Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees, 25894-25895 [2017-11503]

Download as PDF 25894 Federal Register / Vol. 82, No. 106 / Monday, June 5, 2017 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80808; File No. SR–GEMX– 2017–20] Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees May 30, 2017. 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 May 22, 2017, Nasdaq GEMX, LLC (‘‘GEMX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, 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 proposes to amend the Schedule of Fees to assess fees for SQF and SQF Purge Ports that members will use to connect to the Exchange. The text of the proposed rule change is available on the Exchange’s Web site at www.ise.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 asabaliauskas on DSKBBXCHB2PROD with NOTICES 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 aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes amending the Schedule of Fees to increase fees for 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 17:31 Jun 02, 2017 Jkt 241001 Specialized Quote Feed (‘‘SQF’’) 3 and SQF Purge 4 Ports that Market Makers utilize to connect to the Exchange.5 Currently, the Exchange does not charge Market Makers, i.e., Primary Market Makers (‘‘PMMs’’) and Competitive Market Makers (‘‘CMM’’), a fee for SQF and SQF Purge Ports. The Exchange proposes to begin assessing SQF and SQF Purge Port Fees of $1,250 per port, per month in order to recoup the costs of supporting its architecture. The Exchange also proposes to cap these fees for Market Makers utilizing these ports at $12,500 per month. The Exchange believes that its pricing remains competitive. A reference to ‘‘Exchange’’ is being removed from the Schedule of Fees as the reference is extraneous. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,6 in general, and Section 6(b)(4) of the Act,7 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. The Exchange believes that it is reasonable to increase the SQF and SQF Purge Port fees at this time because the GEMX INET migration is complete and the Exchange desires to recoup costs associated with supporting its architecture. The Exchange initially offered these ports free of cost to aid in the migration of the Exchange’s trading system to the INET technology. Today, the Bats BZX Exchange, Inc. (‘‘BATS BZX’’) assesses $1,500 to its market makers for Ports with Bulk Quoting Capabilities.8 Additionally, the Exchange proposes to cap the fees for Market Makers utilizing these ports at 3 SQF is an interface that allows market makers to connect and send quotes, sweeps and auction responses into GEMX. Data includes the following: (1) Options Auction Notifications (e.g., opening imbalance, Flash, PIM, Solicitation and Facilitation or other information); (2) Options Symbol Directory Messages; (3) System Event Messages (e.g., start of messages, start of system hours, start of quoting, start of opening); (4) Option Trading Action Messages (e.g., halts, resumes); (5) Execution Messages; and (6) Quote Messages (quote/sweep messages, risk protection triggers or purge notifications). 4 SQF Purge is a specific port for the SQF interface that only receives and notifies of purge requests from the market maker. 5 The Exchange filed the proposed fee increase on May 17, 2017 (SR–GEMX–2017–19). On May 22, 2017, the Exchange withdrew that filing and submitted this filing. 6 15 U.S.C. 78f. 7 15 U.S.C. 78f(b)(4). 8 See Bats BZX Options Exchange Fee Schedule. BZX assesses $1,500 for the first 5 ports, per month and $2,000 for 6 or more ports, per month. PO 00000 Frm 00140 Fmt 4703 Sfmt 4703 $12,500 per month, which will limit the amount of SQF and SQF Purge Ports Fees that Market Makers will pay per month. The Exchange believes that it is reasonable to cap these ports for Market Makers so that the increased costs for SQF and SQF Purge Ports will not exceed $12,500 a month. The Exchange believes that the amount of the proposed cap is reasonable because it will allow Market Makers to cap their costs beyond 10 ports. The Exchange proposes 10 ports because it desires to cap infrastructure costs for Market Makers who incur more significant fees because of the greater amount of ports that these Market Makers access because of their larger market making footprint on the Exchange. The Exchange believes that it is equitable and not unfairly discriminatory to increase the SQF and SQF Purge Port fees to $1,250 per port, per month because all Market Makers would be uniformly assessed the same SQF and SQF Purge Port Fees. The Exchange will also uniformly apply the proposed $12,500 per month cap to Market Makers utilizing SQF and SQF Purge Ports. No Market Maker who utilizes more than 10 SQF or SQF Purge Ports will be assessed a fee beyond the 10 ports. Finally, removing the extraneous reference to ‘‘Exchange’’ will bring clarity to the rule text. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,9 the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed SQF and SQF Purge Port fees will be uniformly assessed to all Market Makers. The fees remain competitive with fees at other markets.10 The Exchange will also uniformly apply the proposed $12,500 per month cap to Marker Makers utilizing SQF and SQF Purge Ports. The Exchange operates in a highly competitive market in which market participants can readily direct their order flow to competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and rebates to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed fee changes reflect this competitive environment. 9 15 U.S.C. 78f(b)(8). note 8 above. 10 See E:\FR\FM\05JNN1.SGM 05JNN1 Federal Register / Vol. 82, No. 106 / Monday, June 5, 2017 / Notices 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 The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.11 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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 is consistent with the Act. Comments may be submitted by any of the following methods: asabaliauskas on DSKBBXCHB2PROD with 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– GEMX–2017–20 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–GEMX–2017–20. 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 11 15 U.S.C. 78s(b)(3)(A)(ii). VerDate Sep<11>2014 17:31 Jun 02, 2017 Jkt 241001 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 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–GEMX– 2017–20, and should be submitted on or before June 26, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–11503 Filed 6–2–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80816/May 31, 2017] Order Making Fiscal Year 2017 Annual Adjustments to Transaction Fee Rates I. Background Section 31 of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) requires each national securities exchange and national securities association to pay transaction fees to the Commission.1 Specifically, Section 31(b) requires each national securities exchange to pay to the Commission fees based on the aggregate dollar amount of sales of certain securities (‘‘covered sales’’) transacted on the exchange.2 Section 31(c) requires each national securities association to pay to the Commission fees based on the aggregate dollar amount of covered sales transacted by or through any member of the association other than on an exchange.3 Section 31 of the Exchange Act requires the Commission to annually adjust the fee rates applicable under Sections 31(b) and (c) to a uniform adjusted rate.4 Specifically, the Commission must adjust the fee rates to 12 17 CFR 200.30–3(a)(12). U.S.C. 78ee. 2 15 U.S.C. 78ee(b). 3 15 U.S.C. 78ee(c). 4 In some circumstances, the SEC also must make a mid-year adjustment to the fee rates applicable under Sections 31(b) and (c). 1 15 PO 00000 Frm 00141 Fmt 4703 Sfmt 4703 25895 a uniform adjusted rate that is reasonably likely to produce aggregate fee collections (including assessments on security futures transactions) equal to the regular appropriation to the Commission for the applicable fiscal year.5 The Commission is required to publish notice of the new fee rates under Section 31 not later than 30 days after the date on which an Act making a regular appropriation for the applicable fiscal year is enacted.6 On May 5, 2017, the President signed into law the ‘‘Consolidated Appropriations Act, 2017,’’ which includes a regular appropriation of $1,605,000,000 to the SEC for fiscal year 2017. II. Fiscal Year 2017 Annual Adjustment to the Fee Rate The new fee rate is determined by (1) subtracting the sum of fees estimated to be collected prior to the effective date of the new fee rate 7 and estimated assessments on security futures transactions to be collected under Section 31(d) of the Exchange Act for all of fiscal year 2017 8 from an amount equal to the regular appropriation to the Commission for fiscal year 2017, and (2) dividing by the estimated aggregate dollar amount of covered sales for the remainder of the fiscal year following the effective date of the new fee rate.9 The regular appropriation to the Commission for fiscal year 2017 is $1,605,000,000. The Commission estimates that it will collect $1,189,634,934 in fees for the period prior to the effective date of the new fee rate and $65,181 in assessments on 5 15 U.S.C. 78ee(j)(1) (the Commission must adjust the rates under Sections 31(b) and (c) to a ‘‘uniform adjusted rate that, when applied to the baseline estimate of the aggregate dollar amount of sales for such fiscal year, is reasonably likely to produce aggregate fee collections under [Section 31] (including assessments collected under [Section 31(d)]) that are equal to the regular appropriation to the Commission by Congress for such fiscal year.’’). 6 15 U.S.C. 78ee(g). 7 The sum of fees to be collected prior to the effective date of the new fee rate is determined by applying the current fee rate to the dollar amount of covered sales prior to the effective date of the new fee rate. The exchanges and FINRA have provided data on the dollar amount of covered sales through March 2017. To calculate the dollar amount of covered sales from April 2017 to the effective date of the new fee rate, the Commission is using the methodology described in the Appendix A of this order. 8 The Commission is using the same methodology it has used previously to estimate assessments on security futures transactions to be collected in fiscal year 2017. An explanation of the methodology appears in Appendix A. 9 To estimate the aggregate dollar amount of covered sales for the remainder of fiscal year 2017 following the effective date of the new fee rate, the Commission is using the methodology described in Appendix A of this order. E:\FR\FM\05JNN1.SGM 05JNN1

Agencies

[Federal Register Volume 82, Number 106 (Monday, June 5, 2017)]
[Notices]
[Pages 25894-25895]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-11503]



[[Page 25894]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80808; File No. SR-GEMX-2017-20]


Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the 
Schedule of Fees

May 30, 2017.
    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 May 22, 2017, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``SEC'' or ``Commission'') the 
proposed rule change as described in Items I, II, and III, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend the Schedule of Fees to assess fees 
for SQF and SQF Purge Ports that members will use to connect to the 
Exchange.
    The text of the proposed rule change is available on the Exchange's 
Web site at www.ise.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 aspects of such 
statements.

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

1. Purpose
    The Exchange proposes amending the Schedule of Fees to increase 
fees for Specialized Quote Feed (``SQF'') \3\ and SQF Purge \4\ Ports 
that Market Makers utilize to connect to the Exchange.\5\ Currently, 
the Exchange does not charge Market Makers, i.e., Primary Market Makers 
(``PMMs'') and Competitive Market Makers (``CMM''), a fee for SQF and 
SQF Purge Ports. The Exchange proposes to begin assessing SQF and SQF 
Purge Port Fees of $1,250 per port, per month in order to recoup the 
costs of supporting its architecture. The Exchange also proposes to cap 
these fees for Market Makers utilizing these ports at $12,500 per 
month. The Exchange believes that its pricing remains competitive.
---------------------------------------------------------------------------

    \3\ SQF is an interface that allows market makers to connect and 
send quotes, sweeps and auction responses into GEMX. Data includes 
the following: (1) Options Auction Notifications (e.g., opening 
imbalance, Flash, PIM, Solicitation and Facilitation or other 
information); (2) Options Symbol Directory Messages; (3) System 
Event Messages (e.g., start of messages, start of system hours, 
start of quoting, start of opening); (4) Option Trading Action 
Messages (e.g., halts, resumes); (5) Execution Messages; and (6) 
Quote Messages (quote/sweep messages, risk protection triggers or 
purge notifications).
    \4\ SQF Purge is a specific port for the SQF interface that only 
receives and notifies of purge requests from the market maker.
    \5\ The Exchange filed the proposed fee increase on May 17, 2017 
(SR-GEMX-2017-19). On May 22, 2017, the Exchange withdrew that 
filing and submitted this filing.
---------------------------------------------------------------------------

    A reference to ``Exchange'' is being removed from the Schedule of 
Fees as the reference is extraneous.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\6\ in general, and Section 
6(b)(4) of the Act,\7\ in particular, in that it is designed to provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and other persons using its facilities.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that it is reasonable to increase the SQF and 
SQF Purge Port fees at this time because the GEMX INET migration is 
complete and the Exchange desires to recoup costs associated with 
supporting its architecture. The Exchange initially offered these ports 
free of cost to aid in the migration of the Exchange's trading system 
to the INET technology. Today, the Bats BZX Exchange, Inc. (``BATS 
BZX'') assesses $1,500 to its market makers for Ports with Bulk Quoting 
Capabilities.\8\ Additionally, the Exchange proposes to cap the fees 
for Market Makers utilizing these ports at $12,500 per month, which 
will limit the amount of SQF and SQF Purge Ports Fees that Market 
Makers will pay per month. The Exchange believes that it is reasonable 
to cap these ports for Market Makers so that the increased costs for 
SQF and SQF Purge Ports will not exceed $12,500 a month. The Exchange 
believes that the amount of the proposed cap is reasonable because it 
will allow Market Makers to cap their costs beyond 10 ports. The 
Exchange proposes 10 ports because it desires to cap infrastructure 
costs for Market Makers who incur more significant fees because of the 
greater amount of ports that these Market Makers access because of 
their larger market making footprint on the Exchange.
---------------------------------------------------------------------------

    \8\ See Bats BZX Options Exchange Fee Schedule. BZX assesses 
$1,500 for the first 5 ports, per month and $2,000 for 6 or more 
ports, per month.
---------------------------------------------------------------------------

    The Exchange believes that it is equitable and not unfairly 
discriminatory to increase the SQF and SQF Purge Port fees to $1,250 
per port, per month because all Market Makers would be uniformly 
assessed the same SQF and SQF Purge Port Fees. The Exchange will also 
uniformly apply the proposed $12,500 per month cap to Market Makers 
utilizing SQF and SQF Purge Ports. No Market Maker who utilizes more 
than 10 SQF or SQF Purge Ports will be assessed a fee beyond the 10 
ports.
    Finally, removing the extraneous reference to ``Exchange'' will 
bring clarity to the rule text.

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

    In accordance with Section 6(b)(8) of the Act,\9\ the Exchange does 
not believe that the proposed rule change will impose any burden on 
intermarket or intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The proposed SQF 
and SQF Purge Port fees will be uniformly assessed to all Market 
Makers. The fees remain competitive with fees at other markets.\10\ The 
Exchange will also uniformly apply the proposed $12,500 per month cap 
to Marker Makers utilizing SQF and SQF Purge Ports.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b)(8).
    \10\ See note 8 above.
---------------------------------------------------------------------------

    The Exchange operates in a highly competitive market in which 
market participants can readily direct their order flow to competing 
venues. In such an environment, the Exchange must continually review, 
and consider adjusting, its fees and rebates to remain competitive with 
other exchanges. For the reasons described above, the Exchange believes 
that the proposed fee changes reflect this competitive environment.

[[Page 25895]]

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\11\ 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: (i) Necessary or appropriate in the public 
interest; (ii) for the protection of investors; or (iii) 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.
---------------------------------------------------------------------------

    \11\ 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 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 email to rule-comments@sec.gov. Please include 
File Number SR-GEMX-2017-20 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-GEMX-2017-20. 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 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-GEMX-2017-20, and should be 
submitted on or before June 26, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11503 Filed 6-2-17; 8:45 am]
 BILLING CODE 8011-01-P
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