81 FR 1257 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Nasdaq Rule 7015

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 6 (January 11, 2016)

Page Range		1257-1260
FR Document		2016-00260
Federal Register, Volume 81 Issue 6 (Monday, January 11, 2016)
[Federal Register Volume 81, Number 6 (Monday, January 11, 2016)]
[Notices]
[Pages 1257-1260]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-00260]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76825; File No. SR-NASDAQ-2015-162]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Nasdaq Rule 7015

January 5, 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 December 23, 2015, The NASDAQ Stock Market LLC (``Nasdaq'' 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 Substance 
of the Proposed Rule Change

    Nasdaq is proposing to amend Nasdaq Rule 7015 to clarify the 
connectivity options and application of the fees assessed thereunder.
    The text of the proposed rule change is available at 
nasdaq.cchwallstreet.com [sic] at Nasdaq [sic] principal office, 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, Nasdaq 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 those 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 parts of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Rule 7015 provides the charges Nasdaq assesses for equity 
securities market connectivity to systems operated by Nasdaq. Nasdaq is 
amending Rule 7015 in seven ways: (1) To clarify how Rule 7015 applies 
to FINRA systems; (2) to clarify the term ``port pair''; (3) to clarify 
QIX protocol connectivity options; (4) to clarify FIX protocol 
connectivity options; (5) to eliminate outdated CTCI connectivity 
options that rely on Nasdaq-supported circuits; (6) to eliminate CTCI 
connectivity as it relates to FINRA/NASDAQ Trade Reporting Facility; 
and (7) to add clarifying rule text and numbering to the section of the 
rule concerning other port fees.
    First, Nasdaq is proposing to add clarifying language to the 
preamble of the rule. Specifically, Nasdaq is proposing to note that 
the various connectivity options under the rule include connectivity to 
systems operated by FINRA. Although Nasdaq believes that it is clear 
that some of the systems listed are operated by FINRA (e.g., FINRA's 
OTCBB Service), the Exchange believes that expressly stating that the 
systems include those of FINRA will make the rule more clear. Nasdaq is 
also updating the list of FINRA systems that the connectivity options 
under the rule may connect to. Nasdaq notes that, from time to time, 
new systems are added by Nasdaq and FINRA, and Nasdaq is taking this 
opportunity to update the rule with all of the FINRA systems covered by 
the rule. As such, Nasdaq is updating the rule to include the FINRA 
Trade Reporting and Compliance Engine (``TRACE''), and the FINRA OTC 
Reporting Facility (``ORF'').
    Second, Nasdaq is proposing to clarify the use of the term ``port 
pair,'' which is used inconsistently under the rule. For certain ports 
under Rule 7015 that are used for either trading or data, Nasdaq 
additionally provides a disaster recovery port at no cost. Such a 
disaster recovery port provides connectivity to Nasdaq's or FINRA's 
disaster recovery location in the event of a failure of Nasdaq's or 
FINRA's primary trading infrastructure. Nasdaq has provided disaster 
recovery ports at no cost since 2006 to encourage member firms to 
maintain such connectivity in the event of a market disruption so that 
the market as a whole could continue to operate.\3\ As noted, Nasdaq 
has not used the term port pair consistently under the rule, whereby in 
certain cases, port pair is not noted in the rule yet Nasdaq provides a 
disaster recovery port nonetheless.\4\ Accordingly, the Exchange is 
eliminating the term port pair and is clarifying the rule by 
specifically noting when a disaster recovery port is available for a 
particular protocol under a rule.\5\
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    \3\ Although Nasdaq encourages all member firms and options 
participants to have and use disaster recovery ports and to 
participate in disaster recovery testing, the Exchange historically 
was unable to compel a member firm to connect to, or otherwise take 
the steps necessary to, use a disaster recovery port. Nasdaq 
recently adopted rules to require mandatory business continuity and 
disaster recovery plans testing by certain member firms and options 
participants, consistent with Regulation SCI. See Rule 1170; see 
also Securities Exchange Act Release No. 76368 (November 5, 2015), 
80 FR 70045 (November 12, 2015) (SR-NASDAQ-2015-134). As a 
consequence, certain member firms will be required to use disaster 
recovery ports and participate in business continuity and disaster 
recovery plans testing.
    \4\ For example, a FIX Trading Port under Rule 7015(b).
    \5\ A disaster recovery port is available for QIX, FIX, and CTCI 
protocol ports under Rules 7015(a), (b), (c). Disaster recovery 
ports are also available for all of the ports available under Rule 
7015(g)(2).
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    Third, Nasdaq is reorganizing and adding language to subparagraph 
(a) of

[[Page 1258]]

Rule 7015 to list all QIX connectivity provided by Nasdaq and to 
clarify that the fee assessed for QIX trading ports applies to ports 
that are used exclusively for FINRA connectivity. QIX is a proprietary 
messaging protocol that allows a member firm to send and receive 
messages relating to quotes and order entry. A QIX port may be used 
exclusively for connectivity to Nasdaq or to FINRA's OTCBB. Nasdaq 
assesses a fee of $1,200 per port,\6\ per month for QIX connectivity to 
FINRA.\7\ Thus, a member firm that wishes to connect to both Nasdaq and 
FINRA using the QIX protocol must have two separate ports. Nasdaq 
assesses a fee for QIX ports used exclusively for connectivity to 
facilities of FINRA, but not for ports used for connectivity to Nasdaq. 
As such, Nasdaq is adding new text that clarifies that the charge under 
the rule applies to QIX ports used for FINRA quoting and/or trading, 
and new language that clarifies that QIX ports used for Nasdaq quoting 
and/or trading are provided at no cost. Nasdaq is also eliminating the 
ECN direct connection port pair connectivity option from the rule as it 
is based on outdated technology and Nasdaq does not have any 
subscribers to it. Lastly, Nasdaq is deleting the existing rule text 
concerning unsolicited message ports and is adding new rule text making 
it clear that such ports are for FINRA connectivity.
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    \6\ Unlike other protocols such as FIX, subscription to QIX 
provides three physical connections to either Nasdaq or FINRA. The 
QIX connectivity option is architected in this manner to increase 
throughput performance by separating unsolicited message streams 
from quote/order entry and response streams, and to separate a 
member firm's proprietary quote information from customer orders 
that are reflected in its quotes. For purposes of assessing a fee, 
the QIX trading functionality is deemed to be a single port.
    \7\ Under Rule 7015(a), a member firm may subscribe to a QIX 
trading port, and a QIX unsolicited message port. An unsolicited 
message port is not used for trading, but rather provides 
information concerning orders such as order status and execution 
reports.
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    Fourth, Nasdaq is proposing to add clarifying rule text to 
subparagraph (b) of the rule, which concerns fees assessed for FIX 
ports. A FIX port is a trading port using a FIX-based telecommunication 
protocol. FIX, an abbreviation for Financial Information eXchange, is a 
standard message protocol that defines an electronic message exchange 
for communicating securities transactions between two parties. Nasdaq 
offers four FIX-based trading ports, which vary based on messaging 
formats and capability. Nasdaq is proposing to list these four 
protocols under the rule that a member firm may select when subscribing 
to a FIX trading port. Similarly, Nasdaq is adding clarifying language 
to the FIX Port for Services Other than Trading subscription. A FIX 
Port for Services Other than Trading provides subscribers with a non-
trading port that is used solely to report over the counter trades for 
tape reporting and/or clearing purposes. Nasdaq is proposing to list 
each venue to which a FIX Port for Services Other than Trading may 
connect a member firm. Lastly, Nasdaq is adding language to the rule 
noting that disaster recovery ports are available for FIX connectivity 
at no charge.
    Fifth, Nasdaq is proposing to eliminate rule text under 
subparagraph (c) of the rule that concerns bandwidth-based connectivity 
options to connect to a CTCI station and related fees. The deleted 
table of fees concerns CTCI connectivity that relies on Nasdaq-
supported circuits. These circuits are based on outdated technology and 
Nasdaq does not have any subscribers to any of these circuits. Member 
firms instead use third party connectivity to access their CTCI 
stations. Nasdaq is also adding language to the subparagraph noting 
that disaster recovery ports are available for CTCI station 
connectivity at no charge.
    Sixth, Nasdaq is proposing to eliminate CTCI connectivity from 
subparagraph (e) of the rule, which concerns specialized services 
related to the FINRA/NASDAQ Trade Reporting Facility. Nasdaq is 
proposing to eliminate the connectivity option because this add on fee 
is directly related to the CTCI connectivity options Nasdaq is 
proposing to eliminate, rendering it moot.
    Seventh, Nasdaq is proposing to add clarifying rule text and 
numbering to subparagraph (g) of the rule, which concerns other port 
fees. Subparagraph (g) contains all other connectivity options 
available that are not otherwise described in Rule 7015. These 
connectivity options include wireless connectivity (specifically 
Multicast Wave Ports), and other trading and telecommunications ports. 
Under the rule, the Exchange assesses a charge of $550 per month for 
each port pair, other than Multicast ITCH data feed pairs, for which 
the fee is $1,000 per month for software-based TotalView-ITCH or $2,500 
per month for combined software- and hardware-based TotalView-ITCH, and 
TCP ITCH data feed pairs, for which the fee is $750 per month. The 
Exchange also assesses an additional charge of $200 per month for each 
port used for entering orders or quotes over the Internet. Lastly, the 
Exchange assesses an additional charge of $600 per month for each port 
used for market data delivery over the Internet. The Exchange is 
proposing to list each connectivity option provided under the rule and 
the related fee.
    Under subparagraph (g) of the rule, a member firm may subscribe to 
other port pairs not otherwise noted in the rule. Such port pairs may 
be OUCH and RASH protocol ports or Drop ports. The Exchange is 
proposing to describe each of these options under the rule separately. 
Member firms may subscribe to trading ports, which are exclusively used 
for testing purposes. These ports may not be used for trading in 
securities in the System, and are provided at no cost. The Exchange is 
adding rule text noting that these test ports may be subscribed to 
under the rule. The Exchange also provides optional backup ports for 
OUCH port subscribers at no cost. OUCH backup ports are similar to 
disaster recovery ports; however, unlike disaster recovery ports that 
provide backup connectivity to the Exchange's disaster recovery 
location in Chicago, OUCH backup ports provide alternative port 
hardware in the event of a failure of the primary port hardware in the 
primary connectivity location in Carteret. The Exchange notes that OUCH 
ports have the largest number of subscribers and the hardware used for 
OUCH ports houses the largest number of member firms per hardware unit, 
therefore representing the greatest potential impact to the market 
should there be a hardware failure. Accordingly, the Exchange 
determined that offering OUCH backup ports will help ensure there is 
minimal market impact should there be an OUCH port hardware failure. 
The Exchange is adding OUCH backup ports as a service that may be 
subscribed to at no cost. The Exchange also provides data 
retransmission ports at no cost. Data retransmission ports allow a 
subscriber to replay market data, in the event the data was missed in 
live feed or for verification purposes. Data retransmission ports only 
allow replay of the current trading day and do not provide data 
concerning prior trading days' data. The Exchange is adding rule text 
noting that data retransmission ports may be subscribed to under the 
rule. The Exchange is also expressly noting that disaster recovery 
ports are available for the connectivity options under the rule at no 
cost. Lastly, the Exchange is proposing to eliminate the two 
subscription options and related fees provided under subparagraph (g) 
of the rule assessed for ports that are used for entering orders or 
quotes over the Internet, and ports that are used for market data 
delivery over the Internet. The Exchange notes that it is

[[Page 1259]]

eliminating these ports because they are outmoded means of connecting 
to the Exchange and neither have any subscribers.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act,\8\ in general, and furthers the objectives of 
Sections 6(b)(4) and 6(b)(5) of the Act,\9\ 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 Nasdaq operates or controls, and is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest; and is not designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the clarifying changes to the rule 
protect investors and the public interest because they explicitly 
describe the fees assessed for all ports under the rule. Describing all 
services covered by the rule will serve to avoid investor confusion 
over the scope of what connectivity options are available, and the 
costs of such options. The Exchange notes that it is not adding new 
connectivity options or functionality, but is rather describing more 
specifically what is currently offered under the rule. In this regard, 
the Exchange is adding new rule text that describes all functionality 
available under each subparagraph of the rule, and is reorganizing some 
rule text under the rule in an effort to make the rule clearer. The 
Exchange notes that much of the new text concerns testing ports, and 
ports used in the event of a disaster or hardware failure. These ports 
help ensure that a fair and orderly market is maintained by allowing 
member firms to test their systems prior to connecting to the live 
trading environment, and to provide backup connectivity in the event of 
a failure or disaster. Thus, the Exchange believes the proposed 
clarifying changes are consistent with the protection of investors and 
the public interest.
    The Exchange believes that the proposed deletion of the ECN direct 
connection port pair under Rule 7014(a) [sic], the deletion of the CTCI 
connectivity options under Rule 7014(c) [sic] and (e) [sic], as well as 
the deletion of the Internet-based port fees under Rule 7014(g) [sic], 
are reasonable, equitably allocated, and not unfairly discriminatory 
because there are no subscribers to these connectivity options, all of 
which are based on outmoded means of connecting to the Exchange. As a 
consequence, no member firms will be impacted by deletion of the 
connectivity options. The Exchange notes that it is not altering the 
charges assessed for the remaining connectivity options under Rule 
7015.

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. Specifically, Nasdaq is 
making clarifying changes to Rule 7015, which does not impose any 
burden on competition whatsoever. To the contrary, the proposed change 
facilitates competition by clarifying what connectivity options are 
provided by the Exchange, thereby informing [sic] other market venues a 
better understanding of what connectivity options are available for 
Nasdaq. With that better understanding, other market venues may improve 
existing connectivity options or offer new connectivity options to 
compete with Nasdaq. Accordingly, the proposed changes do not inhibit 
market participants' ability to compete among each other, nor do they 
impose any burden on competition among market venues, but rather may 
promote competition among market venues.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \10\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\ 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.
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    \10\ 15 U.S.C. 78s(b)(3)(a)(iii) [sic].
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NASDAQ-2015-162 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2015-162. 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

[[Page 1260]]

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-NASDAQ-2015-162 and should 
be submitted on or before February 1, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-00260 Filed 1-8-16; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 6 / Monday, January 11, 2016 / Notices 1257

number should be included on the Commission (‘‘Commission’’) the believes that it is clear that some of the
subject line if email is used. To help the proposed rule change as described in systems listed are operated by FINRA
Commission process and review your Items I, II, and III below, which Items (e.g., FINRA’s OTCBB Service), the
comments more efficiently, please use have been prepared by the Exchange. Exchange believes that expressly stating
only one method. The Commission will The Commission is publishing this that the systems include those of FINRA
post all comments on the Commission’s notice to solicit comments on the will make the rule more clear. Nasdaq
Internet Web site (http://www.sec.gov/ proposed rule change from interested is also updating the list of FINRA
rules/sro.shtml). Copies of the persons. systems that the connectivity options
submission, all subsequent under the rule may connect to. Nasdaq
amendments, all written statements I. Self-Regulatory Organization’s notes that, from time to time, new
with respect to the proposed rule Statement of the Terms of Substance of systems are added by Nasdaq and
change that are filed with the the Proposed Rule Change FINRA, and Nasdaq is taking this
Commission, and all written Nasdaq is proposing to amend Nasdaq opportunity to update the rule with all
communications relating to the Rule 7015 to clarify the connectivity of the FINRA systems covered by the
proposed rule change between the options and application of the fees rule. As such, Nasdaq is updating the
Commission and any person, other than assessed thereunder. rule to include the FINRA Trade
those that may be withheld from the The text of the proposed rule change Reporting and Compliance Engine
public in accordance with the is available at nasdaq.cchwallstreet.com (‘‘TRACE’’), and the FINRA OTC
provisions of 5 U.S.C. 552, will be [sic] at Nasdaq [sic] principal office, and Reporting Facility (‘‘ORF’’).
available for Web site viewing and at the Commission’s Public Reference Second, Nasdaq is proposing to clarify
printing in the Commission’s Public Room. the use of the term ‘‘port pair,’’ which
Reference Room, 100 F Street NE., is used inconsistently under the rule.
Washington, DC 20549 on official II. Self-Regulatory Organization’s For certain ports under Rule 7015 that
business days between the hours of Statement of the Purpose of, and are used for either trading or data,
10:00 a.m. and 3:00 p.m. Copies of the Statutory Basis for, the Proposed Rule Nasdaq additionally provides a disaster
filing also will be available for Change recovery port at no cost. Such a disaster
inspection and copying at the principal In its filing with the Commission, recovery port provides connectivity to
office of the Exchange. All comments Nasdaq included statements concerning Nasdaq’s or FINRA’s disaster recovery
received will be posted without change; the purpose of, and basis for, the location in the event of a failure of
the Commission does not edit personal proposed rule change and discussed any Nasdaq’s or FINRA’s primary trading
identifying information from comments it received on the proposed infrastructure. Nasdaq has provided
submissions. You should submit only rule change. The text of those disaster recovery ports at no cost since
information that you wish to make statements may be examined at the 2006 to encourage member firms to
available publicly. All submissions places specified in Item IV below. The maintain such connectivity in the event
should refer to File Number SR–CBOE– Exchange has prepared summaries, set of a market disruption so that the
2015–118 and should be submitted on forth in sections A, B, and C below, of market as a whole could continue to
or before February 1, 2016. the most significant parts of such operate.3 As noted, Nasdaq has not used
For the Commission, by the Division of statements. the term port pair consistently under the
Trading and Markets, pursuant to delegated rule, whereby in certain cases, port pair
authority.15 A. Self-Regulatory Organization’s is not noted in the rule yet Nasdaq
Statement of the Purpose of, and provides a disaster recovery port
Robert W. Errett,
Statutory Basis for, the Proposed Rule nonetheless.4 Accordingly, the
Deputy Secretary.
Change Exchange is eliminating the term port
[FR Doc. 2016–00259 Filed 1–8–16; 8:45 am]
1. Purpose pair and is clarifying the rule by
BILLING CODE 8011–01–P
specifically noting when a disaster
Rule 7015 provides the charges recovery port is available for a particular
Nasdaq assesses for equity securities protocol under a rule.5
SECURITIES AND EXCHANGE market connectivity to systems operated
COMMISSION Third, Nasdaq is reorganizing and
by Nasdaq. Nasdaq is amending Rule adding language to subparagraph (a) of
[Release No. 34–76825; File No. SR– 7015 in seven ways: (1) To clarify how
NASDAQ–2015–162] Rule 7015 applies to FINRA systems; (2) 3 Although Nasdaq encourages all member firms

to clarify the term ‘‘port pair’’; (3) to and options participants to have and use disaster
Self-Regulatory Organizations; The clarify QIX protocol connectivity recovery ports and to participate in disaster
NASDAQ Stock Market LLC; Notice of options; (4) to clarify FIX protocol recovery testing, the Exchange historically was
Filing and Immediate Effectiveness of unable to compel a member firm to connect to, or
connectivity options; (5) to eliminate otherwise take the steps necessary to, use a disaster
Proposed Rule Change To Amend outdated CTCI connectivity options that recovery port. Nasdaq recently adopted rules to
Nasdaq Rule 7015 rely on Nasdaq-supported circuits; (6) to require mandatory business continuity and disaster
recovery plans testing by certain member firms and
January 5, 2016. eliminate CTCI connectivity as it relates options participants, consistent with Regulation
Pursuant to Section 19(b)(1) of the to FINRA/NASDAQ Trade Reporting SCI. See Rule 1170; see also Securities Exchange
Securities Exchange Act of 1934 Facility; and (7) to add clarifying rule Act Release No. 76368 (November 5, 2015), 80 FR
text and numbering to the section of the 70045 (November 12, 2015) (SR–NASDAQ–2015–
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 134). As a consequence, certain member firms will
rule concerning other port fees.
ebenthall on DSK6SPTVN1PROD with NOTICES

notice is hereby given that, on December be required to use disaster recovery ports and
23, 2015, The NASDAQ Stock Market First, Nasdaq is proposing to add participate in business continuity and disaster
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed clarifying language to the preamble of recovery plans testing.
with the Securities and Exchange the rule. Specifically, Nasdaq is 4 For example, a FIX Trading Port under Rule

proposing to note that the various 7015(b).
5 A disaster recovery port is available for QIX,
15 17 CFR 200.30–3(a)(12) and (59). connectivity options under the rule FIX, and CTCI protocol ports under Rules 7015(a),
1 15 U.S.C. 78s(b)(1). include connectivity to systems (b), (c). Disaster recovery ports are also available for
2 17 CFR 240.19b–4. operated by FINRA. Although Nasdaq all of the ports available under Rule 7015(g)(2).

VerDate Sep<11>2014 21:33 Jan 14, 2016 Jkt 238001 PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 E:\FR\FM\11JAN1.SGM 11JAN1
Federal Register / Vol. 81, No. 6 / Monday, January 11, 2016 / Notices 1259

eliminating these ports because they are The Exchange believes that the 19(b)(3)(A)(iii) of the Act 10 and
outmoded means of connecting to the proposed deletion of the ECN direct subparagraph (f)(6) of Rule 19b–4
Exchange and neither have any connection port pair under Rule 7014(a) thereunder.11 At any time within 60
subscribers. [sic], the deletion of the CTCI days of the filing of the proposed rule
connectivity options under Rule 7014(c) change, the Commission summarily may
2. Statutory Basis
[sic] and (e) [sic], as well as the deletion temporarily suspend such rule change if
The Exchange believes the proposed of the Internet-based port fees under it appears to the Commission that such
rule change is consistent with Section Rule 7014(g) [sic], are reasonable, action is: (i) Necessary or appropriate in
6(b) of the Act,8 in general, and furthers equitably allocated, and not unfairly the public interest; (ii) for the protection
the objectives of Sections 6(b)(4) and discriminatory because there are no of investors; or (iii) otherwise in
6(b)(5) of the Act,9 in particular, in that subscribers to these connectivity furtherance of the purposes of the Act.
it provides for the equitable allocation options, all of which are based on If the Commission takes such action, the
of reasonable dues, fees and other outmoded means of connecting to the Commission shall institute proceedings
charges among members and issuers and Exchange. As a consequence, no to determine whether the proposed rule
other persons using any facility or member firms will be impacted by should be approved or disapproved.
system which Nasdaq operates or deletion of the connectivity options.
controls, and is designed to prevent IV. Solicitation of Comments
The Exchange notes that it is not
fraudulent and manipulative acts and altering the charges assessed for the Interested persons are invited to
practices, to promote just and equitable remaining connectivity options under submit written data, views and
principles of trade, to foster cooperation Rule 7015. arguments concerning the foregoing,
and coordination with persons engaged including whether the proposed rule
in regulating, clearing, settling, B. Self-Regulatory Organization’s change is consistent with the Act.
processing information with respect to, Statement on Burden on Competition Comments may be submitted by any of
and facilitating transactions in The Exchange does not believe that the following methods:
securities, to remove impediments to the proposed rule change will impose
Electronic Comments
and perfect the mechanism of a free and any burden on competition that is not
open market and a national market necessary or appropriate in furtherance • Use the Commission’s Internet
system, and, in general, to protect of the purposes of the Act. Specifically, comment form (http://www.sec.gov/
investors and the public interest; and is Nasdaq is making clarifying changes to rules/sro.shtml); or
not designed to permit unfair Rule 7015, which does not impose any • Send an email to rule-
discrimination between customers, burden on competition whatsoever. To comments@sec.gov. Please include File
issuers, brokers, or dealers. the contrary, the proposed change Number SR–NASDAQ–2015–162 on the
The Exchange believes that the facilitates competition by clarifying subject line.
clarifying changes to the rule protect what connectivity options are provided Paper Comments
investors and the public interest by the Exchange, thereby informing [sic]
because they explicitly describe the fees • Send paper comments in triplicate
other market venues a better
assessed for all ports under the rule. to Secretary, Securities and Exchange
understanding of what connectivity
Describing all services covered by the Commission, 100 F Street NE.,
options are available for Nasdaq. With Washington, DC 20549–1090.
rule will serve to avoid investor that better understanding, other market
confusion over the scope of what venues may improve existing All submissions should refer to File
connectivity options are available, and connectivity options or offer new Number SR–NASDAQ–2015–162. This
the costs of such options. The Exchange file number should be included on the
connectivity options to compete with
notes that it is not adding new subject line if email is used. To help the
Nasdaq. Accordingly, the proposed
connectivity options or functionality, Commission process and review your
changes do not inhibit market
but is rather describing more comments more efficiently, please use
participants’ ability to compete among
specifically what is currently offered only one method. The Commission will
each other, nor do they impose any
under the rule. In this regard, the post all comments on the Commission’s
burden on competition among market
Exchange is adding new rule text that Internet Web site (http://www.sec.gov/
venues, but rather may promote
describes all functionality available rules/sro.shtml). Copies of the
competition among market venues.
under each subparagraph of the rule, submission, all subsequent
and is reorganizing some rule text under C. Self-Regulatory Organization’s amendments, all written statements
the rule in an effort to make the rule Statement on Comments on the with respect to the proposed rule
clearer. The Exchange notes that much Proposed Rule Change Received From change that are filed with the
of the new text concerns testing ports, Members, Participants, or Others Commission, and all written
and ports used in the event of a disaster Written comments were neither communications relating to the
or hardware failure. These ports help solicited nor received. proposed rule change between the
ensure that a fair and orderly market is Commission and any person, other than
III. Date of Effectiveness of the those that may be withheld from the
maintained by allowing member firms
Proposed Rule Change and Timing for public in accordance with the
to test their systems prior to connecting
Commission Action provisions of 5 U.S.C. 552, will be
to the live trading environment, and to
provide backup connectivity in the Because the foregoing proposed rule available for Web site viewing and
event of a failure or disaster. Thus, the change does not: (i) Significantly affect
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10 15 U.S.C. 78s(b)(3)(a)(iii) [sic].
Exchange believes the proposed the protection of investors or the public 11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
clarifying changes are consistent with interest; (ii) impose any significant 4(f)(6) requires a self-regulatory organization to give
the protection of investors and the burden on competition; and (iii) become the Commission written notice of its intent to file
public interest. operative for 30 days from the date on the proposed rule change at least five business days
which it was filed, or such shorter time prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
8 15 U.S.C. 78f(b). as the Commission may designate, it has Commission. The Exchange has satisfied this
9 15 U.S.C. 78f(b)(4) and (5). become effective pursuant to Section requirement.

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1260 Federal Register / Vol. 81, No. 6 / Monday, January 11, 2016 / Notices

printing in the Commission’s Public amendment adds EDGX as a 608(b)(3)(iii) of the Act 6 because it
Reference Room, 100 F Street NE., Participant 4 to the Plan. The involves solely technical or ministerial
Washington, DC 20549, on official Commission is publishing this notice to matters. At any time within sixty days
business days between the hours of solicit comments on the amendment of the filing of this amendment, the
10:00 a.m. and 3:00 p.m. Copies of the from interested persons. Commission may summarily abrogate
filing also will be available for the amendment and require that it be
I. Description and Purpose of the refiled pursuant to paragraph (b)(1) of
inspection and copying at the principal
Amendment Rule 608,7 if it appears to the
office of the Exchange. All comments
received will be posted without change; The current Participants in the Commission that such action is
the Commission does not edit personal Linkage Plan are BOX, C2, CBOE, ISE, necessary or appropriate in the public
identifying information from MIAX, Nasdaq, Phlx, NYSE MKT, NYSE interest, for the protection of investors
submissions. You should submit only Arca, and Topaz. The amendment to the or the maintenance of fair and orderly
information that you wish to make Plan added EDGX as a Participant in the markets, to remove impediments to, and
available publicly. All submissions Plan. EDGX has submitted a signed copy perfect the mechanisms of, a national
should refer to File Number SR– of the Plan to the Commission in market system or otherwise in
NASDAQ–2015–162 and should be accordance with the procedures set furtherance of the purposes of the Act.
submitted on or before February 1, 2016. forth in the Plan regarding new
IV. Solicitation of Comments
For the Commission, by the Division of
Participants. Section 3(c) of the Plan
provides for the entry of new Interested persons are invited to
Trading and Markets, pursuant to delegated
authority.12 Participants to the Plan. Specifically an submit written data, views and
Eligible Exchange 5 may become a arguments concerning the foregoing,
Robert W. Errett,
Participant in the Plan by: (i) Executing including whether the amendment is
Deputy Secretary.
a copy of the Plan, as then in effect; (ii) consistent with the Act. Comments may
[FR Doc. 2016–00260 Filed 1–8–16; 8:45 am] be submitted by any of the following
providing each current Participant with
BILLING CODE 8011–01–P
a copy of such executed Plan; (iii) methods:
effecting an amendment to the Plan, as Electronic Comments
specified in Section 4(b) of the Plan.
SECURITIES AND EXCHANGE
Section 4(b) of the Plan puts forth the • Use the Commission’s Internet
COMMISSION comment form (http://www.sec.gov/
process by which an Eligible Exchange
[Release No. 34–76823; File No. 4–546] may effect an amendment to the Plan. rules/sro.shtml); or
• Send an email to rule-
Specifically, an Eligible Exchange must:
Joint Industry Plan; Notice of Filing comments@sec.gov. Please include File
(a) Execute a copy of the Plan with the
and Immediate Effectiveness of Number 4–546 on the subject line.
only change being the addition of the
Amendment to the Options Order new participant’s name in Section 3(a) Paper Comments
Protection and Locked/Crossed Market of the Plan; and (b) submit the executed • Send paper comments in triplicate
Plan to Add the EDGX Exchange, Inc. Plan to the Commission. The Plan then to Brent J. Fields, Secretary, Securities
as a Participant provides that such an amendment will and Exchange Commission, 100 F Street
January 5, 2016.
be effective when the amendment is NE., Washington, DC 20549–1090.
approved by the Commission or All submissions should refer to File
Pursuant to Section 11A(a)(3) of the
otherwise becomes effective pursuant to Number 4–546. This file number should
Securities Exchange Act of 1934
Section 11A of the Act and Rule 608 be included on the subject line if email
(‘‘Act’’) 1 and Rule 608 thereunder,2
thereunder. is used. To help the Commission
notice is hereby given that on October
26, 2015, EDGX Exchange, Inc. (‘‘EDGX’’ II. Effectiveness of the Proposed process and review your comments
or ‘‘Exchange’’) filed with the Securities Linkage Plan Amendment more efficiently, please use only one
and Exchange Commission method. The Commission will post all
The foregoing Plan amendment has
(‘‘Commission’’) an amendment to the comments on the Commission’s Internet
become effective pursuant to Rule
Options Order Protection and Locked/ Web site (http://www.sec.gov/rules/
Crossed Market Plan (‘‘Plan’’).3 The 70762 (October 28, 2013), 78 FR 65733 (November
sro.shtml). Copies of the submission, all
1, 2013) (adding MIAX International Securities subsequent amendments, all written
12 17 CFR 200.30–3(a)(12). Exchange, LLC (‘‘MIAX’’) as a Participant). statements with respect to the proposed
1 15 U.S.C. 78k–1(a)(3). 4 The term ‘‘Participant’’ is defined as an Eligible
rule change that are filed with the
2 17 CFR 242.608. Exchange whose participation in the Plan has Commission, and all written
3 On July 30, 2009, the Commission approved a become effective pursuant to Section 3(c) of the
national market system plan relating to Options Plan. communications relating to the
Order Protection and Locked/Crossed Markets 5 Section 2(6) of the Plan defines an ‘‘Eligible amendment between the Commission
proposed by Chicago Board Options Exchange, Exchange’’ as a national securities exchange and any person, other than those that
Incorporated (‘‘CBOE’’), International Securities registered with the Commission pursuant to Section may be withheld from the public in
Exchange, LLC (‘‘ISE’’), The NASDAQ Stock Market 6(a) of the Act, 15 U.S.C. 78f(a), that: (a) Is a
LLC (‘‘Nasdaq’’), NASDAQ OMX BX, Inc. (‘‘BOX’’), ‘‘Participant Exchange’’ in the Options Clearing
accordance with the provisions of 5
NASDAQ OMX PHLX, Inc. (‘‘Phlx’’), NYSE Amex, Corporation (‘‘OCC’’) (as defined in OCC By-laws, U.S.C. 552, will be available for Web
LLC (‘‘NYSE Amex’’), and NYSE Arca, Inc. (‘‘NYSE Section VII); (b) is a party to the Options Price site viewing and printing in the
Arca’’). See also Securities Exchange Act Release Reporting Authority (‘‘OPRA’’) Plan (as defined in Commission’s Public Reference Room,
No. 61546 (February 19, 2010), 75 FR 8762 the OPRA Plan, Section 1); and (c) if the national
100 F Street NE., Washington, DC
ebenthall on DSK6SPTVN1PROD with NOTICES

(February 25, 2010) (adding BATS Exchange, Inc. securities exchange chooses not to become part to
(‘‘BATS’’) as a Participant; 63119 (October 15, this Plan, is a participant in another plan approved 20549, on official business days
2010), 75 FR 65536 (October 25, 2010) (adding C2 by the Commission providing for comparable between the hours of 10:00 a.m. and
Options Exchange, Incorporated (‘‘C2’’) as a Trade-Through and Locked and Crossed Market 3:00 p.m. Copies of such filing also will
Participant); 66969 (May 12, 2015), 77 FR 29396 protection. EDGX has represented that it has met
(May 17, 2012) (adding BOX Options Exchange LLC the requirements for being considered an Eligible
be available for inspection and copying
(‘‘BOX Options’’ as a Participant); 70763 (October Exchange. See letter from Anders Franzon, VP and
6 17 CFR 242.608(b)(3)(iii).
28, 2013), 78 FR 65734 (November, 2013) (adding Associate General Counsel, BATS, to Brent J. Fields,
Topaz Exchange, LLC (‘‘Topaz’’) as a Participant; Secretary, Commission, dated October 26, 2015. 7 17 CFR 242.608(b)(1).

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Document Created: 2016-01-16 01:04:29
Document Modified: 2016-01-16 01:04:29
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 1257