Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify Its Fees for Physical Ports, 54453-54455 [2017-24932]
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Federal Register / Vol. 82, No. 221 / Friday, November 17, 2017 / Notices
adopting this requirement, the
Commission stated that ‘‘[r]elevant
internationally accepted communication
procedures and standards could include
messaging standards such as SWIFT,
FIX and FpML.’’ [emphasis added].31
Accordingly, use of the SWIFT
messaging network as the primary
process to support daily cash settlement
is consistent with Rule 17Ad–22(e)(22).
In these ways, OCC believes the
proposed changes are consistent with
Section 805(b)(2) of the Clearing
Supervision Act 32 and Rule 17Ad–
22(e)(22).33
III. Date of Effectiveness of the Advance
Notice and Timing for Commission
Action
The proposed change may be
implemented if the Commission does
not object to the proposed change
within 60 days of the later of: (i) The
date the proposed change was filed with
the Commission or (ii) the date any
additional information requested by the
Commission is received. OCC shall not
implement the proposed change if the
Commission has any objection to the
proposed change.
The Commission may extend the
period for review by an additional 60
days if the proposed change raises novel
or complex issues, subject to the
Commission providing the clearing
agency with prompt written notice of
the extension. A proposed change may
be implemented in less than 60 days
from the date the advance notice is
filed, or the date further information
requested by the Commission is
received, if the Commission notifies the
clearing agency in writing that it does
not object to the proposed change and
authorizes the clearing agency to
implement the proposed change on an
earlier date, subject to any conditions
imposed by the Commission.
OCC shall post notice on its Web site
of proposed changes that are
implemented.
The proposal shall not take effect
until all regulatory actions required
with respect to the proposal are
completed.
sradovich on DSK3GMQ082PROD with NOTICES
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the advance notice is
consistent with the Clearing
Supervision Act and the Act. Comments
31 Securities
Exchange Act Release No. 78961
(September 28, 2016), 81 FR 70786, 70842 (October
13, 2016).
32 12 U.S.C. 5464(b)(2).
33 17 CFR 240.17Ad–22(e)(22).
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18:32 Nov 16, 2017
Jkt 244001
may be submitted by any of the
following methods:
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
54453
[Release No. 34–82060; File No. SR–
BatsEDGX–2017–47]
• 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 SROCC–2017–805 on the subject line.
November 13, 2017.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549.
All submissions should refer to File
Number SR–OCC–2017–805. 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 advance notice that
are filed with the Commission, and all
written communications relating to the
advance notice 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 OCC and on OCC’s Web site at
https://www.theocc.com/components/
docs/legal/rules_and_bylaws/sr_occ_17_
805.pdf.
All comments received will be posted
without change. Persons submitting
comments are cautioned that we do not
redact or edit personal identifying
information from comment submissions.
You should submit only information
that you wish to make available
publicly. All submissions should refer
to File Number SR–OCC–2017–805 and
should be submitted on or before
December 8, 2017.
[FR Doc. 2017–24919 Filed 11–16–17; 8:45 am]
BILLING CODE 8011–01–P
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Fmt 4703
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 November
2, 2017, Cboe EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) (formerly
known as Bats EDGX Exchange, Inc.)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II and III below, which Items
have been prepared by the Exchange.
The Exchange has designated the
proposed rule change as one
establishing or changing a member due,
fee, or other charge imposed by the
Exchange under Section 19(b)(3)(A)(ii)
of the Act 3 and Rule 19b–4(f)(2)
thereunder,4 which renders the
proposed rule change effective upon
filing with the Commission. 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 filed a proposal to
amend the fee schedule applicable to
Members 5 and non-Members of the
Exchange pursuant to EDGX Rules
15.1(a) and (c).
The text of the proposed rule change
is available at the Exchange’s Web site
at www.markets.cboe.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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
5 The term ‘‘Member’’ is defined as ‘‘any
registered broker or dealer that has been admitted
to membership in the Exchange.’’ See Exchange
Rule 1.5(n).
2 17
By the Commission.
Eduardo A. Aleman,
Assistant Secretary.
PO 00000
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Modify Its
Fees for Physical Ports
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54454
Federal Register / Vol. 82, No. 221 / Friday, November 17, 2017 / Notices
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.
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
A physical port is utilized by a
Member or non-Member to connect to
the Exchange at the data centers where
the Exchange’s servers are located. The
Exchange currently maintains a
presence in two third-party data centers:
(i) The primary data center where the
Exchange’s business is primarily
conducted on a daily basis, and (ii) a
secondary data center, which is
predominantly maintained for business
continuity purposes. The Exchange
currently assesses the following
physical connectivity fees for Members
and non-Members on a monthly basis:
$2,000 per physical port that connects
to the System 6 via 1 gigabyte circuit;
and $6,000 per physical port that
connects to the System via 10 gigabyte
circuit. The Exchange proposes to
increase the fee per physical port that
connects to the System via a 10 gigabyte
circuit from $6,000 per month to $7,000
per month in order to cover its
increased infrastructure costs associated
with establishing physical ports to
connect to the Exchange’s Systems and
enable it to continue to maintain and
improve its market technology and
services.7 The Exchange does not
propose to amend the fee for a 1
gigabyte circuit, which will remain
$2,000 per month. The Exchange
proposes to implement this amendment
to its fee schedule on January 2, 2018.
sradovich on DSK3GMQ082PROD with NOTICES
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the objectives of Section 6 of the Act,8
in general, and furthers the objectives of
Section 6(b)(4),9 in particular, as it is
designed to provide for the equitable
allocation of reasonable dues, fees and
other charges among its Members and
6 The term ‘‘System’’ is defined as ‘‘the electronic
communications and trading facility designated by
the Board through which securities orders of Users
are consolidated for ranking, execution and, when
applicable, routing away.’’ See Exchange Rule
1.5(cc).
7 The Exchange also proposes a minor technical
amendment to change the title of the first column
from ‘‘Connection Service Type’’ to Service’’.
8 15 U.S.C. 78f.
9 15 U.S.C. 78f(b)(4).
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18:32 Nov 16, 2017
Jkt 244001
other persons using its facilities. The
Exchange also notes that it operates in
a highly-competitive market in which
market participants can readily direct
order flow to competing venues if they
deem fee levels at a particular venue to
be excessive. The proposed rule change
reflects a competitive pricing structure
designed to incent market participants
to direct their order flow to the
Exchange.
The Exchange believes that the
proposed rate is equitable and nondiscriminatory in that it applies
uniformly to all Members. Members and
non-Members will continue to choose
whether they want more than one
physical port and choose the method of
connectivity based on their specific
needs. All Members that voluntarily
select various service options will be
charged the same amount for the same
services. As is true of all physical
connectivity, all Members and nonMembers have the option to select any
connectivity option, and there is no
differentiation with regard to the fees
charged for the service.
The Exchange believes that the
proposal represents an equitable
allocation of reasonable dues, fees, and
other charges as its fees for physical
connectivity are reasonably constrained
by competitive alternatives. If a
particular exchange charges excessive
fees for connectivity, affected Members
and non-Members may opt to terminate
their connectivity arrangements with
that exchange, and adopt a possible
range of alternative strategies, including
routing to the applicable exchange
through another participant or market
center or taking that exchange’s data
indirectly. Accordingly, if the Exchange
charges excessive fees, it would stand to
lose not only connectivity revenues but
also revenues associated with the
execution of orders routed to it, and, to
the extent applicable, market data
revenues. The Exchange believes that
this competitive dynamic imposes
powerful restraints on the ability of any
exchange to charge unreasonable fees
for connectivity.
Furthermore, the proposed rule
change is also an equitable allocation of
reasonable dues, fees, and other charges
as the Exchange believes that the
increased fees obtained will enable it to
cover its increased infrastructure costs
associated with establishing physical
ports to connect to the Exchange’s
Systems. The additional revenue from
the increased fee will also enable the
Exchange to continue to maintain and
improve its market technology and
services.
Lastly, the Exchange believes the fees
and credits remain competitive with
PO 00000
Frm 00139
Fmt 4703
Sfmt 4703
those charged by other venues and
therefore continue to be reasonable and
equitably allocated to Members. For
instance, the proposed fees for a 10
gigabyte circuit of $7,000 per month is
less than analogous fees charged by the
Nasdaq Stock Market LLC (‘‘Nasdaq’’)
and NYSE Arca, Inc. (‘‘Arca’’), which
range from $10,000–$15,000 per month
for 10 gigabyte circuits.10
(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. As discussed
above, the Exchange believes that fees
for connectivity are constrained by the
robust competition for order flow among
exchanges and non-exchange markets.
The Exchange does not believe that the
proposed changes represent a significant
departure from previous pricing offered
by the Exchange or pricing offered by
the Exchange’s competitors.
Additionally, Members may opt to
disfavor the Exchange’s pricing if they
believe that alternatives offer them
better value. Further, excessive fees for
connectivity would serve to impair an
exchange’s ability to compete for order
flow rather than burdening competition.
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
Members or other interested parties.
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)
of the Act 11 and paragraph (f) of Rule
19b–4 thereunder.12 At any time within
60 days of the filing of the proposed rule
change, the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
10 See Nasdaq Rule 7034(b) and the NYSE Arca
fee schedule available at https://www.nyse.com/
publicdocs/nyse/markets/nyse-arca/NYSE_Arca_
Marketplace_Fees.pdf (dated October 11, 2017).
11 15 U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f).
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Federal Register / Vol. 82, No. 221 / Friday, November 17, 2017 / Notices
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 No. SR–
BatsEDGX–2017–47 on the subject line.
Paper Comments
sradovich on DSK3GMQ082PROD with NOTICES
• 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 No.
SR–BatsEDGX–2017–47. 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 such
filing will also be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File No.
SR–BatsEDGX–2017–47 and should be
submitted on or before December 8,
2017.
VerDate Sep<11>2014
18:32 Nov 16, 2017
Jkt 244001
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–24932 Filed 11–16–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82053; File No. SR–MSRB–
2017–06]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing of Amendment
No. 1 to Proposed Rule Change To
Amend MSRB Rule G–34, on CUSIP
Numbers, New Issue, and Market
Information Requirements
November 13, 2017.
I. Introduction
On August 30, 2017, the Municipal
Securities Rulemaking Board (‘‘MSRB’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change consisting of amendments to
Rule G–34 on CUSIP numbers, new
issue, and market information
requirements. The proposed rule change
was published for comment in the
Federal Register on September 18,
2017.3 The Commission received eleven
comment letters on the proposal.4 On
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Exchange Act Release No. 81595 (September 13,
2017), 82 FR 43587 (‘‘Notice’’). The comment
period closed on October 10, 2017.
4 See Letter to Secretary, Commission, from Leslie
M. Norwood, Managing Director and Associate
General Counsel, Securities Industry and Financial
Markets Association (‘‘SIFMA’’), dated October 10,
2017; Letter to Secretary, Commission, from Susan
Gaffney, Executive Director, National Association of
Municipal Advisors (‘‘NAMA’’), dated October 10,
2017; Letter to Secretary, Commission, from Steve
Apfelbacher, President, EHLERS Inc., dated October
10, 2017; Letter to Secretary, Commission, from
Noreen P. White, Co-President, and Kim W.
Whelan, Co-President, Acacia Financial Group, Inc.,
dated October 10, 2017; Letter to Secretary,
Commission, from Cristeena G. Naser, Vice
President and Senior Counsel, American Bankers
Association (‘‘ABA’’), dated October 10, 2017;
Letter to Secretary, Commission, from Michael G.
Sudsina, President, Sudsina & Associates, LLC,
dated October 10, 2017; Letter to Secretary,
Commission, from Marianne F. Edmonds, Senior
Managing Director, Public Resources Advisory
Group (‘‘PRAG’’), dated October 10, 2017; Letter to
Secretary, Commission, from Emily Swenson Brock,
Director, Federal Liaison Center, Government
Finance Officers Association (‘‘GFOA’’), dated
October 10, 2017; Letter to Secretary, Commission,
from Peter Warms, Senior Manager of Fixed
1 15
PO 00000
Frm 00140
Fmt 4703
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54455
October 18, 2017, the MSRB granted an
extension of time for the Commission to
act on the filing until December 15,
2017. On November 7, 2017, the MSRB
responded to the comments 5 and filed
Amendment No. 1 to the proposed rule
change (‘‘Amendment No. 1’’). The text
of Amendment No. 1 is available on the
MSRB’s Web site.6 The Commission is
publishing this notice to solicit
comments on Amendment No. 1 to the
proposed rule change from interested
persons.
II. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Amendment
In response to concerns raised in the
comments, the MSRB is proposing to
amend proposed paragraph Rule G–
34(a)(i)(F) of the proposed rule change
to require dealers (and municipal
advisors in a competitive sale) seeking
to rely on the principles-based
exception to reasonably believe the
purchaser’s present intent is to hold the
municipal securities to maturity ‘‘or
earlier redemption or mandatory
tender.’’ 7 The MSRB believes the
proposed rule change should be
amended to more accurately reflect the
terms of direct purchase transactions
including the potential for earlier
redemption or mandatory tender.8 The
MSRB is proposing this same
amendment to the proposed principlesbased exception for dealers from the
depository eligibility requirements of
the rule set forth in proposed
subparagraph Rule G–34(a)(ii)(A)(3) for
consistency.9 The MSRB stated that this
provision would clarify that the
depository eligibility requirements of
Rule G–34(a)(ii)(A) do not apply to
municipal securities included in the
principles-based exception.10
In response to concerns raised in the
comments, the MSRB also is proposing
amending the proposed rule change to
Income, Entity, Regulatory Content and Symbology,
Bloomberg L.P., dated October 10, 2017; Letter to
Secretary, Commission, from Dennis Dix, Principal,
DIXWORKS LLC, dated October 10, 2017; Letter to
Secretary, Commission, from Stephan Wolf, CEO,
Global Legal Entity Identifier Foundation
(‘‘GLEIF’’), dated October 9, 2017. Staff from the
Office of Municipal Securities discussed the
proposed rule change with representatives from
PFM Financial Advisors LLC and PFM Asset
Management LLC on October 26, 2017.
5 See Letter from Margaret R. Blake, Associate
General Counsel, MSRB, to Secretary, SEC, dated
November 7, 2017 (‘‘MSRB Response Letter’’),
available at https://www.sec.gov/comments/sr-msrb2017-06/msrb201706-2674227-161458.pdf.
6 Amendment No. 1 is available at https://
www.msrb.org/∼/media/Files/SEC-Filings/2017/
MSRB-2017-06-A-1.ashx.
7 See Amendment No. 1.
8 Id.
9 Id.
10 Id.
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]]>Agencies
[Federal Register Volume 82, Number 221 (Friday, November 17, 2017)]
[Notices]
[Pages 54453-54455]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-24932]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82060; File No. SR-BatsEDGX-2017-47]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Modify Its Fees for Physical Ports
November 13, 2017.
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 November 2, 2017, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') (formerly known as Bats EDGX Exchange, Inc.) filed with the
Securities and Exchange Commission (``Commission'') the proposed rule
change as described in Items I, II and III below, which Items have been
prepared by the Exchange. The Exchange has designated the proposed rule
change as one establishing or changing a member due, fee, or other
charge imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act
\3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposed rule
change effective upon filing with the Commission. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange filed a proposal to amend the fee schedule applicable
to Members \5\ and non-Members of the Exchange pursuant to EDGX Rules
15.1(a) and (c).
---------------------------------------------------------------------------
\5\ The term ``Member'' is defined as ``any registered broker or
dealer that has been admitted to membership in the Exchange.'' See
Exchange Rule 1.5(n).
---------------------------------------------------------------------------
The text of the proposed rule change is available at the Exchange's
Web site at www.markets.cboe.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
[[Page 54454]]
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.
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
A physical port is utilized by a Member or non-Member to connect to
the Exchange at the data centers where the Exchange's servers are
located. The Exchange currently maintains a presence in two third-party
data centers: (i) The primary data center where the Exchange's business
is primarily conducted on a daily basis, and (ii) a secondary data
center, which is predominantly maintained for business continuity
purposes. The Exchange currently assesses the following physical
connectivity fees for Members and non-Members on a monthly basis:
$2,000 per physical port that connects to the System \6\ via 1 gigabyte
circuit; and $6,000 per physical port that connects to the System via
10 gigabyte circuit. The Exchange proposes to increase the fee per
physical port that connects to the System via a 10 gigabyte circuit
from $6,000 per month to $7,000 per month in order to cover its
increased infrastructure costs associated with establishing physical
ports to connect to the Exchange's Systems and enable it to continue to
maintain and improve its market technology and services.\7\ The
Exchange does not propose to amend the fee for a 1 gigabyte circuit,
which will remain $2,000 per month. The Exchange proposes to implement
this amendment to its fee schedule on January 2, 2018.
---------------------------------------------------------------------------
\6\ The term ``System'' is defined as ``the electronic
communications and trading facility designated by the Board through
which securities orders of Users are consolidated for ranking,
execution and, when applicable, routing away.'' See Exchange Rule
1.5(cc).
\7\ The Exchange also proposes a minor technical amendment to
change the title of the first column from ``Connection Service
Type'' to Service''.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\8\ in general, and
furthers the objectives of Section 6(b)(4),\9\ in particular, as 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 also notes that it operates in a highly-
competitive market in which market participants can readily direct
order flow to competing venues if they deem fee levels at a particular
venue to be excessive. The proposed rule change reflects a competitive
pricing structure designed to incent market participants to direct
their order flow to the Exchange.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that the proposed rate is equitable and non-
discriminatory in that it applies uniformly to all Members. Members and
non-Members will continue to choose whether they want more than one
physical port and choose the method of connectivity based on their
specific needs. All Members that voluntarily select various service
options will be charged the same amount for the same services. As is
true of all physical connectivity, all Members and non-Members have the
option to select any connectivity option, and there is no
differentiation with regard to the fees charged for the service.
The Exchange believes that the proposal represents an equitable
allocation of reasonable dues, fees, and other charges as its fees for
physical connectivity are reasonably constrained by competitive
alternatives. If a particular exchange charges excessive fees for
connectivity, affected Members and non-Members may opt to terminate
their connectivity arrangements with that exchange, and adopt a
possible range of alternative strategies, including routing to the
applicable exchange through another participant or market center or
taking that exchange's data indirectly. Accordingly, if the Exchange
charges excessive fees, it would stand to lose not only connectivity
revenues but also revenues associated with the execution of orders
routed to it, and, to the extent applicable, market data revenues. The
Exchange believes that this competitive dynamic imposes powerful
restraints on the ability of any exchange to charge unreasonable fees
for connectivity.
Furthermore, the proposed rule change is also an equitable
allocation of reasonable dues, fees, and other charges as the Exchange
believes that the increased fees obtained will enable it to cover its
increased infrastructure costs associated with establishing physical
ports to connect to the Exchange's Systems. The additional revenue from
the increased fee will also enable the Exchange to continue to maintain
and improve its market technology and services.
Lastly, the Exchange believes the fees and credits remain
competitive with those charged by other venues and therefore continue
to be reasonable and equitably allocated to Members. For instance, the
proposed fees for a 10 gigabyte circuit of $7,000 per month is less
than analogous fees charged by the Nasdaq Stock Market LLC (``Nasdaq'')
and NYSE Arca, Inc. (``Arca''), which range from $10,000-$15,000 per
month for 10 gigabyte circuits.\10\
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\10\ See Nasdaq Rule 7034(b) and the NYSE Arca fee schedule
available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf (dated October 11, 2017).
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(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. As discussed above, the
Exchange believes that fees for connectivity are constrained by the
robust competition for order flow among exchanges and non-exchange
markets. The Exchange does not believe that the proposed changes
represent a significant departure from previous pricing offered by the
Exchange or pricing offered by the Exchange's competitors.
Additionally, Members may opt to disfavor the Exchange's pricing if
they believe that alternatives offer them better value. Further,
excessive fees for connectivity would serve to impair an exchange's
ability to compete for order flow rather than burdening competition.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from Members or other interested
parties.
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) of the Act \11\ and paragraph (f) of Rule 19b-4
thereunder.\12\ At any time within 60 days of the filing of the
proposed rule change, the Commission summarily may temporarily suspend
such rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f).
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[[Page 54455]]
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 No. SR-BatsEDGX-2017-47 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 No. SR-BatsEDGX-2017-47. 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 such filing will also be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change. Persons submitting
comments are cautioned that we do not redact or edit personal
identifying information from comment submissions. You should submit
only information that you wish to make available publicly. All
submissions should refer to File No. SR-BatsEDGX-2017-47 and should be
submitted on or before December 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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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-24932 Filed 11-16-17; 8:45 am]
BILLING CODE 8011-01-P
