Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend General 8, 67792-67794 [2018-28390]
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Federal Register / Vol. 83, No. 249 / Monday, December 31, 2018 / Notices
burden on competition; and (iii) become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate, it has
become effective pursuant to 19(b)(3)(A)
of the Act 45 and Rule 19b–4(f)(6) 46
thereunder.
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
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–
CboeEDGX–2018–060 on the subject
line.
Paper Comments
khammond on DSK30JT082PROD with NOTICES
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CboeEDGX–2018–060. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
45 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
46 17
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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–CboeEDGX–2018–060 and
should be submitted on or before
January 22, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.47
Brent J. Fields,
Secretary.
[FR Doc. 2018–28395 Filed 12–28–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84934; File No. SR–GEMX–
2018–43]
Self-Regulatory Organizations; Nasdaq
GEMX, LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend General 8
December 21, 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 December
19, 2018, Nasdaq GEMX, LLC (‘‘GEMX’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to delete the
Exchange’s existing rules on colocation,
47 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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connectivity, and direct connectivity
(the ‘‘Existing Connectivity Rules’’),
under General 8, and incorporate by
reference into General 8 The Nasdaq
Stock Market LLC’s (‘‘Nasdaq’s’’) rules
on colocation, connectivity, and direct
connectivity, which are located in
General 8 of the Nasdaq rulebook shell
structure.3
The text of the proposed rule change
is available on the Exchange’s website at
https://nasdaqgemx.cchwallstreet.com/,
at the principal office of the Exchange,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to delete its
Existing Connectivity Rules, currently
under General 8, and incorporate by
reference the corresponding Nasdaq
rules, at General 8 of Nasdaq’s rulebook.
The Exchange proposes to remove the
current rule text from General 8 and
replace it with the following text:
General 8 Connectivity
The rules contained in The Nasdaq Stock
Market LLC General 8, as such rules may be
in effect from time to time (the ‘‘General 8
Rules’’), are hereby incorporated by reference
into this Nasdaq GEMX General 8, and are
thus Nasdaq GEMX Rules and thereby
applicable to Nasdaq GEMX Members.
Nasdaq GEMX Members shall comply with
the General 8 Rules as though such rules
were fully set forth herein. All defined terms,
including any variations thereof, contained
in the General 8 Rules shall be read to refer
to the Nasdaq GEMX related meaning of such
term. Solely by way of example, and not in
limitation or in exhaustion: the defined term
3 Recently, the six exchanges affiliated with
Nasdaq, Inc. (The Nasdaq Stock Market LLC,
Nasdaq BX, Inc., Nasdaq PHLX LLC, Nasdaq ISE,
LLC, Nasdaq GEMX, LLC, and Nasdaq MRX, LLC
(collectively, the ‘‘Affiliated Exchanges’’)) added
shell structures to their respective rulebooks with
the purpose of improving efficiency and readability
and to align their respective rules.
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Federal Register / Vol. 83, No. 249 / Monday, December 31, 2018 / Notices
‘‘Exchange’’ in the General 8 Rules shall be
read to refer to the Nasdaq GEMX Exchange;
the defined term ‘‘Rule’’ in the General 8
Rules shall be read to refer to the Nasdaq
GEMX Rule.4
khammond on DSK30JT082PROD with NOTICES
Over the past year, the Affiliated
Exchanges each took steps to harmonize
their respective rules on colocation,
connectivity, and direct connectivity,
first by relocating them to General 8 of
their respective rulebooks, and then by
eliminating substantive differences
among the rules. The Affiliated
Exchanges harmonized these rules
because the Affiliated Exchanges offer
colocation, connectivity, and direct
connectivity services and related
products to their customers on a shared
basis with one another,5 and to do so,
the rules and fees governing such shared
products and services should be the
same for all of the Affiliated Exchanges.
Because the text of the Exchange’s
General 8 is already substantively
identical 6 to Nasdaq’s General 8, the
proposal will not effect any substantive
changes to the Exchange’s General 8.
Instead, the proposal will merely adopt
language indicating that the Exchange is
incorporating by reference Nasdaq’s
General 8 and it will make conforming
cross-reference changes.
This proposal is the penultimate step
in the harmonization process. The
Exchange plans to file with the
Commission a request to exempt it from
Section 19(b) of the Act with respect to
General 8, as amended herein, so that
the Exchange will not need to file a
proposed rule change whenever Nasdaq
amends its General 8 rules. The
Exchange proposes that this rule change
become operative at such time as it
receives approval for this exemption
from the Commission, pursuant to its
4 The Exchange shall include a hyperlink to
Nasdaq’s General 8 for ease of reference.
5 The offering of products and services on a
shared basis means that a customer purchases
colocation, connectivity, and direct connectivity
products and services once to gain access to any or
all of the Affiliated Exchanges to which the
customer is otherwise entitled to receive access
under the respective rules of the Affiliated
Exchanges. In other words, the Affiliated Exchanges
only charge customers once for these shared
products and services, even to the extent that a
customer uses the products and services to connect
to more than one of the Affiliated Exchanges.
Likewise, the rules 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
Affiliated Exchanges.
6 A small number of minor differences exist
among the Section 8s of the Affiliated Exchanges.
However, these differences, such as the use of the
word ‘‘the’’ before the phrase ‘‘Nasdaq Data Center’’
in one version of the Rulebook and not in the
others, are technical and do result in substantive
variations in the meanings of the Rulebooks.
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67793
authority under Section 36 of the Act 7
and Rule 0–12 thereunder.8
The Exchange’s General 8 and
Nasdaq’s General 8 are regulatory in
nature.9 Should any rules which impact
trading behavior be added to Nasdaq
General 8 in the future, those rules shall
not become subject to the incorporation
by reference and shall be placed
elsewhere within the Exchange’s
Rulebook. The Exchange notes that as a
condition of any exemption approved
by the Commission, the Exchange agrees
to provide written notice to its members
whenever Nasdaq proposes a change to
its General 8 Rules.10 Such notice will
alert Exchange members to the proposed
Nasdaq rule change and give them an
opportunity to comment on the
proposal. The Exchange will similarly
inform its members in writing when the
Commission approves any such
proposed change.
8 are already the same, the proposed
change will have no substantive impact
on firms that colocate with or connect
to the Exchange.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,11 in general, and furthers the
objectives of Section 6(b)(5) of the Act,12
in particular, 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
harmonizing the Existing Connectivity
Rules with the colocation, connectivity,
and direct connectivity rules of Nasdaq
will improve efficiency and reduce the
burden on firms as they only will need
to be familiar with a single set of rules
going forward governing colocation,
connectivity, and direct connectivity.
Because the text of the Existing
Connectivity Rules and Nasdaq General
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 13 and
subparagraph (f)(6) of Rule 19b–4
thereunder.14
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
should be approved or disapproved.
7 15
U.S.C. 78mm.
17 CFR 240.0–12; Exchange Act Release No.
39624 (February 5, 1998), 63 FR 8101 (February 18,
1998).
9 The General 8 Rules are categories of rules that
are not trading rules. See 17 CFR 200.30–3(a)(76)
(contemplating such requests). In addition, several
other SROs incorporate by reference certain
regulatory rules of another SRO and have received
from the Commission similar exemptions from
Section 19(b) of the Exchange Act. See e.g.,
Securities Exchange Act Release Nos. 57478 (March
12, 2008), 73 FR 14521 (March 18, 2008), 53128
(January 13, 2006), 71 FR 3550 (January 23, 2006);
49260 (February 17, 2004), 69 FR 8500 (February
24, 2004).
10 The Exchange will provide such notice via a
posting on the same website location where it posts
its own rule filings pursuant to Rule 19b–4 within
the timeframe require by such Rule. The website
posting will include a link to the location on the
Nasdaq website where the applicable proposed rule
change is posted.
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
8 See
PO 00000
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B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed rule change does not make
any substantive change to Exchange
General 8 and will not impact
competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
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:
13 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
14 17
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67794
Federal Register / Vol. 83, No. 249 / Monday, December 31, 2018 / Notices
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–
GEMX–2018–43 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.
khammond on DSK30JT082PROD with NOTICES
All submissions should refer to File
Number SR–GEMX–2018–43. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–GEMX–2018–43 and
should be submitted on or before
January 22, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Brent J. Fields,
Secretary.
[FR Doc. 2018–28390 Filed 12–28–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–84928; File No. SR–
CboeBZX–2018–092]
Self-Regulatory Organizations; Cboe
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change Relating To
Adopt Definitions of Ports and
Discontinue Bulk Order Functionality
and Implement Bulk Message
Functionality
December 21, 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 December
18, 2018, Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) 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
Cboe BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX Options’’)
proposes to adopt definitions of ports
and discontinue bulk order
functionality and implement bulk
message functionality. The text of the
proposed rule change is provided in
Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://www.cboe.com/
AboutCBOE/CBOELegal
RegulatoryHome.aspx), at the
Exchange’s Office of the Secretary, 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
15 17
CFR 200.30–3(a)(12).
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16:24 Dec 28, 2018
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00083
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
In 2016, the Exchange’s parent
company, Cboe Global Markets, Inc.
(‘‘Cboe Global’’), which is the parent
company of Cboe Exchange, Inc. (‘‘Cboe
Options’’) and Cboe C2 Exchange, Inc.
(‘‘C2’’), acquired the Exchange, Cboe
EDGA Exchange, Inc. (‘‘EDGA’’), Cboe
EDGX Exchange, Inc. (‘‘EDGX or EDGX
Options’’), and Cboe BYX Exchange,
Inc. (‘‘BYX’’ and, together with C2, Cboe
Options, the Exchange, EDGA, and
EDGX, the ‘‘Cboe Affiliated
Exchanges’’). The Cboe Affiliated
Exchanges are working to align certain
system functionality, retaining only
intended differences between the Cboe
Affiliated Exchanges, in the context of a
technology migration. Cboe Options
intends to migrate its technology to the
same trading platform used by the
Exchange, C2, and EDGX Options in the
fourth quarter of 2019. The proposals set
forth below are intended to add certain
functionality to the Exchange’s System
that is more similar to functionality
offered by Cboe Options in order to
ultimately provide a consistent
technology offering for market
participants who interact with the Cboe
Affiliated Exchanges, as well as codify
certain functionality. Although the
Exchange intentionally offers certain
features that differ from those offered by
its affiliates and will continue to do so,
the Exchange believes that offering
similar functionality to the extent
practicable will reduce potential
confusion for Users.
Port Definitions
The Exchange currently provides
access to BZX Options to Users 3
through various ports. These ports have
been previously described in multiple
filings submitted by the Exchange 4 and
are referenced on the Exchange’s fee
schedule. However, the Exchange has
not previously maintained any language
in its Rules related to such ports. The
Exchange proposes to add language to
Rule 21.1(l) to provide additional clarity
3 The term ‘‘User’’ means any Options Member or
Sponsored Participant who is authorized to obtain
access to the Exchange’s System (as defined below)
pursuant to Rule 11.3. See current Rule 16.1(a)(63)
(proposed subparagraph (64)).
4 See Securities Exchange Act Release Nos. 82052
(November 9, 2017), 82 FR 53547 (November 16,
2017) (SR–BatsBZX–2017–76) (modifying fees for
physical ports on an immediately effective basis);
and 61650 (March 4, 2010), 75 FR 11951 (March 12,
2010) (SR–BATS–2010–005) (adopting initial fees
for BZX Options, including description of logical
and physical ports).
E:\FR\FM\31DEN1.SGM
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]]>Agencies
[Federal Register Volume 83, Number 249 (Monday, December 31, 2018)]
[Notices]
[Pages 67792-67794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-28390]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84934; File No. SR-GEMX-2018-43]
Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend General 8
December 21, 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 December 19, 2018, Nasdaq GEMX, LLC (``GEMX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III, below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to delete the Exchange's existing rules on
colocation, connectivity, and direct connectivity (the ``Existing
Connectivity Rules''), under General 8, and incorporate by reference
into General 8 The Nasdaq Stock Market LLC's (``Nasdaq's'') rules on
colocation, connectivity, and direct connectivity, which are located in
General 8 of the Nasdaq rulebook shell structure.\3\
---------------------------------------------------------------------------
\3\ Recently, the six exchanges affiliated with Nasdaq, Inc.
(The Nasdaq Stock Market LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC,
Nasdaq ISE, LLC, Nasdaq GEMX, LLC, and Nasdaq MRX, LLC
(collectively, the ``Affiliated Exchanges'')) added shell structures
to their respective rulebooks with the purpose of improving
efficiency and readability and to align their respective rules.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
website at https://nasdaqgemx.cchwallstreet.com/, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to delete its Existing Connectivity Rules,
currently under General 8, and incorporate by reference the
corresponding Nasdaq rules, at General 8 of Nasdaq's rulebook. The
Exchange proposes to remove the current rule text from General 8 and
replace it with the following text:
General 8 Connectivity
The rules contained in The Nasdaq Stock Market LLC General 8, as
such rules may be in effect from time to time (the ``General 8
Rules''), are hereby incorporated by reference into this Nasdaq GEMX
General 8, and are thus Nasdaq GEMX Rules and thereby applicable to
Nasdaq GEMX Members. Nasdaq GEMX Members shall comply with the
General 8 Rules as though such rules were fully set forth herein.
All defined terms, including any variations thereof, contained in
the General 8 Rules shall be read to refer to the Nasdaq GEMX
related meaning of such term. Solely by way of example, and not in
limitation or in exhaustion: the defined term
[[Page 67793]]
``Exchange'' in the General 8 Rules shall be read to refer to the
Nasdaq GEMX Exchange; the defined term ``Rule'' in the General 8
Rules shall be read to refer to the Nasdaq GEMX Rule.\4\
---------------------------------------------------------------------------
\4\ The Exchange shall include a hyperlink to Nasdaq's General 8
for ease of reference.
Over the past year, the Affiliated Exchanges each took steps to
harmonize their respective rules on colocation, connectivity, and
direct connectivity, first by relocating them to General 8 of their
respective rulebooks, and then by eliminating substantive differences
among the rules. The Affiliated Exchanges harmonized these rules
because the Affiliated Exchanges offer colocation, connectivity, and
direct connectivity services and related products to their customers on
a shared basis with one another,\5\ and to do so, the rules and fees
governing such shared products and services should be the same for all
of the Affiliated Exchanges.
---------------------------------------------------------------------------
\5\ The offering of products and services on a shared basis
means that a customer purchases colocation, connectivity, and direct
connectivity products and services once to gain access to any or all
of the Affiliated Exchanges to which the customer is otherwise
entitled to receive access under the respective rules of the
Affiliated Exchanges. In other words, the Affiliated Exchanges only
charge customers once for these shared products and services, even
to the extent that a customer uses the products and services to
connect to more than one of the Affiliated Exchanges. Likewise, the
rules 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
Affiliated Exchanges.
---------------------------------------------------------------------------
Because the text of the Exchange's General 8 is already
substantively identical \6\ to Nasdaq's General 8, the proposal will
not effect any substantive changes to the Exchange's General 8.
Instead, the proposal will merely adopt language indicating that the
Exchange is incorporating by reference Nasdaq's General 8 and it will
make conforming cross-reference changes.
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\6\ A small number of minor differences exist among the Section
8s of the Affiliated Exchanges. However, these differences, such as
the use of the word ``the'' before the phrase ``Nasdaq Data Center''
in one version of the Rulebook and not in the others, are technical
and do result in substantive variations in the meanings of the
Rulebooks.
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This proposal is the penultimate step in the harmonization process.
The Exchange plans to file with the Commission a request to exempt it
from Section 19(b) of the Act with respect to General 8, as amended
herein, so that the Exchange will not need to file a proposed rule
change whenever Nasdaq amends its General 8 rules. The Exchange
proposes that this rule change become operative at such time as it
receives approval for this exemption from the Commission, pursuant to
its authority under Section 36 of the Act \7\ and Rule 0-12
thereunder.\8\
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\7\ 15 U.S.C. 78mm.
\8\ See 17 CFR 240.0-12; Exchange Act Release No. 39624
(February 5, 1998), 63 FR 8101 (February 18, 1998).
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The Exchange's General 8 and Nasdaq's General 8 are regulatory in
nature.\9\ Should any rules which impact trading behavior be added to
Nasdaq General 8 in the future, those rules shall not become subject to
the incorporation by reference and shall be placed elsewhere within the
Exchange's Rulebook. The Exchange notes that as a condition of any
exemption approved by the Commission, the Exchange agrees to provide
written notice to its members whenever Nasdaq proposes a change to its
General 8 Rules.\10\ Such notice will alert Exchange members to the
proposed Nasdaq rule change and give them an opportunity to comment on
the proposal. The Exchange will similarly inform its members in writing
when the Commission approves any such proposed change.
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\9\ The General 8 Rules are categories of rules that are not
trading rules. See 17 CFR 200.30-3(a)(76) (contemplating such
requests). In addition, several other SROs incorporate by reference
certain regulatory rules of another SRO and have received from the
Commission similar exemptions from Section 19(b) of the Exchange
Act. See e.g., Securities Exchange Act Release Nos. 57478 (March 12,
2008), 73 FR 14521 (March 18, 2008), 53128 (January 13, 2006), 71 FR
3550 (January 23, 2006); 49260 (February 17, 2004), 69 FR 8500
(February 24, 2004).
\10\ The Exchange will provide such notice via a posting on the
same website location where it posts its own rule filings pursuant
to Rule 19b-4 within the timeframe require by such Rule. The website
posting will include a link to the location on the Nasdaq website
where the applicable proposed rule change is posted.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\11\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\12\ in particular, 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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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that harmonizing the Existing Connectivity
Rules with the colocation, connectivity, and direct connectivity rules
of Nasdaq will improve efficiency and reduce the burden on firms as
they only will need to be familiar with a single set of rules going
forward governing colocation, connectivity, and direct connectivity.
Because the text of the Existing Connectivity Rules and Nasdaq General
8 are already the same, the proposed change will have no substantive
impact on firms that colocate with or connect to the Exchange.
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 proposed rule change does
not make any substantive change to Exchange General 8 and will not
impact competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \13\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is 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 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:
[[Page 67794]]
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-GEMX-2018-43 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-GEMX-2018-43. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-GEMX-2018-43 and should be submitted on
or before January 22, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2018-28390 Filed 12-28-18; 8:45 am]
BILLING CODE 8011-01-P
