Federal Register / Vol. 79, No. 220 / Friday, November 14, 2014 / Notices 68327 

59See note 3 and accompanying text, supra. The 

Trust, the Advisor, and the Distributor submitted an 

application for an order under section 6(c) of the 

1940 Act for an exemption from sections 2(a)(32), 

5(a)(1), 22(d) and 22(e) of the 1940 Act and rule 

22c–1 under the 1940 Act; under sections 6(c) and 

17(b) of the 1940 Act for an exemption from 

sections 17(a)(1) and 17(a)(2) of the 1940 Act; and 

under section 12(d)(1)(J) of the 1940 Act for an 

exemption from sections 12(d)(1)(A) and 12(d)(1)(B) 

of the 1940 Act. 

60Notice of Application for Exemptive Relief, 

supra note 3, at 3. 

61 Id. at 31. 

62The Commission’s determinations under 

Section 6(c) of the 1940 Act with respect to the 

Funds are preliminary and could change if a 

hearing were requested, the Commission were to 

grant the request, and persuasive new information 

were presented. Under Section 19(b)(2) of the 

Exchange Act, however, the Commission must 

approve, disapprove, or institute proceedings to 

disapprove this proposed rule change by November 

11, 2014, and it must do so on the basis of the facts 

as they currently exist, irrespective of any 

information that might be presented to or 

considered by the Commission at a later date in the 

context of its final determination under Section 6(c) 

of the 1940 Act. 

63Having found for the reasons explained above 

that the Exchange’s proposed rule change is not 

consistent with the requirements of the Exchange 

Act, the Commission does not believe it is 

necessary to address each of the particular 

objections raised by the commenter who opposes 

the proposed rule change. 

64 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 PSX, Equity Trader Alert 2014–95, Updates 

to PSX and BX Pricing for November 2014, dated 

October 27, 2014, available at http://

Continued 

Act.59 As stated in the Notice of an 

Application for Exemptive Relief, 

however, ‘‘the Commission 

preliminarily believes that [the Trust’s] 

proposed ETFs do not meet the standard 

for exemptive relief under section 6(c) 

of the [1940] Act,’’ 60 and accordingly, 

‘‘absent a request for a hearing that is 

granted by the Commission, the 

Commission intends to deny [the 

Trust’s] request for an exemption under 

section 6(c) of the [1940] Act as not 

necessary or appropriate in the public 

interest and as not consistent with the 

protection of investors and the purposes 

fairly intended by the policy and 

provisions of the [1940] Act.’’ 61

The purpose of the Exchange’s 

proposed rule change is to allow the 

listing and trading of the proposed 

Funds and future funds of the same 

type. The Commission does not believe 

that approving this proposed rule 

change would be consistent with the 

requirement under the Exchange Act 

that an exchange’s rules be consistent 

with the protection of investors and the 

public interest, because the Commission 

has stated its intention to deny the 

Trust’s request for exemptive relief 

under the 1940 Act and because 

denying this exemptive relief would 

mean that the Funds could not legally 

operate.62

IV. Conclusion 

For the reasons set forth above, the 

Commission does not find that the 

proposed rule change is consistent with 

the requirements of the Exchange Act 

and the rules and regulations 

thereunder applicable to a national 

securities exchange, and in particular, 

with Section 6(b)(5) of the Exchange 

Act.63

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act, 

that the proposed rule change (SR– 

BATS–2014–018) be, and it hereby is, 

disapproved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.64

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–26947 Filed 11–13–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73564; File No. SR–EDGA– 

2014–26] 

Self-Regulatory Organizations; EDGA 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Related to Fees for Use 

of EDGA Exchange, Inc. 

November 7, 2014. 

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 October 

31, 2014, 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 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 19–4(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 the fee schedule applicable to 

Members 5 and non-members of the 

Exchange pursuant to EDGA Rules 

15.1(a) and (c). Changes to the fee 

schedule pursuant to this proposal are 

effective upon filing. 

The text of the proposed rule change 

is available at the Exchange’s Web site 

at http://www.directedge.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 to decrease the fee for 

orders yielding Flag K, which routes to 

PSX using ROUC or ROUE routing 

strategies. In securities priced at or 

above $1.00, the Exchange currently 

assesses a fee of $0.0026 per share for 

Members’ orders that yield Flag K. The 

Exchange proposes to amend its Fee 

Schedule to decrease this fee to $0.0024 

per share from $0.0026 per share. The 

proposed change represents a pass 

through of the rate that Direct Edge ECN 

LLC (d/b/a DE Route) (‘‘DE Route’’), the 

Exchange’s affiliated routing brokerdealer, is charged for routing orders to 

PSX when it does not qualify for a 

volume tiered reduced fee. The 

proposed change is in response to PSX’s 

November 2014 fee change where PSX 

decreased the fee to remove liquidity via 

routable order types it charges its 

customers, from a fee of $0.0026 per 

share to a fee of $0.0024 per share.6

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68328 Federal Register / Vol. 79, No. 220 / Friday, November 14, 2014 / Notices 

www.nasdaqtrader.com/

MicroNews.aspx?id=ETA2014-95. 

7The Exchange notes that to the extent DE Route 

does or does not achieve any volume tiered reduced 

fee on PSX, its rate for Flag K will not change. 

8 15 U.S.C. 78f. 

9 15 U.S.C. 78f(b)(4). 

10See supra note 6. 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f). 13 17 CFR 200.30–3(a)(12). 

When DE Route routes to PSX, it will 

now be charged a standard rate of 

$0.0024 per share.7 DE Route will pass 

through this rate on PSX to the 

Exchange and the Exchange, in turn, 

will pass through this rate to its 

Members. The Exchange proposes to 

implement this amendment to its Fee 

Schedule on November 3, 2014. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,8

in general, and furthers the objectives of 

Section 6(b)(4),9 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 its proposal to 

decrease the pass through fee for 

Members’ orders that yield Flag K from 

$0.0026 per share to $0.0024 per share 

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 PSX through DE Route. Prior 

to PSX’s November 2014 fee change, 

PSX charged its members, which 

includes DE Route, a fee of $0.0026 per 

share to remove liquidity using nonroutable order types, which DE Route 

passed through to the Exchange and the 

Exchange charged to its Members. In 

November 2014, PSX decreased this fee 

from $0.0026 per share to $0.0024 per 

share.10 Therefore, the Exchange 

believes that its proposal to pass 

through a fee of $0.0024 per share for 

orders that yield Flag K is equitable and 

reasonable because it accounts for the 

pricing changes on PSX. In addition, the 

proposal allows the Exchange to charge 

its Members a pass-through rate for 

orders that are routed to PSX. 

Furthermore, the Exchange notes that 

routing through DE Route is voluntary. 

Lastly, the Exchange also believes that 

the proposed amendment is nondiscriminatory because it applies 

uniformly to all Members. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

These proposed rule changes do 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 any 

of these changes represent a significant 

departure from previous pricing offered 

by the Exchange or pricing offered by 

the Exchange’s competitors. 

Additionally, Members may opt to 

disfavor EDGA’s pricing if they believe 

that alternatives offer them better value. 

Accordingly, the Exchange does not 

believe that the proposed changes will 

impair the ability of Members or 

competing venues to maintain their 

competitive standing in the financial 

markets. The Exchange believes that its 

proposal to pass through a fee of 

$0.0024 per share for Members’ orders 

that yield Flag K would increase 

intermarket competition because it 

offers customers an alternative means to 

route to PSX for the same price as 

entering orders on PSX directly. The 

Exchange believes that its proposal 

would not burden intramarket 

competition because the proposed rate 

would apply uniformly to all Members. 

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 11 and paragraph (f) of Rule 

19b–4 thereunder.12 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– 

EDGA–2014–26 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–EDGA–2014–26. 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 

10:00 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–EDGA– 

2014–26, and should be submitted on or 

before December 5, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–26951 Filed 11–13–14; 8:45 am] 

BILLING CODE 8011–01–P 

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