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]
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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
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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
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extension of the previously approved
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under the Securities Exchange Act of
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Rule 17Ad–13 requires an annual
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Exchange Act of 1934 (15 U.S.C. 78a et
seq.). It requires approximately 100
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internal accounting controls from an
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appropriate regulatory agencies in the
event that the transfer agent is required
to take any corrective action. These
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Small transfer agents are exempt from
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Rule 17Ad–13 as are transfer agents that
service only their own companies’
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Approximately 100 independent,
professional transfer agents must file the
independent accountant’s report
annually. We estimate that the annual
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submitting the report prepared by the
independent accountant to the
Commission is minimal. The time
required for the independent accountant
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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
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was estimated using Commission review
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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
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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
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sponsor, and a person is not required to
respond to, a collection of information
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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
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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.
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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
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.
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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
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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
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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,
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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
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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).
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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
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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
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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://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
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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.
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\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\
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\3\ The other Nasdaq, Inc. Exchanges plan to file similar
proposals in the near future.
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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).
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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 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).
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Brent J. Fields,
Secretary.
[FR Doc. 2018-25032 Filed 11-15-18; 8:45 am]
BILLING CODE 8011-01-P
