[Federal Register Volume 77, Number 171 (Tuesday, September 4, 2012)]
[Notices]
[Pages 53950-53951]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-21679]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67741; File No. SR-EDGX-2012-36]


Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
Amendments to the EDGX Exchange, Inc. Fee Schedule

August 28, 2012.
    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 22, 2012 the 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 self-regulatory 
organization. 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 Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its fees and rebates applicable to 
Members \3\ and non-Members of the Exchange pursuant to EDGX Rule 
15.1(a) and (c). All of the changes described herein are applicable to 
EDGX Members and non-Members. The text of the proposed rule change is 
available on the Exchange's Internet Web site at http://www.directedge.com, at the Exchange's principal office, and at the 
Public Reference Room of the Commission.
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    \3\ A Member is any registered broker or dealer, or any person 
associated with a registered broker or dealer, that has been 
admitted to membership in the Exchange.
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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 self-regulatory organization 
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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange maintains logical ports for order entry (FIX, HP-API), 
drop copies (DROP), and market data (collectively, ``DIRECT Logical 
Ports'').\4\ The Exchange proposes to reduce the quantity of free 
DIRECT Logical Ports from ten (10) sessions to five (5) sessions. 
Therefore, the Exchange will assess a monthly fee per logical port for 
Members and non-Members that maintain six or more DIRECT Logical Ports. 
Accordingly, the Exchange proposes to amend its fee schedule to reduce 
the quantity of free DIRECT Logical Ports from ten sessions to five 
sessions. In addition, the Exchange, pursuant to an information 
circular dated July 20, 2012, communicated to Members and non-Members 
that the Exchange would propose these changes in a subsequent filing 
with the Securities and Exchange Commission.\5\
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    \4\ See Securities and Exchange Act Release No. 64963 (July 26, 
2011), 76 FR 45895 (August 1, 2011) (SR-EDGX-2011-21) (discussing 
the Exchange's proposal to include logical ports that receive market 
data among the types of logical ports that the Exchange assesses a 
monthly fee to Members and non-Members).
    \5\ See Direct Edge Notice to Members  12-28, Reduction 
in Number of Free Logical Ports Effective September 4, 2012, http://www.directedge.com/About/Announcements/ViewNewsletterDetail.aspx?NewsletterID=751.
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    The Exchange proposes to implement these amendments to its fee 
schedule on September 1, 2012.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with the objectives of Section 6 of the Act,\6\ in general, and 
furthers the objectives of Section 6(b)(4),\7\ in particular, as the 
proposed rule changes are designed to provide for the equitable 
allocation of reasonable dues, fees and other charges among Members and 
other persons using the Exchange's facilities.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes its proposal to amend its fee schedule to 
reduce the quantity of free DIRECT Logical Ports from ten sessions to 
five sessions represents an equitable allocation of reasonable dues, 
fees and other charges because the Exchange has implemented several 
infrastructure enhancements that increased the message throughput 
(efficiency) per port, thereby requiring fewer ports to communicate the 
same information. The Exchange also believes that reducing the quantity 
of free DIRECT Logical Ports to five sessions will promote efficient 
use of the ports by market participants, helping the Exchange to 
continue to maintain and improve its infrastructure, while also 
encouraging Members and non-Members to request and enable only the 
ports that are necessary for their operations related to the Exchange. 
In addition, the Exchange will use the revenue generated from its 
proposal to supplement its administrative and infrastructure costs 
associated with allowing Members and non-Members to establish logical 
ports to connect to the Exchange's systems and continue to maintain and 
improve its infrastructure, market technology, and services. The 
Exchange also notes that assessing charges for logical ports is 
reasonable because it is consistent with the practices of other 
exchanges, such as the BATS Exchange and the NASDAQ OMX Group, Inc. 
that charge customers for logical ports.\8\ Lastly, the Exchange also 
believes that the proposed reduction in quantity of free ports is non-
discriminatory because it applies uniformly to Members and non-Members.
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    \8\ See BATS BZX fee schedule at http://batstrading.com/FeeSchedule/ (where BATS BZX charges its customers a monthly fee per 
logical port). See also NASDAQ Price List-Trading & Connectivity, 
http://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2 (where 
NASDAQ charges its customers a monthly fee per logical port).
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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

[[Page 53951]]

this proposed rule change. The Exchange has not received any 
unsolicited written comments from members or other interested parties.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3) of the Act \9\ and Rule 19b-4(f)(2) \10\ thereunder. At any 
time within 60 days of the filing of such proposed rule change, the 
Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 19b-4(f)(2) [sic].
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please 
include File Number SR-EDGX-2012-36 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-2012-36. 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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-EDGX-2012-36 and should be 
submitted on or before September 25, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Kevin M. O'Neill,
Deputy Secretary.
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    \11\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2012-21679 Filed 8-31-12; 8:45 am]
BILLING CODE 8011-01-P