Document ID: SEC-2013-1450-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: EDGX Exchange, Inc.
Posted Date: 2013-08-14T04:00Z

[Federal Register Volume 78, Number 157 (Wednesday, August 14, 2013)]
[Notices]
[Pages 49579-49584]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-19669]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70145; File No. SR-EDGX-2013-27]

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 8, 2013.
    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, 2013, 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

[[Page 49580]]

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\ pursuant to EDGX Rule 15.1(a) and (c) (``Fee Schedule'') 
to: (1) Increase the fee charged from $0.0029 per share to $0.0030 per 
share for orders that yield Flag U, which routes to LavaFlow, Inc. 
(``LavaFlow''); (2) eliminate underutilized pricing tiers from its Fee 
Schedule; and (3) make a number of non-substantive amendments and 
clarifications. 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 www.directedge.com, at the Exchange's 
principal office, and at the Public Reference Room of the Commission.
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    \3\ ``Member'' is defined as ``any registered broker or dealer, 
or any person associated with a registered broker or dealer, that 
has been admitted to membership in the Exchange. A Member will have 
the status of a ``member'' of the Exchange as that term is defined 
in Section 3(a)(3) of the Act.'' EDGX Rule 1.5(n).
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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
    The Exchange proposes to amend its Fee Schedule to: (1) Increase 
the fee charged from $0.0029 per share to $0.0030 per share for orders 
that yield Flag U, which routes to LavaFlow; (2) eliminate 
underutilized pricing tiers from its Fee Schedule; and (3) make a 
number of non-substantive amendments and clarifications.
Fee Change for Flag U
    In securities priced at or above $1.00, the Exchange currently 
assesses a fee of $0.0029 per share for Members' orders that yield Flag 
U, which routes to LavaFlow. The Exchange proposes to amend its Fee 
Schedule to increase this fee to $0.0030 per share for Members' orders 
that yield Flag U. The proposed change represents a pass through of the 
rate that Direct Edge ECN LLC (d/b/a DE Route) (``DE Route''), the 
Exchange's affiliated routing broker-dealer, is charged for routing 
orders to LavaFlow and do not qualify for a volume tiered discount. 
When DE Route routes to LavaFlow, it is charged a default fee of 
$0.0030 per share.\4\ DE Route will pass through this rate on LavaFlow 
to the Exchange and the Exchange, in turn, will pass through this rate 
to its Members. The Exchange notes that the proposed change is in 
response to LavaFlow's July 2013 fee change where LavaFlow increased 
the rate it charges its customers, such as DE Route, from a charge of 
$0.0029 per share to a charge of $0.0030 per share for orders that are 
routed to LavaFlow and add liquidity.\5\
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    \4\ The Exchange notes that to the extent DE Route does or does 
not achieve any volume tiered discount on LavaFlow, its rate for 
Flag U will not change.
    \5\ See LavaFlow Pricing, available at https://www.lavatrading.com/solutions/pricing.php (July 1, 2013) (charging a 
fee of $0.0030 per share for removing liquidity in shares priced at 
or above $1.00) (last visited July 19, 2013).
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Elimination of the Tier Under Footnote 6 \6\
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    \6\ References herein to ``footnotes'' refer only to footnotes 
on the Exchange's Fee Schedule and not to footnotes within the 
current filing.
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    Currently, under Footnote 6, Members can qualify for a decreased 
fee of $0.0023 per share for orders yielding Flag U where they post an 
average of 100,000 shares or more per day using routing strategy ROLF 
(yielding Flag M). The Exchange proposes to amend its Fee Schedule to 
remove this pricing tier under Footnote 6. This pricing tier 
represented a pass through of the rate that DE Route was charged for 
routing orders to LavaFlow that qualify for an identical volume tiered 
discount provided by LavaFlow. When DE Route routed to LavaFlow and 
satisfied its tier, it was charged a reduced fee of $0.0023 per share. 
DE Route passed through this rate on LavaFlow to the Exchange and the 
Exchange, in turn, passed through this rate to its Members. The 
Exchange notes that the proposed change is in response to LavaFlow's 
recent fee change where LavaFlow eliminated its equivalent pricing tier 
from its fee schedule.\7\ The Exchange also proposes to remove 
references to Footnote 6 from the list of ``Liquidity Flags'' and 
insert the word ``Reserved'' into Footnote 6. Lastly, the Exchange 
notes that with the deletion of this tier, Members will continue to be 
subject to the other fees and tiers listed on the Exchange's Fee 
Schedule.
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    \7\ See LavaFlow Pricing, available at https://www.lavatrading.com/solutions/pricing.php (July 1, 2013) (no longer 
charging a fee of $0.0023 per share for members that post an average 
of 100,000 shares or more per day) (last visited July 19, 2013).
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Elimination of Tiers Under Footnotes 1, 2 and 13
    The final paragraph in Footnote 1 currently contains a tier that 
provides for reimbursement of the difference between the rebate 
received and the rebate potentially received for Members that meet the 
following criteria: (i) Add 10,000,000 shares or more of ADV of 
liquidity to EDGX; (ii) where such added liquidity on EDGX is at least 
5,000,000 shares of ADV greater than the previous calendar month; (iii) 
but for the liquidity added on EDGX, such Member would have qualified 
for a better rebate with respect to liquidity added on another exchange 
or ECN that the Member previously qualified for in the three calendar 
months prior to meeting the above-described criteria in (i) and (ii); 
and (iii) provide source documentation evidencing the above to the 
Exchange within fifteen (15) calendar days from the end of the relevant 
month.
    Footnote 2 currently contains the Step-up Take Tier, which provides 
Members with a rebate of $0.0030 per share for orders that add 
liquidity and yield Flags B, V, Y, 3 and 4, and assesses a fee of 
$0.0028 per share for orders that remove liquidity and yield Flags N, 
W, BB, PI, 6, and ZR if a Member (i) adds an ADV of at least 2 million 
shares on a daily basis, measured monthly, more than that Member's 
September 2012 added ADV; and (ii) removes at least 0.40% TCV on a 
daily basis, measured monthly more than that Member's September 2012 
removed ADV.
    The Exchange notes that no Member has qualified for these tiers 
during the previous three months, nor does the Exchange anticipate a 
Member to qualify for these tiers in the near future. Therefore, the 
Exchange proposes to remove these tiers from its Fee Schedule and 
replace the text of Footnote 2 with the word ``Reserved.'' The Exchange 
also proposes to remove references to Footnote 2 from the list of 
``Liquidity Flags.'' Lastly, the Exchange notes that with the deletion 
of these tiers,

[[Page 49581]]

Members will continue to be subject to the other fees and tiers listed 
on the Exchange's Fee Schedule.
    Footnote 13 currently contains tiers that provide a rebate of 
$0.0032 for Members that (i) add a minimum of 0.15% of the TCV on a 
daily basis measured monthly; and (ii) have an ``added liquidity'' to 
``added plus removed liquidity'' ratio of at least 85% (the ``$0.0032 
Investor Tier'') and a rebate of $0.0030 for Members that (i) on a 
daily basis, measured monthly, posts an ADV of at least 8 million 
shares on EDGX where added flags are defined as B, HA, V, Y, MM, RP, 
ZA, 3, or 4; (ii) have an ``added liquidity'' to ``added plus removed 
liquidity'' ratio of at least 60% (the ``$0.0030 Investor Tier''). 
Since the addition of the $0.0032 Investor Tier, the Exchange believes 
that those Members that achieved the $0.0030 Investor Tier in the 
previous three months will achieve the $0.0032 Investor Tier from July 
1, 2013 onward. Therefore, the Exchange proposes to remove the $0.0030 
Investor Tier from its Fee Schedule. Lastly, the Exchange notes that 
with the deletion of these tiers, Members will continue to be subject 
to the other fees and tiers listed on the Exchange's Fee Schedule.
Non-Substantive Clarifying Changes
    The Exchange also proposes to make a number of clarifying, non-
substantive changes to its Fee Schedule to provide greater transparency 
to Members on how the Exchange assesses fees and calculates rebates. 
The Exchange notes that none of these changes substantively amend any 
fee or rebate, nor alter the manner in which it assesses fees or 
calculates rebates. These proposed changes are outlined below:
     Amend ``EDGX Exchange'' at the top of the Fee Schedule to 
read ``EDGX Exchange, Inc.'' and make a similar change to the last 
sentence of the ``EdgeBook AttributedSM Fees'' section.
     Amend the sentence at the top of the Fee Schedule from 
``Rebates & Charges for Adding, Removing or Routing Liquidity per Share 
for Tape A, B, & C Securities'' to ``Rebates & Charges for Adding, 
Removing or Routing Liquidity per share for Tape A, B, & C securities.
     Add language to the beginning of the Fee Schedule to 
clarify that the rates listed in the ``Standard Rates'' table apply 
unless a Member is assigned a liquidity flag other than a standard 
flag. If a Member is assigned a liquidity flag other than a standard 
flag, the rates listed in the ``Liquidity Flags'' table will apply.
     Title the first section of the Fee Schedule as ``Standard 
Rates'' and the second section ``Liquidity Flags'' by deleting current 
text ``Liquidity Flags and Associated Fees.''
     Add a row to the ``Standard Rates'' section of the Fee 
Schedule specifying to which flags the standard rates apply. These 
flags are B, V, Y, 3 and 4 for adding liquidity, N, W, 6, BB, PI and ZR 
for removing liquidity, and X for routing and removing liquidity. The 
Exchange notes that the flags listed in this row are also listed as 
``Liquidity Flags'' indicating a rate equal to the standard rate. The 
Exchange believes adding a row indicating which flags provide the 
standard rate would add clarity to its Fee Schedule.
     Make grammatical changes to the ``Liquidity Flags'' 
section. These proposed changes are the following: (i) Replacing 
``Add'' with ``Adds'' under flags B, V, Y, 3 and 4; (ii) replacing 
``Remove'' with ``Removes'' under flags N, W, 6, BB, MT, PI and PR; 
(iii) replace ``primary'' with ``listing'' under Flag O; (iv) delete 
``order'' from Flag S as it is repetitive; (v) conform spelling of 
``MidPoint Match'' under flags AA, HA, MM, MT and PI; (vi) add the word 
``away'' to Flag R to clarify that the flag is referring to an away 
exchange and not the Exchange; and (vii) remove instances of ``book'' 
from footnotes B, N, V, W, Y, BB, PI and PR.
     Add a section titled ``Definitions,'' which would consist 
of terms that are currently defined within the footnotes of the Fee 
Schedule. This section would consist of definitions for ``Added 
Flags,'' ``Removal Flags,'' ``Routed Flags,'' ``Average Daily Volume'' 
and ``Total Consolidated Volume.'' ``Added Flags'' would be defined as 
the following flags that are counted towards tiers, where applicable: 
B, V, Y, 3, 4, HA, MM, RP, and ZA. ``Removal Flags'' would be defined 
as the following flags that are counted towards tiers, where 
applicable: N, W, 6, BB, MT, PI, PR, and ZR. In addition, the following 
Routed Flag is counted towards tiers prior to 9:30 a.m. or after 4:00 
p.m., where applicable: 7. ADV would be defined as the average daily 
volume of shares that a Member executed on the Exchange for the month 
in which the fees are calculated. TCV would be defined as the volume 
reported by all exchanges and trade reporting facilities to the 
consolidated transaction reporting plans for Tapes A, B and C 
securities for the month in which the fees are calculated. Where these 
terms appear in the footnotes, such terms would be abbreviated to match 
the ``Definitions'' section. The Exchange notes that these terms were 
previously defined within the footnotes. The Exchange does not propose 
any substantive changes to the definitions; it is simply moving the 
definitions from the footnotes and consolidating them under the new 
``Definitions'' section.
     Add a section entitled ``General Notes'' to help clarify 
the application of the footnotes. First, the ``General Notes'' section 
would clarify that, to the extent a Member: (i) Does not qualify for 
any of the tiers included in the footnotes, the rates listed in the 
``Liquidity Flags'' section will apply; or (ii) qualifies for higher 
rebates and/or lower fees than those provided by a tier for which such 
Member qualifies, the higher rebates and/or lower fees shall apply. The 
Exchange notes that the language in (ii) is similar to that currently 
contained in footnotes 2 and 4 of the Fee Schedule. Second, the section 
will incorporate text currently located in footnotes ``a'' and ``b'' 
that (i) trading activity on days when the market closes early does not 
count toward volume tiers and (ii) upon a Member's request, EDGX will 
aggregate share volume calculations for wholly owned affiliates on a 
prospective basis. Lastly, the section will clarify that variable rates 
provided by tiers apply only to executions in securities priced at or 
above $1.00.
     Convert the tiers in Footnote 1 into table format and 
provide a name for each tier. The Exchange does not propose to alter 
the fees or rebates offered under these tiers or the requirements of 
the tiers; it simply seeks to reformat the tiers as a table to make 
them easier to read and understand. The Exchange also proposes to name 
the tiers under Footnote 1 as the ``Add Volume Tiers.'' In addition, 
the Exchange proposes to clarify that the rebate to add for meeting any 
of these tiers is applicable to flags B, V, Y, 3, 4 and ZA and that the 
fee to remove for meeting any of these tiers is applicable to flags N, 
W, 6, BB, PI and ZR.
     Convert the tier in Footnote 3 into table format and 
rename the tier the ``MidPoint Match Volume Tier.'' The Exchange does 
not propose to alter the reduced rate offered under the tier or the 
requirements of the tier; it simply seeks to reformat the tier as a 
table to make it easier to read and understand.
     Rename Footnote 4 as ``Retail Orders.'' The Exchange also 
proposes to convert the tier in Footnote 4 into table format and rename 
the tier the ``Retail Order Tier.'' The Exchange does not propose to 
alter the reduced rate offered under the tier or the requirements of 
the tier; it simply seeks to reformat the tier as a table to make it 
easier to read and understand.
     Delete the language ``Intentionally omitted'' from 
Footnote 7 and replace it with the exact content from Footnote 11. 
Conforming changes are proposed to be

[[Page 49582]]

made to references to the footnotes in the ``Liquidity Flags'' section.
     Amend footnotes 8 and 9 to simplify the language of the 
footnotes. The rates offered by the footnotes and the criteria 
necessary to obtain the rates would remain unchanged. In addition, 
pricing information would be removed from Footnote 9 because such 
information is redundant and its removal would simplify the Fee 
Schedule.
     Move the $0.0032 Investor Tier from Footnote 13 into the 
table of tiers in Footnote 1 and rename the tier the ``Investor Tier.'' 
The Exchange does not propose to alter the rebate offered under the 
tier or the requirements of the tier; it simply seeks to relocate and 
reformat the tier in a table to make it easier to read and understand.
     Delete footnotes 10-13 and ``a''--``c'' as well as 
references to the footnotes in the ``Liquidity Flags'' section.
     Delete Footnote ``d'' and rename it as a new section 
entitled, ``Late Fees.'' The Exchange does not propose to amend the 
text of Footnote ``d,'' which will now be included under the new ``Late 
Fees'' section. References to Footnote ``d'' would be removed from the 
``Liquidity Flags'' section.
     Amend the section ``Port Fees'' to replace the word 
``Edge'' with ``EDGE'' and add the word ``Ports'' after ``EdgeRisk.''
     Remove references to the effective date of a rule filing 
where such filing has become effective (i.e., Port Fees, EdgeRisk 
Gateway, Physical Connectivity Fees, Membership Fees, EdgeBook 
Attributed Fees, Edge Attribution Incentive Program and Edge Routed 
Liquidity Report).
     Conform titles of products in the sections following the 
footnotes to read first as product name followed by ``Fees'' rather 
than ``Pricing,'' where applicable. Furthermore, the titles of columns 
would be amended to conform to a common format.
     Insert and remove trademark symbols where applicable 
throughout the Fee Schedule (i.e., EDGA[supreg], EDGX[supreg], EDGE 
XPRS[supreg], EdgeRisk PortsSM, EdgeRisk GatewaySM, EdgeBook DepthSM, 
EdgeBook AttributedSM, Edge Routed Liquidity ReportSM, and EdgeBook 
Cloud[supreg]).
Implementation Date
    The Exchange proposes to implement these amendments to its Fee 
Schedule on August 1, 2013.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\8\ in general, and 
furthers the objectives of Section 6(b)(4),\9\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities. The Exchange also believes the proposed rule change is 
consistent with the Section 6(b)(5) \10\ requirements that the rules of 
an exchange be designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general, to protect investors and the public interest.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
    \10\ 15 U.S.C. 78f(b)(5).
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Fee Change for Flag U
    The Exchange believes that its proposal to increase the pass 
through charge for Members' orders that yield Flag U from $0.0029 to 
$0.0030 per share represents an equitable allocation of reasonable 
dues, fees, and other charges among Members and other persons using its 
facilities because the Exchange does not levy additional fees or offer 
additional rebates for orders that it routes to LavaFlow through DE 
Route. Prior to LavaFlow's July 2013 fee change, LavaFlow charged DE 
Route a fee of $0.0029 per share for orders yielding Flag U, which DE 
Route passed through to the Exchange and the Exchange passed through to 
its Members. In July 2013, LavaFlow increased the rate it charges its 
customers, such as DE Route, from a charge of $0.0029 per share to a 
charge of $0.0030 per share for orders that are routed to LavaFlow.\11\ 
Therefore, the Exchange believes that the proposed change in Flag U 
from a fee of $0.0029 per share to a fee of $0.0030 per share is 
equitable and reasonable because it accounts for the pricing changes on 
LavaFlow. In addition, the proposal allows the Exchange to continue to 
charge its Members a pass-through rate for orders that are routed to 
LavaFlow and remove liquidity using DE Route. The Exchange notes that 
routing through DE Route is voluntary. Lastly, the Exchange also 
believes that the proposed amendment is non-discriminatory because it 
applies uniformly to all Members.
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    \11\ See LavaFlow Pricing, available at https://www.lavatrading.com/solutions/pricing.php (July 1, 2013) (charging a 
fee of $0.0030 per share for removing liquidity in shares priced at 
or above $1.00).
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Elimination of the Tier Under Footnote 6
    The Exchange believes that its proposal to eliminate the pricing 
tier under Footnote 6 represents an equitable allocation of reasonable 
dues, fees, and other charges among Members and other persons using its 
facilities because the Exchange does not levy additional fees or offer 
additional rebates for orders that it routes to LavaFlow through DE 
Route. Prior to LavaFlow's recent fee change, LavaFlow charged DE Route 
a fee of $ 0.0023 per share when volume criteria identical to that 
contained in Footnote 6 were met. DE Route, in turn, passed through 
this rate to the Exchange and the Exchange passed it through to its 
Members. Recently, LavaFlow eliminated this pricing tier from its fee 
schedule.\12\ Therefore, the Exchange believes that removing the 
related pricing tier under Footnote 6 is equitable and reasonable 
because it accounts for the pricing changes on LavaFlow. The Exchange 
notes that routing through DE Route is voluntary. The Exchange also 
believes the elimination of unnecessary and obsolete tiers simplifies 
its Fee Schedule. Removal of the tiers under Footnote 6 is also 
equitable and not unfairly discriminatory because those tiers would be 
eliminated and no longer be available to any Member. Lastly, the 
Exchange notes that with the deletion of this tier, Members would 
continue to be subject to the other fees and tiers listed on the 
Exchange's Fee Schedule.
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    \12\ See LavaFlow Pricing, available at https://www.lavatrading.com/solutions/pricing.php (July 1, 2013) 
(eliminating a fee of $0.0023 per share for orders yielding Flag U 
where they post an average of 100,000 shares or more per day).
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Elimination of Tiers Under Footnotes 1, 2 and 13
    The Exchange believes that the proposal to eliminate certain tiers 
under footnotes 1 and 2 from its Fee Schedule is reasonable because 
these tiers are underutilized and have generally not incentivized 
Members to add liquidity to the Exchange. The Exchange notes that no 
Member has qualified for these tiers during the past three months, nor 
does the Exchange anticipate a Member to qualify for these tiers in the 
near future. Therefore, the Exchange believes eliminating the tiers 
would clarify its Fee Schedule.
    The Exchange also believes that the proposal to eliminate the 
$0.0030 Investor Tier under Footnote 13 from its Fee Schedule is 
reasonable because the

[[Page 49583]]

Exchange anticipates that Members that previously achieved the tier 
will now achieve the $0.0032 Investor Tier located in Footnote 1. 
Therefore, the Exchange believes eliminating the tier would clarify its 
Fee Schedule.
    The Exchange also believes the elimination of unnecessary and 
obsolete tiers simplifies its Fee Schedule. Removal of these tiers is 
also equitable and not unfairly discriminatory because those tiers 
would be eliminated and no longer be available to any Member. Lastly, 
the Exchange notes that with the deletion of these tiers, Members would 
continue to be subject to the other fees and tiers listed on the 
Exchange's Fee Schedule.
Non-Substantive Clarifying Changes
    The Exchange believes that the non-substantive clarifying changes 
to its Fee Schedule are reasonable because they are designed to provide 
greater transparency to Members with regard to how the Exchange 
assesses fees and provides rebates. The Exchange notes that none of the 
proposed non-substantive clarifying changes are designed to amend any 
fee or rebate, nor alter the manner in which it assesses fees or 
calculates rebates. The Exchange believes that Members would benefit 
from clear guidance in its Fee Schedule that describes the manner in 
which the Exchange would assess fees and calculate rebates. These non-
substantive, technical changes to the Fee Schedule as intended to make 
the Fee Schedule clearer and less confusing for investors and eliminate 
potential investor confusion, thereby removing impediments to and 
perfecting the mechanism of a free and open market and a national 
market system, and, in general, protecting investors and the public 
interest.

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

    These proposed rule changes do not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act. The Exchange does not believe that any of these changes 
represent a significant departure from previous pricing offered by the 
Exchange or pricing offered by any of the Exchange's competitors. 
Additionally, Members may opt to disfavor the Exchange's pricing if 
they believe that alternatives offer them better value. Accordingly, 
the Exchange believes that the proposed changes would not impair the 
ability of Members or competing venues to maintain their competitive 
standing in the financial markets.
Fee Change for Flag U
    The Exchange believes that its proposal to pass through a charge of 
$0.0030 per share for Members' orders that yield Flag U would increase 
intermarket competition because it offers customers an alternative 
means to route to LavaFlow for the same price as entering orders on 
LavaFlow directly. The Exchange believes that its proposal would not 
burden intramarket competition because the proposed rate would apply 
uniformly to all Members.
Elimination of the Tier Under Footnote 6
    The Exchange believes that its proposal to eliminate the pricing 
tier under Footnote 6 would not impact intermarket competition because 
the change is in response to LavaFlow removing an identical 
corresponding tier from its fee schedule. The Exchange believes that 
its proposal would not burden intramarket competition because the 
pricing tier would no longer be available to any Members.
Elimination of Tiers Under Footnotes 1, 2 and 13
    The Exchange believes that elimination of the tiers under footnotes 
1, 2 and 13 would not affect intermarket nor intramarket competition 
because the tiers in footnotes 1 and 2 have generally not incentivized 
Members to add liquidity to the Exchange and the Exchange anticipates 
that Members that previously achieved the $0.0030 Investor Tier in 
Footnote 13 will now achieve the $0.0032 Investor Tier.
Non-Substantive Clarifying Changes
    The Exchange believes that non-substantive, clarifying changes to 
the Fee Schedule would not affect intermarket nor intramarket 
competition because none of these changes are designed to amend any fee 
or rebate or alter the manner in which the Exchange assesses fees or 
calculates rebates. These changes are intended to provide greater 
transparency to Members with regard to how the Exchange access fees and 
provides rebates.

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

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

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(2) \14\ 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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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-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-2013-27 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-2013-27. 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

[[Page 49584]]

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-2013-27 and should be 
submitted on or before September 4, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-19669 Filed 8-13-13; 8:45 am]
BILLING CODE 8011-01-P