Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend General 8 of the Exchange's Rules, 57762-57765 [2018-25032]

Download as PDF 57762 Federal Register / Vol. 83, No. 222 / Friday, November 16, 2018 / Notices Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503, or by sending an email to: Lindsay.M.Abate@omb.eop.gov; and (ii) Charles Riddle, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner, 100 F Street NE, Washington, DC 20549, or by sending an email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: November 13, 2018. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–25049 Filed 11–15–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736 amozie on DSK3GDR082PROD with NOTICES Extension: Rule 17Ad–13 SEC File No. 270–263; OMB Control No. 3235–0275 Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (‘‘PRA’’), the Securities and Exchange Commission (‘‘Commission’’) has submitted to the Office of Management and Budget (‘‘OMB’’) a request for approval of extension of the previously approved collection of information provided for in Rule 17Ad–13 (17 CFR 240.17Ad–13), under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). Rule 17Ad–13 requires an annual study and evaluation of internal accounting controls under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). It requires approximately 100 registered transfer agents to obtain an annual report on the adequacy of their internal accounting controls from an independent accountant. In addition, transfer agents must maintain copies of any reports prepared pursuant to Rule 17Ad–13 plus any documents prepared to notify the Commission and appropriate regulatory agencies in the event that the transfer agent is required to take any corrective action. These recordkeeping requirements assist the Commission and other regulatory agencies with monitoring transfer agents and ensuring compliance with the rule. Small transfer agents are exempt from VerDate Sep<11>2014 17:19 Nov 15, 2018 Jkt 247001 Rule 17Ad–13 as are transfer agents that service only their own companies’ securities. Approximately 100 independent, professional transfer agents must file the independent accountant’s report annually. We estimate that the annual internal time burden for each transfer agent to comply with Rule 17Ad–13 by submitting the report prepared by the independent accountant to the Commission is minimal. The time required for the independent accountant to prepare the accountant’s report varies with each transfer agent depending on the size and nature of the transfer agent’s operations. The Commission estimates that, on average, each report can be completed by the independent accountant in 120 hours, resulting in a total of 12,000 external hours annually (120 hours × 100 reports). The burden was estimated using Commission review of filed Rule 17Ad–13 reports. The Commission estimates that, on average, 120 hours are needed to perform the study, prepare the report, and retain the required records on an annual basis. Assuming an average hourly rate of an independent accountant of $60, the average total annual cost of the report is $7,200. The total annual cost for the approximate 100 respondents is approximately $720,000. The retention period for the recordkeeping requirement under Rule 17Ad–13 is three years following the date of a report prepared pursuant to the rule. The recordkeeping requirement under Rule 17Ad–13 is mandatory to assist the Commission and other regulatory agencies with monitoring transfer agents and ensuring compliance with the rule. This rule does not involve the collection of confidential information. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. The public may view background documentation for this information collection at the following website: www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503 or by sending an email to: Lindsay.M.Abate@omb.eop.gov; and (ii) Charles Riddle, Acting Director/Chief Information Officer, Securities and Exchange Commission, c/o Candace Kenner, 100 F Street NE, Washington, DC 20549, or by sending an email to PRA_Mailbox@sec.gov. Comments must PO 00000 Frm 00049 Fmt 4703 Sfmt 4703 be submitted to OMB within 30 days of this notice. Dated: November 13, 2018. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018–25048 Filed 11–15–18; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–84572; File No. SR–BX– 2018–052] Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend General 8 of the Exchange’s Rules November 9, 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 October 29, 2018, Nasdaq BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend General 8 of the Exchange’s Rules, 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 the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\16NON1.SGM 16NON1 Federal Register / Vol. 83, No. 222 / Friday, November 16, 2018 / Notices amozie on DSK3GDR082PROD with NOTICES 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 General 8 of its Rules, which govern the provision by the Exchange of colocation, connectivity, and direct connectivity services and related products, and which set forth the fees that the Exchange charges for those products and services, to: (1) Clarify that all of the products and services set forth in General 8 are shared among the Nasdaq Inc. affiliated exchanges—The Nasdaq Stock Market LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, and Nasdaq GEMX, LLC (collectively, the ‘‘Nasdaq, Inc. Exchanges’’)—meaning that a firm need only purchase these products and services once to be able to use them to connect to all of the Nasdaq, Inc. Exchanges to which the firm is otherwise entitled to connect, and to receive the third party services and market data feeds that it is otherwise entitled to receive; and (2) make other non-substantive changes that will further the objective of harmonizing General 8 with parallel rules that exist among the other Nasdaq, Inc. Exchanges.3 The Nasdaq, Inc. Exchanges offer colocation, connectivity, and direct connectivity services and related products to their customers on a shared basis, meaning that a customer may utilize these products and services to gain access to any or all of the Nasdaq, Inc. Exchanges to which they are otherwise entitled to receive access under the Rules. The Nasdaq, Inc. Exchanges only charge customers once for these shared products and services, even to the extent that customers use the products and services to connect to more than one of the Nasdaq, Inc. Exchanges. For example, a firm that is a member or member organization, as applicable, of all six Nasdaq, Inc. Exchanges, and which co-locates its servers in the Nasdaq Data Center by purchasing a 10 GB fiber connection, cabinet space, cooling fans, and patch cables, only needs to purchase these products and services once to use them to connect to all six Nasdaq, Inc. Exchanges. Likewise, the Rules were intended to provide for connectivity to third-party services and market data feeds on a shared basis, meaning that a firm need only purchase a subscription to these 3 The other Nasdaq, Inc. Exchanges plan to file similar proposals in the near future. VerDate Sep<11>2014 17:19 Nov 15, 2018 Jkt 247001 services once, regardless of whether the firm is a member or member organization, as applicable, of multiple Nasdaq, Inc. Exchanges. Historically, the Exchange has billed customers on a shared basis for all of the products and services currently set forth in General 8. Presently, however, only certain provisions of General 8 state this fact expressly. That is, provisions in General 8 pertaining to connectivity to the Exchange, direct circuit connectivity to the Exchange, and point-of-presence connectivity to the Exchange, each state that they include connectivity to the other markets of the Nasdaq, Inc. Exchanges. However, other provisions in General 8—such as cabinets, cabinet power, fiber and wireless connectivity to market data feeds, and fiber and wireless connectivity to third party services—do not contain such language. Notwithstanding the absence of express language in these provisions of General 8, the Exchange believes that it is or should be apparent that a firm need only pay once to purchase products and services—like server cabinets, power supplies, and cables—that the firm will use to connect to multiple Nasdaq, Inc. Exchanges or to connect to third party services or market data feeds. Indeed, the Exchange is aware of no actual customer confusion on this issue. Nevertheless, the Exchange believes that the existing Rules would benefit from clarification so as to avoid the potential for any confusion in the future. Accordingly, the Exchange proposes to amend General 8 by doing the following: (1) Deleting the existing selective references therein to shared connectivity services; and (2) replacing selective references with the following language, which will serve as a general preface to General 8: The connectivity products and services that this Rule describes are shared among all of the Nasdaq, Inc. exchanges (The Nasdaq Stock Market, LLC, Nasdaq BX, Inc., Nasdaq PHLX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, and Nasdaq GEMX, LLC). Fees for these products and services are also the same among all of the Nasdaq, Inc. exchanges. As such, a firm need only purchase the products and services listed below from any Nasdaq, Inc. exchange once to connect to any and all of the Nasdaq, Inc. exchanges to which it is otherwise entitled to connect, or to connect to third party market data feeds or services. For example, if a firm purchases connectivity to one Nasdaq, Inc. exchange and then subsequently qualifies to connect to a second Nasdaq, Inc. exchange, then the firm may utilize its existing services for connecting to the first exchange to also connect to the second exchange, without incurring an additional charge. This preface will clarify that all products and services set forth in PO 00000 Frm 00050 Fmt 4703 Sfmt 4703 57763 General 8 are offered on a shared basis and that a firm need only purchase them once from any of the Nasdaq, Inc. Exchanges. In addition to adding this preface, the Exchange also proposes several other non-substantive amendments to General 8 to correct technical errors and to harmonize it with parallel provisions set forth in the rules of the other Nasdaq, Inc. Exchanges. These changes will reconcile minor, non-substantive differences in the phrasing and placement of text between the Exchange’s General 8 and the other Nasdaq, Inc. Exchanges’ Sections 8. The amendments will also remove certain references to the name ‘‘Nasdaq BX’’ or replace it with general references to ‘‘the Exchange.’’ Finally, the amendments will replace a specific reference in General 8, Section 1(b) to millimeter or microwave wireless subscriptions under Equity 7, Section 115 with a general reference to ‘‘any other provision of these Rules that provides for such subscriptions, as may exist, from time to time.’’ The intended result of the proposed changes—along with similar changes that the other Nasdaq, Inc. Exchanges plan to propose—will be to generalize General 8 and render it completely identical across all six Nasdaq, Inc. Exchanges. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,4 in general, and that it furthers the objectives of Section 6(b)(4) of the Act,5 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. Likewise, the Exchange believes that its proposal is consistent with Section 6(b)(5) of the Act,6 in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. The Exchange believes that it is equitable for the Exchange and the other Nasdaq, Inc. Exchanges to collectively charge a firm only once for the products and services set forth in General 8 because the same instance of such products and services may be used by the firm to connect to any or all of the Nasdaq, Inc. Exchanges to which it is 4 15 U.S.C. 78f(b). U.S.C. 78f(b)(4). 6 15 U.S.C. 78f(b)(5). 5 15 E:\FR\FM\16NON1.SGM 16NON1 amozie on DSK3GDR082PROD with NOTICES 57764 Federal Register / Vol. 83, No. 222 / Friday, November 16, 2018 / Notices otherwise entitled to connect. Said otherwise, the Exchange does not believe that it would be fair for the Nasdaq, Inc. Exchanges to each charge separate fees to a firm to, say, rent the same cabinet space in the same data center or to purchase the same wires to connect its servers to the market data feed. Moreover, the practice of charging a firm once for products and services with shared applicability among the Nasdaq, Inc. Exchanges is not unfairly discriminatory because each of the Nasdaq, Inc. Exchanges makes the products and services that are set forth in General 8 of their respective rulebooks available to all similarly situated members at the same prices. Meanwhile, the Exchange believes that it is just and equitable, and in the interests of the public and investors, for the Exchange to amend General 8 to clarify the existing practice of the Nasdaq, Inc. Exchanges to charge firms once to purchase shared products and services, and to codify that practice where it is not stated expressly in the Rule. Although the Exchange believes that such codification and clarification of General 8 are not necessary in this instance—given that it should be (and in the Exchange’s experience, it is) apparent to firms that each of the Nasdaq, Inc. Exchanges will not charge them more than once to, say, rent the same cabinet space or to purchase the same wires or power supplies—the Exchange believes, nevertheless, that the public and investors will benefit from increased clarity to General 8. Even if the proposal is not needed to dispel any actual confusion about the Rules, it will help to limit any potential confusion in the future. The Exchange also believes that it is just and equitable, and in the interests of the public and investors, to completely harmonize the language of General 8 among all six of the Nasdaq, Inc. Exchanges. Given that General 8 in each of the Nasdaq, Inc. Exchanges’ rulebooks sets forth the same products, services, and associated fees that are assessed on a shared basis, the language of General 8 should be uniform across these Exchanges avoid any confusion about unintended disparities. The proposal makes minor, non-substantive changes to accomplish this harmonization, which include removing cross-references and names that are idiosyncratic to this Exchange and are not common among all of the Nasdaq, Inc. Exchanges. Lastly, the Exchange believes that its proposals to amend General 8 are noncontroversial because they merely codify and clarify the Exchange’s existing interpretation of General 8, VerDate Sep<11>2014 17:19 Nov 15, 2018 Jkt 247001 serve the interests of the public and investors in promoting a more clear and transparent Rulebook that is harmonized with the shared rules of the other Nasdaq, Inc. Exchanges, and because the proposals will not impact competition or limit access to or availability of the Exchange or its systems. 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. The proposals merely codify and clarify existing practice of the Nasdaq, Inc. Exchanges to collectively charge a customer only once to connect to any or all of the Nasdaq, Inc. Exchanges of which it is a member and to connect to third party services. The proposals also harmonize Section 8 with corresponding provisions of the rulebooks of the other Nasdaq, Inc. Exchanges. 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) of the Act 7 and Rule 19b– 4(f)(6) thereunder.8 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 9 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 10 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the 7 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of 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. 9 17 CFR 240.19b–4(f)(6). 10 17 CFR 240.19b–4(f)(6)(iii). 8 17 PO 00000 Frm 00051 Fmt 4703 Sfmt 4703 public interest. The Exchange has requested that the Commission waive the 30-day operative delay so that the proposed rule change may become operative upon filing. Waiver of the operative delay would allow the Exchange to immediately amend its rules to specify that the products and services set forth in General 8 are shared among the Nasdaq, Inc. Exchanges and to harmonize General 8 with parallel rules of the other Nasdaq, Inc. Exchanges. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the operative delay and designates the proposed rule change operative upon filing.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 necessary or appropriate in the public interest, for the protection of investors, or 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 change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– BX–2018–052 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–2018–052. 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 11 For purposes only of waiving the 30-day operative delay, the Commission also has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). E:\FR\FM\16NON1.SGM 16NON1 Federal Register / Vol. 83, No. 222 / Friday, November 16, 2018 / Notices 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–2018–052, and should be submitted on or before December 7, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Brent J. Fields, Secretary. [FR Doc. 2018–25032 Filed 11–15–18; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–84569; File No. SR–MRX– 2018–33] Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend General 8 of the Exchange’s Rules amozie on DSK3GDR082PROD with NOTICES November 9, 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 October 29, 2018, Nasdaq MRX, LLC (‘‘MRX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 17:19 Nov 15, 2018 Jkt 247001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend General 8 of the Exchange’s Rules, as described below. The text of the proposed rule change is available on the Exchange’s website at https://nasdaqmrx.cchwallstreet.com/, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose BILLING CODE 8011–01–P 12 17 by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. The Exchange proposes to amend General 8 of its Rules, which govern the provision by the Exchange of colocation, connectivity, and direct connectivity services and related products, and which set forth the fees that the Exchange charges for those products and services, to: (1) Clarify that all of the products and services set forth in General 8 are shared among the Nasdaq Inc. affiliated exchanges—The Nasdaq Stock Market LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, and Nasdaq GEMX, LLC (collectively, the ‘‘Nasdaq, Inc. Exchanges’’)—meaning that a firm need only purchase these products and services once to be able to use them to connect to all of the Nasdaq, Inc. Exchanges to which the firm is otherwise entitled to connect, and to receive the third party services and market data feeds that it is otherwise entitled to receive; and (2) make other non-substantive changes that will further the objective of harmonizing General 8 with parallel rules that exist PO 00000 Frm 00052 Fmt 4703 Sfmt 4703 57765 among the other Nasdaq, Inc. Exchanges.3 The Nasdaq, Inc. Exchanges offer colocation, connectivity, and direct connectivity services and related products to their customers on a shared basis, meaning that a customer may utilize these products and services to gain access to any or all of the Nasdaq, Inc. Exchanges to which they are otherwise entitled to receive access under the Rules. The Nasdaq, Inc. Exchanges only charge customers once for these shared products and services, even to the extent that customers use the products and services to connect to more than one of the Nasdaq, Inc. Exchanges. For example, a firm that is a member or member organization, as applicable, of all six Nasdaq, Inc. Exchanges, and which co-locates its servers in the Nasdaq Data Center by purchasing a 10 GB fiber connection, cabinet space, cooling fans, and patch cables, only needs to purchase these products and services once to use them to connect to all six Nasdaq, Inc. Exchanges. Likewise, the Rules were intended to provide for connectivity to third-party services and market data feeds on a shared basis, meaning that a firm need only purchase a subscription to these services once, regardless of whether the firm is a member or member organization, as applicable, of multiple Nasdaq, Inc. Exchanges. Historically, the Exchange has billed customers on a shared basis for all of the products and services currently set forth in General 8. Presently, however, only certain provisions of General 8 state this fact expressly. That is, provisions in General 8 pertaining to connectivity to the Exchange, direct circuit connectivity to the Exchange, and point-of-presence connectivity to the Exchange, each state that they include connectivity to the other markets of the Nasdaq, Inc. Exchanges. However, other provisions in General 8—such as cabinets, cabinet power, fiber and wireless connectivity to market data feeds, and fiber and wireless connectivity to third party services—do not contain such language. Notwithstanding the absence of express language in these provisions of General 8, the Exchange believes that it is or should be apparent that a firm need only pay once to purchase products and services—like server cabinets, power supplies, and cables—that the firm will use to connect to multiple Nasdaq, Inc. Exchanges or to connect to third party services or market data feeds. Indeed, the Exchange is aware of no actual 3 The other Nasdaq, Inc. Exchanges plan to file similar proposals in the near future. E:\FR\FM\16NON1.SGM 16NON1

Agencies

[Federal Register Volume 83, Number 222 (Friday, November 16, 2018)]
[Notices]
[Pages 57762-57765]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25032]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84572; File No. SR-BX-2018-052]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend General 8 
of the Exchange's Rules

November 9, 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 October 29, 2018, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend General 8 of the Exchange's Rules, 
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 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.

[[Page 57763]]

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 General 8 of its Rules, which govern 
the provision by the Exchange of colocation, connectivity, and direct 
connectivity services and related products, and which set forth the 
fees that the Exchange charges for those products and services, to: (1) 
Clarify that all of the products and services set forth in General 8 
are shared among the Nasdaq Inc. affiliated exchanges--The Nasdaq Stock 
Market LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, Nasdaq ISE, LLC, Nasdaq 
MRX, LLC, and Nasdaq GEMX, LLC (collectively, the ``Nasdaq, Inc. 
Exchanges'')--meaning that a firm need only purchase these products and 
services once to be able to use them to connect to all of the Nasdaq, 
Inc. Exchanges to which the firm is otherwise entitled to connect, and 
to receive the third party services and market data feeds that it is 
otherwise entitled to receive; and (2) make other non-substantive 
changes that will further the objective of harmonizing General 8 with 
parallel rules that exist among the other Nasdaq, Inc. Exchanges.\3\
---------------------------------------------------------------------------

    \3\ The other Nasdaq, Inc. Exchanges plan to file similar 
proposals in the near future.
---------------------------------------------------------------------------

    The Nasdaq, Inc. Exchanges offer colocation, connectivity, and 
direct connectivity services and related products to their customers on 
a shared basis, meaning that a customer may utilize these products and 
services to gain access to any or all of the Nasdaq, Inc. Exchanges to 
which they are otherwise entitled to receive access under the Rules. 
The Nasdaq, Inc. Exchanges only charge customers once for these shared 
products and services, even to the extent that customers use the 
products and services to connect to more than one of the Nasdaq, Inc. 
Exchanges. For example, a firm that is a member or member organization, 
as applicable, of all six Nasdaq, Inc. Exchanges, and which co-locates 
its servers in the Nasdaq Data Center by purchasing a 10 GB fiber 
connection, cabinet space, cooling fans, and patch cables, only needs 
to purchase these products and services once to use them to connect to 
all six Nasdaq, Inc. Exchanges.
    Likewise, the Rules were intended to provide for connectivity to 
third-party services and market data feeds on a shared basis, meaning 
that a firm need only purchase a subscription to these services once, 
regardless of whether the firm is a member or member organization, as 
applicable, of multiple Nasdaq, Inc. Exchanges.
    Historically, the Exchange has billed customers on a shared basis 
for all of the products and services currently set forth in General 8. 
Presently, however, only certain provisions of General 8 state this 
fact expressly. That is, provisions in General 8 pertaining to 
connectivity to the Exchange, direct circuit connectivity to the 
Exchange, and point-of-presence connectivity to the Exchange, each 
state that they include connectivity to the other markets of the 
Nasdaq, Inc. Exchanges. However, other provisions in General 8--such as 
cabinets, cabinet power, fiber and wireless connectivity to market data 
feeds, and fiber and wireless connectivity to third party services--do 
not contain such language.
    Notwithstanding the absence of express language in these provisions 
of General 8, the Exchange believes that it is or should be apparent 
that a firm need only pay once to purchase products and services--like 
server cabinets, power supplies, and cables--that the firm will use to 
connect to multiple Nasdaq, Inc. Exchanges or to connect to third party 
services or market data feeds. Indeed, the Exchange is aware of no 
actual customer confusion on this issue. Nevertheless, the Exchange 
believes that the existing Rules would benefit from clarification so as 
to avoid the potential for any confusion in the future.
    Accordingly, the Exchange proposes to amend General 8 by doing the 
following: (1) Deleting the existing selective references therein to 
shared connectivity services; and (2) replacing selective references 
with the following language, which will serve as a general preface to 
General 8:

    The connectivity products and services that this Rule describes 
are shared among all of the Nasdaq, Inc. exchanges (The Nasdaq Stock 
Market, LLC, Nasdaq BX, Inc., Nasdaq PHLX, LLC, Nasdaq ISE, LLC, 
Nasdaq MRX, LLC, and Nasdaq GEMX, LLC). Fees for these products and 
services are also the same among all of the Nasdaq, Inc. exchanges. 
As such, a firm need only purchase the products and services listed 
below from any Nasdaq, Inc. exchange once to connect to any and all 
of the Nasdaq, Inc. exchanges to which it is otherwise entitled to 
connect, or to connect to third party market data feeds or services. 
For example, if a firm purchases connectivity to one Nasdaq, Inc. 
exchange and then subsequently qualifies to connect to a second 
Nasdaq, Inc. exchange, then the firm may utilize its existing 
services for connecting to the first exchange to also connect to the 
second exchange, without incurring an additional charge.

This preface will clarify that all products and services set forth in 
General 8 are offered on a shared basis and that a firm need only 
purchase them once from any of the Nasdaq, Inc. Exchanges.
    In addition to adding this preface, the Exchange also proposes 
several other non-substantive amendments to General 8 to correct 
technical errors and to harmonize it with parallel provisions set forth 
in the rules of the other Nasdaq, Inc. Exchanges. These changes will 
reconcile minor, non-substantive differences in the phrasing and 
placement of text between the Exchange's General 8 and the other 
Nasdaq, Inc. Exchanges' Sections 8. The amendments will also remove 
certain references to the name ``Nasdaq BX'' or replace it with general 
references to ``the Exchange.'' Finally, the amendments will replace a 
specific reference in General 8, Section 1(b) to millimeter or 
microwave wireless subscriptions under Equity 7, Section 115 with a 
general reference to ``any other provision of these Rules that provides 
for such subscriptions, as may exist, from time to time.'' The intended 
result of the proposed changes--along with similar changes that the 
other Nasdaq, Inc. Exchanges plan to propose--will be to generalize 
General 8 and render it completely identical across all six Nasdaq, 
Inc. Exchanges.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\4\ in general, and that it furthers the objectives of 
Section 6(b)(4) of the Act,\5\ 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. Likewise, the Exchange believes that its proposal is 
consistent with Section 6(b)(5) of the Act,\6\ in that it is designed 
to promote just and equitable principles of trade, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and, in general, to protect investors and the 
public interest.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that it is equitable for the Exchange and the 
other Nasdaq, Inc. Exchanges to collectively charge a firm only once 
for the products and services set forth in General 8 because the same 
instance of such products and services may be used by the firm to 
connect to any or all of the Nasdaq, Inc. Exchanges to which it is

[[Page 57764]]

otherwise entitled to connect. Said otherwise, the Exchange does not 
believe that it would be fair for the Nasdaq, Inc. Exchanges to each 
charge separate fees to a firm to, say, rent the same cabinet space in 
the same data center or to purchase the same wires to connect its 
servers to the market data feed. Moreover, the practice of charging a 
firm once for products and services with shared applicability among the 
Nasdaq, Inc. Exchanges is not unfairly discriminatory because each of 
the Nasdaq, Inc. Exchanges makes the products and services that are set 
forth in General 8 of their respective rulebooks available to all 
similarly situated members at the same prices.
    Meanwhile, the Exchange believes that it is just and equitable, and 
in the interests of the public and investors, for the Exchange to amend 
General 8 to clarify the existing practice of the Nasdaq, Inc. 
Exchanges to charge firms once to purchase shared products and 
services, and to codify that practice where it is not stated expressly 
in the Rule. Although the Exchange believes that such codification and 
clarification of General 8 are not necessary in this instance--given 
that it should be (and in the Exchange's experience, it is) apparent to 
firms that each of the Nasdaq, Inc. Exchanges will not charge them more 
than once to, say, rent the same cabinet space or to purchase the same 
wires or power supplies--the Exchange believes, nevertheless, that the 
public and investors will benefit from increased clarity to General 8. 
Even if the proposal is not needed to dispel any actual confusion about 
the Rules, it will help to limit any potential confusion in the future.
    The Exchange also believes that it is just and equitable, and in 
the interests of the public and investors, to completely harmonize the 
language of General 8 among all six of the Nasdaq, Inc. Exchanges. 
Given that General 8 in each of the Nasdaq, Inc. Exchanges' rulebooks 
sets forth the same products, services, and associated fees that are 
assessed on a shared basis, the language of General 8 should be uniform 
across these Exchanges avoid any confusion about unintended 
disparities. The proposal makes minor, non-substantive changes to 
accomplish this harmonization, which include removing cross-references 
and names that are idiosyncratic to this Exchange and are not common 
among all of the Nasdaq, Inc. Exchanges.
    Lastly, the Exchange believes that its proposals to amend General 8 
are non-controversial because they merely codify and clarify the 
Exchange's existing interpretation of General 8, serve the interests of 
the public and investors in promoting a more clear and transparent 
Rulebook that is harmonized with the shared rules of the other Nasdaq, 
Inc. Exchanges, and because the proposals will not impact competition 
or limit access to or availability of the Exchange or its systems.

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. The proposals merely codify and 
clarify existing practice of the Nasdaq, Inc. Exchanges to collectively 
charge a customer only once to connect to any or all of the Nasdaq, 
Inc. Exchanges of which it is a member and to connect to third party 
services. The proposals also harmonize Section 8 with corresponding 
provisions of the rulebooks of the other Nasdaq, Inc. Exchanges.

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) of the Act \7\ and Rule 19b-
4(f)(6) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of 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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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \9\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \10\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission waive the 30-day operative delay so 
that the proposed rule change may become operative upon filing. Waiver 
of the operative delay would allow the Exchange to immediately amend 
its rules to specify that the products and services set forth in 
General 8 are shared among the Nasdaq, Inc. Exchanges and to harmonize 
General 8 with parallel rules of the other Nasdaq, Inc. Exchanges. The 
Commission believes that waiver of the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Accordingly, the Commission hereby waives the operative delay and 
designates the proposed rule change operative upon filing.\11\
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change 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-2018-052 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-2018-052. 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

[[Page 57765]]

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-
2018-052, and should be submitted on or before December 7, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2018-25032 Filed 11-15-18; 8:45 am]
 BILLING CODE 8011-01-P


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