81 FR 2268 - Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7015

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 10 (January 15, 2016)

[Federal Register Volume 81, Number 10 (Friday, January 15, 2016)]
[Notices]
[Pages 2268-2269]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-00644]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76868; File No. SR-BX-2015-087]


Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Rule 7015

January 11, 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 29, 2015, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change as described in Items I, II, 
and III, below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend BX Rule 7015 to clarify the 
connectivity options and application of the fees assessed thereunder.
    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
    Rule 7015 provides the charges BX assesses for equity securities 
market connectivity to systems operated by BX. BX is amending Rule 7015 
in three ways: (1) To clarify the term ``port pair''; (2) to clarify 
the connectivity options available under the rule; and (3) to eliminate 
internet ports as a connectivity option.
    First, BX is proposing to clarify the use of the term ``port 
pair.'' For certain ports under Rule 7015 that are used for either 
trading or data, BX additionally provides a disaster recovery port at 
no cost. Such a disaster recovery port provides connectivity to BX's 
disaster recovery location in the event of a failure of BX's primary 
trading infrastructure. BX has provided disaster recovery ports at no 
cost since 2009 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. In the interest of clarity, the Exchange is 
proposing to eliminate the term port pair and to separately list 
disaster recovery ports as a connectivity option available at no cost 
under the rule.
    Second, BX is reorganizing and adding language to Rule 7015 to list 
all connectivity provided by BX under the rule, which is currently 
subsumed in a connectivity option and related fee. Specifically, the 
Exchange currently offers connectivity for $500 per port, per month for 
each port pair other than Multicast ITCH data feed pairs and TCP ITCH 
data feed pairs. Under the $500 per port, per month connectivity option 
a member firm may subscribe to an OUCH protocol trading port, a FIX 
Trading Port (either a FIX or FIX Lite protocol),\3\ RASH protocol 
trading port, and DROP ports. BX is listing separately each of the 
options available under the rule. BX also offers trading ports that may 
be used only in test mode. Member firms may subscribe to these test 
mode trading ports at no cost, which are exclusively used for testing 
purposes and may not be used for trading in securities in the System. 
The Exchange is adding rule text noting that these test ports may be 
subscribed to under the rule. 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 a 
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.
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    \3\ 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. BX offers two FIX-based trading 
ports, which vary based on messaging formats and capability. BX is 
proposing to list these two protocols as options under the rule that 
a member firm may select when subscribing to a FIX trading port.
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    Third, BX is proposing to eliminate Internet Ports. Internet ports 
are based on outdated technology and BX does not have any subscribers 
to this connectivity method.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act,\4\ in general, and furthers the objectives of 
Sections 6(b)(4) and 6(b)(5) of the Act,\5\ 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 BX 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

[[Page 2269]]

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 are not designed to permit 
unfair discrimination between customers, issuers, brokers, or dealers.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 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 Internet 
Port connectivity option is reasonable, equitably allocated, and not 
unfairly discriminatory because there are no subscribers to this 
connectivity option, which is based on outdated means of connecting to 
the Exchange. As a consequence, no member firms will be impacted by 
deletion of the connectivity option. 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, BX 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 other market venues a 
better understanding of what connectivity options are available for BX. 
With that better understanding, other market venues may improve 
existing connectivity options or offer new connectivity options to 
compete with BX. 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

    No written comments were either solicited or 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)(ii) of the Act \6\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\7\ 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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    \6\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \7\ 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-BX-2015-087 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-BX-2015-087. 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-2015-087 and should be 
submitted on or before February 5, 2016.
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    \8\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-00644 Filed 1-14-16; 8:45 am]
 BILLING CODE 8011-01-P