Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Pricing for Co-Location Services, 67422-67423 [2010-27663]

Download as PDF 67422 Federal Register / Vol. 75, No. 211 / Tuesday, November 2, 2010 / Notices options business of its sole members, it is not technically the DOEA for such firms. Second, the 17d–2 Agreement addresses only a firm’s public options business. As such, a firm that conducts only a proprietary options business, irrespective of whether such firm is a member of FINRA and another SRO, would not be covered by the 17d–2 Agreement, and FINRA would not technically be the DOEA. FINRA stated that although its regulatory responsibilities are more limited for a firm that does not conduct a public options business, it still retains regulatory responsibilities over the firm’s options activities. III. Discussion and Commission Findings hsrobinson on DSK69SOYB1PROD with NOTICES After carefully reviewing the proposed rule change, the Commission finds that the proposal is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities association.16 In particular, the Commission finds that the proposal is consistent with Section 15A(b)(5) of the Act,17 which requires that a national securities association have rules that provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. Further, the Commission finds that the proposal is consistent with Section 15A(b)(6) of the Act,18 which requires, among other things, that FINRA rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. The Commission believes that removal of the TAF exemption for transactions in exchange listed options effected by members for whom FINRA is not the DOEA is consistent with the Act because it more properly aligns the imposition of the TAF with those situations where FINRA has regulatory responsibility over the member firm. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,19 that the proposed rule change (SR–FINRA– 2010–046) be, and hereby is, approved.20 16 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 17 15 U.S.C. 78o–3(b)(5). 18 15 U.S.C. 78o–3(b)(6). 19 15 U.S.C. 78s(b)(2). 20 FINRA states it will implement the proposed rule change on the first day of the month following Commission approval. FINRA will announce the implementation of the proposed rule change in a VerDate Mar<15>2010 18:39 Nov 01, 2010 Jkt 223001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–27671 Filed 11–1–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–63190; File No. SR–BX– 2010–069] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Pricing for Co-Location Services October 27, 2010. 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 October 25, 2010, NASDAQ OMX BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) 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 BX. Pursuant to Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b– 4(f)(2) thereunder,4 BX has designated this proposal as establishing or changing a due, fee, or other charge, which renders the proposed rule change effective upon filing. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change BX proposes to codify [sic] pricing for co-location services. BX will implement the proposed change immediately. The text of the proposed rule change is available at https:// nasdaqomxbx.cchwallstreet.com, at BX’s principal office, on the Commission’s Web site at https:// www.sec.gov, 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, BX included statements concerning the Regulatory Notice to be published no later than 30 days following Commission approval. 21 17 CFR 200.30–3(a)(12). 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). PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 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. BX 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 is proposing to modify its fee schedule 5 for co-location services.6 These modifications are summarized below: First, as a result of the entry of the Direct Edge and BATS Y exchanges into the public market and the availability of other data feeds, the Exchange is implementing and modifying its telecommunications installation and connectivity fees to accommodate these data linkages for co-located customers. The new fees are: (1) $125 per-month fee for connectivity to the Arca Best Bid and Offer feed; (2) a $1,500 per-month fee for connectivity to the new BATS Y exchange; and (3) a one-time fee of $1000 for the installation of telecommunications connectivity for the Direct Edge exchange, along with a permonth fee of $2500 for each of its two markets, EDGA and EDGX. In connection with foregoing, the Exchange notes that its installation fee for Direct Edge is equal to that currently charged for installation of SIAC, CME,7 and BATS connectivity, and that the monthly rates proposed are based on the anticipated bandwidth needed to accommodate a particular fee and are similar to connectivity fees imposed by other vendors.8 Next, to provide additional flexibility for customers to select only the equipment they need, the Exchange proposes to separate its current combined $1750 installation fee for cooling fans and perforated tiles into separate fees of $1,500 for the fans and $250 for the tiles. 5 This schedule includes modifications made by SR–BX–2010–068, filed with the Commission on October 14, 2010. 6 Co-location services are a suite of hardware, power, telecommunication and other ancillary products and services that allow users to place their trading and communications equipment in close physical proximity to the quoting and execution facilities of the Exchange. 7 The Exchange is also removing from the fee schedule an incorrect duplicate $1000 installation fee for CME market data connectivity. 8 Separate fees for market data are charged independently by individual markets. E:\FR\FM\02NON1.SGM 02NON1 Federal Register / Vol. 75, No. 211 / Tuesday, November 2, 2010 / Notices hsrobinson on DSK69SOYB1PROD with NOTICES Further, in the area of providing internet bandwidth to users, the Exchange, responding to decreased demand for lower-level bandwidth options, is eliminating its current 256kb, 500kb, and1.5Mb options and replacing them with new 3Mb, 4Mb, and 5Mb options priced at $700, $900, and $1,100 per-month respectively. Finally, the Exchange is offering various services related to hardware installation, security and storage including: a custom installation fee, which will vary depending upon cost, for installing customized equipment to meet individual customer needs; cabinet caging, a metal security fencing option to protect customer equipment at a monthly rate of $3,000, with installation fees individually determined by the size and complexity of the equipment to be caged; and, lastly, a monthly cabinet equipment storage fee in the amount of $500. This storage fee differs from the equipment storage fee of $100 in the current fee schedule, which relates to temporary storage of equipment by the Exchange itself rather than in a customer controlled cabinet. As with all the Exchange’ [sic] colocation offerings, use of the above products and services is completely voluntary, and all products and services are available on a non-discriminatory basis. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,9 in general, and with Section 6(b)(5) of the Act,10 in particular, in that the proposal is designed to prevent fraudulent and manipulative acts and practices, 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 and a national market system, and, in general, to protect investors and the public interest. In particular, the filing codifies and makes transparent uniform fees imposed for co-location services. In addition, the Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,11 in general, and with Section 6(b)(4) of the Act,12 in particular, in that it provides for the 9 15 U.S.C. 78f. 10 15 U.S.C. 78f(b)(5). 11 15 U.S.C. 78f. 12 15 U.S.C. 78f(b)(4). VerDate Mar<15>2010 18:39 Nov 01, 2010 equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which the Exchange operates or controls. In particular, the Exchange notes that the use of colocation services is entirely voluntary and made available on a nondiscriminatory basis. B. Self-Regulatory Organization’s Statement on Burden on Competition BX does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. 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)(ii) of the Act.13 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or 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, as amended, is consistent with the Act. Comments may be submitted by any of the following methods: Jkt 223001 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–BX–2010–069. 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 (https://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, 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–BX– 2010–069 and should be submitted on or before November 23, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–27663 Filed 11–1–10; 8:45 am] BILLING CODE 8011–01–P Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–BX–2010–069 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 13 15 PO 00000 U.S.C. 78s(b)(3)(A)(ii). Frm 00080 Fmt 4703 Sfmt 9990 67423 14 17 E:\FR\FM\02NON1.SGM CFR 200.30–3(a)(12). 02NON1

Agencies

[Federal Register Volume 75, Number 211 (Tuesday, November 2, 2010)]
[Notices]
[Pages 67422-67423]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-27663]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63190; File No. SR-BX-2010-069]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Modify 
Pricing for Co-Location Services

October 27, 2010.
    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 October 25, 2010, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'') 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 BX. Pursuant to Section 19(b)(3)(A)(ii) of 
the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ BX has designated this 
proposal as establishing or changing a due, fee, or other charge, which 
renders the proposed rule change effective upon filing. The Commission 
is publishing this notice to solicit comments on the proposed rule 
change from interested persons.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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

    BX proposes to codify [sic] pricing for co-location services. BX 
will implement the proposed change immediately. The text of the 
proposed rule change is available at https://nasdaqomxbx.cchwallstreet.com, at BX's principal office, on the 
Commission's Web site at https://www.sec.gov, 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, BX 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. BX 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 is proposing to modify its fee schedule \5\ for co-
location services.\6\ These modifications are summarized below:
---------------------------------------------------------------------------

    \5\ This schedule includes modifications made by SR-BX-2010-068, 
filed with the Commission on October 14, 2010.
    \6\ Co-location services are a suite of hardware, power, 
telecommunication and other ancillary products and services that 
allow users to place their trading and communications equipment in 
close physical proximity to the quoting and execution facilities of 
the Exchange.
---------------------------------------------------------------------------

    First, as a result of the entry of the Direct Edge and BATS Y 
exchanges into the public market and the availability of other data 
feeds, the Exchange is implementing and modifying its 
telecommunications installation and connectivity fees to accommodate 
these data linkages for co-located customers. The new fees are: (1) 
$125 per-month fee for connectivity to the Arca Best Bid and Offer 
feed; (2) a $1,500 per-month fee for connectivity to the new BATS Y 
exchange; and (3) a one-time fee of $1000 for the installation of 
telecommunications connectivity for the Direct Edge exchange, along 
with a per-month fee of $2500 for each of its two markets, EDGA and 
EDGX. In connection with foregoing, the Exchange notes that its 
installation fee for Direct Edge is equal to that currently charged for 
installation of SIAC, CME,\7\ and BATS connectivity, and that the 
monthly rates proposed are based on the anticipated bandwidth needed to 
accommodate a particular fee and are similar to connectivity fees 
imposed by other vendors.\8\
---------------------------------------------------------------------------

    \7\ The Exchange is also removing from the fee schedule an 
incorrect duplicate $1000 installation fee for CME market data 
connectivity.
    \8\ Separate fees for market data are charged independently by 
individual markets.
---------------------------------------------------------------------------

    Next, to provide additional flexibility for customers to select 
only the equipment they need, the Exchange proposes to separate its 
current combined $1750 installation fee for cooling fans and perforated 
tiles into separate fees of $1,500 for the fans and $250 for the tiles.

[[Page 67423]]

    Further, in the area of providing internet bandwidth to users, the 
Exchange, responding to decreased demand for lower-level bandwidth 
options, is eliminating its current 256kb, 500kb, and1.5Mb options and 
replacing them with new 3Mb, 4Mb, and 5Mb options priced at $700, $900, 
and $1,100 per-month respectively.
    Finally, the Exchange is offering various services related to 
hardware installation, security and storage including: a custom 
installation fee, which will vary depending upon cost, for installing 
customized equipment to meet individual customer needs; cabinet caging, 
a metal security fencing option to protect customer equipment at a 
monthly rate of $3,000, with installation fees individually determined 
by the size and complexity of the equipment to be caged; and, lastly, a 
monthly cabinet equipment storage fee in the amount of $500. This 
storage fee differs from the equipment storage fee of $100 in the 
current fee schedule, which relates to temporary storage of equipment 
by the Exchange itself rather than in a customer controlled cabinet.
    As with all the Exchange' [sic] co-location offerings, use of the 
above products and services is completely voluntary, and all products 
and services are available on a non-discriminatory basis.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\9\ in general, and with 
Section 6(b)(5) of the Act,\10\ in particular, in that the proposal is 
designed to prevent fraudulent and manipulative acts and practices, 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 and a national market system, and, 
in general, to protect investors and the public interest. In 
particular, the filing codifies and makes transparent uniform fees 
imposed for co-location services.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In addition, the Exchange believes that the proposed rule change is 
consistent with the provisions of Section 6 of the Act,\11\ in general, 
and with Section 6(b)(4) of the Act,\12\ in particular, in that it 
provides for the equitable allocation of reasonable dues, fees and 
other charges among members and issuers and other persons using any 
facility or system which the Exchange operates or controls. In 
particular, the Exchange notes that the use of co-location services is 
entirely voluntary and made available on a non-discriminatory basis.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    BX does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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)(ii) of the Act.\13\ 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. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-BX-2010-069 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-BX-2010-069. 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 (https://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, 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-BX-2010-069 and should be 
submitted on or before November 23, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-27663 Filed 11-1-10; 8:45 am]
BILLING CODE 8011-01-P
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