Document ID: SEC-2012-1329-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: EDGX Exchange, Inc.
Posted Date: 2012-08-13T04:00Z

[Federal Register Volume 77, Number 156 (Monday, August 13, 2012)]
[Notices]
[Pages 48191-48192]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-19741]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67608; File No. SR-EDGX-2012-34]

Self-Regulatory Organizations; EDGX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
Amendments to the EDGX Exchange, Inc. Fee Schedule

August 7, 2012.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 1, 2012 the 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 self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its fees and rebates applicable to 
Members \3\ of the Exchange pursuant to EDGX Rule 15.1(a) and (c). All 
of the changes described herein are applicable to EDGX Members. The 
text of the proposed rule change is available on the Exchange's 
Internet Web site at http://www.directedge.com, at the Exchange's 
principal office, and at the Public Reference Room of the Commission.
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    \3\ A Member is any registered broker or dealer, or any person 
associated with a registered broker or dealer, that has been 
admitted to membership in the Exchange.
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
has prepared summaries, set forth in sections A, B and C below, of the 
most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In SR-EDGX-2012-26, the Exchange proposed to pass-through the rates 
for routing orders to the Nasdaq OMX PSX (the ``PSX'') on Flags K and 
RS.\4\ Accordingly, in response to the proposed pricing changes in the 
PSX's pending filing with the Securities and Exchange Commission, which 
is effective August 1, 2012, the Exchange proposes to amend the fees 
for Flags K and RS in response to the PSX's proposed fee changes.\5\ 
The Exchange proposes to increase the rate for Flag K from $0.0005 per 
share to $0.0027 per share. The Exchange also proposes to change the 
rate for Flag RS from a charge of $0.0005 per share to a rebate of 
$0.0016 per share.
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    \4\ See Securities and Exchange Act Release No. 67379 (July 10, 
2012), 77 FR 41864 (July 16, 2012) (SR-EDGX-2012-26).
    \5\ See NASDAQ OMX PSX, Price List--Trading and Connectivity, 
http://www.nasdaqtrader.com/Trader.aspx?id=PSX_pricing.
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    The Exchange proposes to implement these amendments to its fee 
schedule on August 1, 2012.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with the objectives of Section 6 of the Act,\6\ in general, and 
furthers the objectives of Section 6(b)(4),\7\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange proposes to amend the fees for Flags K and RS in 
response to the proposed pricing changes in the PSX's pending filing 
with the Securities and Exchange Commission, which is effective August 
1, 2012, where the PSX proposed a range of fees and rebates for Tape A 
and Tapes B and C securities. At this time, the PSX passes through 
applicable fees and/or rebates to DE Route, which, in turn, passes 
through the applicable fees and/or rebates to the Exchange. In response 
to the PSX's pending filing, the Exchange proposes to increase the rate 
for Flag K from $0.0005 per share to $0.0027 per share, and the rate 
for Flag RS from a charge of $0.0005 per share to a rebate of $0.0016 
per share. Because the Exchange's fee schedule currently does not 
differentiate between Tape A and Tapes B and C securities that are 
routed to the PSX in Flags K and RS and the Exchange cannot mirror the 
new PSX fees associated with each tape, the Exchange proposes assessing 
its Members the highest fee and the lowest rebate associated with the 
PSX's pending filing for all tapes for ease of administration and to 
prevent potential arbitrage. The Exchange also notes that routing 
through DE Route is voluntary. The Exchange believes this represents an 
equitable allocation of reasonable dues, fees and other charges since 
it reflects the pass-through of these fees from the PSX. In addition, 
the Exchange believes that it is reasonable and equitable to pass-
through certain fees to its Members. The Exchange also believes that 
the proposed pass-through of fees is non-discriminatory because it 
applies to all Members.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from members or other interested 
parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3) of

[[Page 48192]]

the Act \8\ and Rule 19b-4(f)(2) \9\ thereunder. At any time within 60 
days of the filing of such proposed rule change, the Commission 
summarily may temporarily suspend such rule change if it appears to the 
Commission that such action is necessary or appropriate in the public 
interest, for the protection of investors, or otherwise in furtherance 
of the purposes of the Act.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-EDGX-2012-34 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-EDGX-2012-34. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-EDGX-2012-34 and should be 
submitted on or before September 4, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-19741 Filed 8-10-12; 8:45 am]
BILLING CODE 8011-01-P