82 FR 48869 - Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Schedule of Fees To Increase the Monthly Cap on the Fees Assessed for Specialized Quote Feed and SQF Purge Ports That Market Makers Utilize To Connect to the Exchange

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 202 (October 20, 2017)

Page Range		48869-48870
FR Document		2017-22756
Federal Register, Volume 82 Issue 202 (Friday, October 20, 2017)
[Federal Register Volume 82, Number 202 (Friday, October 20, 2017)]
[Notices]
[Pages 48869-48870]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-22756]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81881; File No. SR-GEMX-2017-44]


Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Its 
Schedule of Fees To Increase the Monthly Cap on the Fees Assessed for 
Specialized Quote Feed and SQF Purge Ports That Market Makers Utilize 
To Connect to the Exchange

October 16, 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 October 2, 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 its Schedule of Fees to increase the 
monthly cap on the fees assessed for Specialized Quote Feed (``SQF'') 
\3\ and SQF Purge \4\ Ports that Market Makers \5\ utilize to connect 
to the Exchange.
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    \3\ SQF is an interface that allows market makers to connect and 
send quotes, sweeps and auction responses into the Exchange. 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; (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 term ``Market Makers'' refers to ``Competitive Market 
Makers'' and ``Primary Market Makers'' collectively. See GEMX Rule 
100(a)(25).
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    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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is proposing to amend its Schedule of Fees to increase 
the monthly cap on the fees assessed for Specialized Quote Feed 
(``SQF'') \6\ and SQF Purge \7\ Ports that Market Makers \8\ utilize to 
connect to the Exchange. Currently, the Exchange charges monthly SQF 
and SQF Purge Port Fees of $1,250 per port, and caps these fees for 
Market Makers utilizing these ports at $12,500 per month (``SQF Fee 
Cap''). The Exchange now proposes to increase the SQF Fee Cap from 
$12,500 to $17,500. The monthly $1,250 per port fees for SQF and SQF 
Purge Ports will remain unchanged.
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    \6\ SQF is an interface that allows market makers to connect and 
send quotes, sweeps and auction responses into the Exchange. 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; (6) 
Quote Messages (quote/sweep messages, risk protection triggers or 
purge notifications).
    \7\ SQF Purge is a specific port for the SQF interface that only 
receives and notifies of purge requests from the market maker.
    \8\ The term ``Market Makers'' refers to ``Competitive Market 
Makers'' and ``Primary Market Makers'' collectively. See GEMX Rule 
100(a)(25).
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\9\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\10\ 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.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that increasing the SQF Fee Cap from $12,500 
to $17,500 is reasonable because it better aligns the fees collected 
from Market Makers utilizing the SQF and SQF Purge Ports with the costs 
associated with maintaining and supporting the ports, as well as the 
initial investment in such ports for the Exchange. The Exchange also 
believes that the proposed increase of the SQF Fee Cap is reasonable 
because it will allow the Exchange to recoup costs while continuing to 
cap infrastructure costs for Market Makers that subscribe to a large 
number of ports due to their larger market making footprint on the 
Exchange. Without such a cap, Market Makers may be inhibited from 
expanding their activity on the Exchange. As a general principal, the 
Exchange believes that greater participation on the Exchange by members 
improves market quality for all market participants. Thus, in arriving 
at a fee cap of $17,500, the Exchange balanced the desire to improve 
market quality against the need to cover costs and make a profit. 
Lastly, the Exchange notes that its affiliate, Nasdaq Phlx

[[Page 48870]]

(``Phlx''), offers its members a monthly fee cap of $42,000 for its 
active SQF ports.\11\
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    \11\ See Phlx Pricing Schedule, VII. Other Member Fees, B. Port 
Fees.
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    The Exchange believes that the proposed increase of the SQF Fee Cap 
is equitable and not unfairly discriminatory because the fee cap will 
apply uniformly to all Market Makers utilizing SQF and SQF Purge Ports.

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 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, or rebate opportunities available at other venues to be 
more favorable. 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 
competitors are free to modify their own fees in response, and because 
market participants may readily adjust their order routing practices, 
the Exchange believes that the degree to which fee changes in this 
market may impose any burden on competition is extremely limited.
    In this instance, the proposed increase in the SQF Fee Cap would 
not burden competition because it would apply uniformly to all Market 
Makers utilizing SQF and SQF Purge Ports. Accordingly, the Exchange 
does not believe that the proposed fee changes herein 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.\12\ 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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    \12\ 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-2017-44 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-GEMX-2017-44. 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-2017-44 and should be 
submitted on or before November 13, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-22756 Filed 10-19-17; 8:45 am]
 BILLING CODE 8011-01-P
48870 Federal Register / Vol. 82, No. 202 / Friday, October 20, 2017 / Notices

(‘‘Phlx’’), offers its members a monthly proposed rule change, the Commission information that you wish to make
fee cap of $42,000 for its active SQF summarily may temporarily suspend available publicly. All submissions
ports.11 such rule change if it appears to the should refer to File Number SR–GEMX–
The Exchange believes that the Commission that such action is: (i) 2017–44 and should be submitted on or
proposed increase of the SQF Fee Cap Necessary or appropriate in the public before November 13, 2017.
is equitable and not unfairly interest; (ii) for the protection of For the Commission, by the Division of
discriminatory because the fee cap will investors; or (iii) otherwise in Trading and Markets, pursuant to delegated
apply uniformly to all Market Makers furtherance of the purposes of the Act. authority.13
utilizing SQF and SQF Purge Ports. If the Commission takes such action, the Eduardo A. Aleman,
Commission shall institute proceedings Assistant Secretary.
B. Self-Regulatory Organization’s to determine whether the proposed rule
Statement on Burden on Competition [FR Doc. 2017–22756 Filed 10–19–17; 8:45 am]
should be approved or disapproved.
BILLING CODE 8011–01–P
The Exchange does not believe that
IV. Solicitation of Comments
the proposed rule change will impose
any burden on competition not Interested persons are invited to
SECURITIES AND EXCHANGE
necessary or appropriate in furtherance submit written data, views, and
COMMISSION
of the purposes of the Act. The arguments concerning the foregoing,
Exchange operates in a highly including whether the proposed rule [Release No. 34–81880; File No. SR–NYSE–
competitive market in which market change is consistent with the Act. 2017–51]
participants can readily favor competing Comments may be submitted by any of
the following methods: Self-Regulatory Organizations; New
venues if they deem fee levels at a
York Stock Exchange LLC; Notice of
particular venue to be excessive, or Electronic Comments Filing and Immediate Effectiveness of
rebate opportunities available at other
venues to be more favorable. In such an • Use the Commission’s Internet Proposed Rule Change To Amend
comment form (http://www.sec.gov/ Rules 80C, 104, 107B, and 128
environment, the Exchange must
continually adjust its fees to remain rules/sro.shtml); or
October 16, 2017.
• Send an email to rule-comments@
competitive with other exchanges and Pursuant to Section 19(b)(1) 1 of the
sec.gov. Please include File Number SR–
with alternative trading systems that Securities Exchange Act of 1934
GEMX–2017–44 on the subject line.
have been exempted from compliance (‘‘Act’’) 2 and Rule 19b–4 thereunder,3
with the statutory standards applicable Paper Comments notice is hereby given that on October
to exchanges. Because competitors are • Send paper comments in triplicate 3, 2017, New York Stock Exchange LLC
free to modify their own fees in to Brent J. Fields, Secretary, Securities (‘‘NYSE’’ or the ‘‘Exchange’’) filed with
response, and because market and Exchange Commission, 100 F Street the Securities and Exchange
participants may readily adjust their NE., Washington, DC 20549–1090. Commission (‘‘Commission’’) the
order routing practices, the Exchange All submissions should refer to File proposed rule change as described in
believes that the degree to which fee Number SR–GEMX–2017–44. This file Items I, II, and III below, which Items
changes in this market may impose any number should be included on the have been prepared by the self-
burden on competition is extremely subject line if email is used. To help the regulatory organization. The
limited. Commission process and review your Commission is publishing this notice to
In this instance, the proposed increase comments more efficiently, please use solicit comments on the proposed rule
in the SQF Fee Cap would not burden only one method. The Commission will change from interested persons.
competition because it would apply post all comments on the Commission’s
uniformly to all Market Makers utilizing I. Self-Regulatory Organization’s
Internet Web site (http://www.sec.gov/ Statement of the Terms of Substance of
SQF and SQF Purge Ports. Accordingly, rules/sro.shtml). Copies of the
the Exchange does not believe that the the Proposed Rule Change
submission, all subsequent
proposed fee changes herein will impair The Exchange proposes to amend
amendments, all written statements
the ability of members or competing Rules 80C, 104, 107B, and 128. The
with respect to the proposed rule
order execution venues to maintain proposed rule change is available on the
change that are filed with the
their competitive standing in the Exchange’s Web site at www.nyse.com,
Commission, and all written
financial markets. at the principal office of the Exchange,
communications relating to the
and at the Commission’s Public
C. Self-Regulatory Organization’s proposed rule change between the
Reference Room.
Statement on Comments on the Commission and any person, other than
Proposed Rule Change Received From those that may be withheld from the II. Self-Regulatory Organization’s
Members, Participants, or Others public in accordance with the Statement of the Purpose of, and
provisions of 5 U.S.C. 552, will be Statutory Basis for, the Proposed Rule
No written comments were either
available for Web site viewing and Change
solicited or received.
printing in the Commission’s Public In its filing with the Commission, the
III. Date of Effectiveness of the Reference Room, 100 F Street NE., self-regulatory organization included
Proposed Rule Change and Timing for Washington, DC 20549, on official statements concerning the purpose of,
Commission Action business days between the hours of and basis for, the proposed rule change
10:00 a.m. and 3:00 p.m. Copies of the
srobinson on DSKBC5CHB2PROD with NOTICES

The foregoing rule change has become and discussed any comments it received
effective pursuant to Section filing also will be available for on the proposed rule change. The text
19(b)(3)(A)(ii) of the Act.12 At any time inspection and copying at the principal of those statements may be examined at
within 60 days of the filing of the office of the Exchange. All comments
received will be posted without change; 13 17 CFR 200.30–3(a)(12).
11 See Phlx Pricing Schedule, VII. Other Member the Commission does not edit personal 1 15 U.S.C.78s(b)(1).
Fees, B. Port Fees. identifying information from 2 15 U.S.C. 78a.
12 15 U.S.C. 78s(b)(3)(A)(ii). submissions. You should submit only 3 17 CFR 240.19b–4.

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Document Created: 2017-10-20 00:05:57
Document Modified: 2017-10-20 00:05:57
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 48869