82 FR 17490 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Reduce Fees for Certain Connectivity Under Rule 7015(g)(1) and Rule 7034(b)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 68 (April 11, 2017)

Page Range		17490-17492
FR Document		2017-07179
Federal Register, Volume 82 Issue 68 (Tuesday, April 11, 2017)
[Federal Register Volume 82, Number 68 (Tuesday, April 11, 2017)]
[Notices]
[Pages 17490-17492]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-07179]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80380; File No. SR-NASDAQ-2017-030]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Reduce Fees for Certain Connectivity Under Rule 7015(g)(1) and Rule 
7034(b)

April 5, 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 March 28, 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, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to assess reduced monthly fees for microwave 
or millimeter wave ports under Rule 7015(g)(1) and wireless market data 
connectivity under Rule 7034(b), based on the total number of 
subscriptions to such wireless connectivity under those rules. While 
these amendments are effective upon filing, the Exchange has designated 
the proposed amendments to be operative on April 3, 2017.
    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 Exchange is proposing to assess reduced monthly fees for 
microwave or millimeter wave ports under Rules 7015(g)(1) and 7034(b), 
based on the total number of subscriptions to ports under Rule 
7015(g)(1) and colocation connectivity to market data feeds under Rule 
7034(b).
    Under Rule 7015(g)(1), the Exchange provides Multi-cast ITCH 
(``MITCH'') Wave Ports to clients co-located at other third-party data 
centers, including the New York Stock Exchange's (``NYSE'') data center 
located in Mahwah, NJ, through which the Exchange's TotalView ITCH 
market data is distributed after delivery to those data centers via a 
wireless network. Rule 7034(b) provides the various connectivity 
options for co-location services. The Exchange offers multicast Market 
Data feeds that are delivered to the Exchange's data center located in 
Carteret, NJ via a wireless network.\3\ The Exchange offers 
connectivity to data feeds provided by NYSE, BATS (including Direct 
Edge), and CME, which are delivered wirelessly by third party vendors 
from those market's data centers to the Exchange's Carteret, NJ data 
center. Specifically, the NYSE Equities data feeds under Rule 7034(b) 
are wirelessly delivered to Carteret, NJ from NYSE's Mahwah, NJ data 
center, the BATS and Direct Edge data feeds are wirelessly delivered to 
Carteret, NJ from BATS's Secaucus, NJ data center, and the CME data 
feeds are wirelessly delivered to Carteret, NJ from CME's Aurora, IL 
data center.
---------------------------------------------------------------------------

    \3\ Subscription to the connectivity options under Rule 7034(b) 
is entirely optional. To receive a particular data feed, a 
participant must subscribe to the connectivity under Rule 7034(b) 
and also have a subscription to the data feed with the applicable 
exchange.
---------------------------------------------------------------------------

    The Exchange is proposing to provide discounts to the current 
monthly fees for microwave or millimeter wave connectivity under Rules 
7015(g)(1) and 7034(b) based on the total number of billable 
subscriptions under those rules.\4\ The fees under Rules 7015(g)(1) and 
7034(b) differ based on the costs incurred by the Exchange in providing 
the connectivity, including vendor costs that generally increase with 
the distance between the origin and destination of the wireless signal. 
To keep the discounts in line with the different fees assessed for the 
connectivity under Rules 7015(g)(1) and 7034(b), the Exchange is 
proposing to apply a percentage-based reduction on the fees assessed in 
lieu of a fixed amount. Specifically, the Exchange is proposing to 
provide subscribers with three to five microwave or millimeter wave 
wireless subscriptions under Rule 7015(g)(1) and/or Rule 7034(b) a 5% 
discount on all such subscriptions; subscribers with six to ten 
microwave or millimeter wave wireless subscriptions under Rule 
7015(g)(1) and/or Rule 7034(b) would receive a 10% discount on all such 
subscriptions; subscribers with eleven to fourteen microwave or 
millimeter wave wireless subscriptions under Rule 7015(g)(1) and/or 
Rule 7034(b) would receive a 15% discount on all such subscriptions; 
and subscribers with fifteen or more microwave or millimeter wave 
wireless subscriptions under Rule 7015(g)(1) and/or Rule 7034(b) would 
receive a 20% discount on all such subscriptions.
---------------------------------------------------------------------------

    \4\ The Exchange is proposing to add footnotes to Rules 
7015(g)(1) and 7034(b) describing the proposed discounts. As 
described above, Rule 7015(g)(1) provides wireless connectivity to 
clients co-located at other third-party data centers and Rule 
7034(b) provides wireless colocation connectivity options to clients 
at the Exchange's colocation facility. Any of the options under 
these rules may be subscribed to by a client of the Exchange, and 
the Exchange is using the term ``subscriber'' to refer to any such 
client subscribing to one or more of the options under Rules 
7015(g)(1) and/or 7034(b).
---------------------------------------------------------------------------

    The Exchange notes that the proposed reduction in fees will reward 
the greatest users of its wireless connectivity under Rule 7015(g)(1) 
and/or Rule 7034(b), although the Exchange does not believe that the 
proposed change will result in a fee assessed that is less than the 
cost of offering the connectivity.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\5\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5)

[[Page 17491]]

of the Act,\6\ 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, and is not designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed fee reductions are 
reasonable because they are less than the fees currently assessed for 
the connectivity under Rule 7015(g)(1) and Rule 7034(b), while 
continuing to allow the Exchange to cover the costs associated with 
offering the connectivity. The Exchange believes that the proposed fee 
reductions are an equitable allocation and are not unfairly 
discriminatory because the reduction to each fee is based on applying a 
percentage, which will account for the varying expense of each 
connectivity option under Rule 7015(g)(1) and Rule 7034(b). For 
example, a subscriber that has three subscriptions total under Rule 
7015(g)(1) and/or Rule 7034(b) in a given month, with one MITCH Wave 
Port at Mahwah, NJ at $10,000 per month, one MITCH Wave Port at 
Weehawken, NJ at $7,500 per month and one Wireless Connectivity to NYSE 
Equities (Arca Integrated) at $10,000 per month, would realize a 
reduction of $500 ($10,000 - ($10,000 x .05)) to its MITCH Wave Port at 
Mahwah, NJ subscription and a reduction of $375 ($7,500 - ($7,500 x 
.05)) to its MITCH Wave Port at Weehawken, NJ subscription, and a 
reduction of 500 ($10,000 - ($10,000 x .05) to its Wireless 
Connectivity to NYSE Equities (Arca Integrated). Thus, the levels of 
the proposed fee reductions are related to the fee assessed for the 
connectivity offered, which ensures that subscribers receive a fee 
reduction consistent with the amount of its fee burden. In contrast, 
offering a flat rebate would benefit some subscribers (i.e., those with 
a greater number of lower cost subscriptions) over other subscribers 
(i.e., those with higher cost subscriptions) for whom the flat fee 
would be less meaningful. The Exchange believes that the proposed tiers 
are an equitable allocation and are not unfairly discriminatory because 
the number of subscriptions required to qualify for each tier generally 
increases linearly between each tier. The Exchange chose the number of 
subscriptions required, and the percentage of the fee discounts, based 
on its analysis of the level of subscribership under Rule 7015(g)(1) 
and Rule 7034(b) and its desire to provide meaningful discounts to its 
fees to promote greater connectivity thereunder, balanced against the 
Exchange's need to cover costs for such connectivity.

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. In terms of inter-market 
competition, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive. In such an environment, the Exchange must continually adjust 
its fees to remain competitive with other exchanges and with 
alternative trading systems that have been exempted from compliance 
with the statutory standards applicable to exchanges. Because most 
competitors are not required to file their fees with regulators, they 
are free to quickly and easily modify their fees and discount policies 
for each subscriber. Subscribers also have a good amount of wireless 
connectivity vendors to choose from for these services and can switch 
between providers quite easily.
    In this instance, the proposed changes to the charges assessed for 
microwave or millimeter wave ports under Rule 7015(g)(1) and wireless 
market data connectivity under Rule 7034(b) do not impose a burden on 
competition because the Exchange's connectivity services are completely 
voluntary and subject to extensive competition from other exchanges and 
from connectivity vendors. The proposed reduction to the monthly fees 
assessed for microwave or millimeter wave wireless connectivity under 
Rules 7015(g)(1) and 7034(b) does not place a burden on competition, 
but rather may promote competition as it will reduce costs for 
subscribers to the connectivity provided under those rules. As a 
consequence, competitor exchanges and other market venues may choose to 
offer similar reductions in fees, to the benefit of all market 
participants. Ultimately, if the changes proposed herein are 
unattractive to market participants, it is likely that the Exchange 
will lose wireless subscriptions, and the revenue derived therefrom, as 
a result. Accordingly, the Exchange does not believe that the proposed 
changes will impair the ability of members or competing order execution 
venues to maintain their competitive standing in the financial markets.

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 foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\7\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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 No. SR-NASDAQ-2017-030 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 No. SR-NASDAQ-2017-030. 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

[[Page 17492]]

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 such 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 No. SR-NASDAQ-2017-030, and should be 
submitted on or before May 2, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07179 Filed 4-10-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 68 / Tuesday, April 11, 2017 / Notices 17491

of the Act,6 in particular, in that it to promote greater connectivity C. Self-Regulatory Organization’s
provides for the equitable allocation of thereunder, balanced against the Statement on Comments on the
reasonable dues, fees and other charges Exchange’s need to cover costs for such Proposed Rule Change Received From
among members and issuers and other connectivity. Members, Participants, or Others
persons using any facility, and is not No written comments were either
designed to permit unfair B. Self-Regulatory Organization’s
Statement on Burden on Competition solicited or received.
discrimination between customers,
issuers, brokers, or dealers. III. Date of Effectiveness of the
The Exchange does not believe that Proposed Rule Change and Timing for
The Exchange believes that the
the proposed rule change will impose Commission Action
proposed fee reductions are reasonable
any burden on competition not
because they are less than the fees The foregoing rule change has become
necessary or appropriate in furtherance
currently assessed for the connectivity effective pursuant to Section
under Rule 7015(g)(1) and Rule 7034(b), of the purposes of the Act. In terms of
inter-market competition, the Exchange 19(b)(3)(A)(ii) of the Act.7
while continuing to allow the Exchange At any time within 60 days of the
to cover the costs associated with notes that it operates in a highly
filing of the proposed rule change, the
offering the connectivity. The Exchange competitive market in which market
Commission summarily may
believes that the proposed fee participants can readily favor competing
temporarily suspend such rule change if
reductions are an equitable allocation venues if they deem fee levels at a
it appears to the Commission that such
and are not unfairly discriminatory particular venue to be excessive. In such
action is: (i) Necessary or appropriate in
because the reduction to each fee is an environment, the Exchange must
the public interest; (ii) for the protection
based on applying a percentage, which continually adjust its fees to remain of investors; or (iii) otherwise in
will account for the varying expense of competitive with other exchanges and furtherance of the purposes of the Act.
each connectivity option under Rule with alternative trading systems that If the Commission takes such action, the
7015(g)(1) and Rule 7034(b). For have been exempted from compliance Commission shall institute proceedings
example, a subscriber that has three with the statutory standards applicable to determine whether the proposed rule
subscriptions total under Rule to exchanges. Because most competitors should be approved or disapproved.
7015(g)(1) and/or Rule 7034(b) in a are not required to file their fees with
given month, with one MITCH Wave regulators, they are free to quickly and IV. Solicitation of Comments
Port at Mahwah, NJ at $10,000 per easily modify their fees and discount Interested persons are invited to
month, one MITCH Wave Port at policies for each subscriber. Subscribers submit written data, views, and
Weehawken, NJ at $7,500 per month also have a good amount of wireless arguments concerning the foregoing,
and one Wireless Connectivity to NYSE connectivity vendors to choose from for including whether the proposed rule
Equities (Arca Integrated) at $10,000 per these services and can switch between change is consistent with the Act.
month, would realize a reduction of providers quite easily. Comments may be submitted by any of
$500 ($10,000 ¥ ($10,000 × .05)) to its In this instance, the proposed changes the following methods:
MITCH Wave Port at Mahwah, NJ to the charges assessed for microwave or Electronic Comments
subscription and a reduction of $375 millimeter wave ports under Rule
($7,500 ¥ ($7,500 × .05)) to its MITCH • Use the Commission’s Internet
7015(g)(1) and wireless market data
Wave Port at Weehawken, NJ comment form (http://www.sec.gov/
connectivity under Rule 7034(b) do not
subscription, and a reduction of 500 rules/sro.shtml); or
impose a burden on competition • Send an email to rule-comments@
($10,000 ¥ ($10,000 × .05) to its because the Exchange’s connectivity
Wireless Connectivity to NYSE Equities sec.gov. Please include File No. SR–
services are completely voluntary and NASDAQ–2017–030 on the subject line.
(Arca Integrated). Thus, the levels of the
subject to extensive competition from
proposed fee reductions are related to Paper Comments
other exchanges and from connectivity
the fee assessed for the connectivity
offered, which ensures that subscribers
vendors. The proposed reduction to the • Send paper comments in triplicate
monthly fees assessed for microwave or to Secretary, Securities and Exchange
receive a fee reduction consistent with
the amount of its fee burden. In contrast, millimeter wave wireless connectivity Commission, 100 F Street NE.,
offering a flat rebate would benefit some under Rules 7015(g)(1) and 7034(b) does Washington, DC 20549–1090.
subscribers (i.e., those with a greater not place a burden on competition, but All submissions should refer to File No.
number of lower cost subscriptions) rather may promote competition as it SR–NASDAQ–2017–030. This file
over other subscribers (i.e., those with will reduce costs for subscribers to the number should be included on the
higher cost subscriptions) for whom the connectivity provided under those subject line if email is used. To help the
flat fee would be less meaningful. The rules. As a consequence, competitor Commission process and review your
Exchange believes that the proposed exchanges and other market venues may comments more efficiently, please use
tiers are an equitable allocation and are choose to offer similar reductions in only one method. The Commission will
not unfairly discriminatory because the fees, to the benefit of all market post all comments on the Commission’s
number of subscriptions required to participants. Ultimately, if the changes Internet Web site (http://www.sec.gov/
qualify for each tier generally increases proposed herein are unattractive to rules/sro.shtml). Copies of the
linearly between each tier. The market participants, it is likely that the submission, all subsequent
Exchange chose the number of Exchange will lose wireless amendments, all written statements
subscriptions, and the revenue derived with respect to the proposed rule
srobinson on DSK5SPTVN1PROD with NOTICES

subscriptions required, and the
percentage of the fee discounts, based therefrom, as a result. Accordingly, the change that are filed with the
on its analysis of the level of Exchange does not believe that the Commission, and all written
subscribership under Rule 7015(g)(1) proposed changes will impair the ability communications relating to the
and Rule 7034(b) and its desire to of members or competing order proposed rule change between the
provide meaningful discounts to its fees execution venues to maintain their Commission and any person, other than
competitive standing in the financial
6 15 U.S.C. 78f(b)(4) and (5). markets. 7 15 U.S.C. 78s(b)(3)(A)(ii).

VerDate Sep<11>2014 20:18 Apr 10, 2017 Jkt 241001 PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 E:\FR\FM\11APN1.SGM 11APN1
17492 Federal Register / Vol. 82, No. 68 / Tuesday, April 11, 2017 / Notices

those that may be withheld from the I. Clearing Agency’s Statement of the technological difficulties (including
public in accordance with the Terms of Substance of the Proposed purchase of a digital certificate)
provisions of 5 U.S.C. 552, will be Rule Change, Security-Based Swap associated with the filing process,
available for Web site viewing and Submission, or Advance Notice resulted in LCH SA not being able to
printing in the Commission’s Public The proposed rule change will submit the filing on December 30, 2016,
Reference Room, 100 F Street NE., retroactively apply LCH SA’s recently- as LCH SA initially anticipated.
Washington, DC 20549 on official revised fee schedule 5 from January 1, Because LCH SA had also intended
business days between the hours of 2017 through February 17, 2017, the the fee change to become effective by
10:00 a.m. and 3:00 p.m. Copies of such date that the revised schedule became January 1, 2017 it had already gone
filing also will be available for effective. through the member consultation
inspection and copying at the principal process, meaning that members were
office of the Exchange. All comments II. Clearing Agency’s Statement of the aware of the pending change in fee
received will be posted without change; Purpose of, and Statutory Basis for, the structure, including the proposed
the Commission does not edit personal Proposed Rule Change, Security-Based effective date of January 1, 2017.
identifying information from Swap Submission, or Advance Notice Additionally, LCH SA’s national
submissions. You should submit only In its filing with the Commission, competent authorities had been advised
information that you wish to make LCH SA included statements concerning of the proposed fee change that had
available publicly. All submissions the purpose of and basis for the already gone through the regulatory
should refer to File No. SR–NASDAQ– proposed rule change and discussed any review process with the Commodity
2017–030, and should be submitted on comments it received on the proposed Futures Trading Commission (‘‘CFTC’’)
or before May 2, 2017. rule change. The text of these statements in a manner that would have permitted
For the Commission, by the Division of may be examined at the places specified the fee change to take effect on January
Trading and Markets, pursuant to delegated in Item IV below. LCH SA has prepared 1, 2017.6
authority.8 summaries, set forth in sections A, B, In that way, the proposed fee change
Eduardo A. Aleman, and C below, of the most significant was published on LCH SA’s Web site no
aspects of such statements. later than December 14, 2016, when it
Assistant Secretary.
was self-certified to the CFTC pursuant
[FR Doc. 2017–07179 Filed 4–10–17; 8:45 am] A. Clearing Agency’s Statement of the to CFTC Rule 40.6.
BILLING CODE 8011–01–P Purpose of, and Statutory Basis for, the
Proposed Rule Change, Security-Based 2. Statutory Basis
Swap Submission, or Advance Notice LCH SA believes that the proposal is
SECURITIES AND EXCHANGE consistent with the provisions of
COMMISSION 1. Purpose
Section 17A of the Act, in general and
The purpose of the proposed rule in particular with Section 17A(b)(3)(D)
[Release No. 34–80379; File No. SR–LCH change is to retroactively apply LCH of the Act requiring the equitable
SA–2017–002] SA’s recently-revised fee schedule allocation of reasonable dues, fees and
beginning January 1, 2017. other charges.7
Self-Regulatory Organizations; LCH The purpose of the CDSClear fee grid LCH believes that applying the fees
SA; Notice of Filing and Immediate revisions was to: (1) Modify the annual retroactively is reasonable. The fees
Effectiveness of Proposed Rule fixed fee that covers all self-clearing would have been applicable absent the
Change To Retroactively Apply activity for a Clearing Member and its year end Commission registration as
Recently-Revised Fee Schedule affiliates under the Unlimited Tariff, (2) well as the technological difficulties
establish an annual fixed fee for all LCH SA encountered with the
April 5, 2017. General Members that participate in the submission of the filing. The members
Pursuant to Section 19(b)(1) of the CDS Clearing Services under the of LCH SA were consulted in advance
Securities Exchange Act of 1934 Introductory Tariff, and (3) remove the and were fully aware that such fees
(‘‘Act’’),1 and Rule 19b-4 thereunder,2 volume-based discounts previously in were intended to be applicable by
notice is hereby given that on March 30, effect for the client clearing activities of January 1, 2017.
2017, Banque Centrale de the CDS Clearing Service. Section 17A(b)(3)(D) of the Act
Compensation, which conducts LCH SA was registered on December requires that the rules of a clearing
business under the name LCH SA (‘‘LCH 29, 2016 but had long-standing plans to agency provide for the equitable
SA’’), filed with the Securities and revise the fee schedule with an intended allocation of reasonable dues, fees, and
Exchange Commission (‘‘Commission’’) effective date of January 1, 2017. other charges.8 With respect to the
the proposed rule change described in The need to apply the fees Unlimited Tariff, LCH SA has
Items I and II below, which Items have retroactively results from being granted determined that the reduction in the
been primarily prepared by LCH SA. registration on December 29, 2016, only Unlimited Tariff fixed fee for General
LCH SA filed the proposed rule change one (1) full business day prior to the Members with respect to self-clearing
pursuant to Section 19(b)(3)(A) of the expected effective date on January 1, activity on behalf of the Clearing
Act,3 and Rule 19b–4(f)(6) thereunder.4 which, when coupled with Member and its affiliates is reasonable
The Commission is publishing this and appropriate given the costs and
5 Changes to the fee schedule included (1) a
notice to solicit comments on the expenses to LCH SA. With CDSClear
modification of the annual fixed fee that covers all
srobinson on DSK5SPTVN1PROD with NOTICES

proposed rule change from interested self-clearing activity for a Clearing Member and its now reaching a maturity stage in its
persons. affiliates under the Unlimited Tariff, (2) addition of development and the introduction of
an annual fixed fee for all General Members that mandatory clearing of OTC derivatives
8 17 participate in the CDS Clearing Services under the
CFR 200.30–3(a)(12).
1 15
Introductory Tariff, and (3) removal of the volume-
U.S.C. 78s(b)(1). based discounts previously in effect for the client
6 See http://www.cftc.gov/filings/orgrules/
2 17 CFR 240.19b–4. rule121516lchsadco001.pdf.
clearing activities of the CDS Clearing Service. See
3 15 U.S.C. 78s(b)(3)(A). 7 15 U.S.C. 78q–1(b)(3)(D).
Securities Exchange Act Release No. 34–80114
4 17 CFR 240.19b–4(f)(6). (February 27, 2017), 82 FR 12481 (March 3, 2017). 8 15 U.S.C. 78q–1(b)(3)(D).

VerDate Sep<11>2014 20:18 Apr 10, 2017 Jkt 241001 PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 E:\FR\FM\11APN1.SGM 11APN1
Document Created: 2017-04-11 00:48:30
Document Modified: 2017-04-11 00:48:30
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 17490