82 FR 13166 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Billing Ports and Other Services

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 45 (March 9, 2017)

Page Range		13166-13167
FR Document		2017-04605
Federal Register, Volume 82 Issue 45 (Thursday, March 9, 2017)
[Federal Register Volume 82, Number 45 (Thursday, March 9, 2017)]
[Notices]
[Pages 13166-13167]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-04605]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80153; File No. SR-NASDAQ-2017-022]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Related to Billing Ports and Other Services

March 3, 2017.
    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 21, 2017, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II, 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 Chapter XV, entitled ``Options 
Pricing,'' at Section 3, which governs pricing for Exchange members 
using the NASDAQ Options Market (``NOM''), the Exchange's facility for 
executing and routing standardized equity and index options. The 
Exchange proposes to clarify that NOM port fees and other services in 
Chapter VX, Section 3 of NOM Rules are not prorated.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaq.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
    The purpose of the proposed rule change is to include language 
within Chapter XV, Section 3 to clarify that the port fees and other 
services noted in this section are not subject to proration.
    Chapter XV, Section 3, entitled ``NASDAQ Options Market--Ports and 
other Services'' includes pricing for TradeInfo,\3\ various port fees 
and Remote ITCH to Trade Options (ITTO) Wave Ports.\4\ The port fees 
include Order Entry Ports,\5\ CTI Ports,\6\ OTTO Ports,\7\ ITTO 
Ports,\8\ BONO Ports,\9\ Order Entry DROP Ports,\10\ OTTO DROP Ports 
\11\ and SQF Ports.\12\ Today, the

[[Page 13167]]

Exchange does not prorate any of these per month fees. The Exchange 
proposes to add a clarifying sentence to make clear that fees are 
assessed in full month increments and are not prorated, to avoid any 
confusion.
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    \3\ TradeInfo allows an Options Participant to scan for all 
orders it submitted to NOM in a particular security or all orders of 
a particular type, regardless of their status (open, canceled, 
executed, etc.) [sic] Also, it permits a participant to cancel open 
orders at the port or firm mnemonic level. TradeInfo allows a NOM 
Participant to manage its order flow and mitigate risk by giving 
users the ability to view its orders and executions, as well as the 
ability to perform cancels at the port or firm mnemonic level. 
Finally, TradeInfo has the ability download records of orders and 
executions for recordkeeping purposes.
    \4\ These are wireless networks through which Nasdaq provides 
ITTO market data. A Remote Wave Port is a physical port located in 
Nasdaq's space within a third-party's (remote) data center that 
receives market data delivered by Nasdaq via a wireless network, 
which is then simultaneously distributed to Wave Ports within that 
location. Clients must separately subscribe to the data received by 
the Remote Wave Port service.
    \5\ The Order Entry Port Fee is a connectivity fee in connection 
with routing orders to the Exchange via an external order entry 
port. NOM Participants access the Exchange's network through order 
entry ports. A NOM Participant may have more than one order entry 
port.
    \6\ CTI offers real-time clearing trade updates. A real-time 
clearing trade update is a message that is sent to a member after an 
execution has occurred and contains trade details. The message 
containing the trade details is also simultaneously sent to The 
Options Clearing Corporation. The trade messages are routed to a 
member's connection containing certain information. The 
administrative and market event messages include, but are not 
limited to: System event messages to communicate operational-related 
events; options directory messages to relay basic option symbol and 
contract information for options traded on the Exchange; complex 
strategy messages to relay information for those strategies traded 
on the Exchange; trading action messages to inform market 
participants when a specific option or strategy is halted or 
released for trading on the Exchange; and an indicator which 
distinguishes electronic and non-electronically delivered orders.
    \7\ OTTO provides a method for subscribers to send orders and 
receive status updates on those orders. OTTO accepts limit orders 
from system subscribers, and if there is a matching order, the 
orders will execute. Non-matching orders are added to the limit 
order book, a database of available limit orders, where they are 
matched in price-time priority.
    \8\ ITTO is a data feed that provides quotation information for 
individual orders on the NOM book, last sale information for trades 
executed on NOM, and Order Imbalance Information as set forth in NOM 
Rules Chapter VI, Section 8. ITTO is the options equivalent of the 
NASDAQ TotalView/ITCH data feed that NASDAQ offers under NASDAQ Rule 
7023 with respect to equities traded on NASDAQ. As with TotalView, 
members use ITTO to ``build'' their view of the NOM book by adding 
individual orders that appear on the feed, and subtracting 
individual orders that are executed. See Chapter VI, Section 1 at 
subsection (a)(3)(A).
    \9\ Best of NASDAQ Options or ``BONO'' \(SM)\ is a data feed 
that provides the NOM Best Bid and Offer (``NBBO'') and last sale 
information for trades executed on NOM. The NBBO and last sale 
information are identical to the information that NOM sends the 
Options Price Regulatory Authority (``OPRA'') and which OPRA 
disseminates via the consolidated data feed for options.
    \10\ The DROP interface provides real time information regarding 
orders sent to NOM and executions that occurred on NOM. The DROP 
interface is not a trading interface and does not accept order 
messages.
    \11\ The OTTO DROP data feed provides real-time information 
regarding orders entered through OTTO and the execution of those 
orders. The OTTO DROP data feed is not a trading interface and does 
not accept order messages.
    \12\ SQF is an interface that allows NOM Market Makers to 
connect and send quotes and sweeps into the System. Data includes 
the following: (1) Options Auction Notifications (e.g., opening 
imbalance, market exhaust, PRISM Auction information, or other 
information); (2) Options Symbol Directory Messages; (3) System 
Event Messages (e.g., start of messages, start of system hours, 
start of quoting, start of opening); (4) Option Trading Action 
Messages (e.g., halts, resumes); and (5) Quote Messages (quote/sweep 
messages, risk protection triggers or purge notifications). An 
Active Purge Port may be configured as a ``Purge-only'' port of 
purging option interest from the Exchange's system and allowing 
entry of underlying-level purges for a specified range of options 
and delivery of Purge Notification messages identifying the 
identification of who submitted the purge and the underlying symbol.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\13\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\14\ in particular, in that it is designed to 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general to protect investors and the public 
interest, by clearly specifying in Chapter XV, Section 3 that the 
Exchange's pricing regarding ports and other services is not prorated. 
The Exchange believes that its decision to not prorate is consistent 
with the Act because prorating billing results in complexity and 
increased costs associated with the billing process.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
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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. The Exchange will uniformly 
assess the fees in Chapter XV, Section 3 to all Options Participants in 
a uniform manner.

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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \15\ and Rule 19b-4(f)(6) thereunder.\16\ 
Because the 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, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \17\ and Rule 19b-
4(f)(6) thereunder.\18\
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    \15\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \19\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\20\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative immediately. The Exchange requests 
that the Commission waive the 30-day operative delay contained in Rule 
19b-4(f)(6)(iii) so that the Exchange may implement the change upon 
filing specifying that the fees in Chapter XV, Section 3 of the 
Exchange's Options Pricing rule will not be prorated. The Commission 
believes that adding the sentence to Chapter XV, Section 3 of the 
Exchange's Options Pricing rule to state that fees are assessed in 
full-month increments, i.e., they are not prorated, will avoid 
confusion and thus serve to protect investors and the public interest. 
For this reason, the Commission hereby waives the 30-day operative 
delay and designates the proposal operative upon filing.\21\
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    \19\ 17 CFR 240.19b-4(f)(6).
    \20\ 17 CFR 240.19b-4(f)(6)(iii).
    \21\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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 necessary or 
appropriate in the public interest, for the protection of investors, or 
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 change 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-NASDAQ-2017-022 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-NASDAQ-2017-022. 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 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-2017-022 and 
should be submitted on or before March 30, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-04605 Filed 3-8-17; 8:45 am]
BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 45 / Thursday, March 9, 2017 / Notices 13167

Exchange does not prorate any of these Commission may designate, if Electronic Comments
per month fees. The Exchange proposes consistent with the protection of
to add a clarifying sentence to make investors and the public interest, the • Use the Commission’s Internet
clear that fees are assessed in full month proposed rule change has become comment form (http://www.sec.gov/
increments and are not prorated, to effective pursuant to Section 19(b)(3)(A) rules/sro.shtml); or
avoid any confusion. of the Act 17 and Rule 19b–4(f)(6) • Send an email to rule-comments@
thereunder.18 sec.gov. Please include File Number SR–
2. Statutory Basis A proposed rule change filed under NASDAQ–2017–022 on the subject line.
The Exchange believes that its Rule 19b–4(f)(6) 19 normally does not
proposal is consistent with Section 6(b) become operative prior to 30 days after Paper Comments
of the Act,13 in general, and furthers the the date of the filing. However, pursuant
objectives of Section 6(b)(5) of the Act,14 to Rule 19b–4(f)(6)(iii),20 the • Send paper comments in triplicate
in particular, in that it is designed to Commission may designate a shorter to Secretary, Securities and Exchange
promote just and equitable principles of time if such action is consistent with the Commission, 100 F Street NE.,
trade, to remove impediments to and protection of investors and the public Washington, DC 20549–1090.
perfect the mechanism of a free and interest. The Exchange has asked the All submissions should refer to File
open market and a national market Commission to waive the 30-day Number SR–NASDAQ–2017–022. This
system, and, in general to protect operative delay so that the proposed
file number should be included on the
investors and the public interest, by rule change may become operative
subject line if email is used. To help the
clearly specifying in Chapter XV, immediately. The Exchange requests
that the Commission waive the 30-day Commission process and review your
Section 3 that the Exchange’s pricing
operative delay contained in Rule 19b– comments more efficiently, please use
regarding ports and other services is not
4(f)(6)(iii) so that the Exchange may only one method. The Commission will
prorated. The Exchange believes that its
decision to not prorate is consistent implement the change upon filing post all comments on the Commission’s
with the Act because prorating billing specifying that the fees in Chapter XV, Internet Web site (http://www.sec.gov/
results in complexity and increased Section 3 of the Exchange’s Options rules/sro.shtml).
costs associated with the billing process. Pricing rule will not be prorated. The Copies of the submission, all
Commission believes that adding the subsequent amendments, all written
B. Self-Regulatory Organization’s sentence to Chapter XV, Section 3 of the statements with respect to the proposed
Statement on Burden on Competition Exchange’s Options Pricing rule to state rule change that are filed with the
The Exchange does not believe that that fees are assessed in full-month Commission, and all written
the proposed rule change will impose increments, i.e., they are not prorated, communications relating to the
any burden on competition not will avoid confusion and thus serve to
proposed rule change between the
necessary or appropriate in furtherance protect investors and the public interest.
Commission and any person, other than
of the purposes of the Act. The For this reason, the Commission hereby
waives the 30-day operative delay and those that may be withheld from the
Exchange will uniformly assess the fees
designates the proposal operative upon public in accordance with the
in Chapter XV, Section 3 to all Options
filing.21 provisions of 5 U.S.C. 552, will be
Participants in a uniform manner.
At any time within 60 days of the available for Web site viewing and
C. Self-Regulatory Organization’s filing of the proposed rule change, the printing in the Commission’s Public
Statement on Comments on the Commission summarily may Reference Room, 100 F Street NE.,
Proposed Rule Change Received From temporarily suspend such rule change if Washington, DC 20549, on official
Members, Participants, or Others it appears to the Commission that such business days between the hours of
No written comments were either action is necessary or appropriate in the 10:00 a.m. and 3:00 p.m. Copies of the
solicited or received. public interest, for the protection of filing also will be available for
investors, or otherwise in furtherance of inspection and copying at the principal
III. Date of Effectiveness of the the purposes of the Act. If the office of the Exchange. All comments
Proposed Rule Change and Timing for Commission takes such action, the
Commission Action received will be posted without change;
Commission shall institute proceedings the Commission does not edit personal
The Exchange has filed the proposed to determine whether the proposed rule identifying information from
rule change pursuant to Section change should be approved or submissions. You should submit only
19(b)(3)(A)(iii) of the Act 15 and Rule disapproved. information that you wish to make
19b–4(f)(6) thereunder.16 Because the available publicly.
IV. Solicitation of Comments
proposed rule change does not: (i)
Significantly affect the protection of Interested persons are invited to All submissions should refer to File
investors or the public interest; (ii) submit written data, views, and Number SR–NASDAQ–2017–022 and
impose any significant burden on arguments concerning the foregoing, should be submitted on or before March
competition; and (iii) become operative including whether the proposed rule 30, 2017.
for 30 days from the date on which it change is consistent with the Act. For the Commission, by the Division of
was filed, or such shorter time as the Comments may be submitted by any of Trading and Markets, pursuant to delegated
the following methods:
asabaliauskas on DSK3SPTVN1PROD with NOTICES

authority.22
and allowing entry of underlying-level purges for a
Eduardo A. Aleman,
specified range of options and delivery of Purge 17 15 U.S.C. 78s(b)(3)(A).
Notification messages identifying the identification 18 17 CFR 240.19b–4(f)(6). Assistant Secretary.
of who submitted the purge and the underlying 19 17 CFR 240.19b–4(f)(6).
[FR Doc. 2017–04605 Filed 3–8–17; 8:45 am]
symbol. 20 17 CFR 240.19b–4(f)(6)(iii).
13 15 U.S.C. 78f(b). BILLING CODE 8011–01–P
21 For purposes only of waiving the 30-day
14 15 U.S.C. 78f(b)(5).
operative delay, the Commission has considered the
15 15 U.S.C. 78s(b)(3)(A)(iii).
proposed rule’s impact on efficiency, competition,
16 17 CFR 240.19b–4(f)(6). and capital formation. See 15 U.S.C. 78c(f). 22 17 CFR 200.30–3(a)(12).

VerDate Sep<11>2014 17:43 Mar 08, 2017 Jkt 241001 PO 00000 Frm 00079 Fmt 4703 Sfmt 9990 E:\FR\FM\09MRN1.SGM 09MRN1
Document Created: 2017-03-09 04:58:13
Document Modified: 2017-03-09 04:58:13
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		82 FR 13166