Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Certain Fees Based on the Rate of Inflation, 102207-102211 [2024-29633]
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Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.50
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–29625 Filed 12–16–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101880; File No. SR–FICC–
2024–009]
Self-Regulatory Organizations; Fixed
Income Clearing Corporation; Notice of
Designation of Longer Period for
Commission Action on Proceedings To
Determine Whether To Approve or
Disapprove a Proposed Rule Change,
as Modified by Partial Amendment No.
1, Relating to the Adoption of a Trade
Submission Requirement
December 11, 2024.
On June 12, 2024, Fixed Income
Clearing Corporation (‘‘FICC’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change SR–FICC–2024–
009 pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder.2
The notice of filing of the proposed rule
change was published for comment in
the Federal Register on July 1, 2024.3
On August 16, 2024, the Commission
extended the review period of the
proposed rule change, pursuant to
section 19(b)(2) of the Act,4 by which
the Commission shall either approve,
disapprove, or institute proceedings to
determine whether to disapprove the
proposed rule change.5 The Commission
has received comments regarding the
proposed rule change.6
On October 2, 2024, the Commission
instituted proceedings, pursuant to
Section 19(b)(2)(B) of the Exchange
Act,7 to determine whether to approve
or disapprove the proposed rule
change.8 On September 24, 2024, FICC
filed Partial Amendment No. 1 to make
clarifications and corrections to the
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Securities Exchange Act Release No. 100417
(June 25, 2024), 89 FR 54602 (July 1, 2024) (File No.
SR–FICC–2024–009) (‘‘Notice of Filing’’).
4 15 U.S.C. 78s(b)(2).
5 Securities Exchange Act Release No. 100693
(Aug. 12, 2024), 89 FR 66746 (Aug. 16, 2024) (File
No. SR–FICC–2024–009).
6 Comments on the Proposed Rule Change are
available at https://www.sec.gov/comments/sr-ficc2024-009/srficc2024009.htm.
7 15 U.S.C. 78s(b)(2)(B).
8 Securities Exchange Act Release No. 101194
(Sept. 26, 2024), 89 FR 80296 (Oct. 2, 2024) (SR–
FICC–2024–009).
proposed rule change.9 The Commission
published notice of Partial Amendment
No. 1 in the Federal Register on October
21, 2024.10 The proposed rule change,
as modified by Partial Amendment No.
1, is referred to herein as the ‘‘Proposed
Rule Change.’’
Section 19(b)(2) of the Exchange
Act 11 provides that proceedings to
determine whether to approve or
disapprove a proposed rule change must
be concluded within 180 days of the
date of publication of notice of filing of
the proposed rule change. The time for
conclusion of the proceedings may be
extended for up to 60 days if the
Commission determines that a longer
period is appropriate and publishes the
reasons for such determination.12 The
180th day after publication of the Notice
of Filing in the Federal Register is
December 28, 2024.
The Commission is extending the
period for Commission action on the
Proposed Rule Change, as modified by
Partial Amendment No. 1. The
Commission finds that it is appropriate
to designate a longer period within
which to take action on the Proposed
Rule Change so that the Commission has
sufficient time to consider the issues
raised by the Proposed Rule Change and
to take action on the Proposed Rule
Change. Accordingly, pursuant to
Section 19(b)(2)(B)(ii)(II) of the
Exchange Act,13 the Commission
designates February 26, 2025, as the
date by which the Commission should
either approve or disapprove the
Proposed Rule Change SR–FICC–2024–
009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–29627 Filed 12–16–24; 8:45 am]
BILLING CODE 8011–01–P
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9 Text of the proposed changes made by the
Partial Amendment No. 1 to the Proposed Rule
Change is available at https://www.sec.gov/
comments/sr-ficc-2024-009/srficc2024009-5240751504142.pdf.
10 Securities Exchange Act Release No. 101340
(Oct. 15, 2024), 89 FR 84211 (Oct. 21, 2024) (File
No. SR–FICC–2024–009) (‘‘Notice of Amendment
No. 1’’).
11 15 U.S.C. 78s(b)(2).
12 15 U.S.C 78s(b)(2)(B)(ii)(II).
13 Id.
14 17 CFR 200.30–3(a)(57).
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102207
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101887; File No. SR–BX–
2024–055]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Certain Fees
Based on the Rate of Inflation
December 11, 2024.
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
2, 2024, Nasdaq BX, Inc. (‘‘BX’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Exchange’s fees based on the rate of
inflation.
While these amendments are effective
upon filing, the Exchange has
designated the proposed amendments to
be operative on January 1, 2025.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/bx/rules, 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
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
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1. Purpose
The purpose of the proposed rule
change is to adjust market data fees for
inflation, to be operative on January 1,
2025.
Many market data fees have not
changed for years. As such, the fees
have fallen substantially in real terms.
The Exchange proposes to restore fees to
the real amount intended in the original
filings in a one-time inflationary
adjustment. This adjustment will
become operative in three parts: 45
percent in 2025; 30 percent in 2026; and
the final 25 percent in 2027. The
Exchange believes that it is necessary to
spread the impact of this one-time
adjustment for past inflation to prevent
any undue impact that execution in a
single tranche may have on our
customers.3
The proposed fee increases will apply
to three types of products: (i) Market
Data Distributor Fees; (ii) BX TotalView;
and (iii) Distribution Models. A detailed
list of fee adjustments is set forth below.
The Exchange is not proposing to adjust
fees for non-professional usage,
administrative fees, extranet fees, or
certain categories of Non-Display usage.
The Exchange plans to use this
inflationary adjustment to support
continued investment in innovative,
high-quality data products.
Investments in Nasdaq Data Products
BX has continuously invested in its
products in the period after the current
fees were first instituted to
accommodate the increasing amount of
information processed and the changes
in technology over time. It is reasonable
and consistent with the Act for the
Exchange to recoup its investments, at
least in part, by adjusting its fees.
Continuing to operate at fees frozen in
time impacts the Exchange’s ability to
enhance its offerings and the interests of
market participants and investors.
These investments have been
necessary in part because of increases in
the amount of information processed,
coupled with the need to maintain
infrastructure in a high fixed cost
environment. The following message
rate metrics for depth of book data
illustrate changes in system demand
over time:
• Peak Rate by Millisecond: up
approximately 14%
3 This proposal will adjust for inflation up to
August 2024. Depending on inflation thereafter,
further adjustments may, or may not, be necessary.
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• Average Rate per Millisecond: up
approximately 15%
• Peak Rate per Second: down
approximately 28%
• Average Rate per Second: down
approximately 41%
• Peak Total Messages: up
approximately 143%
• Average Total Messages: up
approximately 50%
• Average Daily Volume: down
approximately 87%
• Maximum Message Count: up
approximately 143%
With this increase in message traffic
and need to maintain infrastructure, the
Exchange expended significant
resources to improve its market data
products to meet customer expectations,
including continued investment in all
aspects of the technology ecosystem
(e.g., software, hardware, and network).
During the period between 2018 and
2023, advancements in system
performance as measured by latency not
only accommodated the high message
traffic volumes but stayed well ahead of
it. The following latency metrics 4
illustrate the increase in message
processing speed:
• Median: down approximately 26%
• Average: down approximately 36%
• Max: down approximately 46%
The Exchange continues to invest in
enhancing its technology for the benefit
and often at the behest of its customers.
Yet the Exchange has not adjusted any
of the fees included in this proposal for
many years (as set forth below), to even
partially offset the costs of maintaining
and enhancing its market data offerings.
Inflationary Index
The fee increases the Exchange
proposes are based on an industryspecific Producer Price Index (PPI),
which is a tailored measure of
inflation.5 As a general matter, the
Producer Price Index is a family of
indexes that measures the average
change over time in selling prices
received by domestic producers of
goods and services, measuring price
change from the perspective of the
seller. This contrasts with other metrics,
such as the Consumer Price Index (CPI),
that measure price change from the
purchaser’s perspective.6
About 10,000 PPIs for individual
products and groups of products are
tracked and released each month.7 PPIs
4 These measurements compare the time
difference between events on the matching engine
and the time these events are published.
5 See https://fred.stlouisfed.org/series/
PCU51825182#0.
6 See https://www.bls.gov/ppi/overview.htm.
7 See https://www.bls.gov/ppi/overview.htm.
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are available for the output of nearly all
industries in the goods-producing
sectors of the U.S. economy—mining,
manufacturing, agriculture, fishing, and
forestry—as well as natural gas,
electricity, and construction, among
others. The PPI program covers
approximately 69 percent of the service
sector’s output, as measured by revenue
reported in the 2017 Economic Census.
For purposes of this proposal, the
relevant industry-specific PPI is the
Data Processing and Related Services
PPI (‘‘Data Processing PPI’’), which is an
industry net-output PPI that measures
the average change in selling prices
received by companies that provide data
processing services. The Data Processing
PPI was introduced in January 2002 by
the Bureau of Labor Statistics (BLS) as
part of an ongoing effort to expand
Producer Price Index coverage of the
services sector of the U.S. economy and
is identified as NAICS–518210 in the
North American Industry Classification
System.8 According to the BLS ‘‘[t]he
primary output of NAICS 518210 is the
provision of electronic data processing
services. In the broadest sense,
computer services companies help their
customers efficiently use technology.
The processing services market consists
of vendors who use their own computer
systems—often utilizing proprietary
software—to process customers’
transactions and data. Companies that
offer processing services collect,
organize, and store a customer’s
transactions and other data for recordkeeping purposes. Price movements for
the NAICS 518210 index are based on
changes in the revenue received by
companies that provide data processing
services. Each month, companies
provide net transaction prices for a
specified service. The transaction is an
actual contract selected by probability,
where the price-determining
characteristics are held constant while
the service is repriced. The prices used
in index calculation are the actual
prices billed for the selected service
contract.’’ 9
The Exchange believes the Data
Processing PPI is an adequate measure
to for adjusting fees for its proprietary
market data products because the
Exchange uses its ‘‘own computer
systems’’ and ‘‘proprietary software,’’
i.e., its own data center and proprietary
matching engine software, respectively,
to collect, organize, store and report
8 NAICS appears in table 5 of the PPI Detailed
Report and is available at https://data.bls.gov/
timeseries/PCU518210518210.
9 See https://www.bls.gov/ppi/factsheets/
producer-price-index-for-the-data-processing-andrelated-servicesindustry-naics-518210.htm.
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customers’ transactions in U.S. equity
securities.10
The Exchange furthermore notes that
the Data Processing PPI is a stable
metric with limited volatility, unlike
other consumer-side inflation metrics.
The Data Processing PPI has not
experienced a greater than 2.16%
increase for any one calendar year
period since Data Processing PPI was
introduced into the PPI in January 2002.
The average calendar year change from
January 2002 to December 2023 was
0.62%, with a cumulative increase of
15.67% over this 21-year period.
The Exchange notes that other
exchanges have filed for increases in
certain fees, based in part on the rate of
inflation.11
Calculation and Proposed Fee Changes
The proposed inflationary
adjustments are based on a comparison
of the Data Processing PPI index on the
last date that the relevant fee was
adjusted with the level of the Data
Processing PPI index on August 1, 2024.
For example, for a fee that was last
changed on September 1, 2010, the
Exchange divided the difference
between the Data Processing PPI index
on August 2024 (116.022) and the Data
Processing PPI index in September 2010
(101.7) by the Data Processing PPI index
in September 2010 (101.7), to calculate
a total inflationary adjustment of 14
percent to obtain the percentage
increase. That percentage increase was
102209
then applied to the prior fee to
determine the proposed fee, and then
rounding the result.12 This calculation
was repeated for each market data fee.
As noted above, the Exchange
proposes to adjust fees through a onetime inflationary adjustment to be
executed in three tranches: one in 2025
that will cover 45 percent of the
adjustment, another in 2026 to cover an
additional 30 percent, and a final
tranche in 2027 for the final 25 percent
of the adjustment.
Table 1 below shows the proposed
changes for 2025, 2026 and 2027, the
date of the last fee change, and the
overall adjustment:
TABLE 1—PROPOSED INFLATIONARY ADJUSTMENT
Product
Current
2025
2026
2027
Last change
Overall
percent
change
Market Data Distributor Fees
Monthly Direct Access Fee ......................
Monthly Internal Distributor Fee ..............
Monthly External Distributor Fee .............
$1,000
750
1,500
$1,070
784
1,570
$1,120
810
1,620
$1,150
824
1,649
22.25
22.25
58.50
21,400
23.00
23.00
59.50
21,747
1,660
166
1,686
168
13 1/1/2010
14 15.0
15 12/1/2016
10.0
16 12/1/2016
17 9.9
BX TotalView
Subscriber fee (Nasdaq) ..........................
Subscriber fee (Non-Nasdaq) ..................
Non-Display Direct Access ......................
Enterprise License ...................................
20
20
55
20,000
21.25
21.25
57.00
20,790
18 4/1/2010
19 15.0
20 4/1/2010
21 15.0
22 1/1/2018
23 8.2
24 1/1/2018
8.7
Distribution Models
Managed Data Solutions Admin ..............
Managed Data Solutions Subscriber .......
1,500
150
2. Statutory Basis
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The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,28 in general, and furthers the
10 The Exchange notes that the Bureau of Labor
Statistics uses a number of measures of inflation
that may apply to Exchange market data. For
example, there is also an inflation measure related
to PPI industry data for data processing, hosting and
related services: Hosting, ASP, and other IT
infrastructure provisioning services. This other
measure has been used by other SROs in
determining price changes and may provide an
alternative point of reference.
11 See, e.g., Securities Exchange Act Release Nos.
34–100004 (April 22, 2024), 89 FR 32465 (April 26,
2024) (SR–CboeBYX–2024–012); and 34–100398
(June 21, 2024), 89 FR 53676 (June 27, 2024) (SR–
BOX–2024–16); Securities Exchange Act Release
No. 100994 (September 10, 2024), 89 FR 75612
(September 16, 2024) (SR–NYSEARCA–2024–79).
12 The Exchange rounded fees as follows: fee
values over $999.99 were rounded to the nearest
$10; fees between $99.99 and $999.99 were rounded
to the nearest dollar; fees between $9.99 and $99.99
were rounded to the nearest $0.50; fees less than
$9.99 were rounded to the nearest $0.10. Where
rounding would have caused the proposed fee to
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159
25 1/1/2016
12.4
26 1/1/2016
27 12.0
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,29 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.
exceed the rate of inflation, the Exchange rounded
downward.
13 See Securities Exchange Act Release No. 59307
(January 28, 2009), 74 FR 6069 (February 4, 2009)
(SR–BX–2009–005).
14 The change as calculated by the Data
Processing PPI index is 15.1%. The actual change
is 15.0% due to rounding of the fee.
15 See Securities Exchange Act Release No. 79690,
(December 23, 2016), 81 FR 96527 (December 30,
2016) (SR–BX–2016–073).
16 See id.
17 The change as calculated by the Data
Processing PPI index is 10.0%. The actual change
is 9.9% due to rounding of the fee.
18 See Securities Exchange Act Release No. 25014
(May 6, 2010), 75 FR 25014 (May 6, 2010) (SR–BX–
2010–027).
19 The change as calculated by the Data
Processing PPI index is 15.1%. The actual change
is 15.0% due to rounding of the fee.
20 See Securities Exchange Act Release No. 25014
(May 6, 2010), 75 FR 25014 (May 6, 2010) (SR–BX–
2010–027).
21 The change as calculated by the Data
Processing PPI index is 15.1%. The actual change
is 15.0% due to rounding of the fee.
22 See Securities Exchange Act Release No. 82567
(January 23, 2018), 83 FR 4092 (January 29, 2018)
(SR–BX–2018–005).
23 The change as calculated by the Data
Processing PPI index is 8.7%. The actual change is
8.2% due to rounding of the fee.
24 See Securities Exchange Act Release No. 82567
(January 23, 2018), 83 FR 4092 (January 29, 2018)
(SR–BX–2018–005).
25 See Securities Exchange Act Release No. 76796
(December 30, 2015), 81 FR 555 (January 6, 2016)
(SR–BX–2015–084).
26 See id.
27 The change as calculated by the Data
Processing PPI index is 12.4%. The actual change
is 12.0% due to rounding of the fee.
28 15 U.S.C. 78f(b).
29 15 U.S.C. 78f(b)(4) and (5).
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This belief is based on two factors.
First, the current fees do not properly
reflect the quality of the services and
products, as fees for the services and
products in question have been static in
nominal terms, and therefore falling in
real terms due to inflation. Second, the
Exchange believes that investments
made in enhancing the capacity of
Exchange systems have increased the
performance of the services and
products notwithstanding fees having
remained static in nominal terms.
Equitable Allocation of Reasonable
Dues, Fees and Other Charges
The proposed changes are an
equitable allocation of reasonable dues,
fees and other charges because, as noted
above, the Exchange has not increased
any of the fees included in the proposal
since the dates indicated in Table 1. In
the years following the last fee increase,
the Exchange has made significant
investments in upgrades to Exchange
systems and enhancing the quality of its
services as measured by, among other
things, increased throughput. As such,
Exchange customers have benefitted
while the Exchange’s ability to recoup
its investments has been hampered, and
Exchange fees have fallen in real terms
during the relevant period.
Between 2018 and 2023, for example,
the overall inflation rate was an average
of 3.93% per year, producing a
cumulative inflation rate of 21.28%.30
Using the more targeted inflation
number of Data Processing PPI, the
cumulative inflation rate was 8.07%.31
The Exchange believes the Data
Processing PPI is a reasonable metric for
this fee increase because it is targeted to
producer-side increases in the data
processing industry, which, based on
the definition adopted by BLS, would
include the Exchange’s market data
products. Notwithstanding this
inflation, the Exchange has not
increased its fees for the subject services
for the period of time indicated in Table
1, and therefore the proposed fee
changes represent a reasonable increase
from the current fees.
The Exchange believes the proposed
fee increase is reasonable in light of the
Exchange’s continued expenditure in
maintaining a robust technology
ecosystem. The Exchange continues to
invest in maintaining and enhancing its
market data products for the benefit and
often at the behest of its customers and
global investors. Such enhancements
include refreshing all aspects of the
30 See
https://www.officialdata.org/us/inflation/
2019?endYear=2023&amount=1.
31 See https://data.bls.gov/timeseries/
PCU518210518210.
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technology ecosystem including
software, hardware, and network while
introducing new and innovative
products. The goal of these
enhancements, among other things, is to
provide faster and more consistent
market data products. The Exchange
continues to expend resources to
innovate and modernize technology so
that it may benefit its members in
offering its market data products.
The Proposal Does Not Permit Unfair
Discrimination
The proposed fee increases are not
unfairly discriminatory because they
would apply to all data recipients that
choose to purchase the market data
products identified above. Any person
that chooses to purchase any of these
products would be subject to the same
fee schedule, regardless of what type of
business they operate or the use they
plan to make of the data feed.
Additionally, the fee increase would be
applied uniformly to subscribers
without regard to Exchange membership
status or the extent of any other
business with the Exchange or affiliated
entities.
The proposed changes are also not
unfairly discriminatory because the fees
would be assessed uniformly across all
market participants that purchase these
products in the same manner they are
today, and all products will remain
available for purchase by all market
participants.
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.
Intramarket Competition
The proposed fees do not put any
market participants at a relative
disadvantage compared to other market
participants. As noted above, the fee
schedule would continue to apply to all
customers of the market data products
identified above in the same manner as
it does today, albeit at inflation-adjusted
rates for certain fees, and customers may
choose whether to subscribe to the feed
at all. The Exchange also believes that
the level of the proposed fees neither
favors nor penalizes any one or more
categories of market participants in a
manner that would impose an undue
burden on competition.
Intermarket Competition
The proposed fees do not impose a
burden on competition or on other Self
Regulatory Organizations that is not
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necessary or appropriate. In determining
the proposed fees, the Exchange utilized
an objective and stable metric with
limited volatility. Utilizing Data
Processing PPI over a specified period of
time is a reasonable means of recouping
the Exchange’s investment in
maintaining and enhancing the market
data products identified above. The
Exchange believes utilizing Data
Processing PPI, a tailored measure of
inflation, to increase certain market data
fees to recoup the Exchange’s
investment in maintaining and
enhancing its market data products
would not impose a burden on
competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.32
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–2024–055 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.
32 15
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U.S.C. 78s(b)(3)(A)(ii).
17DEN1
Federal Register / Vol. 89, No. 242 / Tuesday, December 17, 2024 / Notices
All submissions should refer to file
number SR–BX–2024–055. 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
a.m. and 3 p.m. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–BX–2024–055 and should be
submitted on or before January 7, 2025.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.33
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–29633 Filed 12–16–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–101885; File No. SR–
NSCC–2024–010]
ddrumheller on DSK120RN23PROD with NOTICES1
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing of
Proposed Rule Change To Amend the
Clearing Agency Investment Policy
December 11, 2024.
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
33 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Sep<11>2014
19:45 Dec 16, 2024
Jkt 265001
102211
3, 2024, National Securities Clearing
Corporation (‘‘NSCC’’) 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 clearing agency. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
changes proposed to the Investment
Policy herein are collectively designed
to comply with certain requirements of
Rule 17ad–22(e)(6)(i) under the Act,5
and to ensure that FICC has appropriate
rules to satisfy certain conditions of
Note H to Rule 15c3–3a under the Act
for a broker-dealer to record a debit in
the customer and broker-dealer
proprietary account reserve formulas.6
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change consists of
amendments to the Clearing Agency
Investment Policy (‘‘Investment Policy’’,
or ‘‘Policy’’) of NSCC and its affiliates,
Fixed Income Clearing Corporation
(‘‘FICC’’) and The Depository Trust
Company (‘‘DTC,’’ and together with
NSCC and FICC, the ‘‘Clearing
Agencies’’) 3 and would facilitate
changes to the FICC Government
Securities Division Rulebook (‘‘GSD
Rules’’) that will be implemented by
FICC.4
Specifically, as described in greater
detail in the Account Segregation Filing,
FICC will implement changes to the
GSD Rules that will, among other
things, provide for FICC to (1) hold
margin collected with respect to the
proprietary transactions of a Netting
Member separately and independently
from the margin collected with respect
to transactions that a Netting Member
submits to FICC on behalf of indirect
participants, (2) legally segregate certain
margin collected with respect to indirect
participant transactions from the margin
for a Netting Member’s proprietary
transactions (as well as those of other
indirect participants), and (3) limit
investments of certain margin collected
with respect to indirect participant
transactions to only U.S. Treasuries
with a maturity date of one year or less.
The Clearing Agencies are proposing to
amend the Policy to facilitate
implementation of these changes and
would also make other clean-up changes
to the Policy, as described in greater
detail below.
The changes that were proposed in
the Account Segregation Filing and the
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, the
clearing agency 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
clearing agency has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
3 See Securities Exchange Act Release No. 79528
(Dec. 12, 2016), 81 FR 91232 (Dec. 16, 2016) (SR–
DTC–2016–007, SR–FICC–2016–005, SR–NSCC–
2016–003).
4 See Securities Exchange Act Release No. 101695
(Nov. 21, 2024), 89 FR 93763 (Nov. 27, 2024) (SR–
FICC–2024–007) (‘‘Account Segregation Filing’’).
The changes proposed in the Account Segregation
Filing are expected to be implemented by no later
than March 31, 2025, on a date to be announced by
an Important Notice posted to FICC’s website.
Terms not defined herein are defined in the GSD
Rules, available at www.dtcc.com/∼/media/Files/
Downloads/legal/rules/ficc_gov_rules.pdf.
PO 00000
Frm 00108
Fmt 4703
Sfmt 4703
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
The Investment Policy governs the
management, custody and investment of
cash deposited to the respective NSCC
and FICC Clearing Funds, and the DTC
Participants Fund,7 the proprietary
liquid net assets (cash and cash
equivalents) of the Clearing Agencies,
and other funds held by the Clearing
Agencies pursuant to their respective
rules. In doing this, the Investment
Policy identifies the guiding principles
for investments and defines the roles
and responsibilities of DTCC 8 staff in
administering the Investment Policy
pursuant to those principles. The
guiding principles for investments set
forth in Section 3 of the Investment
Policy address, among other things, how
5 17 CFR 240.17ad–22(e)(6)(i). See Securities
Exchange Act Release No. 99149 (Dec. 13, 2023), 89
FR 2714 (Jan. 16, 2024) (‘‘Adopting Release,’’ and
the rules adopted therein referred to herein as
‘‘Treasury Clearing Rules’’).
6 17 CFR 240.15c3–3a, Note H. See id.
7 The respective Clearing Funds of NSCC, FICC’s
GSD and FICC’s MBSD, and the DTC Participants
Fund are described further in the Rules &
Procedures of NSCC (‘‘NSCC Rules’’), the DTC
Rules, By-laws and Organization Certificate (‘‘DTC
Rules’’), the Clearing Rules of the Mortgage-Backed
Securities Division of FICC (‘‘MBSD Rules’’) or the
GSD Rules, respectively, available at https://
dtcc.com/legal/rules-and-procedures. See Rule 4
(Clearing Fund) of the NSCC Rules, Rule 4
(Participants Fund and Participants Investment) of
the DTC Rules, Rule 4 (Clearing Fund and Loss
Allocation) of the GSD Rules, and Rule 4 (Clearing
Fund and Loss Allocation) of the MBSD Rules.
8 The Depository Trust & Clearing Corporation
(‘‘DTCC’’) is the parent company of the Clearing
Agencies.
E:\FR\FM\17DEN1.SGM
17DEN1
]]>Agencies
[Federal Register Volume 89, Number 242 (Tuesday, December 17, 2024)]
[Notices]
[Pages 102207-102211]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-29633]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-101887; File No. SR-BX-2024-055]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Certain
Fees Based on the Rate of Inflation
December 11, 2024.
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 2, 2024, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed
with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III, below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's fees based on the
rate of inflation.
While these amendments are effective upon filing, the Exchange has
designated the proposed amendments to be operative on January 1, 2025.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, 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 102208]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to adjust market data
fees for inflation, to be operative on January 1, 2025.
Many market data fees have not changed for years. As such, the fees
have fallen substantially in real terms. The Exchange proposes to
restore fees to the real amount intended in the original filings in a
one-time inflationary adjustment. This adjustment will become operative
in three parts: 45 percent in 2025; 30 percent in 2026; and the final
25 percent in 2027. The Exchange believes that it is necessary to
spread the impact of this one-time adjustment for past inflation to
prevent any undue impact that execution in a single tranche may have on
our customers.\3\
---------------------------------------------------------------------------
\3\ This proposal will adjust for inflation up to August 2024.
Depending on inflation thereafter, further adjustments may, or may
not, be necessary.
---------------------------------------------------------------------------
The proposed fee increases will apply to three types of products:
(i) Market Data Distributor Fees; (ii) BX TotalView; and (iii)
Distribution Models. A detailed list of fee adjustments is set forth
below. The Exchange is not proposing to adjust fees for non-
professional usage, administrative fees, extranet fees, or certain
categories of Non-Display usage. The Exchange plans to use this
inflationary adjustment to support continued investment in innovative,
high-quality data products.
Investments in Nasdaq Data Products
BX has continuously invested in its products in the period after
the current fees were first instituted to accommodate the increasing
amount of information processed and the changes in technology over
time. It is reasonable and consistent with the Act for the Exchange to
recoup its investments, at least in part, by adjusting its fees.
Continuing to operate at fees frozen in time impacts the Exchange's
ability to enhance its offerings and the interests of market
participants and investors.
These investments have been necessary in part because of increases
in the amount of information processed, coupled with the need to
maintain infrastructure in a high fixed cost environment. The following
message rate metrics for depth of book data illustrate changes in
system demand over time:
Peak Rate by Millisecond: up approximately 14%
Average Rate per Millisecond: up approximately 15%
Peak Rate per Second: down approximately 28%
Average Rate per Second: down approximately 41%
Peak Total Messages: up approximately 143%
Average Total Messages: up approximately 50%
Average Daily Volume: down approximately 87%
Maximum Message Count: up approximately 143%
With this increase in message traffic and need to maintain
infrastructure, the Exchange expended significant resources to improve
its market data products to meet customer expectations, including
continued investment in all aspects of the technology ecosystem (e.g.,
software, hardware, and network). During the period between 2018 and
2023, advancements in system performance as measured by latency not
only accommodated the high message traffic volumes but stayed well
ahead of it. The following latency metrics \4\ illustrate the increase
in message processing speed:
---------------------------------------------------------------------------
\4\ These measurements compare the time difference between
events on the matching engine and the time these events are
published.
Median: down approximately 26%
Average: down approximately 36%
Max: down approximately 46%
The Exchange continues to invest in enhancing its technology for
the benefit and often at the behest of its customers. Yet the Exchange
has not adjusted any of the fees included in this proposal for many
years (as set forth below), to even partially offset the costs of
maintaining and enhancing its market data offerings.
Inflationary Index
The fee increases the Exchange proposes are based on an industry-
specific Producer Price Index (PPI), which is a tailored measure of
inflation.\5\ As a general matter, the Producer Price Index is a family
of indexes that measures the average change over time in selling prices
received by domestic producers of goods and services, measuring price
change from the perspective of the seller. This contrasts with other
metrics, such as the Consumer Price Index (CPI), that measure price
change from the purchaser's perspective.\6\
---------------------------------------------------------------------------
\5\ See https://fred.stlouisfed.org/series/PCU51825182#0.
\6\ See https://www.bls.gov/ppi/overview.htm.
---------------------------------------------------------------------------
About 10,000 PPIs for individual products and groups of products
are tracked and released each month.\7\ PPIs are available for the
output of nearly all industries in the goods-producing sectors of the
U.S. economy--mining, manufacturing, agriculture, fishing, and
forestry--as well as natural gas, electricity, and construction, among
others. The PPI program covers approximately 69 percent of the service
sector's output, as measured by revenue reported in the 2017 Economic
Census.
---------------------------------------------------------------------------
\7\ See https://www.bls.gov/ppi/overview.htm.
---------------------------------------------------------------------------
For purposes of this proposal, the relevant industry-specific PPI
is the Data Processing and Related Services PPI (``Data Processing
PPI''), which is an industry net-output PPI that measures the average
change in selling prices received by companies that provide data
processing services. The Data Processing PPI was introduced in January
2002 by the Bureau of Labor Statistics (BLS) as part of an ongoing
effort to expand Producer Price Index coverage of the services sector
of the U.S. economy and is identified as NAICS-518210 in the North
American Industry Classification System.\8\ According to the BLS
``[t]he primary output of NAICS 518210 is the provision of electronic
data processing services. In the broadest sense, computer services
companies help their customers efficiently use technology. The
processing services market consists of vendors who use their own
computer systems--often utilizing proprietary software--to process
customers' transactions and data. Companies that offer processing
services collect, organize, and store a customer's transactions and
other data for record-keeping purposes. Price movements for the NAICS
518210 index are based on changes in the revenue received by companies
that provide data processing services. Each month, companies provide
net transaction prices for a specified service. The transaction is an
actual contract selected by probability, where the price-determining
characteristics are held constant while the service is repriced. The
prices used in index calculation are the actual prices billed for the
selected service contract.'' \9\
---------------------------------------------------------------------------
\8\ NAICS appears in table 5 of the PPI Detailed Report and is
available at https://data.bls.gov/timeseries/PCU518210518210.
\9\ See https://www.bls.gov/ppi/factsheets/producer-price-index-for-the-data-processing-and-related-servicesindustry-naics-518210.htm.
---------------------------------------------------------------------------
The Exchange believes the Data Processing PPI is an adequate
measure to for adjusting fees for its proprietary market data products
because the Exchange uses its ``own computer systems'' and
``proprietary software,'' i.e., its own data center and proprietary
matching engine software, respectively, to collect, organize, store and
report
[[Page 102209]]
customers' transactions in U.S. equity securities.\10\
---------------------------------------------------------------------------
\10\ The Exchange notes that the Bureau of Labor Statistics uses
a number of measures of inflation that may apply to Exchange market
data. For example, there is also an inflation measure related to PPI
industry data for data processing, hosting and related services:
Hosting, ASP, and other IT infrastructure provisioning services.
This other measure has been used by other SROs in determining price
changes and may provide an alternative point of reference.
---------------------------------------------------------------------------
The Exchange furthermore notes that the Data Processing PPI is a
stable metric with limited volatility, unlike other consumer-side
inflation metrics. The Data Processing PPI has not experienced a
greater than 2.16% increase for any one calendar year period since Data
Processing PPI was introduced into the PPI in January 2002. The average
calendar year change from January 2002 to December 2023 was 0.62%, with
a cumulative increase of 15.67% over this 21-year period.
The Exchange notes that other exchanges have filed for increases in
certain fees, based in part on the rate of inflation.\11\
---------------------------------------------------------------------------
\11\ See, e.g., Securities Exchange Act Release Nos. 34-100004
(April 22, 2024), 89 FR 32465 (April 26, 2024) (SR-CboeBYX-2024-
012); and 34-100398 (June 21, 2024), 89 FR 53676 (June 27, 2024)
(SR-BOX-2024-16); Securities Exchange Act Release No. 100994
(September 10, 2024), 89 FR 75612 (September 16, 2024) (SR-NYSEARCA-
2024-79).
---------------------------------------------------------------------------
Calculation and Proposed Fee Changes
The proposed inflationary adjustments are based on a comparison of
the Data Processing PPI index on the last date that the relevant fee
was adjusted with the level of the Data Processing PPI index on August
1, 2024. For example, for a fee that was last changed on September 1,
2010, the Exchange divided the difference between the Data Processing
PPI index on August 2024 (116.022) and the Data Processing PPI index in
September 2010 (101.7) by the Data Processing PPI index in September
2010 (101.7), to calculate a total inflationary adjustment of 14
percent to obtain the percentage increase. That percentage increase was
then applied to the prior fee to determine the proposed fee, and then
rounding the result.\12\ This calculation was repeated for each market
data fee.
---------------------------------------------------------------------------
\12\ The Exchange rounded fees as follows: fee values over
$999.99 were rounded to the nearest $10; fees between $99.99 and
$999.99 were rounded to the nearest dollar; fees between $9.99 and
$99.99 were rounded to the nearest $0.50; fees less than $9.99 were
rounded to the nearest $0.10. Where rounding would have caused the
proposed fee to exceed the rate of inflation, the Exchange rounded
downward.
---------------------------------------------------------------------------
As noted above, the Exchange proposes to adjust fees through a one-
time inflationary adjustment to be executed in three tranches: one in
2025 that will cover 45 percent of the adjustment, another in 2026 to
cover an additional 30 percent, and a final tranche in 2027 for the
final 25 percent of the adjustment.
Table 1 below shows the proposed changes for 2025, 2026 and 2027,
the date of the last fee change, and the overall adjustment:
Table 1--Proposed Inflationary Adjustment
--------------------------------------------------------------------------------------------------------------------------------------------------------
Overall
Product Current 2025 2026 2027 Last change percent
change
--------------------------------------------------------------------------------------------------------------------------------------------------------
Market Data Distributor Fees
--------------------------------------------------------------------------------------------------------------------------------------------------------
Monthly Direct Access Fee............................... $1,000 $1,070 $1,120 $1,150 \13\ 1/1/2010 \14\ 15.0
Monthly Internal Distributor Fee........................ 750 784 810 824 \15\ 12/1/2016 10.0
Monthly External Distributor Fee........................ 1,500 1,570 1,620 1,649 \16\ 12/1/2016 \17\ 9.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
BX TotalView
--------------------------------------------------------------------------------------------------------------------------------------------------------
Subscriber fee (Nasdaq)................................. 20 21.25 22.25 23.00 \18\ 4/1/2010 \19\ 15.0
Subscriber fee (Non-Nasdaq)............................. 20 21.25 22.25 23.00 \20\ 4/1/2010 \21\ 15.0
Non-Display Direct Access............................... 55 57.00 58.50 59.50 \22\ 1/1/2018 \23\ 8.2
Enterprise License...................................... 20,000 20,790 21,400 21,747 \24\ 1/1/2018 8.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Distribution Models
--------------------------------------------------------------------------------------------------------------------------------------------------------
Managed Data Solutions Admin............................ 1,500 1,590 1,660 1,686 \25\ 1/1/2016 12.4
Managed Data Solutions Subscriber....................... 150 159 166 168 \26\ 1/1/2016 \27\ 12.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
2. Statutory Basis
---------------------------------------------------------------------------
\13\ See Securities Exchange Act Release No. 59307 (January 28,
2009), 74 FR 6069 (February 4, 2009) (SR-BX-2009-005).
\14\ The change as calculated by the Data Processing PPI index
is 15.1%. The actual change is 15.0% due to rounding of the fee.
\15\ See Securities Exchange Act Release No. 79690, (December
23, 2016), 81 FR 96527 (December 30, 2016) (SR-BX-2016-073).
\16\ See id.
\17\ The change as calculated by the Data Processing PPI index
is 10.0%. The actual change is 9.9% due to rounding of the fee.
\18\ See Securities Exchange Act Release No. 25014 (May 6,
2010), 75 FR 25014 (May 6, 2010) (SR-BX-2010-027).
\19\ The change as calculated by the Data Processing PPI index
is 15.1%. The actual change is 15.0% due to rounding of the fee.
\20\ See Securities Exchange Act Release No. 25014 (May 6,
2010), 75 FR 25014 (May 6, 2010) (SR-BX-2010-027).
\21\ The change as calculated by the Data Processing PPI index
is 15.1%. The actual change is 15.0% due to rounding of the fee.
\22\ See Securities Exchange Act Release No. 82567 (January 23,
2018), 83 FR 4092 (January 29, 2018) (SR-BX-2018-005).
\23\ The change as calculated by the Data Processing PPI index
is 8.7%. The actual change is 8.2% due to rounding of the fee.
\24\ See Securities Exchange Act Release No. 82567 (January 23,
2018), 83 FR 4092 (January 29, 2018) (SR-BX-2018-005).
\25\ See Securities Exchange Act Release No. 76796 (December 30,
2015), 81 FR 555 (January 6, 2016) (SR-BX-2015-084).
\26\ See id.
\27\ The change as calculated by the Data Processing PPI index
is 12.4%. The actual change is 12.0% due to rounding of the fee.
---------------------------------------------------------------------------
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\28\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\29\ 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.
---------------------------------------------------------------------------
\28\ 15 U.S.C. 78f(b).
\29\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
[[Page 102210]]
This belief is based on two factors. First, the current fees do not
properly reflect the quality of the services and products, as fees for
the services and products in question have been static in nominal
terms, and therefore falling in real terms due to inflation. Second,
the Exchange believes that investments made in enhancing the capacity
of Exchange systems have increased the performance of the services and
products notwithstanding fees having remained static in nominal terms.
Equitable Allocation of Reasonable Dues, Fees and Other Charges
The proposed changes are an equitable allocation of reasonable
dues, fees and other charges because, as noted above, the Exchange has
not increased any of the fees included in the proposal since the dates
indicated in Table 1. In the years following the last fee increase, the
Exchange has made significant investments in upgrades to Exchange
systems and enhancing the quality of its services as measured by, among
other things, increased throughput. As such, Exchange customers have
benefitted while the Exchange's ability to recoup its investments has
been hampered, and Exchange fees have fallen in real terms during the
relevant period.
Between 2018 and 2023, for example, the overall inflation rate was
an average of 3.93% per year, producing a cumulative inflation rate of
21.28%.\30\ Using the more targeted inflation number of Data Processing
PPI, the cumulative inflation rate was 8.07%.\31\ The Exchange believes
the Data Processing PPI is a reasonable metric for this fee increase
because it is targeted to producer-side increases in the data
processing industry, which, based on the definition adopted by BLS,
would include the Exchange's market data products. Notwithstanding this
inflation, the Exchange has not increased its fees for the subject
services for the period of time indicated in Table 1, and therefore the
proposed fee changes represent a reasonable increase from the current
fees.
---------------------------------------------------------------------------
\30\ See https://www.officialdata.org/us/inflation/2019?endYear=2023&amount=1.
\31\ See https://data.bls.gov/timeseries/PCU518210518210.
---------------------------------------------------------------------------
The Exchange believes the proposed fee increase is reasonable in
light of the Exchange's continued expenditure in maintaining a robust
technology ecosystem. The Exchange continues to invest in maintaining
and enhancing its market data products for the benefit and often at the
behest of its customers and global investors. Such enhancements include
refreshing all aspects of the technology ecosystem including software,
hardware, and network while introducing new and innovative products.
The goal of these enhancements, among other things, is to provide
faster and more consistent market data products. The Exchange continues
to expend resources to innovate and modernize technology so that it may
benefit its members in offering its market data products.
The Proposal Does Not Permit Unfair Discrimination
The proposed fee increases are not unfairly discriminatory because
they would apply to all data recipients that choose to purchase the
market data products identified above. Any person that chooses to
purchase any of these products would be subject to the same fee
schedule, regardless of what type of business they operate or the use
they plan to make of the data feed. Additionally, the fee increase
would be applied uniformly to subscribers without regard to Exchange
membership status or the extent of any other business with the Exchange
or affiliated entities.
The proposed changes are also not unfairly discriminatory because
the fees would be assessed uniformly across all market participants
that purchase these products in the same manner they are today, and all
products will remain available for purchase by all market participants.
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.
Intramarket Competition
The proposed fees do not put any market participants at a relative
disadvantage compared to other market participants. As noted above, the
fee schedule would continue to apply to all customers of the market
data products identified above in the same manner as it does today,
albeit at inflation-adjusted rates for certain fees, and customers may
choose whether to subscribe to the feed at all. The Exchange also
believes that the level of the proposed fees neither favors nor
penalizes any one or more categories of market participants in a manner
that would impose an undue burden on competition.
Intermarket Competition
The proposed fees do not impose a burden on competition or on other
Self Regulatory Organizations that is not necessary or appropriate. In
determining the proposed fees, the Exchange utilized an objective and
stable metric with limited volatility. Utilizing Data Processing PPI
over a specified period of time is a reasonable means of recouping the
Exchange's investment in maintaining and enhancing the market data
products identified above. The Exchange believes utilizing Data
Processing PPI, a tailored measure of inflation, to increase certain
market data fees to recoup the Exchange's investment in maintaining and
enhancing its market data products would not impose a burden on
competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\32\
---------------------------------------------------------------------------
\32\ 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 [email protected]. Please include
file number SR-BX-2024-055 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.
[[Page 102211]]
All submissions should refer to file number SR-BX-2024-055. 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
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-BX-2024-055 and should be
submitted on or before January 7, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
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\33\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-29633 Filed 12-16-24; 8:45 am]
BILLING CODE 8011-01-P
