Federal Register / Vol. 80, No. 50 / Monday, March 16, 2015 / Notices 13651 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5The term ‘‘Member’’ is defined as ‘‘any 

registered broker or dealer, or any person associated 

with a registered broker or dealer, that has been 

admitted to membership in the Exchange. A 

Member will have the status of a ‘‘member’’ of the 

Exchange as that term is defined in Section 3(a)(3) 

of the Act.’’ See Exchange Rule 1.5(n). 

6The Exchange notes that to the extent BATS 

Trading does or does not achieve any volume tiered 

discount on Nasdaq or routes an order to Nasdaq 

in a symbol that is not included in Nasdaq’s Select 

Symbol Program to receive a rebate of $0.00040 per 

share, its rate for Flag A will not change. The 

Exchange further notes that, due to billing system 

limitations that do not allow for separate rates by 

tape, it will pass through the lesser rebate of 

$0.00040 per share for all Tapes A, B & C securities. 

7See Securities Exchange Act Release No. 73967 

(December 30, 2014), 80 FR 594 (January 6, 2015) 

(SR–Nasdaq–2014–128). 

8The Exchange notes that to the extent BATS 

Trading does or does not achieve any volume tiered 

discount on Nasdaq or routes an order to Nasdaq 

in a symbol that is included in Nasdaq’s Select 

Continued 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74464; File No. SR–EDGX– 

2015–13] 

Self-Regulatory Organizations; EDGX 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Related to Fees for Use 

of EDGX Exchange, Inc. 

March 10, 2015. 

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 March 2, 

2015, EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘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 Exchange. The Exchange has 

designated the proposed rule change as 

one establishing or changing a member 

due, fee, or other charge imposed by the 

Exchange under Section 19(b)(3)(A)(ii) 

of the Act 3 and Rule 19b–4(f)(2) 

thereunder,4 which renders the 

proposed rule change 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 

The Exchange filed a to amend its fees 

and rebates applicable to Members 5 of 

the Exchange pursuant to EDGX Rule 

15.1(a) and (c) (‘‘Fee Schedule’’) to: (i) 

Decrease the rebate from $0.00150 per 

share to $0.00040 per share for orders 

that yield fee code A, which routes to 

the Nasdaq Stock Market LLC 

(‘‘Nasdaq’’) and adds liquidity; (ii) add 

new fee code RN, which routes to 

Nasdaq using the ROOC routing strategy 

and adds liquidity; (iii) add a bullet to 

the General Notes section regarding the 

rates that would apply when the New 

York Stock Exchange, Inc. (‘‘NYSE’’) or 

NYSE MKT LLC (‘‘NYSE MKT’’) declare 

an emergency condition under their 

Rule 49; (iv) amend footnotes 1, 2, and 

4 to place parentheses around the 

amount of the rebate to be provided for 

each tier; (v) amend footnote 10 

regarding how a Member’s volume 

attributed to fee code 5 will be 

allocated; and (vi) amend fees related to 

the use of ConnectEdge. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at www.batstrading.com, at the 

principal office of the Exchange, and at 

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 

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 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant parts 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: (i) 

Decrease the rebate from $0.00150 per 

share to $0.00040 per share for orders 

that yield fee code A, which routes to 

Nasdaq and adds liquidity; (ii) add new 

fee code RN, which routes to Nasdaq 

using the ROOC routing strategy and 

adds liquidity; (iii) add a bullet to the 

General Notes section regarding the 

rates that would apply when the NYSE 

or NYSE MKT declare an emergency 

condition under their Rule 49; (iv) 

amend footnotes 1, 2, and 4 to place 

parentheses around the amount of the 

rebate to be provided for each tier; (v) 

amend footnote 10 regarding how a 

Member’s volume attributed to fee code 

5 will be allocated; and (vi) amend fees 

related to the use of ConnectEdge. 

Fee Code A 

In securities priced at or above $1.00, 

the Exchange currently provides a 

rebate of $0.00150 per share for 

Members’ orders that yield fee code A, 

which routes to Nasdaq and adds 

liquidity. The Exchange proposes to 

amend its Fee Schedule to decrease this 

rebate to $0.00040 per share for 

Members’ orders that yield fee code A. 

The proposed change represents a pass 

through of the rate that BATS Trading, 

Inc. (‘‘BATS Trading’’), the Exchange’s 

affiliated routing broker-dealer, is 

rebated for routing orders in certain 

symbols to Nasdaq when it does not 

qualify for a volume tiered rebate. When 

BATS Trading routes to Nasdaq, it is 

rebated a standard rate of $0.00040 per 

share for orders in select symbols 

(‘‘Nasdaq’s Select Symbol Program’’).6

BATS Trading will pass through this 

rate on Nasdaq to the Exchange and the 

Exchange, in turn, will pass through this 

rate to its Members. The Exchange notes 

that the proposed change is in response 

to Nasdaq’s January 2015 fee change 

where Nasdaq decreased the rebate it 

provides its customers, such as BATS 

Trading, from a rebate of $0.00150 per 

share to a rebate of $0.00040 per share 

for orders in symbols included in 

Nasdaq’s Select Symbol Program.7

Fee Code RN 

The Exchange proposes to adopt new 

fee code RN, which would be applied to 

orders routed to Nasdaq using the ROOC 

routing strategy that add liquidity. 

Orders that yield fee code RN will 

receive a rebate of $0.00150 per share. 

The ROOC Routing strategy routes 

orders to participate in the opening, reopening (following a halt, suspension, 

or pause), or closing process of a 

primary listing market (BATS, NYSE, 

Nasdaq, NYSE MKT, or NYSE Arca) if 

received before the opening/re-opening/ 

closing time of such market. If shares 

remain unexecuted after attempting to 

execute in the opening, re-opening, or 

closing process, they are either posted to 

the EDGX Book, executed, or routed to 

destinations on the System routing 

table. Proposed fee code RN represents 

a pass through of the rate that BATS 

Trading, the Exchange’s affiliated 

routing broker-dealer, is rebated for 

routing orders to Nasdaq in Tape C 

securities not included in Nasdaq’s 

Select Symbol Program when it does not 

qualify for a volume tiered rebate. When 

BATS Trading routes to Nasdaq using 

the ROOC routing strategy, it is rebated 

a standard rate of $0.00150 per share for 

Tape C securities that are not included 

in Nasdaq’s Select Symbol Program.8


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Symbol Program to receive a rebate of $0.00040 per 

share, its rate for Flag RN will not change. The 

Exchange further notes that, due to billing system 

limitations that do not allow for separate rates by 

tape, it will pass through the rebate of $0.000150 

per share for all Tapes A, B & C securities that yield 

fee code RN. 

9See Securities Exchange Act Release No. 73782 

(December 8, 2014), 79 FR 73916 (December 12, 

2014) (SR–EDGX–2014–32). 

10See Securities Exchange Act Release No. 71449 

(January 30, 2014), 79 FR 6961 (February 5, 2014) 

(SR–EDGX–2013–43; SR–EDGA–2013–34). 

11This service is an alternative to a service that 

the Exchange already provides to its Members— 

current order-sending Members route orders 

through access provided by the Exchange to the 

Exchange that either check the Exchange for 

available liquidity and then route to other 

destinations or, in certain circumstances, bypass the 

Exchange and route to other destinations. See 

Exchange Rule 11.9(b)(2) (setting forth routing 

options whereby Members may select their orders 

be routed to other market centers). 

BATS Trading will pass through this 

rate on Nasdaq to the Exchange and the 

Exchange, in turn, will pass through this 

rate to its Members. The Exchange notes 

that fee code A above will be applied to 

all orders routed to Nasdaq not utilizing 

the ROOC routing strategy that add 

liquidity. 

NYSE and NYSE MKT Rule 49 

The Exchange proposes to add a 

bullet under the General Notes section 

of the Fee Schedule to describe the rates 

that would apply where the NYSE or 

NYSE MKT declare an emergency 

condition under their Rule 49. Under 

NYSE and NYSE MKT Rule 49, the 

NYSE or NYSE MKT may invoke their 

emergency powers during an emergency 

condition and designate NYSE Arca, 

Inc. (‘‘NYSE Arca’’) as their backup 

facility to receive and process bids and 

offers and to execute orders on behalf of 

the NYSE or NYSE MKT. In such case, 

the Exchange will route any order that 

was intended to be routed to the NYSE 

or NYSE MKT to NYSE Arca and the 

Exchange’s System will identify such 

trades as being executed on NYSE Arca, 

not the NYSE or NYSE MKT. Because 

the executions occurred on NYSE Arca, 

NYSE Arca will charge BATS Trading 

their applicable fee or rebate, and BATS 

Trading will pass through that fee or 

rebate to the Exchange who would, in 

turn, pass that rate along to its Members. 

Therefore, the Exchange proposes to add 

a bullet to its Fee Schedule stating that 

fee codes applicable to orders routed to 

NYSE Arca will be applied to orders 

routed to the NYSE or NYSE MKT 

where, pursuant to NYSE and NYSE 

MKT Rule 49, the NYSE or NYSE MKT 

have designated NYSE Arca as their 

backup facility to receive and process 

bids and offers and to execute orders on 

behalf of the NYSE or NYSE MKT. 

Identifying Rebates in Footnotes 1, 2, 

and 4 

The Exchange proposes to amend 

footnotes 1, 2, and 4 to place the amount 

of each rebate in parentheses. The 

Exchange notes that rebates listed 

elsewhere in the Fee Schedule are 

identified by parentheses. Doing so 

within footnotes 1, 2, and 4 would align 

the identification of rebates in these 

footnotes with the way rebates are 

identified elsewhere in the Fee 

Schedule. 

Footnote 10 

In December 2014, the Exchange 

added footnote 10 to state that a 

Member’s monthly volume attributed to 

fee code 5 will be divided evenly 

between the added fee codes and 

removal fee codes when determining 

whether that Member satisfied a certain 

tier.9 At that time, the Exchange 

proposed to divide a Member’s fee code 

5 volume as such because the 

Exchange’s systems could not delineate 

orders yielding fee code 5 that added 

from those that removed liquidity for 

purposes of determining whether a 

Member satisfied a certain tier. 

In January 2014, the Exchange and its 

affiliate, EDGA Exchange, Inc. 

(‘‘EDGA’’) received approval to effect a 

merger (the ‘‘Merger’’) of the Exchange’s 

parent company, Direct Edge Holdings 

LLC, with BATS Global Markets, Inc., 

the parent of BATS (together with 

BATS, EDGA and EDGX, the ‘‘BGM 

Affiliated Exchanges’’).10 In the context 

of the Merger, the BGM Affiliated 

Exchanges migrated EDGX and EDGA 

onto the BATS technology platform, 

which was completed in January 2015. 

Under the BATS technology platform, 

the Exchange is now able to delineate 

orders yield fee code 5 that added from 

those that removed liquidity for 

purposes of determining whether a 

Member satisfies a certain tier. 

Therefore, the Exchange proposes to 

amend footnote 10 to state that a 

Member’s monthly volume attributed to 

fee code 5 will be allocated accordingly 

between the added fee codes and 

removal fee codes when determining 

whether that Member satisfied a certain 

tier. 

ConnectEdge 

The Exchange proposes to amend the 

fees related to the use of ConnectEdge 

by: (i) Adopting a fee of $250 per month 

for receipt of Nasdaq Glimpse; and (ii) 

provide access to market data and order 

entry for the BGM Affiliated Exchanges 

at no charge. ConnectEdge is a 

communication and routing service that 

provides Members an additional means 

to receive market data from and route 

orders to any destination connected to 

the Exchange’s network. ConnectEdge 

does not affect trade executions and 

would not report trades to the relevant 

Securities Information Processor. The 

servers of the Member need not be 

located in the same facilities as the 

Exchange in order to subscribe to 

ConnectEdge. Members may also seek to 

utilize ConnectEdge in the event of a 

market disruption where other 

alternative connection methods become 

unavailable.11

The Exchange charges a monthly 

connectivity fee to Members utilizing 

ConnectEdge to route orders to other 

exchanges and broker-dealers that are 

connected to the Exchange’s network. 

The amount of the connectivity fee 

varies based solely on the bandwidth 

selected by the Member. Specifically, 

the Exchange currently charges $350 for 

1 Mb, $700 for 5 Mb, $950 for 10 Mb, 

$1,500 for 25 Mb, $2,500 for 50 Mb, and 

$3,500 for 100 Mb. The Exchange 

proposes to provide at no charge, 

bandwidth required to access each of 

the BGM Affiliated Exchanges and BZX 

Options. 

Members utilizing ConnectEdge to 

access the Exchange or its affiliates for 

either order entry or market data will 

remain liable for the applicable Physical 

Connectivity Fees as set forth in the Fee 

Schedule and charged by each BGM 

Affiliated Exchange. Currently, the 

Exchange and EDGA charge $500 per 

month a 1 Gb Copper connection, 

$1,000 per month for a 1 Gb Fiber 

connection, and $2,000 per month for a 

10 Gb Fiber connection. BZX and BYX 

currently charge $1,000 per month for a 

1 Gb physical port at the BZX or BYX 

primary of secondary data center, 

$2,000 per month for a 1 Gb physical 

port at any other data center where BZX 

or BYX maintain a point-to-point 

presence (‘‘PoP’’), $2,500 per month for 

a 10 Gb physical port at the BZX or BYX 

primary of secondary data center; and 

$5,000 per month for a 10 Gb physical 

port at any other data center where BZX 

or BYX maintain a PoP. 

ConnectEdge also allows participants 

to receive market data feeds from 

exchanges connected to the Exchange’s 

network. In such case, the Member 

would pay the Exchange a connectivity 

fee, which varies and is based solely on 

the amount of bandwidth required to 

transmit the selected data product to the 

Member. The proposed connectivity 

fees range from $100 to $3,500 based on 

the market data product the vendor 

selects. The Exchange currently charges 

$1,300 per month for BZX PITCH 


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12Market data connectivity to EDGA and EDGX 

is free if the Member’s connection if within the 

Equinix facilities in Secaucus, New Jersey. 

13See http://www.nasdaqomx.com/transactions/

marketdata/europeanproducts/data-feeds/glimpse 

for a description of Nasdaq Glimpse. 

14The date of the EDGX Fee Schedule was 

previously amended to March 2, 2015 in SR– 

EDGX–2015–12 filed on February 26, 2015. 

15 15 U.S.C. 78f. 

16 15 U.S.C. 78f(b)(4). 17See supra note 6. 18See supra note 8. 

Multicast, $250 per month for BZX 

PITCH Spin Server, $350 per month for 

BYX Pitch Multicast, $250 per month 

for BYX Spin Server, $1,000 per month 

for BZX Options Pitch, and $500 per 

month for EDGA or EDGX.12 The 

Exchange proposes to provide access to 

each of these market data products at no 

charge. Members would pay any fees 

charged by the BGM Affiliated Exchange 

providing the market data feed directly 

to that exchange. 

The Exchange also proposes to adopt 

a fee of $250 per month for market data 

connectivity to Nasdaq Glimpse. Nasdaq 

Glimpse is a point-to-point data feed 

connection that provides direct data 

feed customers with the current state of 

the Nasdaq execution systems with full 

market participant attribution.13 The 

proposed fee is designed to reflect the 

amount of bandwidth required to 

transmit the Nasdaq Glimpse to the 

Member. Participants would pay any 

fees charged by Nasdaq for Nasdaq 

Glimpse directly to Nasdaq. 

Implementation Date 

The Exchange proposes to implement 

these amendments to its Fee Schedule 

on March 2, 2015.14

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,15

in general, and furthers the objectives of 

Section 6(b)(4),16 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 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 

non-discriminatory 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. 

Fee Code A 

The Exchange believes that its 

proposal to decrease the pass through 

rebate for Members’ orders that yield fee 

code A from $0.00150 to $0.00040 per 

share represents an equitable allocation 

of reasonable dues, fees, and other 

charges among Members and other 

persons using its facilities. Prior to 

Nasdaq’s Select Symbol Program, 

Nasdaq provided BATS Trading a rebate 

of $0.00150 per share for orders yielding 

fee code A, which BATS Trading passed 

through to the Exchange and the 

Exchange passed through to its 

Members. In January 2015, Nasdaq 

decreased the standard rebate it 

provides its customers, such as BATS 

Trading, from a rebate of $0.00150 per 

share to a rebate of $0.00040 per share 

for orders that are routed to Nasdaq in 

symbols included in its Select Symbol 

Program.17 Therefore, the Exchange 

believes that the proposed change in fee 

code A from a rebate of $0.00150 per 

share to a rebate of $0.00040 per share 

is equitable and reasonable because it 

accounts for the pricing changes on 

Nasdaq. In addition, the proposal allows 

the Exchange to continue to charge its 

Members a pass-through rate for orders 

that are routed to Nasdaq. The Exchange 

further notes that, due to billing system 

limitations that do not allow for 

separate rates by security for those 

included in Nasdaq’s Select Symbol 

Program, it will pass through the lesser 

rebate of $0.00040 per share for all 

Tapes A, B & C securities routed to 

Nasdaq. The Exchange notes that 

routing through BATS Trading is 

voluntary. Lastly, the Exchange also 

believes that the proposed amendment 

is non-discriminatory because it applies 

uniformly to all Members. 

Fee Code RN 

The Exchange believes its proposal to 

adopt new fee code RN, which would be 

applied to orders routed to Nasdaq 

using the ROOC routing strategy that 

add liquidity, represents an equitable 

allocation of reasonable dues, fees, and 

other charges among Members and other 

persons using its facilities because the 

Exchange does not levy additional fees 

or offer additional rebates for orders that 

it routes to Nasdaq through BATS 

Trading using the ROOC routing 

strategy. Proposed fee code RN 

represents a pass through of the rate that 

BATS Trading, the Exchange’s affiliated 

routing broker-dealer, is rebated for 

routing orders to Nasdaq in certain 

securities not included in Nasdaq’s 

Select Symbol Program when it does not 

qualify for a volume tiered rebate. When 

BATS Trading routes to Nasdaq using 

the ROOC routing strategy, it is rebated 

a standard rate of $0.00150 per share for 

Tape C securities that are not included 

in Nasdaq’s Select Symbol Program.18

Therefore, the Exchange believes to 

provide proposed fee code RN a rebate 

of $0.00150 per share is equitable and 

reasonable because it accounts for 

pricing on Nasdaq and allows the 

Exchange to charge its Members a passthrough rate for orders that are routed to 

Nasdaq using the ROOC routing 

strategy. The Exchange further notes 

that, due to billing system limitations 

that do not allow for separate rates by 

security for those included in Nasdaq’s 

Select Symbol Program, it will pass 

through the rebate of $0.00150 per share 

for all Tapes A, B & C securities routed 

to Nasdaq yielding fee code RN. The 

Exchange notes that routing through 

BATS Trading is voluntary. Lastly, the 

Exchange also believes that the 

proposed amendment is nondiscriminatory because it applies 

uniformly to all Members. 

NYSE and NYSE MKT Rule 49 

The Exchange believes that adding a 

bullet under the General Notes section 

of the Fee Schedule to describe the rates 

that would apply where the NYSE or 

NYSE MKT declare an emergency 

condition under their Rule 49 is 

reasonable because it is designed to 

provide greater transparency to 

Members by describing which rates 

would apply in such circumstances. In 

the case when NYSE or NYSE MKT 

invoke their Rule 49, the Exchange will 

route any order that was intended for 

the NYSE or NYSE MKT to NYSE Arca 

and the Exchange’s System will identify 

such trades as being executed on NYSE 

Arca, not the NYSE or NYSE MKT. 

Because the executions occurred on 

NYSE Arca, NYSE Arca will charge 

their applicable fee or rebate. The 

proposed bullet is intended to make 

clear within the Fee Schedule which 

rate would apply where the NYSE or 

NYSE MKT invoke their emergency 

powers under their Rule 49, thereby 

eliminating potential investor 

confusion, removing impediments to 

and perfecting the mechanism of a free 

and open market and a national market 

system, and, in general, protecting 

investors and the public interest. The 

Exchange notes that routing through 

BATS Trading is voluntary. Lastly, the 

Exchange also believes that the 

proposed amendment is nonVerDate Sep<11>2014 14:09 Mar 13, 2015 Jkt 235001 PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 E:\FR\FM\16MRN1.SGM 16MRN1

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19 15 U.S.C. 78f(b)(4). 

20Similarly, the Exchange notes that it currently 

charges no fee to Member’s utilizing ConnectEdge 

to connect to the Exchange and EDGA if located in 

the same data center. 

21 15 U.S.C. 78f(b)(4). 

discriminatory because it applies 

uniformly to all Members. 

Identifying Rebates in Footnotes 1, 2, 

and 4 

The Exchange believes that amending 

footnotes 1, 2, and 4 to place the amount 

of each rebate in parentheses is 

reasonable because it is designed to 

provide greater transparency to 

Members by aligning the identification 

of rebates in these footnotes with the 

way rebates are identified elsewhere in 

the Fee Schedule. The Exchange notes 

that this change is not designed to 

amend any rebate, nor alter the manner 

in which it calculates rebates. This nonsubstantive change to the Fee Schedule 

is intended to make the Fee Schedule 

clearer and less confusing for investors 

and eliminate potential investor 

confusion, thereby removing 

impediments to and perfecting the 

mechanism of a free and open market 

and a national market system, and, in 

general, protecting investors and the 

public interest. 

Footnote 10 

The Exchange believes proposed 

footnote 10 stating that a Member’s 

monthly volume attributed to fee code 

5 will be allocated accordingly between 

the added fee codes and removal fee 

codes when determining whether that 

Member satisfied a certain tier 

represents an equitable allocation of 

reasonable dues, fees, and other charges. 

Footnote 10 initially divided a 

Member’s fee code 5 volume as such 

because fee code 5 includes both added 

and removed liquidity and the 

Exchange’s systems could not delineate 

orders yielding fee code 5 that added 

from those that removed liquidity 

purposes of determining whether a 

Member satisfies a certain tier. Under 

the BATS technology platform, the 

Exchange is now able to delineate 

orders yield fee code 5 that added from 

those that removed liquidity for 

purposes of determining whether a 

Member satisfies a certain tier. 

Therefore, the Exchange believes 

amending footnote 10 to state that a 

Member’s monthly volume attributed to 

fee code 5 will be allocated accordingly 

between the added fee codes and 

removal fee codes is reasonable because 

it would provide Members an accurate 

understanding of how their orders 

yielding fee code 5 would be allocated 

amongst added and removed volume for 

purposes of determining whether they 

satisfied a certain tier. Lastly, the 

Exchange also believes that the 

proposed amendment is nondiscriminatory because it applies 

uniformly to all Members. 

ConnectEdge 

The Exchange believes its proposal to 

amend fees for the use of ConnectEdge 

is consistent with Section 6(b)(4) of the 

Act,19 in that it provides for the 

equitable allocation of reasonable dues, 

fees and other charges among members 

and other persons using its facilities. 

The Exchange charges a connectivity fee 

to Members utilizing ConnectEdge to 

route orders to or receive market data 

from other exchanges and market 

centers that are connected to the 

Exchange’s network, the amounts of 

which vary based solely on the amount 

of bandwidth selected by the Member or 

required to transmit the market data. 

The BGM Affiliated Exchanges are 

currently located in different data 

centers and the Exchange is in the 

process of transitioning itself and its 

affiliates into a single data center. 

Members currently located in a different 

data center than one of the BGM 

Affiliated Exchanges may utilize 

ConnectEdge to connect to that BGM 

Affiliated Exchange and would be 

subject to the applicable ConnectEdge 

fees. The Exchange has notified 

Members that is it is migrating the BGM 

Affiliated Exchange into a single data 

center and many of those Members are 

already located in that data center or 

may elect to establish a presence in that 

data center. In the interim, the Exchange 

proposes to charge no fee for the use of 

ConnectEdge to access the BGM 

Affiliated Exchange as an 

accommodation to Members pending 

the migration. Once the migration is 

complete, it will not be necessary for a 

ConnectEdge subscriber to pay an 

additional fee for order entry or receipt 

of market data from the Exchange or of 

its affiliates if located in the same data 

center over and above the connectivity 

fees currently charged.20 Therefore, the 

Exchange believes it is reasonable and 

equitable to charge no fee for the use of 

ConnectEdge to access the BGM 

Affiliated Exchanges during this 

transitional period. 

The Exchange also believes that its fee 

of $250 per month for market data 

connectivity to Nasdaq Glimpse is 

consistent with Section 6(b)(4) of the 

Act,21 in that it provides for the 

equitable allocation of reasonable dues, 

fees and other charges among members 

and other persons using its facilities. 

ConnectEdge is offered and purchased 

on a voluntary basis, in that neither the 

Exchange nor Members are required by 

any rule or regulation to make this 

product available. Accordingly, 

Members can discontinue use at any 

time and for any reason, including due 

to an assessment of the reasonableness 

of fees charged. Moreover, the Exchange 

believes the proposed fees are 

reasonable and equitable because they 

are based on the Exchange’s costs to 

cover the amount of bandwidth required 

to provide connectivity to Nasdaq 

Glimpse. The proposed fees allow the 

Exchange to recoup this cost, while 

providing Members with an alternative 

means to connect to Nasdaq Glimpse. 

The Exchange believes that the 

proposed fees are reasonable and 

equitable in that they reflect the costs 

and the benefit of providing alternative 

connectivity. 

Lastly, the Exchange also believes that 

the proposed amendments to its fee 

schedule are non-discriminatory 

because they will apply uniformly to all 

Members. All Members that voluntarily 

select various service options will be 

charged the same amount for the same 

services. All Members have the option 

to select any connectivity option, and 

there is no differentiation among 

Members with regard to the fees charged 

for the service. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange believes its proposed 

amendments to its Fee Schedule would 

not impose any burden on competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The Exchange does not believe that the 

proposed change represents a significant 

departure from previous pricing offered 

by the Exchange or pricing offered by 

the Exchange’s competitors. 

Additionally, Members may opt to 

disfavor the Exchange’s pricing if they 

believe that alternatives offer them 

better value. Accordingly, the Exchange 

does not believe that the proposed 

change will impair the ability of 

Members or competing venues to 

maintain their competitive standing in 

the financial markets. 

Fee Code A 

The Exchange believes that its 

proposal to pass through a rebate of 

$0.00040 per share for Members’ orders 

that yield fee code A would increase 

intermarket competition because it 

offers customers an alternative means to 

route to Nasdaq for a similar rate as 

entering orders in certain symbols on 

Nasdaq directly. The Exchange believes 

that its proposal would not burden 

intramarket competition because the 


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Federal Register / Vol. 80, No. 50 / Monday, March 16, 2015 / Notices 13655 

22 15 U.S.C. 78s(b)(3)(A). 

23 17 CFR 240.19b–4(f). 

proposed rate would apply uniformly to 

all Members. 

Fee Code RN 

The Exchange believes that its 

proposal to add fee code RN for orders 

that route to Nasdaq using the ROOC 

routing strategy and pass through a 

rebate of $0.00150 per share to Members 

would increase intermarket competition 

because it offers customers an 

alternative means to route orders to 

Nasdaq to participate in their opening, 

re-opening or closing process for a 

similar rate as entering orders in certain 

symbols on Nasdaq directly. The 

Exchange believes that its proposal 

would not burden intramarket 

competition because the proposed rate 

would apply uniformly to all Members. 

NYSE and NYSE MKT Rule 49 

The Exchange believes that adding a 

bullet under the General Notes section 

of the Fee Schedule to describe which 

rates that would apply where the NYSE 

or NYSE MKT declare an emergency 

condition under their Rule 49 would not 

affect intermarket nor intramarket 

competition because none of these 

changes are designed to amend any 

rebate or alter the manner in which the 

Exchange calculates rebates. This 

change is not designed to have a 

competitive impact. Rather, it is 

intended to make clear to Members and 

investors within the Fee Schedule 

which rate would apply where the 

NYSE or NYSE MKT invoke their 

emergency powers under their Rule 49, 

thereby eliminating potential investor 

confusion. 

Identifying Rebates in Footnotes 1, 2, 

and 4 

The Exchange believes that amending 

footnotes 1, 2, and 4 to place the amount 

of each rebate in parentheses would not 

affect intermarket nor intramarket 

competition because none of these 

changes are designed to amend any 

rebate or alter the manner in which the 

Exchange calculates rebates. This 

change is intended to make the Fee 

Schedule clearer and less confusing for 

investors and eliminate potential 

investor confusion by providing greater 

clarity to Members with regard to how 

the Exchange calculates rebates. 

Footnote 10 

The Exchange believes that amending 

footnote 10 to reflect current system 

functionality that orders yielding fee 

code 5 will be allocated accordingly 

amongst added fee codes and removal 

fee codes would increase intermarket 

competition because it would encourage 

Members to direct their orders to the 

Exchange because they would have 

certainty as to how their orders will be 

allocated when determining whether 

that Member qualified for a certain 

pricing tier. The Exchange believes that 

its proposal would neither increase nor 

decrease intramarket competition 

because the fee code 5 and footnote 10 

would continue to apply uniformly to 

all Members. 

ConnectEdge 

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. The 

proposed rule change is designed to 

accommodate Members while the 

Exchange migrates itself and its 

affiliates into a single data center. Once 

that migration is complete it will not be 

necessary for a ConnectEdge subscriber 

to pay an additional fee for order entry 

or receipt of market data from the 

Exchange or of its affiliates over and 

above the connectivity fees currently 

charged. The Exchange believes that 

charging no fee during this for the use 

of ConnectEdge to access the Exchange 

or its affiliates during this transitional 

period will not result in any burden on 

competition that is not necessary or 

appropriate because Members will 

remain liable for the applicable Physical 

Connectivity Fees charged by each BGM 

Affiliated Exchange. The Exchange 

believes that its proposal would neither 

increase nor decrease intramarket 

competition because it would apply 

uniformly to all Members. 

The Exchange also believes the 

proposed connectivity fee for Nasdaq 

Glimpse will not result in any burden 

on completion. The proposed rule 

change is designed to provide Members 

with an alternative means to access 

Nasdaq Glimpse if they choose or in the 

event of a market disruption where 

other alternative connection methods 

become unavailable. ConnectEdge is not 

the exclusive method to connect to 

Nasdaq Glimpse and Members may 

utilize alternative methods to connect to 

the product if they believe the 

Exchange’s proposed pricing is 

unreasonable or otherwise. Therefore, 

the Exchange does not believe the 

proposed rule change will have any 

effect on competition. 

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)(A) 

of the Act 22 and paragraph (f) of Rule 

19b–4 thereunder.23 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 rule-comments@

sec.gov. Please include File Number SR– 

EDGX–2015–13 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–EDGX–2015–13. 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 


Rmajette on DSK2VPTVN1PROD with NOTICES
13656 Federal Register / Vol. 80, No. 50 / Monday, March 16, 2015 / Notices 

24 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)(ii). 

4 17 CFR 240.19b–4(f)(2). 

5The term ‘‘Member’’ is defined as ‘‘any 

registered broker or dealer, or any person associated 

with a registered broker or dealer, that has been 

admitted to membership in the Exchange. A 

Member will have the status of a ‘‘member’’ of the 

Exchange as that term is defined in section 3(a)(3) 

of the Act.’’ See Exchange Rule 1.5(n). 

6See Rule 11.8(d) for a description of MidPoint 

Match Orders. 

7See Rule 11.6(l)(1)(B) for a description of the 

Hide Not Slide instruction. 

8See Rule 11.6(e)(2) for a description of the NonDisplayed instruction. 

9See Rule 11.6(n)(4) for a description of the Post 

Only instruction. 

business days between the hours of 

10:00 a.m. and 3:00 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–EDGX– 

2015–13, and should be submitted on or 

before April 6, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–05860 Filed 3–13–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74463; File No. SR–EDGX– 

2015–12] 

Self-Regulatory Organizations; EDGX 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Related to Fees for Use 

of EDGX Exchange, Inc. 

March 10, 2015. 

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 

26, 2015, EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘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 Exchange. The Exchange has 

designated the proposed rule change as 

one establishing or changing a member 

due, fee, or other charge imposed by the 

Exchange under section 19(b)(3)(A)(ii) 

of the Act 3 and Rule 19b–4(f)(2) 

thereunder,4 which renders the 

proposed rule change 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 

The Exchange filed a proposal to 

amend its fees and rebates applicable to 

Members 5 of the Exchange pursuant to 

EDGX Rule 15.1(a) and (c) (‘‘Fee 

Schedule’’) related to the fees charged 

and rebates provided for executions 

occurring at the midpoint of the 

National Best Bid or Offer (‘‘NBBO’’) by: 

(i) Amending the descriptions of fee 

codes MM and MT; and (ii) adopting 

new fee code AM. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at www.batstrading.com, at the 

principal office of the Exchange, and at 

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 

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 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant parts 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 amend its 

Fee Schedule related to the fees charged 

and rebates provided for executions 

occurring at the midpoint of the NBBO 

by: (i) Amending the descriptions of fee 

codes MM and MT; and (ii) adopting 

new fee code AM. 

Fee Code MM 

Fee code MM is applied to orders that 

add liquidity at the midpoint of the 

NBBO using: (i) A MidPoint Match 

Order; 6 (ii) an order with a Hide Not 

Slide instruction; 7 or (iii) an order with 

a Non-Displayed instruction.8 Orders 

yielding fee code MM are charged a fee 

of $0.0012 per share in securities priced 

at $1.00 or above and receive a rebate 

of $0.00003 per share in securities 

priced below $1.00. The Exchange 

proposes to reformat the description of 

fee code MM using numbers (1) through 

(3) to better delineate each transaction 

to which the fee code is applied. 

Pursuant to footnote 11 of the Fee 

Schedule, an order with a NonDisplayed instruction will receive fee 

code MM where it executes against an 

order that receives fee code MT, as 

discussed below. The Exchange 

proposes to amend footnote 11 to 

specifically state that an order with a 

Non-Displayed instruction that adds 

liquidity at the midpoint of the NBBO 

will only receive fee code MM where it 

receives price improvement relative to 

its limit price (in contrast to an order 

receiving fee code AM, as proposed 

below). Footnote 11 also currently lists 

the three types of orders against which 

an order with a Non-Displayed 

instruction will execute that results in 

fee code MM for such order, including 

orders with a Hide Not Slide instruction 

(as well as MidPoint Match Orders and 

orders with a Non-Displayed and Post 

Only instruction). The Exchange 

proposes to specify in footnote 11 that 

an order with a Non-Displayed 

instruction executing against an order 

with a Hide Not Slide instruction will 

receive fee code MM if the order with 

a Hide Not Slide instruction receives fee 

code MT because it also contains a Post 

Only instruction 9 and the difference 

between the NBB and NBO is $0.01. The 

applicability of fee code MT to such 

orders with a Hide Not Slide instruction 

is described in further detail below and 

in proposed footnote 13. As described 

below, the Exchange proposes an update 

to footnote 3, which relates to a volume 

tier for orders that receive fee code MM, 

and to append footnote 3 to fee code 

MM, as this is the fee code to which the 

footnote pertains. 

Neither the proposed changes to fee 

code MM nor the proposed changes to 

footnotes 3 and 11 are intended to 

amend the amount of the fees charged, 

the amount of the rebate provided or the 

transactions to which fee code MM is 

applied. The proposed changes are 

intended to clearly delineate the 

transactions to which fee code MM may 

be applied when adding liquidity at the 

midpoint of the NBBO. 

Fee Code MT 

Fee code MT is applied to orders that 

remove liquidity at the midpoint of the 

NBBO using: (i) A MidPoint Match 

Order; (ii) an order with a Hide Not 

Slide instruction; or (iii) an order with 

a Non-Displayed and Post Only 


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