that contains all 

orders for securities trading on the Exchange. The EDGX Book Feed is 

available to all EDGX members equally at no charge, and offers all 

firms real-time data concerning EDGX's depth of book. EDGX makes the 

EDGX Book Feed available to all market participants via subscription 

through an established connection to EDGX through extranets, direct 

connection, and service bureaus. The EDGX Book Feed is available in 

multicast and unicast formats.

    The EDGX Book Feed contains the following data elements: all 

displayed orders for listed securities trading on EDGX, order 

executions, order cancellations, order modifications, order 

identification numbers, and administrative messages.

    By making the EDGX Book Feed data available, EDGX enhances market 

transparency and fosters competition among orders and markets. Member 

firms may use the EDGX Book Feed to more accurately price their orders 

based on EDGX's view of the depth of book information, such as all 

displayed limit orders at any point in time. Additionally, Members can 

track their own orders from order entry to execution.

    The Exchange proposes to add the definition of EDGX Book Feed to 

new Rule 13.8(a). In addition, the Exchange proposes to add to Rule 

13.8(b) the process by which a Member can obfuscate their unique order 

identification number on the EDGX Book Feed for subsequent 

replenishments of reserve orders per Market Participant Identifier 

(``MPID'') for all logical ports or specific logical ports, as 

designated by the Member. In order to do so, and have a randomly 

generated order identification number applied to the replenishment of 

Member's reserve orders, the Member would contact Member Services via 

e-mail or phone. Such feature would be enabled the next trading day by 

the Exchange for the Member-selected MPID for all logical ports or 

specific logical ports until further instructions are received by 

Member Services from the Member. The Exchange believes that the random 

order identification number would help deter other market participants 

from being able to trace the life of a specific order, including short-



[[Page 39945]]



term price movements and trading patterns.

    At this time, EDGX does not have plans to charge an additional fee 

associated with the receipt of the EDGX Book Feed. Should EDGX 

determine to charge fees associated with the EDGX Book Feed, EDGX will 

submit a proposed rule change to the Commission in order to implement 

those fees.

2. Statutory Basis

    The Exchange believes that the proposed rule change is consistent 

with the objectives of Section 6 of the Act,\3\ in general, and 

furthers the objectives of Section 6(b)(5),\4\ in particular, as it is 

designed to prevent fraudulent and manipulative acts and practices, to 

promote just and equitable principles of trade, to foster cooperation 

and coordination with persons engaged in regulating, clearing, 

settling, processing information with respect to, and facilitating 

transactions in securities, to remove impediments to and perfect the 

mechanism of a free and open market and a national market system, and, 

in general, to protect investors and the public interest. EDGX believes 

that this proposal is in keeping with those principles by promoting 

increased transparency through the dissemination of the EDGX Book Feed 

and by codifying its availability.

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    \3\ 15 U.S.C. 78f.

    \4\ 15 U.S.C. 78f(b)(5).

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    In addition, EDGX is making a voluntary decision to make this data 

available. EDGX is not required by the Act in the first instance to 

make the data available, unlike the best bid and offer which must be 

made available under the Act. EDGX chooses to make the data available 

as proposed in order to improve market quality, to attract order flow, 

and to increase transparency. Once this filing becomes effective, EDGX 

will be required to continue making the data available until such time 

as EDGX changes its rule.



B. Self-Regulatory Organization's Statement on Burden on Competition



    The proposed rule change does not impose any burden on competition 

that is not necessary or appropriate in furtherance of the purposes of 

the Act.



C. Self-Regulatory Organization's Statement on Comments on the Proposed 

Rule Change Received From Members, Participants, or Others



    The Exchange has not solicited, and does not intend to solicit, 

comments on this proposed rule change. The Exchange has not received 

any unsolicited written comments from members or other interested 

parties.



III. Date of Effectiveness of the Proposed Rule Change and Timing for 

Commission Action



    Because the foregoing 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, it has become 

effective pursuant to Section 19(b)(3)(A) of the Act \5\ and Rule 19b-

4(f)(6)(iii) thereunder.\6\

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    \5\ 15 U.S.C. 78s(b)(3)(A).

    \6\ 17 CFR 240.19b-4(f)(6)(iii).

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    A proposed rule change filed under Rule 19b-4(f)(6) \7\ normally 

does not become operative prior to 30 days after the date of the 

filing. However, pursuant to Rule 19b4(f)(6)(iii),\8\ the Commission 

may designate a shorter time if such action is consistent with the 

protection of investors and the public interest. The Exchange has asked 

that the Commission waive the 30-day pre-operative waiting period 

contained in Rule 19b-4(f)(6)(iii).\9\ The Exchange has requested such 

waiver because it believes that such waiver is consistent with the 

protection of investors and the public interest because it would permit 

EDGX to immediately provide the information regarding the EDGX Book 

Feed access requirements to market participants. Specifically, the 

Exchange believes that, because the EDGX Book Feed is already 

available, strictly voluntary, and free to receive, waiver is 

consistent with the protection of investors and the public interest. 

For these reasons, the Commission sees no reason to delay 

implementation of the proposed rule change. The Commission believes it 

is consistent with the protection of investors and the public interest 

to waive the 30-day operative delay, and hereby grants such waiver.\10\

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    \7\ 17 CFR 240.19b-4(f)(6).

    \8\ 17 CFR 240.19b-4(f)(6)(iii).

    \9\ Id.

    \10\ For purposes only of waiving the 30-day operative delay, 

the Commission has considered the proposed rule change's impact on 

efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

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    At any time within 60 days of the filing of the proposed rule 

change, the Commission summarily may temporarily suspend such rule 

change if it appears to the Commission that such action is necessary or 

appropriate in the public interest, for the protection of investors, or 

otherwise in furtherance of the purposes of the Act.



IV. Solicitation of Comments



    Interested persons are invited to submit written data, views, and 

arguments concerning the foregoing, including whether the proposed rule 

change is consistent with the Act. Comments may be submitted by any of 

the following methods:



Electronic Comments



     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or

     Send an e-mail to [email protected]. Please include 

File Number SR-EDGX-2011-18 on the subject line.



Paper Comments



     Send paper comments in triplicate to Elizabeth M. Murphy, 

Secretary, Securities and Exchange Commission, 100 F Street, NE., 

Washington, DC 20549-1090.



All submissions should refer to File Number SR-EDGX-2011-18. This file 

number should be included on the subject line if e-mail is used.

    To help the Commission process and review your comments more 

efficiently, please use only one method. The Commission will post all 

comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, 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 on 

official business days between the hours of 10 a.m. and 3 p.m. Copies 

of such filing also will be available for inspection and copying at the 

principal offices 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-2011-18, and should be submitted on or before July 

28, 2011.





[[Page 39946]]





    For the Commission, by the Division of Trading and Markets, 

pursuant to delegated authority.\11\

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    \11\ 17 CFR 200.30-3(a)(12).

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Cathy H. Ahn,

Deputy Secretary.

[FR Doc. 2011-17033 Filed 7-6-11; 8:45 am]

BILLING CODE 8011-01-P