Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Transaction Fees at Rule 7030 That Apply to Use of the Nasdaq Testing Facility, 48554-48556 [2017-22541]
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48554
Federal Register / Vol. 82, No. 200 / Wednesday, October 18, 2017 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81870; File No. SR–
NASDAQ–2017–105]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
Exchange’s Transaction Fees at Rule
7030 That Apply to Use of the Nasdaq
Testing Facility
October 12, 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 October
2, 2017, The NASDAQ Stock Market
LLC (‘‘Nasdaq’’ 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
Exchange’s transaction fees at Rule 7030
that apply to use of the Nasdaq Testing
Facility (‘‘NTF’’).
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaq.cchwallstreet.com/, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
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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.
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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17:50 Oct 17, 2017
Jkt 244001
1. Purpose
The Exchange proposes to amend the
fees that it assesses for use of the NTF.3
The NTF provides users with a virtual
Nasdaq system test environment that
closely approximates the production
environment and on which they may
test their automated systems that
integrate with the Exchange. For
example, users may test upcoming
Exchange releases and product
enhancements, as well as test software
prior to implementation.
The Exchange assesses certain fees
under Rule 7030 for use of the NTF. In
pertinent part, Rule 7030(d)(1) states
that the Exchange assesses a fee of $285
per hour for ‘‘Active Connection’’
testing using current Exchange access
protocols during the normal operating
hours and $333 per hour for such testing
after hours.4 The Exchange does not
currently assess a fee for ‘‘Idle
Connections.’’ 5
For purposes of the foregoing fees, an
‘‘Active Connection’’ is one that
‘‘commences when the user begins to
send and/or receive a transaction to and
from the NTF and continues until the
earlier of the disconnection or the
commencement of an Idle
Connection.’’ 6 An ‘‘Idle Connection’’ is
a connection that ‘‘commences after a
Period of Inactivity and continues until
the earlier of disconnection or the
commencement of an Active
Connection.’’ 7 A ‘‘Period of Inactivity’’
is an ‘‘uninterrupted period of time of
specified length when the connection is
open but the NTF is not receiving from
or sending to subscriber any
transactions.’’ 8
The Exchange proposes to modify
Rule 7030 in several respects. First, the
Exchange proposes to decrease and
simplify the fees it charges to users 9 for
their active use of the NTF. Specifically,
the Exchange proposes to eliminate the
$333 hourly rate that it presently
3 See https://www.nasdaqtrader.com/
Trader.aspx?id=TestingFacility for a description of
the NTF.
4 See Rule 7030(d)(1)(A).
5 See id.
6 Rule 7030(d)(2)(A).
7 Rule 7030(d)(2)(B).
8 Rule 7030(d)(2)(C). The length of the Period of
Inactivity is such period of time between 10
minutes and 60 minutes in length as Nasdaq may
specify from time to time by giving notice to users
of the NTF. See id.
9 The existing Rule refers alternatively to those
that utilize the NTF as ‘‘subscribers’’ or ‘‘users.’’ For
purposes of clarity, the Exchange proposes to
modify the Rule to use the term ‘‘user’’ exclusively.
PO 00000
Frm 00079
Fmt 4703
Sfmt 4703
charges users for Active Connection
testing outside of normal operating
hours of the NTF such that the
Exchange will charge users $285 per
hour for Active Connection testing in all
instances.
Second, the Exchange proposes to
clarify the definition of a Period of
Inactivity as well as establish a new fee
for users to the extent that they
experience one or more Periods of
Inactivity while they are connected to
the NTF in a given day. Specifically, the
Exchange proposes to define a Period of
Inactivity as any uninterrupted period
of time that occurs while a user is
connected to the NTF and when the
NTF is neither receiving from nor
sending to the user any transactions.
The proposal states that each Period of
Inactivity will be billable at the Active
Connection rate after the first 10
minutes thereof and up to a cumulative
amount of 60 minutes per user, per day.
This means that: (i) The first 10 minutes
of each Period of Inactivity will be free;
(ii) each Period of Inactivity in excess of
10 minutes will be billable at the rate of
$285 per hour; (iii) a user that
experiences either a single Period of
Inactivity of less than 60 billable
minutes in a day or multiple Periods of
Inactivity of less than 60 billable
minutes in a day, cumulatively, will
incur a fee for such Inactivity on a pro
rata basis; and (iv) a user that
experiences either a single Period of
Inactivity in excess of 60 billable
minutes in a day or multiple Periods of
Inactivity in excess of 60 billable
minutes in a day, cumulatively, will
only incur a fee for the first 60 billable
minutes of Inactivity.
Third, the Exchange proposes to
eliminate the term ‘‘Idle Connection’’
insofar as no clear distinction exists
between that term and a ‘‘Period of
Inactivity.’’ That is, the Exchange
believes it would be difficult for users
to discern when an Idle Connection
exists, which is free under the existing
Rule, and when a Period of Activity
commences, which would be billable.
The Exchange proposes to simplify the
fee schedule by collapsing these
concepts into the single term ‘‘Period of
Inactivity’’ and billing for Periods of
Activity as described above.
Finally, the Exchange proposes to
modify Rule 7030 to clarify that the
connectivity provided under the Rule
also applies, not only to NASDAQ OMX
BX, Inc. (now, Nasdaq BX, Inc.) and
NASDAQ OMX PHLX LLC (now,
Nasdaq PHLX, LLC), but also to Nasdaq
ISE LLC, Nasdaq MRX LLC, and Nasdaq
GEMX LLC. This purpose of this
proposal is to clarify that a client can
use the connectivity to the NTF it
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Federal Register / Vol. 82, No. 200 / Wednesday, October 18, 2017 / Notices
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establishes under the Rule to perform
tests with respect to all of the Nasdaq,
Inc. exchanges, and in doing so, it will
be billed only once.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,10 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,11 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, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange’s proposal to eliminate
its $330 hourly ‘‘after-hours’’ Active
Connection rate is equitable and is not
unfairly discriminatory in that it will
apply to all NTF users equally. This
proposal is also reasonable because the
Exchange no longer incurs additional
costs or requires additional resources, as
it once did, to permit its users to utilize
the NTF outside of normal operating
hours. Moreover, the act of simplifying
the NTF fee schedule so that it involves
only a single hourly rate will render the
schedule easier for the Exchange to
administer and easier for users to
understand.
The Exchange’s proposal to assess a
new fee for inactive use of the NTF is
equitable and is not unfairly
discriminatory in that it will apply to all
NTF users and will vary only depending
upon the nature and extent of their
activity while connected to the NTF.
The proposal is reasonable, moreover, as
a means of reducing the extent to which
inactive users consume the limited
bandwidth of the NTF at any given time.
The Exchange intends for the fee to
provide a disincentive for users to
remain connected while inactive. That
said, the Exchange proposes to refrain
from charging users a fee for their first
10 minutes of inactivity because it
believes that it would be an unnecessary
and excessive act to penalize users that
become momentarily inactive between
periods of activity on the NTF or that
fail to disconnect from the NTF the
instant that they cease any activity.
Likewise, the Exchange proposes to cap
the fees it charges for Periods of
Inactivity because it does not wish to
penalize excessively those users that
wish or need to maintain their
connections to the NTF, even when they
are inactive, so that they can resume
active testing quickly. The Exchange
believes that its proposal to cap this fee
10 15
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
VerDate Sep<11>2014
17:50 Oct 17, 2017
at 60 minutes of billable inactive time
represents a reasonable balance between
its desire to promote active use of the
NTF and the practical needs of its users
to maintain inactive connections to the
NTF in certain circumstances.
Lastly, the proposals to eliminate
references to the term ‘‘Idle Connection’’
and to amend the term ‘‘Period of
Inactivity’’ are reasonable and not
unfairly discriminatory in that these
changes will clarify and simplify the fee
schedule that applies to all NTF users.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. Testing is a
matter of regulatory hygiene, not of
competition.
In this instance, the Exchange does
not believe that its proposal to eliminate
the $330 hourly ‘‘after hours’’ fee for use
of the NTF will impose any burden
insofar as it is merely reducing the rates
it charges its users for use of the NTF
outside of normal operating hours.
Likewise, the Exchange does not
believe that its proposal to establish a
fee for Periods of Inactive Use will
impose any unnecessary or
inappropriate burden on competition
because it designed the proposal, not to
raise revenue for the Exchange, but
rather to act as a modest and targeted
disincentive for users to remain inactive
while they are connected to the NTF.
The design of the fee permits users to
avoid the fee by disconnecting from or
resuming activity on the NTF within 10
minutes of the commencement of a
Period of Inactivity. It also caps the fee
at 60 minutes of cumulative daily
billable inactivity so that users that
choose to or inadvertently do remain
inactive for long periods of time will not
incur unreasonable or excessive fees as
a result of doing so.
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.12
At any time within 60 days of the
filing of the proposed rule change, the
12 15
Jkt 244001
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
Frm 00080
Fmt 4703
Sfmt 4703
48555
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:
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–2017–105 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–2017–105. 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
E:\FR\FM\18OCN1.SGM
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48556
Federal Register / Vol. 82, No. 200 / Wednesday, October 18, 2017 / Notices
available publicly. All submissions
should refer to File Number SR–
NASDAQ–2017–105, and should be
submitted on or before November 8,
2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Brent J. Fields,
Secretary.
[FR Doc. 2017–22541 Filed 10–17–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81860; File No. SR–Phlx–
2017–78]
Self-Regulatory Organizations;
NASDAQ PHLX LLC; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Decrease
the Qualification Criteria of a Credit
Tier and Make Related Changes
October 12, 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 October
2, 2017, NASDAQ PHLX LLC (‘‘Phlx’’ 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.
ethrower on DSK3G9T082PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to decrease
the level of Consolidated Volume
required to qualify for a $0.0031 per
share executed credit and make related
changes.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaqphlx.cchwallstreet.
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
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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 purpose of the proposed rule
change is to amend the Exchange’s
transaction fees at Section VIII
(NASDAQ PSX Fees) of the NASDAQ
PHLX LLC Pricing Schedule to decrease
the level of Consolidated Volume
required to qualify for a $0.0031 per
share executed credit and make related
changes. Currently, the Exchange
provides credits ranging from $0.0023 to
$0.0031 per share executed to member
organizations for displayed quotes and
orders that provide liquidity through the
PSX System. The top two credit tiers are
the following: (1) A credit of $0.0031
per share executed for Quotes/Orders
entered by a member organization that
provides and accesses 0.3% or more of
Consolidated Volume during the month;
and (2) a credit of $0.0029 per share
executed for Quotes/Orders entered by a
member organization that provides and
accesses 0.25% or more of Consolidated
Volume during the month. The
Exchange is proposing to decrease the
level of monthly Consolidated Volume
required of a member organization to
qualify for the $0.0031 per share
executed credit from 0.3% to 0.25%,
which is the level required to currently
qualify for the $0.0029 per share
executed credit tier. As a consequence,
the Exchange is also proposing to
eliminate the $0.0029 per share
executed credit tier.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,3 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,4 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, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange believes that the
$0.0031 per share executed credit
provided to a member organization for
13 17
1 15
VerDate Sep<11>2014
17:50 Oct 17, 2017
3 15
4 15
Jkt 244001
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
Frm 00081
Fmt 4703
Sfmt 4703
displayed quotes and orders is
reasonable because it will remain
unchanged, and it is competitive with
the fees of other exchanges. For
example, The Nasdaq Stock Market
provides its members with credits up to
$0.00305 per share executed for
displayed quotes and orders.5
Elimination of the $0.0029 per share
executed credit provided to a member
organization for displayed quotes and
orders is reasonable because the criteria
currently required to receive the
$0.0029 per share executed credit will
be the same as the criteria required to
receive the $0.0031 per share executed
credit. Thus, member organizations that
currently qualify for $0.0029 per share
executed credit will qualify for the
higher credit under the proposed
change.
The Exchange believes that decreasing
the level of Consolidated Volume during
the month required to qualify for the
$0.0031 per share executed credit is an
equitable allocation and is not unfairly
discriminatory because the Exchange is
using the reduced Consolidated Volume
requirement to provide incentive to
member organizations to participate on
the Exchange. The Exchange has
observed that the current qualification
criteria for the $0.0031 per share
executed credit and the qualification
requirement of the $0.0029 per share
executed credit have not provided
adequate incentive. The Exchange
believes that creating a single credit tier
that combines the higher credit with the
lower Consolidated Volume
requirement will be more effective at
increasing participation on the
Exchange. The proposed change will
apply to all member organizations, any
of which may provide the level of
Consolidated Volume required to
qualify for the credit.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. In terms of
inter-market competition, the Exchange
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. In such an
environment, the Exchange must
continually adjust its fees to remain
competitive with other exchanges and
with alternative trading systems that
5 See
E:\FR\FM\18OCN1.SGM
Nasdaq Rule 7018(a).
18OCN1
]]>Agencies
[Federal Register Volume 82, Number 200 (Wednesday, October 18, 2017)]
[Notices]
[Pages 48554-48556]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-22541]
[[Page 48554]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81870; File No. SR-NASDAQ-2017-105]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Exchange's Transaction Fees at Rule 7030 That Apply to Use of
the Nasdaq Testing Facility
October 12, 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 October 2, 2017, The NASDAQ Stock Market LLC (``Nasdaq'' 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 Exchange's transaction fees at
Rule 7030 that apply to use of the Nasdaq Testing Facility (``NTF'').
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaq.cchwallstreet.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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the fees that it assesses for use of
the NTF.\3\ The NTF provides users with a virtual Nasdaq system test
environment that closely approximates the production environment and on
which they may test their automated systems that integrate with the
Exchange. For example, users may test upcoming Exchange releases and
product enhancements, as well as test software prior to implementation.
---------------------------------------------------------------------------
\3\ See https://www.nasdaqtrader.com/Trader.aspx?id=TestingFacility for a description of the NTF.
---------------------------------------------------------------------------
The Exchange assesses certain fees under Rule 7030 for use of the
NTF. In pertinent part, Rule 7030(d)(1) states that the Exchange
assesses a fee of $285 per hour for ``Active Connection'' testing using
current Exchange access protocols during the normal operating hours and
$333 per hour for such testing after hours.\4\ The Exchange does not
currently assess a fee for ``Idle Connections.'' \5\
---------------------------------------------------------------------------
\4\ See Rule 7030(d)(1)(A).
\5\ See id.
---------------------------------------------------------------------------
For purposes of the foregoing fees, an ``Active Connection'' is one
that ``commences when the user begins to send and/or receive a
transaction to and from the NTF and continues until the earlier of the
disconnection or the commencement of an Idle Connection.'' \6\ An
``Idle Connection'' is a connection that ``commences after a Period of
Inactivity and continues until the earlier of disconnection or the
commencement of an Active Connection.'' \7\ A ``Period of Inactivity''
is an ``uninterrupted period of time of specified length when the
connection is open but the NTF is not receiving from or sending to
subscriber any transactions.'' \8\
---------------------------------------------------------------------------
\6\ Rule 7030(d)(2)(A).
\7\ Rule 7030(d)(2)(B).
\8\ Rule 7030(d)(2)(C). The length of the Period of Inactivity
is such period of time between 10 minutes and 60 minutes in length
as Nasdaq may specify from time to time by giving notice to users of
the NTF. See id.
---------------------------------------------------------------------------
The Exchange proposes to modify Rule 7030 in several respects.
First, the Exchange proposes to decrease and simplify the fees it
charges to users \9\ for their active use of the NTF. Specifically, the
Exchange proposes to eliminate the $333 hourly rate that it presently
charges users for Active Connection testing outside of normal operating
hours of the NTF such that the Exchange will charge users $285 per hour
for Active Connection testing in all instances.
---------------------------------------------------------------------------
\9\ The existing Rule refers alternatively to those that utilize
the NTF as ``subscribers'' or ``users.'' For purposes of clarity,
the Exchange proposes to modify the Rule to use the term ``user''
exclusively.
---------------------------------------------------------------------------
Second, the Exchange proposes to clarify the definition of a Period
of Inactivity as well as establish a new fee for users to the extent
that they experience one or more Periods of Inactivity while they are
connected to the NTF in a given day. Specifically, the Exchange
proposes to define a Period of Inactivity as any uninterrupted period
of time that occurs while a user is connected to the NTF and when the
NTF is neither receiving from nor sending to the user any transactions.
The proposal states that each Period of Inactivity will be billable at
the Active Connection rate after the first 10 minutes thereof and up to
a cumulative amount of 60 minutes per user, per day. This means that:
(i) The first 10 minutes of each Period of Inactivity will be free;
(ii) each Period of Inactivity in excess of 10 minutes will be billable
at the rate of $285 per hour; (iii) a user that experiences either a
single Period of Inactivity of less than 60 billable minutes in a day
or multiple Periods of Inactivity of less than 60 billable minutes in a
day, cumulatively, will incur a fee for such Inactivity on a pro rata
basis; and (iv) a user that experiences either a single Period of
Inactivity in excess of 60 billable minutes in a day or multiple
Periods of Inactivity in excess of 60 billable minutes in a day,
cumulatively, will only incur a fee for the first 60 billable minutes
of Inactivity.
Third, the Exchange proposes to eliminate the term ``Idle
Connection'' insofar as no clear distinction exists between that term
and a ``Period of Inactivity.'' That is, the Exchange believes it would
be difficult for users to discern when an Idle Connection exists, which
is free under the existing Rule, and when a Period of Activity
commences, which would be billable. The Exchange proposes to simplify
the fee schedule by collapsing these concepts into the single term
``Period of Inactivity'' and billing for Periods of Activity as
described above.
Finally, the Exchange proposes to modify Rule 7030 to clarify that
the connectivity provided under the Rule also applies, not only to
NASDAQ OMX BX, Inc. (now, Nasdaq BX, Inc.) and NASDAQ OMX PHLX LLC
(now, Nasdaq PHLX, LLC), but also to Nasdaq ISE LLC, Nasdaq MRX LLC,
and Nasdaq GEMX LLC. This purpose of this proposal is to clarify that a
client can use the connectivity to the NTF it
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establishes under the Rule to perform tests with respect to all of the
Nasdaq, Inc. exchanges, and in doing so, it will be billed only once.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\11\ 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, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange's proposal to eliminate its $330 hourly ``after-
hours'' Active Connection rate is equitable and is not unfairly
discriminatory in that it will apply to all NTF users equally. This
proposal is also reasonable because the Exchange no longer incurs
additional costs or requires additional resources, as it once did, to
permit its users to utilize the NTF outside of normal operating hours.
Moreover, the act of simplifying the NTF fee schedule so that it
involves only a single hourly rate will render the schedule easier for
the Exchange to administer and easier for users to understand.
The Exchange's proposal to assess a new fee for inactive use of the
NTF is equitable and is not unfairly discriminatory in that it will
apply to all NTF users and will vary only depending upon the nature and
extent of their activity while connected to the NTF. The proposal is
reasonable, moreover, as a means of reducing the extent to which
inactive users consume the limited bandwidth of the NTF at any given
time. The Exchange intends for the fee to provide a disincentive for
users to remain connected while inactive. That said, the Exchange
proposes to refrain from charging users a fee for their first 10
minutes of inactivity because it believes that it would be an
unnecessary and excessive act to penalize users that become momentarily
inactive between periods of activity on the NTF or that fail to
disconnect from the NTF the instant that they cease any activity.
Likewise, the Exchange proposes to cap the fees it charges for Periods
of Inactivity because it does not wish to penalize excessively those
users that wish or need to maintain their connections to the NTF, even
when they are inactive, so that they can resume active testing quickly.
The Exchange believes that its proposal to cap this fee at 60 minutes
of billable inactive time represents a reasonable balance between its
desire to promote active use of the NTF and the practical needs of its
users to maintain inactive connections to the NTF in certain
circumstances.
Lastly, the proposals to eliminate references to the term ``Idle
Connection'' and to amend the term ``Period of Inactivity'' are
reasonable and not unfairly discriminatory in that these changes will
clarify and simplify the fee schedule that applies to all NTF users.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. Testing is a matter of
regulatory hygiene, not of competition.
In this instance, the Exchange does not believe that its proposal
to eliminate the $330 hourly ``after hours'' fee for use of the NTF
will impose any burden insofar as it is merely reducing the rates it
charges its users for use of the NTF outside of normal operating hours.
Likewise, the Exchange does not believe that its proposal to
establish a fee for Periods of Inactive Use will impose any unnecessary
or inappropriate burden on competition because it designed the
proposal, not to raise revenue for the Exchange, but rather to act as a
modest and targeted disincentive for users to remain inactive while
they are connected to the NTF. The design of the fee permits users to
avoid the fee by disconnecting from or resuming activity on the NTF
within 10 minutes of the commencement of a Period of Inactivity. It
also caps the fee at 60 minutes of cumulative daily billable inactivity
so that users that choose to or inadvertently do remain inactive for
long periods of time will not incur unreasonable or excessive fees as a
result of doing so.
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.\12\
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\12\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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:
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-2017-105 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-2017-105. 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
[[Page 48556]]
available publicly. All submissions should refer to File Number SR-
NASDAQ-2017-105, and should be submitted on or before November 8, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2017-22541 Filed 10-17-17; 8:45 am]
BILLING CODE 8011-01-P
