Federal Register / Vol. 75, No. 198 / Thursday, October 14, 2010 / Notices 63227 

13 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. 

4 15 U.S.C. 78f. 

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

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–Phlx– 

2010–137 and should be submitted on 

or before November 4, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25808 Filed 10–13–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63054; File No. SR–EDGX– 

2010–13] 

Self-Regulatory Organizations; EDGX 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Amendments 

to the EDGX Exchange, Inc. Fee 

Schedule 

October 6, 2010. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on 

September 30, 2010, the EDGX 

Exchange, Inc. (the ‘‘Exchange’’ or the 

‘‘EDGX’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change as described 

in Items I and II 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 

EDGX Exchange, Inc. (‘‘Exchange’’ or 

‘‘EDGX’’) proposes to amend its fees and 

rebates applicable to Members 3 of the 

Exchange pursuant to EDGX Rule 

15.1(a) and (c). 

All of the changes described herein 

are applicable to EDGX Members. The 

text of the proposed rule change is 

available on the Exchange’s Internet 

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

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization has 

prepared summaries, set forth in 

sections A, B and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to make 

several amendments to its fee schedule. 

First, it proposes to increase the fee for 

removing liquidity from $0.0029 per 

share to $0.0030 per share. Conforming 

amendments have been made to the B, 

V, Y, 3, and 4 Flags (‘‘add liquidity’’ 

flags) to reflect this change. Secondly, it 

proposes to decrease the rebate for 

adding liquidity from $0.0029 per share 

to $0.0026 per share. Conforming 

amendments have been made to the N, 

W, and 6 flags (‘‘remove liquidity’’ flags) 

to reflect this change. The Exchange 

believes that these rate changes will 

enable it to maintain a competitive 

position with regards to other away 

market centers. 

Secondly, the Exchange proposes to 

incorporate a three tier rebate structure. 

The Exchange proposes to introduce the 

Mega Tier, which modifies the rebate 

incorporated in footnote 1 of the fee 

schedule. There are two alternative 

ways a Member can qualify for the Mega 

Tier rebate. First, footnote 1 of the fee 

schedule currently provides that 

Members can qualify for a rebate of 

$0.0032 per share for all liquidity 

posted on EDGX if they add or route at 

least 5,000,000 shares of average daily 

volume prior to 9:30 AM or after 4:00 

PM (includes all flags except 6) AND 

add a minimum of 50,000,000 shares of 

average daily volume on EDGX in total. 

The Exchange proposes to amend the 

50,000,000 share minimum to 

25,000,000 shares. Secondly, footnote 1 

further provides that Members will be 

provided a $0.0031 rebate per share for 

liquidity added on EDGX if the Member 

on a daily basis, measured monthly, 

posts 0.75% of the Total Consolidated 

Volume (‘‘TCV’’) in average daily 

volume. 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. The Exchange 

proposes to increase this rebate to 

$0.0032 per share. 

Next, the Exchange proposes to 

introduce the Ultra Tier, in which a 

Member will be provided a $0.0031 

rebate per share for liquidity added on 

EDGX if the Member posts 0.50% of 

TCV in average daily volume to EDGX, 

as measured on a monthly basis. 

Finally, the Exchange propose to 

introduce the Super Tier, in which a 

Member will be provided a $0.0030 

rebate per share for liquidity added on 

EDGX if the Member posts 10,000,000 

shares or more of average daily volume 

to EDGX, as measured on a monthly 

basis. 

The Exchange believes that the above 

pricing is appropriate since higher 

rebates are directly correlated with more 

stringent criteria. The Mega Tier rebate 

($0.0032 per share) has the most 

stringent criteria, and is $0.0001 greater 

than the Ultra Tier rebate ($0.0031 per 

share) and $0.0002 greater than the 

Super Tier rebate ($0.0030 per share). 

For example, based on average TCV for 

August 2010 (7.2 billion), in order for a 

Member to qualify for the Mega Tier, the 

Member would have to post 54 million 

shares on EDGX. In order to qualify for 

the Ultra Tier, which has less stringent 

criteria than the Mega Tier, the Member 

would have to post 36 million shares on 

EDGX. Finally, the Super Tier has the 

least stringent criteria. In order for a 

Member to qualify for this rebate, the 

Member would have to post 10 million 

shares on EDGX. In addition, these 

rebates also result, in part, from lower 

administrative costs associated with 

higher volume. 

Finally, the Exchange proposes to 

make a clarifying amendment to the 

price guarantee language found in 

footnote 1 of the schedule to clarify that 

the share amounts are based upon 

average daily volume. 

EDGX Exchange proposes to 

implement these amendments to the 

Exchange fee schedule on October 1, 

2010. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,4

in general, and furthers the objectives of 

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

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

other persons using its facilities. The 


jlentini on DSKJ8SOYB1PROD with NOTICES
63228 Federal Register / Vol. 75, No. 198 / Thursday, October 14, 2010 / Notices 

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

7 17 CFR 19b–4(f)(2). 

8The text of the proposed rule change is available 

on Exchange’s Web site at http:// 

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

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

Commission’s Public Reference Room. 

9 17 CFR 200.30–3(a)(12). 

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

2Securities Exchange Act Release No. 62801 

(August 31, 2010), 75 FR 54410. 

Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily direct 

order flow to competing venues if they 

deem fee levels at a particular venue to 

be excessive. The proposed rule change 

reflects a competitive pricing structure 

designed to incent market participants 

to direct their order flow to the 

Exchange. Finally, the Exchange 

believes that the proposed rates are 

equitable in that they apply uniformly 

to all Members. In addition, the rebates 

provided result, in part, from lower 

administrative costs associated with 

higher volume. 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 those members 

that opt to direct orders to the Exchange 

rather than competing venues. 

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 6 and Rule 19b–4(f)(2) 7

thereunder. At any time within 60 days 

of the filing of such proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–EDGX–2010–13 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–EDGX–2010–13. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission,8 all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street, NE., 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. All comments received will 

be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–EDGX– 

2010–13 and should be submitted on or 

before November 4, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–25744 Filed 10–13–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63066; File No. SR–OCC– 

2010–13] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Order 

Approving Proposed Rule Change To 

Allow for Adjustments to the 

Settlement Price of ExchangeDesignated Security Futures for All 

Cash Dividends or Distributions Paid 

by the Issuer of the Underlying 

Security 

October 8, 2010. 

I. Introduction 

On August 19, 2010, The Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule change SR–OCC–2010–13 pursuant 

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

Exchange Act of 1934 (‘‘Act’’).1 On 

August 25, 2010, OCC amended the 

proposed rule change. Notice of the 

proposal was published in the Federal 

Register on September 7, 2010.2 The 

Commission received no comment 

letters in response to the proposed rule 

change. For the reasons discussed 

below, the Commission is approving the 

proposed rule change. 

II. Description 

The primary purpose of this proposed 

rule change is to revise OCC’s By-Laws 

to allow OCC to make adjustments to 

the settlement price of exchangedesignated security futures for all cash 

dividends or distributions paid by the 

issuer of the underlying security. Under 

its current rules, OCC makes such 

adjustments only for ‘‘non-ordinary’’ 

dividends. However, OneChicago, LLC 

(‘‘OneChicago’’) has informed OCC that 

it believes there is a demand for security 

futures that would be adjusted in 

response to all cash dividends or 

distributions. Accordingly, OCC is 

amending Section 3 of Article XII of its 

By-Laws to permit exchanges to 

designate certain security futures that 

will be adjusted for ordinary as well as 

‘‘non-ordinary’’ cash dividends and 

distributions. Exchanges can continue to 

trade security futures that will be 

adjusted only in the event of a ‘‘nonordinary’’ dividend or distribution. 

For security futures subject to 

adjustment for all cash dividends or 

distributions, it will be the exchange’s 

responsibility to inform OCC of the 

issuance of a cash dividend or 


jlentini on DSKJ8SOYB1PROD with NOTICES