82 FR 13369 - Self-Regulatory Organizations; NASDAQ BX, Inc.; 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 46 (March 10, 2017)

[Federal Register Volume 82, Number 46 (Friday, March 10, 2017)]
[Notices]
[Pages 13369-13370]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-04725]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80161; File No. SR-BX-2017-015]


Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Related to Billing 
Ports and Other Services

March 6, 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, NASDAQ BX, Inc. (``BX'' 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 clarify that BX Options Market port fees 
and other services in Chapter VX, Section 3 of BX Rules are not 
prorated.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqbx.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 ``BX Options Market--Ports and 
other Services'' includes pricing for TradeInfo BX,\3\ various port 
fees and an Extranet Access Fee.\4\ The port fees include Order Entry 
Ports,\5\ CTI Ports,\6\ BX Depth Ports,\7\ BX TOP Ports,\8\ Order Entry 
DROP Ports \9\ and SQF Ports.\10\

[[Page 13370]]

Today, the 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 a BX Options Participant to scan for all 
orders it submitted to BX Options 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 BX Options 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 BX has the ability download 
records of orders and executions for recordkeeping purposes.
    \4\ The Extranet Access Fee is a monthly access fee per 
recipient Customer Premises Equipment (``CPE'') Configuration. A 
``Customer Premises Equipment Configuration'' means any line, 
circuit, router package, or other technical configuration used by an 
extranet provider to provide a direct access connection to the 
Exchange market data feeds to a recipient's site.
    \5\ The Order Entry Port Fee is a connectivity fee in connection 
with routing orders to the Exchange via an external order entry 
port. BX Options Market Participants access the Exchange's network 
through order entry ports. A BX Options Market 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\ A BX Depth Port provides access to BX Depth, which is a data 
feed that provides quotation information for individual orders on 
the BX book, last sale information for trades executed on BX, and 
Order Imbalance Information as set forth in BX Options Rules Chapter 
VI, Section 8. BX Depth is the options equivalent of the BX 
TotalView/ITCH data feed that BX offers under BX Rule 7023 with 
respect to equities traded on BX. As with TotalView, members use BX 
Depth to ``build'' their view of the BX book by adding individual 
orders that appear on the feed, and subtracting individual orders 
that are executed. See Chapter VI, Section 1(a)(3)(A).
    \8\ BX TOP Port is a data feed that provides the BX Best Bid and 
Offer (``BBO'') and last sale information for trades executed on BX. 
The BBO and last sale information are identical to the information 
that BX sends to the Options Price Regulatory Authority (``OPRA'') 
and which OPRA disseminates via the consolidated data feed for 
options. BX TOP Port is the options equivalent of the BX Basic data 
feed offered for equities under BX Rule 7047. See Chapter VI, 
Section 1(a)(3)(B).
    \9\ The DROP interface provides real time information regarding 
orders sent to the BX Options Market and executions that occurred on 
the BX Options Market. The DROP interface is not a trading interface 
and does not accept order messages.
    \10\ SQF is an interface that allows BX 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,\11\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\12\ 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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    \11\ 15 U.S.C. 78f(b).
    \12\ 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 \13\ and Rule 19b-4(f)(6) thereunder.\14\ 
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 \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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    \13\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \17\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\18\ 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.\19\
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    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ 17 CFR 240.19b-4(f)(6)(iii).
    \19\ 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-BX-2017-015 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-2017-015. 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-2017-015 and 
should be submitted on or before March 31, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-04725 Filed 3-9-17; 8:45 am]
BILLING CODE 8011-01-P