22020 Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Notices 

3 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘System’’ is defined in EDGA Rule 

1.5(cc). 

for ICC to be in compliance with the 

law. The ICE Clear Credit Board, Risk 

Committee and Risk Management 

Subcommittee discussed with concern 

the extreme reduction in the minimum 

capital requirement from the current 

ICC requirement of $5,000,000,000 for 

non-FCM or Broker Dealer Clearing 

Participants to the minimum capital 

requirement of $50,000,000 mandated 

by CFTC Regulation 39.12(a)(2)(iii) and 

proposed in Commission Rule 17Ad– 

22(b)(7). 

Similarly, the ICE Clear Credit Board, 

Risk Committee and Risk Management 

Subcommittee discussed the very 

significant reduction in the minimum 

capital requirement initially established 

by ICC for its FCM or Broker Dealer 

Clearing Participants of $500,000,000 

(subsequently reduced to $100,000,000) 

to the minimum capital requirement of 

$50,000,000 mandated by CFTC 

Regulation 39.12(a)(2)(iii) and proposed 

in Commission Rule 17Ad–22(b)(7). The 

concerns raised by the ICE Clear Credit 

Board, Risk Committee, and Risk 

Management Subcommittee are 

mitigated in part by the Risk-Based 

Capital Requirement ICC is proposing. 

ICC believes that the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act 

and the rules and regulations 

thereunder applicable to it. ICC believes 

that the proposed membership 

requirements will comply with the Act 

and the rules and regulations 

thereunder. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

ICC does not believe that the 

proposed rule change would impose any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments relating to the 

proposed rule change have not been 

solicited or received. ICC will notify the 

Commission of any written comments 

received by ICC. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the proposed rule change or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be 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 may be 

submitted by using the Commission’s 

Internet comment form (http:// 

www.sec.gov/rules/sro.shtml), or send 

an email to rule-comments@sec.gov. 

Please include File No. SR–ICC–2012– 

05 on the subject line. 

• Paper comments should be sent 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–ICC–2012–05. 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 filings 

will also be available for inspection and 

copying at the principal office of ICE 

Clear Credit and on ICE Clear Credit’s 

Web site at https://www.theice.com/ 

publicdocs/regulatory_filings/ 

032812_SEC_ICEClearCredit.pdf. 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–ICC–2012–05 and should 

be submitted on or before May 3, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.3

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8790 Filed 4–11–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66764; File No. SR–EDGA– 

2012–14] 

Self-Regulatory Organizations; EDGA 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to New EDGA 

Rule 11.22 Requiring Members To 

Input Accurate Information Into the 

System 

April 6, 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 April 2, 

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, II, and 

III 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to adopt new 

EDGA Rule 11.22 to require Members to 

input accurate information into the 

System,3 including, but not limited to, 

identifying each order accurately as a 

principal, agency, or riskless principal 

order. 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. 

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 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Notices 22021 

4Members utilize an industry standard Financial 

Information eXchange (‘‘FIX’’) protocol to 

electronically enter orders into the System. 

Members populate certain FIX fields (i.e., tags) to 

indicate certain terms of the order. FIX tag 47 is 

used to identify the Member’s capacity. 

5See Securities Exchange Act Release No. 63969 

(February 25, 2011), 76 FR 12155 (March 4, 2011); 

and Securities Exchange Act Release No. 63970 

(February 25, 2011), 76 FR 12204 (March 4, 2011). 

6See Securities Exchange Act Release No. 59547 

(March 10, 2009), 74 FR 11386 (March 17, 2009). 

7 15 U.S.C. 78s(b)(1). 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

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

11 17 CFR 240.19b–4(f)(6). 

12 17 CFR 240.19b–4(f)(6)(iii). 

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 add new 

EDGA Rule 11.22 for the purpose of 

increasing transparency and to enhance 

the surveillance database and audit trail 

of transaction data used by the 

Exchange in surveillance of its market. 

The proposed rule change would 

require Members to input accurate 

information into the System, including, 

but not limited to, identifying the 

capacity of each order accurately as a 

principal, agency, or riskless principal 

order. For purposes of surveillance, the 

Exchange currently identifies the 

capacity of each order as principal, 

agency, or riskless principal; however, 

several other capacities are accepted 

upon order entry, including no 

response, which are thereafter mapped 

to one of the above-listed order 

capacities. By requiring Members to 

accurately submit an order capacity for 

each order and to otherwise input 

accurate information into the System, 

the Exchange will be able to more 

precisely identify the type of order 

received and more effectively surveil for 

abusive trading. 

EDGA does not currently have a rule 

that makes an explicit statement 

regarding a Member’s obligation to 

input accurate information into the 

System. However, currently, in FIX tag 

47,4 Members are asked to populate 

their capacity when entering orders into 

the Exchange’s System; however, if the 

field is left blank by the Member, it is 

automatically populated with an ‘‘A’’ 

value (denoting agency). 

Notwithstanding, EDGA believes that 

disciplinary cases against Members 

entering inaccurate or incomplete 

information may be brought 

appropriately under EDGA Rule 3.1, 

which requires Members to observe high 

standards of commercial honor and just 

and equitable principles of trade. Rule 

3.1 protects the investing public and the 

securities industry from dishonest 

practices that are unfair to investors or 

hinder the functioning of a free and 

open market, even though those 

practices may not be illegal or violate a 

specific rule or regulation. Because of 

the regulatory importance of inputting 

accurate information into the System, 

EDGA believes a rule that directly 

addresses Members’ obligation to 

provide accurate information is 

warranted. The proposed rule makes 

clear Members’ obligation to input 

accurate information into the System 

and that failure to do so would be 

considered a violation of EDGA Rules. 

In addition, once the rule is effective, if 

Members do not input the capacity in 

which they are acting (principal, agent, 

or riskless principal) into the System, 

the order will be rejected back to the 

Member by the Exchange. 

EDGA notes that both BATS Exchange 

Inc. (‘‘BATS’’) and BATS–Y Exchange, 

Inc. (‘‘BYX’’) have adopted rules 

materially identical to proposed EDGA 

Rule 11.22.5 Similarly, the Commission 

has previously approved rules proposed 

by the NASDAQ Stock Market LLC 

(‘‘NASDAQ’’) requiring participants to 

ensure that accurate information is 

entered into NASDAQ’s system, 

including, but not limited to, the 

capacity in which the participant is 

acting.6 Thus, the proposed rule change 

would bring EDGA Rules in line with 

those of other self-regulatory 

organizations. 

In order to allow Members sufficient 

time to review and complete any 

systems changes necessitated by this 

filing, the Exchange will notify 

Members via information circular of an 

exact implementation date for the 

proposed rule change, which will be no 

later than August 31, 2012. 

2. Statutory Basis 

The rule change proposed in this 

submission is consistent with the 

requirements of Section 19(b)(1) of the 

Act 7 and the rules and regulations 

thereunder that are applicable to a 

national securities exchange, and, in 

particular, with the requirements of 

Section 6(b) of the Act.8 Specifically, for 

the reasons described above, the 

proposed change is consistent with 

Section 6(b)(5) of the Act,9 because it is 

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 to 

protect investors and the public interest. 

Specifically, the changes proposed 

herein will serve to promote the 

accuracy of information input into the 

Exchange. Accurate information is 

necessary for the efficient and fair 

operation of the Exchange, and will 

assist the Exchange in surveilling the 

markets for abusive or otherwise 

violative trading activity. 

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 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 neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has designated this rule 

filing as non-controversial under 

Section 19(b)(3)(A) of the Act 10 and 

paragraph (f)(6) of Rule 19b–4 

thereunder.11 The Exchange asserts that 

the proposed rule change: (1) Will not 

significantly affect the protection of 

investors or the public interest, (2) will 

not impose any significant burden on 

competition, and (3) will not become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as designated by the Commission. The 

Exchange provided the Commission 

with written notice of its intent to file 

the proposed rule change, along with a 

brief description and text of the 

proposed rule change, at least five 

business days prior to the date of filing, 

or such shorter time as the Commission 

may designate.12 In addition, the 

Exchange believes that the proposal to 

require Members to identify the capacity 

of each order as either a principal, 

agency, or riskless principal order does 

not present any policy issues that have 

not previously been considered by the 

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22022 Federal Register / Vol. 77, No. 71 / Thursday, April 12, 2012 / Notices 

13See, e.g., NASDAQ Rule 4611(a)(6), BATS Rule 

11.21 and BYX Rule 11.21. 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 66393 

(February 14, 2012), 77 FR 10020 (‘‘Notice’’). 

4C2 proposes to define a complex order as any 

order involving the execution of two or more 

different options series in the same underlying 

security occurring at or near the same time in a ratio 

that is equal to or greater than one-to-three (.333) 

and less than or equal to three-to-one (3.00) (or such 

lower ratio as may be determined by the Exchange 

on a class-by-class basis) and for the purpose of 

executing a particular investment strategy. See C2 

Rule 6.13(a)(1). 

5C2 proposes to define a ‘‘stock-option order’’ as 

an order to buy or sell a stated number of units of 

an underlying stock or a security convertible into 

the underlying stock (‘‘convertible security’’) 

coupled with the purchase or sale of options 

contract(s) on the opposite side of the market 

representing either (i) the same number of units of 

the underlying stock or convertible security; or (ii) 

the number of units of the underlying stock 

necessary to create a delta neutral position, but in 

no case in a ratio greater than eight (8) options 

contracts per unit of trading of the underlying stock 

or convertible security established for that series by 

The Options Clearing Corporation (or such lower 

ratio as may be determined by the Exchange on a 

class-by-class basis). See C2 Rule 6.13(a)(2). 

6See ISE Rule 722(a)(1) and (2). 

7See C2 Rule 6.13(a)(1) and (2). 

8See C2 Rule 6.13, Interpretation and Policy 

.06(d). 

Commission, but rather, is a minor 

change to the Exchange’s existing rules 

that is consistent with the rules of other 

national securities exchanges.13 For the 

foregoing reasons, this rule filing 

qualifies for immediate effectiveness as 

a ‘‘non-controversial’’ rule change under 

paragraph (f)(6) of Rule 19b–4. 

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. 

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–2012–14 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–2012–14. 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– 

2012–14 and should be submitted on or 

before May 3, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–8788 Filed 4–11–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66760; File No. SR–C2– 

2012–004] 

Self-Regulatory Organizations; C2 

Options Exchange, Incorporated; 

Order Approving a Proposed Rule 

Change Relating To Stock-Option 

Orders 

April 6, 2012. 

I. Introduction 

On February 7, 2012, the C2 Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘C2’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

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

Securities Exchange Act of 1934 

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

proposed rule change to amend C2 Rule 

6.13, ‘‘Complex Order Execution,’’ to, 

among other things, revise C2’s 

procedures for electronically executing 

stock-option orders. The proposed rule 

change was published for comment in 

the Federal Register on February 21, 

2012.3 The Commission received no 

comment letters regarding the proposed 

rule change. This order approves the 

proposed rule change. 

II. Description of the Proposal 

C2 proposes to amend C2 Rule 6.13 to 

adopt definitions of complex order and 

stock-option order, and to provide 

procedures for electronically executing 

stock-option orders. 

A. Definitions of Complex Order and 

Stock-Option Order 

C2 proposes to amend C2 Rule 6.13(a) 

to include definitions of complex order 4

and stock-option order.5 C2 notes that 

its new definitions of complex order 

and stock-option order are consistent 

with those of another options 

exchange,6 and with the definitions 

used in C2 Chapter VI, Section E, 

‘‘Intermarket Linkage,’’ which 

incorporates by reference Chicago Board 

Options Exchange, Inc. (‘‘CBOE’’) CBOE 

Rule 6.80(4). 

C2 Rule 6.13(b)(2) currently permits 

only complex orders with no more than 

four legs to be placed in the Complex 

Order Book (‘‘COB’’). C2 proposes to 

remove this limitation and to provide 

that only complex orders and stockoption orders with no more than the 

applicable number of legs, as 

determined by C2 on a class-by-class 

basis, will be eligible for processing.7

B. Execution of Stock-Option Orders 

1. Legging 

C2 proposes to add Interpretation and 

Policy .06 to Rule 6.13 to provide that 

stock-option orders will execute against 

other stock-option orders through COB 

and the Complex Order RFR Auction 

(‘‘COA’’). Stock-option orders will not 

be legged against the individual 

component legs, except in one limited 

circumstance, as described below.8 C2 

believes that the proposal will provide 

for more efficient execution and 

processing of stock-option orders and 

will help to mitigate the potential risks 

associated with legging stock-option 

orders, including the risk of an 

mstockstill on DSK4VPTVN1PROD with NOTICES