Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 2125 

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

2 17 CFR 240.19b–4. 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget (‘‘OMB’’) for 

extension and approval. 

Regulation G (17 CFR 244.100– 

244.102) under the Securities Exchange 

Act of 1934 (the ‘‘Exchange Act’’) (15 

U.S.C. 78a et seq.) requires publicly 

reporting companies that disclose or 

releases financial information in a 

manner that is calculated or presented 

other than in accordance with generally 

accepted accounting principles 

(‘‘GAAP’’) to provide a reconciliation of 

the non-GAAP financial information to 

the most directly comparable GAAP 

financial measure. Regulation G 

implemented the requirements of 

Section 401 of the Sarbanes-Oxley Act 

of 2002 (15 U.S.C. 7261). We estimate 

that approximately 14,000 public 

companies must comply with 

Regulation G approximately six times a 

year for a total of 84,000 responses 

annually. We estimated that it takes 

approximately 0.5 hours per response 

(84,000 x 0.5 hours) for a total reporting 

burden of 42,000 hours annually. 

Written comments are invited on: (a) 

Whether this collection of information 

is necessary for the proper performance 

of the functions of the agency, including 

whether the information will have 

practical utility; (b) the accuracy of the 

agency’s estimate of the burden imposed 

by the collections of information; (c) 

ways to enhance the quality, utility, and 

clarity of the information collected; and 

(d) ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. 

Please direct your written comments 

to Pamela Dyson, Acting Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE., Washington, 

DC 20549; or send an email to: PRA_

Mailbox@sec.gov. 

Dated: January 9, 2015. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2015–00534 Filed 1–14–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Proposed Collection; Comment 

Request 

Upon Written Request Copies Available 

From: U.S. Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE., Washington, DC 

20549–2736. 

Extension: 

Regulation BTR; 

OMB Control No. 3235–0579, SEC File No. 

270–521. 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget (‘‘OMB’’) for 

extension and approval. 

Regulation Blackout Trade Restriction 

(‘‘Regulation BTR’’) (17 CFR 245.100– 

245.104) clarifies the scope and 

application of Section 306(a) of the 

Sarbanes-Oxley Act of 2002 (‘‘Act’’) (15 

U.S.C. 7244(a)). Section 306(a)(6) [15 

U.S.C.7244(a)(6)] of the Act requires an 

issuer to provide timely notice to its 

directors and executive officers and to 

the Commission of the imposition of a 

blackout period that would trigger the 

statutory trading prohibition of Section 

306(a)(1) [15 U.S.C. 7244(a)(1)]. Section 

306(a) of the Act prohibits any director 

or executive officer of an issuer of any 

equity security, directly or indirectly, 

from purchasing, selling or otherwise 

acquiring or transferring any equity 

security of that issuer during any 

blackout period with respect to such 

equity security, if the director or 

executive officer acquired the equity 

security in connection with his or her 

service or employment. Approximately 

1,230 issuers file Regulation BTR 

notices approximately 5 times a year for 

a total of 6,150 responses. We estimate 

that it takes approximately 2 hours to 

prepare the blackout notice for a total 

annual burden of 2,460 hours. The 

issuer prepares 75% of the 2,460 annual 

burden hours for a total reporting 

burden of (1,230 × 2 × 0.75) 1,845 hours. 

In addition, we estimate that an issuer 

distributes a notice to five directors and 

executive officers at an estimated 5 

minutes per notice (1,230 blackout 

period × 5 notices × 5 minutes) for a 

total reporting burden of 512 hours. The 

combined annual reporting burden is 

(1,845 hours + 512 hours) 2,357 hours. 

Written comments are invited on: (a) 

Whether this collection of information 

is necessary for the proper performance 

of the functions of the agency, including 

whether the information will have 

practical utility; (b) the accuracy of the 

agency’s estimate of the burden imposed 

by the collection of information; (c) 

ways to enhance the quality, utility, and 

clarity of the information collected; and 

(d) ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. 

Please direct your written comment to 

Pamela Dyson, Acting Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE., Washington, 

DC 20549 or send an email to: PRA_

Mailbox@sec.gov. 

Dated: January 9, 2015. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2015–00533 Filed 1–14–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74028; File No. SR–EDGA– 

2015–03] 

Self-Regulatory Organizations; EDGA 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Certain Rules 

To Adopt or Align System 

Functionality With That Currently 

Offered by BATS Exchange, Inc. and 

BATS Y-Exchange, Inc. 

January 9, 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 January 

9, 2015, EDGA Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGA’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 


rljohnson on DSK3VPTVN1PROD with NOTICES
2126 Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 

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

4 17 CFR 240.19b–4(f)(6)(iii). 

5See Securities Exchange Act Release No. 71449 

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

(SR–EDGX–2013–43; SR–EDGA–2013–34). 

6The term ‘‘User’’ is defined as ‘‘any Member or 

Sponsored Participant who is authorized to obtain 

access to the System pursuant to Rule 11.3.’’ See 

Exchange Rule 1.5(ee). 

7To the extent a proposed rule change is based 

on an existing BATS Rule, the language of the 

BATS and Exchange Rules may differ to extent 

necessary to conform with existing Exchange rule 

text or to account for details or descriptions 

included in the Exchange Rules but not currently 

included in BATS rules based on the current 

structure of such rules. 

8Exchange Rule 1.5(cc) defines ‘‘System’’ as ‘‘the 

electronic communications and trading facility 

designated by the Board through which securities 

orders of Users are consolidated for ranking, 

execution and, when applicable, routing away.’’ 

9Beginning at 9:30:00 a.m. Eastern Time, the 

System will accept: (i) Incoming orders designated 

as Intermarket Sweep Orders (‘‘ISOs’’), and (ii) 

orders with a time-in-force instruction other than 

Regular Hours Only. This is to assist Members’ 

compliance with Rule 611 of Regulation NMS. 

10The Exchange also proposes to and its TIF 

instructions under Rule 11.6(q) to align with BATS 

Rule 11.9(b). The changes are described in more 

detail below. 

Act 3 and Rule 19b–4(f)(6)(iii) 

thereunder,4 which renders it 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 certain rules to adopt or align 

system functionality with that currently 

offered by BATS Exchange, Inc. (‘‘BZX’’) 

and BATS Y-Exchange, Inc. (‘‘BYX’’, 

collectively with BZX, ‘‘BATS’’) in 

order to provide a consistent technology 

offering amongst the Exchange and its 

affiliates. These changes are described 

in detail below and include amending: 

(i) Rule 11.1 regarding the Exchange’s 

trading sessions and hours of operation; 

(ii) Rule 11.6, Definitions; (iii) Rule 

11.7, Opening Process; (iv) Rule 11.8, 

Order Types; (v) Rule 11.9, Priority of 

Orders; (vi) Rule 11.10, Order 

Execution; and (vii) Rule 11.11, Routing 

to Away Trading Centers. 

The proposed rule change does not 

propose to implement new or unique 

functionality that has not been 

previously filed with the Commission or 

is not available on BATS. The Exchange 

notes that the proposed rule text is 

based on the rules and is different only 

to the extent necessary to conform to the 

Exchange’s current rules. 

The Exchange does not believe that 

the proposed rule change will have any 

direct or significant indirect effect on 

any other Exchange rule in effect at the 

time of this 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 the 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Earlier this year, the Exchange and its 

affiliate, EDGX Exchange, Inc. (‘‘EDGX’’) 

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’’).5 In the context of the 

Merger, the BGM Affiliated Exchanges 

are working to migrate EDGX and EDGA 

onto the BATS technology platform, and 

align certain system functionality, 

retaining only intended differences 

between the BGM Affiliated Exchanges. 

As a result of these efforts, the Exchange 

proposes to amend: (i) Rule 11.1 

regarding the Exchange’s trading 

sessions and hours of operation; (ii) 

Rule 11.6, Definitions; (iii) Rule 11.7, 

Opening Process; (iv) Rule 11.8, Order 

Types; (v) Rule 11.9, Priority of Orders; 

(vi) Rule 11.10, Order Execution; and 

(vii) Rule 11.11, Routing to Away 

Trading Centers. 

The proposed amendments are 

intended to align certain system 

functionality with that currently offered 

by BATS in order to provide a 

consistent technology offering for 

Users 6 of the BGM Affiliated 

Exchanges. The Exchange notes that the 

proposed rule text is based on the BATS 

Rule and is different only to the extent 

necessary to conform to the Exchange’s 

current rules.7 The proposed 

amendments do not propose to 

implement new or unique functionality 

that has not been previously filed with 

the Commission or is not available on 

BZX or BYX. 

Rule 11.1, Hours of Trading and Trading 

Days 

Current Functionality. Rule 11.1 sets 

forth when orders may be entered into 

the System 8 and outlines a User’s 

ability to select the trading sessions for 

which an order may be eligible for 

execution. Proposed Rule 11.1(a)(1), 

Session Indicator, describes each of the 

Exchange’s existing trading sessions. A 

User may select the particular trading 

sessions for which their order(s) may be 

eligible for execution. Specifically, 

orders designated as: ‘‘Pre-Opening 

Session’’ are eligible for execution 

between 8:00 a.m. Eastern Time and 

4:00 p.m. Eastern Time; ‘‘Regular 

Session’’ are eligible for execution 

between the completion of the Opening 

Process or a Contingent Open as defined 

in proposed Rule 11.7 (described 

below), whichever occurs first, and 4:00 

p.m. Eastern Time, unless otherwise 

noted; 9 ‘‘Post-Closing Session’’ are 

eligible for execution between the start 

of the Regular Session and 8:00 p.m. 

Eastern Time; and ‘‘All Sessions’’ are 

eligible for execution between 8:00 a.m. 

and 8:00 p.m. Eastern Time. 

Under Rule 11.1(a)(1), orders may be 

entered into the System from 6:00 a.m. 

until 8:00 p.m. Eastern Time, but orders 

entered between 6:00 a.m. and 8:00 a.m. 

Eastern Time are not eligible for 

execution until the start of the session 

selected by the User. All orders are 

eligible for execution during the Regular 

Session. A User may designate that their 

order to be eligible for the Pre-Opening 

and/or Post-Closing Sessions. If the User 

does not select a particular session or 

sessions, the order will default to the 

Regular Session only. 

Proposed Functionality. To align with 

BATS functionality, the Exchange 

proposes to amend Rule 11.1(a)(1) to 

allow Users to designate when their 

order is eligible for execution by 

selecting the desired Time-In-Force 

(‘‘TIF’’) instruction under Exchange 

Rule 11.6(q) 10 and not by selecting a 

particular trading session, as is 

currently required. Therefore, the 

Exchange proposes to delete references 

to the Pre-Opening Session, Regular 

Session, Post-Closing Session, and All 

Sessions indicators set forth under Rule 

11.1(a)(1)(A)–(D). These session 

indicators will no longer be available 

upon completion of the technology 

integration and Users will designate the 

session(s) during which their order is 

eligible for execution by selecting the 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 2127 

11Pre-Opening Session is defined as ‘‘the time 

between 8:00 a.m. and 9:30 a.m. Eastern Time.’’ See 

Exchange Rule 1.5(s). 12Post-Closing Session is defined as ‘‘the time 

between 4:00 p.m. and 8:00 p.m. Eastern Time.’’ See 

Exchange Rule 1.5(r). 

13See Securities Exchange Act Release Nos. 

73745 (December 4, 2014), 79 FR 73359 (December 

10, 2014) (SR–BATS–2014–062); 73744 (December 

4, 2014), 79 FR 73369 (December 10, 2014) (SR– 

BYX–2014–036). 

14See supra note 7. 

15See EDGA Rule 11.6(a). The EDGA Book Feed 

is a data feed that contains all displayed orders for 

listed securities trading on EDGA, order executions, 

order cancellations, order modifications, order 

identification numbers, and administrative 

messages. See Exchange Rule 13.8(a). 

16See Exchange Rule 11.6(a)(1). 

17The term ‘‘EDGA Book’’ is defined as ‘‘the 

System’s electronic file of orders.’’ See EDGA Rule 

1.5(d). 

desired TIF instruction under Exchange 

Rule 11.6(q). The Exchange also 

proposes to no longer default orders to 

the Regular Session where another 

session indicator is not selected by the 

User. Thus, Users will be required to 

select a TIF instruction. Pre-Opening 

Session 11 and Post-Closing Session 12

will continue to be defined under 

Exchange Rule 1.5. The Exchange also 

proposes to retain but relocate the 

definition of Regular Session to Rule 1.5 

as new paragraph (hh). 

The Exchange also proposes to amend 

Rule 11.1(a)(1) to align with recent rule 

changes filed with the Commission by 

BATS.13 As proposed, orders entered 

between 6:00 a.m. and 8:00 a.m. Eastern 

Time are not eligible for execution until 

the start of the Pre-Opening Session or 

Regular Trading Hours, depending on 

the time-in-force selected by the User. 

The Exchange proposes to further 

amend Rule 11.1(a)(1) to state that the 

following orders will not be accepted 

prior to 8:00 a.m. Eastern Time: orders 

with a Post Only instruction, ISOs, 

Market Orders with a TIF instruction 

other than Regular Hours Only (‘‘RHO’’), 

orders with a Minimum Execution 

Quantity instruction that also include a 

TIF instruction of RHO, and all orders 

with a TIF instruction of Immediate or 

Cancel (‘‘IOC’’) or Fill Or Kill (‘‘FOK’’). 

At the commencement of the PreOpening Session, orders entered 

between 6:00 a.m. and 8:00 a.m. Eastern 

Time orders will be handled in time 

sequence, beginning with the order with 

the oldest time stamp, and will be 

placed on the EDGA Book, routed, 

cancelled, or executed in accordance 

with the terms of the order. 

Rule 11.6, Definitions 

Rule 11.6, Definitions, sets forth in 

one rule current defined terms and 

order instructions that are utilized in 

Chapter XI. Rule 11.6 also includes 

additional defined terms and 

instructions to aid in describing System 

functionality and the operation of the 

Exchange’s order types. The Exchange 

proposes to amend Rule 11.6 to align 

certain sections with BATS 

functionality and rules as part of the 

technology integration. These changes 

are described below and include: (i) 

Amending subparagraph (a) regarding 

Attribution; (ii) amending paragraph (d) 

regarding Discretionary Range; (iii) 

amending paragraph (h) regarding 

Minimum Execution Quantity; (iv) 

amending subparagraph (j) regarding the 

Pegged order instruction; (v) amending 

subparagraph (k) regarding the 

definition of Permitted Price; (vi) 

amending subparagraph (l)(1)(A) 

regarding the Price Adjust Re-Pricing 

instruction to allow for multiple repricing; (vii) renaming the Hide Not 

Slide re-pricing instruction under Rule 

11.8(l)(1)(B) as Displayed Price Sliding 

and amending the rule to allow for 

multiple re-pricing; (viii) deleting 

subparagraph (l)(1)(B)(i) to 

decommission the Routed and Returned 

Re-Pricing instruction; (ix) amending 

subparagraph (l)(2) to decommission 

Short Sale Price Adjust and Short Sale 

Price Sliding, and adopt the BATS short 

sale re-pricing process; (x) amending 

subparagraph (l)(3) regarding the repricing of Non-Displayed Orders; (xi) 

amending subparagraph (m)(1) 

regarding Replenishment Amounts; (xii) 

amending subparagraph (m)(2) 

regarding the Super Aggressive order 

instruction; and (xiii) amending 

subparagraph (q) regarding TIF 

instructions. As stated above, the 

proposed amendments to Rule 11.6 do 

not propose to implement new or 

unique functionality that has not been 

previously filed with the Commission or 

is not available on BZX or BYX.14 Each 

of these amendments are described in 

more detail below. 

Attribution (Rule 11.6(a)) 

Pursuant to Rule 11.6(a), where a User 

includes an Attributable instruction 

with an order, the User’s Market 

Participant Identifier (‘‘MPID’’) is visible 

via the Exchange’s Book Feed.15

Conversely, if an order is to be NonAttributable,16 the User’s MPID is not 

visible via the Exchange’s Book Feed. 

Under Exchange Rule 11.6(a)(1), unless 

the User elects otherwise, all orders are 

automatically defaulted by the System 

to Non-Attributable. Further, under Rule 

11.6(a)(2), a User may elect an order to 

be Attributable on an order-by-order 

basis or instruct the Exchange to default 

all of its orders as Attributable on a portby-port basis. However, pursuant to 

Rule 11.6(a), if a User instructs the 

Exchange to default all its orders as 

Attributable on a particular port, such 

User would not be able to designate any 

order from that port as NonAttributable. 

The Exchange proposes to amend 

Rule 11.6(a)(2) to provide Users with 

additional flexibility when designating 

all of its orders as Attributable on a 

particular port consistent with BATS 

functionality. As amended, Rule 

11.6(a)(2) would provide a User that 

instructs the Exchange to default all of 

its orders as Attributable on a particular 

port the ability to override that setting 

and designate an individual order from 

that port as Non-Attributable. This 

proposed rule change is representative 

of additional detail with regard to the 

operation of orders with an Attributable 

instruction in the Exchange’s rules. 

While the proposed rule change is not 

directly based on an existing BATS 

Rule, as BATS rules do not currently 

address port level settings with respect 

to attribution, the Exchange believes 

that amending its current rule text to 

accurately describe how a Member may 

designate their orders as Attributable or 

Non-Attributable will provide them 

with increased transparency regarding 

how the System operates. 

Cancel Back (Rule 11.6(b)) 

Cancel Back is an instruction a User 

may attach to an order instructing the 

System to cancel an order, when, if 

displayed by the System on the EDGA 

Book 17 at the time of entry, the order 

would create a violation of Rule 610(d) 

of Regulation NMS, Rule 201 of 

Regulation SHO, or the order cannot 

otherwise be executed or posted by the 

System to the EDGA Book at its limit 

price. 

The Exchange proposes to amend the 

definition of Cancel Back to remove the 

requirement that the order only be 

cancelled where it creates a violation of 

Rule 610(d) of Regulation NMS, Rule 

201 of Regulation SHO, or cannot 

otherwise be executed or posted by the 

System to the EDGA Book at its limit 

price upon entry. Removal of the phrase 

‘‘upon entry’’ from Rule 11.6(b) would 

enable an order with a Cancel Back 

instruction that is posted to the EDGA 

Book to be cancelled if it subsequently 

creates a violation of Rule 610(d) of 

Regulation NMS, Rule 201 of Regulation 

SHO, or the cannot otherwise be 

executed or continue to be posted by the 

System to the EDGA Book at its limit 

price. The proposed amendment would 

align the operation of the Exchange’s 


rljohnson on DSK3VPTVN1PROD with NOTICES
2128 Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 

18Under BATS Rule 11.13, ‘‘an order will be 

cancelled back to the User if, based on market 

conditions, User instructions, applicable Exchange 

Rules and/or the Act and the rules and regulations 

thereunder, such order is not executable, cannot be 

routed to another Trading Center pursuant to Rule 

11.13(a)(2) below and cannot be posted to the BATS 

Book.’’ The cancelling back of an order under Rule 

11.13 is not limited to cancellation upon entry. See 

also BATS Rule 11.9(g)(1)(D). 

19The term ‘‘Non-Displayed’’ is defined as ‘‘[a]n 

instruction the User may attach to an order stating 

that the order is not to be displayed by the System 

on the EDGA Book.’’ See Exchange Rule 1.5(e)(2). 

20See Securities Exchange Act Release Nos. 

72646 (July 21, 2014), 79 FR 43516 (July 25, 2014) 

(SR–BATS–2014–027) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

to Rules 11.9, 11.12, 11.18, 21.1 and 21.7 of BATS 

Exchange, Inc.); 72647 (July 21, 2014), 79 FR 43522 

(July 25, 2014) (SR–BYX–2014–010) (Notice of 

Filing and Immediate Effectiveness of a Proposed 

Rule Change to Rules 11.9, 11.12, and 11.18 of 

BATS Y–Exchange, Inc.). As amended, Exchange 

Rule 11.6(h) only differs from BATS Rule 11.9(c)(5) 

to extent necessary to conform with existing rule 

text or to account for details or descriptions 

currently included in the Exchange’s Rule that are 

not included in BATS Rule 11.9(c)(5). 

21The term ‘‘Minimum Price Variation’’ is 

defined as ‘‘[b]ids, offers, or orders in securities 

traded on the Exchange shall not be made in an 

increment smaller than: (i) $0.01 If those bids, 

offers, or orders are priced equal to or greater than 

$1.00 per share; or (ii) $0.0001 if those bids, offers, 

or orders are priced less than $1.00 per share; or 

(iii) any other increment established by the 

Commission for any security which has been 

granted an exemption from the minimum price 

increments requirements of SEC Rule 612(a) or 

612(b) of Regulation NMS.’’ See Exchange Rule 

11.6(i). 

22The term ‘‘Locking Quotation’’ is defined as 

‘‘[t]he display of a bid for an NMS stock at a price 

that equals the price of an offer for such NMS stock 

previously disseminated pursuant to an effective 

national market system plan, or the display of an 

offer for an NMS stock at a price that equals the 

price of a bid for such NMS stock previously 

disseminated pursuant to an effective national 

market system plan in violation of Rule 610(d) of 

Regulation NMS.’’ See Exchange Rule 11.6(g). 

23The term ‘‘Crossing Quotation’’ is defined as 

‘‘[t]he display of a bid (offer) for an NMS stock at 

a price that is higher (lower) than the price of an 

offer (bid) for such NMS stock previously 

disseminated pursuant to an effective national 

market system plan in violation of Rule 610(d) of 

Regulation NMS.’’ See Exchange Rule 11.6(c). 

Cancel Back instruction with current 

BATS Rule 11.13.18

Discretionary Range (Rule 11.6(d)) 

Discretionary Range is an instruction 

the User may attach to an order to buy 

(sell) a stated amount of a security at a 

specified, displayed price with 

discretion to execute up (down) to a 

specified, non-displayed price. The 

Exchange proposes to remove the 

prohibition that the Discretionary Range 

of an order to buy (sell) cannot be more 

than $0.99 higher (lower) than the 

order’s displayed price because, upon 

migration of the Exchange onto BATS 

technology, the Discretionary Range of 

an order will not be limited to $0.99. 

This proposed rule change is 

representative of additional detail with 

regard to the operation of orders with 

Discretionary Range in the Exchange’s 

rules. In addition, no such limitation is 

included in BATS or BYX Rules 

11.9(c)(10) regarding Discretionary 

Orders and the BATS systems 

effectively do not incorporate such a 

limitation. 

Minimum Execution Quantity (Rule 

11.6(h)) 

Minimum Execution Quantity is an 

instruction a User may attach to an 

order with a Non-Displayed 19

instruction requiring the System to 

execute the order only to the extent that 

a minimum quantity can be satisfied by 

execution against a single order or 

multiple aggregated orders 

simultaneously. Unless the User elects 

otherwise, any shares remaining after a 

partial execution will be executed at a 

size that is equal to or exceeds the 

Minimum Execution Quantity. Thus, 

under current Exchange Rules and 

functionality a User can elect that a 

Minimum Execution Quantity only 

apply to an initial execution but not any 

remaining shares after such execution. 

The Exchange proposes to amend 

Minimum Execution Quantity to reflect 

that, upon migration of the Exchange 

onto BATS technology, any shares 

remaining after a partial execution will 

continue to be executed at a size that is 

equal to or exceeds the Minimum 

Execution Quantity, regardless of the 

Users instructions. A User who wishes 

otherwise may cancel and resubmit 

their order without a Minimum 

Execution Quantity. In addition, 

currently the Minimum Execution 

Quantity instruction will not apply 

where the number of shares remaining 

after a partial execution are less than the 

quantity provided in the instruction. As 

amended, in such case, the Minimum 

Execution Quantity will equal the 

number of remaining shares, which is 

similar to current Exchange 

functionality. Like above, a User who 

wishes otherwise may cancel and 

resubmit their order with a new 

Minimum Execution Quantity. As 

amended, the Minimum Execution 

Quantity instruction will operate 

similarly to the BATS Minimum 

Quantity Order under BATS Rule 

11.9(c)(5).20

Pegged (Rule 11.6(j)) 

Current Functionality. An order with 

a Pegged instruction enables a User to 

specify that the order’s price will peg to 

a price a certain amount away from the 

NBB or NBO (offset). If an order with a 

Pegged instruction displayed on the 

Exchange would lock the market, the 

price of the order will be automatically 

adjusted by the System to one Minimum 

Price Variation below the current NBO 

(for bids) or to one Minimum Price 

Variation above the current NBB (for 

offers). A new time stamp is created for 

the order each time it is automatically 

adjusted and orders with a Pegged 

instruction are not eligible for routing 

pursuant to Rule 11.11. For purposes of 

the Pegged instruction, the System’s 

calculation of the NBBO does not take 

into account any orders with Pegged 

instructions that are resting on the 

EDGA Book. An order with a Pegged 

instruction is cancelled if an NBB or 

NBO, as applicable, is no longer 

available. 

An order with a Pegged instruction 

may be a Market Peg or Primary Peg. An 

order that includes a Primary Peg 

instruction will have its price pegged by 

the System to the NBB, for a buy order, 

or the NBO for a sell order. A User may, 

but is not required to, select an offset 

equal to or greater than one Minimum 

Price Variation 21 above or below the 

NBB or NBO that the order is pegged to. 

An order with a Primary Peg instruction 

is currently eligible to join the 

Exchange’s Best Bid or Offer (‘‘Exchange 

BBO’’) when the EDGA Book has been 

locked or crossed by another market. If 

an order with a Primary Peg instruction 

creates a Locking Quotation 22 or 

Crossing Quotation,23 the price of the 

order is automatically adjusted by the 

System to one Minimum Price Variation 

below the current NBO (for bids) or to 

one Minimum Price Variation above the 

current NBB (for offers). 

An order that includes a Market Peg 

instruction will have its price pegged by 

the System to the NBB, for a sell order, 

or the NBO, for a buy order. An order 

with a Market Peg instruction that is to 

be displayed by the System on the 

EDGA Book must include an offset for 

an order to buy (sell) that is equal to or 

greater than one Minimum Price 

Variation below (above) the NBO (NBB) 

that the order is pegged to. If a User does 

not select an offset, the System will 

automatically include an offset on an 

order to buy (sell) that is equal to one 

Minimum Price Variation below (above) 

the NBO (NBB) that the order is pegged 

to. For an order with a Non-Displayed 

instruction, a User may, but is not 

required to, select an offset for an order 

to buy (sell) that is equal to or greater 

than one Minimum Price Variation 

below (above) the NBO (NBB) that the 

order is pegged to. 

Proposed Functionality. The 

Exchange proposes to amend the Pegged 

instruction under Rule 11.6(j) to align 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 2129 

24See Securities Exchange Act Release Nos. 

73188 (September 23, 2014), 79 FR 58004 

(September 26, 2014) (SR–BATS–2014–041) (Notice 

of Filing and Immediate Effectiveness of a Proposed 

Rule Change to Rule 11.9 of BATS Exchange, Inc.); 

73190 (September 23, 2014), 79 FR 58019 

(September 26, 2014) (SR–BYX–2014–022) (Notice 

of Filing and Immediate Effectiveness of a Proposed 

Rule Change to Rule 11.9 of BATS Y-Exchange, 

Inc.). As amended, Exchange Rule 11.6(j) only 

differs from BATS Rule 11.9(c)(8) to extent 

necessary to conform with existing rule text or to 

account for details or descriptions currently 

included in the Exchange’s Rule that are not 

included in BATS Rule 11.9(c)(8). 

25The proposed definition of Permitted Price is 

also similar to that of other exchange. See e.g., 

Nasdaq Rule 4763(e); NYSE MKT Rule 440B(e); 

Rule 7016(f)(v)(C). 

26The term ‘‘Locking Price’’ is defined as ‘‘the 

price at which an order to buy (sell), that if 

displayed by the System on the EDGA Book, either 

upon entry into the System, or upon return to the 

System after being routed away, would be a Locking 

Quotation.’’ See Exchange Rule 11.6(i). 

with BATS Rule 11.9(c)(8).24 First, the 

Exchange proposes to no longer cancel 

an order with a Pegged instruction 

where the NBB or NBO, as applicable, 

is no longer available. In such case, 

instead of being cancelled, the order 

will not be eligible for execution. The 

order will receive a new time stamp and 

be eligible for execution where the NBB 

or NBO it is pegged to becomes 

available. 

Second, the Exchange proposes to 

amend the Market Peg instruction under 

Rule 11.6(j)(1) to state that such orders 

are not eligible for display on the EDGA 

Book. As a result, the Exchange also 

proposes to delete the requirement that 

an order with a Market Peg instruction 

that is to be displayed on the EDGA 

Book must include an offset for an order 

to buy (sell) that is equal to or greater 

than one Minimum Price Variation 

below (above) the NBO (NBB) that the 

order is pegged to. 

Third, the Exchange proposes to 

amend the Primary Peg instruction 

under Rule 11.6(j)(2) to define an offset 

equal to or greater than one Minimum 

Price Variation above or below the NBB 

or NBO that the order is pegged to as the 

‘‘Primary Offset Amount’’. The 

Exchange also proposes to specify that 

the Primary Offset Amount for an order 

with a Primary Peg instruction that is to 

be displayed on the EDGA Book must 

result in the price of such order being 

inferior to or equal to the inside quote 

on the same side of the market. 

Fourth, the Exchange proposes to 

amend the provisions governing the 

operation of an order with a Primary Peg 

instruction during a locked or crossed 

market. As proposed, an order with a 

Primary Peg instruction will no longer 

be able to join the Exchange BBO when 

the EDGX Book [sic] is locked or crossed 

by another market. When the EDGX 

Book [sic] is crossed by another market, 

the Exchange proposes to automatically 

adjust an order with a Primary Peg 

instruction to the current NBO (for bids) 

or the current NBB (for offers). For 

example, assume the NBBO is $10.08 x 

$10.09. An order with a Primary Peg 

instruction to buy with a limit price of 

$10.10 is entered and displayed by the 

System at $10.08, the current NBB. 

Assume the NBO updates to $10.07, 

resulting in a crossed market. The order 

with a Primary Peg instruction to buy 

would then be pegged and displayed at 

$10.07, the updated NBO. 

Rule 11.6(j)(2) will continue to require 

that an order with a Primary Peg 

instruction that would otherwise be a 

Locking Quotation or Crossing 

Quotation be automatically adjusted by 

the System to one Minimum Price 

Variation below the current NBO (for 

bids) or to one Minimum Price Variation 

above the current NBB (for offers). For 

example, assume the NBBO is $10.09 × 

$10.08, resulting in a crossed market. 

An order with a Primary Peg instruction 

to buy with a limit price of $10.10 is 

entered and displayed by the System at 

$10.07, one Minimum Price Variation 

below the current NBB. Assume the 

NBBO is updated to $10.08 × $10.09, the 

order with a Primary Peg instruction to 

buy would then be pegged and 

displayed at $10.08, the updated NBB 

now that the market is no longer 

crossed. This proposed rule change is 

representative of additional detail with 

regard to the operation of orders with a 

Pegged instruction during locked or 

crossed markets that is currently 

included in Rule 11.6(j) and is 

consistent with Exchange’s current repricing options under Rule 11.6(l), as 

well as Exchange Rule 11.10(f) and 

BATS Rule 11.20(a)(3), which outline 

the prohibition against displaying 

locking and crossing quotations under 

Rule 610 of Regulation NMS. 

Permitted Price (Rule 11.6(k)) 

Permitted Price is currently defined as 

the price at which a sell order will be 

priced, ranked and displayed at one 

Minimum Price Variation above the 

NBB. As amended, the definition of 

Permitted Price will only state that it is 

the price that the order is displayed at 

one Minimum Price Variation above the 

NBBO.25 This is to update the definition 

of Permitted Price to reflect the 

decommissioning of the Short Sale Price 

Adjust and Short Sale Price Sliding 

instructions and the proposed 

amendment that an order with both a 

Short Sale instruction and Hide Not 

Slide instruction will be ranked at the 

mid-point of the NBBO, but displayed at 

the Permitted Price discussed below. 

While the amended definition of 

Permitted Price is not identical to the 

definition of Permitted Price under 

BATS Rules, any differences are 

necessary to conform the proposed rule 

text with the other proposed rule 

changes described above. 

Re-Pricing (Rule 11.6(l)) 

The Exchange currently offers repricing instructions which, in all cases, 

result in the ranking and/or display of 

an order at a price other than the order’s 

limit price in order to comply with 

applicable securities laws and Exchange 

Rules. Specifically, the Exchange’s repricing instructions are designed to 

permit Users to comply with Rule 

610(d) of Regulation NMS or Rule 201 

of Regulation SHO. Rule 11.6(l) sets 

forth the re-pricing instructions 

currently available to Users with regard 

to Regulation NMS compliance—Price 

Adjust, Hide Not Slide, and Routed and 

Returned Re-Pricing, and with regard to 

Regulation SHO compliance—Short 

Sale Price Adjust and Short Sale Price 

Sliding. The Exchange now proposes to 

amend its re-pricing instructions to 

streamline the re-pricing options 

available to Users in order to align 

Exchange functionality with that of 

BATS. 

Re-Pricing Instructions To Comply With 

Rule 610(d) of Regulation NMS 

The Exchange proposes to amend its 

re-pricing instructions to comply with 

Rule 610(d) of Regulation NMS as 

follows: (i) Amend the Price Adjust 

instruction to enable Users to elect that 

their order be adjusted multiple times in 

response to changes in the NBBO; 

rename the Hide Not Slide instruction 

as Displayed Price Sliding and amend it 

to allow for multiple re-pricing; and (iii) 

delete Routed and Returned Re-Pricing. 

Routed and Returned Re-Pricing (Rule 

11.6(l)(1)(B)(i)). The Exchange proposes 

to delete the Routed and Returned RePricing instruction under Rule 

11.6(l)(1)(B)(i). Pursuant to current 

Exchange Rules and Functionality, 

under the Routed and Returned RePricing instruction, a Limit Order that is 

returned to the EDGA Book after being 

routed to an away Trading Center with 

a limit price that would cause the order 

to be a Locking Quotation or Crossing 

Quotation will be displayed by the 

System on the EDGA Book at a price 

that is one Minimum Price Variation 

lower (higher) than the Locking Price 26

for orders to buy (sell), will be ranked 

at the Locking Price with the ability to 

execute at the Locking Price. Each time 

the NBBO is updated, a buy (sell) order 


rljohnson on DSK3VPTVN1PROD with NOTICES
2130 Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 

27For purposes of the description of the repricing instructions under proposed Rule 11.6(l), 

the terms ‘‘ranked’’ and ‘‘priced’’ are synonymous 

and used interchangeably. 

28See Division of Trading and Markets: Response 

to Frequently Asked Questions Concerning Rule 

611 and Rule 610 of Regulation NMS, Question 

5.02, available at http://www.sec.gov/divisions/

marketreg/nmsfaq610–11.htm (last visited March 6, 

2014). 

29See Securities Exchange Act Release Nos. 

73359 (October 15, 2014), 79 FR 63003 (October 21, 

2014) (SR–BATS–2014–038) (Order Granting 

Approval of Proposed Rule Change to Rule 11.9 of 

the BATS Exchange, Inc. to Add Price Adjust 

Functionality); and 73366 (October 15, 2014), 79 FR 

62993 (October 21, 2014) (SR–EDGA–2014–019) 

[sic] (Order Granting Approval of Proposed Rule 

Change to Rule 11.9 of the BATS Y-Exchange, Inc. 

to Add Price Adjust Functionality). 

30The Exchange notes that it is proposing to rename the Hide Not Slide Re-Pricing instruction to 

the Displayed Price Sliding instruction, which is 

the same name used to describe analogous 

functionality on BATS. The Exchange understands 

that, its affiliate, EDGX, will retain the current name 

with respect to the Hide Not Slide Re-Pricing 

instruction because such functionality is 

distinguishable from Displayed Price Sliding 

functionality. The primary difference between Hide 

Not Slide functionality and Displayed Price Sliding 

functionality is that an order with a Hide Not Slide 

re-pricing instruction will be ranked at the midpoint of the NBBO with discretion to execute at the 

Locking Price whereas an order with a Displayed 

Price Sliding instruction (including an analogous 

order on BZX or BYX) is ranked at the Locking 

Price. 

subject to the Routed and Returned RePricing instruction will be further 

adjusted so that it continues to be 

displayed by the System on the EDGA 

Book at one Minimum Price Variation 

below (above) the NBO (NBB) and will 

be ranked at the Locking Price with the 

ability to execute at the Locking Price 

until the price of such order reaches its 

limit price, at which point it will remain 

displayed by the System on the EDGA 

Book at that price and cease to be 

further adjusted pursuant to the Routed 

and Returned Re-Pricing instruction. 

The order will receive a new time stamp 

when it is returned to the EDGA Book 

and each time it is subsequently reranked. 

Upon completion of the migration of 

the Exchange to BATS technology, Limit 

Orders that are returned to the EDGA 

Book after being routed to an away 

Trading Center with a limit price that 

would cause the order to be a Locking 

Quotation or Crossing Quotation will be 

subject to the Exchange’s standard repricing instructions; i.e., automatically 

defaulted by the System to the Price 

Adjust Re-Pricing instruction, unless the 

User affirmatively elects the Cancel 

Back instruction or the Hide Not Slide 

instruction. The Exchange also proposes 

to remove a reference to the Routed and 

Returned Re-Pricing instruction from 

Rule 11.6(l)(1)(B). 

Price Adjust Re-Pricing (Rule 

11.6(l)(1)(A)). Under the Price Adjust 

instruction, where a buy (sell) order 

would be a Locking Quotation or 

Crossing Quotation if displayed by the 

System on the EDGA Book at the time 

of entry, the order will be displayed and 

ranked 27 at a price that is one Minimum 

Price Variation lower (higher) than the 

Locking Price. The order will be 

displayed and ranked by the System on 

the EDGA Book at the Locking Price if: 

(i) The NBBO changes such that the 

order, if displayed at the Locking Price, 

would not be a Locking Quotation or 

Crossing Quotation, including where an 

ISO with a TIF instruction of Day is 

entered into the System and displayed 

on the EDGA Book on the same side of 

the market as the order at a price that 

is equal to or more aggressive than the 

Locking Price.28 An order re-priced as 

set forth above would not be subject to 

further re-ranking and will be displayed 

by the System on the EDGA Book at the 

Locking Price until executed or 

cancelled by the User. The order will 

receive a new time stamp at the time it 

is re-ranked. 

The Exchange proposes to amend the 

Price Adjust instruction to provide 

Users with additional flexibility by 

enabling them to elect that their order 

be adjusted multiple times in response 

to changes in the NBBO. The ranked 

and displayed prices of an order subject 

to the Price Adjust instruction will only 

be adjusted once, unless the User elects 

that the order be adjusted multiple 

times in response to changes to the 

prevailing NBBO. Unless a User has 

elected the multiple re-pricing option, 

the order would not be subject to further 

re-ranking and will be displayed on the 

EDGA Book at the Locking Price until 

executed or cancelled by the User. An 

order subject to the multiple re-pricing 

option will be further re-ranked and redisplayed to the extent it can 

permissibly be ranked and displayed at 

a more aggressive price based on 

changes to the prevailing NBBO. 

Multiple re-pricing pursuant to Price 

Adjust would be optional and would 

have to be explicitly selected by a User 

before it will be applied. Orders subject 

to multiple re-pricing for Price Adjust 

will be permitted to move all the way 

back to their most aggressive price, 

whereas orders subject to Price Adjust 

may not be adjusted to their most 

aggressive price, depending upon 

market conditions and the limit price of 

the order upon entry. The Exchange 

notes that this functionality is identical 

to the operation of BATS Rule 

11.9(g)(2).29 The Exchange does not 

propose to amend any other aspect of 

the Price Adjust instruction. 

As an example of multiple re-pricing 

for Price Adjust assume the Exchange 

has a posted and displayed bid to buy 

100 shares of a security priced at $10.10 

per share and a posted and displayed 

offer to sell 100 shares at $10.14 per 

share. Assume the NBBO is $10.10 by 

$10.12. If the Exchange receives a nonroutable bid to buy 100 shares at $10.13 

per share, the Exchange would rank and 

display the order to buy at $10.11 

because displaying the bid at $10.13 

would cross an external market’s 

Protected Offer to sell for $10.12. If the 

NBO then moved to $10.13, the 

Exchange would un-slide the bid to buy 

and rank and display it at $10.12. Under 

existing Price Adjust functionality, the 

Exchange does not further adjust the 

ranked or displayed price following this 

un-slide. However, under multiple repricing for Price Adjust if the NBO then 

moved to $10.14, the Exchange would 

un-slide the bid to buy and rank and 

display it at its full limit price of $10.13. 

Hide Not Slide Re-Pricing (Rule 

11.6(l)(1)(B)). The Exchange proposes to 

rename the Hide Not Slide Re-Pricing 

instruction under Rule 11.6(l)(1)(B) as 

Displayed Price Sliding and to amend 

the rule to allow for multiple repricing.30 Under the renamed Displayed 

Price Sliding instruction, where an 

order would be a Locking Quotation or 

Crossing Quotation if displayed by the 

System on the EDGA Book at the time 

of entry, the order will be displayed at 

a price that is one Minimum Price 

Variation lower (higher) than the 

Locking Price for orders to buy (sell), 

will be ranked at the Locking Price with 

the ability to execute at the Locking 

Price; provided, however, that if a 

contra-side order that equals the 

Locking Price is displayed by the 

System on the EDGA Book, the order’s 

ability to execute at the Locking Price 

will be suspended unless and until 

there is no contra-side displayed order 

on the EDGA Book that equals the 

Locking Price. However, in such case, 

an order subject to the Displayed Price 

Sliding instruction may execute against 

other orders at its displayed price. 

Where the NBBO changes such that the 

order, if displayed by the System on the 

EDGA Book at the Locking Price, would 

not be a Locking Quotation or Crossing 

Quotation, the System will rank and 

display such orders at the Locking Price. 

The order will not be subject to further 

re-ranking and will be displayed on the 

EDGA Book at the Locking Price 

retaining its time stamp until executed 

or cancelled by the User. Currently, an 

order subject to the Displayed Price 

Sliding instruction will only receive a 

new time stamp when it is re-ranked by 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 2131 

31See Securities Exchange Act Release Nos. 

67657 (August 14, 2012), 77 FR 50199 (August 20, 

2012) (SR–BATS–2012–035) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

by the BATS Exchange, Inc. to Amend BATS Rules 

Related to Price Sliding Functionality); and 67656 

(August 14, 2012), 77 FR 50193 (August 20, 2012) 

(SR–BYX–2012–018) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

by the BATS Y-Exchange, Inc. to Amend BYX Rules 

Related to Price Sliding Functionality). 

the System upon clearance of a Locking 

Quotation due to the receipt of an ISO 

with a TIF instruction of Day that 

establishes a new NBBO at the Locked 

Price in accordance with Rule 

11.9(a)(2)(B). 

Like as proposed for the Price Adjust 

instruction described above, the 

Exchange proposes to amend the 

Displayed Price Sliding instruction to 

provide Users with additional flexibility 

by enabling them to elect that their 

order be adjusted multiple times in 

response to changes in the NBBO. The 

ranked and displayed prices of an order 

subject to the Displayed Price Sliding 

instruction will only be adjusted once, 

unless the User elects that the order be 

adjusted multiple times in response to 

changes to the prevailing NBBO. Unless 

a User has elected the multiple repricing option, the order would not be 

subject to further re-ranking and will be 

displayed on the EDGA Book at the 

Locking Price until executed or 

cancelled by the User. An order subject 

to the multiple re-pricing option will be 

further re-ranked and re-displayed to 

the extent it can permissibly be ranked 

and displayed at a more aggressive price 

based on changes to the prevailing 

NBBO. Multiple re-pricing pursuant to 

Displayed Price Sliding would be 

optional and would have to be explicitly 

selected by a User before it will be 

applied. Orders subject to multiple repricing for Displayed Price Sliding will 

be permitted to move all the way back 

to their most aggressive price, whereas 

orders subject to Price Adjust may not 

be adjusted to their most aggressive 

price, depending upon market 

conditions and the limit price of the 

order upon entry. The Exchange notes 

that this functionality is identical to the 

operation of BATS Rule 11.9(g)(1).31 To 

account for option multiple price 

sliding, the Exchange proposes to state 

that an order subject to the Displayed 

Price Sliding instruction will receive a 

new time stamp each time is re-ranked, 

which will include when the order is reranked by the System upon clearance of 

a Locking Quotation due to the receipt 

of an ISO with a TIF instruction of Day 

that establishes a new NBBO at the 

Locked Price in accordance with Rule 

11.9(a)(2)(B).The Exchange does not 

propose to amend any other aspect of 

the Displayed Price Sliding instruction. 

As an example of multiple Displayed 

Price Sliding, assume the Exchange has 

a posted and displayed bid to buy 100 

shares of a security priced at $10.10 per 

share and a posted and displayed offer 

to sell 100 shares at $10.13 per share. 

Assume the NBBO is $10.10 by $10.12. 

If the Exchange receives a non-routable 

bid to buy 100 shares at $10.12 per 

share the Exchange will rank the order 

to buy at $10.12 and display the order 

at $10.11 because displaying the bid at 

$10.12 would lock an external market’s 

Protected Offer to sell for $10.12. If the 

NBO then moved to $10.13, the 

Exchange would un-slide the bid to buy 

and display it at its ranked price (and 

limit price) of $10.12. 

Re-Pricing Instructions To Comply With 

Rule 201 of Regulation SHO 

The Exchange proposes to amend its 

Re-Pricing instructions to comply with 

Rule 201 of Regulation SHO by deleting 

Short Sale Price Adjust and Short Sale 

Price Sliding and adopting a new, 

streamlined rule to align with BATS 

Rule 11.9(g)(5). 

Current Functionality. The Exchange 

currently offers two re-pricing 

instructions to comply with Rule 201 of 

Regulation SHO—Short Sale Price 

Adjust and Short Sale Price Sliding. 

Under the Short Sale Price Adjust 

instruction, an order to sell with a Short 

Sale instruction will be ranked and 

displayed by the System on the EDGA 

Book at the Permitted Price. Following 

the initial ranking, the order will, to the 

extent the NBB declines, continue to be 

re-ranked and displayed by the System 

on the EDGA Book at the Permitted 

Price down to the order’s limit price. 

The Short Sale Price Sliding instruction 

operates similarly to the Short Sale 

Price Adjust instruction; except that 

after its initial ranking, the order will, 

to the extent the NBB declines, be reranked and displayed by the System on 

the EDGA Book one additional time at 

a price that is equal to the NBB at the 

time the order was received by the 

System. In both cases, the order to sell 

with a Short Sale instruction will 

receive a new time stamp each time it 

is re-ranked. 

Proposed Functionality. The 

Exchange proposes to delete the Short 

Sale Price Adjust and Short Sale Price 

Sliding and adopt a new, streamlined 

rule to align with BATS Rule 11.9(g)(5). 

Under the amended Rule 11.6(l)(2), an 

order to sell with a Short Sale 

instruction that, at the time of entry, 

could not be executed or displayed in 

compliance with Rule 201 of Regulation 

SHO will be re-priced by the System at 

the Permitted Price. Like BATS Rule 

11.9(g)(5), proposed Exchange Rule 

11.6(l)(2)(A) would state that the default 

short sale re-pricing process will only 

re-price an order upon entry. 

As proposed, depending upon the 

instructions of a User, to reflect declines 

in the NBB the System will continue to 

re-price and re-display a short sale order 

at the Permitted Price down to the 

order’s limit price. In the event the NBB 

changes such that the price of an order 

with a Non-Displayed instruction 

subject to Rule 201 of Regulation SHO 

would be a Locking Quotation or 

Crossing Quotation, the order will 

receive a new time stamp, and will be 

re-priced by the System to the Permitted 

Price. Like the Short Sale Price Adjust 

process that is to be decommissioned, 

an order to sell with a Short Sale 

instruction that is re-priced will be 

ranked at the Permitted Price. 

Like BATS Rule 11.9(g)(5), amended 

Rule 11.6(l)(2) would state that: (i) 

When a Short Sale Circuit Breaker is in 

effect, the System will execute a sell 

order with a Displayed and Short Sale 

instruction at the price of the NBB if, at 

the time of initial display of the sell 

order with a Short Sale instruction, the 

order was at a price above the then 

current NBB; (ii) orders with a Short 

Exempt instruction will not be subject 

to re-pricing under amended Rule 

11.6(l)(2); and (iii) the re-pricing 

instructions to comply with Rule 610(d) 

of Regulation NMS will be continue to 

be ignored for an order to sell with a 

Short Sale instruction when a Short Sale 

Circuit Breaker is in effect and the repricing instructions to comply with 

Rule 201 of Regulation SHO under this 

Rule will apply. 

Re-Pricing of Orders With a NonDisplayed Instruction (Rule 11.6(l)(3)) 

Rule 11.6(l)(3) currently sets forth the 

re-pricing process for orders with a NonDisplayed instruction to avoid 

potentially trading through Protected 

Quotations of external markets. 

Currently, under Rule 11.6(l)(3), a nonroutable order with a Non-Displayed 

instruction that would be a Crossing 

Quotation of an external market will be 

ranked at the Locking Price, unless the 

User affirmatively elects that the order 

Cancel Back. Rule 11.6(l)(3) states that 

to avoid potentially trading through 

Protected Quotations of external 

markets, a non-routable order with a 

Non-Displayed instruction that would 

be a Crossing Quotation of an external 

market will be ranked at the Locking 

Price, unless the User affirmatively 

elects that the order Cancel Back. Each 

time the NBBO is updated and the order 

continues to be a Locking Quotation or 


rljohnson on DSK3VPTVN1PROD with NOTICES
2132 Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 

32 Id. 

33See supra note 20. 

34 Id. 

35 Id. 

36 Id. 

Crossing Quotation of an external 

market, the order will be adjusted so 

that it continues to be ranked at the 

current Locking Price. Once an order 

with a Non-Displayed instruction has 

been ranked at its limit price it will only 

be adjusted in the event the NBBO is 

updated and the order would again be 

a Crossing Quotation of an external 

market. The order will receive a new 

time stamp each time it is subsequently 

re-ranked. For example, assume the 

NBBO is $24.00 × $26.00 and there are 

no orders resting on the EDGA Book. If 

an incoming order with a NonDisplayed instruction is entered into the 

System to buy at $27.00, it will be 

ranked by the System at $26.00, the 

Locking Price. Assume the NBBO 

changes to $24.00 × $25.00. The buy 

order with a Non-Displayed instruction 

will be re-ranked at $25.00, the new 

Locking Price, and be given a new time 

stamp. 

The Exchange proposes to amend 

Rule 11.6(l)(3) to align with BATS Rule 

11.9(g)(4).32 As amended, an order with 

a Non-Displayed instruction that has 

been re-ranked by the System in 

accordance with Rule 11.6(l)(3) will not 

be re-ranked by the System each time 

the NBBO is adjusted. Rather, such 

order will only be re-ranked by the 

System should it is again be Crossing 

Quotation of an external market upon 

the NBBO being updated. Assume the 

same facts as the above example. 

Assume the NBBO again changes to 

$24.00 × $27.00. The buy order with a 

Non-Displayed instruction will be 

remain ranked at $25.00 because it is 

not a Crossing Quotation upon the 

NBBO changing. However, assume the 

NBBO changed to $23.00 × $24.00. The 

buy order with a Non-Displayed 

instruction will be remain ranked at 

$24.00, and be given a new time stamp, 

because it would be a Crossing 

Quotation if it remained ranked at 

$25.00. 

Reserve Quantity and Replenishment 

Amounts (Rule 11.6(m)) 

Current Functionality. If the portion 

of the order with a Displayed 

instruction is reduced to less than a 

Round Lot, the System will, in 

accordance with the User’s instruction, 

replenish the displayed quantity from 

the Reserve Quantity by at least a single 

Round-Lot using either the Random or 

Fixed Replenishment instructions. A 

new time stamp is created for the 

displayed quantity of the order each 

time it is replenished from the Reserve 

Quantity, while the Reserve Quantity 

retains the time stamp of its original 

entry. Where the combined amount of 

the displayed quantity and Reserve 

Quantity of an order are reduced to less 

than one Round Lot, the order converts 

to an order with a Displayed instruction 

and be treated as Displayed for purposes 

of execution priority under Rule 11.9. 

Proposed Functionality. The 

Exchange proposes to amend Rule 

11.6(m) to align with BATS Rule 

11.9(c)(1).33 First, the Exchange 

proposes to no longer require that the 

displayed quantity from the Reserve 

Quantity be replenished by at least a 

single Round-Lot. Instead, the displayed 

quantity will be replenished in 

accordance with the replenishment 

instruction the User selects. 

Specifically, like on BATS, Users will 

be required to designate the original 

display quantity of an order, which is 

also the amount to which an order is 

replenished (unless the remainder of an 

order is smaller than the original 

displayed quantity) under the current 

replenishment functionality. The 

Exchange refers to this quantity as ‘‘max 

floor’’ in its specifications. The 

Exchange proposes to add a defined 

term of ‘‘Max Floor’’ to Rule 11.6(m), 

which would be a mandatory value 

entered by a User that will determine 

the quantity of the order to be initially 

displayed by the System and will also 

be used to determine the replenishment 

amount under both replenishment 

options described below. If the 

remainder of an order is less than the 

replenishment amount, the Exchange 

will replenish and display the entire 

remainder of the order. 

Second, the Exchange proposes to 

amend the time stamp functionality of 

an order with a Reserve Quantity. 

Currently, when an order is replenished 

from Reserve Quantity, the displayed 

quantity receives a new time stamp 

while the Reserve Quantity retains the 

time stamp of its original entry. As 

amended, a new time stamp will be 

created for the displayed quantity and 

Reserve Quantity of the order each time 

it is replenished from the Reserve 

Quantity. This functionality is identical 

to functionality set forth in BATS Rule 

11.12(a)(5).34

Random Replenishment is an 

instruction that a User may attach to an 

order with Reserve Quantity where 

replenishment quantities for the order 

are randomly determined by the System 

within a replenishment range 

established by the User. The Exchange 

proposes to minor amendments to the 

operation of Random Replenishment to 

align with BATS Rule 11.9(c)(1).35

Currently, both the actual quantity of 

the order that will be initially displayed 

by the System on the EDGA Book and 

subsequent displayed replenishment 

quantities are randomly determined by 

the System within a replenishment 

range established by the User. As 

amended, only the replenishment 

quantities for the order will be 

randomly determined by the System 

within a replenishment range 

established by the User. A User will be 

required to select a replenishment value 

and Max Floor. The Max Floor will be 

the initial quantity to be displayed. The 

displayed replenishment quantities will 

then be determined by the System by 

randomly selecting a number of shares 

within a replenishment range that is 

between: (i) The Max Floor minus the 

replenishment value; and (ii) the Max 

Floor plus the replenishment value. The 

displayed replenishment quantities 

randomly determined by the System 

will no longer be limited to Round Lots. 

Nor will the replenishment quantity be 

within a replenishment range that is 

between the quantity around which the 

replenishment range is established plus 

or minus the replenishment value. In 

addition, the Exchange will no longer 

prohibit the displayed replenishment 

quantity from: (i) Exceeding the 

remaining Reserve Quantity of the 

order; (ii) from being less than a single 

Round Lot or greater than the remaining 

unexecuted shares in the order. 

In addition to the changes set forth 

above, the Exchange proposes to modify 

Rule 11.10(e)(3) to state that the Max 

Floor set for an order can be modified 

through the use of a replace message 

rather than requiring a User to cancel 

and re-enter an order. The Exchange 

also proposes to modify Rule 11.9(a)(4) 

to align with BATS Rule 11.12(a)(3)36 to 

make clear that a modification to the 

Max Floor of an order with a Reserve 

Quantity will not cause such order to 

lose priority. When a replenishment 

occurs (based on the new Max Floor), 

the order will receive a new timestamp, 

and thus, will have a new priority. 

Under Fixed Replenishment, the 

displayed quantity of an order is 

replenished for a Fixed Replenishment 

quantity designated by the User. The 

Fixed Replenishment quantity for the 

order equals the initial displayed 

quantity designated by the User. The 

Exchange proposes to amend Rule 

11.6(m) to specify that the Fixed 

Replenishment quantity will be the Max 

Floor designated by the User. In 

addition, Rule 11.6(m) will also specify 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 2133 

37See supra note 20. 

38See Securities Exchange Act Release Nos. 

73295 (October 3, 2014), 79 FR 61117 (October 9, 

2014) (SR–BATS–2014–044) (Notice of Filing and 

Immediate Effectiveness of Proposed Rule Change 

to Rules 11.13 and 21.9 of the BATS Exchange, 

Inc.); and 73296 (October 3, 2014), 79 FR 61121 

(October 9, 2014) (SR–BYX–2014–026) (Notice of 

Filing and Immediate Effectiveness of Proposed 

Rule Change to Rule 11.13 of the BATS Y-Exchange, 

Inc.). As amended, Exchange Rule 11.6(n)(2) only 

differs from BATS Rule 11.13(a)(4)(B) to extent 

necessary to conform the rule with existing 

Exchange rule text or to account for details or 

descriptions currently included in the Exchange’s 

Rule but not included in BATS Rule 11.13(a)(4)(B). 

An ‘‘Odd Lot’ is defined as ‘‘any amount less than 

a Round Lot. See Exchange Rule 11.8(s)(2). 39See supra note 20. 

40See Securities Exchange Act Release Nos. 

73473 (October 30, 2014), 79 FR 65744 (November 

5, 2014) (SR–BATS–2014–037) (Order Granting 

Approval of Proposed Rule Change to Establish an 

Opening Process for Non-BATS-Listed Securities); 

and 73472 (November 5, 2014), 79 FR 65735 

(October 9, 2014) (SR–BYX–2014–018) (Order 

Granting Approval of Proposed Rule Change to 

Establish an Opening Process). As amended, 

Exchange Rule 11.7 only differs from BZX Rule 

11.24 and BYX Rule 11.23 to extent necessary to 

conform the rule with existing Exchange rule text 

or to account for details or descriptions currently 

included in the Exchange’s Rule but not contained 

in BZX or BYX rules. 

41See supra note 9. 

that Fixed Replenishment will apply to 

any order for which Random 

Replenishment has not been selected. 

Lastly, like proposed for Random 

Replenishment discussed above, the 

Exchange will no longer prohibit the 

displayed replenishment quantity from 

being less than a single Round Lot or 

greater than the remaining unexecuted 

shares in the order. As amended, Fixed 

Replenishment will be identical to 

BATS Rule 11.9(c)(1)(B).37

Super Aggressive (Rule 11.6(n)(2)) 

Super Aggressive is an order 

instruction that directs the System to 

route the order if an away Trading 

Center locks or crosses the limit price of 

the order resting on the EDGA Book. 

Like BATS Rule 11.13(a)(4)(B), the 

Exchange proposes to also permit a User 

to designate an order as Super 

Aggressive solely to routable orders 

posted to the EDGA Book with 

remaining size of an Odd Lot.38 To the 

extent the amended text of Exchange 

Rule 11.6(n)(2) differs from BATS Rule 

11.13(a)(4)(B), such differences are 

necessary to conform the rule with 

existing rule text, and in this case, to 

account for details or descriptions 

currently included in BATS Rule 

11.9(d) [sic] that are not necessary under 

the structure of the Exchange’s Rules. 

Time-In-Force (Rule 11.6(q)) 

The Exchange proposes to amend its 

TIF instructions to align with BATS 

Rule 11.9(b). To the extent the amended 

text of Exchange Rule 11.6(q) differs 

from BATS Rule 11.9(b), such 

differences are necessary to conform the 

rule with existing Exchange rule text or 

to account for details or descriptions 

currently included in the Exchange’s 

Rule but not included in BATS Rule 

11.9(b). Where necessary, the Exchange 

has proposed rule changes consistent 

with the Exchange’s operation on BATS 

technology, which the Exchange also 

believes are consistent with User 

expectations of how the System 

operates. 

First, the Exchange proposes minor 

modifications to align the definition of 

IOC with BATS Rule 11.9(b)(1), the 

most notable of which is to specify that 

an order with a TIF instruction of IOC 

is eligible for routing. BATS rules do not 

restrict an order with an IOC instruction 

from being eligible for routing. In 

addition, permitting orders with an IOC 

instruction to be eligible for routing is 

consistent with BATS technology as 

well as with Users’ expectations to use 

orders with an IOC instruction in 

combination with available routing 

functionality and strategies. As 

amended, an IOC would be an 

instruction the User may attach to an 

order stating the order is to be executed 

in whole or in part as soon as such order 

is received. The portion not executed 

immediately on the Exchange or another 

trading center is treated as cancelled 

and is not posted to the EDGA Book. 

Second, the Exchange proposes to 

amend the definition of the Day TIF 

instruction to state that an order with a 

TIF instruction of Day, if not executed, 

expires at the end of Regular Trading 

Hours and not at the end of the 

specified trading session. In addition, 

orders with a Day TIF instruction will 

be eligible for execution as soon as 

received by the Exchange. Therefore, the 

Exchange proposes to no longer require 

that any order with a Day instruction 

entered into the System before the start 

of the specified trading session will be 

placed by the System in a pending state 

and activated for potential execution 

upon the start of that trading session. 

Lastly, any Day Order entered into the 

System before the opening for business 

on the Exchange as determined 

pursuant to Rule 11.1 (which is 

currently 6:00 a.m.), or after the closing 

of Regular Trading Hours, will be 

rejected. 

Third, Good-‘til Time will be renamed 

as Good-‘til Day (‘‘GTD’’). GTD will 

continue to be defined as an instruction 

the User may attach to an order 

specifying the time of day at which the 

order expires. Any unexecuted portion 

of an order with a TIF instruction of 

GTD will be continue to be cancelled at 

the expiration of the User’s specified 

time, which can be no later than the 

close of the Post-Market Session. A User 

will no longer be able to designate that 

an order with a GTD instruction be 

cancelled at the end of a specified 

trading session(s). 

Lastly, the Exchange proposes to 

adopt two new TIF instructions which 

are currently available on BATS: 39

Good ‘til Extended Day (‘‘GTX’’) and 

RHO. GTX will be defined as an 

instruction the User may attach to an 

order to buy or sell which, if not 

executed, will be cancelled by the close 

of the Post-Market Session. RHO will be 

defined as an instruction a User may 

attach to an order designating it for 

execution only during Regular Trading 

Hours, which includes the Opening 

Process and Re-Opening Process 

following a halt suspension or pause. 

The proposed definition of RHO under 

Exchange Rule 11.6(q)(6) is substantially 

similar to BYX Rule 11.9(b)(7) and any 

differences are necessary to conform the 

rule with existing Exchange rule text or 

to account for details or descriptions 

currently included in the Exchange’s 

rules but not in BYX Rule 11.9(b)(7). 

The Exchange notes that the proposed 

definition of RHO is also similar to BZX 

Rule 11.9(b)(7) but such rule includes 

additional detail not necessary in the 

proposed rule because the Exchange 

does not have any listed securities or a 

separate process for handling such 

listed securities whereas BZX does. 

Rule 11.7, Opening Process 

The Exchange proposes to amend 

Rule 11.7 regarding the Opening Process 

to align with BATS Rule 11.24 and BYX 

Rule 11.23.40 The Exchange proposes to 

modify paragraph (a) to specify that buy 

or sell orders that wish to participate in 

the Opening Process are to include a TIF 

instruction of RHO and that any order 

that does not include a TIF instruction 

of RHO will not be eligible for 

participation in the Opening Process. 

Paragraph (a)(1) would be amended to 

make clear that only orders without a 

TIF instruction of RHO and ISOs 

designated RHO may execute against 

eligible Pre-Opening Session contra-side 

interest resting in the EDGA Book in the 

time period between the start of 9:30 

a.m. Eastern Time and the Exchange’s 

Opening Process or a Contingent Open, 

as described in paragraph (b) and (d).41

Orders with a TIF instruction of IOC or 

FOK will continue to be eligible for 

execution during this time period as 

they would be considered orders 

without a TIF instruction of RHO. 

Paragraph (a)(1) would also state that 


rljohnson on DSK3VPTVN1PROD with NOTICES
2134 Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 

42See Securities Exchange Act Release Nos. 

73875 (December 18, 2014) (SR–BATS–2014–068) 

(Notice of Filing and Immediate Effectiveness of a 

Proposed Rule Change to Rules 11.0(a)(2) and 

11.18(e) of the BATS Exchange, Inc.); and 73874 

(December 18, 2014) (SR–BYX–2014–039) (Notice 

of Filing and Immediate Effectiveness of a Proposed 

Rule Change to Rules 11.0(a)(2) and 11.18(e) of the 

BATS Y-Exchange, Inc.). 

any unexecuted portion of an ISO that 

is designated RHO will be converted 

into a non-ISO and be queued for 

participation in the Opening Process. 

Paragraph (a)(2) would be amended to 

state that all orders that include a TIF 

instruction of RHO may participate in 

the Opening Process except: Limit 

Orders with a Post Only instruction, the 

Discretionary Range of Limit Orders, 

and ISOs not modified by Rule 

11.7(a)(1), and orders with a Minimum 

Execution Quantity instruction. Limit 

Orders with a Discretionary Range may 

participate up to their ranked limit price 

for buy orders or down to their ranked 

limit price for sell orders, rather than up 

or down to their discretionary price, as 

is currently allowed. Orders with a TIF 

instruction of IOC or FOK will continue 

to be ineligible for execution in the 

Opening Process as they would not be 

able to also include a TIF instruction of 

RHO. Orders with a Stop Price or Stop 

Limit Price instruction will be eligible 

to participate in the Opening Process 

where their stop prices have been 

trigged. 

Paragraph (b) defines the process by 

which the System will attempt to match 

buy and sell orders that are executable 

at the midpoint of the NBBO. The 

Exchange does not propose to alter this 

process other than to define it as the 

Opening Match. In addition, the 

Exchange propose to include in 

paragraph (b) that all ERSTP modifiers, 

as defined in Rule 11.10(d), will be 

ignored as it relates to executions 

occurring during the Opening Match. 

Paragraph (d) sets forth the 

Exchange’s Contingent Open process 

that occurs when the conditions to 

establish the price of the Opening 

Process set forth under Rule 11.7(c) do 

not occur by 9:45:00 a.m. Eastern Time. 

In such case, orders will be placed on 

the EDGA Book, routed, cancelled, or 

executed in accordance with the terms 

of the order. The Exchange proposes to 

state under paragraph (d) that the orders 

will be handled in time sequence, 

beginning with the order with the oldest 

times [sic] stamp. 

Paragraph (e) or Exchange Rule 11.7 

states that re-openings after a halt, 

suspension or pause will occur at the 

midpoint of the: (i) First NBBO 

subsequent to the first reported trade on 

the listing exchange following the 

resumption of trading after a halt, 

suspension, or pause; or (ii) then 

prevailing NBBO when the first twosided quotation published by the listing 

exchange following the resumption of 

trading after a halt, suspension, or pause 

if no first trade is reported by the listing 

exchange within one second of 

publication of the first two-sided 

quotation by the listing exchange. The 

Exchange proposes to add additional 

language to paragraph (e) to align with 

BATS Rule 11.24 and BYX Rule 11.23. 

First, the Exchange proposes to specify 

that while a security is subject to a halt, 

suspension, or pause in trading, the 

Exchange will accept orders eligible 

pursuant to paragraph (a)(2) described 

above for queuing prior to the 

resumption of trading in the security for 

participation in the Re-Opening Process. 

In addition, proposed paragraph (e)(2) 

would specify that the Re-Opening 

Process will occur in the same manner 

described in paragraphs (a)(2) and (b) of 

Rule 11.7, with the following 

exceptions: (1) Orders without a TIF 

instruction of RHO will be eligible for 

participation in the Re-Opening Process, 

but orders that include a TIF instruction 

of IOC or FOK, a Post Only instruction 

or Minimum Execution Quantity 

instruction will be cancelled or rejected, 

as applicable, and any ISO that does not 

include a TIF instruction of IOC or FOK 

will be converted into a non-ISO and be 

queued for participation in the ReOpening Process. Proposed paragraph 

(e)(2) would state that where neither of 

the conditions required to establish the 

price of the Re-Opening Process in 

paragraph (1) above have occurred, the 

security may be opened for trading at 

the discretion of the Exchange. Where 

the security is opened by the Exchange 

subject to this discretion, orders will be 

handled in the same manner described 

in paragraph (d) regarding a Contingent 

Open. Proposed paragraphs (e)(1)–(2) 

would be substantially similar to the 

functionality set forth in BATS Rule 

11.24(e)(1)–(2) and BYX Rule 

11.23(e)(1)–(2). 

Rule 11.8, Order Types 

The Exchange proposes to amend the 

order types set forth under Rule 11.8 to 

align their operation with existing BATS 

Rule and functionality. 

Market Orders (Rule 11.8(a)). The 

Exchange proposes to amend paragraph 

(a)(2) to state that Market Orders may 

also include a TIF instruction of RHO 

and any portion of a Market Order with 

a TIF instruction of RHO will be 

cancelled immediately following the 

Opening or Re-Opening Process in 

which it is not executed, unless it is 

eligible to be displayed on the EDGA 

Book pursuant to Rule 11.8(a)(4). A 

Market Order being canceled 

immediately following the Opening or 

Re-Opening Process if not executed is a 

natural extension of the Opening 

Process. Exchange Rule 11.7(b) states 

that upon conclusion of the Opening 

Process, any remaining orders will be 

placed on the EDGA Book, cancelled, 

executed, or routed to an away in 

accordance with Rule 11.11. As a result, 

the Market Order will be cancelled 

unless it is eligible to be displayed on 

the EDGA Book pursuant to Rule 

11.8(a)(4). 

Under current Rule 11.10(a)(3)(A), 

where a non-routable buy (sell) Market 

Order is entered into the System and the 

NBO (NBB) is greater (less) than the 

Upper (Lower) Price Band, such order 

will be posted by the System to the 

EDGA Book and priced at the Upper 

(Lower) Price Band, unless (i) the order 

includes a TIF instruction of IOC or 

FOK, in which case it will be cancelled 

if not executed, or (ii) the User entered 

a Cancel Back instruction. The 

Exchange proposes to specify, 

consistent with BATS Rule 11.9(a)(2),42

that a Market Order to buy (sell) that is 

posted by the System to the EDGA Book 

and displayed at the Upper (Lower) 

Price Band will be re-priced and 

displayed at the Upper (Lower) Price 

Band if Price Bands move such that the 

price of the resting Market Order to buy 

(sell) would be above (below) the Upper 

(Lower) Price Band or if the Price Bands 

move such that the order is no longer 

posted and displayed at the most 

aggressive permissible price. The 

System shall re-price such displayed 

interest to the most aggressive 

permissible price until the order is 

executed in its entirety or cancelled. In 

addition, the amended rule would state 

that a Market Order that includes both 

a TIF instruction of RHO and a Short 

Sale instruction that cannot be executed 

because of the existence of a Short Sale 

Circuit Breaker will be posted and 

displayed by the System to the EDGA 

Book and priced in accordance with the 

Short Sale Re-Price instruction 

described in Rule 11.6(l)(2). 

Currently, with the exception of a 

Market Order with a Destination-onOpen instruction, any portion of a 

Market Order that would execute at a 

price more than the greater of $0.50 or 

5 percent worse than the consolidated 

last sale as published by the responsible 

single plan processor at the time the 

order is entered into the System will be 

cancelled. As amended, such order will 

be cancelled where they would execute 

at a price more than $0.50 or 5 percent 

worse than the NBBO at the time the 

order initially reaches the Exchange, 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 2135 

43Book Only is an order instruction stating that 

an order will be matched against an order on the 

EDGA Book or posted to the EDGA Book, but will 

not route to an away Trading Center. See EDGA 

Rule 11.6(n)(3). 

whichever is greater. This is identical to 

BATS Rule 11.9(a)(2). 

Limit Orders (Rule 11.8(b)). The 

Exchange proposes to state that a Limit 

Order may also include a TIF 

instruction of RHO or GTX, in addition 

to IOC, FOK, Day or GTD. In addition, 

Limit Orders with a TIF instruction of 

IOC that do not include a Book Only 43

instruction and will be eligible for 

routing away pursuant to Rule 11.11, 

while Limit Orders with a TIF 

instruction of FOK will not. This is 

designed to provide additional detail 

regarding the operation of Limit Order 

and is consistent with BATS Rule 

11.13(a)(2), which states, in sum, that 

‘‘[w]ith respect to an order that is 

eligible for routing, the System will 

designate orders as IOCs and will cause 

such orders to be routed to one or more 

Trading Centers.’’ 

Rule 11.8(b)(11) describes the 

application of the re-pricing instruction 

to comply with Regulation SHO to Limit 

Orders. The Exchange proposes to 

amend this paragraph to reflect the 

decommissioning of Short Sale Price 

Adjust and Short Sale Price Sliding in 

order to align and streamline its short 

sale pricing functionality with BATS 

Rule 11.9(g)(5) with no substantive 

differences from existing BATS Rules or 

functionality. The Exchange proposes to 

replace the reference to the Hide Not 

Slide instruction in Rule 11.8(b)(11) 

with Displayed Price Sliding to reflect 

the name change discussed above. The 

Exchange also proposes to delete Rule 

11.8(b)(12) regarding the re-pricing of 

Routed and Returned orders as this 

functionality will not be available upon 

the Exchange being migrated to BATS 

technology as discussed above. Lastly, 

the Exchange proposes to renumber 

Rule 11.8(b)(13) regarding the re-pricing 

of non-displayed orders as 11.8(b)(12). 

ISOs (Rule 11.8(c)). The Exchange 

proposes to state that an ISO may also 

include a TIF instruction of RHO or 

GTX, in addition to IOC, Day or GTD. 

The Exchange also proposes to amend 

Rule 11.8(c) to reflect the ISO with a 

Post Only and TIF instruction of GTD, 

GTX, or Day will no longer be eligible 

for the Re-Pricing Instructions to 

Comply with Rule 610 of Regulation 

NMS or Rule 201 of Regulation SHO. 

Also, as amended, an ISO that includes 

a Post Only instruction and a TIF 

instruction of GTD, GTX, or Day will be 

cancelled if the System is displaying 

orders at the Locking Price at the time 

of entry unless such order removes 

liquidity pursuant to current Rule 

11.6(n)(4), which governs the execution 

of orders with a Post Only instruction 

against resting liquidity on the EDGA 

Book. Such orders that also include a 

Short Sale instruction that cannot be 

executed or displayed at their limit 

price at the time of entry because of the 

existence of a Short Sale Circuit Breaker 

will also be cancelled. This proposed 

rule change is representative of 

additional detail with regard to the repricing of ISOs that, if displayed on the 

EDGA Book, would be a Locking or 

Crossing Quotation in the Exchange’s 

rules. Cancelling ISOs in the above 

situations is reasonable because ISOs 

would no longer be eligible for the RePricing Instructions to comply with 

Rule 610 of Regulation NMS or 201 of 

Regulation SHO, thereby ensuring the 

Exchange does not post an order that 

would lock or cross the market or 

violate Rule 201 of Regulation SHO 

consistent with BATS functionality. The 

Exchange notes, however, that absent a 

Short Sale Circuit Breaker being in 

effect, an ISO that includes a Post Only 

instruction and TIF instruction of GTD, 

GTX, or Day will remove liquidity when 

the System is displaying an order at the 

Locking price if the value of such 

execution equals or exceeds the value of 

such execution if the order instead 

posted to the EDGA Book and provided 

liquidity, including applicable fees and 

rebates, under current Rule 11.6(n)(4). 

MidPoint Peg Orders (Rule 11.8(d)). 

The Exchange proposes amend Rule 

11.8(d) to reflect the operation of 

MidPoint Peg Orders once the Exchange 

is migrated onto BATS technology. As 

amended, a MidPoint Peg Order maybe 

pegged to the less aggressive of the 

midpoint of the NBBO or one minimum 

price variation inside the same side of 

the NBBO as the order, in addition to 

the mid-point of the NBBO. This is 

identical to current BATS Rule 

11.9(c)(9). In addition, the rule would 

specify that a MidPoint Peg Order will 

not be eligible for execution when an 

NBBO is not available. In such case, a 

MidPoint Peg Order would rest on the 

EDGA Book and would not be eligible 

for execution in the System until an 

NBBO is available. The Exchange 

believes MidPoint Peg Orders being 

ineligible for execution when no NBBO 

exists is reasonable and consistent with 

a User’s intent and the purpose of the 

order type. A User entering an MidPoint 

Peg Order is doing so to receive an 

execution at the mid-point of the NBBO 

and a mid-point does not exist in the 

absence of an NBBO. The MidPoint Peg 

Order will receive a new time stamp 

when an NBBO becomes available and 

a new midpoint of the NBBO is 

established. In such case, all MidPoint 

Peg Orders that are ranked at the 

midpoint of the NBBO will retain their 

priority as compared to each other based 

upon the time such orders were initially 

received by the System. 

The Exchange proposes to state that a 

MidPoint Peg Order may also include a 

TIF instruction of RHO or GTX, in 

addition to IOC, FOK, Day or GTD. In 

addition, Users will be able to enter 

MidPoint Peg Orders as an Odd Lot, in 

addition to a Round Lot or Mixed Lot. 

Currently, MidPoint Peg Orders may 

only be executed during Regular 

Trading Hours. Upon migration of the 

Exchange onto BATS technology, 

MidPoint Peg Orders will also be 

eligible for execution during the PreOpening Session, Regular Session and 

Post Closing Session. While MidPoint 

Peg Orders may be submitted to be 

executed during the Opening Process 

described in Rule 11.7(c), any Minimum 

Execution Quantity instruction on 

aMidPoint Peg Order will not be applied 

during the Opening Process. Lastly, the 

Exchange proposes to specify that 

MidPoint Peg Orders may include a 

Book Only or Post Only instruction. 

MidPoint Discretionary Order (Rule 

11.8(e)). In sum, a MidPoint 

Discretionary Order (‘‘MDO’’) is a limit 

order to buy that is displayed at and 

pegged to the NBB, with discretion to 

execute at prices up to and including 

the midpoint of the NBBO, and a limit 

order to sell that is displayed at and 

pegged to the NBO, with discretion to 

execute at prices down to and including 

the midpoint of the NBBO. The 

Exchange proposes to amend Rule 

11.8(e)(1) to specify that an MDO may 

include a TIF instruction of RHO or 

GTX, in addition to GTD or Day. The 

Exchange also proposes to state that 

MDOs may be entered as Odd Lots, in 

addition to Round Lots and Mixed Lots. 

Currently, MDOs may only be executed 

during Regular Trading Hours. Upon 

migration of the Exchange onto BATS 

technology, MDOs will also be eligible 

for execution during the Pre-Opening 

Session and Post Closing Session. The 

Exchange does not proposes any other 

changes to MDO. 

In addition, similar to the changes to 

orders with a Primary Peg instruction 

described above, the Exchange proposes 

to amend the provisions governing 

when an MDO is locked or crossed by 

another market and when an MDO 

would itself create a Locking or Crossing 

Quotation (i.e., locking or crossing 

another market’s quotation). As 

proposed, an MDO will no longer be 

able to join the Exchange BBO when the 

EDGA Book is locked by another 


rljohnson on DSK3VPTVN1PROD with NOTICES
2136 Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 

44See BATS Rule 11.9(c)(16). 

45The term Designated Percentage is defined in 

Exchange Rule 11.20(d)(2)(D) and (E). 46See BATS Rule 11.9(c)(19). 

47For purposes of priority under proposed Rule 

11.9(a)(2)(A) and (B), the Exchange notes that orders 

of Odd Lot, Round Lot, or Mixed Lot size are treated 

equally. 

market. When the EDGA Book is crossed 

by another market, the Exchange 

proposes to automatically adjust an 

MDO to the current NBO (for bids) or 

the current NBB (for offers). Rule 

11.8(e)(7) will continue to require that 

an MDO that would otherwise be a 

Locking Quotation or Crossing 

Quotation be automatically adjusted by 

the System to one Minimum Price 

Variation below the current NBO (for 

bids) or to one Minimum Price Variation 

above the current NBB (for offers) with 

no discretion to execute to the midpoint 

of the NBBO. This proposed rule change 

is representative of additional detail 

with regard to the operation of MDOs 

during locked or crossed markets that is 

currently included in Rule 11.8(e)(7) 

and is consistent with Exchange’s 

current re-pricing options under Rule 

11.6(l), as well as Exchange Rule 

11.10(f) and BATS Rule 11.20(a)(3) 

outlining the prohibition against locked 

and crossed markets under Rule 610 of 

Regulation NMS. 

NBBO Offset Peg Order (Rule 11.8(f)). 

The Exchange proposes to change the 

name of the NBBO Offset Peg Order to 

the Market Maker Peg Order, which is 

the equivalent order type on BATS.44 A 

Market Maker Peg Order is a Limit 

Order that, upon entry or at the 

beginning of Regular Trading Hours, as 

applicable, will be automatically priced 

by the System at the Designated 

Percentage 45 away from the last 

reported sale, rather than then current 

NBO (in the case of an order to buy) or 

NBB (in the case of an order to sell), as 

is currently the case. A Market Maker 

Peg order may also include a TIF 

instruction of RHO or GTD, in addition 

to Day. Market Maker Peg Orders may 

also be entered as Odd Lots, in addition 

to Round Lots and Mixed Lots. 

The Exchange also proposes to add 

definitions for Designated Percentage 

and Defined Limit under Rule 11.8(f) to 

account for securities priced below $1. 

For purposes of Market Maker Peg Order 

pricing, the Designated Percentage shall 

be the same as set forth in Rules 

11.20(d)(2)(D) and 11.20(d)(2)(E), except 

that the Designated Percentage for 

securities priced below $1 as set forth in 

Rule 11.20(d)(2)(E) shall be 28%. For 

purposes of Market Maker Peg Order 

pricing, the Defined Limit shall be the 

same as set forth in Rules 11.20(d)(2)(F) 

and 11.20(d)(2)(G), except that the 

Defined Limit for securities priced 

below $1 as set forth in Rule 

11.20(d)(2)(G) shall be 29.5%. The 

proposed changes to Rule 11.8(f) are 

similar to the functionality set forth in 

BATS Rule 11.9(c)(16). 

Route Peg Order (Rule 11.8(g)). The 

Exchange proposes to change the name 

of the Route Peg Order to the 

Supplemental Peg Order, which is the 

equivalent order type on BATS.46 The 

Exchange also proposes to specify that 

a Supplemental Peg Order to buy (sell) 

will not be eligible for execution when 

an NBB (NBO) is not available. In such 

case, a Supplemental Peg Order to buy 

(sell) would rest on the EDGA Book and 

would not be eligible for execution in 

the System until an NBB (NBO) exists. 

This functionality is similar to that 

proposed for the MPM Order described 

above, and is based upon BATS Rule 

11.9(c)(19). The Exchange believes 

Supplemental Peg Orders being 

ineligible for execution when an NBB or 

NBO is not available is reasonable and 

consistent with a User’s intent and the 

purpose of the order type. A User 

entering a Supplemental Peg Order is 

doing so to receive an execution at the 

NBBO against an order that is in the 

process of being routed away. If no 

NBBO exists, there is no price at which 

to execute the Supplemental Peg Order. 

A Supplemental Peg Order may 

include a TIF instruction of GTX or 

RHO, in addition to GTD or Day. 

Supplemental Peg Orders may also be 

entered as Odd Lots, in addition to 

Round Lots and Mixed Lots. As 

amended, a Supplemental Peg Order 

will be eligible for execution during the 

Pre-Opening Session, Regular Session, 

and Post-Closing Session. Therefore, the 

Exchange proposes to remove the 

restriction that Supplemental Peg 

Orders: (i) May only be entered, 

cancelled, and cancelled/replaced prior 

to and during the Regular Session; (ii) 

are only eligible for execution during 

the Regular Session, but not until such 

time that orders in that security during 

the Regular Session can be posted by the 

System to the EDGA Book. Any 

remaining unexecuted Supplemental 

Peg Orders are cancelled at the 

conclusion of the Regular Session. 

Supplemental Peg Orders will continue 

to be ineligible for execution in the 

Opening Process. The proposed changes 

to Rule 11.8(g) regarding Route Peg 

Orders are similar to BATS Rule 

11.9(c)(19). 

Rule 11.9, Priority of Orders 

The Exchange proposes to amend 

Rule 11.9 to align with BATS 

functionality and BATS Rule 11.12 

regarding how orders with certain 

instructions are to be ranked by the 

System: (i) At a price other than the 

midpoint of the NBBO; (ii) at the 

midpoint of the NBBO; and (iii) where 

buy (sell) orders utilize instructions that 

cause them to be ranked by the System 

upon clearance of a Locking 

Quotation.47 The proposed amendment 

to Rules 11.9(a)(4) and (6) are described 

under the amendments to Reserve 

Quantity discussed above. 

Rule 11.9(a)(2)(A) currently states that 

the System will execute equally priced 

trading interest within the System in 

time priority in the following order: (i) 

The portion of a Limit order with a 

Displayed instruction; (ii) Limit Orders 

with a Non-Displayed instruction and 

the Reserve Quantity of Limit Orders; 

(iii) MidPoint Discretionary Orders 

executed within their Discretionary 

Range and Limit Orders executed within 

their Discretionary Range; and (iv) 

Route Peg Orders. As amended, the 

System will rank equally priced trading 

interest in such circumstances in the 

following order: (i) The portion of a 

Limit Order with a Displayed 

instruction; (ii) Limit Orders with a 

Non-Displayed instruction; (iii) Orders 

with a Pegged and Non-Displayed 

instruction; (iv) MidPoint Peg Orders; 

(v) Reserve Quantity of Limit Orders; 

(vi) MidPoint Discretionary Orders 

executed within their Discretionary 

Range and Limit Orders executed within 

their Discretionary Range; and (vii) 

Supplemental Peg Orders. Orders will 

be substantially ranked in same order 

except that, as amended, orders with a 

Pegged and Non-Displayed instruction 

will be distinguished from and placed 

behind Limit Orders with a NonDisplayed Instruction. In turn, the 

Reserve Quantity of Limit Orders will be 

separated from and placed behind Limit 

Orders with a Non-Displayed 

instruction and orders with a Pegged 

and Non-Displayed instruction. The 

Exchange believes it is reasonable to 

rank orders with a Pegged and NonDisplayed instruction behind Limit 

Orders with a Displayed instruction and 

Limit Orders with a Non-Displayed 

instruction because this priority 

sequence incentivizes the use of 

displayed liquidity on the EDGA Book 

as well as orders that provide liquidity 

at a specific limit price. These proposed 

changes are substantially similar to 

BATS functionality and Rules 

11.12(a)(2). The Exchange notes that 

BATS Rule 11.12(a)(2) does not 

currently specify that BATS Pegged 

Orders referenced in the priority rule 

are limited to Pegged Orders that are not 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 2137 

48The Exchange notes that BATS recently 

amended its Rule 11.13 to harmonize certain of its 

routing options with the Exchange. See supra note 

38. 49See BATS Rule 11.13(a)(3)(E). 

displayed on BATS, however, the 

Exchange represents that BATS 

technology does treat Pegged Orders 

displayed on BATS as displayed orders 

and that only Pegged Orders that are not 

displayed on BATS are afforded later 

priority than displayed orders and other 

non-displayed orders. Thus, the 

Exchange’s proposal (which would limit 

the later priority treatment to orders 

with a Pegged instruction and a NonDisplayed instruction) is consistent with 

BATS technology. 

Lastly, the Exchange does not propose 

to make any changes to the ranking of 

orders that are re-ranked upon clearance 

of a Locking Quotation under Rule 

11.9(a)(2)(B) other than to; (i) Remove a 

reference to the Routed and Returned 

Re-Pricing instruction because, as 

described above, it will be 

decommissioned upon migration of the 

Exchange onto BATS technology; and 

(ii) replace the term Hide Not Slide with 

Displayed Price Sliding to reflect the 

name change discussed above. 

Rule 11.10, Order Execution 

Rule 11.10(a)(2) summarizes the 

Exchange compliance with Regulation 

NMS. The rule states that for any 

execution to occur during Regular 

Trading Hours, the price must be equal 

to or better than the Protected NBBO, 

unless the order is marked ISO or unless 

the execution falls within another 

exception set forth in Rule 611(b) of 

Regulation NMS. For any execution to 

occur during the Pre-Opening Session or 

the Post-Closing Session, the price must 

be equal to or better than the highest bid 

or lowest offer in the EDGA Book or 

disseminated by the responsible single 

plan processor, unless the order is 

marked ISO. To align Rule 11.10(a)(2) 

with BATS Rule 11.13, the Exchange 

proposed to further state that such 

executions may occur during the PreOpening Session or the Post-Closing 

Session where a Protected Bid is 

crossing a Protected Offer. A User may, 

in such circumstance, instruct the 

Exchange to cancel any incoming order 

from such User in the event a Protected 

Bid is crossing a Protected Offer. 

To further align Exchange Rule 

11.10(a)(2) with BATS Rule 11.13, Rule 

11.10(a)(2) will state that 

notwithstanding the above, in the event 

that a Protected Bid is crossing a 

Protected Offer, whether during or 

outside of Regular Trading Hours, 

unless an order is marked ISO, the 

Exchange will not execute any portion 

of a bid at a price more than the greater 

of 5 cents or 0.5 percent higher than the 

lowest Protected Offer or any portion of 

an offer that would execute at a price 

more than the greater of 5 cents or 0.5 

percent lower than the highest Protected 

Bid. 

The Exchange also proposes to amend 

Rule 11.12(e)(3) to mirror BATS Rule 

11.9(e)(3). Rule 11.12 currently states 

that only the price and quantity terms 

of the order may be changed by a 

Replace Message (including changing a 

Limit Order to a Market Order). As 

amended, Rule 11.12 would also allow 

the Stop Price, the sell long indicator, 

Short Sale instruction, and Max Floor to 

be changed by a Replace Message. 

Rule 11.11, Routing to Away Trading 

Centers 

The Exchange proposes to amend 

Rule 11.11, which describe the 

Exchange’s routing options align with 

BATS Rule 11.13.48 In doing so, the 

Exchange proposes to eliminate obsolete 

routing options, modify certain routing 

options, and add to Rule 11.11 to offer 

many of the same routing options 

offered by BATS. The Exchange notes 

that the proposed rule text is based on 

the Rule 11.13 of BATS and is different 

only to the extent necessary to conform 

to the Exchange’s current rules. The 

Exchange believes that it is appropriate 

to amend its routing options as 

described below to ensure consistency 

with BATS Rule upon migration of the 

Exchange onto BATS technology. 

Deletions. The Exchange also 

proposes to delete from Rule 11.11 the 

following routing options that will be 

decommissioned upon migration of the 

Exchange onto BATS technology: 

ROBA, ROBX, ROBY, ROPA, IOCX, 

IOCT, and SWPC. Each of these routing 

options are described below. 

• ROBA. The Exchange proposes to 

delete the ROBA routing option under 

which an order checks the System for 

available shares and then is sent, with 

a Time-in-Force instruction of IOC, to 

BATS. If shares remain unexecuted after 

routing, they are posted on the EDGA 

Book, unless otherwise instructed by the 

User. 

• ROBX. The Exchange proposes to 

delete the ROBX routing option under 

which an order checks the System for 

available shares and then is sent, with 

a Time-in-Force instruction of IOC, to 

Nasdaq BX Exchange. If shares remain 

unexecuted after routing, they are 

posted on the EDGA Book, unless 

otherwise instructed by the User. 

• ROBY. The Exchange proposes to 

delete the ROBY routing option under 

which an order checks the System for 

available shares and then is sent, with 

a Time-in-Force instruction of IOC, to 

BYX. If shares remain unexecuted after 

routing, they are posted on the EDGA 

Book, unless otherwise instructed by the 

User. 

• ROPA. The Exchange proposes to 

delete the ROPA routing option under 

which an order checks the System for 

available shares and then is sent, with 

a Time-in-Force instruction of IOC, to 

NYSE Arca. If shares remain unexecuted 

after routing, they are posted on the 

EDGA Book, unless otherwise instructed 

by the User. 

• IOCX. The Exchange proposes to 

delete the IOCX routing option under 

which an order checks the System for 

available shares and then is sent, with 

a Time-in-Force instruction of IOC, to 

EDGA. If shares remain unexecuted after 

routing, they are posted on the EDGA 

Book, unless otherwise instructed by the 

User. 

• IOCT. The Exchange proposes to 

delete the IOCT routing option under 

which an order checks the System for 

available shares and then is sent to 

destinations on the System routing 

table. If shares remain unexecuted after 

routing, they are sent, with a Time-inForce instruction of IOC, to EDGA. If 

shares remain unexecuted after routing, 

they are posted on the EDGA Book, 

unless otherwise instructed by the User. 

• SWPC. The Exchange proposes to 

delete the SWPC routing option under 

which an order checks the System for 

available shares and then is sent to only 

Protected Quotations and only for 

displayed size. To the extent that any 

portion of the order is unexecuted, the 

remainder is posted on the EDGA Book 

at the order’s limit price. The entire 

SWPC order will not be cancelled back 

to the User immediately if at the time of 

entry there is an insufficient share 

quantity in the SWPC order to fulfill the 

displayed size of all Protected 

Quotations. The Exchange also proposes 

to delete a reference to SWPC in Rule 

11.11(d). 

The Exchange believes that it is 

appropriate to eliminate the above 

routing options because they will be 

decommissioned upon migration of the 

Exchange onto BATS technology and 

are unlikely to be offered by the 

Exchange in the near future. 

Additions. The Exchange proposes to 

add a Destination Specific routing 

option, which is currently offered by 

BATS.49 Destination Specific is a 

routing option under which an order 

checks the System for available shares 

and then is sent to an away trading 

center or centers specified by the User. 

The Destination Specific routing option 


rljohnson on DSK3VPTVN1PROD with NOTICES
2138 Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 

50See BATS Rule 11.13(a)(3)(H). 

51The Exchange notes that Post to Away under 

BATS Rule 11.13(a)(3)(H) may be combined with 

less routing options than are proposed above. This 

is because, due to the Exchange’s taker-maker 

pricing model, Members may wish to send an order 

to the Exchange in order to take liquidity and 

receive a rebate, before being routed to and posted 

on another Trading Center that incorporates a 

maker-taker pricing model that provides a rebate to 

orders that provide liquidity. 

52 Implementation of the proposed rule change on 

or about January 12, 2015 is contingent upon the 

is also similar to the Exchange’s current 

Destination Specified order instruction 

in Rule 11.6(n)(5), in that both allow the 

User to select the destination the order 

shall be routed to. The only differences 

are that under the Destination Specific 

order instruction, the order is first 

exposed to the EDGA Book before 

routing and if the order is not executed 

in full after routing away will be 

processed by the Exchange as described 

in Exchange Rule 11.10(a)(4), unless the 

User has provided instructions that the 

order reside on the book of the relevant 

away Trading Center. 

The Exchange also proposes to add a 

Post to Away routing option, which is 

currently offered by BATS.50 Post to 

Away is a routing option under which 

the System will route the remainder of 

a routed order to and posts such order 

on the order book of a destination on the 

System routing table as specified by the 

User. The Post to Away routing option 

is an alternative to either cancelling a 

routed order back to a User or posting 

such order to the BATS Book to the 

extent an order is not completely filled 

through the routing process. The Post to 

Away routing option can be combined 

with the following routing options: 

ROUT, ROUX, ROUE, ROUD, ROUZ, 

ROUQ, RDOT, RDOX, ROBB, ROCO, 

ROLF, INET, IOCM and ICMT.51 As a 

result of adding the Post to Away 

routing option, the Exchange proposes 

to amend Rule 11.11(g)(3) to remove 

now redundant language that a User 

may instruct that any remainder of the 

order may be posted to the EDGA Book 

or another destination on the System 

routing table. 

Lastly, the Exchange also proposes to 

specify for ROOC, ROUE, ROUT and 

ROUX that the entering User may select 

either Route To Improve (‘‘RTI’’) or 

Route To Fill (‘‘RTF’’). RTI may route to 

multiple destinations at a single price 

level simultaneously while RTF may 

route to multiple destinations and at 

multiple price levels simultaneously. 

RTI is similar to the RTI routing option 

available under BYX Rule 

11.13(a)(3)(G). 

Modifications. First, the Exchange 

proposes to modify Rule 11.11(a) 

regarding Regulation SHO to reflect the 

elimination of Short Sale Price Adjust 

and Short Sale Price Sliding discussed 

above, as well as to replace the phrase 

replace the phrase ‘‘the short sale price 

restriction’’ with the defined term 

‘‘Short Sale Circuit Breaker.’’ The later 

change does not change the meaning of 

Rule 11.11(a) and simply ensures a 

consistent use of defined terms 

throughout the Exchange’s Rules. 

Second, the Exchange proposes to 

modify the following routing options to 

ensure consistency with BATS Rule: 

ROUC, INET, ROLF, ROOC, SWPA, and 

SWPB. Each of these modifications are 

described below. 

• ROUC. ROUC is a routing option 

under which an order checks the 

System for available shares and then is 

sent to destinations on the System 

routing table, Nasdaq OMX BX, and 

NYSE. If shares remain unexecuted after 

routing, they are posted on the EDGA 

Book. The ROUC routing option 

currently incorrectly states that any 

remaining shares will be post to EDGA. 

Therefore, the Exchange proposes to 

correct the ROUC routing option to state 

that any remaining shares will be posted 

to the EDGX Book, rather than EDGA. 

The Exchange also proposes to amend 

the ROUC routing option to state that 

any remaining shares will not be posted 

to EDGX Book where the User instructs 

the Exchange otherwise. 

• INET. INET is a routing option 

under which an order will check the 

System for available shares and then 

will be sent to Nasdaq. If shares remain 

unexecuted after routing through the 

INET routing option, they will be posted 

on the Nasdaq book. The Exchange 

proposes to amend the INET routing 

option to state that any remaining shares 

will not be posted to Nasdaq where the 

User instructs the Exchange otherwise. 

• ROLF. ROLF is a routing option 

under which an order will check the 

System for available shares and then 

will be sent to LavaFlow ECN. The 

Exchange proposes to amend the ROLF 

routing option to states that any 

remaining shares will be cancelled 

unless the User instructs otherwise. 

• ROOC. ROOC is a routing option for 

orders that the entering firm wishes to 

designate for participation in the 

opening, re-opening (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. The Exchange proposes to 

amend the ROOC routing option to add 

BATS to the list of primary listing 

markets and to specify that, due to 

current system limitations, orders in 

BATS listed securities designated for 

participation in the re-opening process 

on BATS following a halt, suspension, 

or pause will remain on the EDGA Book 

and be eligible for execution once the 

halt, suspension, or pause has been 

lifted. Lastly, to ensure consistency with 

the ROOC routing option available on 

BATS, the Exchange proposes to states 

that any remaining shares will either be 

posted to the EDGA Book, executed, or 

routed to destinations on the System 

routing table, rather than like a ROUT 

routing option under Rule 11.11(g)(3). 

The proposed modifications to the 

ROOC routing option is similar to the 

ROOC routing option available under 

BYX Rule 11.13(a)(3)(N). 

• SWPA. SWPA is a routing option 

under which an order checks the 

System for available shares and then is 

sent to only Protected Quotations and 

only for displayed size. The entire 

SWPA order will not be cancelled back 

to the User immediately if at the time of 

entry there is an insufficient share 

quantity in the SWPA order to fulfill the 

displayed size of all Protected 

Quotations. The Exchange proposes to 

amend the SWPA routing option to state 

that, rather than cancelling any 

remaining unexecuted shares, those 

shares will be posted to the EDGA Book 

at the order’s limit price, unless 

otherwise instructed by the User. This is 

consistent with BATS Rule 

11.13(a)(2)(A), which states that any 

unfilled balance of a Limit Order will be 

posted to the BATS book. 

• SWPB. SWPB is a routing option 

under which an order checks the 

System for available shares and then is 

sent to only Protected Quotations and 

only for displayed size. The entire 

SWPB order will be cancelled back to 

the User immediately if at the time of 

entry there is an insufficient share 

quantity in the SWPB order to fulfill the 

displayed size of all Protected 

Quotations. Like as proposes for SWPA 

above, the Exchange proposes to amend 

the SWPB routing option to state that, 

rather than cancelling any remaining 

unexecuted shares, those shares will be 

posted to the EDGA Book at the order’s 

limit price, unless otherwise instructed 

by the User. This is consistent with 

BATS Rule 11.13(a)(2)(A), which states 

that any unfilled balance of a Limit 

Order will be posted to the BATS book. 

Implementation Date 

The Exchange intends to implement 

the proposed rule change on or about 

January 12, 2015, which is the 

anticipated date upon which the 

migration of the Exchange to the BATS 

technology platform will be complete.52


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 2139 

Commission granting a waiver of the 30-day 

operative delay. 17 CFR 240.19b–4(f)(6)(iii). 

53 15 U.S.C. 78f(b). 

54 15 U.S.C. 78f(b)(5). 

55 15 U.S.C. 78k–1(a)(1). 

56 15 U.S.C. 78f(b)(5). 

57 17 CFR 242.610. 

58 17 CFR 242.201. 

59 17 CFR 242.610(d). 

60 Id. 

61 17 CFR 242.201. 

62 15 U.S.C. 78f(b)(5). 

63 17 CFR 242.610. 

64See supra note 29. 

65See EDGX Rule 11.6(l)(1)(B). 

66 15 U.S.C. 78f(b)(5). 

67 17 CFR 242.610. 

68 17 CFR 242.201. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule changes are consistent 

with Section 6(b) of the Act 53 and 

further the objectives of Section 6(b)(5) 

of the Act 54 because they are designed 

to promote just and equitable principles 

of trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, 

and, in general, to protect investors and 

the public interest. The proposed rule 

change also is designed to support the 

principles of Section 11A(a)(1) 55 of the 

Act in that it seeks to assure fair 

competition among brokers and dealers 

and among exchange markets. 

The proposed rule changes are 

generally intended to add or align 

certain system functionality currently 

offered by BATS in order to provide a 

consistent technology offering for the 

BGM Affiliated Exchanges. A consistent 

technology offering, in turn, will 

simplify the technology 

implementation, changes and 

maintenance by Users of the Exchange 

that are also participants on BATS. The 

proposed rule changes would also 

provide Users with access to 

functionality that is generally available 

on markets other than the BGM 

Affiliated Exchanges and may result in 

the efficient execution of such orders 

and will provide additional flexibility as 

well as increased functionality to the 

Exchange’s System and its Users. The 

proposed rule change does not propose 

to implement new or unique 

functionality that has not been 

previously filed with the Commission or 

is not available on BATS. The Exchange 

notes that the proposed rule text is 

based on the BATS Rule and is different 

only to the extent necessary to conform 

to the Exchange’s current rules. To the 

extent a proposed rule change is based 

on an existing BATS Rule, the language 

of the BATS and Exchange Rules may 

differ to extent necessary to conform 

with existing Exchange rule text or to 

account for details or descriptions 

included in the Exchange’s Rules but 

not in the applicable BATS rule. Where 

possible, the Exchange has mirrored 

BATS rules, because consistent rules 

will simplify the regulatory 

requirements and increase the 

understanding of the Exchange’s 

operations for Members of the Exchange 

that are also participants on BATS. The 

proposed rule change would provide 

greater harmonization between the rules 

of the BGM Affiliated Exchanges, 

resulting in greater uniformity and less 

burdensome and more efficient 

regulatory compliance. As such, the 

proposed rule change would foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities and would 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system. The 

Exchange also believes that the 

proposed amendments will contribute 

to the protection of investors and the 

public interest by making the 

Exchange’s rules easier to understand. 

Where necessary, the Exchange has 

proposed language consistent with the 

Exchange’s operations on BATS 

technology, even if there are specific 

details not contained in the current 

structure of BATS rules. The Exchange 

believes it is consistent with the Act to 

maintain its current structure and such 

detail, rather than removing such details 

simply to conform to the structure or 

format of BATS rules, again because the 

Exchange believes this will increase the 

understanding of the Exchange’s 

operations for all Members of the 

Exchange. 

Re-Pricing (Rule 11.6(l)). The 

Exchange believes that the proposed 

changes to Rule 11.6(l) are consistent 

with Section 6(b)(5) of the Act,56 as well 

as Rule 610 of Regulation NMS 57 and 

Rule 201 of Regulation SHO.58 Rule 

610(d) requires exchanges to establish, 

maintain, and enforce rules that require 

members reasonably to avoid 

‘‘[d]isplaying quotations that lock or 

cross any protected quotation in an 

NMS stock.’’ 59 Such rules must be 

‘‘reasonably designed to assure the 

reconciliation of locked or crossed 

quotations in an NMS stock,’’ and must 

‘‘prohibit . . . members from engaging 

in a pattern or practice of displaying 

quotations that lock or cross any 

quotation in an NMS stock.’’ 60 Thus, 

the amendments to the Price Adjust 

instruction proposed by the Exchange 

will assist Users by displaying orders at 

permissible prices. Similarly, Rule 201 

of Regulation SHO 61 requires trading 

centers to establish, maintain, and 

enforce written policies and procedures 

reasonably designed to prevent the 

execution or display of a short sale 

order at a price at or below the current 

NBB under certain circumstances. 

The Exchange believes that the 

proposed optional multiple re-pricing 

for Price Adjust and Displayed Price 

Sliding are consistent with Section 

6(b)(5) of the Act,62 as well as Rule 610 

of Regulation NMS.63 The Exchange is 

not modifying the overall functionality 

of Price Adjust or Displayed Price 

Sliding, which, to avoid locking or 

crossing quotations of other market 

centers, displays orders at permissible 

prices while retaining a price at which 

the User is willing to buy or sell, in the 

event display at such price or an 

execution at such price becomes 

possible. Instead, the Exchange is 

making changes to adopt an optional 

multiple re-pricing under Price Adjust 

and Displayed Price Sliding as well as 

to align with other similar re-pricing 

instructions under BATS Rules 

11.9(g)(1) and (2).64 The Exchange also 

believes decommissioning the Routed 

and Returned Re-Pricing option is 

consistent with the Act because those 

Users who would wish to engage in 

multiple re-pricing upon return to the 

Exchange may select the option 

multiple re-pricing for Price Adjust or 

Displayed Price Sliding as discussed 

above. Lastly, the Exchange also 

believes renaming Hide Not Slide as 

Displayed Price Sliding is consistent 

with the Act because it would avoid 

investor confusion with a similarly 

named re-pricing instruction on 

EDGX.65

The Exchange also believes that 

cancelling ISOs with a TIF instruction 

of GTD, GTX, or Day and not subjecting 

them to the re-pricing instructions to 

comply with Rule 610 of Regulation 

NMS or Rule 201 of Regulation SHO is 

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

Act,66 as well as Rule 610 of Regulation 

NMS 67 and Rule 201 of Regulation 

SHO.68 As amended, an ISO that 

includes a TIF instruction of GTD, GTX, 

or Day will be cancelled if the System 

is displaying orders at the Locking Price 

at the time of entry. Such orders that 

also include a Short Sale instruction 

that cannot be executed or displayed at 

their limit price at the time of entry 

because of the existence of a Short Sale 

Circuit Breaker will also be cancelled. 

Such orders are cancelled in order to 

avoid a potential violation of Rule 

610(d) of Regulation NMS or Rule 201 


rljohnson on DSK3VPTVN1PROD with NOTICES
2140 Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 

69 15 U.S.C. 78f(b)(5). 

70 17 CFR 242.201. 

71See supra note 40. 

72 Id. 

73 15 U.S.C. 78f(b)(5). 74 15 U.S.C. 78f(b)(5). 

of Regulation SHO and is, therefore, 

consistent with the Act. 

The Exchange believes that the 

proposed changes to its Re-Pricing 

Instructions to Comply with Rule 201 of 

Regulation SHO are consistent with 

Section 6(b)(5) of the Act,69 as well as 

Rule 201 of Regulation SHO.70 The 

Exchange proposes to streamline and 

simplify its available re-pricing 

instructions by deleting Short Sale Price 

Adjust and Short Sale Price Sliding and 

adopting a new, streamlined rule to 

align with BATS Rule 11.9(g)(5), with 

the following differences. Rule 11.6(l)(2) 

states that an order to sell with a Short 

Sale instruction and a Price Adjust 

instruction that is re-priced will be 

ranked at the Permitted Price and that 

an order to sell with a Short Sale 

instruction and a Hide Not Slide 

instruction that is re-priced pursuant to 

this paragraph will be ranked at the 

Permitted Price. The Exchange’s short 

sale price sliding will operate the same 

for Users of Price Adjust on BATS while 

Users who select Displayed Price 

Sliding will be ranked at the Permitted 

Price. The proposed rule change would 

provide greater harmonization between 

the rules of the BGM Affiliated 

Exchanges, resulting in greater 

uniformity and less burdensome and 

more efficient regulatory compliance. 

As such, the proposed rule change 

would foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities and 

would remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system. 

Opening Process (Rule 11.7). The 

amended description of the Opening 

Process in Rule 11.7 is designed to 

promote just and equitable principles of 

trade and remove impediments to, and 

perfect the mechanism of, a free and 

open market system because it would 

align with BZX Rule 11.24 and BYX 

Rule 11.23 as it relates to: 71 (i) Which 

orders may participate in the process; 

(ii) how the price of the Opening 

Transaction is determined; and (iii) the 

process for late openings and reopenings. The Opening Process and 

their related rules would be identical 

across the BGM Affiliated Exchanges, 

and will therefore, contribute to the 

protection of investors and the public 

interest by avoiding investor confusion 

and providing consistent functionality 

across the BGM Affiliated Exchanges. 

Lastly, and as stated above, the 

amendment to Rule 11.7 is based on 

BATS Rule 11.24 and BYX Rule 11.23, 

both of which were recently approved 

by the Commission.72

Order Types (Rule 11.8). The 

Exchange believes that the proposed 

changes to its order types under Rule 

11.8 in order to align their functionality 

with BATS rules are consistent with 

Section 6(b)(5) of the Act,73 because 

these changes are designed to provide 

Members with additional specificity as 

to how their orders will be handled 

upon migration of the Exchange onto 

BATS technologies, thereby fostering 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities and removing 

impediments to and perfecting the 

mechanism of a free and open market 

and a national market system. Each 

order type was amended to update the 

TIF instructions that would be available 

upon migration of the Exchange onto 

BATS technology. In addition, the 

proposed amendments are designed to 

align their operation with like order 

types on BATS and do not propose any 

additional functionality. For example, 

Market Orders under Rule 11.8(a) is to 

be amended to reflect the execution 

parameters under BATS Rule 11.9(a)(2). 

The amendments to Limit Orders under 

Rule 11.8(b) and ISOs under Rule 

11.8(c) are designed to update TIF 

instruction available to each order type. 

In addition, the changes are designed to 

update the Re-Pricing options available 

to Limit Order and ISOs to reflect the 

decommissioning of Routed and 

Returned as well as the streamlining of 

the Re-Pricing Options to Comply with 

Regulations SHO to align with BATS 

rules. In sum, the amendments to 

MidPoint Peg Orders under Rule 

11.8(d), MidPoint Discretionary Orders 

under Rule 11.8(e), and Supplemental 

Peg Orders under rule 11.8(g) simply 

clarify their operation during a locked 

or crossed market as well as expand 

their eligibility for execution from the 

Regular Session or Regular Trading 

Hours to also include the Pre-Opening 

Session and Post-Closing Session. The 

proposed changes to Rule 11.8(d) 

regarding MidPoint Peg Orders are 

based on BATS Rule 11.9(c)(9). Lastly, 

the proposed changes to Rule 11.8(f) 

regarding Market Maker Peg Orders are 

based on BATS Rule 11.9(c)(17). The 

proposed changes to Rule 11.8(g) 

regarding Route Peg Orders are based on 

BATS Rule 11.9(c)(19). 

The proposed rule change does not 

propose to implement new or unique 

functionality that has not been 

previously filed with the Commission or 

is not available on BATS. Therefore, the 

proposed rule change would provide 

greater harmonization between the rules 

of the BGM Affiliated Exchanges, 

resulting in greater uniformity and less 

burdensome and more efficient 

regulatory compliance. As such, the 

proposed rule change would foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities and would 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system. 

Priority (Rule 11.9). The Exchange 

also believes its proposed amendments 

to Rule 11.9 to regarding the priority of 

orders promotes just and equitable 

principles of trade, remove 

impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system by 

providing Members, Users, and the 

investing public with greater 

transparency regarding how the System 

operates. The Exchange proposes to 

amend Rule 11.9 to align with BATS 

functionality and BATS Rules 11.12 

regarding how orders with certain 

instructions are to be ranked by the 

System generally and where orders 

utilize instructions that cause them to 

be ranked by the System upon clearance 

of a Locking Quotation providing 

valuable, clear information to Members, 

Users, and the investing public on how 

their orders would be executed. As 

amended, orders will be substantially 

ranked in same order as under current 

rules except that orders with a Pegged 

instruction and Non-Displayed 

instruction will be distinguished from 

and placed behind Limit Orders with a 

Non-Displayed Instruction. In turn, the 

Reserve Quantity of Limit Orders will be 

separated from and placed behind Limit 

Orders with a Non-Displayed 

instruction, orders with a Pegged and 

Non-Displayed instruction, and 

MidPoint Peg Orders. These changes are 

made to align Exchange Rule 11.9 with 

the functionality set forth in BATS Rule 

11.12, as described above. The Exchange 

believes that the proposed rule changes 

regarding order priority will provide 

greater transparency and further clarity 

on how the various order types will be 

assigned priority under various 

scenarios, thereby assisting Members, 

Users and the investing public in 

understanding the manner in which the 

System may execute their orders. 

Routing (Rule 11.11). The Exchange 

believes that the proposed changes to 

Rule 11.11) [sic] are consistent with 

Section 6(b)(5) of the Act.74 As noted 

above, the proposed rule changes to add 


rljohnson on DSK3VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 2141 

75 15 U.S.C. 78s(b)(3)(A). 

76 17 CFR 240.19b–4(f)(6). Rule 19b–4(f)(6) 

requires a self-regulatory organization to give the 

Commission written notice of its intent to file the 

proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

77 17 CFR 240.19b–4(f)(6). 

78 17 CFR 240.19b–4(f)(6)(iii). 

79For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

functionality are intended to add certain 

system functionality currently offered 

by BATS in order to provide consistent 

routing options across the BGM 

Affiliated Exchanges. A consistent 

offering, in turn, will simplify the 

implementation, changes and 

maintenance by Users of the Exchange 

that are also participants on BATS. The 

proposed rule changes would also 

provide Users with access to 

functionality that may result in the 

efficient execution of such orders and 

will provide additional flexibility as 

well as increased functionality to the 

Exchange’s System and its Users. As 

explained elsewhere in this proposal, all 

of the proposed routing options are 

similar to routing strategies on other 

market centers, including BATS. The 

proposed rule change would provide 

greater harmonization between the 

routing options available amongst the 

BGM Affiliated Exchanges, resulting in 

greater uniformity and less burdensome 

and more efficient regulatory 

compliance. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

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 

Exchange reiterates that the proposed 

rule change is being proposed in the 

context of the technology integration of 

the BGM Affiliated Exchanges. Thus, 

the Exchange believes this proposed 

rule change is necessary to permit fair 

competition among national securities 

exchanges. In addition, the Exchange 

believes the proposed rule change will 

benefit Exchange participants in that it 

is one of several changes necessary to 

achieve a consistent technology offering 

by the BGM Affiliated Exchanges. 

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 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 75 and Rule 19b– 

4(f)(6) thereunder.76

A proposed rule change filed under 

Rule 19b–4(f)(6) 77 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),78 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. 

The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Exchange represents that 

since completion of the Merger, both 

Members and the BGM Affiliated 

Exchange have made numerous systems 

changes in preparation for the 

technology migration occurring on 

January 12, 2015. The Exchange has 

issued frequent updates to Members 

informing them the BGM Affiliated 

Exchange technology migration changes 

as well as its anticipated time line so 

that Members may make the requisite 

system changes. In addition, the 

Exchange has conducted multiple 

testing opportunities for Members to 

ensure both the Member’s and Exchange 

system will operate in accordance with 

the proposed rule change on January 12, 

2015. Based on these representations, 

the Commission believes that waiver of 

the operative delay is consistent with 

the protection of investors and the 

public interest. Therefore, the 

Commission designates the proposal 

operative upon filing.79

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File No. SR– 

EDGA–2015–03 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File No. 

SR–EDGA–2015–03. 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 No. SR–EDGA– 

2015–03 and should be submitted on or 

before February 5, 2015. 


rljohnson on DSK3VPTVN1PROD with NOTICES
2142 Federal Register / Vol. 80, No. 10 / Thursday, January 15, 2015 / Notices 

80 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 72575 

(July 9, 2014), 79 FR 41339 (‘‘Notice’’). 4See Letter from Daniel Zinn, General Counsel, 

OTC Markets Group Inc., dated August 5, 2014 

(‘‘OTC Markets Letter’’). 

5See Securities Exchange Act Release No. 73313, 

79 FR 61677 (October 14, 2014) (‘‘Order Instituting 

Proceedings’’). 

6 15 U.S.C. 78s(b)(2)(B). 

7See Letter from Dr. Lee Jackson, PAHCII, dated 

October 8, 2014 (‘‘PAHCII Letter’’); Letter from 

Barry Scadden, Vice President, ATS Trade Support 

and Operations, Global OTC, dated October 10, 

2014 (‘‘Global OTC Letter’’); and Letter from 

Michael R. Trocchio, Sidley Austin LLP, on behalf 

of OTC Markets Group Inc., dated November 4, 

2014 (‘‘Sidley Letter’’). 

8 15 U.S.C. 78s(b)(2). 

9 15 U.S.C. 78o–3(b)(6). 

10 15 U.S.C. 78o–3(b)(11). 

11 15 U.S.C. 78q–2. 

12 15 U.S.C. 78s(b)(2). 

13 17 CFR 200.30–3(a)(57). 

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 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.80

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00531 Filed 1–14–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74021; File No. SR–FINRA– 

2014–030] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Designation 

of Longer Period for Commission 

Action on Proceedings To Determine 

Whether To Approve or Disapprove 

Proposed Rule Change Relating to 

Quotation Requirements for Unlisted 

Equity Securities and Deletion of the 

Rules Related to the OTC Bulletin 

Board Service 

January 9, 2015. 

On June 27, 2014, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

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

Securities Exchange Act of 1934 

(‘‘Exchange Act ’’ or ‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to adopt rules relating to 

quotation requirements for over-thecounter (‘‘OTC’’) equity securities and to 

delete the rules relating to the OTC 

Bulletin Board Service (‘‘OTCBB’’) and 

thus cease its operation. The proposed 

rule change was published for comment 

in the Federal Register on July 15, 

2014.3 On August 8, 2014, FINRA 

consented to extending the time period 

for the Commission to either approve or 

disapprove the proposed rule change, or 

to institute proceedings to determine 

whether to approve or disapprove the 

proposed rule change, to October 10, 

2014. The Commission received one 

comment letter on the proposed rule 

change.4

On October 7, 2014, the Commission 

instituted proceedings 5 to determine 

whether to approve or disapprove the 

proposed rule change under Section 

19(b)(2)(B) of the Act.6 The Commission 

thereafter received three comment 

letters in response to the Order 

Instituting Proceedings.7

Section 19(b)(2) of the Act 8 provides 

that, after initiating disapproval 

proceedings, the Commission shall issue 

an order approving or disapproving the 

proposed rule change not later than 180 

days after the date of publication of 

notice of the filing of the proposed rule 

change. The Commission may extend 

the period for issuing an order 

approving or disapproving the proposed 

rule change, however, by not more than 

60 days if the Commission determines 

that a longer period is appropriate and 

publishes the reasons for such 

determination. The proposed rule 

change was published for comment in 

the Federal Register on July 15, 2014. 

January 11, 2015 is 180 days from that 

date, and March 12, 2015 is an 

additional 60 days from that date. 

The Commission finds it appropriate 

to designate a longer period within 

which to issue an order approving or 

disapproving the proposed rule change 

so that it has sufficient time to consider 

the proposed rule change and the issues 

raised in the comment letters that have 

been submitted in connection with the 

proposal. As the Commission noted in 

the Order Instituting Proceedings, the 

proposal raises questions as to whether 

FINRA’s proposed rule change is 

consistent with the requirements of 

Sections 15A(b)(6),9 15A(b)(11),10 and 

17B11 of the Act. Specifically, FINRA’s 

proposal to delete the rules governing 

the OTCBB, and thus cease operation of 

the only self-regulatory organization 

(‘‘SRO’’) facility that collects, publishes 

and distributes quotations in OTC 

equity securities, raises questions as to 

whether the proposal is consistent with 

the requirements of the Act, particularly 

under circumstances where non-SRO 

quotation systems are experiencing 

operational difficulties. In such an 

event, reliable and accurate quotation 

information for OTC equity securities 

may not be widely available to investors 

through such non-SRO systems. 

Extending the time within which to 

approve or disapprove the proposed 

rule change will enable the Commission 

to more fully consider these issues and 

the other issues raised in the comment 

letters. 

Accordingly, the Commission, 

pursuant to Section 19(b)(2) of the 

Act,12 designates March 12, 2015, as the 

date by which the Commission should 

either approve or disapprove the 

proposed rule change (File No. SR– 

FINRA–2014–030). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–00523 Filed 1–14–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74024; File No. SR–EDGX– 

2014–37] 

Self-Regulatory Organizations; EDGX 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change to Related to Fees for 

Use of EDGX Exchange, Inc. 

January 9, 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 December 

30, 2014, 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 19b4(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 person. 

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 


rljohnson on DSK3VPTVN1PROD with NOTICES