81 FR 26607 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Update Public Disclosure of Exchange Usage of Market Data

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 85 (May 3, 2016)

[Federal Register Volume 81, Number 85 (Tuesday, May 3, 2016)]
[Notices]
[Pages 26607-26609]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-10268]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77719; File No. SR-BX-2016-022]


Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Update Public 
Disclosure of Exchange Usage of Market Data

April 27, 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 April 21, 2016, NASDAQ BX, Inc. (``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. 782(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 update Exchange Rule 4759 and to amend the 
public disclosure of the sources of data that the Exchange utilizes 
when performing (1) order handling and execution; (2) order routing; 
and (3) related compliance processes.
    The text of the proposed rule change is below. Proposed new 
language is italicized and deleted language is bracketed.
* * * * *
4759. Data Feeds Utilized
    The BX System utilizes the below proprietary and network processor 
feeds for the handling, routing, and execution of orders, as well as 
for the regulatory compliance processes related to those functions. The 
Secondary Source of data is, where applicable, utilized only in 
emergency market conditions and only until those emergency conditions 
are resolved.

------------------------------------------------------------------------
        Market center           Primary source       Secondary source
------------------------------------------------------------------------
A--NYSE MKT (AMEX)...........  NYSE MKT          CQS/UQDF.
                                OpenBook Ultra.
B--NASDAQ OMX BX.............  BX ITCH 5.0.....  CQS/UQDF.
C--NSX.......................  CQS/UQDF........  n/a.
D--FINRA ADF.................  CQS/UQDF........  n/a.
J--DirectEdge A..............  BATS PITCH......  CQS/UQDF.
K--DirectEdge X..............  BATS PITCH......  CQS/UQDF.
M--[CSX] CHX.................  [CQS/UQDF] CHX    [n/a] CQS/UQDF.
                                Book Feed.
N--NYSE......................  NYSE OpenBook     CQS/UQDF.
                                Ultra.
P--NYSE Arca.................  NYSE ARCA XDP...  CQS/UQDF.
T/Q--NASDAQ..................  ITCH 5.0........  CQS/UQDF.
X--NASDAQ OMX PSX............  PSX ITCH 5.0....  CQS/UQDF.
Y--BATS Y-Exchange...........  BATS PITCH......  CQS/UQDF.
Z--BATS Exchange.............  BATS PITCH......  CQS/UQDF.
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* * * * *
    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.

[[Page 26608]]

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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to update and amend the table in Exchange 
Rule 4759 that sets forth on a market-by-market basis the specific 
network processor and proprietary data feeds that the Exchange utilizes 
for the handling, routing, and execution of orders, and for performing 
the regulatory compliance checks related to each of those functions.
    Specifically, the table will be amended to update the symbol for 
the Chicago Stock Exchange, Inc. from ``CSX'' to ``CHX'', as well as to 
update the primary and secondary sources in the table for CHX. The 
primary source will be CHX Book Feed and the former primary source, 
CQS/UQDF, will become the secondary source. The change to the primary 
source reflects the Exchange's effort to increase the amount of data it 
gathers.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\3\ in general and with 
Sections 6(b)(5) of the Act,\4\ in particular in that it 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.
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    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that its proposal to amend the table in 
Exchange Rule 4759 to update it for the symbol for the Chicago Stock 
Exchange, Inc. and to amend the primary and secondary sources of data 
for CHX that the Exchange utilizes when performing (1) order handling 
and execution; (2) order routing; and (3) related compliance processes 
will ensure that Exchange Rule 4759 correctly identifies and publicly 
states on a market-by-market basis all of the specific network 
processor and proprietary data feeds that the Exchange utilizes for the 
handling, routing, and execution of orders, and for performing the 
regulatory compliance checks related to each of those functions. The 
Exchange also believes that the proposed rule change removes 
impediments to and perfects the mechanism of a free and open market and 
protects investors and the public interest because it provides 
additional specificity, clarity and transparency.

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

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended. To 
the contrary, the Exchange believes the proposal will enhance 
competition because including all of the correct information for the 
exchanges enhances transparency and enables investors to better assess 
the quality of the Exchange's execution and routing services.

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)(iii) of the Act \5\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\6\
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    \5\ 15 U.S.C. 78s(b)(3)(a)(iii).
    \6\ 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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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BX-2016-022 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-2016-022. 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

[[Page 26609]]

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-2016-022, and should be submitted on or before May 24, 2016.\7\
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    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-10268 Filed 5-2-16; 8:45 am]
 BILLING CODE 8011-01-P