[Federal Register Volume 77, Number 188 (Thursday, September 27, 2012)]
[Notices]
[Pages 59441-59442]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-23768]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67909; File No. SR-EDGA-2012-42]


Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
EDGA Rule 13.9

September 21, 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 September 19, 2012, 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 
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 is filing with the Commission a proposed rule change 
to amend Rule 13.9, which provides a new market data product to Members 
\3\ and non-Members of the Exchange. The text of the proposed rule 
change is available on the Exchange's Web site at 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 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 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, Proposed Rule Change

1. Purpose
    In SR-EDGA-2012-38 (the ``Filing''),\4\ the Exchange introduced a 
new market data product, Edge Routed Liquidity Report (``Edge Routed 
Liquidity Report'' or the ``Service'') to Members and non-Members of 
the Exchange (collectively referred to as ``Subscribers''). The Edge 
Routed Liquidity Report is a data feed that contains historical order 
information for orders routed to away destinations by the Exchange. The 
Filing stated that Edge Routed Liquidity Report is offered as either a 
standard report (the ``Standard Report'') or a premium report (the 
``Premium Report'') (the Standard Report and the Premium Report shall 
be collectively referred to as the ``Reports'').
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    \4\ Securities Exchange Act Release No. 67765 (August 31, 2012), 
77 FR 55248 (September 7, 2012) (SR-EDGA-2012-38).
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    The purpose of this proposed rule change is to amend Rule 13.9 to 
provide additional information regarding the features of the Standard 
Report and the Premium Report. The Filing noted that both the Standard 
Report and the Premium Report provide a view of all marketable orders 
that are routed to away destinations by the Exchange. The Reports are 
available to the Subscribers on the morning of the following trading 
day (T + 1) and include limit price, routed quantity, symbol, side 
(bid/offer), time of routing, and the National Best Bid and Offer 
(NBBO) at the time of routing.
    However, [the] Premium Report also identifies various categories of 
routing destinations. First, the Premium Report identifies whether the 
routing destination is either directed to a destination that is not an 
exchange (``Non-Exchange Destination'') or directed to another 
exchange. If the order is routed to a Non-Exchange Destination, the 
Premium Report will then also specify one of the following Non-Exchange 
Destination categories: Regular, Fast, Superfast and Midpoint 
(collectively, the ``Categories''). The Category is determined by the 
applicable routing strategy associated with the relevant order, based 
on responsiveness of the destination (i.e. latency), number of 
destinations, and/or type of execution (i.e. midpoint). For example, a 
routing strategy that leverages many dark pools for low-cost, low 
impact executions, which takes a greater amount of time to fill an 
order may be categorized as ``Regular'' in the Premium Report, whereas 
a destination specific strategy that has fewer Non-Exchange 
Destinations and responds more quickly may be categorized as 
``Superfast'' in the Premium Report. Notwithstanding the foregoing, the 
Premium Report will not identify the specific destination.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\5\ in general, and with 
Section 6(b)(5) of the Act \6\ in particular, which requires, among 
other things, that the Exchange's rules are not designed to unfairly 
discriminate between customers, issuers, brokers or dealers and are 
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.
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    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that this proposal is in 
keeping with those principles by promoting increased transparency 
through the dissemination of an additional market data feed, which will 
provide market participants with the opportunity to obtain additional 
data in furtherance of their investment decisions. The proposed rule 
change will contribute to providing such additional information and 
afford Subscribers transparency by categorizing routed liquidity to 
various Non-Exchange Destinations.

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, as amended.

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

[[Page 59442]]

unsolicited written comments from its 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: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest, the proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) \7\ of the Act and Rule 19b-4(f)(6) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\9\ However, 
Rule 19b-4(f)(6)(iii) \10\ 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 requested that the 
Commission waive the 30-day operative delay. The Exchange notes that 
waiver of these requirements will allow the Exchange to offer the Edge 
Routed Liquidity Report, with the revised and clarified distinction of 
the features available in each of the Reports, on or about the Filing's 
operative date. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest because such waiver would immediately provide 
additional information necessary for the operation of the Exchange's 
rules regarding the Edge Routed Liquidity Report. For this reason, the 
Commission designates the proposed rule change to be operative upon the 
operative date of the Filing.\11\
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    \9\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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.
    \10\ Id.
    \11\ For the purposes only of waiving the 30-day operative 
delay, the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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.

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-EDGA-2012-42 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-EDGA-2012-42. 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-EDGA-2012-42 and should be 
submitted on or before October 18, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-23768 Filed 9-26-12; 8:45 am]
BILLING CODE 8011-01-P