80 FR 46640 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend NASDAQ Rule 7015(b) and (g) To Modify Port Fees

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 150 (August 5, 2015)

Page Range		46640-46641
FR Document		2015-19127

Federal Register, Volume 80 Issue 150 (Wednesday, August 5, 2015)

[Federal Register Volume 80, Number 150 (Wednesday, August 5, 2015)]
[Notices]
[Pages 46640-46641]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-19127]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75557; File No. SR-NASDAQ-2015-086]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend NASDAQ Rule 7015(b) and (g) To Modify Port Fees

July 30, 2015.
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 July 20, 2015, The NASDAQ Stock Market LLC (``Nasdaq'' 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

The Exchange proposes to amend NASDAQ Rule 7015(b) and (g) to
modify the port fees charged to members and non-members for ports used
to enter orders into Nasdaq systems, in connection with the use of the
FIX and OUCH trading telecommunication protocols. The Exchange will
implement the proposed new fees on August 3, 2015.
The text of the proposed rule change is below; proposed new
language is italicized; proposed deletions are in brackets.
* * * * *
7015. Access Services
(a) No change.
(b) Financial Information Exchange (FIX).

------------------------------------------------------------------------
Ports Price
------------------------------------------------------------------------
FIX Trading Port.......................... $575[50]/port/month.
FIX Port for Services Other than Trading.. $500/port/month.
------------------------------------------------------------------------

(c)-(f) No change.
(g) Other Port Fees.

Remote Multi-Cast ITCH Wave Ports
------------------------------------------------------------------------
Installation Recurring
Description fee monthly fee
------------------------------------------------------------------------
MITCH Wave Port at Secaucus, NJ.............. $2,500 $7,500
MITCH Wave Port at Weehawken, NJ............. 2,500 7,500
MITCH Wave Port at Mahwah, NJ................ 5,000 12,500
------------------------------------------------------------------------

The following port fees shall apply in connection with the use of
other trading telecommunication protocols:
$575[50] per month for each port pair, other than
Multicast ITCH[supreg] data feed pairs, for which the fee is $1,000 per
month for software-based TotalView-ITCH or $2,500 per month for
combined software- and hardware-based TotalView-ITCH, and TCP ITCH data
feed pairs, for which the fee is $750 per month.
An additional $200 per month for each port used for
entering orders or quotes over the Internet.
An additional $600 per month for each port used for market
data delivery over the Internet.
Dedicated OUCH Port Infrastructure
The Dedicated OUCH Port Infrastructure subscription allows a member
firm to assign up to 30 of its OUCH ports to a dedicated server
infrastructure for its exclusive use. A Dedicated OUCH Port
Infrastructure subscription is available to a member firm for a fee of
$5,000 per month, which is in addition to the standard fees assessed
for each OUCH port. A one-time installation fee of $5,000 is assessed
subscribers for each Dedicated OUCH Port Server subscription.
(h)-(i) No change.
* * * * *

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
NASDAQ is proposing to amend NASDAQ Rules 7015 (b) and (g) to
modify the monthly fee it charges for ports used to enter orders in the
NASDAQ Market Center for the trading of equities, in connection with
the use of FIX and OUCH trading telecommunication protocols.\3\
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\3\ In April 2015, the Exchange increased the charges assessed
under Rules 7015(b) and (g) to the levels proposed herein in light
of the FPGA hardware upgrade. See Securities Exchange Act Release
No. 74829 (April 29, 2015), 80 FR 25745 (May 5, 2015) (SR-NASDAQ-
2015-042). The upgrade to FPGA hardware was delayed, however, and
the Exchange reverted the fees to their original levels with
retroactive application. See Securities Exchange Act Release No.
75366 (July 6, 2015), 80 FR 39827 (July 10, 2015) (SR-NASDAQ-2015-
067). The Exchange is now confident that the FPGA hardware will be
installed by the August 3, 2015 implementation date proposed by this
filing.
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The enhanced ports will use field-programmable gate array
(``FPGA'') technology, which is a hardware-delivery mechanism and an
upgrade to the existing software and software-and-hardware based
mechanisms. By taking advantage of hardware parallelism, FPGA
technology is capable of processing more data packets during peak
market conditions without the introduction of variable queuing latency.
In other words, the upgrade to FPGA will improve the predictability of
the telecommunications ports and thereby add value to the user
experience.
The Exchange is offering new technology and pricing in order to
keep pace with changes in the industry and

[[Page 46641]]

evolving customer needs as new technologies emerge and products
continue to develop and change. The costs associated with the hardware-
based delivery system cover creating, shipping, installing and
maintaining the new equipment and codebase. From a messaging
perspective, the data content and sequencing on the new hardware
version of the OUCH ports will be the same as on the legacy software-
based versions of NASDAQ's ports that are being replaced.
2. Statutory Basis
NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\4\ in general, and with Section
6(b)(5) of the Act \5\ in particular, in that the proposal is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, 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 continuously
strives to offer members state of the art technology to enhance their
trading experience and thereby enhance the national market system.
Incremental enhancements such as the advent of FPGA technology has
helped make the U.S. markets the deepest, most liquid markets in the
world.
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\4\ 15 U.S.C. 78f.
\5\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed rule change is consistent with
Section 6(b)(4) of the Act \6\ 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 or system which the
Exchange operates or controls, and it does not unfairly discriminate
between customers, issuers, brokers or dealers.
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\6\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed fees are reasonable in that
they are based on the costs associated with purchasing hardware
(capital expenditures) and supporting and maintaining the
infrastructure (operating expenditures) for the FPGA enhancement for
member firms. In addition, the FPGA enhancements will provide value to
members far exceeding the incremental costs imposed. The Exchange also
believes that the proposed fees are equitable and not unfairly
discriminatory because the fees apply equally to all users of the FPGA-
enhanced ports. Moreover, the fees apply in direct proportion to the
number of ports used by each member.

B. Self-Regulatory Organization's Statement on Burden on Competition

NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. To the contrary,
NASDAQ believes that the proposed rule change is pro-competitive in
that the enhancements improve the competitiveness of the NASDAQ Market
Center and the overall quality of the national market system. If, as
NASDAQ believes, the FPGA enhancement provides NASDAQ a competitive
advantage, other exchanges will quickly respond by enhancing their own
markets in the same way. Such innovation and imitation is the very
essence of the competition the Exchange Act is designed to promote.\7\
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\7\ The Chicago Mercantile Exchange is already using FPGA
technology in order entry ports for the trading of futures. See
https://www.cmegroup.com/globex/files/NewiLinkArchitecture2014.pdf.
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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 change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \8\. 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.
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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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 (http://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2015-086 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-NASDAQ-2015-086. 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 Web site (http://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 Web site 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 such filing also will be available
for inspection and copying at the principal offices of the Exchange.
All comments received will be posted without change; the Commission
does not edit personal identifying information from submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-NASDAQ-2015-
086, and should be submitted on or before August 26, 2015.
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\9\ 17 CFR 200.30-3(a)(12).

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-19127 Filed 8-4-15; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 150 / Wednesday, August 5, 2015 / Notices 46641

evolving customer needs as new apply equally to all users of the FPGA- • Send an email to rule-comments@
technologies emerge and products enhanced ports. Moreover, the fees sec.gov. Please include File Number SR–
continue to develop and change. The apply in direct proportion to the NASDAQ–2015–086 on the subject line.
costs associated with the hardware- number of ports used by each member.
based delivery system cover creating, Paper Comments
B. Self-Regulatory Organization’s
shipping, installing and maintaining the • Send paper comments in triplicate
new equipment and codebase. From a Statement on Burden on Competition
to Secretary, Securities and Exchange
messaging perspective, the data content NASDAQ does not believe that the
Commission, 100 F Street NE.,
and sequencing on the new hardware proposed rule change will result in any
version of the OUCH ports will be the Washington, DC 20549–1090.
burden on competition that is not
same as on the legacy software-based necessary or appropriate in furtherance All submissions should refer to File
versions of NASDAQ’s ports that are of the purposes of the Act, as amended. Number SR–NASDAQ–2015–086. This
being replaced. To the contrary, NASDAQ believes that file number should be included on the
2. Statutory Basis the proposed rule change is pro- subject line if email is used. To help the
competitive in that the enhancements Commission process and review your
NASDAQ believes that the proposed improve the competitiveness of the
rule change is consistent with the comments more efficiently, please use
NASDAQ Market Center and the overall only one method. The Commission will
provisions of Section 6 of the Act,4 in quality of the national market system. If,
general, and with Section 6(b)(5) of the post all comments on the Commission’s
as NASDAQ believes, the FPGA Internet Web site (http://www.sec.gov/
Act 5 in particular, in that the proposal enhancement provides NASDAQ a
is designed to prevent fraudulent and rules/sro.shtml). Copies of the
competitive advantage, other exchanges
manipulative acts and practices, to submission, all subsequent
will quickly respond by enhancing their
promote just and equitable principles of amendments, all written statements
own markets in the same way. Such
trade, to foster cooperation and with respect to the proposed rule
innovation and imitation is the very
coordination with persons engaged in essence of the competition the Exchange change that are filed with the
regulating, clearing, settling, processing Act is designed to promote.7 Commission, and all written
information with respect to, and communications relating to the
facilitating transactions in securities, to C. Self-Regulatory Organization’s proposed rule change between the
remove impediments to and perfect the Statement on Comments on the Commission and any person, other than
mechanism of a free and open market Proposed Rule Change Received From those that may be withheld from the
and a national market system, and, in Members, Participants, or Others public in accordance with the
general, to protect investors and the No written comments were either provisions of 5 U.S.C. 552, will be
public interest. The Exchange solicited or received. available for Web site viewing and
continuously strives to offer members printing in the Commission’s Public
state of the art technology to enhance III. Date of Effectiveness of the
Reference Room, 100 F Street, NE.,
their trading experience and thereby Proposed Rule Change and Timing for
Commission Action Washington, DC 20549 on official
enhance the national market system. business days between the hours of
Incremental enhancements such as the The foregoing change has become 10:00 a.m. and 3:00 p.m. Copies of such
advent of FPGA technology has helped effective pursuant to Section filing also will be available for
make the U.S. markets the deepest, most 19(b)(3)(A)(ii) of the Act 8. At any time inspection and copying at the principal
liquid markets in the world. within 60 days of the filing of the
The Exchange believes the proposed offices of the Exchange. All comments
proposed rule change, the Commission received will be posted without change;
rule change is consistent with Section summarily may temporarily suspend
6(b)(4) of the Act 6 in that it provides for the Commission does not edit personal
such rule change if it appears to the identifying information from
the equitable allocation of reasonable Commission that such action is
dues, fees and other charges among submissions. You should submit only
necessary or appropriate in the public
members and issuers and other persons information that you wish to make
interest, for the protection of investors,
using any facility or system which the or otherwise in furtherance of the available publicly. All submissions
Exchange operates or controls, and it purposes of the Act. should refer to File Number SR–
does not unfairly discriminate between NASDAQ–2015–086, and should be
customers, issuers, brokers or dealers. IV. Solicitation of Comments submitted on or before August 26, 2015.
The Exchange believes that the Interested persons are invited to For the Commission, by the Division of
proposed fees are reasonable in that submit written data, views, and Trading and Markets, pursuant to delegated
they are based on the costs associated arguments concerning the foregoing, authority.9
with purchasing hardware (capital including whether the proposed rule
expenditures) and supporting and Robert W. Errett,
change is consistent with the Act. Deputy Secretary.
maintaining the infrastructure Comments may be submitted by any of
(operating expenditures) for the FPGA the following methods:
[FR Doc. 2015–19127 Filed 8–4–15; 8:45 am]
enhancement for member firms. In BILLING CODE 8011–01–P
addition, the FPGA enhancements will Electronic Comments
asabaliauskas on DSK5VPTVN1PROD with NOTICES

provide value to members far exceeding • Use the Commission’s Internet
the incremental costs imposed. The comment form (http://www.sec.gov/
Exchange also believes that the rules/sro.shtml); or
proposed fees are equitable and not
unfairly discriminatory because the fees 7 The Chicago Mercantile Exchange is already

using FPGA technology in order entry ports for the
4 15 U.S.C. 78f. trading of futures. See https://www.cmegroup.com/
5 15 U.S.C. 78f(b)(5). globex/files/NewiLinkArchitecture2014.pdf.
6 15 U.S.C. 78f(b)(4). 8 15 U.S.C. 78s(b)(3)(A)(ii). 9 17 CFR 200.30–3(a)(12).

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Document Created: 2018-02-23 10:53:39
Document Modified: 2018-02-23 10:53:39

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		80 FR 46640