81 FR 12184 - Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend Access Services Fees under Rule 7015
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 45 (March 8, 2016)
Federal Register Volume 81, Issue 45 (March 8, 2016)
| Page Range | 12184-12187 | |
| FR Document | 2016-05122 |
[Federal Register Volume 81, Number 45 (Tuesday, March 8, 2016)] [Notices] [Pages 12184-12187] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-05122] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77282; File No. SR-BX-2016-013] Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend Access Services Fees under Rule 7015 March 3, 2016. 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 February 23, 2016, NASDAQ OMX BX, Inc. (``Exchange'') \3\ filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ In the filing, the Exchange states that it has legally changed its name to NASDAQ BX, Inc. with the state of Delaware, and that the Exchange is in the process of both amending its Form 1 with the Commission and changing its rules to reflect this new name. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Exchange's Access Services fees under Rule 7015 to: (i) Assess a $25/port/month Disaster Recovery Port fee for Disaster Recovery Ports used with FIX Trading Ports, OUCH, RASH, and DROP ports; and (ii) assess a $100/port/month fee for Trading Ports used in Test Mode. 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 [[Page 12185]] the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change to Rule 7015 is to amend the Exchange's Access Services fees under Rule 7015 to: (i) Assess a $25/port/month Disaster Recovery Port fee for Disaster Recovery Ports used with FIX Trading Ports, OUCH, RASH, and DROP ports; and (ii) assess a $100/port/month fee for Trading Ports used in Test Mode. First Change The Exchange is in the process of transitioning its Disaster Recovery (``DR'') functionality for the U.S. equities and options markets from Ashburn, VA to its new Chicago, IL data center. The Exchange has invested and installed new equipment in the Chicago data center for client connectivity and for the infrastructure of Exchange systems. The Exchange chose Chicago as the location of its new DR data center as many other exchanges are using this same location for a disaster recovery or a primary location and, as a result, many of our market participants have a presence or connection at this location, thus making it easier and less expensive for many market participants to connect to the Exchange for DR. Under Rule 7015, member firms may subscribe to DR ports, which provide backup connectivity in the event of a failure or disaster rendering their primary connectivity at Carteret, NJ subscribed to under Rule 7015 unavailable. To date, the Exchange has transitioned its FIX Trading Ports, OUCH, RASH, and DROP Ports to the Chicago center from Ashburn. Currently, the Exchange does not assess a fee for any DR ports. The Exchange has incurred an initial cost associated with moving DR ports to the Chicago center, including the purchase of upgraded hardware and physical space to house the DR ports, which is more expensive than the Ashburn location. The Exchange also incurs ongoing costs in maintaining the DR ports, including costs incurred maintaining servers and their physical location, monitoring order activity, and other support, which is collectively more expensive in Chicago than Ashburn. Accordingly, the Exchange is proposing to assess a fee of $25 per port, per month for DR Ports used with FIX Trading Ports, OUCH, RASH, and DROP Ports. Second Change Under Rule 7015, Member firms may subscribe to Trading Ports used in Test Mode, which are trading ports available in primary market location in Carteret, NJ, that are exclusively used for testing purposes, at no cost. These ports may not be used for trading in securities in the System, but rather allow a member firm to test their systems prior to connecting to the live trading environment. Test Ports are identical to trading ports \4\ and share the same infrastructure, but are restricted to only allow order entry into the System in test symbols. A member firm may elect to designate a subscribed trading port as either in ``production mode'' or in ``test mode.'' A Trading Port that is in production mode allows a member firm to send orders for execution on the Exchange system in the normal course. When a member firm changes a trading port's status to test mode, the Exchange will not allow normal order activity to occur through the port but rather it limits all order activity to test symbols. Under Rule 7015, member firms are assessed a monthly fee of $500 per port for each trading port subscribed in production mode. Member firms are not currently assessed a fee for Trading Ports used in Test Mode. --------------------------------------------------------------------------- \4\ E.g., FIX, RASH, and OUCH. --------------------------------------------------------------------------- The Exchange has audited the use of Trading Ports used in Test Mode and found that a majority of Trading Ports used in Test Mode are not used for testing, but rather remain idle. The Exchange incurs costs associated with maintaining such ports, including costs incurred maintaining servers and their physical location, monitoring order activity, and other support. Accordingly, the Exchange is proposing to assess a fee of $100 per port, per month.\5\ --------------------------------------------------------------------------- \5\ The Exchange bills Access Services subscriptions by prorating the first monthly fee by the number of days that subscription was subscribed and thereafter assesses the full monthly fee, including the full month in which the subscription is cancelled. If a subscriber elects to change a test mode port to a production port in a given month, the Exchange will assess the Trading Ports used in Test Mode fee, which may be prorated if subscribed to in the same month, and will also assess the production port fee, which will be prorated from the date the change is made through the end of the month. Likewise, if a subscriber elects to change a production mode port to a test mode port in a given month, the Exchange will assess the monthly production port fee, which may be prorated if subscribed to in the same month, and will also assess the Trading Ports used in Test Mode fee, which will be prorated from the date the change is made through the end of the month. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act \6\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act \7\ 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 or system which the Exchange operates or controls, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \6\ 15 U.S.C. Sec. 78f(b). \7\ 15 U.S.C. Sec. 78f(b)(4) and (5). --------------------------------------------------------------------------- The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In Regulation NMS, while adopting a series of steps to improve the current market model, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system ``has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.'' \8\ Likewise, in NetCoalition v. Securities and Exchange Commission \9\ (``NetCoalition'') the DC Circuit upheld the Commission's use of a market-based approach in evaluating the fairness of market data fees against a challenge claiming that Congress mandated a cost-based approach.\10\ As the court emphasized, the Commission ``intended in Regulation NMS that `market forces, rather than regulatory requirements' play a role in determining the market data . . . to be made available to investors and at what cost.'' \11\ --------------------------------------------------------------------------- \8\ Securities Exchange Act Release No. 51808 at 37499 (June 9, 2005) (``Regulation NMS Adopting Release''). \9\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010). \10\ See NetCoalition, at 534. \11\ Id. at 537. --------------------------------------------------------------------------- Further, ``[n]o one disputes that competition for order flow is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market system, buyers and sellers of securities, and the broker-dealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution'; [and] `no exchange can afford to take its market share percentages for granted' because `no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers'. . . .'' \12\ --------------------------------------------------------------------------- \12\ Id. at 539 (quoting ArcaBook Order, 73 FR at 74782-74783). --------------------------------------------------------------------------- [[Page 12186]] DR Port Fees The fee assessed for DR Ports is reasonable because it is based on the cost incurred by the Exchange in purchasing and maintaining DR ports in the Chicago data center. Currently, the Exchange does not have a means to recoup its investment and costs associated with providing member firms with DR ports in the Chicago data center. Thus, the Exchange believes that the proposed fee is reasonable because the fee is intended to cover the Exchange's costs incurred in maintaining DR ports. The proposed fee may also allow the Exchange to make a profit to the extent the costs associated with purchasing and maintaining DR ports are covered. The Exchange believes that the proposed fee is equitably allocated and not unfairly discriminatory because it will apply equally to all subscribers to DR ports based on the number of ports subscribed. Last, the Exchange notes that, for most member firms, subscription to DR ports is voluntary, and member firms may subscribe to as many or as few ports they believe is necessary. A select number of member firms chosen by the Exchange to participate in business continuity and disaster recovery plan testing pursuant to Rule 1170 will be obligated to subscribe to a DR port to participate in the annual test. Although subscription to DR ports is not voluntary for member firms selected for this once a year test, the Exchange believes that assessing the proposed fee is an equitable allocation and not unfairly discriminatory because such member firms will derive the same benefit as those members that voluntarily elect to subscribe to DR ports and such members may cancel their DR port subscription once their Rule 1170 testing obligation is satisfied. Trading Ports used in Test Mode Fees The proposed fee is also reasonable because it is based on the cost incurred by the Exchange in developing and maintaining multiple port connections, which are not used in the production environment and are designated as in test mode. As noted, the Exchange invests time and capital in initiating, monitoring and maintaining port connections to its system. Currently, the Exchange does not have a means to recoup its investment and costs associated with providing member firms with Trading Ports used in Test Mode. Thus, the Exchange believes that the proposed fee is reasonable because the fee is intended to cover the Exchange's costs incurred in maintaining test mode ports and is less than what is charged for a trading port in production mode. The proposed fee may also allow the Exchange to make a profit to the extent the costs associated with developing and maintaining Trading Ports used in Test Mode are covered. The Exchange believes that the proposed fee does not discriminate unfairly as it will promote efficiency in the market by incentivizing member firms to either place idle ports into production or cancel them if unneeded. The proposed fee is also equitably allocated because all Exchange member firms that voluntarily elect to subscribe to trading ports, yet maintain them in test mode, will be charged the fee equally on a per- port basis. Last, the Exchange notes that subscription to Trading Ports used in Test Mode is voluntary, and member firms may subscribe to as many or as few ports they believe is necessary for their testing purposes. 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. In terms of inter-market competition, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. In this instance, the proposed fee merely allows the Exchange to recapture the costs associated with maintaining member ports that are in test mode and DR, and may provide the Exchange with a profit to the extent its costs are covered. The Trading Port used in Test Mode fee is applied uniformly to member firms that have such ports in the Carteret data center, where the Exchange incurs expenses to support this port configuration option. The proposed fee will also promote efficient use of Trading Ports for testing. Similarly, the Exchange incurs greater costs in offering DR ports in the new Chicago data center, which the Exchange is seeking to cover. Any burden arising from the fees is necessary to cover costs associated with the location of the functionality in Chicago. If the changes proposed herein are unattractive to market participants, it is likely that the Exchange will lose market share as a result as member firms chose one of many alternative venues on which they may trade. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets. 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.\13\ --------------------------------------------------------------------------- \13\ 15 U.S.C. Sec. 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 CommentsUse 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-2016-013 on the subject line. Paper comments Send paper comments in triplicate to Secretary, Securities and Exchange [[Page 12187]] Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-BX-2016-013. 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 the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; 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-2016-013, and should be submitted on or before March 29, 2016. --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ Robert W. Errett, Deputy Secretary. [FR Doc. 2016-05122 Filed 3-7-16; 8:45 am] BILLING CODE 8011-01-P
![12184 Federal Register / Vol. 81, No. 45 / Tuesday, March 8, 2016 / Notices
Investor.13 The term ‘‘Affiliated Co- Partners, and agree that all such records SECURITIES AND EXCHANGE
Investor’’ with respect to any will be subject to examination by the COMMISSION
Partnership means any person who is: Commission and its staff.14
(i) An ‘‘affiliated person’’ (as such term 5. Within 120 days after the end of [Release No. 34–77282; File No. SR–BX–
is defined in section 2(a)(3) of the Act) each fiscal year of each Partnership, or 2016–013]
of the Partnership (other than a Third as soon as practicable thereafter, the
Party Fund); (ii) Ares; (iii) an officer or General Partner of each Partnership will Self-Regulatory Organizations;
director of Ares; (iv) an Eligible send to each Limited Partner having an NASDAQ OMX BX, Inc.; Notice of Filing
Employee; or (v) an entity (other than a Interest in the Partnership at any time and Immediate Effectiveness of
Third Party Fund) in which an Ares during the fiscal year then ended, Proposed Rule Change to Amend
entity acts as a general partner or has a Partnership financial statements audited Access Services Fees under Rule 7015
similar capacity to control the sale or by the Partnership’s independent March 3, 2016.
other disposition of the entity’s accountants with respect to those Series
securities. The restrictions contained in Pursuant to Section 19(b)(1) of the
in which the Limited Partner had an Securities Exchange Act of 1934
this condition, however, shall not be Interest, except under certain
deemed to limit or prevent the (‘‘Act’’),1 and Rule 19b–4 thereunder,2
circumstances in the case of a notice is hereby given that on February
disposition of an investment by an Partnership formed to make a single
Affiliated Co-Investor (i) to its direct or 23, 2016, NASDAQ OMX BX, Inc.
portfolio investment. In such cases, the (‘‘Exchange’’) 3 filed with the Securities
indirect wholly-owned subsidiary, to Partnership may send unaudited
any company (a ‘‘Parent’’) of which the and Exchange Commission (‘‘SEC’’ or
financial statements, but each Limited ‘‘Commission’’) the proposed rule
Affiliated Co-Investor is a direct or Partner will receive financial statements
indirect wholly-owned subsidiary or to change as described in Items I, II, and
of the single portfolio investment III below, which Items have been
a direct or indirect wholly-owned audited by such entity’s independent
subsidiary of its Parent, (ii) to prepared by the Exchange. The
accountants. At the end of each fiscal Commission is publishing this notice to
immediate family members of the year, the General Partner will make or
Affiliated Co-Investor or a trust or other solicit comments on the proposed rule
cause to be made a valuation of all of change from interested persons.
investment vehicle established for any the assets of the Partnership as of such
Affiliated Co-Investor or any such fiscal year end in a manner consistent I. Self-Regulatory Organization’s
immediate family member, or (iii) when with customary practice with respect to Statement of the Terms of Substance of
the investment is comprised of the valuation of assets of the kind held the Proposed Rule Change
securities that are (a) listed on a national by the Partnership. In addition, within The Exchange proposes to amend the
securities exchange registered under 120 days after the end of each fiscal year Exchange’s Access Services fees under
section 6 of the Exchange Act, (b) NMS of each Partnership (or as soon as Rule 7015 to: (i) Assess a $25/port/
stocks pursuant to section 11A(a)(2) of practicable thereafter), the General month Disaster Recovery Port fee for
the Exchange Act and rule 600(a) of Partner will send a report to each person Disaster Recovery Ports used with FIX
Regulation NMS thereunder, (c) who was a Limited Partner at any time Trading Ports, OUCH, RASH, and DROP
government securities as defined in during the fiscal year then ended, ports; and (ii) assess a $100/port/month
section 2(a)(16) of the Act or other setting forth such tax information as fee for Trading Ports used in Test Mode.
securities that meet the definition of shall be necessary for the preparation by The text of the proposed rule change
‘‘Eligible Security’’ in rule 2a–7 under the Limited Partner of that partner’s is available on the Exchange’s Web site
the Act, or (d) listed or traded on any federal and state income tax returns and at http://
foreign securities exchange or board of a report of the investment activities of nasdaqomxbx.cchwallstreet.com/, at the
trade that satisfies regulatory the Partnership during that fiscal year. principal office of the Exchange, and at
requirements under the law of the 6. If a Partnership makes purchases or the Commission’s Public Reference
jurisdiction in which such foreign sales from or to an entity affiliated with Room.
securities exchange or board of trade is the Partnership by reason of an officer,
organized similar to those that apply to director or employee of an Ares entity II. Self-Regulatory Organization’s
a national securities exchange or a (i) serving as an officer, director, general Statement of the Purpose of, and
national market system for securities. partner, manager or investment adviser Statutory Basis for, the Proposed Rule
4. Each Partnership and its General of the entity (other than an entity that Change
Partner will maintain and preserve, for is an Aggregation Vehicle), or (ii) having In its filing with the Commission, the
the life of each Series of the Partnership a 5% or more investment in the entity, Exchange included statements
and at least six years thereafter, such such individual will not participate in concerning the purpose of and basis for
accounts, books and other documents the Partnership’s determination of the proposed rule change and discussed
constituting the record forming the basis whether or not to effect the purchase or any comments it received on the
for the audited financial statements that sale. proposed rule change. The text of these
are to be provided to the Limited
For the Commission, by the Division of statements may be examined at the
Partners in the Partnership, and each
Investment Management, under delegated places specified in Item IV below. The
annual report of the Partnership
authority. Exchange has prepared summaries, set
required to be sent to the Limited
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Robert W. Errett, forth in sections A, B, and C below, of
13 If a Partnership invests in a Rule 17d–1 Deputy Secretary.
1 15 U.S.C. 78s(b)(1).
Investment through an Aggregation Vehicle, the [FR Doc. 2016–05039 Filed 3–7–16; 8:45 am]
2 17 CFR 240.19b–4.
requirements of clauses (i) and (ii) of this sentence BILLING CODE 8011–01–P
shall apply to both the Affiliated Co-Investor’s 3 In the filing, the Exchange states that it has
disposition of such Rule 17d–1 Investment and, if legally changed its name to NASDAQ BX, Inc. with
the Affiliated Co-Investor also holds a Rule 17d–1 14 Each Partnership will preserve the accounts, the state of Delaware, and that the Exchange is in
Investment through such Aggregation Vehicle, its books and other documents required to be the process of both amending its Form 1 with the
disposition of all or part of its investment in the maintained in an easily accessible place for the first Commission and changing its rules to reflect this
Aggregation Vehicle. two years. new name.
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the most significant aspects of such Second Change of the Act 6 in general, and furthers the
statements. Under Rule 7015, Member firms may objectives of Sections 6(b)(4) and 6(b)(5)
A. Self-Regulatory Organization’s subscribe to Trading Ports used in Test of the Act 7 in particular, in that it
Statement of the Purpose of, and Mode, which are trading ports available provides for the equitable allocation of
Statutory Basis for, the Proposed Rule in primary market location in Carteret, reasonable dues, fees and other charges
Change NJ, that are exclusively used for testing among members and issuers and other
purposes, at no cost. These ports may persons using any facility or system
1. Purpose not be used for trading in securities in which the Exchange operates or
The purpose of the proposed rule the System, but rather allow a member controls, and is not designed to permit
change to Rule 7015 is to amend the firm to test their systems prior to unfair discrimination between
Exchange’s Access Services fees under connecting to the live trading customers, issuers, brokers, or dealers.
Rule 7015 to: (i) Assess a $25/port/ environment. Test Ports are identical to The Commission and the courts have
month Disaster Recovery Port fee for trading ports 4 and share the same repeatedly expressed their preference
Disaster Recovery Ports used with FIX infrastructure, but are restricted to only for competition over regulatory
Trading Ports, OUCH, RASH, and DROP allow order entry into the System in test
intervention in determining prices,
ports; and (ii) assess a $100/port/month symbols. A member firm may elect to
products, and services in the securities
fee for Trading Ports used in Test Mode. designate a subscribed trading port as
either in ‘‘production mode’’ or in ‘‘test markets. In Regulation NMS, while
First Change adopting a series of steps to improve the
mode.’’ A Trading Port that is in
The Exchange is in the process of production mode allows a member firm current market model, the Commission
transitioning its Disaster Recovery to send orders for execution on the highlighted the importance of market
(‘‘DR’’) functionality for the U.S. Exchange system in the normal course. forces in determining prices and SRO
equities and options markets from When a member firm changes a trading revenues and, also, recognized that
Ashburn, VA to its new Chicago, IL data port’s status to test mode, the Exchange current regulation of the market system
center. The Exchange has invested and will not allow normal order activity to ‘‘has been remarkably successful in
installed new equipment in the Chicago occur through the port but rather it promoting market competition in its
data center for client connectivity and limits all order activity to test symbols. broader forms that are most important to
for the infrastructure of Exchange Under Rule 7015, member firms are investors and listed companies.’’ 8
systems. The Exchange chose Chicago as assessed a monthly fee of $500 per port Likewise, in NetCoalition v. Securities
the location of its new DR data center for each trading port subscribed in and Exchange Commission 9
as many other exchanges are using this production mode. Member firms are not (‘‘NetCoalition’’) the DC Circuit upheld
same location for a disaster recovery or currently assessed a fee for Trading the Commission’s use of a market-based
a primary location and, as a result, Ports used in Test Mode. approach in evaluating the fairness of
many of our market participants have a The Exchange has audited the use of market data fees against a challenge
presence or connection at this location, Trading Ports used in Test Mode and claiming that Congress mandated a cost-
thus making it easier and less expensive found that a majority of Trading Ports based approach.10 As the court
for many market participants to connect used in Test Mode are not used for emphasized, the Commission ‘‘intended
to the Exchange for DR. testing, but rather remain idle. The in Regulation NMS that ‘market forces,
Under Rule 7015, member firms may Exchange incurs costs associated with rather than regulatory requirements’
subscribe to DR ports, which provide maintaining such ports, including costs play a role in determining the market
backup connectivity in the event of a incurred maintaining servers and their
data . . . to be made available to
failure or disaster rendering their physical location, monitoring order
primary connectivity at Carteret, NJ investors and at what cost.’’ 11
activity, and other support.
subscribed to under Rule 7015 Accordingly, the Exchange is proposing Further, ‘‘[n]o one disputes that
unavailable. To date, the Exchange has to assess a fee of $100 per port, per competition for order flow is ‘fierce.’
transitioned its FIX Trading Ports, month.5 . . . As the SEC explained, ‘[i]n the U.S.
OUCH, RASH, and DROP Ports to the national market system, buyers and
Chicago center from Ashburn. 2. Statutory Basis sellers of securities, and the broker-
Currently, the Exchange does not assess The Exchange believes that its dealers that act as their order-routing
a fee for any DR ports. proposal is consistent with Section 6(b) agents, have a wide range of choices of
The Exchange has incurred an initial where to route orders for execution’;
cost associated with moving DR ports to 4 E.g.,FIX, RASH, and OUCH. [and] ‘no exchange can afford to take its
5 The Exchange bills Access Services
the Chicago center, including the market share percentages for granted’
subscriptions by prorating the first monthly fee by
purchase of upgraded hardware and the number of days that subscription was because ‘no exchange possesses a
physical space to house the DR ports, subscribed and thereafter assesses the full monthly monopoly, regulatory or otherwise, in
which is more expensive than the fee, including the full month in which the the execution of order flow from broker
Ashburn location. The Exchange also subscription is cancelled. If a subscriber elects to
change a test mode port to a production port in a dealers’. . . .’’ 12
incurs ongoing costs in maintaining the given month, the Exchange will assess the Trading
DR ports, including costs incurred Ports used in Test Mode fee, which may be prorated 6 15 U.S.C. § 78f(b).
maintaining servers and their physical
asabaliauskas on DSK3SPTVN1PROD with NOTICES
if subscribed to in the same month, and will also 7 15 U.S.C. § 78f(b)(4) and (5).
location, monitoring order activity, and assess the production port fee, which will be 8 Securities Exchange Act Release No. 51808 at
prorated from the date the change is made through
other support, which is collectively the end of the month. Likewise, if a subscriber
37499 (June 9, 2005) (‘‘Regulation NMS Adopting
more expensive in Chicago than Release’’).
elects to change a production mode port to a test 9 NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir.
Ashburn. Accordingly, the Exchange is mode port in a given month, the Exchange will
assess the monthly production port fee, which may 2010).
proposing to assess a fee of $25 per port, 10 See NetCoalition, at 534.
be prorated if subscribed to in the same month, and
per month for DR Ports used with FIX will also assess the Trading Ports used in Test Mode 11 Id. at 537.
Trading Ports, OUCH, RASH, and DROP fee, which will be prorated from the date the change 12 Id. at 539 (quoting ArcaBook Order, 73 FR at
Ports. is made through the end of the month. 74782–74783).
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![Federal Register / Vol. 81, No. 45 / Tuesday, March 8, 2016 / Notices 12187
Commission, 100 F Street NE., SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
Washington, DC 20549–1090. COMMISSION Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
All submissions should refer to File
[Release No. 34–77275; File No. SR– Change
Number SR–BX–2016–013. This file
number should be included on the NYSEMKT–2016–28] 1. Purpose
subject line if email is used. To help the The Exchange proposes to amend the
Self-Regulatory Organizations; NYSE
Commission process and review your NYSE Amex Options Proprietary Market
MKT LLC; Notice of Filing and
comments more efficiently, please use Data Fee Schedule (‘‘Fee Schedule’’), to
Immediate Effectiveness of a Proposed
only one method. The Commission will provide that market data fees do not
Change Amending the Fees for NYSE
post all comments on the Commission’s apply to any Federal agency for their
Amex Options Proprietary Market Data
Internet Web site (http://www.sec.gov/ use of NYSE Amex Options real-time
as They Apply to Federal Agency proprietary market data products. The
rules/sro.shtml). Copies of the
Customers term ‘‘Federal agency’’ as used in the
submission, all subsequent
amendments, all written statements March 2, 2016. Fee Schedule would include all Federal
with respect to the proposed rule agencies subject to the Federal
Pursuant to Section 19(b)(1) 1 of the Acquisition Regulation (FAR),4 as well
change that are filed with the
Securities Exchange Act of 1934 (the as any Federal agency not subject to
Commission, and all written
‘‘Act’’) 2 and Rule 19b–4 thereunder,3 FAR that has promulgated its own
communications relating to the
notice is hereby given that, on February procurement rules.5
proposed rule change between the
17, 2016, NYSE MKT LLC (the The Exchange is proposing to specify
Commission and any person, other than
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with that access fees, professional user fees
those that may be withheld from the
the Securities and Exchange and non-display fees do not apply to
public in accordance with the
Commission (the ‘‘Commission’’) the Federal agencies for those products to
provisions of 5 U.S.C. 552, will be which those fees apply.6 The proposal
proposed rule change as described in
available for Web site viewing and is designed to allow the Exchange to
Items I, II, and III below, which Items
printing in the Commission’s Public provide Federal agencies with NYSE
have been prepared by the self-
Reference Room, 100 F Street NE., Amex Options real-time proprietary
regulatory organization. The
Washington, DC 20549 on official market data products at no cost in
Commission is publishing this notice to
business days between the hours of support of Federal agencies’ regulatory
solicit comments on the proposed rule
10:00 a.m. and 3:00 p.m. Copies of the responsibilities. With the adoption of
change from interested persons.
filing also will be available for the proposed fee waiver, the Exchange
inspection and copying at the principal I. Self-Regulatory Organization’s is not waiving any of its contractual
office of the Exchange. All comments Statement of the Terms of Substance of rights and all Federal agencies that
received will be posted without change; the Proposed Rule Change subscribe to NYSE Amex Options real-
the Commission does not edit personal time proprietary market data products
identifying information from The Exchange proposes to amend the will be required to execute the
submissions. You should submit only fees for NYSE Amex Options appropriate subscriber agreement,
information that you wish to make proprietary market data as they apply to which include [sic], among other things,
available publicly. All submissions Federal agency customers. The provisions against the redistribution of
should refer to File Number SR–BX– proposed change is available on the data.
2016–013, and should be submitted on Exchange’s Web site at www.nyse.com,
2. Statutory Basis
or before March 29, 2016. at the principal office of the Exchange,
and at the Commission’s Public The Exchange believes that the
For the Commission, by the Division of Reference Room. proposed rule change is consistent with
Trading and Markets, pursuant to delegated the provisions of Section 6 of the Act,7
authority.14 II. Self-Regulatory Organization’s in general, and Sections 6(b)(4) and
Robert W. Errett, Statement of the Purpose of, and 6(b)(5) of the Act,8 in particular, in that
Deputy Secretary. Statutory Basis for, the Proposed Rule it provides an equitable allocation of
[FR Doc. 2016–05122 Filed 3–7–16; 8:45 am] Change reasonable fees among users and
recipients of the data and is not
BILLING CODE 8011–01–P In its filing with the Commission, the
self-regulatory organization included 4 FAR is the principal set of rules governing the
statements concerning the purpose of, process by which the U.S. federal government
and basis for, the proposed rule change purchases goods and services.
5 See 48 CFR 2.101. FAR defines ‘‘Federal
and discussed any comments it received
agency’’ as ‘‘any executive agency or any
on the proposed rule change. The text independent establishment in the legislative or
of those statements may be examined at judicial branch of the Government (except the
the places specified in Item IV below. Senate, the House of Representatives, the Architect
of the Capitol, and any activities under the
The Exchange has prepared summaries, Architect’s direction).’’ ‘‘Executive agency’’ is
asabaliauskas on DSK3SPTVN1PROD with NOTICES
set forth in sections A, B, and C below, defined as ‘‘an executive department, a military
of the most significant parts of such department, or any independent establishment
within the meaning of 5 U.S.C. 101, 102, and
statements. 104(1), respectively, and any wholly owned
Government corporation within the meaning of 31
U.S.C. 9101.’’
6 These products are currently Amex Options
1 15 U.S.C. 78s(b)(1). Product and Amex Options Complex.
2 15 U.S.C. 78a. 7 15 U.S.C. 78f(b).
14 17 CFR 200.30–3(a)(12). 3 17 CFR 240.19b–4. 8 15 U.S.C. 78f(b)(4), (5).
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Document Created: 2018-02-02 15:10:17
Document Modified: 2018-02-02 15:10:17
| 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 | 81 FR 12184 |
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