Document ID: SEC-2011-0390-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: EDGA Exchange, Inc.
Posted Date: 2011-03-23T04:00Z

[Federal Register Volume 76, Number 56 (Wednesday, March 23, 2011)]
[Notices]
[Pages 16468-16469]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-6836]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64094; File No. SR-EDGA-2011-07]

Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by EDGA Exchange, 
Inc. To Delete the Description of and All References to Step-Up Orders 
in EDGA Rules

March 18, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 10, 2011, EDGA Exchange, Inc. (``EDGA'' or ``Exchange'') 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 Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons, and is approving the proposal on an accelerated basis.
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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 Rules 11.5(c)(11) and Rule 
11.9(b)(1)(C) to delete the description of and all references to Step-
Up orders. 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, 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
    EDGA filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change to amend EDGA Rule 11.9 
regarding the description of the Step-up order type and modify how 
Step-up orders would be processed pursuant to Exchange Rule 11.9.\3\
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    \3\ See Securities Exchange Act Release No. 63335 (November 18, 
2010, 75 FR71783. Amendment No. 2 replaced in its entirety the 
original filing, SR-EDGA-2010-18 (November 8, 2010) and partial 
Amendment No. 1 (November 23, 2010). See Securities Exchange Act 
Release No. 63572 (December 17, 2010), 75 FR 80873.
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    Exchange Rule 11.5(c)(11) defines a Step-up order as a ``market or 
limit order with the instruction that the System display the order to 
Users at or within the NBBO price pursuant to Rule 11.9(b)(1)(C).'' 
Exchange Rule 11.9(b)(1)(C), in turn, states that orders shall be 
displayed to Users \4\ in a manner that is separately identifiable from 
other Exchange orders, at or within the NBBO price for a period of time 
not to exceed five hundred milliseconds, as determined by the Exchange.
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    \4\ Exchange Rule 1.5(cc) defines a User as any ``any Member or 
Sponsored Participant who is authorized to obtain access to the 
System pursuant to Rule 11.3.''
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    In light of the Commission's order instituting proceedings to 
determine whether to disapprove the above-referenced proposed rule 
change,\5\ the Exchange withdrew the filing mentioned above on February 
25, 2011 and ceased offering the Step-up order as of the close of 
business on February 28, 2011.
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    \5\ See Securities Exchange Act Release No. 63929 (February 18, 
2011), 76 FR10416 (SR-EDGA-2010-18).
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    The Exchange now proposes to delete rules that reference Step-up 
orders. Therefore, it is proposing to delete Rules 11.5(c)(11) and 
11.9(b)(1)(C). As a result, conforming changes have been made to re-
number current Rules 11.5(c)(12)-(14) as Rules 11.5(c)(11)-(13). In 
addition, a conforming change is proposed to re-number the reference to 
Discretionary Orders, as set forth in Rule 11.8(a)(2)(C).
2. Statutory Basis
    The statutory basis for the proposed rule change is Section 6(b)(5) 
of the Act,\6\ 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. Since 
the Step-up order type was an enhanced functionality offered by the 
Exchange not required under the Act, the Exchange would like to remove 
references to it from its rulebook.
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    \6\ 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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory

[[Page 16469]]

organization consents, the Commission will:
    (a) By order approve or disapprove such proposed rule change; or
    (b) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-2011-07 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-2011-07. 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 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 website 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 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-2011-07 and should be submitted on 
or before April 13, 2011.

V. Commission's Findings and Order Granting Accelerated Approval of a 
Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange.\7\ In particular, the Commission finds that the proposed rule 
change is consistent with the requirements of Section 6(b)(5) of the 
Act,\8\ which requires, among other things, that the Exchange's rules 
be designed 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 a national market 
system, and in general, to protect investors and the public interest. 
The Commission agrees with the Exchange that the Step-Up order type is 
a functionality that is not required under the Act.\9\
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    \7\ In approving the proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ See supra Section II.A.2.
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    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\10\ for approving the proposed rule change prior to the 30th 
day after publication of notice in the Federal Register. Accelerated 
approval will allow the Exchange to delete references to an order type 
in its rules that is not required under the Act and that the Exchange 
has determined to discontinue.
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    \10\ 15 U.S.C. 78s(b)(2).
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VI. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-EDGA-2011-07) is hereby approved on 
an accelerated basis.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-6836 Filed 3-22-11; 8:45 am]
BILLING CODE 8011-01-P