SEC Grants Exemption from Certain Quoting and Trading Requirements under Tick Size Pilot Program

The SEC granted a limited exemption (the "Exemption") to BATS EDGA Exchange, Inc. ("EDGA") from complying with certain requirements of the Tick Size Pilot Plan under Rule 608(c) of Regulation NMS. The Tick Size Pilot Plan is intended to test whether market making in the securities of small companies will be encouraged if the minimum tick increment is increased from one penny to five cents, thereby creating a greater spread profit for market makers. The Tick Size Pilot Plan outlines the criteria for dividing securities that are to be subject to the pilot ("Pilot Securities") into a control group and three test groups, and specifies the trading rules that will be applicable to each group (e.g., trading increments, the "trade-at" requirement, etc.). The Exemption grants relief to EDGA that includes the following:

• permitting EDGA to move any Pilot Security that has a closing price below $1.00 from its assigned test group to the control group in order to avoid being subject to the quoting and trading requirements of the initial test group (such as trading in $0.05 increments);

• for certain test groups, exempting EDGA members from the requirement to execute customer orders in Pilot Securities at $0.05 increments, where the member is otherwise required by EDGA rules to execute a customer order in a Pilot Security after executing a proprietary trade in that same Pilot Security (e.g., EDGA Rule 12.6 ("Prohibition against Trading ahead of Customer Orders")). In these instances, the proprietary trade would have been executed at a price other than in the required $0.05 increment pursuant to an enumerated exception in the Tick Size Pilot Plan;

• for certain test groups, exempting EDGA members from the "trade-at" requirement for "stopped orders" and transactions to correct bona fide errors.