Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Exchange Rules 7030, 7034, and 7051, 5818-5822 [2018-02567]
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Federal Register / Vol. 83, No. 28 / Friday, February 9, 2018 / Notices
Retirement Programs, U.S. Office of
Personnel Management, 1900 E Street
NW, Room 4316, Washington, DC
20415. Phone (202) 606–0722 or email
at actuary@opm.gov.
For the Board of Actuaries.
Kathleen M. McGettigan,
Acting Director.
[FR Doc. 2018–02574 Filed 2–8–18; 8:45 am]
BILLING CODE 6325–64–P
POSTAL REGULATORY COMMISSION
[Docket Nos. MC2018–123 and CP2018–166]
New Postal Products
Postal Regulatory Commission.
Notice.
AGENCY:
ACTION:
The Commission is noticing a
recent Postal Service filing for the
Commission’s consideration concerning
negotiated service agreements. This
notice informs the public of the filing,
invites public comment, and takes other
administrative steps.
DATES: Comments are due: February 13,
2018.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s website (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
with the requirements of 39 CFR
3007.40.
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3010, and 39
CFR part 3020, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3015, and
39 CFR part 3020, subpart B. Comment
deadline(s) for each request appear in
section II.
II. Docketed Proceeding(s)
1. Docket No(s).: MC2018–123 and
CP2018–166; Filing Title: USPS Request
to Add Priority Mail Contract 421 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: February 5, 2018;
Filing Authority: 39 U.S.C. 3642 and 39
CFR 3020.30 et seq.; Public
Representative: Timothy J. Schwuchow;
Comments Due: February 13, 2018.
This notice will be published in the
Federal Register.
Stacy L. Ruble,
Secretary.
I. Introduction
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I. Introduction
II. Docketed Proceeding(s)
[FR Doc. 2018–02627 Filed 2–8–18; 8:45 am]
The Commission gives notice that the
Postal Service filed request(s) for the
Commission to consider matters related
to negotiated service agreement(s). The
request(s) may propose the addition or
removal of a negotiated service
agreement from the market dominant or
the competitive product list, or the
modification of an existing product
currently appearing on the market
dominant or the competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
BILLING CODE 7710–FW–P
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POSTAL SERVICE
Product Change—Priority Mail
Negotiated Service Agreement
Postal ServiceTM.
Notice.
AGENCY:
ACTION:
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice: February
9, 2018.
SUMMARY:
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FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Reed, 202–268–3179.
The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on February 5,
2018, it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Contract 421 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2018–123, CP2018–166.
SUPPLEMENTARY INFORMATION:
Elizabeth A. Reed,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2018–02570 Filed 2–8–18; 8:45 am]
BILLING CODE 7710–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82628; File No. SR–BX–
2018–006]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Exchange
Rules 7030, 7034, and 7051
February 5, 2018.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
22, 2018, Nasdaq BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by 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
Exchange Rules 7030, 7034, and 7051,
as described below.
The text of the proposed rule change
is available on the Exchange’s website at
https://nasdaqbx.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
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 83, No. 28 / Friday, February 9, 2018 / Notices
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.
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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
several sections of its Rules to
harmonize its colocation, connectivity,
and direct connectivity services and fees
with those of its sister exchanges,
including The Nasdaq Stock Market LLC
(‘‘Nasdaq’’), Nasdaq ISE, LLC (‘‘Nasdaq
ISE’’), Nasdaq MRX, LLC (‘‘Nasdaq
MRX’’), and Nasdaq GEMX, LLC
(‘‘Nasdaq GEMX’’) (collectively, the
‘‘Nasdaq, Inc. Exchanges’’).3 The
Exchange also proposes to update or
eliminate certain obsolete or extraneous
language from its Rules.
The Nasdaq, Inc. Exchanges offer
certain colocation, connectivity, and
direct connectivity services to their
customers on a shared basis, meaning
that a customer may utilize these
services to gain access to any or all of
the Nasdaq, Inc. Exchanges. The
Nasdaq, Inc. Exchanges only charge
customers once for these shared
services, even to the extent that
customers use the services to connect to
more than one of the Nasdaq, Inc.
Exchanges.
The amendments that the Exchange
proposes herein are intended
principally to ensure that the shared
services that the Exchange offers, and
the fees that it charges for such services,
are uniform across the Nasdaq, Inc.
Exchanges’ rulebooks and reflect
relevant changes that have been made
already to the rules of other Nasdaq, Inc.
Exchanges. The amendments also
remove certain language from the
Exchange’s Rules that refers to obsolete
terms or expired time-limited programs
or that is otherwise extraneous.
First, the Exchange proposes to
amend Rule 7030(d), entitled ‘‘Testing
Facilities,’’ to eliminate extraneous
provisions that were inadvertently and
erroneously included in the Rule but
have no intended meaning or purpose
there. These provisions are subsections
(d)(2)–(d)(3). Subsection (d)(2) defines
terms, such as ‘‘Active Connection,’’
3 In the near future, Nasdaq PHLX LLC (‘‘Phlx’’)
plans to file a proposal with the Commission to
make similar conforming changes to its rules.
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‘‘Idle Connection,’’ and ‘‘Period of
Inactivity,’’ that are not utilized
elsewhere in the Rule, Subsection (d)(3)
lists exceptions to the testing fees that
are not applicable to the Exchange’s
Test Facility. The Exchange proposes
that existing subsection (d)(4) be
renumbered as new subsection (d)(2).
The Exchange also proposes that new
subsection (d)(2) delete reference to an
obsolete waiver of installation fees for
installations ordered prior to March
2014. Lastly, the Exchange proposes to
clarify that connectivity to the
Exchange’s testing facility will also
provide for connectivity to the testing
facilities of any or all of the other
Nasdaq, Inc. Exchanges, including those
of not only Nasdaq and Phlx (as is stated
in the existing Rule), but also those of
Nasdaq ISE, Nasdaq MRX, and Nasdaq
GEMX.
Second, the Exchange proposes to
amend BX Rule 7034, which lists the
schedule of fees that the Exchange
charges for colocation services, to
harmonize that schedule with the
existing rules of other Nasdaq, Inc.
Exchanges, including Nasdaq Rule 7034,
Chapter VI.E of the Nasdaq ISE
Schedule of Fees, Chapter IV.A of the
Nasdaq MRX Schedule of Fees, and
Chapter IV.F of the Nasdaq GEMX
Schedule of Fees. The proposed changes
are as follows:
• The Exchange proposes to amend
Rule 7034(a), under the heading
‘‘Cabinet with Power,’’ to update the
installation and monthly fees it charges
to customers to rent powered cabinet
space in its colocation facilities. The
proposed changes are as follows: (i) For
super high density cabinets, the
Exchange proposes to decrease its
installation fee from $7,000 to $4,500
and its monthly fee from $13,000 to
$8,000; (ii) for high density cabinets, it
proposes to decrease its monthly fee
from $7,000 to $4,500; (iii) for mediumhigh density cabinets, it proposes to
decrease its monthly fees from $6,000 to
$3,500; (iv) for medium density
cabinets, it proposes to decrease its
monthly fees from $5,000 to $2,500; (v)
for low density cabinets, it proposes to
decrease its monthly fees from $4,000 to
$2,000; and (vi) for half cabinets, it
proposes to decrease its monthly fees
from $3,000 to $2,000. These changes
will render this subsection of the Rules
consistent with the existing rules of
other Nasdaq, Inc. Exchanges, including
Nasdaq Rule 7034(a), Chapter VI.E of
the Nasdaq ISE Schedule of Fees,
Chapter IV.A of the Nasdaq MRX
Schedule of Fees, and Chapter IV.F of
the Nasdaq GEMX Schedule of Fees.
• The Exchange proposes to amend
Rule 7034(a) to remove the paragraph
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entitled ‘‘Temporary Fee Reduction for
Cabinets with Power,’’ as this fee
reduction program has expired.
• The Exchange proposes to amend
Rule 7034(b), under the heading
‘‘External Telco/Inter-Cabinet
Connectivity,’’ to update the monthly
fees it charges for external
telecommunications and inter-cabinet
connectivity, as follows: (i) For a
category 6 cable patch, a DS–3
connection, and a fiber connection, the
Exchange proposes to increase its
monthly fees from $300 to $350; and (ii)
for a POTS Line, the Exchange proposes
to increase the monthly fee from $0 to
$50. These changes will render this
paragraph of the Rules consistent with
a corresponding paragraph in the
existing rules of other Nasdaq, Inc.
Exchanges, including Nasdaq Rule
7034(b), Chapter VI.E of the Nasdaq ISE
Schedule of Fees, Chapter IV.A of the
Nasdaq MRX Schedule of Fees, and
Chapter IV.F of the Nasdaq GEMX
Schedule of Fees.
• The Exchange proposes to amend
Rule 7034(b), under the heading
‘‘Connectivity to BX,’’ to update the fees
it charges for fiber connectivity to the
Exchange, as follows: (i) For a 10Gb
fiber connection to the Exchange, the
Exchange proposes to increase the
monthly fee from $5,000 to $10,000; (ii)
for a 40Gb fiber connection to the
Exchange, it proposes to increase the
monthly fee from $15,000 to $20,000;
(iii) for a 1Gb fiber connection to the
Exchange, it proposes to increase the
monthly fee from $1,000 to $2,500; (iv)
for a 1Gb copper connection to the
Exchange, it proposes to increase the
monthly fee from $1,000 to $2,500; (v)
the Exchange proposes to add a 1Gb
Ultra fiber connection to the Exchange
for an installation fee of $1,500 and a
monthly fee of $2,500; and (vi) the
Exchange proposes to remove obsolete
language regarding an expired fee
waiver program. These changes will
render this paragraph of the Rules
consistent with corresponding
paragraphs in the existing rules of other
Nasdaq, Inc. Exchanges, including
Nasdaq Rule 7034(b), Chapter VI.E of
the Nasdaq ISE Schedule of Fees,
Chapter IV.A of the Nasdaq MRX
Schedule of Fees, and Chapter IV.F of
the Nasdaq GEMX Schedule of Fees.
The Exchange also proposes an
amendment to this provision to clarify
that connectivity to the Exchange will
also provide for connectivity to any or
all of the other Nasdaq, Inc. Exchanges,
including not only Nasdaq and Phlx (as
the existing Rule provides), but also
Nasdaq ISE, Nasdaq MRX, and Nasdaq
GEMX. This proposal mirrors existing
language in Chapter VI.E of the Nasdaq
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ISE Schedule of Fees, Chapter IV.A of
the Nasdaq MRX Schedule of Fees, and
Chapter IV.F of the Nasdaq GEMX
Schedule of Fees.
• The Exchange proposes to amend
Rule 7034(b) to add a new paragraph
under a heading entitled ‘‘Connectivity
to Third Party Services.’’ This proposed
paragraph will provide for connectivity
via colocation to market data feeds from
other markets and exchanges,4
Securities Information Processors
(‘‘SIPs’’) 5 data, and other non-exchange
services. The proposed connectivity and
associated fees are as follows: (i) For a
10Gb Ultra fiber connection, the
Exchange proposes to charge a $1,500
installation fee and an ongoing monthly
fee of $5,000; (ii) for a 1Gb Ultra fiber
connection, it proposes to charge a
$1,500 installation fee and an ongoing
monthly fee of $2,000; and (iii) for a 1Gb
Ultra or a 10Gb Ultra connection for
UTP only, it proposes to charge a $100
installation fee and an ongoing monthly
fee of $100. All of the foregoing fees will
be waived for two connections per
client to UTP SIP feeds only (UQDF and
UTDF). The Exchange notes that the
proposed paragraph parallels the
existing rules of other Nasdaq, Inc.
Exchanges, including Nasdaq Rule
7034(b), Chapter VI.E of the Nasdaq ISE
Schedule of Fees, Chapter IV.A of the
Nasdaq MRX Schedule of Fees, and
Chapter IV.F of the Nasdaq GEMX
Schedule of Fees.
• The Exchange proposes to amend
Rule 7034(b), under the heading
‘‘Market Data Connectivity,’’ to add
prefatory language that exists in the
analogous portion of Nasdaq Rule
7034(b). The language merely notes that
the Market Data feeds listed in the
provision are delivered to the Nasdaq
Data Center via a fiber optic network.
Additionally, the Exchange proposes to
re-categorize and update the names of
the certain CBOE/Bats/Direct Edge data
feeds insofar as the names listed in the
current Rule are obsolete. Similarly, the
Exchange proposes to delete a $1,000
installation fee that presently applies to
the Direct Edge feeds insofar as the
Direct Edge feeds are now offerings of
CBOE, along with the BZX and BYX
4 For example, Third Party Connectivity will
support connectivity to the FINRA/Nasdaq Trade
Reporting Facility, BZX and BYX Depth Feeds, and
NYSE Feeds. A customer must separately subscribe
to the third party services to which it connects with
a Third Party Connectivity subscription.
5 The SIPs link the U.S. markets by processing
and consolidating all protected bid/ask quotes and
trades from every registered exchange trading venue
and FINRA into a single data feed, and they
disseminate and calculate critical regulatory
information, including the National Best Bid and
Offer, Limit Up Limit Down price bands, short sale
restrictions and regulatory halts.
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feeds. Going forward, a single, one-time
$1,000 installation fee will apply to
subscribers to any or all of the CBOE
data feeds.
• The Exchange proposes to amend
Rule 7034(b) to add a new paragraph
that will provide for multicast market
data feeds from other markets to be
delivered to the Exchange’s customers
via wireless microwave or millimeter
wave networks. The Exchange notes that
Nasdaq already provides such data feeds
to its customers pursuant to an
analogous paragraph in Nasdaq Rule
7034(b). The proposed data feeds, and
their corresponding installation and
monthly fees, are as follows: (i) NYSE
Equities (Arca Integrated), for an
installation fee of $5,000 and a monthly
fee of $10,000; (ii) NYSE Equities (NYSE
Integrated), for an installation fee of
$5,000 and a monthly fee of $10,000;
(iii) BATS Multicast PITCH (BZX and
BYZ), for an installation fee of $2,500
and a monthly fee of $7,500; (iv) Direct
EDGE Depth of Book (EDGA, EDGX), for
an installation fee of $2,500 and a
monthly fee of $7,500; (v) CME
Multicast Total (including CME Equities
Futures Data, CME Fixed Income
Futures Data, and CME Metal Futures
Data), for an installation fee of $5,000
and a monthly fee of $23,500; (vi) CME
Equities Futures Data Only, for a $5,000
installation fee and a monthly fee of
$10,000; (vii) CME Fixed Income
Futures Data Only, for a $5,000
installation fee and a monthly fee of
$10,000; and (viii) CME Metals Futures
Data Only, for a $5,000 installation fee
and a monthly fee of $3,500.6 As to the
monthly fee for these services, the
proposal provides that subscribers will
receive discounts based upon the
number of subscriptions they maintain.7
The Exchange proposes to add this
paragraph to render the Rules consistent
with corresponding paragraphs in the
existing rules of other Nasdaq, Inc.
6 The Exchange proposes to charge subscribers to
any or all of the CME Data Feeds a single $5,000
installation fee. In other words, a subscriber to the
CME Fixed Income Futures Data Feed and the CME
Metals Futures Data Feed will only pay a single
$5,000 installation fee for access to both feeds.
7 The proposed Rule paragraph provides that
subscribers with three to five microwave or
millimeter wave wireless subscriptions under Rule
7015 and/or Rule 7034(b) will receive a 5%
discount on all such subscriptions. Meanwhile,
subscribers with six to ten microwave or millimeter
wave wireless subscriptions under Rule 7015 and/
or Rule 7034(b) will receive a 10% discount on all
such subscriptions. Subscribers with eleven to
fourteen microwave or millimeter wave wireless
subscriptions under Rule 7015 and/or Rule 7034(b)
will receive a 15% discount on all such
subscriptions. Finally, subscribers with fifteen or
more microwave or millimeter wave wireless
subscriptions under Rule 7015 and/or Rule 7034(b)
will receive a 20% discount on all such
subscriptions.
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Exchanges, including Nasdaq Rule
7034(b), Chapter VI.E of the Nasdaq ISE
Schedule of Fees, Chapter IV.A of the
Nasdaq MRX Schedule of Fees, and
Chapter IV.F of the Nasdaq GEMX
Schedule of Fees.
• The Exchange proposes to amend
Rule 7034(d), under the heading
‘‘Additional Charges/Services,’’ to
update the installation fee it charges for
super high density cabinet kits.
Specifically, the Exchange proposes to
decrease the fee from $7,000 to $4,500.
This change will render this paragraph
of the Rules consistent with
corresponding paragraphs in the
existing rules of other Nasdaq, Inc.
Exchanges, including Nasdaq Rule
7034(d), Chapter VI.E of the Nasdaq ISE
Schedule of Fees, Chapter IV.A of the
Nasdaq MRX Schedule of Fees, and
Chapter IV.F of the Nasdaq GEMX
Schedule of Fees, entitled ‘‘Additional
Items.’’
Third, the Exchange proposes to
amend Rule 7051, entitled ‘‘Direct
Connectivity to BX.’’ This Rule
describes the means by which
customers may connect directly to the
Exchange’s main or satellite data centers
via a third party vendor’s
telecommunications circuit. The
proposed changes to this Section are as
follows:
• The Exchange proposes to update
the structure of Rule 7051 so that it will
parallel the structure of the existing
rules of other Nasdaq, Inc. Exchanges,
including Nasdaq Rule 7051, Chapter
VI.F, G, and H of the Nasdaq ISE
Schedule of Fees, Chapter IV.B, C, and
D of the Nasdaq MRX Schedule of Fees,
and Chapter IV.G, H, and I of the
Nasdaq GEMX Schedule of Fees.
Specifically, the Exchange proposes to
place the existing text of Rule 7051 into
a subsection (a), to be entitled ‘‘Direct
Circuit Connection to BX.’’ It also
proposes to add two additional
subsections, as described below.
• The Exchange proposes to amend
the text of Rule 7051 (as reorganized in
proposed subsection (a) and re-titled
‘‘Direct Circuit Connection to BX’’) so
that it is fully consistent with the
existing rules of other Nasdaq, Inc.
Exchanges, including Nasdaq Rule
7051(a), Chapter VI.F of the Nasdaq ISE
Schedule of Fees, Chapter IV.B of the
Nasdaq MRX Schedule of Fees, and
Chapter IV.G of the Nasdaq GEMX
Schedule of Fees in terms of both the
direct circuit connections that it offers
to its customers as well as the associated
fees that it charges for such connections.
The proposed changes are as follows: (i)
For 10Gb direct circuit connections to
BX, the Exchange proposes to increase
the installation fee from $1,000 to
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$1,500 and the monthly fee from $5,000
to $7,500; (ii) for 1Gb direct circuit
connections to BX, the Exchange
proposes to increase the installation fee
from $1,000 to $1,500 and the monthly
fee from $1,000 to $2,500; (iii) the
Exchange proposes to add a 1Gb Ultra
direct circuit connection for an
installation fee of $1,500 and a monthly
fee from $2,500; and (iv) the Exchange
proposes to clarify that direct circuit
connectivity to the Exchange will also
provide for direct circuit connectivity to
any or all of the other Nasdaq, Inc.
Exchanges, including not only Nasdaq
and Phlx (as the existing Rule provides),
but also Nasdaq ISE, Nasdaq MRX, and
Nasdaq GEMX.
• The Exchange proposes to add a
new subsection (b) to Rule 7051,
entitled ‘‘Direct Circuit Connection to
Third Party Services.’’ Through this
subsection, which is an analogue to the
existing rules of other Nasdaq, Inc.
Exchanges, including Nasdaq Rule
7051(b), Chapter VI.G of the Nasdaq ISE
Schedule of Fees, Chapter IV.C of the
Nasdaq MRX Schedule of Fees, and
Chapter IV.H of the Nasdaq GEMX
Schedule of Fees, the Exchange will
offer its customers direct circuit
connections to third party services,
including the same third party services
to which it proposes to connect
customers through colocation, as set
forth in proposed Rule 7034(b)
(described above). Specifically, the
Exchange proposes to offer the
following services and charge the
following fees for them: (i) A 10Gb Ultra
direct circuit connection for an
installation fee of $1,500 and a monthly
fee of $5,000; (ii) a 1Gb Ultra direct
circuit connection for an installation fee
of $1,500 and a monthly fee of $2,000;
(iii) a 1Gb Ultra or 10Gb direct circuit
connection (for UTP only) for an
installation fee of $100 and a monthly
fee of $100; (iv) an optional cable router
for a $925 installation fee; and (v) a
monthly fee of $150 per ‘‘U’’ of cabinet
space rented. For direct circuit
connectivity to UTP SIP feeds only, the
installation and monthly fees will be
waived for the first two connections.
The Exchange proposes to add a new
subsection (c) to Rule 7051, entitled
‘‘Point of Presence (POP) Connectivity.’’
This subsection, which is an analogue to
the existing rules of other Nasdaq, Inc.
Exchanges, including Nasdaq Rule
7051(c), Chapter VI.H of the Nasdaq ISE
Schedule of Fees, Chapter IV.D of the
Nasdaq MRX Schedule of Fees, and
Chapter IV.I of the Nasdaq GEMX
Schedule of Fees, provides for
customers to connect directly to the
Exchange through a ‘‘Point of Presence’’
or ‘‘POP’’ that is located at one of the
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Exchange’s satellite data centers, rather
than in the Exchange’s main data center.
Each such POP, in turn, has a fully
redundant connection to the Exchange’s
primary data center. The proposed
services and associated fees are as
follows: (i) The Exchange proposes to
offering a 10Gb POP connection to BX
for an installation fee of $1,500 and a
monthly of $7,500; (ii) it proposes to
offer a 1Gb Ultra POP connection to BX
for an installation fee of $1,500 and a
monthly fee of $2,500; and (iii) the
Exchange proposes to state that the POP
connectivity provided under this
subsection also applies to connectivity
to any or all of the other Nasdaq, Inc.
Exchanges.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,8 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,9 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees and other charges
among members and issuers and other
persons using any facility, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange believes that its
proposals to update its schedule of
shared connectivity, direct circuit
connectivity, and colocation services
that it provides in concert with its sister
Nasdaq, Inc. Exchanges, and for which
the Nasdaq, Inc. Exchanges charge a
single fee, is reasonable insofar as the
proposals will ensure that the
Exchange’s Rules, as they apply to such
services and fees, are consistent with
the applicable schedules and rules of
other Nasdaq, Inc. Exchanges, including
Nasdaq, Nasdaq ISE, Nasdaq MRX, and
Nasdaq GEMX. In this regard, the
Exchange notes that the proposed
amendments to its Rules largely reflect
changes and updates that have been
made already to the schedules and rules
of these other Nasdaq, Inc. Exchanges.
For example, each of the proposed
changes to the Exchange’s connectivity,
direct connectivity, and colocation fees
will harmonize the Exchange’s fees with
those of Nasdaq, Nasdaq ISE, Nasdaq
MRX, and Nasdaq GEMX.
In a few instances, however, the
Exchange proposes amendments to its
rules that are not reflected in the rules
of the other Nasdaq, Inc. Exchanges.
These proposals seek to eliminate
certain language from its Rules that is
extraneous, eliminate references to
expired fee reduction or waiver
8 15
9 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
Frm 00068
Fmt 4703
Sfmt 4703
5821
programs, update references to third
party data feeds to reflect their current
names, and eliminate an obsolete
installation fee for Direct Edge data
feeds. The Exchange believes that these
proposals are non-controversial because
it serves the interests of the public and
investors for the Exchange to maintain
a current and accurate Rulebook and
because the proposals will not impact
competition or limit access to or
availability of the Exchange or its
systems.
The Exchange believes that the
foregoing proposals provide for the
equitable allocation of fees because the
connectivity and colocation services to
which these fees apply are shared
services for which customers pay once,
regardless of whether the customers
choose to use these services to connect
only to BX or also to any or all of the
other Nasdaq, Inc. Exchanges. Moreover,
the other Nasdaq, Inc. Exchanges
already offer these shared services to
their customers and do so at the same
prices that the Exchange now proposes
to charge. As such, the proposals will
ensure that the fees that the Exchanges
charges its customers for shared services
are the same fees that the other Nasdaq,
Inc. Exchanges charges their customers
(including their customers who are also
BX Members) for the same shared
services. In other words, the proposals
would ensure that a customer of the
Exchange that wishes to, say, purchase
direct connectivity to all of the Nasdaq,
Inc. Exchanges will not pay more to do
so through BX than it would pay if it
purchased that same connectivity from
Nasdaq, and vice versa.
The proposed fees and fee changes,
moreover, are equitably allocated
because the proposals align these fees
with the costs that the Exchange incurs
to provide the shared services,
including the costs of developing,
installing, maintaining, and upgrading
equipment and systems relating to
connectivity and colocation services.
Finally, the proposed fees are equitably
allocated because all member firms that
subscribe to a particular connectivity
option under the amended Rules will be
assessed the same fee.
The proposals, similarly, are not
unfairly discriminatory because the
shared services they entail will be
available to all similarly situated clients,
while the fees and fee changes they
entail will apply uniformly to such
clients to the extent that they choose to
utilize the shared services.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
E:\FR\FM\09FEN1.SGM
09FEN1
5822
Federal Register / Vol. 83, No. 28 / Friday, February 9, 2018 / Notices
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 have been exempted from
compliance with the statutory standards
applicable to exchanges. Because
competitors are free to modify their own
fees in response, and because market
participants may connect to third
parties instead of directly connecting to
the Exchange, the Exchange believes
that the degree to which fee changes in
this market may impose any burden on
competition is extremely limited.
In this instance, the proposed changes
to the charges assessed for colocation,
connectivity, and direct circuit
connectivity are consistent with the fees
already assessed by other Nasdaq, Inc.
Exchanges for the same shared services.
To the extent that any of these fees are
[sic] unattractive to market participants,
it is likely that the Exchange, and its
sister Nasdaq, Inc. Exchanges, will lose
market share as a result. The Exchange
does not believe that the proposed
changes will impair the ability of
members or competing order execution
venues to maintain their competitive
standing in the financial markets.
Furthermore, the Exchange does not
expect that its proposals to eliminate or
replace expired or obsolete language
from its Rulebook will have any impact
on competition.
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.
sradovich on DSK3GMQ082PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
VerDate Sep<11>2014
16:57 Feb 08, 2018
Jkt 244001
19(b)(3)(A)(iii) of the Act 10 and
subparagraph (f)(6) of Rule 19b–4
thereunder.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
available for website 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.
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–BX–2018–006, and should
be submitted on or before March 2,
2018.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Eduardo A. Aleman,
Assistant Secretary.
Electronic Comments
[FR Doc. 2018–02567 Filed 2–8–18; 8:45 am]
• 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–
BX–2018–006 on the subject line.
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82629; File No. SR–
NASDAQ–2017–074]
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–BX–2018–006. 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 website (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
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Designation of Longer Period for
Commission Action on Proceedings To
Determine Whether To Approve or
Disapprove a Proposed Rule Change,
as Modified by Amendment Nos. 1 and
2, To Adopt the Midpoint Extended Life
Order
February 5, 2018.
On July 21, 2017, The Nasdaq Stock
Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to adopt the Midpoint Extended
Life Order (‘‘MELO’’). The proposed
rule change was published for comment
in the Federal Register on August 9,
2017.3 On August 9, 2017, the Exchange
filed Amendment No. 1 to the proposed
rule change.4 On September 21, 2017,
12 17
10 15
U.S.C. 78s(b)(3)(A)(iii).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 81311
(August 3, 2017), 82 FR 37248.
4 In Amendment No. 1, the Exchange updated the
proposal to reflect the approval of the proposal by
the Exchange’s Board of Directors on July 21, 2017.
Amendment No. 1 is available at https://
www.sec.gov/comments/sr-nasdaq-2017-074/
1 15
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09FEN1
]]>Agencies
[Federal Register Volume 83, Number 28 (Friday, February 9, 2018)]
[Notices]
[Pages 5818-5822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-02567]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82628; File No. SR-BX-2018-006]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Exchange
Rules 7030, 7034, and 7051
February 5, 2018.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on January 22, 2018, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by 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 Exchange Rules 7030, 7034, and 7051,
as described below.
The text of the proposed rule change is available on the Exchange's
website at https://nasdaqbx.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
[[Page 5819]]
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 several sections of its Rules to
harmonize its colocation, connectivity, and direct connectivity
services and fees with those of its sister exchanges, including The
Nasdaq Stock Market LLC (``Nasdaq''), Nasdaq ISE, LLC (``Nasdaq ISE''),
Nasdaq MRX, LLC (``Nasdaq MRX''), and Nasdaq GEMX, LLC (``Nasdaq
GEMX'') (collectively, the ``Nasdaq, Inc. Exchanges'').\3\ The Exchange
also proposes to update or eliminate certain obsolete or extraneous
language from its Rules.
---------------------------------------------------------------------------
\3\ In the near future, Nasdaq PHLX LLC (``Phlx'') plans to file
a proposal with the Commission to make similar conforming changes to
its rules.
---------------------------------------------------------------------------
The Nasdaq, Inc. Exchanges offer certain colocation, connectivity,
and direct connectivity services to their customers on a shared basis,
meaning that a customer may utilize these services to gain access to
any or all of the Nasdaq, Inc. Exchanges. The Nasdaq, Inc. Exchanges
only charge customers once for these shared services, even to the
extent that customers use the services to connect to more than one of
the Nasdaq, Inc. Exchanges.
The amendments that the Exchange proposes herein are intended
principally to ensure that the shared services that the Exchange
offers, and the fees that it charges for such services, are uniform
across the Nasdaq, Inc. Exchanges' rulebooks and reflect relevant
changes that have been made already to the rules of other Nasdaq, Inc.
Exchanges. The amendments also remove certain language from the
Exchange's Rules that refers to obsolete terms or expired time-limited
programs or that is otherwise extraneous.
First, the Exchange proposes to amend Rule 7030(d), entitled
``Testing Facilities,'' to eliminate extraneous provisions that were
inadvertently and erroneously included in the Rule but have no intended
meaning or purpose there. These provisions are subsections (d)(2)-
(d)(3). Subsection (d)(2) defines terms, such as ``Active Connection,''
``Idle Connection,'' and ``Period of Inactivity,'' that are not
utilized elsewhere in the Rule, Subsection (d)(3) lists exceptions to
the testing fees that are not applicable to the Exchange's Test
Facility. The Exchange proposes that existing subsection (d)(4) be
renumbered as new subsection (d)(2). The Exchange also proposes that
new subsection (d)(2) delete reference to an obsolete waiver of
installation fees for installations ordered prior to March 2014.
Lastly, the Exchange proposes to clarify that connectivity to the
Exchange's testing facility will also provide for connectivity to the
testing facilities of any or all of the other Nasdaq, Inc. Exchanges,
including those of not only Nasdaq and Phlx (as is stated in the
existing Rule), but also those of Nasdaq ISE, Nasdaq MRX, and Nasdaq
GEMX.
Second, the Exchange proposes to amend BX Rule 7034, which lists
the schedule of fees that the Exchange charges for colocation services,
to harmonize that schedule with the existing rules of other Nasdaq,
Inc. Exchanges, including Nasdaq Rule 7034, Chapter VI.E of the Nasdaq
ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees,
and Chapter IV.F of the Nasdaq GEMX Schedule of Fees. The proposed
changes are as follows:
The Exchange proposes to amend Rule 7034(a), under the
heading ``Cabinet with Power,'' to update the installation and monthly
fees it charges to customers to rent powered cabinet space in its
colocation facilities. The proposed changes are as follows: (i) For
super high density cabinets, the Exchange proposes to decrease its
installation fee from $7,000 to $4,500 and its monthly fee from $13,000
to $8,000; (ii) for high density cabinets, it proposes to decrease its
monthly fee from $7,000 to $4,500; (iii) for medium-high density
cabinets, it proposes to decrease its monthly fees from $6,000 to
$3,500; (iv) for medium density cabinets, it proposes to decrease its
monthly fees from $5,000 to $2,500; (v) for low density cabinets, it
proposes to decrease its monthly fees from $4,000 to $2,000; and (vi)
for half cabinets, it proposes to decrease its monthly fees from $3,000
to $2,000. These changes will render this subsection of the Rules
consistent with the existing rules of other Nasdaq, Inc. Exchanges,
including Nasdaq Rule 7034(a), Chapter VI.E of the Nasdaq ISE Schedule
of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees, and Chapter
IV.F of the Nasdaq GEMX Schedule of Fees.
The Exchange proposes to amend Rule 7034(a) to remove the
paragraph entitled ``Temporary Fee Reduction for Cabinets with Power,''
as this fee reduction program has expired.
The Exchange proposes to amend Rule 7034(b), under the
heading ``External Telco/Inter-Cabinet Connectivity,'' to update the
monthly fees it charges for external telecommunications and inter-
cabinet connectivity, as follows: (i) For a category 6 cable patch, a
DS-3 connection, and a fiber connection, the Exchange proposes to
increase its monthly fees from $300 to $350; and (ii) for a POTS Line,
the Exchange proposes to increase the monthly fee from $0 to $50. These
changes will render this paragraph of the Rules consistent with a
corresponding paragraph in the existing rules of other Nasdaq, Inc.
Exchanges, including Nasdaq Rule 7034(b), Chapter VI.E of the Nasdaq
ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees,
and Chapter IV.F of the Nasdaq GEMX Schedule of Fees.
The Exchange proposes to amend Rule 7034(b), under the
heading ``Connectivity to BX,'' to update the fees it charges for fiber
connectivity to the Exchange, as follows: (i) For a 10Gb fiber
connection to the Exchange, the Exchange proposes to increase the
monthly fee from $5,000 to $10,000; (ii) for a 40Gb fiber connection to
the Exchange, it proposes to increase the monthly fee from $15,000 to
$20,000; (iii) for a 1Gb fiber connection to the Exchange, it proposes
to increase the monthly fee from $1,000 to $2,500; (iv) for a 1Gb
copper connection to the Exchange, it proposes to increase the monthly
fee from $1,000 to $2,500; (v) the Exchange proposes to add a 1Gb Ultra
fiber connection to the Exchange for an installation fee of $1,500 and
a monthly fee of $2,500; and (vi) the Exchange proposes to remove
obsolete language regarding an expired fee waiver program. These
changes will render this paragraph of the Rules consistent with
corresponding paragraphs in the existing rules of other Nasdaq, Inc.
Exchanges, including Nasdaq Rule 7034(b), Chapter VI.E of the Nasdaq
ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees,
and Chapter IV.F of the Nasdaq GEMX Schedule of Fees. The Exchange also
proposes an amendment to this provision to clarify that connectivity to
the Exchange will also provide for connectivity to any or all of the
other Nasdaq, Inc. Exchanges, including not only Nasdaq and Phlx (as
the existing Rule provides), but also Nasdaq ISE, Nasdaq MRX, and
Nasdaq GEMX. This proposal mirrors existing language in Chapter VI.E of
the Nasdaq
[[Page 5820]]
ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees,
and Chapter IV.F of the Nasdaq GEMX Schedule of Fees.
The Exchange proposes to amend Rule 7034(b) to add a new
paragraph under a heading entitled ``Connectivity to Third Party
Services.'' This proposed paragraph will provide for connectivity via
colocation to market data feeds from other markets and exchanges,\4\
Securities Information Processors (``SIPs'') \5\ data, and other non-
exchange services. The proposed connectivity and associated fees are as
follows: (i) For a 10Gb Ultra fiber connection, the Exchange proposes
to charge a $1,500 installation fee and an ongoing monthly fee of
$5,000; (ii) for a 1Gb Ultra fiber connection, it proposes to charge a
$1,500 installation fee and an ongoing monthly fee of $2,000; and (iii)
for a 1Gb Ultra or a 10Gb Ultra connection for UTP only, it proposes to
charge a $100 installation fee and an ongoing monthly fee of $100. All
of the foregoing fees will be waived for two connections per client to
UTP SIP feeds only (UQDF and UTDF). The Exchange notes that the
proposed paragraph parallels the existing rules of other Nasdaq, Inc.
Exchanges, including Nasdaq Rule 7034(b), Chapter VI.E of the Nasdaq
ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees,
and Chapter IV.F of the Nasdaq GEMX Schedule of Fees.
---------------------------------------------------------------------------
\4\ For example, Third Party Connectivity will support
connectivity to the FINRA/Nasdaq Trade Reporting Facility, BZX and
BYX Depth Feeds, and NYSE Feeds. A customer must separately
subscribe to the third party services to which it connects with a
Third Party Connectivity subscription.
\5\ The SIPs link the U.S. markets by processing and
consolidating all protected bid/ask quotes and trades from every
registered exchange trading venue and FINRA into a single data feed,
and they disseminate and calculate critical regulatory information,
including the National Best Bid and Offer, Limit Up Limit Down price
bands, short sale restrictions and regulatory halts.
---------------------------------------------------------------------------
The Exchange proposes to amend Rule 7034(b), under the
heading ``Market Data Connectivity,'' to add prefatory language that
exists in the analogous portion of Nasdaq Rule 7034(b). The language
merely notes that the Market Data feeds listed in the provision are
delivered to the Nasdaq Data Center via a fiber optic network.
Additionally, the Exchange proposes to re-categorize and update the
names of the certain CBOE/Bats/Direct Edge data feeds insofar as the
names listed in the current Rule are obsolete. Similarly, the Exchange
proposes to delete a $1,000 installation fee that presently applies to
the Direct Edge feeds insofar as the Direct Edge feeds are now
offerings of CBOE, along with the BZX and BYX feeds. Going forward, a
single, one-time $1,000 installation fee will apply to subscribers to
any or all of the CBOE data feeds.
The Exchange proposes to amend Rule 7034(b) to add a new
paragraph that will provide for multicast market data feeds from other
markets to be delivered to the Exchange's customers via wireless
microwave or millimeter wave networks. The Exchange notes that Nasdaq
already provides such data feeds to its customers pursuant to an
analogous paragraph in Nasdaq Rule 7034(b). The proposed data feeds,
and their corresponding installation and monthly fees, are as follows:
(i) NYSE Equities (Arca Integrated), for an installation fee of $5,000
and a monthly fee of $10,000; (ii) NYSE Equities (NYSE Integrated), for
an installation fee of $5,000 and a monthly fee of $10,000; (iii) BATS
Multicast PITCH (BZX and BYZ), for an installation fee of $2,500 and a
monthly fee of $7,500; (iv) Direct EDGE Depth of Book (EDGA, EDGX), for
an installation fee of $2,500 and a monthly fee of $7,500; (v) CME
Multicast Total (including CME Equities Futures Data, CME Fixed Income
Futures Data, and CME Metal Futures Data), for an installation fee of
$5,000 and a monthly fee of $23,500; (vi) CME Equities Futures Data
Only, for a $5,000 installation fee and a monthly fee of $10,000; (vii)
CME Fixed Income Futures Data Only, for a $5,000 installation fee and a
monthly fee of $10,000; and (viii) CME Metals Futures Data Only, for a
$5,000 installation fee and a monthly fee of $3,500.\6\ As to the
monthly fee for these services, the proposal provides that subscribers
will receive discounts based upon the number of subscriptions they
maintain.\7\ The Exchange proposes to add this paragraph to render the
Rules consistent with corresponding paragraphs in the existing rules of
other Nasdaq, Inc. Exchanges, including Nasdaq Rule 7034(b), Chapter
VI.E of the Nasdaq ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX
Schedule of Fees, and Chapter IV.F of the Nasdaq GEMX Schedule of Fees.
---------------------------------------------------------------------------
\6\ The Exchange proposes to charge subscribers to any or all of
the CME Data Feeds a single $5,000 installation fee. In other words,
a subscriber to the CME Fixed Income Futures Data Feed and the CME
Metals Futures Data Feed will only pay a single $5,000 installation
fee for access to both feeds.
\7\ The proposed Rule paragraph provides that subscribers with
three to five microwave or millimeter wave wireless subscriptions
under Rule 7015 and/or Rule 7034(b) will receive a 5% discount on
all such subscriptions. Meanwhile, subscribers with six to ten
microwave or millimeter wave wireless subscriptions under Rule 7015
and/or Rule 7034(b) will receive a 10% discount on all such
subscriptions. Subscribers with eleven to fourteen microwave or
millimeter wave wireless subscriptions under Rule 7015 and/or Rule
7034(b) will receive a 15% discount on all such subscriptions.
Finally, subscribers with fifteen or more microwave or millimeter
wave wireless subscriptions under Rule 7015 and/or Rule 7034(b) will
receive a 20% discount on all such subscriptions.
---------------------------------------------------------------------------
The Exchange proposes to amend Rule 7034(d), under the
heading ``Additional Charges/Services,'' to update the installation fee
it charges for super high density cabinet kits. Specifically, the
Exchange proposes to decrease the fee from $7,000 to $4,500. This
change will render this paragraph of the Rules consistent with
corresponding paragraphs in the existing rules of other Nasdaq, Inc.
Exchanges, including Nasdaq Rule 7034(d), Chapter VI.E of the Nasdaq
ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees,
and Chapter IV.F of the Nasdaq GEMX Schedule of Fees, entitled
``Additional Items.''
Third, the Exchange proposes to amend Rule 7051, entitled ``Direct
Connectivity to BX.'' This Rule describes the means by which customers
may connect directly to the Exchange's main or satellite data centers
via a third party vendor's telecommunications circuit. The proposed
changes to this Section are as follows:
The Exchange proposes to update the structure of Rule 7051
so that it will parallel the structure of the existing rules of other
Nasdaq, Inc. Exchanges, including Nasdaq Rule 7051, Chapter VI.F, G,
and H of the Nasdaq ISE Schedule of Fees, Chapter IV.B, C, and D of the
Nasdaq MRX Schedule of Fees, and Chapter IV.G, H, and I of the Nasdaq
GEMX Schedule of Fees. Specifically, the Exchange proposes to place the
existing text of Rule 7051 into a subsection (a), to be entitled
``Direct Circuit Connection to BX.'' It also proposes to add two
additional subsections, as described below.
The Exchange proposes to amend the text of Rule 7051 (as
reorganized in proposed subsection (a) and re-titled ``Direct Circuit
Connection to BX'') so that it is fully consistent with the existing
rules of other Nasdaq, Inc. Exchanges, including Nasdaq Rule 7051(a),
Chapter VI.F of the Nasdaq ISE Schedule of Fees, Chapter IV.B of the
Nasdaq MRX Schedule of Fees, and Chapter IV.G of the Nasdaq GEMX
Schedule of Fees in terms of both the direct circuit connections that
it offers to its customers as well as the associated fees that it
charges for such connections. The proposed changes are as follows: (i)
For 10Gb direct circuit connections to BX, the Exchange proposes to
increase the installation fee from $1,000 to
[[Page 5821]]
$1,500 and the monthly fee from $5,000 to $7,500; (ii) for 1Gb direct
circuit connections to BX, the Exchange proposes to increase the
installation fee from $1,000 to $1,500 and the monthly fee from $1,000
to $2,500; (iii) the Exchange proposes to add a 1Gb Ultra direct
circuit connection for an installation fee of $1,500 and a monthly fee
from $2,500; and (iv) the Exchange proposes to clarify that direct
circuit connectivity to the Exchange will also provide for direct
circuit connectivity to any or all of the other Nasdaq, Inc. Exchanges,
including not only Nasdaq and Phlx (as the existing Rule provides), but
also Nasdaq ISE, Nasdaq MRX, and Nasdaq GEMX.
The Exchange proposes to add a new subsection (b) to Rule
7051, entitled ``Direct Circuit Connection to Third Party Services.''
Through this subsection, which is an analogue to the existing rules of
other Nasdaq, Inc. Exchanges, including Nasdaq Rule 7051(b), Chapter
VI.G of the Nasdaq ISE Schedule of Fees, Chapter IV.C of the Nasdaq MRX
Schedule of Fees, and Chapter IV.H of the Nasdaq GEMX Schedule of Fees,
the Exchange will offer its customers direct circuit connections to
third party services, including the same third party services to which
it proposes to connect customers through colocation, as set forth in
proposed Rule 7034(b) (described above). Specifically, the Exchange
proposes to offer the following services and charge the following fees
for them: (i) A 10Gb Ultra direct circuit connection for an
installation fee of $1,500 and a monthly fee of $5,000; (ii) a 1Gb
Ultra direct circuit connection for an installation fee of $1,500 and a
monthly fee of $2,000; (iii) a 1Gb Ultra or 10Gb direct circuit
connection (for UTP only) for an installation fee of $100 and a monthly
fee of $100; (iv) an optional cable router for a $925 installation fee;
and (v) a monthly fee of $150 per ``U'' of cabinet space rented. For
direct circuit connectivity to UTP SIP feeds only, the installation and
monthly fees will be waived for the first two connections.
The Exchange proposes to add a new subsection (c) to Rule 7051,
entitled ``Point of Presence (POP) Connectivity.'' This subsection,
which is an analogue to the existing rules of other Nasdaq, Inc.
Exchanges, including Nasdaq Rule 7051(c), Chapter VI.H of the Nasdaq
ISE Schedule of Fees, Chapter IV.D of the Nasdaq MRX Schedule of Fees,
and Chapter IV.I of the Nasdaq GEMX Schedule of Fees, provides for
customers to connect directly to the Exchange through a ``Point of
Presence'' or ``POP'' that is located at one of the Exchange's
satellite data centers, rather than in the Exchange's main data center.
Each such POP, in turn, has a fully redundant connection to the
Exchange's primary data center. The proposed services and associated
fees are as follows: (i) The Exchange proposes to offering a 10Gb POP
connection to BX for an installation fee of $1,500 and a monthly of
$7,500; (ii) it proposes to offer a 1Gb Ultra POP connection to BX for
an installation fee of $1,500 and a monthly fee of $2,500; and (iii)
the Exchange proposes to state that the POP connectivity provided under
this subsection also applies to connectivity to any or all of the other
Nasdaq, Inc. Exchanges.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\8\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\9\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using any facility, and is
not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange believes that its proposals to update its schedule of
shared connectivity, direct circuit connectivity, and colocation
services that it provides in concert with its sister Nasdaq, Inc.
Exchanges, and for which the Nasdaq, Inc. Exchanges charge a single
fee, is reasonable insofar as the proposals will ensure that the
Exchange's Rules, as they apply to such services and fees, are
consistent with the applicable schedules and rules of other Nasdaq,
Inc. Exchanges, including Nasdaq, Nasdaq ISE, Nasdaq MRX, and Nasdaq
GEMX. In this regard, the Exchange notes that the proposed amendments
to its Rules largely reflect changes and updates that have been made
already to the schedules and rules of these other Nasdaq, Inc.
Exchanges. For example, each of the proposed changes to the Exchange's
connectivity, direct connectivity, and colocation fees will harmonize
the Exchange's fees with those of Nasdaq, Nasdaq ISE, Nasdaq MRX, and
Nasdaq GEMX.
In a few instances, however, the Exchange proposes amendments to
its rules that are not reflected in the rules of the other Nasdaq, Inc.
Exchanges. These proposals seek to eliminate certain language from its
Rules that is extraneous, eliminate references to expired fee reduction
or waiver programs, update references to third party data feeds to
reflect their current names, and eliminate an obsolete installation fee
for Direct Edge data feeds. The Exchange believes that these proposals
are non-controversial because it serves the interests of the public and
investors for the Exchange to maintain a current and accurate Rulebook
and because the proposals will not impact competition or limit access
to or availability of the Exchange or its systems.
The Exchange believes that the foregoing proposals provide for the
equitable allocation of fees because the connectivity and colocation
services to which these fees apply are shared services for which
customers pay once, regardless of whether the customers choose to use
these services to connect only to BX or also to any or all of the other
Nasdaq, Inc. Exchanges. Moreover, the other Nasdaq, Inc. Exchanges
already offer these shared services to their customers and do so at the
same prices that the Exchange now proposes to charge. As such, the
proposals will ensure that the fees that the Exchanges charges its
customers for shared services are the same fees that the other Nasdaq,
Inc. Exchanges charges their customers (including their customers who
are also BX Members) for the same shared services. In other words, the
proposals would ensure that a customer of the Exchange that wishes to,
say, purchase direct connectivity to all of the Nasdaq, Inc. Exchanges
will not pay more to do so through BX than it would pay if it purchased
that same connectivity from Nasdaq, and vice versa.
The proposed fees and fee changes, moreover, are equitably
allocated because the proposals align these fees with the costs that
the Exchange incurs to provide the shared services, including the costs
of developing, installing, maintaining, and upgrading equipment and
systems relating to connectivity and colocation services. Finally, the
proposed fees are equitably allocated because all member firms that
subscribe to a particular connectivity option under the amended Rules
will be assessed the same fee.
The proposals, similarly, are not unfairly discriminatory because
the shared services they entail will be available to all similarly
situated clients, while the fees and fee changes they entail will apply
uniformly to such clients to the extent that they choose to utilize the
shared services.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose
[[Page 5822]]
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 have been exempted
from compliance with the statutory standards applicable to exchanges.
Because competitors are free to modify their own fees in response, and
because market participants may connect to third parties instead of
directly connecting to the Exchange, the Exchange believes that the
degree to which fee changes in this market may impose any burden on
competition is extremely limited.
In this instance, the proposed changes to the charges assessed for
colocation, connectivity, and direct circuit connectivity are
consistent with the fees already assessed by other Nasdaq, Inc.
Exchanges for the same shared services. To the extent that any of these
fees are [sic] unattractive to market participants, it is likely that
the Exchange, and its sister Nasdaq, Inc. Exchanges, will lose market
share as a result. The Exchange does not believe that the proposed
changes will impair the ability of members or competing order execution
venues to maintain their competitive standing in the financial markets.
Furthermore, the Exchange does not expect that its proposals to
eliminate or replace expired or obsolete language from its Rulebook
will have any impact on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \10\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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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 [email protected]. Please include
File Number SR-BX-2018-006 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-BX-2018-006. 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 website (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 website 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. 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-BX-2018-006, and should be submitted on
or before March 2, 2018.
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\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-02567 Filed 2-8-18; 8:45 am]
BILLING CODE 8011-01-P
