Document ID: SEC-2011-0506-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: EDGA Exchange, Inc.
Posted Date: 2011-04-13T04:00Z

[Federal Register Volume 76, Number 71 (Wednesday, April 13, 2011)]
[Notices]
[Pages 20797-20799]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-8851]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64252; File No. SR-EDGA-2011-09]

Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule To Amend EDGA Rule 
11.9 To Introduce Additional Routing Options to the Rule

April 7, 2011.
    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 April 1, 2011, the EDGA Exchange, Inc. (the ``Exchange'' or the 
``EDGA'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II 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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[[Page 20798]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 11.9 to introduce additional 
routing options to the rule. The text of the proposed rule change is 
attached as Exhibit 5 and is available on the Exchange's Web site at 
http://www.directedge.com, at the Exchange's principal office, on the 
Commission's Web site at http://www.sec.gov, and at the Public 
Reference Room of the Commission.

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 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange's current list of routing options are codified in Rule 
11.9(b)(3). In this filing, the Exchange proposes to amend Rule 
11.9(b)(3) to add three new additional strategies.
    In Rule 11.9(b)(3), the Exchange describes that its system 
(``System'') provides a variety of routing options. Routing options may 
be combined with all available order types and times-in-force, with the 
exception of order types and times-in-force whose terms are 
inconsistent with the terms of a particular routing option. The System 
will consider the quotations only of accessible markets. The term 
``System routing table'' refers to the proprietary process for 
determining the specific trading venues to which the System routes 
orders and the order in which it routes them. The Exchange reserves the 
right to maintain a different System routing table for different 
routing options and to modify the System routing table at any time 
without notice. The new System routing options are described in more 
detail below.
    The Exchange proposes to describe the ICMT routing strategy and add 
it to Rule 11.9(b)(3)(r). ICMT is a routing strategy under which an 
order checks the System for available shares, then is sent to 
destinations on the System routing table and then to EDGX Exchange, 
Inc. (``EDGX'') as an immediate or cancel (IOC) Mid-Point Match 
(``MPM'')order.\3\ If there is no liquidity at EDGX to execute at the 
midpoint, the order is subsequently cancelled.
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    \3\ EDGX Rule 11.5(c)(7) defines a Mid-Point Match (MPM) order 
as an order with an instruction to execute it at the midpoint of the 
NBBO. A MPM order may be a Day Order, Fill-or-Kill Order, or IOC 
Order. The Exchange notes that members can send in a MPM order 
directly to EDGX without routing through the EDGA platform as an 
ICMT routing option.
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    The Exchange proposes to describe the ROUQ routing strategy and add 
it to Rule 11.9(b)(3)(c)(iv). ROUQ 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.
    The Exchange proposes to describe the ROUZ routing strategy and add 
it to Rule 11.9(b)(3)(c)(v). ROUZ 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.
    The differences between the latter two strategies lies in the 
differences in the System routing tables for the ROUQ/ROUZ strategies. 
The ROUQ routing strategy goes to fewer low cost destinations than does 
the ROUZ routing strategy.
    The Exchange also proposes to move the existing descriptions of 
ROUE, ROUT, and ROUX into Rule 11.9(b)(3)(c)(i)-(iii), respectively. 
Formerly, the descriptions were in Rules 11.9(b)(3)(c) for ROUE, 
11.9(b)(3)(h) for ROUT, and 11.9(b)(3)(i) for ROUX.
    The Exchange proposes to make conforming changes to the rest of the 
rule to re-letter the sections accordingly.
    The Exchange believes that the proposed introduction of these 
routing options, described above, will provide market participants with 
greater flexibility in routing orders, without having to develop their 
own complicated routing strategies.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b)(5) of the Act'',\4\ which requires the rules of an 
exchange 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 and, in general, to protect investors and the 
public interest. The proposed change to introduce the routing options 
described above will provide market participants with greater 
flexibility in routing orders without developing complicated order 
routing strategies on their own.
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    \4\ 15 U.S.C. 78f(b)(5).
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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

    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 \5\ and Rule 19b-4 
(f)(6)(iii) thereunder.\6\
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6)(iii).
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    A proposed rule change filed under Rule 19b-4 (f)(6) normally may 
not become operative prior to 30 days after the date of filing.\7\ 
However, Rule 19b-4(f)(6) \8\ permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay so that the proposal may 
become operative upon filing. The Exchange notes that waiver of this 
requirement will allow the Exchange to immediately offer Exchange users 
new routing strategies, and the inability to immediately offer the new 
routing strategies would put the Exchange at a competitive 
disadvantage. The Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest because such waiver would allow the new routing strategies to 
become immediately available to

[[Page 20799]]

Exchange users. For this reason, the Commission designates the proposed 
rule change to be operative upon filing with the Commission.\9\
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    \7\ 17 CFR 240.19b-4(f)(6)(iii).
    \8\ Id.
    \9\ For the 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).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-EDGA-2011-09 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-EDGA-2011-09. This file 
number should be included on the subject line if e-mail 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 on official business 
days between the hours of 10 a.m. and 3 p.m. Copies of such filing also 
will be available for inspection and copying at the principal office of 
the Exchange. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
EDGA-2011-09 and should be submitted on or before May 4, 2011.

    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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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-8851 Filed 4-12-11; 8:45 am]
BILLING CODE 8011-01-P