Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Equity 7, Section 115, 842-843 [2019-00475]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 84, Number 21 (Thursday, January 31, 2019)]
[Notices]
[Pages 842-843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-00475]



[[Page 842]]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84965; File No. SR-BX-2018-066]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Equity 7, 
Section 115

December 26, 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 20, 2018, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change as described in Items I, II, and III, below, 
which Items have been prepared by the Exchange. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Exchange's port fee schedule at 
Equity 7, Section 115, as described further 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.

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 its fee schedule, at Equity 7, 
Section 115, to clarify its existing practice for assessing port fees.
    Presently, the Exchange assigns ports to customers that request 
them using the customers' Market Participant Identifiers or ``MPIDs.'' 
The Exchange assesses ports fees in two ways.
    First, for certain port types--i.e., Multicast TotalView-ITCH, TCP 
ITCH data feed, DROP, and their corresponding disaster recovery ports--
the Exchange assigns a port only to the MPID of the customer that 
requested it. Even if, as a practical matter, others also utilize the 
port, the Exchange will only bill the MPID of the customer that 
requested the port. The requesting customer may then, at its 
discretion, subsequently bill any other users for their shared usage of 
the port.
    Second, for other port types--i.e., OUCH, FIX Trading Ports (FIX 
and FIX Lite), RASH, and their corresponding disaster recovery ports--
the Exchange assigns the port to the MPID of the customer that 
requested it as well as to any other MPIDs that the requester had 
specified. In these instances, the Exchange does not only bill the 
port-requesting MPID. Instead, the Exchange assesses a separate monthly 
fee to each of the MPIDs it assigned to the port.
    The existing port fee schedule, at Section 115, does not explain 
these nuances of Exchange's port billing practices. Instead, Section 
115 states simply, for all port types, that the Exchange will assess 
fees of certain stated amounts on a per port, per month basis. Although 
this existing language is accurate, the Exchange believes that it 
should be more descriptive so as to avoid confusion as to the 
circumstances in which a customer will incur port fees. The Exchange 
now proposes to amend Section 115 to provide a more fulsome explanation 
of its billing practices.
    To accomplish this, the Exchange proposes to reorganize its chart 
of ports and associated fees in the second paragraph of Section 115. 
Specifically, the Exchange proposes to split this chart into two parts.
    The first part of the proposed amended chart will comprise port 
types for which the Exchange will charge a separate monthly fee to each 
MPID that it has assigned to a port, i.e., OUCH, FIX Trading Port (FIX 
and FIX Lite (FLITE), RASH, and disaster recovery ports for OUCH, FIX 
Trading Port, and RASH. The first part of the chart will include the 
following preface to explain the Exchange's pertinent billing practice:

For the port types listed immediately below, where a customer has 
requested that the Exchange assign more than one MPID to a particular 
port, then the Exchange will assess a separate monthly fee to each MPID 
assigned to the port.

The Exchange also proposes to revise its description of the price 
formula for each port type therein from ``$X/port/month'' to ``$X/each 
MPID assigned to port/month.''
    The second part of the proposed amended chart will comprise port 
types for which the Exchange will charge a monthly fee only to the MPID 
that requested the port, i.e., Multicast TotalView-ITCH (software 
based), TCP ITCH data feed, DROP, Trading Ports used in Test Mode, and 
the disaster recover port for DROP.\3\ This part will include the 
following preface describing the applicable billing practice:
---------------------------------------------------------------------------

    \3\ It also includes ports for which the exchange charges no 
fee--Data Retransmission Ports and other disaster recover ports. The 
Exchange proposes to add a parenthetical with the word ``Glimpse'' 
next to Data Retransmission Ports to clarify that that such Ports 
include access to the ``Glimpse'' product, which allows a subscriber 
to replay market data from the current trading day.
---------------------------------------------------------------------------

    For the port types listed immediately below, the Exchange will 
assess the monthly fee to the single MPID that requested that 
particular port. For the ports in this part, the Exchange will maintain 
its existing price formula: ``$X/port/month.''
    The Exchange emphasizes that the foregoing proposal does not make 
any change to the Exchange's existing port fees other than to clarify 
its existing practices for assessing them.\4\
---------------------------------------------------------------------------

    \4\ The Exchange proposes to correct a typographical error in 
the existing Rule text. Presently, the Rule contains the following 
footnote: ``[dagger]Fees are assessed in full month increments under 
this section, and thus are not prorated.'' However, the footnote is 
not associated with anything in the main section of the Rule. This 
is an unintended error. The Exchange proposes to correct this error 
by placing the symbol ``[dagger]'' immediately after the heading of 
Section 115.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\5\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\6\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees and other charges 
among members and issuers and other persons using any facility, and is 
not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposal is reasonable because it 
clarifies the Exchange's port fee schedule, at Section 115. Although 
existing Section 115 is an accurate description of the fees that the 
Exchange

[[Page 843]]

charges for ports, it does not describe the nuances of the Exchange's 
existing practices for assessing port fees in different situations. The 
proposal will convey these nuances in order to avoid potential 
confusion among customers as to the circumstances in which they will 
incur port fees. In particular, the proposal will amend Section 115 to 
state that, for certain enumerated port types, the Exchange will assess 
a monthly fee only on the MPID that requested the port, whereas in 
other enumerated port types, the Exchange will assess a separate fee to 
the requesting MPID as well as to each additional MPID that the 
requester asked the Exchange to assign to the same port.
    The Exchange believes that this proposal is also equitable in that 
a more fulsome description of the Exchange's port fee practices will 
help to avoid any potential confusion as to when and under what 
circumstances the Exchange will assess a monthly port fee to a 
customer. The Exchange notes that the proposal merely codifies the 
existing practices of the Exchange with respect to port fees and will 
not involve any substantive changes to the fees that the Exchange's 
customers are paying now.
    Finally, the Exchange believes that its proposal is not unfairly 
discriminatory because, again, the proposal will merely make non-
substantive clarifications to Section 115 that will codify the 
Exchange's existing practices for assessing port fees in different 
situations. The proposal will not make any changes to the fees that 
port users pay presently.

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. Insofar as the proposal merely 
codifies existing practice and makes no changes to the fees that the 
Exchange charges presently, the Exchange does not expect that the 
proposal will have any impact on competition whatsoever.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\7\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-BX-2018-066 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-2018-066. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-BX-2018-066, and should be submitted on 
or before February 21, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-00475 Filed 1-30-19; 8:45 am]
BILLING CODE P