80_FR_67159 80 FR 66949 - Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Options Testing Facility

80 FR 66949 - Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Options Testing Facility

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 210 (October 30, 2015)

Page Range66949-66951
FR Document2015-27649

Federal Register, Volume 80 Issue 210 (Friday, October 30, 2015)
[Federal Register Volume 80, Number 210 (Friday, October 30, 2015)]
[Notices]
[Pages 66949-66951]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-27649]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76258; File No. SR-BX-2015-059]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change to Options 
Testing Facility

October 26, 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 October 16, 2015, NASDAQ OMX 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.
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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 its Options Pricing at Chapter XV to 
adopt a new Section 9, entitled ``Testing Facilities'' which describes 
fees in connection with the use of the Testing Facility (``NTF'') test 
environment located in Carteret, New Jersey.
    While the changes proposed herein are effective upon filing, the 
Exchange has designated that the amendments be operative on October 26, 
2015.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqomxbx.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
    BX proposes to amend its Options Pricing at Chapter XV to adopt a 
new Section 9, entitled ``Testing Facilities'' to establish fees to 
subscribe for testing. Currently, Options Participants may test in a 
virtual trading environment for purposes of testing in Ashburn, 
Virginia (``Ashburn''), at no cost. The NTF provides subscribers a 
virtual System environment for testing upcoming BX releases and product 
enhancements, as well as testing firm software prior to implementation. 
The test environment closely approximates the production environment to 
enable subscribers to test their automated systems that integrate with 
the Exchange.
    The Exchange is moving the options test environment from the 
Ashburn location to Carteret, NJ (``Carteret''), which is also the 
location of BX's primary trading System. While Options Participants 
will be able to continue to utilize the Ashburn facility at no cost 
until that facility is no longer in use, Options Participants will be 
able to subscribe to the Carteret test facility for future testing.\3\
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    \3\ The Exchange anticipates that it will sunset the Ashburn 
trading testing functionality on January 29, 2016.
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    The relatively large distance between the Ashburn Testing Facility 
and the majority of BX firms results in expensive connectivity costs 
for customers that connect via

[[Page 66950]]

telecommunication providers. As a consequence, a large majority of 
member firms do not connect to Ashburn for NTF connectivity. In an 
effort to improve the utility of the NTF, BX is developing a test 
environment located in Carteret that will provide the same 
functionality as the testing functionality of Ashburn, yet more closely 
approximate the live trading environment due to its proximity to the 
System and upgraded hardware. In particular, the Carteret test 
environment will take advantage of technology upgrades BX is making to 
its trading-related systems. Unlike the Ashburn test environment, the 
Carteret test environment will provide dedicated connectivity to the 
facility via a cross-connection to either a member firm's direct 
connection router in Carteret or its co-location cabinet.
    BX notes that, because the Carteret facility also houses the 
System, subscribers to the Carteret test environment will no longer 
need to pay for third party connectivity to Ashburn,\4\ provided the 
sole purpose for connecting to Ashburn is for testing and not also for 
co-location or disaster recovery. Such member firms may use an existing 
connection to Carteret to access the NTF through the use of a dedicated 
switch port and cross connect within the facility. Similar to the 
equities test facility,\5\ the Exchange will assess a fee for the 
connection to this virtual trading environment for testing. 
Specifically, BX proposes a $1,000 per hand-off, per month fee for 
connection to the Testing Facility. The hand-off fee includes either a 
1Gb or 10Gb switch port and a cross connect to the Testing Facility. 
Subscribers shall also pay a one-time installation fee of $1,000 per 
hand-off.
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    \4\ Today, member firms pay fees to third party connectivity 
providers to provide connection from the member firm to Ashburn.
    \5\ See BX Rule 7030 concerning equities pricing.
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    The connectivity provided under this rule also provides 
connectivity to the other test environments of The NASDAQ Stock Market 
LLC and NASDAQ OMX PHLX LLC. Additionally, the connectivity may be 
utilized for either equities or options testing. If for example a BX 
member has already paid the $1,000 per hand-off, per month for 
connection to the Testing Facility in Carteret, there would be no need 
to pay this fee for options testing.
    Notwithstanding the foregoing, BX will also continue to offer 
certain limited testing capabilities free of charge at Carteret. 
Options Participants that connect to Cartert's [sic] NTF through a 
virtual private network (``VPN'') through the internet for site-to-site 
limited order routing capability only will not be assessed a fee.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \6\ in general, and with Sections 6(b)(4) and 6(b)(5) 
of the Act,\7\ in particular. BX believes the proposal is consistent 
with Section 6(b)(4) of the Act \8\ 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.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) and (5).
    \8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The proposed fees are equitably allocated because all Options 
Participants desiring to connect to the Carteret test environment will 
be assessed a uniform fee for those services. The Exchange believes 
that offering subscribers the option to subscribe to either 1Gb or 10Gb 
for the same fee is an equitable allocation because, unlike the live 
trading environment, there is no competitive advantage to possessing a 
higher capacity switch port in the test environment. The test 
environment is designed to closely mirror the live trading environment 
for Options Participants, including matching the capacity of each 
Options Participant's live environment switch port. In the absence of 
any competitive advantage, charging a uniform fee for both 1Gb and 10Gb 
switch ports is an equitable allocation of fees. BX believes that 
charging a uniform fee will encourage member firms to subscribe to 
Carteret, and further encourage those that subscribe to use the same 
hardware as is used by them for connectivity to the live trading 
environment.
    The proposed fees are reasonable because they are designed to cover 
the costs incurred by the Exchange to develop the test facility and the 
costs incurred by the Exchange to continue to offer the test 
environment. The proposed fee should allow the Exchange to recoup these 
costs and also make a profit, while providing Options Participants with 
a superior test environment that more closely mirrors that of the live 
trading environment on the Exchange. BX believes that offering both 1Gb 
and 10Gb connectivity for the same fee is reasonable as the increased 
incremental cost it incurs by offering the 10Gb switch port at the 
lower fee is outweighed by the benefit all subscribers will receive if 
Options Participants use hardware identical to what they use in the 
live trading environment, hence furthering the goal of creating a test 
environment that closely mirrors the live trading environment.
    Further, the connectivity provided under this rule also provides 
connectivity to the other test environments of The NASDAQ Stock Market 
LLC and NASDAQ OMX PHLX LLC. This connectivity may be utilized for 
either equities or options testing. If for example a BX member has 
already paid the $1,000 per hand-off, per month for connection to the 
Testing Facility in Carteret, there would be no need to pay this fee 
for options testing.
    The Exchange also believes the proposal furthers the objectives of 
Section 6(b)(5) of the Act \9\ in that it is designed to promote just 
and equitable principles of trade, to remove impediments to and perfect 
the mechanism of a free and open market and a national market system, 
and, in general to protect investors and the public interest and is not 
designed to permit unfair discrimination between customer, issuers, 
brokers and dealers. BX does not believe that the proposed fees are 
unfairly discriminatory to subscribers to 10Gb live trading environment 
connectivity because, unlike the live trading environment where the 
capacity of connectivity to BX may confer a competitive advantage to a 
market participant and therefore price differentiation is appropriate 
for the benefit conferred, there is no such benefit conferred in the 
trade test environment. BX does not believe that the proposed fees are 
unfairly discriminatory among subscribers to the Carteret test facility 
because all Options Participants that subscribe to the service will be 
assessed the same fees. Because the proposed fees do not discriminate 
between 1Gb and 10Gb connectivity options, Options Participants are 
able to subscribe to Carteret without regard to the cost of their 
switch port capacity election. BX believes that by not discriminating 
on this basis it will encourage participants to connect to the Carteret 
test environment in the same manner as they do to the live trading 
environment, and thereby help Carteret more closely mirror the live 
test environment, as discussed above. Providing a more useful and 
accurate test environment will serve to improve live trading on BX and 
the national market system by permitting Options Participants the 
ability to accurately test changes prior to implementing them in the 
live trading environment, thereby

[[Page 66951]]

reducing the likelihood of a potentially disruptive system failure in 
the live trading environment, which has the potential to affect all 
market participants.
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    \9\ 15 U.S.C. 78f(b)(5).
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    Finally, the Exchange will continue to offer Options Participants 
certain limited testing capabilities free of charge at Carteret through 
VPN. While this feature offers limited capability in terms of 
functionality, the Exchange continues to offer a free of charge 
alternative to Options Participants desiring to utilize the NTF.

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

    BX does not believe that the proposed rule change will result in 
any intra-market or inter-market burdens on competition that are not 
necessary or appropriate in furtherance of the purposes of the Act, as 
amended. The proposed fees for access to the Carteret test environment 
more closely approximate the live trading environment, subscribing 
member firms will be able to more accurately test their trading systems 
and avoid potentially disruptive system failures in the live trading 
environment. Despite the fee that will now be assessed to Options 
Participants for testing, the Exchange believes that Options 
Participants utilizing this service will benefit from the move to 
Carteret because the test environment is designed to closely mirror the 
live trading environment for Options Participants, including matching 
the capacity of each Options Participant's live environment switch 
port. Subscribing to the test facility is optional.
    Also, the connectivity provided under this rule also provides 
connectivity to the other test environments of The NASDAQ Stock Market 
LLC and NASDAQ OMX PHLX LLC. Members that are already connected for 
equities testing would not incur an additional charge. This 
connectivity may be utilized for either equities or options testing. 
Finally, subscribing to the test facility is optional.
    Additionally, the Exchange does not believe that the move to 
Carteret and imposition of connectivity fees to the NTF creates an 
undue burden on competition because the Exchange will continue to offer 
Options Participants certain limited testing capabilities free of 
charge at Carteret through VPN.

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.\10\
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BX-2015-059 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BX-2015-059. 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 office 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-BX-2015-059, and should be 
submitted on or before November 20, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-27649 Filed 10-29-15; 8:45 am]
BILLING CODE 8011-01-P



                                                                                   Federal Register / Vol. 80, No. 210 / Friday, October 30, 2015 / Notices                                              66949

                                              III. Date of Effectiveness of the                          Washington, DC 20549 on official                      has designated that the amendments be
                                              Proposed Rule Change and Timing for                        business days between the hours of                    operative on October 26, 2015.
                                              Commission Action                                          10:00 a.m. and 3:00 p.m. Copies of such                  The text of the proposed rule change
                                                                                                         filing also will be available for                     is available on the Exchange’s Web site
                                                 The foregoing rule change has become
                                                                                                         inspection and copying at the principal               at http://
                                              effective pursuant to Section
                                                                                                         office of the Exchange. All comments                  nasdaqomxbx.cchwallstreet.com/, at the
                                              19(b)(3)(A)(ii) of the Act.10
                                                                                                         received will be posted without change;               principal office of the Exchange, and at
                                                 At any time within 60 days of the
                                                                                                         the Commission does not edit personal                 the Commission’s Public Reference
                                              filing of the proposed rule change, the                                                                          Room.
                                              Commission summarily may                                   identifying information from
                                              temporarily suspend such rule change if                    submissions. You should submit only                   II. Self-Regulatory Organization’s
                                              it appears to the Commission that such                     information that you wish to make                     Statement of the Purpose of, and
                                              action is: (i) Necessary or appropriate in                 available publicly. All submissions                   Statutory Basis for, the Proposed Rule
                                              the public interest; (ii) for the protection               should refer to File Number SR–                       Change
                                              of investors; or (iii) otherwise in                        NASDAQ–2015–117, and should be
                                                                                                         submitted on or before November 20,                      In its filing with the Commission, the
                                              furtherance of the purposes of the Act.                                                                          Exchange included statements
                                              If the Commission takes such action, the                   2015.
                                                                                                                                                               concerning the purpose of and basis for
                                              Commission shall institute proceedings                       For the Commission, by the Division of              the proposed rule change and discussed
                                              to determine whether the proposed rule                     Trading and Markets, pursuant to delegated            any comments it received on the
                                              should be approved or disapproved.                         authority.11
                                                                                                                                                               proposed rule change. The text of these
                                                                                                         Robert W. Errett,                                     statements may be examined at the
                                              IV. Solicitation of Comments                               Deputy Secretary.                                     places specified in Item IV below. The
                                                Interested persons are invited to                        [FR Doc. 2015–27650 Filed 10–29–15; 8:45 am]          Exchange has prepared summaries, set
                                              submit written data, views, and                            BILLING CODE 8011–01–P                                forth in sections A, B, and C below, of
                                              arguments concerning the foregoing,                                                                              the most significant aspects of such
                                              including whether the proposed rule                                                                              statements.
                                              change is consistent with the Act.                         SECURITIES AND EXCHANGE
                                              Comments may be submitted by any of                        COMMISSION                                            A. Self-Regulatory Organization’s
                                              the following methods:                                                                                           Statement of the Purpose of, and
                                                                                                         [Release No. 34–76258; File No. SR–BX–                Statutory Basis for, the Proposed Rule
                                              Electronic Comments                                        2015–059]                                             Change
                                                • Use the Commission’s Internet                                                                                1. Purpose
                                                                                                         Self-Regulatory Organizations;
                                              comment form (http://www.sec.gov/
                                                                                                         NASDAQ OMX BX, Inc.; Notice of Filing                    BX proposes to amend its Options
                                              rules/sro.shtml); or
                                                                                                         and Immediate Effectiveness of                        Pricing at Chapter XV to adopt a new
                                                • Send an email to rule-comments@
                                                                                                         Proposed Rule Change to Options                       Section 9, entitled ‘‘Testing Facilities’’
                                              sec.gov. Please include File Number SR–
                                                                                                         Testing Facility                                      to establish fees to subscribe for testing.
                                              NASDAQ–2015–117 on the subject line.
                                                                                                                                                               Currently, Options Participants may test
                                              Paper Comments                                             October 26, 2015.
                                                                                                                                                               in a virtual trading environment for
                                                                                                            Pursuant to Section 19(b)(1) of the                purposes of testing in Ashburn, Virginia
                                                 • Send paper comments in triplicate                     Securities Exchange Act of 1934
                                              to Brent J. Fields, Secretary, Securities                                                                        (‘‘Ashburn’’), at no cost. The NTF
                                                                                                         (‘‘Act’’),1 and Rule 19b–4 thereunder,2               provides subscribers a virtual System
                                              and Exchange Commission, 100 F Street                      notice is hereby given that, on October
                                              NE., Washington, DC 20549–1090.                                                                                  environment for testing upcoming BX
                                                                                                         16, 2015, NASDAQ OMX BX, Inc. (‘‘BX’’                 releases and product enhancements, as
                                              All submissions should refer to File                       or ‘‘Exchange’’) filed with the Securities            well as testing firm software prior to
                                              Number SR–NASDAQ–2015–117. This                            and Exchange Commission                               implementation. The test environment
                                              file number should be included on the                      (‘‘Commission’’) the proposed rule                    closely approximates the production
                                              subject line if email is used. To help the                 change as described in Items I, II, and               environment to enable subscribers to
                                              Commission process and review your                         III below, which Items have been                      test their automated systems that
                                              comments more efficiently, please use                      prepared by the Exchange. The                         integrate with the Exchange.
                                              only one method. The Commission will                       Commission is publishing this notice to                  The Exchange is moving the options
                                              post all comments on the Commission’s                      solicit comments on the proposed rule                 test environment from the Ashburn
                                              Internet Web site (http://www.sec.gov/                     change from interested persons.                       location to Carteret, NJ (‘‘Carteret’’),
                                              rules/sro.shtml). Copies of the                                                                                  which is also the location of BX’s
                                              submission, all subsequent                                 I. Self-Regulatory Organization’s
                                                                                                         Statement of the Terms of the Substance               primary trading System. While Options
                                              amendments, all written statements                                                                               Participants will be able to continue to
                                              with respect to the proposed rule                          of the Proposed Rule Change
                                                                                                                                                               utilize the Ashburn facility at no cost
                                              change that are filed with the                               The Exchange proposes to amend its                  until that facility is no longer in use,
                                              Commission, and all written                                Options Pricing at Chapter XV to adopt                Options Participants will be able to
                                              communications relating to the                             a new Section 9, entitled ‘‘Testing                   subscribe to the Carteret test facility for
                                              proposed rule change between the                           Facilities’’ which describes fees in                  future testing.3
                                              Commission and any person, other than                      connection with the use of the Testing                   The relatively large distance between
                                              those that may be withheld from the                        Facility (‘‘NTF’’) test environment                   the Ashburn Testing Facility and the
tkelley on DSK3SPTVN1PROD with NOTICES




                                              public in accordance with the                              located in Carteret, New Jersey.                      majority of BX firms results in
                                              provisions of 5 U.S.C. 552, will be                          While the changes proposed herein                   expensive connectivity costs for
                                              available for Web site viewing and                         are effective upon filing, the Exchange               customers that connect via
                                              printing in the Commission’s Public
                                              Reference Room, 100 F Street NE.,                            11 17 CFR 200.30–3(a)(12).                            3 The Exchange anticipates that it will sunset the
                                                                                                           1 15 U.S.C. 78s(b)(1).                              Ashburn trading testing functionality on January 29,
                                                10 15   U.S.C. 78s(b)(3)(A)(ii).                           2 17 CFR 240.19b–4.                                 2016.



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                                              66950                         Federal Register / Vol. 80, No. 210 / Friday, October 30, 2015 / Notices

                                              telecommunication providers. As a                       the internet for site-to-site limited order           Participants use hardware identical to
                                              consequence, a large majority of                        routing capability only will not be                   what they use in the live trading
                                              member firms do not connect to                          assessed a fee.                                       environment, hence furthering the goal
                                              Ashburn for NTF connectivity. In an                                                                           of creating a test environment that
                                                                                                      2. Statutory Basis
                                              effort to improve the utility of the NTF,                                                                     closely mirrors the live trading
                                              BX is developing a test environment                        The Exchange believes that its                     environment.
                                              located in Carteret that will provide the               proposal is consistent with Section 6(b)                 Further, the connectivity provided
                                              same functionality as the testing                       of the Act 6 in general, and with                     under this rule also provides
                                              functionality of Ashburn, yet more                      Sections 6(b)(4) and 6(b)(5) of the Act,7             connectivity to the other test
                                              closely approximate the live trading                    in particular. BX believes the proposal               environments of The NASDAQ Stock
                                              environment due to its proximity to the                 is consistent with Section 6(b)(4) of the             Market LLC and NASDAQ OMX PHLX
                                              System and upgraded hardware. In                        Act 8 in that it provides for the equitable           LLC. This connectivity may be utilized
                                              particular, the Carteret test environment               allocation of reasonable dues, fees and               for either equities or options testing. If
                                              will take advantage of technology                       other charges among members and                       for example a BX member has already
                                              upgrades BX is making to its trading-                   issuers and other persons using any                   paid the $1,000 per hand-off, per month
                                              related systems. Unlike the Ashburn test                facility or system which the Exchange                 for connection to the Testing Facility in
                                              environment, the Carteret test                          operates or controls.                                 Carteret, there would be no need to pay
                                              environment will provide dedicated                         The proposed fees are equitably                    this fee for options testing.
                                              connectivity to the facility via a cross-               allocated because all Options                            The Exchange also believes the
                                              connection to either a member firm’s                    Participants desiring to connect to the               proposal furthers the objectives of
                                              direct connection router in Carteret or                 Carteret test environment will be                     Section 6(b)(5) of the Act 9 in that it is
                                              its co-location cabinet.                                assessed a uniform fee for those                      designed to promote just and equitable
                                                 BX notes that, because the Carteret                  services. The Exchange believes that                  principles of trade, to remove
                                              facility also houses the System,                        offering subscribers the option to                    impediments to and perfect the
                                              subscribers to the Carteret test                        subscribe to either 1Gb or 10Gb for the               mechanism of a free and open market
                                              environment will no longer need to pay                  same fee is an equitable allocation                   and a national market system, and, in
                                              for third party connectivity to Ashburn,4               because, unlike the live trading                      general to protect investors and the
                                              provided the sole purpose for                           environment, there is no competitive                  public interest and is not designed to
                                              connecting to Ashburn is for testing and                advantage to possessing a higher                      permit unfair discrimination between
                                              not also for co-location or disaster                    capacity switch port in the test                      customer, issuers, brokers and dealers.
                                              recovery. Such member firms may use                     environment. The test environment is                  BX does not believe that the proposed
                                              an existing connection to Carteret to                   designed to closely mirror the live                   fees are unfairly discriminatory to
                                              access the NTF through the use of a                     trading environment for Options                       subscribers to 10Gb live trading
                                              dedicated switch port and cross connect                 Participants, including matching the                  environment connectivity because,
                                              within the facility. Similar to the                     capacity of each Options Participant’s                unlike the live trading environment
                                              equities test facility,5 the Exchange will              live environment switch port. In the                  where the capacity of connectivity to BX
                                              assess a fee for the connection to this                 absence of any competitive advantage,                 may confer a competitive advantage to
                                              virtual trading environment for testing.                charging a uniform fee for both 1Gb and               a market participant and therefore price
                                              Specifically, BX proposes a $1,000 per                  10Gb switch ports is an equitable                     differentiation is appropriate for the
                                              hand-off, per month fee for connection                  allocation of fees. BX believes that                  benefit conferred, there is no such
                                              to the Testing Facility. The hand-off fee               charging a uniform fee will encourage                 benefit conferred in the trade test
                                                                                                      member firms to subscribe to Carteret,                environment. BX does not believe that
                                              includes either a 1Gb or 10Gb switch
                                                                                                      and further encourage those that                      the proposed fees are unfairly
                                              port and a cross connect to the Testing
                                                                                                      subscribe to use the same hardware as                 discriminatory among subscribers to the
                                              Facility. Subscribers shall also pay a
                                                                                                      is used by them for connectivity to the               Carteret test facility because all Options
                                              one-time installation fee of $1,000 per
                                                                                                      live trading environment.                             Participants that subscribe to the service
                                              hand-off.
                                                 The connectivity provided under this                    The proposed fees are reasonable                   will be assessed the same fees. Because
                                              rule also provides connectivity to the                  because they are designed to cover the                the proposed fees do not discriminate
                                              other test environments of The                          costs incurred by the Exchange to                     between 1Gb and 10Gb connectivity
                                                                                                      develop the test facility and the costs               options, Options Participants are able to
                                              NASDAQ Stock Market LLC and
                                                                                                      incurred by the Exchange to continue to               subscribe to Carteret without regard to
                                              NASDAQ OMX PHLX LLC.
                                                                                                      offer the test environment. The                       the cost of their switch port capacity
                                              Additionally, the connectivity may be
                                                                                                      proposed fee should allow the Exchange                election. BX believes that by not
                                              utilized for either equities or options
                                                                                                      to recoup these costs and also make a                 discriminating on this basis it will
                                              testing. If for example a BX member has
                                                                                                      profit, while providing Options                       encourage participants to connect to the
                                              already paid the $1,000 per hand-off,
                                                                                                      Participants with a superior test                     Carteret test environment in the same
                                              per month for connection to the Testing
                                                                                                      environment that more closely mirrors                 manner as they do to the live trading
                                              Facility in Carteret, there would be no
                                                                                                      that of the live trading environment on               environment, and thereby help Carteret
                                              need to pay this fee for options testing.
                                                                                                      the Exchange. BX believes that offering               more closely mirror the live test
                                                 Notwithstanding the foregoing, BX
                                                                                                      both 1Gb and 10Gb connectivity for the                environment, as discussed above.
                                              will also continue to offer certain
                                                                                                      same fee is reasonable as the increased               Providing a more useful and accurate
                                              limited testing capabilities free of charge
                                                                                                      incremental cost it incurs by offering the            test environment will serve to improve
                                              at Carteret. Options Participants that
tkelley on DSK3SPTVN1PROD with NOTICES




                                                                                                      10Gb switch port at the lower fee is                  live trading on BX and the national
                                              connect to Cartert’s [sic] NTF through a
                                                                                                      outweighed by the benefit all                         market system by permitting Options
                                              virtual private network (‘‘VPN’’) through
                                                                                                      subscribers will receive if Options                   Participants the ability to accurately test
                                                4 Today, member firms pay fees to third party
                                                                                                                                                            changes prior to implementing them in
                                              connectivity providers to provide connection from         6 15 U.S.C. 78f(b).                                 the live trading environment, thereby
                                              the member firm to Ashburn.                               7 15 U.S.C. 78f(b)(4) and (5).
                                                5 See BX Rule 7030 concerning equities pricing.         8 15 U.S.C. 78f(b)(4).                                9 15   U.S.C. 78f(b)(5).



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                                                                            Federal Register / Vol. 80, No. 210 / Friday, October 30, 2015 / Notices                                                   66951

                                              reducing the likelihood of a potentially                III. Date of Effectiveness of the                       Washington, DC 20549 on official
                                              disruptive system failure in the live                   Proposed Rule Change and Timing for                     business days between the hours of
                                              trading environment, which has the                      Commission Action                                       10:00 a.m. and 3:00 p.m. Copies of such
                                              potential to affect all market                             The foregoing rule change has become                 filing also will be available for
                                              participants.                                           effective pursuant to Section                           inspection and copying at the principal
                                                 Finally, the Exchange will continue to                                                                       office of the Exchange. All comments
                                                                                                      19(b)(3)(A)(ii) of the Act.10
                                              offer Options Participants certain                                                                              received will be posted without change;
                                                                                                         At any time within 60 days of the
                                              limited testing capabilities free of charge                                                                     the Commission does not edit personal
                                                                                                      filing of the proposed rule change, the
                                              at Carteret through VPN. While this                                                                             identifying information from
                                              feature offers limited capability in terms              Commission summarily may
                                                                                                                                                              submissions. You should submit only
                                              of functionality, the Exchange continues                temporarily suspend such rule change if
                                                                                                                                                              information that you wish to make
                                              to offer a free of charge alternative to                it appears to the Commission that such
                                                                                                                                                              available publicly. All submissions
                                              Options Participants desiring to utilize                action is: (i) Necessary or appropriate in
                                                                                                                                                              should refer to File Number SR–BX–
                                              the NTF.                                                the public interest; (ii) for the protection
                                                                                                                                                              2015–059, and should be submitted on
                                                                                                      of investors; or (iii) otherwise in
                                              B. Self-Regulatory Organization’s                                                                               or before November 20, 2015.
                                                                                                      furtherance of the purposes of the Act.
                                              Statement on Burden on Competition                      If the Commission takes such action, the                  For the Commission, by the Division of
                                                                                                      Commission shall institute proceedings                  Trading and Markets, pursuant to delegated
                                                 BX does not believe that the proposed                                                                        authority.11
                                              rule change will result in any intra-                   to determine whether the proposed rule
                                                                                                                                                              Robert W. Errett,
                                              market or inter-market burdens on                       should be approved or disapproved.
                                                                                                                                                              Deputy Secretary.
                                              competition that are not necessary or                   IV. Solicitation of Comments                            [FR Doc. 2015–27649 Filed 10–29–15; 8:45 am]
                                              appropriate in furtherance of the
                                              purposes of the Act, as amended. The                      Interested persons are invited to                     BILLING CODE 8011–01–P

                                              proposed fees for access to the Carteret                submit written data, views, and
                                              test environment more closely                           arguments concerning the foregoing,
                                                                                                      including whether the proposed rule                     SECURITIES AND EXCHANGE
                                              approximate the live trading
                                                                                                      change is consistent with the Act.                      COMMISSION
                                              environment, subscribing member firms
                                              will be able to more accurately test their              Comments may be submitted by any of                     [Release No. 34–76267; File No. SR–
                                              trading systems and avoid potentially                   the following methods:                                  NYSEArca–2015–56]
                                              disruptive system failures in the live                  Electronic Comments
                                              trading environment. Despite the fee                                                                            Self-Regulatory Organizations; NYSE
                                              that will now be assessed to Options                      • Use the Commission’s Internet                       Arca, Inc.; Order Approving Proposed
                                              Participants for testing, the Exchange                  comment form (http://www.sec.gov/                       Rule Change, and Notice of Filing and
                                              believes that Options Participants                      rules/sro.shtml); or                                    Order Granting Accelerated Approval
                                              utilizing this service will benefit from                  • Send an email to rule-comments@                     of Amendment Nos. 1 and 2 Thereto,
                                                                                                      sec.gov. Please include File Number SR–                 Adopting New Equity Trading Rules
                                              the move to Carteret because the test
                                                                                                      BX–2015–059 on the subject line.                        Relating to Orders and Modifiers and
                                              environment is designed to closely
                                                                                                                                                              the Retail Liquidity Program To Reflect
                                              mirror the live trading environment for                 Paper Comments                                          the Implementation of Pillar, the
                                              Options Participants, including
                                                                                                        • Send paper comments in triplicate                   Exchange’s New Trading Technology
                                              matching the capacity of each Options
                                                                                                      to Brent J. Fields, Secretary, Securities               Platform
                                              Participant’s live environment switch
                                                                                                      and Exchange Commission, 100 F Street
                                              port. Subscribing to the test facility is                                                                       October 26, 2015.
                                                                                                      NE., Washington, DC 20549–1090.
                                              optional.
                                                 Also, the connectivity provided under                All submissions should refer to File                    I. Introduction
                                              this rule also provides connectivity to                 Number SR–BX–2015–059. This file                           On July 7, 2015, NYSE Arca, Inc. (the
                                              the other test environments of The                      number should be included on the                        ‘‘Exchange’’ or ‘‘Arca’’) filed with the
                                              NASDAQ Stock Market LLC and                             subject line if email is used. To help the              Securities and Exchange Commission
                                              NASDAQ OMX PHLX LLC. Members                            Commission process and review your                      (‘‘Commission’’), pursuant to Section
                                              that are already connected for equities                 comments more efficiently, please use                   19(b)(1) of the Securities Exchange Act
                                              testing would not incur an additional                   only one method. The Commission will                    of 1934 (‘‘Act’’) 1 and Rule 19b–4
                                              charge. This connectivity may be                        post all comments on the Commission’s                   thereunder,2 a proposed rule change to
                                              utilized for either equities or options                 Internet Web site (http://www.sec.gov/                  adopt new equity trading rules relating
                                              testing. Finally, subscribing to the test               rules/sro.shtml). Copies of the                         to Orders and Modifiers, and the Retail
                                              facility is optional.                                   submission, all subsequent                              Liquidity Program, to reflect the
                                                 Additionally, the Exchange does not                  amendments, all written statements                      implementation of Pillar, the Exchange’s
                                              believe that the move to Carteret and                   with respect to the proposed rule                       new trading technology platform. The
                                              imposition of connectivity fees to the                  change that are filed with the                          proposed rule change was published for
                                              NTF creates an undue burden on                          Commission, and all written                             comment in the Federal Register on July
                                              competition because the Exchange will                   communications relating to the                          28, 2015.3 On July 29, 2015, the
                                              continue to offer Options Participants                  proposed rule change between the                        Exchange filed Amendment No. 1 to the
                                              certain limited testing capabilities free               Commission and any person, other than                   proposed rule change.4 On September 1,
                                              of charge at Carteret through VPN.                      those that may be withheld from the
tkelley on DSK3SPTVN1PROD with NOTICES




                                                                                                      public in accordance with the                             11 17  CFR 200.30–3(a)(12).
                                              C. Self-Regulatory Organization’s                       provisions of 5 U.S.C. 552, will be                       1 15  U.S.C. 78s(b)(1).
                                              Statement on Comments on the                            available for Web site viewing and
                                                                                                                                                                 2 17 CFR 240.19b–4

                                              Proposed Rule Change Received From                      printing in the Commission’s Public
                                                                                                                                                                 3 See Securities Exchange Act Release No. 75497

                                              Members, Participants, or Others                                                                                (July 21, 2015), 80 FR 45022 (‘‘Notice’’).
                                                                                                      Reference Room, 100 F Street NE.,                          4 Amendment No. 1 deletes references to IOC
                                                No written comments were either                                                                               Routable Cross Orders and states that the Exchange
                                              solicited or received.                                    10 15   U.S.C. 78s(b)(3)(A)(ii).                                                                Continued




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Document Created: 2015-12-14 15:29:57
Document Modified: 2015-12-14 15:29:57
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation80 FR 66949 

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