Federal Register / Vol. 77, No. 11 / Wednesday, January 18, 2012 / Notices 2581 

and for 2,000,000 or more originating contract sides 

ISE pays $0.05 per contract. 27 15 U.S.C. 78s(b)(3)(A)(ii). 

28 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Also, all members are equally eligible to 

transact Multiply Listed securities. 

The Exchange believes that it 

continues to be equitable and not 

unfairly discriminatory to pay the rebate 

for Floor QCC Orders to Floor Brokers 

because it would uniformly apply to all 

Floor QCC Orders entered by a Floor 

Broker into FBMS for execution based 

on volume. The rebate is not unfairly 

discriminatory to firms that enter eQCC 

Orders directly into PHLX XL II, 

because the transaction fees and rebates 

are the same whether the order is 

entered electronically or through a Floor 

Broker. In addition, pursuant to 

Exchange Rule 1080(o)(3), only Floor 

Brokers may enter a Floor QCC Order 

from the floor of the Exchange; 

therefore, providing the rebate to Floor 

Brokers does not discriminate against 

eQCC orders entered into PHLX XL II. 

Any participant will be able to engage 

a rebate-receiving Floor Broker in a 

discussion surrounding the appropriate 

level of fees that they may be charged 

for entrusting the entry of the Floor QCC 

Order to the Floor Broker into FBMS for 

execution. The additional order flow 

attracted by this rebate should benefit 

all participants. The rebate is meant to 

assist Floor Brokers to recruit business 

on an agency basis. The Floor Broker 

may use all or part of the rebate to offset 

its fees. 

The Exchange believes it is equitable 

and not unfairly discriminatory to not 

offer a rebate for eQCC Orders and Floor 

QCC Orders for Customer-to-Customer 

executions and for dividend, merger and 

short stock interest strategies and 

executions subject to the Reversal and 

Conversion Cap because the Exchange 

would not offer a rebate for these two 

types of transactions for any QCC Order 

uniformly. Neither Customer-toCustomer executions nor dividend, 

merger and short stock interest 

strategies and executions subject to the 

Reversal and Conversion Cap will 

receive the rebate. Also, Customers are 

not assessed a QCC Transaction Fee. 

The Exchange believes that the 

technical amendments proposed herein 

are reasonable, equitable and not 

unfairly discriminatory because they 

would add clarity to the Fee Schedule 

and conform the Fee Schedule. 

The Exchange operates in a highly 

competitive market comprised of nine 

U.S. options exchanges in which 

sophisticated and knowledgeable 

market participants readily can, and do, 

send order flow to competing exchanges 

if they deem fee levels at a particular 

exchange to be excessive. The Exchange 

believes that the proposed rebates for 

eQCC Orders and Floor QCC Orders 

must be competitive with rebates 

offered at other options exchanges. The 

Exchange believes that this competitive 

marketplace impacts the rebates and 

fees present on the Exchange today and 

influences the proposals set forth above. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition 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 

No written comments were either 

solicited or received. 

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)(A)(ii) of the Act.27 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. If the Commission 

takes such action, the Commission shall 

institute proceedings to determine 

whether the proposed rule should be 

approved or disapproved. 

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–Phlx–2011–189 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–Phlx–2011–189. 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 such 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–Phlx– 

2011–189 and should be submitted on 

or before February 8, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–818 Filed 1–17–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66130; File No. SR–EDGA– 

2011–42] 

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 

January 11, 2012. 

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

Securities Exchange Act of 1934 (the 

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


tkelley on DSK3SPTVN1PROD with NOTICES
2582 Federal Register / Vol. 77, No. 11 / Wednesday, January 18, 2012 / Notices 

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, e.g., Securities Exchange Act Release No. 

65541 (October 12, 2011), 76 FR 64409 (October 18, 

2011) (SR–EDGX–2011–31). 

5 In 2012, these days include July 3, 2012, 

November 23, 2012, and December 24, 2012. 

6 15 U.S.C. 78f. 

7 15 U.S.C. 78f(b)(4). 

8 In 2012, these days include July 3, 2012, 

November 23, 2012, and December 24, 2012. 

notice is hereby given that on December 

30, 2011, 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 

Statutory Basis for, the Proposed Rule 

Change 

Purpose 

Footnote 4 of the EDGA fee schedule 

currently provides that: If a Member, on 

a daily basis, measured monthly, posts 

more than 1% of the Total Consolidated 

Volume (‘‘TCV’’) in average daily 

volume, 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 and removes more than 

.25% of TCV in average daily volume, 

then the Member will receive a rebate of 

$0.0005 per share. 

The Exchange proposes to amend the 

description in footnote 4 of its fee 

schedule to state that all non-displayed 

orders (H Flag executions) count toward 

added/posting liquidity in both 

paragraphs of footnote 4. The Exchange 

also proposes to append footnote 4 to 

the H Flag on its fee schedule in 

connection with this. Similar to the way 

that the H Flag counts toward adding/ 

posting liquidity tiers on the EDGX 

Exchange, Inc. (‘‘EDGX’’),4 the H Flag is 

another flag that can also add liquidity 

on EDGA. Currently, the flags that add 

liquidity on EDGA and count toward the 

tiers identified in footnote 4 are B, V, Y, 

3, and 4. 

Furthermore, the Exchange also 

proposes to amend the description in 

footnote 4 of its fee schedule to state 

that a Member has to post liquidity to 

EDGA in order to satisfy the tiers 

delineated in footnote 4. To do so, the 

Exchange proposes to insert the words 

‘‘to EDGA’’ after the phrases ‘‘posts 

more than 1% of the TCV’’ and ‘‘posts 

more than .25% of the TCV’’ in footnote 

4. 

The Exchange proposes to delete 

footnote 13 from its fee schedule, as no 

Members have qualified for this tier. 

Footnote 13 states that for Members that 

route an average daily volume (ADV) 

more than 30,000,000 shares per day to 

NYSE using the RDOT or RDOX routing 

strategy, then their removal rate 

decreases to $0.0022 per share. 

The Exchange also proposes to amend 

its fee schedule to add footnote b to it 

to specify that trading activity on days 

when the market closes early 5 does not 

count toward any volume tiers, which 

are currently found in footnotes 1, 2, 4, 

6, 13. 

The Exchange proposes to implement 

these amendments to its fee schedule on 

January 1, 2012. 

Basis 

The Exchange believes that the 

proposed rule change is 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 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 amending 

the H Flag’s application toward the tiers 

outlined in footnote 4 on the Exchange’s 

fee schedule is an equitable allocation of 

reasonable dues, fees, and other charges. 

The H Flag is another flag that can also 

add liquidity on EDGA and counts 

towards the tiers identified in footnote 

4. The Exchange believes that providing 

discounts for adding liquidity to the 

Exchange would incent liquidity. In 

addition, 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 

a higher rebate. The increased liquidity 

also benefits all investors by deepening 

EDGA’s liquidity pool, offering 

additional flexibility for all investors to 

enjoy cost savings, supporting the 

quality of price discovery, promoting 

market transparency and improving 

investor protection. In addition, by 

making this amendment, the Exchange 

adds additional transparency to its fee 

schedule for Members. 

The deletion of the tier in footnote 13 

to the fee schedule is an equitable 

allocation of reasonable dues, fees, and 

other charges, as no Members have 

qualified for this tier and the Exchange 

generates administrative costs by 

maintaining it. In addition, by deleting 

this tier, the Exchange adds additional 

clarity to its fee schedule for Members. 

The Exchange believes that the 

proposed amendment is 

nondiscriminatory in that it applies 

uniformly to all Members. 

The Exchange also proposes to amend 

its schedule by adding footnote b to 

specify that trading activity on days 

when the market closes early does not 

count toward volume tiers (footnotes 1, 

2, 4, 6, 13). Since the Exchange is only 

open until 1 p.m. Eastern Time (‘‘ET’’) 

on these days (e.g., the day after 

Thanksgiving),8 the Exchange believes 

that counting volume on these days 

towards the tiers would not be 

illustrative of typical market activity or 

liquidity provision, since the trading 

day is shortened. Therefore, the 

Exchange proposes to exclude such 

shortened trading days from any volume 

tier calculations, as presently found in 

footnotes numbers 1, 2, 4, 6, and 13. The 

Exchange believes that the proposed 

amendment is non-discriminatory in 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 11 / Wednesday, January 18, 2012 / Notices 2583 

9See fee schedules of Nasdaq and NYSE Arca 

found at: http://www.nasdaqtrader.com/ 

Trader.aspx?id=PriceListTrading2; and https:// 

usequities.nyx.com/sites/usequities.nyx.com/files/ 

nyse_arca_marketplace_fees_12_1_2011.pdf 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 19b–4(f)(2). 12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

that it applies uniformly to all Members 

and would more accurately represent 

their trading volume. In addition, the 

proposed amendment is in accordance 

with the practices employed by other 

Exchanges.9

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 10 and Rule 19b–4(f)(2) 11

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–2011–42 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–2011–42. 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–2011–42 and should 

be submittedon or before February 8, 

2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–770 Filed 1–17–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66139; File No. SR–CHX– 

2012–01] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change To Amend 

its Fee Schedule To Assess Fees for 

Derivative Securities Products 

January 11, 2012. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on January 6, 

2012, the Chicago Stock Exchange, Inc. 

(‘‘CHX’’ or the ‘‘Exchange’’) 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 CHX. CHX 

has filed the proposal pursuant to 

Section 19(b)(3)(A) of the Act 3 and Rule 

19b–4(f)(2) thereunder,4 which renders 

the proposal effective upon filing with 

the Commission. 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 

CHX proposes to amend its Fee 

Schedule, effective January 9, 2012, to 

create a separate fee and rebate structure 

for Derivative Securities Products and to 

remove certain references to Tape A, B 

and C securities throughout the Fee 

Schedule. 

The text of this proposed rule change 

is available on the Exchange’s Web site 

at (www.chx.com) and in the 

Commission’s Public Reference Room. 

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 

CHX included statements concerning 

the purpose of and basis for the 


tkelley on DSK3SPTVN1PROD with NOTICES