In re EDGX EXCHANGE

 
 
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No.  65556 / October 13, 2011 
 
ADMINISTRATIVE PROCEEDING 
File N o.  3-14586 
 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -  x  
 
 
In the Matter of 
 
EDGX EXCHANGE, INC.,  
EDGA EXCHANGE, INC., and  
DIRECT EDGE ECN LLC 
 
Respondents. 
 
 
 :
:
:
:
:
:
:
:
:
:
: 
ORDER INSTITUTING 
ADMINISTRATIVE AND 
CEASE-AND-DESIST 
PROCEEDINGS PURSUANT 
TO SECTIONS 19(h) AND 21C 
OF THE SECURITIES 
EXCHANGE ACT OF 1934, 
MAKING FINDINGS, AND 
IMPOSING REMEDIAL 
SANCTIONS AND A CEASE-
AND-DESIST ORDER 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -  x 
 
I. 
The Securities and Exchange Commission (the “Commission”) deems it 
necessary and appropriate in the public interest and for the protection of investors that 
public administrative and cease-and-desist proceedings be, and hereby are, instituted 
pursuant to Sections 19(h)(1) and 21C of the Securities Exchange Act of 1934 
(“Exchange Act”) against EDGX Exchange, Inc. (“EDGX”), EDGA Exchange, Inc. 
(“EDGA”) (collectively, “Exchange” or the “Exchanges”), and Direct Edge ECN LLC 
(“DECN”) doing business as DE Route (“DE Route”) (collectively, “Respondents”). 
II.  
In anticipation of the institution of these proceedings, Respondents have 
submitted a joint Offer of Settlement (the “Offer”) which the Commission has determined 
to accept. Solely for the purpose of these proceedings and any other proceedings brought 
by or on behalf of the Commission, or to which the Commission is a party, and without 
admitting or denying the findings herein, except as to the Commission’s jurisdiction over 
them and the subject matter of these proceedings, which are admitted, Respondents 
consent to the entry of this Order Instituting Administrative and Cease-and-Desist 
Proceedings Pursuant to Sections 19(h) and 21C of the Securities Exchange Act of 1934, 
Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order 
(“Order”), as set forth below. 

2 
III. 
On the basis of this Order and Respondents’ Offer, the Commission finds that: 
A. Respondents 
1. EDGA is registered with the Commission as a national securities exchange 
pursuant to Section 6(a) of the Exchange Act and is a self-regulatory organization 
(“SRO”). Since July 2010, EDGA has operated as an all-electronic exchange. EDGA is 
located in Jersey City, New Jersey and currently trades U.S. equity securities. 
2. EDGX is registered with the Commission as a national securities exchange 
pursuant to Section 6(a) of the Exchange Act and is an SRO. Since July 2010, EDGX has 
operated as an all-electronic exchange. EDGX is located in Jersey City, New Jersey and 
currently trades U.S. equity securities. 
3. DE Route is a broker-dealer registered with the Commission pursuant to 
Section 15 of the Exchange Act. DE Route is both a facility of and the affiliated routing 
broker of EDGA and EDGX. DE Route is also a member of FINRA and the Exchanges. 
DE Route is located in Jersey City, New Jersey. 
B. Summary 
4. The National Market System is among the pillars of our economy and 
provides the foundation for investor confidence in the integrity and orderliness of our 
capital markets. National securities exchanges and the electronic quoting, routing, and 
execution platforms through which they operate are critical elements of the National 
Market System. To gain Commission approval to become registered as an exchange, an 
exchange operator must not only represent that it is able to meet its regulatory obligations 
but also demonstrate that it is organized to do so and has the capacity to carry out the 
purposes of the statutes, rules, and regulations upon which its registration is conditioned. 
Given the systemic risk that can result from the failure of an exchange to comply with 
these requirements, the operation of a national securities exchange carries with it among 
the most significant regulatory compliance obligations that are expected of any market 
participant. 
5. National securities exchanges are obligated to ensure that their order 
quoting, routing, and execution systems, compliance infrastructures, and communications 
platforms are developed, maintained, and governed to avoid material failures, outages, 
and other significant contingencies that could pose material risk to the National Market 
System and to the public interest. While some system outages inevitably will occur and 
not every outage is a violation of the federal securities laws, such outages, particularly 
when combined with significant other deficiencies in an exchange’s systems, processes, 
and controls, can present risks that, left unremediated, could cause harm to investors and 
other market participants. A national securities exchange must invest appropriate 
resources necessary to ensure the strength and integrity of its systems, processes, and 
controls, to comply with its own Commission-approved rules, to provide for adequate 
backup and failover systems, to prevent or react appropriately to significant system 

3 
outages and failures, and, ultimately, to ensure an adequate governance and oversight 
structure necessary for quality assurance, continuous improvement, and process 
measurement, monitoring, and control. 
6. This matter concerns the failure by EDGX, EDGA, and DE Route to 
comply with certain provisions of the Exchange Act, the rules and regulations thereunder, 
and each Exchange’s own rules. EDGA violated Sections 19(b) and 19(g) of the 
Exchange Act, EDGX violated Sections 19(b) and 19(g) of the Exchange Act and Rule 
602(a)(3) thereunder, and DE Route caused violations of Section 19(g) of the Exchange 
Act and violated Rules 200(g) and 203(b) thereunder.  These violations occurred against 
the backdrop of weaknesses in Respondents’ systems, processes, and controls.  
C. Discussion 
7. On May 7, 2009, EDGA and EDGX submitted to the Commission Form 1 
applications seeking registration as national securities exchanges under Section 6 of the 
Exchange Act. When the Exchanges applied for registration as national securities 
exchanges, each was operating as a separate trading platform of DECN,
Facts 
1
 an alternative 
trading system (“ATS”).
2
8. In an order dated March 12, 2010 (the “Approval Order”), the 
Commission granted the applications of EDGA and EDGX for registration as national 
securities exchanges.
 
3
  The Approval Order that granted the Exchanges’ applications for 
registration conditioned their operation upon the satisfaction of several requirements, 
including that the Exchanges have adequate procedures and programs in place to 
effectively regulate the Exchanges, and, as noted in Commission Automation Review 
Policy (“ARP”) guidelines, to effectively process trades and maintain the confidentiality, 
integrity, and availability of the Exchanges’ systems.
4
9. As required by the Approval Order, the Exchanges sent letters to the 
Commission’s Office of Compliance Inspections and Examinations (“OCIE”) and the 
Division of Trading and Markets (“TM”) on June 18 and 28, 2010, respectively, 
representing that each Exchange had adequate procedures and programs in place to 
effectively regulate the Exchange, and, as noted in Commission ARP guidelines, to 
process trades and maintain the confidentiality, integrity, and availability of the 
 
                                                 
1
  Direct Edge ECN, LLC was formed in the State of Delaware on April 19, 2005. 
2
   Rules 300–303 under the Exchange Act, 17 C.F.R. §§ 242.300–303. 
3
 See In the Matter of the Applications of EDGX Exchange, Inc., and EDGA Exchange, Inc. for 
Registration as National Securities Exchanges: Findings, Opinion, and Order of the Commission, 
Exchange Act Release No. 34-61698 (Mar. 12, 2010), 75 FR 13151 (Mar. 18, 2010) (File Nos. 10-194 
and 10-196). 
4
 Id. at 13167. 

4 
Exchange’s systems. Each Exchange commenced operating as a national securities 
exchange in July 2010. 
10. Following EDGA’s and EDGX’s commencement of operations as national 
securities exchanges, DECN ceased operations as an ATS and began to operate as a 
facility of the Exchanges doing business as DE Route. The Commission approved rules 
permitting DE Route to provide outbound order routing for the Exchanges and inbound 
order routing to EDGX from EDGA and to EDGA from EDGX, subject to certain 
conditions.
5
  In particular, the rules stated that DE Route would not engage in any 
business other than (a) its outbound router function, (b) its inbound router function, and 
(c) any other activities it may engage in as approved by the Commission.
6
 Until 2011, 
neither Exchange had sought Commission approval to expand the activities of DE Route, 
and the Commission had not approved any other DE Route activities. 
11. Prior to November 8, 2010, EDGA and EDGX made certain code changes 
related to the processing of customer orders. The code changes addressed compliance 
with amendments to Regulation SHO (prior to the extension of the compliance date for 
those amendments) as well as several enhancements. While certain code changes were 
subjected to testing prior to being rolled out on November 8, 2010, the code changes at 
issue were not subjected to testing. When the markets opened on November 8, 2010, the 
untested code changes caused an operational error whereby EDGA and EDGX systems 
increased the number of shares in orders submitted by three members, which resulted in 
these orders being executed for more than their intended amount. The Exchanges 
instructed the affected members to trade out of the resulting overfilled positions and to 
submit a claim for any losses to the Exchanges. One member traded out of the overfilled 
executions and submitted a claim for a loss in the amount of $105,000. The other two 
members refused to assume the overfilled positions and, as a result, EDGA and EDGX 
decided that DE Route would assume and liquidate the overfilled positions of the two 
members through its error account. In addition to the positions assumed in response to the 
November 8, 2010 operational error, Respondents assumed positions in other securities to 
facilitate the resolution of overfilled or error positions that separately arose from July 
through November 2010. 
The November 8, 2010 Systems Incident 
12. The assumption of positions to facilitate the resolution of overfilled or 
error positions was not permitted under the rules of the Exchanges, and the Exchanges 
failed to file proposed rule amendments permitting them to assume member positions. 
The use of the DE Route error account to engage in trading activity was not permitted by 
the Exchanges’ rules, and neither Exchange had sought Commission approval to expand 
the activities of DE Route beyond those listed in paragraph 10 above. Section 19(g)(1) of 
the Exchange Act requires every exchange to comply with the provisions of the 
Exchange Act, the rules and regulations thereunder, and its own rules. Section 19(b)(1) of 
                                                 
5
 Id. at 13165. 
6
 EDGA Rules 2.11–12 and EDGX Rules 2.11–12. 

5 
the Exchange Act requires an exchange to file proposed rule changes with the 
Commission, and Rule 19b-4 thereunder provides that any “stated policy, practice or 
interpretation” of an exchange shall be deemed a “proposed rule change” unless “it is 
reasonably and fairly implied by an existing rule” of the exchange. 
13. From November 8 through November 10, 2010, DE Route traded through 
its error account to unwind the November 8, 2010 positions. In attempting to liquidate 
these positions as quickly as practicable, DE Route engaged in short selling activity. DE 
Route did not mark its short orders as short or marked them long and did not locate or 
document the availability of securities to borrow prior to effecting these short sales. 
Regulation SHO requires broker dealers to mark orders in all equity securities “long” or 
“short” in accordance with Rule 200(g) and also requires executing broker-dealers to 
meet the locate requirement under Rule 203(b) prior to effecting short sales. 
See
14. The November 8, 2010 operational error caused an estimated 27 million 
shares of excess trading for three members with a value of roughly $773 million across 
approximately one thousand symbols. The Exchanges realized a net loss of 
approximately $2.1 million in connection with the positions that were assumed and 
liquidated. Respondents did not discuss the operational error with Commission staff until 
after they were contacted by TM on November 10, 2010. 
 17 
C.F.R. §§ 242.200(g), 203(b). 
15. On April 13, 2011, at approximately 3:19 p.m., an EDGX database 
administrator inadvertently entered a command that effectively disabled all other 
connections to EDGX’s production database, disrupting the Exchange’s ability to process 
incoming orders, modifications, and cancellations. This incident occurred, in part, due to 
levels of employee access to production systems inconsistent with the principle of “least 
privilege,” as well as a lack of visual differentiation between production and 
nonproduction environments.
The April 13, 2011 Systems Incident 
7
16. Immediately thereafter, Respondents’ personnel began receiving internal 
system alerts. At 3:23 p.m., reports to EDGX’s trade desk indicated that trades were not 
being reported to the Securities Information Processors (“SIP”), which publish market 
data to the public. Between 3:24 and 3:34 p.m., EDGX received at least eleven self-help 
declarations from other trading centers.
 
8
                                                 
7
 Under the “least privilege” principle, each employee receives the least access necessary to perform his or 
her job responsibilities.   
 At 3:29 p.m., EDGX sent a notice to its 
members that it was “investigating a potential connectivity issue” and would return with 
an update shortly. By approximately 3:35 p.m., EDGX’s help desk had received calls 
from several of its members requesting cancellations, and it advised those members that it 
was experiencing issues and that the members should route away from EDGX. EDGX 
8
 Regulation NMS provides a “self-help” remedy that allows trading centers to bypass the quotations of a 
trading center that fails to provide immediate responses to incoming orders. 

6 
removed its quotations from the SIP at 3:43 p.m., approximately twenty-four minutes 
after the systems incident occurred. EDGX did not “immediately” identify its quotations 
as manual quotations when it had reason to believe that it was not capable of displaying 
automated quotations. 
17. As a result of the April 13, 2011 systems incident, several members of 
EDGX submitted claims for a total of more than $668,000 in losses. Respondents 
promptly notified the Commission staff of the incident. 
18. After the events discussed above, Respondents, with substantial assistance 
from external experts, engaged in an examination of their technological infrastructure in 
light of, among other things, Commission ARP guidelines, for purposes of ensuring that 
their procedures and programs are designed to prevent, and if not prevent, to 
appropriately address, systems errors in a manner consistent with their responsibilities as 
exchange operators. The Exchanges submitted to the Commission staff a Plan of 
Remediation, which they promptly began to implement. Among other things, the 
Exchanges retained multiple consultants and purchased new hardware, software licenses 
and related support systems to implement the Plan of Remediation.  Remedial acts and 
other enhancements undertaken by Respondents include, but are not limited to, engaging 
outside counsel and consultants to conduct a review of Respondents’ compliance and 
operational policies, augmenting the ranks of staff and management, and making 
improvements to their compliance functions, information technology control 
environments, and information systems. 
Systems Procedures and Programs 
D. Violations 
19. Section 19(b)(1) of the Exchange Act requires an exchange to file 
proposed rule changes with the Commission, and Rule 19b-4 provides that any “stated 
policy, practice, or interpretation” of an exchange shall be deemed a “proposed rule 
change” unless “it is reasonably and fairly implied by an existing rule” of the exchange. 
An exchange must file a proposed rule change with the Commission on Form 19b-4 and, 
in turn, the Commission publishes the proposed rule in the Federal Register to allow all 
interested parties to comment upon it. Pursuant to Section 19(b)(2), the Commission will 
approve the proposed rule change only upon a finding that it “is consistent with the 
requirements of [the Exchange Act] and the rules and regulations thereunder.” 
Section 19(b)(1) of the Exchange Act 
20. Each Exchange violated Section 19(b)(1) of the Exchange Act by not 
filing a proposed rule change concerning the use of the DE Route error account to assume 
overfilled or error positions, including those positions arising from the systems incident 
on November 8, 2010. 

7 
21. Section 19(g)(1) of the Exchange Act requires every exchange to comply 
with the provisions of the Exchange Act, the rules and regulations thereunder, and its 
own rules, and, absent reasonable justification or excuse, to enforce compliance by its 
members with such provisions. 
Section 19(g)(1) of the Exchange Act 
22. Each Exchange violated Section 19(g)(1) of the Exchange Act by not 
complying with its own rules when it allowed DE Route to engage in activities not 
approved by the Commission. DE Route conducted trading beyond the outbound and 
inbound routing on behalf of the Exchanges that was filed in the Exchanges’ rules and 
approved by the Commission and caused the Exchanges’ violations of Section 19(g) of 
the Exchange Act. 
23. Rule 200(g) of Regulation SHO requires that a broker or dealer must mark 
all sell orders of any equity security “long” or “short” or “short exempt.” 
17 C.F.R. §§ 242.200(g) and 203(b) (Regulation SHO) 
24. Rule 203(b) of Regulation SHO provides that a broker or dealer may not 
effect a short sale in any equity security for its own account, unless the broker or dealer 
has borrowed the security, has entered into a bona fide agreement to borrow the security, 
or otherwise has reasonable grounds to believe that the security can be borrowed so that it 
can be delivered on the date it is due. Regulation SHO also requires that a broker or 
dealer document compliance with these requirements. 
25. DE Route violated Rules 200(g) and 203(b) of Regulation SHO when, in 
liquidating the positions assumed in connection with the November 8, 2010 systems 
incident, DE Route failed to mark certain orders “short,” mismarked other short sale 
orders “long,” and did not locate the shorted stock prior to effecting these short sales. 
26. The definition of an automated trading center contained in Rule 600(b)(4) 
of Regulation NMS requires that such a trading center immediately identify its quotations 
as manual quotations whenever it has reason to believe that it is not capable of displaying 
automated quotations. 
17 C.F.R. § 242.602 (Regulation NMS) 
27. Rule 602(a)(1)(i) of Regulation NMS provides that “[e]ach national 
securities exchange shall at all times such exchange is open for trading, collect, process, 
and make available to vendors the best bid, the best offer, and aggregate quotation sizes 
for each subject security listed or admitted to unlisted trading privileges which is 
communicated on any national securities exchange by any responsible broker or dealer.” 
28. Rule 602(a)(3)(i) of Regulation NMS provides that “[i]f, at any time a 
national securities exchange is open for trading, such exchange determines . . . that the 
level of trading activities or the existence of unusual market conditions is such that the 
exchange is incapable of collecting, processing, and making available to vendors the data 

8 
for a subject security required to be made available pursuant to paragraph (a)(1) of this 
section in a manner that accurately reflects the current state of the market on such 
exchange, such exchange shall immediately notify all specified persons of that 
determination.” 
29. EDGX, which displayed quotations representing that it was operating as 
an automated trading center, violated Rule 602(a)(3) of Regulation NMS on April 13, 
2011, by not immediately notifying all specified persons when it determined that it was 
not capable of displaying quotations that accurately reflected the current state of the 
market on EDGX. 
E. Findings 
30. Based on the foregoing, the Commission finds that EDGA violated 
Sections 19(b) and 19(g) of the Exchange Act, EDGX violated Sections 19(b) and 19(g) 
of the Exchange Act and Rule 602(a)(3) thereunder, and DE Route caused violations of 
Section 19(g) of the Exchange Act and violated Rules 200(g) and 203(b) thereunder. 
F. Respondents’ Remedial Efforts 
31. In determining to accept the Offer, the Commission considered remedial 
acts undertaken by Respondents and cooperation afforded the Commission staff. 
G. Undertakings 
Respondents have undertaken to:
9
1. Implement the measures set forth in the Plan of Remediation (“the Plan”), 
substantially in accordance with the schedule set forth in the Plan.  To the extent that a 
non-material variation from the Plan is necessary, Respondents shall consult with TM 
and OCIE.  The measures encompassed by the Plan include: 
 
(a) enhancing EDGA’s and EDGX’s policies and procedures with respect to 
systems development and maintenance that include automated testing; 
testing of new code and functions as they are introduced; testing of all 
software changes; end-user testing; audits of information systems; and 
controls over and oversight of systems changes; 
 (b) implementing the following programs: 
(i)   an enterprise risk management framework; 
(ii) an information security program, including the hiring of an 
information security director and the appointment of dedicated 
program resources; 
                                                 
9
 Respondents have begun or completed many of the Undertakings. 

9 
(iii) enhancements to Respondents’ information technology control 
framework and underlying controls, including: 
(1) a policy designed to restrict employee access to production 
trading system components except to the extent necessary, 
including the principle of least privilege user access; 
(2)  measures to provide for greater differentiation of 
production and nonproduction environments; and 
(3)  enhancements to their systems development methodology 
and quality assurance practices. 
 (c) outsourcing the Exchanges’ internal audit function regarding information 
systems; 
(d)   engaging outside counsel to conduct a retrospective review of the 
circumstances leading to the systems incidents at the Exchanges and the 
submission of the Plan; and 
(e) hiring a Corporate Training Director to create and assure a sustainable and 
productive annual training program for all Direct Edge employees, which 
shall include, but not be limited to, training regarding the federal securities 
laws and regulations, including Regulation NMS and Regulation SHO; the 
rules of EDGA and EDGX; and Respondents’ policies and procedures. 
2. Hire a Chief Compliance Officer (“CCO”) who reports directly to the 
Chief Executive Officer of the Exchanges, with dotted line reporting to the Exchanges’ 
Regulatory Oversight Committees and Boards.  The CCO’s responsibilities include 
implementing policies and procedures reasonably designed to ensure that Respondents 
fulfill their regulatory and compliance obligations; coordinating with the Chief 
Information Officer to implement policies and procedures reasonably designed to ensure 
the quality, integrity, security, and stability of Respondents’ information technology and 
information security control environments; and serving as the primary point of contact for 
the Commission staff regarding Respondents’ regulatory obligations.  
3. Develop procedures to compensate Exchange members for losses incurred 
as a result of Exchange activities only as permitted by Respondents’ rules. 
4. Submit a rule filing to the Commission that satisfies the requirements of 
Form 19b-4 to change the operational scope of DE Route’s error account. 
5. Engage outside counsel to conduct a comprehensive review of the 
Respondents’ policies and procedures for compliance with the federal securities laws, 
rules and regulations thereunder, and the Respondents’ rules and identify areas for 
enhancement. 

10 
6. With respect to each of the reviews identified in Paragraphs 1(d) and 5 of 
this Section III.G: 
(a) The Respondents shall require Counsel to submit written 
recommendations for improvement to the Boards. The Boards shall adopt 
the recommendations made by Counsel, subject to Section III.G.6(b) 
below, and shall take steps necessary to commence implementation of 
such recommendations. 
(b) If the Boards determine that any of the recommendations are unduly 
burdensome or impractical, they may propose an alternative reasonably 
designed to accomplish the same objectives, and they shall submit any 
such alternative to Counsel. If, upon evaluating the Boards’ proposal, 
Counsel determines that the suggested alternative is reasonably designed 
to accomplish the same objectives as the recommendations in question, 
then Counsel shall approve the suggested alternative and amend his/her 
recommendations.  If Counsel determines that the suggested alternative is 
not reasonably designed to accomplish the same objectives, Counsel shall 
reject the Boards’ proposal. In the event that the Boards and the Counsel 
jointly determine that they are unable to agree on an alternative proposal, 
Respondents and Counsel shall jointly confer with TM and OCIE to 
resolve the matter. 
7. Expend sufficient funds to permit Respondents’ regulatory personnel to 
discharge the Undertakings referenced herein, including, but not limited to, providing 
adequate funds for the retention of outside counsel and/or professionals. 
8. To the extent that any claims for loss associated with the November 8, 
2010 and April 13, 2011 systems incidents have not yet been paid, ensure that they are 
paid consistent with the rules of EDGX and EDGA in effect at those times. 
9. When each Exchange’s Chief Executive Officer concludes that, to the best 
of his or her knowledge based on reasonable inquiry, EDGX, EDGA, and DE Route have 
achieved all of the Undertakings set forth in this Order, he or she shall certify, in writing, 
compliance with the Undertaking(s) set forth above.  Such certifications shall be 
reviewed and accepted for filing by the Audit Committee of the Board of each Exchange.  
The certification shall identify the Undertaking(s), provide written evidence of 
compliance in the form of a narrative, and be supported by exhibits sufficient to 
demonstrate compliance. The Commission staff may make reasonable requests for further 
evidence of compliance, and Respondent agrees to provide such evidence. The 
certification and supporting material shall be submitted to Kathryn A. Pyszka, Assistant 
Director, Market Abuse Unit, Chicago Regional Office, with a copy to the Office of 
Chief Counsel of the Enforcement Division, no later than sixty (60) days from the date of 
the completion of the undertakings. 
 

11 
IV. 
In view of the foregoing, the Commission deems it necessary and appropriate in 
the public interest, and for the protection of investors to impose the sanctions agreed to in 
Respondents’ Offer. 
Accordingly, pursuant to Sections 19(h)(1) and 21C of the Exchange Act, it is 
hereby ORDERED that: 
A. Respondents EDGA, EDGX, and DE Route be, and hereby are, censured 
pursuant to Section 19(h)(1) of the Exchange Act; 
B. Respondent EDGA be, and hereby is, ordered pursuant to Section 21C of 
the Exchange Act to cease and desist from committing or causing any violations and any 
future violations of Sections 19(b) and 19(g) of the Exchange Act; 
C. Respondent EDGX be, and hereby is, ordered pursuant to Section 21C of 
the Exchange Act to cease and desist from committing or causing any violations and any 
future violations of Sections 19(b) and 19(g) of the Exchange Act and Rule 602(a)(3) 
thereunder; 
D. Respondent DE Route be, and hereby is, ordered pursuant to Section 21C 
of the Exchange Act to cease and desist from committing or causing any violations and 
any future violations of Section 19(g) of the Exchange Act and Rules 200(g) and 203(b) 
thereunder; and 
E. Respondents EDGA, EDGX, and DE Route shall comply with the 
Undertakings enumerated in Section III.G above. 
 
By the Commission. 
Elizabeth M. Murphy 
Secretary 
 
 

UNITED STATES OF AMERICA 

Before the 
SECURITIES AND EXCHANGE COMMISSION 

 
SECURITIES EXCHANGE ACT OF 1934 
Release No.  65556 / October 13, 2011 
 
ADMINISTRATIVE PROCEEDING 
File No.  3-14586 
 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -  x  
 
 
In the Matter of 
 
EDGX EXCHANGE, INC.,  
EDGA EXCHANGE, INC., and  
DIRECT EDGE ECN LLC 
 
Respondents. 
 
 

 :
:
:
:
:
:
:
:
:
:
: 

ORDER INSTITUTING 
ADMINISTRATIVE AND 
CEASE-AND-DESIST 
PROCEEDINGS PURSUANT 
TO SECTIONS 19(h) AND 21C 
OF THE SECURITIES 
EXCHANGE ACT OF 1934, 
MAKING FINDINGS, AND 
IMPOSING REMEDIAL 
SANCTIONS AND A CEASE-
AND-DESIST ORDER - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -  x 

 
I. 

The Securities and Exchange Commission (the “Commission”) deems it 
necessary and appropriate in the public interest and for the protection of investors that 
public administrative and cease-and-desist proceedings be, and hereby are, instituted 
pursuant to Sections 19(h)(1) and 21C of the Securities Exchange Act of 1934 
(“Exchange Act”) against EDGX Exchange, Inc. (“EDGX”), EDGA Exchange, Inc. 
(“EDGA”) (collectively, “Exchange” or the “Exchanges”), and Direct Edge ECN LLC 
(“DECN”) doing business as DE Route (“DE Route”) (collectively, “Respondents”). 

II.  

In anticipation of the institution of these proceedings, Respondents have 
submitted a joint Offer of Settlement (the “Offer”) which the Commission has determined 
to accept. Solely for the purpose of these proceedings and any other proceedings brought 
by or on behalf of the Commission, or to which the Commission is a party, and without 
admitting or denying the findings herein, except as to the Commission’s jurisdiction over 
them and the subject matter of these proceedings, which are admitted, Respondents 
consent to the entry of this Order Instituting Administrative and Cease-and-Desist 
Proceedings Pursuant to Sections 19(h) and 21C of the Securities Exchange Act of 1934, 
Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order 
(“Order”), as set forth below. 



2 

III. 

On the basis of this Order and Respondents’ Offer, the Commission finds that: 

A. Respondents 

1. EDGA is registered with the Commission as a national securities exchange 
pursuant to Section 6(a) of the Exchange Act and is a self-regulatory organization 
(“SRO”). Since July 2010, EDGA has operated as an all-electronic exchange. EDGA is 
located in Jersey City, New Jersey and currently trades U.S. equity securities. 

2. EDGX is registered with the Commission as a national securities exchange 
pursuant to Section 6(a) of the Exchange Act and is an SRO. Since July 2010, EDGX has 
operated as an all-electronic exchange. EDGX is located in Jersey City, New Jersey and 
currently trades U.S. equity securities. 

3. DE Route is a broker-dealer registered with the Commission pursuant to 
Section 15 of the Exchange Act. DE Route is both a facility of and the affiliated routing 
broker of EDGA and EDGX. DE Route is also a member of FINRA and the Exchanges. 
DE Route is located in Jersey City, New Jersey. 

B. Summary 

4. The National Market System is among the pillars of our economy and 
provides the foundation for investor confidence in the integrity and orderliness of our 
capital markets. National securities exchanges and the electronic quoting, routing, and 
execution platforms through which they operate are critical elements of the National 
Market System. To gain Commission approval to become registered as an exchange, an 
exchange operator must not only represent that it is able to meet its regulatory obligations 
but also demonstrate that it is organized to do so and has the capacity to carry out the 
purposes of the statutes, rules, and regulations upon which its registration is conditioned. 
Given the systemic risk that can result from the failure of an exchange to comply with 
these requirements, the operation of a national securities exchange carries with it among 
the most significant regulatory compliance obligations that are expected of any market 
participant. 

5. National securities exchanges are obligated to ensure that their order 
quoting, routing, and execution systems, compliance infrastructures, and communications 
platforms are developed, maintained, and governed to avoid material failures, outages, 
and other significant contingencies that could pose material risk to the National Market 
System and to the public interest. While some system outages inevitably will occur and 
not every outage is a violation of the federal securities laws, such outages, particularly 
when combined with significant other deficiencies in an exchange’s systems, processes, 
and controls, can present risks that, left unremediated, could cause harm to investors and 
other market participants. A national securities exchange must invest appropriate 
resources necessary to ensure the strength and integrity of its systems, processes, and 
controls, to comply with its own Commission-approved rules, to provide for adequate 
backup and failover systems, to prevent or react appropriately to significant system 



3 

outages and failures, and, ultimately, to ensure an adequate governance and oversight 
structure necessary for quality assurance, continuous improvement, and process 
measurement, monitoring, and control. 

6. This matter concerns the failure by EDGX, EDGA, and DE Route to 
comply with certain provisions of the Exchange Act, the rules and regulations thereunder, 
and each Exchange’s own rules. EDGA violated Sections 19(b) and 19(g) of the 
Exchange Act, EDGX violated Sections 19(b) and 19(g) of the Exchange Act and Rule 
602(a)(3) thereunder, and DE Route caused violations of Section 19(g) of the Exchange 
Act and violated Rules 200(g) and 203(b) thereunder.  These violations occurred against 
the backdrop of weaknesses in Respondents’ systems, processes, and controls.  

C. Discussion 

7. On May 7, 2009, EDGA and EDGX submitted to the Commission Form 1 
applications seeking registration as national securities exchanges under Section 6 of the 
Exchange Act. When the Exchanges applied for registration as national securities 
exchanges, each was operating as a separate trading platform of DECN,

Facts 

1 an alternative 
trading system (“ATS”).2

8. In an order dated March 12, 2010 (the “Approval Order”), the 
Commission granted the applications of EDGA and EDGX for registration as national 
securities exchanges.

 

3  The Approval Order that granted the Exchanges’ applications for 
registration conditioned their operation upon the satisfaction of several requirements, 
including that the Exchanges have adequate procedures and programs in place to 
effectively regulate the Exchanges, and, as noted in Commission Automation Review 
Policy (“ARP”) guidelines, to effectively process trades and maintain the confidentiality, 
integrity, and availability of the Exchanges’ systems.4

9. As required by the Approval Order, the Exchanges sent letters to the 
Commission’s Office of Compliance Inspections and Examinations (“OCIE”) and the 
Division of Trading and Markets (“TM”) on June 18 and 28, 2010, respectively, 
representing that each Exchange had adequate procedures and programs in place to 
effectively regulate the Exchange, and, as noted in Commission ARP guidelines, to 
process trades and maintain the confidentiality, integrity, and availability of the 

 

                                                 
1 Direct Edge ECN, LLC was formed in the State of Delaware on April 19, 2005. 

2  Rules 300–303 under the Exchange Act, 17 C.F.R. §§ 242.300–303. 

3 See In the Matter of the Applications of EDGX Exchange, Inc., and EDGA Exchange, Inc. for 
Registration as National Securities Exchanges: Findings, Opinion, and Order of the Commission, 
Exchange Act Release No. 34-61698 (Mar. 12, 2010), 75 FR 13151 (Mar. 18, 2010) (File Nos. 10-194 
and 10-196). 

4 Id. at 13167. 



4 

Exchange’s systems. Each Exchange commenced operating as a national securities 
exchange in July 2010. 

10. Following EDGA’s and EDGX’s commencement of operations as national 
securities exchanges, DECN ceased operations as an ATS and began to operate as a 
facility of the Exchanges doing business as DE Route. The Commission approved rules 
permitting DE Route to provide outbound order routing for the Exchanges and inbound 
order routing to EDGX from EDGA and to EDGA from EDGX, subject to certain 
conditions.5  In particular, the rules stated that DE Route would not engage in any 
business other than (a) its outbound router function, (b) its inbound router function, and 
(c) any other activities it may engage in as approved by the Commission.6 Until 2011, 
neither Exchange had sought Commission approval to expand the activities of DE Route, 
and the Commission had not approved any other DE Route activities. 

11. Prior to November 8, 2010, EDGA and EDGX made certain code changes 
related to the processing of customer orders. The code changes addressed compliance 
with amendments to Regulation SHO (prior to the extension of the compliance date for 
those amendments) as well as several enhancements. While certain code changes were 
subjected to testing prior to being rolled out on November 8, 2010, the code changes at 
issue were not subjected to testing. When the markets opened on November 8, 2010, the 
untested code changes caused an operational error whereby EDGA and EDGX systems 
increased the number of shares in orders submitted by three members, which resulted in 
these orders being executed for more than their intended amount. The Exchanges 
instructed the affected members to trade out of the resulting overfilled positions and to 
submit a claim for any losses to the Exchanges. One member traded out of the overfilled 
executions and submitted a claim for a loss in the amount of $105,000. The other two 
members refused to assume the overfilled positions and, as a result, EDGA and EDGX 
decided that DE Route would assume and liquidate the overfilled positions of the two 
members through its error account. In addition to the positions assumed in response to the 
November 8, 2010 operational error, Respondents assumed positions in other securities to 
facilitate the resolution of overfilled or error positions that separately arose from July 
through November 2010. 

The November 8, 2010 Systems Incident 

12. The assumption of positions to facilitate the resolution of overfilled or 
error positions was not permitted under the rules of the Exchanges, and the Exchanges 
failed to file proposed rule amendments permitting them to assume member positions. 
The use of the DE Route error account to engage in trading activity was not permitted by 
the Exchanges’ rules, and neither Exchange had sought Commission approval to expand 
the activities of DE Route beyond those listed in paragraph 10 above. Section 19(g)(1) of 
the Exchange Act requires every exchange to comply with the provisions of the 
Exchange Act, the rules and regulations thereunder, and its own rules. Section 19(b)(1) of 
                                                 
5 Id. at 13165. 

6 EDGA Rules 2.11–12 and EDGX Rules 2.11–12. 



5 

the Exchange Act requires an exchange to file proposed rule changes with the 
Commission, and Rule 19b-4 thereunder provides that any “stated policy, practice or 
interpretation” of an exchange shall be deemed a “proposed rule change” unless “it is 
reasonably and fairly implied by an existing rule” of the exchange. 

13. From November 8 through November 10, 2010, DE Route traded through 
its error account to unwind the November 8, 2010 positions. In attempting to liquidate 
these positions as quickly as practicable, DE Route engaged in short selling activity. DE 
Route did not mark its short orders as short or marked them long and did not locate or 
document the availability of securities to borrow prior to effecting these short sales. 
Regulation SHO requires broker dealers to mark orders in all equity securities “long” or 
“short” in accordance with Rule 200(g) and also requires executing broker-dealers to 
meet the locate requirement under Rule 203(b) prior to effecting short sales. See

14. The November 8, 2010 operational error caused an estimated 27 million 
shares of excess trading for three members with a value of roughly $773 million across 
approximately one thousand symbols. The Exchanges realized a net loss of 
approximately $2.1 million in connection with the positions that were assumed and 
liquidated. Respondents did not discuss the operational error with Commission staff until 
after they were contacted by TM on November 10, 2010. 

 17 
C.F.R. §§ 242.200(g), 203(b). 

15. On April 13, 2011, at approximately 3:19 p.m., an EDGX database 
administrator inadvertently entered a command that effectively disabled all other 
connections to EDGX’s production database, disrupting the Exchange’s ability to process 
incoming orders, modifications, and cancellations. This incident occurred, in part, due to 
levels of employee access to production systems inconsistent with the principle of “least 
privilege,” as well as a lack of visual differentiation between production and 
nonproduction environments.

The April 13, 2011 Systems Incident 

7

16. Immediately thereafter, Respondents’ personnel began receiving internal 
system alerts. At 3:23 p.m., reports to EDGX’s trade desk indicated that trades were not 
being reported to the Securities Information Processors (“SIP”), which publish market 
data to the public. Between 3:24 and 3:34 p.m., EDGX received at least eleven self-help 
declarations from other trading centers.

 

8

                                                 
7 Under the “least privilege” principle, each employee receives the least access necessary to perform his or 
her job responsibilities.   

 At 3:29 p.m., EDGX sent a notice to its 
members that it was “investigating a potential connectivity issue” and would return with 
an update shortly. By approximately 3:35 p.m., EDGX’s help desk had received calls 
from several of its members requesting cancellations, and it advised those members that it 
was experiencing issues and that the members should route away from EDGX. EDGX 

8 Regulation NMS provides a “self-help” remedy that allows trading centers to bypass the quotations of a 
trading center that fails to provide immediate responses to incoming orders. 



6 

removed its quotations from the SIP at 3:43 p.m., approximately twenty-four minutes 
after the systems incident occurred. EDGX did not “immediately” identify its quotations 
as manual quotations when it had reason to believe that it was not capable of displaying 
automated quotations. 

17. As a result of the April 13, 2011 systems incident, several members of 
EDGX submitted claims for a total of more than $668,000 in losses. Respondents 
promptly notified the Commission staff of the incident. 

18. After the events discussed above, Respondents, with substantial assistance 
from external experts, engaged in an examination of their technological infrastructure in 
light of, among other things, Commission ARP guidelines, for purposes of ensuring that 
their procedures and programs are designed to prevent, and if not prevent, to 
appropriately address, systems errors in a manner consistent with their responsibilities as 
exchange operators. The Exchanges submitted to the Commission staff a Plan of 
Remediation, which they promptly began to implement. Among other things, the 
Exchanges retained multiple consultants and purchased new hardware, software licenses 
and related support systems to implement the Plan of Remediation.  Remedial acts and 
other enhancements undertaken by Respondents include, but are not limited to, engaging 
outside counsel and consultants to conduct a review of Respondents’ compliance and 
operational policies, augmenting the ranks of staff and management, and making 
improvements to their compliance functions, information technology control 
environments, and information systems. 

Systems Procedures and Programs 

D. Violations 

19. Section 19(b)(1) of the Exchange Act requires an exchange to file 
proposed rule changes with the Commission, and Rule 19b-4 provides that any “stated 
policy, practice, or interpretation” of an exchange shall be deemed a “proposed rule 
change” unless “it is reasonably and fairly implied by an existing rule” of the exchange. 
An exchange must file a proposed rule change with the Commission on Form 19b-4 and, 
in turn, the Commission publishes the proposed rule in the Federal Register to allow all 
interested parties to comment upon it. Pursuant to Section 19(b)(2), the Commission will 
approve the proposed rule change only upon a finding that it “is consistent with the 
requirements of [the Exchange Act] and the rules and regulations thereunder.” 

Section 19(b)(1) of the Exchange Act 

20. Each Exchange violated Section 19(b)(1) of the Exchange Act by not 
filing a proposed rule change concerning the use of the DE Route error account to assume 
overfilled or error positions, including those positions arising from the systems incident 
on November 8, 2010. 



7 

21. Section 19(g)(1) of the Exchange Act requires every exchange to comply 
with the provisions of the Exchange Act, the rules and regulations thereunder, and its 
own rules, and, absent reasonable justification or excuse, to enforce compliance by its 
members with such provisions. 

Section 19(g)(1) of the Exchange Act 

22. Each Exchange violated Section 19(g)(1) of the Exchange Act by not 
complying with its own rules when it allowed DE Route to engage in activities not 
approved by the Commission. DE Route conducted trading beyond the outbound and 
inbound routing on behalf of the Exchanges that was filed in the Exchanges’ rules and 
approved by the Commission and caused the Exchanges’ violations of Section 19(g) of 
the Exchange Act. 

23. Rule 200(g) of Regulation SHO requires that a broker or dealer must mark 
all sell orders of any equity security “long” or “short” or “short exempt.” 

17 C.F.R. §§ 242.200(g) and 203(b) (Regulation SHO) 

24. Rule 203(b) of Regulation SHO provides that a broker or dealer may not 
effect a short sale in any equity security for its own account, unless the broker or dealer 
has borrowed the security, has entered into a bona fide agreement to borrow the security, 
or otherwise has reasonable grounds to believe that the security can be borrowed so that it 
can be delivered on the date it is due. Regulation SHO also requires that a broker or 
dealer document compliance with these requirements. 

25. DE Route violated Rules 200(g) and 203(b) of Regulation SHO when, in 
liquidating the positions assumed in connection with the November 8, 2010 systems 
incident, DE Route failed to mark certain orders “short,” mismarked other short sale 
orders “long,” and did not locate the shorted stock prior to effecting these short sales. 

26. The definition of an automated trading center contained in Rule 600(b)(4) 
of Regulation NMS requires that such a trading center immediately identify its quotations 
as manual quotations whenever it has reason to believe that it is not capable of displaying 
automated quotations. 

17 C.F.R. § 242.602 (Regulation NMS) 

27. Rule 602(a)(1)(i) of Regulation NMS provides that “[e]ach national 
securities exchange shall at all times such exchange is open for trading, collect, process, 
and make available to vendors the best bid, the best offer, and aggregate quotation sizes 
for each subject security listed or admitted to unlisted trading privileges which is 
communicated on any national securities exchange by any responsible broker or dealer.” 

28. Rule 602(a)(3)(i) of Regulation NMS provides that “[i]f, at any time a 
national securities exchange is open for trading, such exchange determines . . . that the 
level of trading activities or the existence of unusual market conditions is such that the 
exchange is incapable of collecting, processing, and making available to vendors the data 



8 

for a subject security required to be made available pursuant to paragraph (a)(1) of this 
section in a manner that accurately reflects the current state of the market on such 
exchange, such exchange shall immediately notify all specified persons of that 
determination.” 

29. EDGX, which displayed quotations representing that it was operating as 
an automated trading center, violated Rule 602(a)(3) of Regulation NMS on April 13, 
2011, by not immediately notifying all specified persons when it determined that it was 
not capable of displaying quotations that accurately reflected the current state of the 
market on EDGX. 

E. Findings 

30. Based on the foregoing, the Commission finds that EDGA violated 
Sections 19(b) and 19(g) of the Exchange Act, EDGX violated Sections 19(b) and 19(g) 
of the Exchange Act and Rule 602(a)(3) thereunder, and DE Route caused violations of 
Section 19(g) of the Exchange Act and violated Rules 200(g) and 203(b) thereunder. 

F. Respondents’ Remedial Efforts 

31. In determining to accept the Offer, the Commission considered remedial 
acts undertaken by Respondents and cooperation afforded the Commission staff. 

G. Undertakings 

Respondents have undertaken to:9

1. Implement the measures set forth in the Plan of Remediation (“the Plan”), 
substantially in accordance with the schedule set forth in the Plan.  To the extent that a 
non-material variation from the Plan is necessary, Respondents shall consult with TM 
and OCIE.  The measures encompassed by the Plan include: 

 

(a) enhancing EDGA’s and EDGX’s policies and procedures with respect to 
systems development and maintenance that include automated testing; 
testing of new code and functions as they are introduced; testing of all 
software changes; end-user testing; audits of information systems; and 
controls over and oversight of systems changes; 

 (b) implementing the following programs: 

(i) an enterprise risk management framework; 

(ii) an information security program, including the hiring of an 
information security director and the appointment of dedicated 
program resources; 

                                                 
9 Respondents have begun or completed many of the Undertakings. 



9 

(iii) enhancements to Respondents’ information technology control 
framework and underlying controls, including: 

(1) a policy designed to restrict employee access to production 
trading system components except to the extent necessary, 
including the principle of least privilege user access; 

(2)  measures to provide for greater differentiation of 
production and nonproduction environments; and 

(3)  enhancements to their systems development methodology 
and quality assurance practices. 

 (c) outsourcing the Exchanges’ internal audit function regarding information 
systems; 

(d) engaging outside counsel to conduct a retrospective review of the 
circumstances leading to the systems incidents at the Exchanges and the 
submission of the Plan; and 

(e) hiring a Corporate Training Director to create and assure a sustainable and 
productive annual training program for all Direct Edge employees, which 
shall include, but not be limited to, training regarding the federal securities 
laws and regulations, including Regulation NMS and Regulation SHO; the 
rules of EDGA and EDGX; and Respondents’ policies and procedures. 

2. Hire a Chief Compliance Officer (“CCO”) who reports directly to the 
Chief Executive Officer of the Exchanges, with dotted line reporting to the Exchanges’ 
Regulatory Oversight Committees and Boards.  The CCO’s responsibilities include 
implementing policies and procedures reasonably designed to ensure that Respondents 
fulfill their regulatory and compliance obligations; coordinating with the Chief 
Information Officer to implement policies and procedures reasonably designed to ensure 
the quality, integrity, security, and stability of Respondents’ information technology and 
information security control environments; and serving as the primary point of contact for 
the Commission staff regarding Respondents’ regulatory obligations.  

3. Develop procedures to compensate Exchange members for losses incurred 
as a result of Exchange activities only as permitted by Respondents’ rules. 

4. Submit a rule filing to the Commission that satisfies the requirements of 
Form 19b-4 to change the operational scope of DE Route’s error account. 

5. Engage outside counsel to conduct a comprehensive review of the 
Respondents’ policies and procedures for compliance with the federal securities laws, 
rules and regulations thereunder, and the Respondents’ rules and identify areas for 
enhancement. 



10 

6. With respect to each of the reviews identified in Paragraphs 1(d) and 5 of 
this Section III.G: 

(a) The Respondents shall require Counsel to submit written 
recommendations for improvement to the Boards. The Boards shall adopt 
the recommendations made by Counsel, subject to Section III.G.6(b) 
below, and shall take steps necessary to commence implementation of 
such recommendations. 

(b) If the Boards determine that any of the recommendations are unduly 
burdensome or impractical, they may propose an alternative reasonably 
designed to accomplish the same objectives, and they shall submit any 
such alternative to Counsel. If, upon evaluating the Boards’ proposal, 
Counsel determines that the suggested alternative is reasonably designed 
to accomplish the same objectives as the recommendations in question, 
then Counsel shall approve the suggested alternative and amend his/her 
recommendations.  If Counsel determines that the suggested alternative is 
not reasonably designed to accomplish the same objectives, Counsel shall 
reject the Boards’ proposal. In the event that the Boards and the Counsel 
jointly determine that they are unable to agree on an alternative proposal, 
Respondents and Counsel shall jointly confer with TM and OCIE to 
resolve the matter. 

7. Expend sufficient funds to permit Respondents’ regulatory personnel to 
discharge the Undertakings referenced herein, including, but not limited to, providing 
adequate funds for the retention of outside counsel and/or professionals. 

8. To the extent that any claims for loss associated with the November 8, 
2010 and April 13, 2011 systems incidents have not yet been paid, ensure that they are 
paid consistent with the rules of EDGX and EDGA in effect at those times. 

9. When each Exchange’s Chief Executive Officer concludes that, to the best 
of his or her knowledge based on reasonable inquiry, EDGX, EDGA, and DE Route have 
achieved all of the Undertakings set forth in this Order, he or she shall certify, in writing, 
compliance with the Undertaking(s) set forth above.  Such certifications shall be 
reviewed and accepted for filing by the Audit Committee of the Board of each Exchange.  
The certification shall identify the Undertaking(s), provide written evidence of 
compliance in the form of a narrative, and be supported by exhibits sufficient to 
demonstrate compliance. The Commission staff may make reasonable requests for further 
evidence of compliance, and Respondent agrees to provide such evidence. The 
certification and supporting material shall be submitted to Kathryn A. Pyszka, Assistant 
Director, Market Abuse Unit, Chicago Regional Office, with a copy to the Office of 
Chief Counsel of the Enforcement Division, no later than sixty (60) days from the date of 
the completion of the undertakings. 

 



11 

IV. 

In view of the foregoing, the Commission deems it necessary and appropriate in 
the public interest, and for the protection of investors to impose the sanctions agreed to in 
Respondents’ Offer. 

Accordingly, pursuant to Sections 19(h)(1) and 21C of the Exchange Act, it is 
hereby ORDERED that: 

A. Respondents EDGA, EDGX, and DE Route be, and hereby are, censured 
pursuant to Section 19(h)(1) of the Exchange Act; 

B. Respondent EDGA be, and hereby is, ordered pursuant to Section 21C of 
the Exchange Act to cease and desist from committing or causing any violations and any 
future violations of Sections 19(b) and 19(g) of the Exchange Act; 

C. Respondent EDGX be, and hereby is, ordered pursuant to Section 21C of 
the Exchange Act to cease and desist from committing or causing any violations and any 
future violations of Sections 19(b) and 19(g) of the Exchange Act and Rule 602(a)(3) 
thereunder; 

D. Respondent DE Route be, and hereby is, ordered pursuant to Section 21C 
of the Exchange Act to cease and desist from committing or causing any violations and 
any future violations of Section 19(g) of the Exchange Act and Rules 200(g) and 203(b) 
thereunder; and 

E. Respondents EDGA, EDGX, and DE Route shall comply with the 
Undertakings enumerated in Section III.G above. 

 

By the Commission. 

Elizabeth M. Murphy 
Secretary