Federal Register / Vol. 77, No. 51 / Thursday, March 15, 2012 / Notices 15407 

10 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. 

4See Securities and Exchange Act Release No. 

65225 (August 30, 2011), 76 FR 55148 (September 

6, 2011) (SR–BATS–2011–018). 

5See EDGA Exchange Rule 11.9(b)(3)(n). 6See SR–EDGA–2012–06 (February 24, 2012). 

available publicly. All submissions 

should refer to File Number SR–EDGA– 

2012–06 and should be submitted on or 

before April 5, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6235 Filed 3–14–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66559; File No. SR–EDGA– 

2012–07] 

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 

March 9, 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 February 

29, 2012 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). 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, 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 

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 proposes to make a 

technical amendment to the description 

of Footnote 9 and Flag CL to reflect the 

Commission’s approval of the BATS 

BZX Exchange (‘‘BATS BZX’’) as a 

primary listing exchange.4 Therefore, 

Footnote 9 will state that Flag O will be 

yielded and a fee of $0.0005 per share 

will be assessed if an order is routed to 

NYSE Arca & BATS BZX’s closing 

process. This fee in footnote 9 ($0.0005 

per share) gives a flat rate for the NYSE 

Arca & BATS BZX’s closing processes, 

which is lower than other primary 

listing markets. Flag CL will apply to 

orders routed to a primary listing 

market’s closing process except NYSE 

Arca and BATS BZX. In addition, the 

Exchange proposes to revise the 

descriptions on Flags CL, 8, and 9 to 

broaden their applicability to several 

routing strategies rather than just 

ROOC.5 Therefore, the Exchange 

proposes that Flag CL state ‘‘Routed to 

listing market closing process except 

NYSE Arca & BATS BZX.’’ The 

Exchange proposes conforming 

amendments to Flags 8 and 9 to delete 

the ROOC routing strategy from the 

descriptions of these flags. 

The Exchange proposes to delete Flag 

H, which represents all non-displayed 

orders that add or remove liquidity, and 

bifurcate it by replacing it with Flags 

HA and HR. Flag HA will identify all 

non-displayed orders that add liquidity 

to EDGA and the Exchange will assess 

a fee of $0.0010 per share. Flag HR will 

identify all non-displayed orders that 

remove liquidity from EDGA and the 

Exchange will assess a fee of $0.0010 

per share. Additionally, footnote 2 is 

proposed to be revised to read ‘‘rate 

contingent upon Member adding or 

removing (emphasis added) greater than 

1,000,000 shares hidden on a daily basis 

* * * ’’ as both Flags HA and HR count 

toward this tier since they are both 

forms of hidden liquidity. This change 

allows Members who utilize both forms 

of hidden liquidity (add and remove) to 

satisfy this tier. Footnote 4 is proposed 

to be clarified that only non-displayed 

orders that add liquidity count toward 

the following tier listed there: ‘‘If a 

Member, on a daily basis, measured 

monthly, posts more than 1% of the 

Total Consolidated Volume (‘‘TCV’’) in 

average daily volume on EDGA, 

including all non-displayed orders (H 

Flag), then the Member will receive a 

rebate of $0.0005 per share. TCV is 

defined as volume reported by all 

exchanges and trade reporting facilities 

to the consolidated transaction reporting 

plans for Tapes A, B and C securities for 

the month prior to the month in which 

the fees are calculated. If a Member, on 

a daily basis, measured monthly, posts 

more than .25% of the TCV on EDGA, 

including all non-displayed orders (H 

Flag), and removes more than .25% of 

TCV in average daily volume, then the 

Member will receive a rebate of $0.0005 

per share.’’ To correspond with these 

changes, footnotes 2 and 4 are proposed 

to be appended to Flag HA and footnote 

2 is proposed to be appended to Flag 

HR. Finally, the references to the 

yielded flags (B, H, V, Y, 3–4) in text of 

footnotes 2 and 4 [sic] are duplicative of 

the footnotes next to the applicable 

Flags in the fee schedule and are 

therefore proposed to be deleted to 

simplify the schedule. 

The Exchange proposes to amend Flag 

9 and add new Flag 10 to its fee 

schedule. At this time, NYSE Arca offers 

its Members a rebate of $0.0021 for 

orders that add liquidity on Tapes A or 

C and a rebate of $0.0022 for orders that 

add liquidity on Tape B. The Exchange 

proposes to amend Flag 9 to account for 

the pass-through of the NYSE Arca 

rebate for adding liquidity through 

Tapes A or C and to create Flag 10 to 

account for the pass-through of the 

NYSE Arca rebate for adding liquidity 

on Tape B. Finally, the Exchange 

proposes to make technical amendments 

to Flags N, 3, and 9 to replace the ‘‘and’’ 

connector with ‘‘or’’ (i.e., ‘‘Tapes A or 

C’’ instead of ‘‘Tapes A and C’’) to make 

these references accurate. 

The Exchange proposes to add Flag 

PA for orders that utilize the midpoint 

routing strategy RMPT6 and add 


srobinson on DSK4SPTVN1PROD with NOTICES
15408 Federal Register / Vol. 77, No. 51 / Thursday, March 15, 2012 / Notices 

7 Id. 

8 Id. 

9See Securities Exchange Act Release No. 65902 

(December 6, 2011), 76 FR 77286 (December 12, 

2011). 

10As defined in EDGA Exchange Rule 1.5(cc) 

[sic]. 

11These flags account for all postable destinations 

that are not already accounted for by other flags on 

the fee schedule. 

12 15 U.S.C. 78f. 

13 15 U.S.C. 78f(b)(4). 

14See Nasdaq OMX BX fee schedule at: http:// 

www.nasdaqtrader.com/Trader.aspx?id=bx_pricing. 

15See BATS BYX fee schedule at: http:// 

www.batstrading.com/FeeSchedule. 

liquidity to EDGA. The Exchange 

proposes to assess a charge of $0.0010 

per share. 

The Exchange proposes to add Flag 

PT for orders that utilize the midpoint 

routing strategy RMPT7 and remove 

liquidity. The Exchange proposes to 

assess a charge of $0.0010 per share. 

The Exchange proposes to add Flag 

PX for orders that utilize the midpoint 

routing strategy RMPT 8 and are routed 

to other destinations on the Exchange’s 

System routing table. The Exchange 

proposes to assess a charge of $0.0020 

per share. 

In SR–EDGA–2011–39,9 the Exchange 

amended several routing options 

contained in Rule 11.9(b)(3) to allow 

Users 10 more discretion if shares remain 

unexecuted after routing. In particular, 

Rule 11.9(b)(3)(c)(i)–(iii) was amended 

to provide that Users may elect that any 

remainder of an order be posted to 

another destination on the System 

routing table. In conjunction with this 

amendment, the Exchange proposes to 

create the following new flags: 11

The Exchange proposes to add Flag 

RB for orders that are routed from EDGA 

to Nasdaq OMX BX and add liquidity. 

The Exchange proposes to assess a 

charge of $0.0018 per share to account 

for the pass-through of the Nasdaq OMX 

BX fee for adding liquidity. 

The Exchange proposes to add Flag 

RC for orders that are routed from EDGA 

to the National Stock Exchange, Inc. 

(‘‘NSX’’) and add liquidity. The 

Exchange proposes to offer Members a 

rebate of $0.0026 per share to account 

for the pass-through of the NSX rebate 

for adding liquidity. 

The Exchange proposes to add Flag 

RM for orders that are routed from 

EDGA to the Chicago Stock Exchange, 

Inc. (‘‘CHX’’) and add liquidity. The 

Exchange proposes to assess no charge 

to account for the pass-through of the 

CHX fee for adding liquidity. 

The Exchange proposes to add Flag 

RS for orders that are routed from EDGA 

to the Nasdaq OMX PSX (‘‘PSX’’) and 

add liquidity. The Exchange proposes to 

offer Members a rebate of $0.0024 per 

share to account for the pass-through of 

the PSX rebate for adding liquidity. 

The Exchange proposes to add Flag 

RW for orders that are routed from 

EDGA to the CBOE Stock Exchange, LLC 

(‘‘CBSX’’) and add liquidity. The 

Exchange proposes to assess a charge of 

$0.0017 per share to account for the 

pass-through of the CBSX fee for adding 

liquidity. 

The Exchange proposes to add Flag 

RY for orders that are routed from EDGA 

to the BATS BYX and add liquidity. The 

Exchange proposes to assess a charge of 

$0.0003 per share to account for the 

pass-through of the BATS BYX fee for 

adding liquidity. 

The Exchange proposes to add Flag 

RZ for orders that are routed from EDGA 

to the BATS BZX that add liquidity. The 

Exchange proposes to offer Members a 

rebate of $0.0025 per share to account 

for the pass-through of the BATS BZX 

rebate for adding liquidity to BATS 

BZX. 

The Exchange proposes to implement 

these amendments to its fee schedule on 

March 1, 2012. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule changes are consistent 

with the objectives of Section 6 of the 

Act,12 in general, and furthers the 

objectives of Section 6(b)(4),13 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 believes that the 

proposed technical amendments to 

Footnotes 2 and 4 and Flags 3, 9, and 

N add additional transparency to its fee 

schedule for investors. The Exchange 

believes that the proposed technical 

amendments to Footnote 9 and Flag CL 

to include BATS BZX as one of the 

primary listing exchanges adds 

additional transparency to its fee 

schedule for investors as it brings the 

schedule up-to-date to account for a 

new listing exchange. The Exchange 

also believes that the amendments to 

Flags 8, 9, and CL to remove the specific 

‘‘ROOC routing strategy’’ from those 

flags descriptions provides additional 

transparency to the fee schedule by 

broadening those flags applicability to 

several routing strategies. This 

encourages Members to utilize the 

Exchange to route to various 

destinations. The Exchange believes that 

the proposed amendment to delete Flag 

H and replace it with Flags HA and HR 

support the quality of price discovery, 

promote market transparency and 

improve investor protection by adding 

additional transparency to its fee 

schedule for Members by more precisely 

delineating for Members whether they 

have posted hidden liquidity or 

removed hidden liquidity. 

In addition, the amendment to 

footnote 2 to allow Members that 

remove hidden liquidity (Flag HR), 

rather than just add hidden liquidity 

(Flag HA), to achieve a favorable rate of 

$0.0010 per share opens this tier to 

those Members who remove hidden 

liquidity. The Exchange believes that 

providing an additional way to achieve 

the lower fee of $0.0010 per share 

(instead of $0.0030 per share) represents 

an equitable allocation of reasonable 

dues, fees, and other charges since it 

allows Members another means to 

achieve this lower fee and encourages 

Members to add to or remove liquidity 

from EDGA which is greater than 

1,000,000 shares hidden on a daily 

basis. Such increased volume increases 

potential revenue to the Exchange, and 

would allow the Exchange to spread its 

administrative and infrastructure costs 

over a greater number of shares, leading 

to lower per share costs. These lower 

per share costs would allow the 

Exchange to pass on the savings to 

Members in the form of lower fees. 

The Exchange believes that the rate 

for flags PA/PT (the RMPT routing 

strategy adding/removing liquidity) is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

other person using its facilities. The rate 

of $0.0010 for Mid-Point Peg Orders 

routed through the RMPT routing 

strategy is equitable in that Mid-Point 

Peg Orders behave in a similar fashion 

to non-displayed orders, which are 

currently priced at $0.0010 per share. 

Mid-Point Peg Orders like nondisplayed orders are non-displayed 

orders that remain hidden on the 

Exchange’s book at various price points. 

The rate is also comparable to fees for 

non-displayed liquidity on other 

exchanges. For example, Nasdaq OMX 

BX charges $0.0018 to add nondisplayed liquidity,14 while BATS BYX 

charges $0.001 to add non-displayed 

(hidden) liquidity to its order book.15 In 

addition, EDGA believes that it is 

reasonable and equitable to charge the 

same rates for non-displayed orders, and 

it is non-discriminatory because the 

charge will apply uniformly to all 

Members. 

The Exchange believes the proposed 

fee of $0.0020 associated with Flag PX 

is reasonable and equitable as it 

represents a flat rate charged by 

different exchanges and is consistent 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 51 / Thursday, March 15, 2012 / Notices 15409 

16Nasdaq’s DOTM routing strategy posts on a 

primary listing market for the open and then acts 

like Nasdaq’s STGY routing strategy for the rest of 

the trading session. See NASDAQ Rule 4758 and 

NASDAQ Pricing List at: http:// 

www.nasdaqtrader.com/ 

Trader.aspx?id=PriceListTrading2. 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 19b–4(f)(2). 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

with how other exchanges pass through 

charges plus or minus a differential for 

orders routed to a different exchange. 

The rate represents a flat routing rate for 

EDGA members. The flat-rate provides 

simplicity for Members instead of 

passing through the actual rates that 

EDGA receives from various 

destinations on its schedule. This type 

of rate is similar to other rates that 

EDGA charges, such as the flat rates for 

the ROUT routing strategy (yielding Flag 

RT and priced at $0.0025 per share) and 

for Flag 7 executions ($0.0027 per 

share). In this rate, EDGA takes into 

account the rates that it is charged or 

rebated when routing to other 

destinations. It is also consistent with 

the processing of similar routing 

strategies by EDGA’s competitors, such 

as Nasdaq’s DOTM routing strategy 16

for which Nasdaq charges $0.0030 per 

share. The Exchange believes that the 

proposed fee is non-discriminatory in 

that it applies uniformly to all Members. 

In addition, the Exchange believes 

that the proposed pass-through of rates 

for Flags RZ, 9, 10, RB, RC, RM, RS, RW, 

and RY represent an equitable allocation 

or reasonable dues, fees and other 

charges since it reflects the pass-through 

of the rates associated with transactions 

done on other exchanges, as described 

above. In addition, EDGA believes that 

it is reasonable and equitable to passthrough certain rates to its Members. 

The Exchange also believes that the 

proposed pass-through of rates is nondiscriminatory because they apply to all 

Members. 

The Exchange also 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. The 

Exchange believes that the proposed 

rates are equitable and nondiscriminatory 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. 

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 17 and Rule 19b–4(f)(2) 18

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 email to rulecomments@sec.gov. Please include File 

Number SR–EDGA–2012–07 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–2012–07. 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– 

2012–07 and should be submitted on or 

before April 5, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6237 Filed 3–14–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66569; File No. SR–Phlx– 

2012–28] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Notice of 

Filing of Proposed Rule Change 

Relating to the MSCI EAFE Index 

March 9, 2012. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 2 thereunder, 

notice is hereby given that on March 1, 

2012, NASDAQ OMX PHLX LLC 

(‘‘Phlx’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘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 


srobinson on DSK4SPTVN1PROD with NOTICES