Document ID: SEC-2015-1933-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: EDGA Exchange, Inc.
Posted Date: 2015-11-17T05:00Z

[Federal Register Volume 80, Number 221 (Tuesday, November 17, 2015)]
[Notices]
[Pages 71850-71851]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-29221]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76417; File No. SR-EDGA-2015-43]

Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Fees

November 10, 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 November 2, 2015, EDGA Exchange, Inc. (the ``Exchange'' or 
``EDGA'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by the Exchange. The 
Exchange has designated the proposed rule change as one establishing or 
changing a member due, fee, or other charge imposed by the Exchange 
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposed rule change effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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\ and non-members of the Exchange pursuant to 
EDGA Rule 15.1(a) and (c) (``Fee Schedule'').
---------------------------------------------------------------------------

    \5\ The 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 [sic]. A Member 
will have the status of a ``member'' of the Exchange as that term is 
defined in Section 3(a)(3) of the Act.'' See Exchange Rule 1.5(n).
---------------------------------------------------------------------------

    The text of the proposed rule change is available at the Exchange's 
Web site at www.batstrading.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to increase the fee for orders yielding fee 
code D, which results from an order routed to the New York Stock 
Exchange (``NYSE'') or routed using the RDOT routing strategy. In 
securities priced at or above $1.00, the Exchange currently assesses a 
fee of $0.0027 per share for Members' orders that yield fee code D. The 
Exchange proposes to amend its Fee Schedule to increase this fee to 
$0.00275 per share. The proposed change would enable the Exchange to 
pass through the rate that BATS Trading, Inc. (``BATS Trading''), the 
Exchange's affiliated routing broker-dealer, is charged for routing 
orders to NYSE when it does not qualify for a volume tiered reduced 
fee. The proposed change is in response to NYSE's November 2015 fee 
change where NYSE increased the fee to remove liquidity via routable 
order types it charges its customers, from a fee of $0.0027 per share 
to a fee of $0.00275 per share.\6\ When BATS Trading routes to NYSE, it 
will now be charged a standard rate of $0.00275 per share. BATS Trading 
will pass through this rate to the Exchange and the Exchange, in turn, 
will pass through of a rate of $0.00275 per share to its Members. The 
proposed increase to the fee under fee code D would enable the Exchange 
to equitably allocate its costs among all Members utilizing fee code D. 
The Exchange proposes to implement this amendment to its Fee Schedule 
immediately.
---------------------------------------------------------------------------

    \6\ See NYSE Trader Update, Fee Changes Effective November 2, 
dated October 30, 2015, available at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Client_Notice_Fee_Change_11_2015.pdf.
---------------------------------------------------------------------------

    In addition to the change proposed above, the Exchange proposes to 
change certain references on the Fee Schedule in connection with the 
launch of the options exchange operated by the Exchange's affiliate, 
EDGX Exchange, Inc. (``EDGX Options''). First, the Exchange propose 
[sic] to modify references in the Unicast Access section under BATS 
Connect fees to refer to ``BZX Options'' instead of ``BATS Options''. 
Second, the Exchange proposes to add reference to EDGX Options in the 
list of Exchange affiliates to which such fees do not apply.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\7\ in general, and 
furthers the objectives of Section 6(b)(4),\8\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities. The Exchange believes that its proposal to increase the fee 
for Members' orders that yield fee code D from $0.0027 per share to 
$0.00275 per share represents an

[[Page 71851]]

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 NYSE through BATS Trading. As of November 1, 2015 
[sic], NYSE amended its fee to remove liquidity via routable order 
types it charges its customers, from a fee of $0.0027 per share to a 
fee of $0.00275 per share.\9\ Therefore, the Exchange believes that its 
proposal to pass through a fee of $0.00275 per share for orders that 
yield fee code D is equitable and reasonable because it accounts for 
the pricing changes on NYSE. In addition, the proposal allows the 
Exchange to continue to charge its Members a pass-through rate for 
orders that are routed to NYSE. Furthermore, the Exchange notes that 
routing through BATS Trading is voluntary. Lastly, the Exchange also 
believes that the proposed amendment is non-discriminatory because it 
applies uniformly to all Members. The Exchange also believes that the 
changes to add EDGX Options to the list of affiliates under Unicast 
Access and the re-naming of BATS Options as BZX Options is consistent 
with the Act. Such changes reflect and are in connection with the 
launch of EDGX Options but do not result in any material change to the 
Exchange's Fee Schedule or impose any new or different fee.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ See supra note 6.
---------------------------------------------------------------------------

(B) Self-Regulatory Organization's Statement on Burden on Competition

    These proposed rule changes do not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Act. The Exchange does not believe that any of these changes 
represent a significant departure from previous pricing offered by the 
Exchange or pricing offered by the Exchange's competitors. 
Additionally, Members may opt to disfavor the Exchange's pricing if 
they believe that alternatives offer them better value. Accordingly, 
the Exchange does not believe that the proposed changes will impair the 
ability of Members or competing venues to maintain their competitive 
standing in the financial markets. The Exchange believes that its 
proposal to pass through a fee of $0.00275 per share for Members' 
orders that yield fee code D would increase intermarket competition 
because it offers customers an alternative means to route to NYSE. The 
Exchange believes that its proposal would not burden intramarket 
competition because the proposed rate would apply uniformly to all 
Members.

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

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

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \10\ and paragraph (f) of Rule 19b-4 
thereunder.\11\ 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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-EDGA-2015-43 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 Number SR-EDGA-2015-43. 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 will also be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-EDGA-2015-43 and should be 
submitted on or before December 8, 2015.
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-29221 Filed 11-16-15; 8:45 am]
 BILLING CODE 8011-01-P