Document ID: SEC-2016-0006-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: EDGA Exchange, Inc.,
Posted Date: 2016-01-04T05:00Z

[Federal Register Volume 81, Number 1 (Monday, January 4, 2016)]
[Notices]
[Pages 129-131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-32987]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76777; File No. SR-EDGA-2015-45]

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

December 28, 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 15, 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.
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    \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).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend the fee schedule applicable 
to Members \5\ and non-members of the Exchange pursuant to EDGA Rules 
15.1(a) and (c) (``Fee Schedule'') to adopt fees for the recently 
adopted ALLB routing strategy.
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    \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. 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).
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    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 adopt fees for the ALLB routing strategy. 
In sum, ALLB is a routing option under which the order checks the 
System \6\ for available shares and is then sent to the BATS Exchange, 
Inc. (``BZX''), BATS Y-Exchange, Inc. (``BYX''), and the EDGX Exchange, 
Inc. (``EDGX'' collectively with the Exchange, BZX, and BYX, the ``BGM 
Affiliated Exchanges'').\7\ Specifically, an order subject to the ALLB 
routing option would execute first against liquidity on the EDGA 
Book.\8\ Any remainder would then be routed to BZX, BYX, and/or EDGX in 
accordance with the System routing table.\9\
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    \6\ The term ``System'' is defined 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.'' See Exchange Rule 
1.5(cc).
    \7\ See Exchange Rule 11.11(g)(7). See also Securities Exchange 
Act Release No. 76455 (November 17, 2015), 80 FR 73009 (November 23, 
2015) (SR-EDGA-2015-42).
    \8\ The term ``EDGA Book'' is defined as ``the System's 
electronic file of orders.'' See Exchange Rule 1.5(d).
    \9\ 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. See 
Exchange Rule 11.11(g).
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    The Exchange now proposes to adopt three new fee codes, AX, AY, and 
AZ and related fees for the ALLB routing strategy. These fee codes 
would enable

[[Page 130]]

the Exchange to pass through the rate that BATS Trading, Inc. (``BATS 
Trading''), the Exchange's affiliated routing broker-dealer, would be 
charged for routing orders to BZX, BYX, and EDGA.\10\ Each of the 
proposed fee codes are described as follows:
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    \10\ Orders using the ALLB routing option that execute on the 
Exchange would be subject to the Exchange's standard fees and 
rebates, unless the Member achieves a volume tiered reduced fee or 
enhanced rebate.
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     Fee Code AX. Order routed to EDGX using the ALLB routing 
strategy would yield fee code AY and be charged a fee of $0.00290 per 
share in securities priced at or above $1.00. Orders yielding fee code 
AX in securities priced below $1.00 would be charged a fee of 0.30% of 
the transaction's dollar value.
     Fee Code AY. Order routed to BYX using the ALLB routing 
strategy would yield fee code AY and receive a rebate of $0.00150 per 
share in securities priced at or above $1.00. Orders yielding fee code 
AY in securities priced below $1.00 would be charged a fee of 0.10% of 
the transaction's dollar value.
     Fee Code AZ. Order routed to BZX using the ALLB routing 
strategy would yield fee code AZ and be charged a fee of $0.00300 per 
share in securities priced at or above $1.00. Orders yielding fee code 
AZ in securities priced below $1.00 would be charged a fee of 0.30% of 
the transaction's dollar value.
    BATS Trading will pass through the above rates to the Exchange and 
the Exchange, in turn, will pass through that exact rate to its 
Members. The proposed rates would enable the Exchange to equitably 
allocate its costs among all Members utilizing the ALLB routing 
strategy.
Implementation Date
    The Exchange proposes to implement this amendment to its Fee 
Schedule on January 4, 2016, but the proposed fee codes and their 
associated rates will not be available until January 7, 2016, the date 
upon which it announced to Members that it would implement the ALLB 
routing strategy.\11\
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    \11\ See BATS Announces ALLB Routing Option, available at http://cdn.batstrading.com/resources/release_notes/2015/BATS-ALL-BATS-Routing-Strategy-Release-Schedule-Updated.pdf. The Exchange notes 
that the Fee Schedule's date was amended to January 4, 2016 in file 
no. SR-EDGA-2015-46 (December 8, 2015).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\12\ in general, and 
furthers the objectives of Section 6(b)(4),\13\ 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 proposed rates represent 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 BZX, BYX, and EDGX through BATS Trading. The Exchange 
believes that its proposed pass through rate for orders that yield fee 
codes AX, AY or AZ is equitable and reasonable because it accounts for 
the rate that BATS Trading would be subject to for orders it routes and 
are executed on EDGX, BYX, and BZX. In addition, the proposal allows 
the Exchange to pass-through to its Members the rate for orders that 
are routed to EDGX, BYX, and BZX using the ALLB routing strategy. 
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.
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    \12\ 15 U.S.C. 78f.
    \13\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    This proposed rule change does 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 this change represents 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 the rates that BATS Trading would be subject to for orders 
routing to EDGX, BYX, and BZX using the ALLB routing strategy to 
Members would increase intermarket competition because it offers 
customers an alternative means to route orders to those venues. In 
addition, the proposed pricing would not provide any advantage to Users 
when routing to EDGX, BYX or BYX as compared to other methods of 
routing or connectivity available to Users by the Exchange because the 
proposed rates are identical to what the Member would be subject to if 
it routed to those venues directly. 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 \14\ and paragraph (f) of Rule 19b-4 
thereunder.\15\ 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.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f).
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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 No. SR-EDGA-2015-45 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-EDGA-2015-45. 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

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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 such 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 No. SR-EDGA-2015-45 and should be 
submitted on or before January 25, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-32987 Filed 12-31-15; 8:45 am]
 BILLING CODE 8011-01-P