82 FR 25894 - Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 106 (June 5, 2017)

Page Range		25894-25895
FR Document		2017-11503
Federal Register, Volume 82 Issue 106 (Monday, June 5, 2017)
[Federal Register Volume 82, Number 106 (Monday, June 5, 2017)]
[Notices]
[Pages 25894-25895]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-11503]



[[Page 25894]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80808; File No. SR-GEMX-2017-20]


Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend the 
Schedule of Fees

May 30, 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 May 22, 2017, Nasdaq GEMX, LLC (``GEMX'' 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 the Schedule of Fees to assess fees 
for SQF and SQF Purge Ports that members will use to connect to the 
Exchange.
    The text of the proposed rule change is available on the Exchange's 
Web site at www.ise.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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes amending the Schedule of Fees to increase 
fees for Specialized Quote Feed (``SQF'') \3\ and SQF Purge \4\ Ports 
that Market Makers utilize to connect to the Exchange.\5\ Currently, 
the Exchange does not charge Market Makers, i.e., Primary Market Makers 
(``PMMs'') and Competitive Market Makers (``CMM''), a fee for SQF and 
SQF Purge Ports. The Exchange proposes to begin assessing SQF and SQF 
Purge Port Fees of $1,250 per port, per month in order to recoup the 
costs of supporting its architecture. The Exchange also proposes to cap 
these fees for Market Makers utilizing these ports at $12,500 per 
month. The Exchange believes that its pricing remains competitive.
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    \3\ SQF is an interface that allows market makers to connect and 
send quotes, sweeps and auction responses into GEMX. Data includes 
the following: (1) Options Auction Notifications (e.g., opening 
imbalance, Flash, PIM, Solicitation and Facilitation 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); (5) Execution Messages; and (6) 
Quote Messages (quote/sweep messages, risk protection triggers or 
purge notifications).
    \4\ SQF Purge is a specific port for the SQF interface that only 
receives and notifies of purge requests from the market maker.
    \5\ The Exchange filed the proposed fee increase on May 17, 2017 
(SR-GEMX-2017-19). On May 22, 2017, the Exchange withdrew that 
filing and submitted this filing.
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    A reference to ``Exchange'' is being removed from the Schedule of 
Fees as the reference is extraneous.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\6\ in general, and Section 
6(b)(4) of the Act,\7\ in particular, in that it is designed to provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and other persons using its facilities.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that it is reasonable to increase the SQF and 
SQF Purge Port fees at this time because the GEMX INET migration is 
complete and the Exchange desires to recoup costs associated with 
supporting its architecture. The Exchange initially offered these ports 
free of cost to aid in the migration of the Exchange's trading system 
to the INET technology. Today, the Bats BZX Exchange, Inc. (``BATS 
BZX'') assesses $1,500 to its market makers for Ports with Bulk Quoting 
Capabilities.\8\ Additionally, the Exchange proposes to cap the fees 
for Market Makers utilizing these ports at $12,500 per month, which 
will limit the amount of SQF and SQF Purge Ports Fees that Market 
Makers will pay per month. The Exchange believes that it is reasonable 
to cap these ports for Market Makers so that the increased costs for 
SQF and SQF Purge Ports will not exceed $12,500 a month. The Exchange 
believes that the amount of the proposed cap is reasonable because it 
will allow Market Makers to cap their costs beyond 10 ports. The 
Exchange proposes 10 ports because it desires to cap infrastructure 
costs for Market Makers who incur more significant fees because of the 
greater amount of ports that these Market Makers access because of 
their larger market making footprint on the Exchange.
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    \8\ See Bats BZX Options Exchange Fee Schedule. BZX assesses 
$1,500 for the first 5 ports, per month and $2,000 for 6 or more 
ports, per month.
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    The Exchange believes that it is equitable and not unfairly 
discriminatory to increase the SQF and SQF Purge Port fees to $1,250 
per port, per month because all Market Makers would be uniformly 
assessed the same SQF and SQF Purge Port Fees. The Exchange will also 
uniformly apply the proposed $12,500 per month cap to Market Makers 
utilizing SQF and SQF Purge Ports. No Market Maker who utilizes more 
than 10 SQF or SQF Purge Ports will be assessed a fee beyond the 10 
ports.
    Finally, removing the extraneous reference to ``Exchange'' will 
bring clarity to the rule text.

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

    In accordance with Section 6(b)(8) of the Act,\9\ the Exchange does 
not believe that the proposed rule change will impose any burden on 
intermarket or intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The proposed SQF 
and SQF Purge Port fees will be uniformly assessed to all Market 
Makers. The fees remain competitive with fees at other markets.\10\ The 
Exchange will also uniformly apply the proposed $12,500 per month cap 
to Marker Makers utilizing SQF and SQF Purge Ports.
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    \9\ 15 U.S.C. 78f(b)(8).
    \10\ See note 8 above.
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    The Exchange operates in a highly competitive market in which 
market participants can readily direct their order flow to competing 
venues. In such an environment, the Exchange must continually review, 
and consider adjusting, its fees and rebates to remain competitive with 
other exchanges. For the reasons described above, the Exchange believes 
that the proposed fee changes reflect this competitive environment.

[[Page 25895]]

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.\11\ 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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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-GEMX-2017-20 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-GEMX-2017-20. 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-GEMX-2017-20, and should be 
submitted on or before June 26, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11503 Filed 6-2-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 106 / Monday, June 5, 2017 / Notices 25895

C. Self-Regulatory Organization’s those that may be withheld from the a uniform adjusted rate that is
Statement on Comments on the public in accordance with the reasonably likely to produce aggregate
Proposed Rule Change Received From provisions of 5 U.S.C. 552, will be fee collections (including assessments
Members, Participants, or Others available for Web site viewing and on security futures transactions) equal
No written comments were either printing in the Commission’s Public to the regular appropriation to the
solicited or received. Reference Room, 100 F Street NE., Commission for the applicable fiscal
Washington, DC 20549, on official year.5
III. Date of Effectiveness of the business days between the hours of The Commission is required to
Proposed Rule Change and Timing for 10:00 a.m. and 3:00 p.m. Copies of the publish notice of the new fee rates
Commission Action filing also will be available for under Section 31 not later than 30 days
The foregoing rule change has become inspection and copying at the principal after the date on which an Act making
effective pursuant to Section office of the Exchange. All comments a regular appropriation for the
19(b)(3)(A)(ii) of the Act.11 At any time received will be posted without change; applicable fiscal year is enacted.6 On
within 60 days of the filing of the the Commission does not edit personal May 5, 2017, the President signed into
proposed rule change, the Commission identifying information from law the ‘‘Consolidated Appropriations
summarily may temporarily suspend submissions. You should submit only Act, 2017,’’ which includes a regular
such rule change if it appears to the information that you wish to make appropriation of $1,605,000,000 to the
Commission that such action is: (i) available publicly. All submissions SEC for fiscal year 2017.
Necessary or appropriate in the public should refer to File Number SR–GEMX– II. Fiscal Year 2017 Annual Adjustment
interest; (ii) for the protection of 2017–20, and should be submitted on or to the Fee Rate
investors; or (iii) otherwise in before June 26, 2017.
furtherance of the purposes of the Act. The new fee rate is determined by (1)
For the Commission, by the Division of
If the Commission takes such action, the Trading and Markets, pursuant to delegated
subtracting the sum of fees estimated to
Commission shall institute proceedings authority.12 be collected prior to the effective date of
to determine whether the proposed rule Eduardo A. Aleman,
the new fee rate 7 and estimated
should be approved or disapproved. assessments on security futures
Assistant Secretary.
transactions to be collected under
IV. Solicitation of Comments [FR Doc. 2017–11503 Filed 6–2–17; 8:45 am]
Section 31(d) of the Exchange Act for all
BILLING CODE 8011–01–P of fiscal year 2017 8 from an amount
Interested persons are invited to
submit written data, views, and equal to the regular appropriation to the
arguments concerning the foregoing, Commission for fiscal year 2017, and (2)
SECURITIES AND EXCHANGE dividing by the estimated aggregate
including whether the proposed rule COMMISSION
change is consistent with the Act. dollar amount of covered sales for the
Comments may be submitted by any of [Release No. 34–80816/May 31, 2017] remainder of the fiscal year following
the following methods: the effective date of the new fee rate.9
Order Making Fiscal Year 2017 Annual The regular appropriation to the
Electronic Comments Adjustments to Transaction Fee Rates Commission for fiscal year 2017 is
• Use the Commission’s Internet I. Background
$1,605,000,000. The Commission
comment form (http://www.sec.gov/ estimates that it will collect
rules/sro.shtml); or Section 31 of the Securities Exchange $1,189,634,934 in fees for the period
• Send an email to rule-comments@ Act of 1934 (‘‘Exchange Act’’) requires prior to the effective date of the new fee
sec.gov. Please include File Number SR– each national securities exchange and rate and $65,181 in assessments on
GEMX–2017–20 on the subject line. national securities association to pay
transaction fees to the Commission.1 5 15 U.S.C. 78ee(j)(1) (the Commission must
Paper Comments Specifically, Section 31(b) requires each adjust the rates under Sections 31(b) and (c) to a
• Send paper comments in triplicate national securities exchange to pay to ‘‘uniform adjusted rate that, when applied to the
baseline estimate of the aggregate dollar amount of
to Secretary, Securities and Exchange the Commission fees based on the sales for such fiscal year, is reasonably likely to
Commission, 100 F Street NE., aggregate dollar amount of sales of produce aggregate fee collections under [Section 31]
Washington, DC 20549–1090. certain securities (‘‘covered sales’’) (including assessments collected under [Section
31(d)]) that are equal to the regular appropriation
All submissions should refer to File transacted on the exchange.2 Section to the Commission by Congress for such fiscal
Number SR–GEMX–2017–20. This file 31(c) requires each national securities year.’’).
number should be included on the association to pay to the Commission 6 15 U.S.C. 78ee(g).

subject line if email is used. To help the fees based on the aggregate dollar 7 The sum of fees to be collected prior to the

Commission process and review your amount of covered sales transacted by or effective date of the new fee rate is determined by
applying the current fee rate to the dollar amount
comments more efficiently, please use through any member of the association of covered sales prior to the effective date of the
only one method. The Commission will other than on an exchange.3 new fee rate. The exchanges and FINRA have
post all comments on the Commission’s Section 31 of the Exchange Act provided data on the dollar amount of covered sales
requires the Commission to annually through March 2017. To calculate the dollar amount
Internet Web site (http://www.sec.gov/ of covered sales from April 2017 to the effective
rules/sro.shtml). Copies of the adjust the fee rates applicable under date of the new fee rate, the Commission is using
submission, all subsequent Sections 31(b) and (c) to a uniform the methodology described in the Appendix A of
adjusted rate.4 Specifically, the this order.
asabaliauskas on DSKBBXCHB2PROD with NOTICES

amendments, all written statements
with respect to the proposed rule Commission must adjust the fee rates to 8 The Commission is using the same methodology

it has used previously to estimate assessments on
change that are filed with the security futures transactions to be collected in fiscal
12 17 CFR 200.30–3(a)(12).
Commission, and all written year 2017. An explanation of the methodology
1 15 U.S.C. 78ee.
communications relating to the appears in Appendix A.
2 15 U.S.C. 78ee(b). 9 To estimate the aggregate dollar amount of
proposed rule change between the 3 15 U.S.C. 78ee(c).
covered sales for the remainder of fiscal year 2017
Commission and any person, other than 4 In some circumstances, the SEC also must make following the effective date of the new fee rate, the
a mid-year adjustment to the fee rates applicable Commission is using the methodology described in
11 15 U.S.C. 78s(b)(3)(A)(ii). under Sections 31(b) and (c). Appendix A of this order.

VerDate Sep<11>2014 17:31 Jun 02, 2017 Jkt 241001 PO 00000 Frm 00141 Fmt 4703 Sfmt 4703 E:\FR\FM\05JNN1.SGM 05JNN1
Document Created: 2018-11-14 10:00:23
Document Modified: 2018-11-14 10:00:23
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 25894