Federal Register / Vol. 75, No. 215 / Monday, November 8, 2010 / Notices 68659 

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

2 17 CFR 240.19b–4. 

3A 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. 

4 15 U.S.C. 78f. 

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

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63227; File No. SR–EDGA– 

2010–17] 

Self-Regulatory Organizations; EDGA 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Amendments 

to the EDGA Exchange, Inc. Fee 

Schedule 

November 2, 2010. 

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 October 

29, 2010, the EDGA Exchange, Inc. (the 

‘‘Exchange’’ or the ‘‘EDGA’’) 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 selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

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

of the Exchange pursuant to EDGA Rule 

15.1(a) and (c) by making an 

amendment to its fee schedule. 

All of the changes described herein 

are applicable to EDGA Members. The 

text of the proposed rule change is 

available on the Exchange’s Internet 

Web site at http://www.directedge.com. 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Currently, for Non-Displayed Orders, 

Members are charged $0.0010 per share. 

However, this rate is contingent upon a 

Member adding greater than 1,000,000 

shares on a daily basis, measured 

monthly. Members not meeting this 

minimum are currently charged $0.0030 

per share. 

First, the Exchange proposes to add 

clarifying language in footnote 2 to state 

that a Flag H would be yielded in this 

situation. Next, the Exchange proposes 

to add an additional way for Members 

to be charged the reduced rate of 

$0.0010 per share. This additional 

method would allow Members to 

qualify for the reduced rate if they post 

on EDGA greater than 8,000,000 shares 

on a daily basis, measured monthly 

(yielding Flags B, V, Y, 3 or 4). The 

Exchange proposes to make a 

conforming amendment to change the 

word ‘‘this’’ to ‘‘either’’ in footnote 2 to 

clarify that a Member can receive the 

rate of $0.0010 per share by satisfying 

either condition. 

Finally, the Exchange proposes to 

provide a reduced rate for nondisplayed (‘‘Flag H’’) executions for a 

non-aggregated MPID representing the 

volume of a Member and meeting 

certain criteria. For executions in stocks 

priced $1.00 and over, if the average 

daily volume (‘‘ADV’’) of Flag H 

executions for a non-aggregated MPID is 

increased such that its ADV is 1,000,000 

greater than its ADV of Flag H 

executions averaged across the month of 

October 2010, then the non-aggregated 

MPID would qualify for a rate of 

$0.00025 per share. For executions in 

stocks priced below $1.00, if the ADV of 

Flag H executions for a non-aggregated 

MPID is increased such that its ADV is 

1,000,000 greater than its ADV of Flag 

H executions averaged across the month 

of October 2010, then the nonaggregated MPID would qualify for a 

rate of .025% of the total dollar volume 

of the Flag H executions. The Exchange 

believes that these reduced rates for Flag 

H executions will incent Members to 

add liquidity to EDGA. 

The Exchange believes that the above 

pricing is appropriate since lower rates 

for Flag H executions are directly 

correlated with more stringent criteria. 

The lowest rate of $0.00025 per share 

for Flag H executions has the most 

stringent criteria associated with it and 

is a lower rate than the next best rate of 

$0.0010 per share, which in turn is a 

better rate than the default rate of 

$0.0030 per share for Flag H executions. 

For example, assuming an average ADV 

for the month of October 2010 of 

500,000, a non-aggregated MPID would 

need 1.5 million in Flag H executions to 

qualify for the rate of $0.00025 per 

share. In order to qualify for the next 

best rate of $0.0010, a Member would 

have to add greater than 1 million 

shares or post greater than 8 million 

shares on a daily basis, measured 

monthly. If none of these criteria are 

met, the Member would receive the 

highest rate of $0.0030 per share for Flag 

H executions. In addition, these lower 

rates for Flag H executions also result, 

in part, from lower administrative costs 

associated with higher volume. 

EDGA Exchange proposes to 

implement these amendments to the 

Exchange fee schedule on November 1, 

2010. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,4

in general, and furthers the objectives of 

Section 6(b)(4),5 in particular, as it is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

other persons using its facilities. The 

Exchange notes 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 at a particular venue to 

be excessive. The proposed rule change 

reflects a competitive pricing structure 

designed to incent market participants 

to direct their order flow to the 

Exchange. In addition, the lower rates 

for Flag H executions also result, in part, 

from lower administrative costs 

associated with higher volume. Finally, 

the Exchange believes that the proposed 

rates are equitable in that they apply 

uniformly to all Members. The 

Exchange believes the fees and credits 

remain competitive with those charged 

by other venues and therefore continue 

to be reasonable and equitably allocated 

to Members. 

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. 


jlentini on DSKJ8SOYB1PROD with NOTICES
68660 Federal Register / Vol. 75, No. 215 / Monday, November 8, 2010 / Notices 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 19b–4(f)(2). 

8The text of the proposed rule change is available 

on the Exchange’s Web site at http:// 

www.directedge.com, on the Commission’s Web site 

at http://www.sec.gov, at EDGA, and at the 

Commission’s Public Reference Room. 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3A 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. 

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 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3) of 

the Act 6 and Rule 19b–4(f)(2) 7

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. 

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 rulecomments@sec.gov. Please include File 

Number SR–EDGA–2010–17 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–2010–17. 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,8 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– 

2010–17 and should be submitted on or 

before November 29, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–28182 Filed 11–5–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63226; File No. SR–EDGX– 

2010–16] 

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 

November 2, 2010. 

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 October 

29, 2010, the EDGX Exchange, Inc. (the 

‘‘Exchange’’ or the ‘‘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 selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

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

of the Exchange pursuant to EDGX Rule 

15.1(a) and (c). 

All of the changes described herein 

are applicable to EDGX Members. The 

text of the proposed rule change is 

available on the Exchange’s Internet 

Web site at http://www.directedge.com. 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange’s Mega Tier provides a 

rebate of $0.0032 per share for adding 

liquidity for securities priced at or 

above $1.00 and is incorporated in 

footnote 1 of the fee schedule. As 

provided in footnote 1, a Member can 

qualify for the Mega Tier rebate in one 

of two ways. The first way by which 

Members can qualify for the Mega Tier 

rebate is if they add or route at least 

5,000,000 shares of average daily 

volume prior to 9:30 a.m. or after 4 p.m. 

(includes all flags except 6) AND add a 

minimum of 25,000,000 shares of 

average daily volume on EDGX in total. 

With respect to Members qualifying for 

the Mega Tier rebate pursuant to this 

first method, the Exchange proposes to 

add language to footnote 1 to state that 

such Members will pay a reduced rate 

for removing liquidity of $0.0029 per 

share for Flags N, W, and 6. 

The Exchange believes that the above 

pricing is appropriate since higher 

rebates are directly correlated with more 

stringent criteria. The Mega Tier rebate 


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