Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Retroactively Apply Recently-Reduced Port Fees, 7597-7599 [2016-02837]

Download as PDF asabaliauskas on DSK9F6TC42PROD with NOTICES2 Federal Register / Vol. 81, No. 29 / Friday, February 12, 2016 / Notices Form 1. An exchange that seeks an exemption from registration based on limited trading volume also must apply for such exemption on Form 1. Rule 6a– 2 under the Act requires registered and exempt exchanges: (1) To amend the Form 1 if there are any material changes to the information provided in the initial Form 1; and (2) to submit periodic updates of certain information provided in the initial Form 1, whether such information has changed or not. The information required pursuant to Rules 6a–1 and 6a–2 is necessary to enable the Commission to maintain accurate files regarding the exchange and to exercise its statutory oversight functions. Without the information submitted pursuant to Rule 6a–1 on Form 1, the Commission would not be able to determine whether the respondent has met the criteria for registration (or an exemption from registration) set forth in Section 6 of the Exchange Act. The amendments and periodic updates of information submitted pursuant to Rule 6a–2 are necessary to assist the Commission in determining whether a national securities exchange or exempt exchange is continuing to operate in compliance with the Exchange Act. Initial filings on Form 1 by new exchanges are made on a one-time basis. The Commission estimates that it will receive approximately one initial Form 1 filing per year and that each respondent would incur an average burden of 880 hours to file an initial Form 1 at an average internal labor cost per response of approximately $302,694. Therefore, the Commission estimates that the annual burden for all respondents to file the initial Form 1 would be 880 hours (one response/ respondent × one respondents × 880 hours/response) and an internal compliance cost of $302,694 (one response/respondent × one respondents × $302,694/response). There currently are 18 entities registered as national securities exchanges. The Commission estimates that each registered or exempt exchange files nine amendments or periodic updates to Form 1 per year, incurring an average burden of 25 hours to comply with Rule 6a–2. The SEC estimates that the average internal labor cost for a national securities exchange per response would be approximately $9,445. The Commission estimates that the annual burden for all respondents to file amendments and periodic updates to the Form 1 pursuant to Rule 6a–2 is 4,050 hours (18 respondents × 25 hours/ response × nine responses/respondent per year) and an internal compliance cost of $1,530,090 (18 respondents × VerDate Sep<11>2014 17:38 Feb 11, 2016 Jkt 238001 $9,445/response × nine responses/ respondent per year). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. The public may view background documentation for this information collection at the following Web site, www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Shagufta_ Ahmed@omb.eop.gov; and (ii) Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or by sending an email to: PRA_ Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: February 8, 2016. Robert W. Errett, Deputy Secretary. [FR Doc. 2016–02833 Filed 2–11–16; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–77077; File No. SR– NASDAQ–2016–014] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Retroactively Apply Recently-Reduced Port Fees February 8, 2016 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 January 29, 2016, The NASDAQ Stock Market LLC (‘‘Nasdaq’’) 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 Nasdaq. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 2 17 PO 00000 U.S.C. 78s(b)(1). CFR [sic] § 240.19b–4. Frm 00101 Fmt 4703 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Nasdaq proposes to retroactively apply recently-reduced port fees charged to members and non-members for ports used to enter orders into Nasdaq systems, in connection with the use of the FIX, RASH, and OUCH trading protocols under Nasdaq Rules 7015(b) and (g) beginning January 4, 2016. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, Nasdaq 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. Nasdaq 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 SECURITIES AND EXCHANGE COMMISSION 1 15 7597 Sfmt 4703 The purpose of the proposed rule change is to apply recently-reduced port fees charged to members and nonmembers for ports used to enter orders into Nasdaq systems, in connection with the use of the FIX, RASH, and OUCH trading protocols under Nasdaq Rules 7015(b) and (g) during the period from January 4, 2016 to January 19, 2016. Effective January 4, 2016, Nasdaq increased fees for FIX Ports under Rule 7015(b) and for RASH and OUCH Ports under Rule 7015(g) from $550 per port, per month to $575 per port, per month.3 Nasdaq increased the fees to offset costs associated with upgrading these ports with new field-programmable gate array (‘‘FPGA’’) technology, which is a hardware-delivery mechanism that provides improved performance in terms of predictability.4 Nasdaq implemented the new FPGA hardware 3 See SR–NASDAQ–2016–001, which was withdrawn by Nasdaq on January 19, 2016 (available at https://nasdaq.cchwallstreet.com/ NASDAQ/pdf/nasdaq-filings/2016/SR–NASDAQ– 2016–001.pdf). 4 FPGA hardware is able to process more data packets during peak market conditions without the introduction of variable queuing latency, which improves the predictability of telecommunications ports over non-FPGA hardware and thereby adds value to the user. E:\FR\FM\12FEN1.SGM 12FEN1 7598 Federal Register / Vol. 81, No. 29 / Friday, February 12, 2016 / Notices in mid-December 2015 and increased the related port fees on January 4, 2016.5 Nasdaq recently encountered a few unforeseen minor, but not easily rectifiable, issues with the new implementation that potentially could have a greater impact on the market. As a consequence, Nasdaq determined that the risk associated with keeping the FPGA technology in terms of potential disruption to trading outweighed the benefit provided in terms of increased performance. Effective January 7, 2016, Nasdaq removed the FPGA hardware and reverted all FIX, RASH, and OUCH ports to the infrastructure that was in place prior to the upgrade to those ports. Nasdaq also filed a rule change with the Commission to reduce the fees assessed for FIX, RASH, and OUCH ports back to their lower levels of $550 per port, per month, which was effective January 19, 2016.6 Nasdaq proposes to apply the reduced fees of $550 per port, per month during the period from January 4, 2016 to their reduction on January 19, 2016, effectively eliminating any fee increase for FIX, RASH, and OUCH ports. Subscribers to the affected ports did not enjoy the benefit of the improved hardware for any significant time, as the issues with the ports began to manifest themselves on December 30, 2015 up to the point at which Nasdaq determined to remove the hardware and revert the ports back to the infrastructure in place before. Thus, Nasdaq believes that it is inappropriate to apply the higher fees at any point during January 2016.7 2. Statutory Basis This proposal is consistent with the provisions of section 6 of the Act,8 in general, and with sections 6(b)(4) and 6(b)(5) of the Act,9 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 Nasdaq operates or controls, and is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable 5 See note 3 above. SR–NASDAQ–2016–007, which has not yet been published in the Federal Register (available at https://nasdaq.cchwallstreet.com/NASDAQ/pdf/ nasdaq-filings/2016/SR–NASDAQ–2016–007.pdf). The Commission notes that this filing was subsequently withdrawn, because it was deemed unnecessary. Nasdaq’s withdrawal of SR– NASDAQ–2016–001 effectively caused the rule text to revert to the lower fees that were in place prior to January 4, 2016. See note 3. 7 Nasdaq bills in arrears for the connectivity provided under Rule 7015. Thus, subscribers have not yet been billed at the higher rate in place from January 4, 2016 to January 19, 2016. 8 15 U.S.C. 78f. 9 15 U.S.C. 78f(b)(4) and (5). asabaliauskas on DSK9F6TC42PROD with NOTICES2 6 See VerDate Sep<11>2014 17:38 Feb 11, 2016 Jkt 238001 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; and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. Retroactively applying the lower fees that were assessed prior to the upgrade to the FIX, RASH and OUCH ports effective January 4, 2016 is reasonable because the improved hardware did not provide a trouble-free benefit to subscribers for a significant time during the month of January 2016. Nasdaq did not provide an improved service for the ports in return for the increased fees paid during the period from January 4, 2016 to their reduction on January 19, 2016. The basis for the increased fees was the costs associated with purchasing hardware (capital expenditures) and supporting and maintaining the infrastructure (operating expenditures) for the FPGA enhancement. Thus, retroactively applying the reduced pre-upgrade fee is reasonable. Applying the lower pre-upgrade fees retroactively is both an equitable allocation and not unfairly discriminatory because it will apply uniformly to all market participants that subscribed to FIX Ports under Rule 7015(b), and OUCH and RASH Ports under Rule 7015(g) during the timeframe of January 4, 2016 to January 19, 2016 based on the number of such ports subscribed. Accordingly, all subscribers to the ports under Rule 7015(b) and (g) will be assessed the fees in place prior to the increase, since they did not realize a significant and troublefree benefit from the hardware. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change will not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. In terms of inter-market competition, Nasdaq notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. Nasdaq proposes to retroactively apply a lower fee since it did not provide the improved connectivity trouble-free for a significant time. Thus, PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 Nasdaq does not believe that proposal places any burden on competition, but rather reduces fees assessed subscribers to a service, which will help maintain Nasdaq’s competitiveness among equities markets. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to section 19(b)(3)(A) of the Act 10 and Rule 19b–4(f)(6) thereunder.11 In its filing, Nasdaq requested that the Commission waive the 30-day operative delay so that Nasdaq may implement the fee reduction prior to the end of its monthly billing cycle. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Nasdaq bills its members at the end of the month, and, as of the time of filing, it had not yet assessed the higher port fees put in place by SR–NASDAQ– 2016–001. Waiver of the 30-day operative delay will not only allow Nasdaq to manage its billing process more efficiently, but it will also ensure that subscribers are not charged erroneous and inflated fees. For this reason, the Commission designates the proposed rule change to be operative upon filing.12 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: 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 12 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 11 17 E:\FR\FM\12FEN1.SGM 12FEN1 Federal Register / Vol. 81, No. 29 / Friday, February 12, 2016 / Notices Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NASDAQ–2016–014 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. asabaliauskas on DSK9F6TC42PROD with NOTICES2 All submissions should refer to File Number SR–NASDAQ–2016–014. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (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 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at Nasdaq’s principal office. 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– NASDAQ–2016–014 and should be submitted on or before March 4, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–02837 Filed 2–11–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–77078; File No. SR–BATS– 2016–04] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing of a Proposed Rule Change to Rule 14.11(i), Managed Fund Shares, To List and Trade Shares of the SPDR DoubleLine Short Term Total Return Tactical ETF of the SSgA Active Trust February 8, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 4, 2016, BATS Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BATS’’) 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing a rule change to list and trade shares of the SPDRDoubleLine Short Term Total Return Tactical ETF (the ‘‘Fund’’) of the SSgA Active Trust (the ‘‘Trust’’) under BATS Rule 14.11(i) (‘‘Managed Fund Shares’’). The shares of the Fund are collectively referred to herein as the ‘‘Shares.’’ The text of the proposed rule change is available at the Exchange’s Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. 1 15 13 17 CFR [sic] § 200.30–3(a)(12) and (59). VerDate Sep<11>2014 17:38 Feb 11, 2016 Jkt 238001 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00103 Fmt 4703 7599 (A) Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to list and trade the Shares under BATS Rule 14.11(i), which governs the listing and trading of Managed Fund Shares on the Exchange.3 The Fund will be an actively managed fund. The Shares will be offered by the Trust, which was established as a Massachusetts business trust on March 30, 2011. The Trust is registered with the Commission as an open-end investment company and has filed a registration statement on behalf of the Fund on Form N–1A (‘‘Registration Statement’’) with the Commission.4 Description of the Shares and the Fund SSGA Funds Management, Inc. will be the investment adviser (‘‘SSGA FM’’ or ‘‘Adviser’’) to the Fund. The Adviser will serve as the administrator for the Fund (the ‘‘Administrator’’). DoubleLine Capital LP will be the Fund’s subadviser (‘‘Sub-Adviser’’). State Street Global Markets, LLC (the ‘‘Distributor’’) will be the principal underwriter and distributor of the Fund’s Shares. State Street Bank and Trust Company (the ‘‘Sub-Administrator’’, ‘‘Custodian’’, ‘‘Transfer Agent’’ or ‘‘Lending Agent’’) will serve as sub-administrator, custodian, transfer agent, and, where applicable, lending agent for the Fund. BATS Rule 14.11(i)(7) provides that, if the investment adviser to the investment company issuing Managed Fund Shares is affiliated with a brokerdealer, such investment adviser shall erect a ‘‘fire wall’’ between the investment adviser and the brokerdealer with respect to access to information concerning the composition and/or changes to such investment company portfolio.5 In addition, Rule 3 The Commission approved BATS Rule 14.11(i) in Securities Exchange Act Release No. 65225 (August 30, 2011), 76 FR 55148 (September 6, 2011) (SR–BATS–2011–018). 4 See Registration Statement on Form N–1A for the Trust, dated October 8, 2015 (File Nos. 333– 173276 and 811–22542). The descriptions of the Fund and the Shares contained herein are based, in part, on information in the Registration Statement. The Commission has issued an order granting certain exemptive relief to the Trust under the Investment Company Act of 1940 (15 U.S.C. 80a– 1) (‘‘1940 Act’’) (the ‘‘Exemptive Order’’). See Investment Company Act Release No. 29524 (December 13, 2010) (File No. 812–13487). 5 An investment adviser to an open-end fund is required to be registered under the Investment Advisers Act of 1940 (the ‘‘Advisers Act’’). As a result, the Adviser and its related personnel as well as the Sub-Adviser and its related personnel are subject to the provisions of Rule 204A–1 under the Continued Sfmt 4703 E:\FR\FM\12FEN1.SGM 12FEN1

Agencies

[Federal Register Volume 81, Number 29 (Friday, February 12, 2016)]
[Notices]
[Pages 7597-7599]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-02837]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77077; File No. SR-NASDAQ-2016-014]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to 
Retroactively Apply Recently-Reduced Port Fees

February 8, 2016
    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 January 29, 2016, The NASDAQ Stock Market LLC (``Nasdaq'') 
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 Nasdaq. 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 [sic] Sec.  240.19b-4.
---------------------------------------------------------------------------

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

    Nasdaq proposes to retroactively apply recently-reduced port fees 
charged to members and non-members for ports used to enter orders into 
Nasdaq systems, in connection with the use of the FIX, RASH, and OUCH 
trading protocols under Nasdaq Rules 7015(b) and (g) beginning January 
4, 2016.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, Nasdaq 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. Nasdaq 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 purpose of the proposed rule change is to apply recently-
reduced port fees charged to members and non-members for ports used to 
enter orders into Nasdaq systems, in connection with the use of the 
FIX, RASH, and OUCH trading protocols under Nasdaq Rules 7015(b) and 
(g) during the period from January 4, 2016 to January 19, 2016.
    Effective January 4, 2016, Nasdaq increased fees for FIX Ports 
under Rule 7015(b) and for RASH and OUCH Ports under Rule 7015(g) from 
$550 per port, per month to $575 per port, per month.\3\ Nasdaq 
increased the fees to offset costs associated with upgrading these 
ports with new field-programmable gate array (``FPGA'') technology, 
which is a hardware-delivery mechanism that provides improved 
performance in terms of predictability.\4\ Nasdaq implemented the new 
FPGA hardware

[[Page 7598]]

in mid-December 2015 and increased the related port fees on January 4, 
2016.\5\
---------------------------------------------------------------------------

    \3\ See SR-NASDAQ-2016-001, which was withdrawn by Nasdaq on 
January 19, 2016 (available at https://nasdaq.cchwallstreet.com/NASDAQ/pdf/nasdaq-filings/2016/SR-NASDAQ-2016-001.pdf).
    \4\ FPGA hardware is able to process more data packets during 
peak market conditions without the introduction of variable queuing 
latency, which improves the predictability of telecommunications 
ports over non-FPGA hardware and thereby adds value to the user.
    \5\ See note 3 above.
---------------------------------------------------------------------------

    Nasdaq recently encountered a few unforeseen minor, but not easily 
rectifiable, issues with the new implementation that potentially could 
have a greater impact on the market. As a consequence, Nasdaq 
determined that the risk associated with keeping the FPGA technology in 
terms of potential disruption to trading outweighed the benefit 
provided in terms of increased performance. Effective January 7, 2016, 
Nasdaq removed the FPGA hardware and reverted all FIX, RASH, and OUCH 
ports to the infrastructure that was in place prior to the upgrade to 
those ports. Nasdaq also filed a rule change with the Commission to 
reduce the fees assessed for FIX, RASH, and OUCH ports back to their 
lower levels of $550 per port, per month, which was effective January 
19, 2016.\6\
---------------------------------------------------------------------------

    \6\ See SR-NASDAQ-2016-007, which has not yet been published in 
the Federal Register (available at https://nasdaq.cchwallstreet.com/NASDAQ/pdf/nasdaq-filings/2016/SR-NASDAQ-2016-007.pdf). The 
Commission notes that this filing was subsequently withdrawn, 
because it was deemed unnecessary. Nasdaq's withdrawal of SR-NASDAQ-
2016-001 effectively caused the rule text to revert to the lower 
fees that were in place prior to January 4, 2016. See note 3.
---------------------------------------------------------------------------

    Nasdaq proposes to apply the reduced fees of $550 per port, per 
month during the period from January 4, 2016 to their reduction on 
January 19, 2016, effectively eliminating any fee increase for FIX, 
RASH, and OUCH ports. Subscribers to the affected ports did not enjoy 
the benefit of the improved hardware for any significant time, as the 
issues with the ports began to manifest themselves on December 30, 2015 
up to the point at which Nasdaq determined to remove the hardware and 
revert the ports back to the infrastructure in place before. Thus, 
Nasdaq believes that it is inappropriate to apply the higher fees at 
any point during January 2016.\7\
---------------------------------------------------------------------------

    \7\ Nasdaq bills in arrears for the connectivity provided under 
Rule 7015. Thus, subscribers have not yet been billed at the higher 
rate in place from January 4, 2016 to January 19, 2016.
---------------------------------------------------------------------------

2. Statutory Basis
    This proposal is consistent with the provisions of section 6 of the 
Act,\8\ in general, and with sections 6(b)(4) and 6(b)(5) of the 
Act,\9\ 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 Nasdaq operates or 
controls, and 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; 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    Retroactively applying the lower fees that were assessed prior to 
the upgrade to the FIX, RASH and OUCH ports effective January 4, 2016 
is reasonable because the improved hardware did not provide a trouble-
free benefit to subscribers for a significant time during the month of 
January 2016. Nasdaq did not provide an improved service for the ports 
in return for the increased fees paid during the period from January 4, 
2016 to their reduction on January 19, 2016. The basis for the 
increased fees was the costs associated with purchasing hardware 
(capital expenditures) and supporting and maintaining the 
infrastructure (operating expenditures) for the FPGA enhancement. Thus, 
retroactively applying the reduced pre-upgrade fee is reasonable.
    Applying the lower pre-upgrade fees retroactively is both an 
equitable allocation and not unfairly discriminatory because it will 
apply uniformly to all market participants that subscribed to FIX Ports 
under Rule 7015(b), and OUCH and RASH Ports under Rule 7015(g) during 
the timeframe of January 4, 2016 to January 19, 2016 based on the 
number of such ports subscribed. Accordingly, all subscribers to the 
ports under Rule 7015(b) and (g) will be assessed the fees in place 
prior to the increase, since they did not realize a significant and 
trouble-free benefit from the hardware.

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

    The proposed rule change will not impose any burden on competition 
not necessary or appropriate in furtherance of the purposes of the Act. 
In terms of inter-market competition, Nasdaq notes that it operates in 
a highly competitive market in which market participants can readily 
favor competing venues if they deem fee levels at a particular venue to 
be excessive, or rebate opportunities available at other venues to be 
more favorable.
    Nasdaq proposes to retroactively apply a lower fee since it did not 
provide the improved connectivity trouble-free for a significant time. 
Thus, Nasdaq does not believe that proposal places any burden on 
competition, but rather reduces fees assessed subscribers to a service, 
which will help maintain Nasdaq's competitiveness among equities 
markets.

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

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change does not (i) significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to section 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) 
thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    In its filing, Nasdaq requested that the Commission waive the 30-
day operative delay so that Nasdaq may implement the fee reduction 
prior to the end of its monthly billing cycle. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. Nasdaq bills its 
members at the end of the month, and, as of the time of filing, it had 
not yet assessed the higher port fees put in place by SR-NASDAQ-2016-
001. Waiver of the 30-day operative delay will not only allow Nasdaq to 
manage its billing process more efficiently, but it will also ensure 
that subscribers are not charged erroneous and inflated fees. For this 
reason, the Commission designates the proposed rule change to be 
operative upon filing.\12\
---------------------------------------------------------------------------

    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

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:

[[Page 7599]]

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2016-014 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2016-014. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (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 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at Nasdaq's principal office. 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-NASDAQ-2016-014 and should 
be submitted on or before March 4, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR [sic] Sec.  200.30-3(a)(12) and (59).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-02837 Filed 2-11-16; 8:45 am]
 BILLING CODE 8011-01-P
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