82 FR 49447 - Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Schedule of Fees
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 205 (October 25, 2017)
Federal Register Volume 82, Issue 205 (October 25, 2017)
| Page Range | 49447-49450 | |
| FR Document | 2017-23120 |
[Federal Register Volume 82, Number 205 (Wednesday, October 25, 2017)] [Notices] [Pages 49447-49450] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-23120] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81907; File No. SR-MRX-2017-21] Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Exchange's Schedule of Fees October 19, 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 5, 2017, Nasdaq MRX, LLC (``MRX'' 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- 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 add new fees for co-location services, direct circuit connections to the Exchange, connections to third party services, point of presence (``POP'') connectivity, and connectivity to the Exchange's Test Facility (the ``Test Facility''). 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 proposes to amend its Fee Schedule to eliminate certain fees associated with legacy options for connecting to ISE and to replace them with fees associated with new options for connecting to the Exchange that are similar to those that MRX's sister exchanges presently offer. The Exchange is engaged in an initiative to migrate the Exchange's trading system to the Nasdaq INET architecture. As part of that initiative, the Exchange proposes to offer customers various new options to connect to the Exchange and to assess fees for such connectivity. The connectivity options that the Exchange proposes to offer--colocation, direct circuit connectivity, connectivity to third party services, POP connectivity, and connectivity to the Exchange's Test Facility--and the fees that the Exchange proposes to assess for such connectivity are similar to those that the Exchange's affiliated Nasdaq, Inc. markets--including The NASDAQ Stock Market, LLC (``Nasdaq''), Nasdaq BX, Inc. (``BX''), and Nasdaq Phlx LLC (``Phlx'')--presently offer and assess to their customers under their respective rules. They are also the same as the connectivity options and fees that Nasdaq GEMX, LLC (``GEMX'') and Nasdaq ISE, LLC (``ISE'') propose to offer and assess under their respective rules in tandem with this filing. This proposal, in other words, seeks to harmonize the Exchange's connectivity offerings and fees with those of its sister exchanges. The first new connectivity option that the Exchange proposes to offer its customers is co-location. Co-location is a suite of hardware, power, telecommunication, and other ancillary products and services that allow market participants and vendors to place their trading and communications equipment in close physical proximity to the quoting and execution facilities of the Exchange and other Nasdaq, Inc. markets. The Exchange provides co-location services and imposes fees through Nasdaq Technology Services LLC and pursuant to agreements with the owner/operator of its data center where both the Exchange's quoting and trading facilities and co-located customer equipment are housed. Users of colocation services include private extranet providers, data vendors, as well as Exchange members and non- [[Page 49448]] members. The use of co-location services is entirely voluntary. Like its sister exchanges, and as detailed in the proposed co- location fee schedule, the Exchange proposes to impose a uniform, non- discriminatory set of fees for various co-location services, including: Fees for co-located connections to the Exchange and to third party services (described below) in various bandwidths; fees for cabinet space usage, or options for future space usage; installation and related power provision for hosted equipment; connectivity among multiple cabinets being used by the same customer as well as customer connectivity to the Exchange and telecommunications providers; and related maintenance and consulting services. Fees related to cabinet and power usage are incremental, with additional charges being imposed based on higher levels of cabinet and/or power usage, the use of non- standard cabinet sizes or special cabinet cooling equipment, or the re- selling of cabinet space. In addition to co-location services, the Exchange proposes to offer several other connectivity options for customers that are located outside of the Exchange's primary data center in Carteret, New Jersey. First, the Exchange proposes to offer a ``Direct Circuit Connectivity'' service, whereby subscribers may connect their facilities directly to the Exchange's primary data center using a circuit they obtain from an external telecommunications provider. For this form of connectivity, the Exchange's proposal offers customers the choice of 1 GB, 1 GB Ultra, and 10 GB connections. The installation fee for all such connections will be $1,500 and the monthly fee will be $7,500 for 10 GB connections and $2,500 for both 1 GB and 1 GB connections. The Exchange also proposes to charge a fee to customers that choose to install a cable router in its data center and a monthly fee for customers that choose to install equipment in the Exchange's data center to support the connectivity. Specifically, the Exchange proposes an installation fee of $925 per router, switch or modem, and a monthly fee of $150 to rent cabinet space based on a unit height of approximately 1.75 inches (commonly called a ``U'' space) and a maximum power of 125 Watts per U space. Next, the Exchange proposes to offer a ``POP Connectivity'' service, whereby subscribers may use external telecommunication circuits to connect directly to one or more of the Exchange's satellite data centers (each, a ``POP'') that are located in places other than Carteret. Each POP, in turn, has a fully redundant connection to the Exchange's primary data center, such that subscribers may connect to the primary data center through its connection to a POP. For POP Connectivity to the Exchange, the Exchange proposes to offer 1 GB Ultra and 10 GB Ultra connections. The installation fee for all such connections will be $1,500 and the monthly fee will be $7,500 for 10 GB connections and $2,500 for 1 GB Ultra connections.\3\ --------------------------------------------------------------------------- \3\ Clients will not be permitted to install routers in or rent cabinet space directly from the Exchange at the POPs. Accordingly, the fee schedule for POP connectivity will not include fees for these services. --------------------------------------------------------------------------- Additionally, the Exchange proposes to offer connectivity to third party services. The Exchange is proposing to offer this service to both non-co-location customers (via a direct circuit connection) and co- location customers alike. This connectivity will enable customers to receive third party market data feeds, including Securities Information Processors (``SIPs'') \4\ data, and other non-exchange services.\5\ The Exchange will offer this service to customers in both 10 GB Ultra and 1 GB Ultra connections. The installation fee for both 10 GB Ultra and 1 GB Ultra direct connections will be $1,500. Meanwhile, the monthly fee will be $5,000 for 10 GB Ultra connections and $2,000 for 1 GB Ultra connections. For 1 GB Ultra or 10 GB Ultra connections for UTP only, the installation fee and monthly fee will be waived for the first two connections and thereafter the installation fee will be $100 and the monthly fee also will be $100. As with Direct Circuit Connectivity, the Exchange proposes to charge a $925 fee to customers that choose to install a cable router in its data center for purposes of receiving the third party services as well as a monthly fee of $150 for customers that choose to install equipment in the Exchange's data center to support that connectivity. --------------------------------------------------------------------------- \4\ The SIPs link the U.S. markets by processing and consolidating all protected bid/ask quotes and trades from every registered exchange trading venue and FINRA into a single data feed, and they disseminate and calculate critical regulatory information, including the National Best Bid and Offer, Limit Up Limit Down price bands, short sale restrictions and regulatory halts. \5\ Third Party Services includes not only SIP data feeds, but also data feeds from other exchanges and markets. For example, Third Party Connectivity will support connectivity to the FINRA/Nasdaq Trade Reporting Facility, BATS Depth Feeds, and NYSE Feeds. A customer must separately subscribe to the third party services to which it connects with a Third Party Connectivity subscription. The Exchange notes that customers that do not wish to subscribe to Direct Circuit Connectivity to Third Party Services may alternatively connect through an extranet provider or a market data redistributor. --------------------------------------------------------------------------- Furthermore, the Exchange proposes to offer connectivity to its Test Facility. The Test Facility provides subscribers with a virtual system test environment that closely approximates the production environment and on which they may test their automated systems that integrate with the Exchange. For example, subscribers may test upcoming Exchange releases and product enhancements, as well as test software prior to implementation. The Exchange proposes to assess certain fees for use of the Test Facility. Specifically, the Exchange proposes that subscribers to the Test Facility located in Carteret, New Jersey shall pay a fee of $1,000 per hand-off, per month for connection to the Test Facility. The hand-off fee will includes [sic] either a 1 GB or 10 GB switch port and a cross connect to the Test Facility. Subscribers will also pay a one-time installation fee of $1,000 per handoff. Finally, for each of the connectivity options discussed above, the Exchange proposes to include language in the fee schedule which states that connectivity to the Exchange also applies to connectivity to all of the other Nasdaq, Inc. markets, including Nasdaq, BX, Phlx, ISE, and GEMX. This purpose of this proposal is to specify that a client can use the connections it establishes and maintains to connect, not only to the Exchange, but also to any or all of its sister exchanges, and in doing so, it will be billed only once. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\6\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\7\ 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. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78f(b). \7\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- The Exchange believes that proposed new connectivity fees are reasonable as a means of covering its costs associated with providing new connectivity options. Moreover, these new fees are reasonable because they are similar to or the same as the connectivity fees that the Exchange's sister exchanges, including Nasdaq, BX, and Phlx, charge under their respective rules.\8\ They are [[Page 49449]] also the same as those connectivity fees that GEMX and ISE are proposing to assess in filings being submitted to the Commission concurrently with this one. The Exchange also believes that it is reasonable and in the interest of the public and investors to harmonize all of the Exchange's connectivity options and connectivity fees now that all of the Nasdaq, Inc. exchanges are on a common platform. --------------------------------------------------------------------------- \8\ See Nasdaq Rule 7030, BX Rule 7030, and Nasdaq Phlx LLC Pricing Schedule Section VII.E (Test Facility); Nasdaq Rule 7034(b), BX Rule 7034(b), and Nasdaq Phlx LLC Pricing Schedule Section X (co- location); Nasdaq Rule 7051, BX Rule 7051, and Nasdaq Phlx LLC Pricing Schedule Section XI (direct connectivity). --------------------------------------------------------------------------- The Exchange believes that the proposed new fees are an equitable allocation and are not unfairly discriminatory because the Exchange will apply the same fees to all subscribers to the same connectivity options. 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, 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 connect to third parties instead of directly connecting to the Exchange, 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 changes to the charges assessed for connectivity to the Exchange are consistent with the fees assessed by other exchanges for the same or similar connectivity. Moreover, the Exchange must assess fees to cover the costs incurred in providing connectivity and members had been assessed fees for Exchange connectivity prior to the sunset of the old Exchange architecture. As a consequence, competition will not be burdened by the proposed fees. In sum, if the changes proposed herein are unattractive to market participants, it is likely that the Exchange will lose market share 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 Because the foregoing 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, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act \9\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\10\ --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(A)(iii). \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally does not become operative prior to 30 days after the date of the filing. However, Rule 19b-4(f)(6)(iii) \12\ permits the Commission to 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 proposal may become operative immediately upon filing. The Exchange states that the proposed rule change does not significantly affect the protection of investors or the public interest because it will eliminate obsolete connectivity services and replace them with services that customers will need to connect to the Exchange via its new trading platform. The Exchange further states that such connectivity services will be similar, or the same, as those that are currently offered by other Nasdaq, Inc. exchanges. Moreover, the Exchange states that the fees for such connectivity that are similar to, or the same, as fees charged by the other Nasdaq, Inc. exchanges. --------------------------------------------------------------------------- \11\ 17 CFR 240.19b-4(f)(6). \12\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. The Commission notes that the proposal harmonizes the Exchange's co- location offerings and fees with those of the other Nasdaq, Inc. exchanges. Furthermore, waiver of the 30-day operative delay will eliminate the confusion that could occur if different co-location offerings were available on each of Nasdaq, Inc.'s affiliated exchanges. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposed rule change as operative upon filing.\13\ --------------------------------------------------------------------------- \13\ For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- 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 CommentsUse 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-MRX-2017-21 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-MRX-2017-21. 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 [[Page 49450]] 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-MRX-2017-21 and should be submitted on or before November 15, 2017. --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-23120 Filed 10-24-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Notices 49447
personal identifying information from SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
comment submissions. You should COMMISSION Statement of the Purpose of, and
submit only information that you wish Statutory Basis for, the Proposed Rule
to make available publicly. All [Release No. 34–81907; File No. SR–MRX– Change
submissions should refer to File 2017–21] 1. Purpose
Number SR–CHX–2017–04 and should
be submitted on or before November 15, Self-Regulatory Organizations; Nasdaq The Exchange proposes to amend its
2017. MRX, LLC; Notice of Filing and Fee Schedule to eliminate certain fees
Immediate Effectiveness of Proposed associated with legacy options for
V. Accelerated Approval of Proposed
Rule Change To Amend the connecting to ISE and to replace them
Rule Change, as Modified by
Exchange’s Schedule of Fees with fees associated with new options
Amendments No. 1 and No. 2
for connecting to the Exchange that are
The Commission finds good cause to October 19, 2017. similar to those that MRX’s sister
approve the proposed rule change, as exchanges presently offer.
Pursuant to Section 19(b)(1) of the
modified by Amendments No. 1 and No. Securities Exchange Act of 1934 The Exchange is engaged in an
2, prior to the 30th day after the date of initiative to migrate the Exchange’s
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
publication of notice of Amendments trading system to the Nasdaq INET
notice is hereby given that on October
No. 1 and No. 2 in the Federal Register. architecture. As part of that initiative,
5, 2017, Nasdaq MRX, LLC (‘‘MRX’’ or
Neither Amendment No. 1 nor the Exchange proposes to offer
‘‘Exchange’’) filed with the Securities customers various new options to
Amendment No. 2 expands the structure
and Exchange Commission (‘‘SEC’’ or connect to the Exchange and to assess
of the proposed rule change as it was
‘‘Commission’’) the proposed rule fees for such connectivity. The
previously published for notice and
comment.177 Rather, the Exchange change as described in Items I and II connectivity options that the Exchange
circumscribed its proposal to implement below, which Items have been prepared proposes to offer—colocation, direct
the LEAD during the regular trading by the Exchange. The Commission is circuit connectivity, connectivity to
session on a pilot basis to provide an publishing this notice to solicit third party services, POP connectivity,
opportunity to study the impact of the comments on the proposed rule change and connectivity to the Exchange’s Test
LEAD Rules on the markets and to from interested persons. Facility—and the fees that the Exchange
address comments by further explaining proposes to assess for such connectivity
I. Self-Regulatory Organization’s
the purpose and the intended impact of are similar to those that the Exchange’s
Statement of the Terms of Substance of
the proposal. Accordingly, the affiliated Nasdaq, Inc. markets—
the Proposed Rule Change including The NASDAQ Stock Market,
Commission finds good cause, pursuant
to Section 19(b)(2) of the Exchange The Exchange proposes to amend its LLC (‘‘Nasdaq’’), Nasdaq BX, Inc.
Act,178 to approve the proposed rule Schedule of Fees to add new fees for co- (‘‘BX’’), and Nasdaq Phlx LLC
change, as modified by Amendments location services, direct circuit (‘‘Phlx’’)—presently offer and assess to
No. 1 and No. 2, on an accelerated basis. connections to the Exchange, their customers under their respective
rules. They are also the same as the
VI. Conclusion connections to third party services,
connectivity options and fees that
point of presence (‘‘POP’’) connectivity,
For the foregoing reasons, the Nasdaq GEMX, LLC (‘‘GEMX’’) and
and connectivity to the Exchange’s Test
Commission finds that the proposed Nasdaq ISE, LLC (‘‘ISE’’) propose to
Facility (the ‘‘Test Facility’’). offer and assess under their respective
rule change, as modified by
The text of the proposed rule change rules in tandem with this filing. This
Amendments No. 1 and No. 2, is
consistent with the Exchange Act and is available on the Exchange’s Web site proposal, in other words, seeks to
the rules and regulations thereunder at www.ise.com, at the principal office harmonize the Exchange’s connectivity
applicable to a national securities of the Exchange, and at the offerings and fees with those of its sister
exchange. Commission’s Public Reference Room. exchanges.
The first new connectivity option that
It is therefore ordered, pursuant to II. Self-Regulatory Organization’s
the Exchange proposes to offer its
Section 19(b)(2) of the Exchange Act 179 Statement of the Purpose of, and customers is co-location. Co-location is
that the proposed rule change (SR– Statutory Basis for, the Proposed Rule a suite of hardware, power,
CHX–2017–04), as modified by Change telecommunication, and other ancillary
Amendments No. 1 and No. 2, be, and products and services that allow market
hereby is, approved on an accelerated In its filing with the Commission, the
Exchange included statements participants and vendors to place their
basis, subject to a pilot period set to trading and communications equipment
expire twenty- four months after concerning the purpose of and basis for
in close physical proximity to the
implementation of the pilot program. the proposed rule change and discussed
quoting and execution facilities of the
For the Commission, by the Division of any comments it received on the
Exchange and other Nasdaq, Inc.
Trading and Markets, pursuant to delegated proposed rule change. The text of these markets. The Exchange provides co-
authority.180 statements may be examined at the location services and imposes fees
Eduardo A. Aleman, places specified in Item IV below. The through Nasdaq Technology Services
Exchange has prepared summaries, set LLC and pursuant to agreements with
sradovich on DSK3GMQ082PROD with NOTICES
Assistant Secretary.
[FR Doc. 2017–23122 Filed 10–24–17; 8:45 am] forth in sections A, B, and C below, of the owner/operator of its data center
BILLING CODE 8011–01–P
the most significant aspects of such where both the Exchange’s quoting and
statements. trading facilities and co-located
177 See supra notes 12 and 13. customer equipment are housed. Users
178 15 U.S.C. 78s(b)(2). of colocation services include private
179 15 U.S.C. 78s(b)(2). 1 15 U.S.C. 78s(b)(1). extranet providers, data vendors, as well
180 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. as Exchange members and non-
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![49448 Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Notices
members. The use of co-location than Carteret. Each POP, in turn, has a Furthermore, the Exchange proposes
services is entirely voluntary. fully redundant connection to the to offer connectivity to its Test Facility.
Like its sister exchanges, and as Exchange’s primary data center, such The Test Facility provides subscribers
detailed in the proposed co-location fee that subscribers may connect to the with a virtual system test environment
schedule, the Exchange proposes to primary data center through its that closely approximates the
impose a uniform, non-discriminatory connection to a POP. For POP production environment and on which
set of fees for various co-location Connectivity to the Exchange, the they may test their automated systems
services, including: Fees for co-located Exchange proposes to offer 1 GB Ultra that integrate with the Exchange. For
connections to the Exchange and to and 10 GB Ultra connections. The example, subscribers may test upcoming
third party services (described below) in installation fee for all such connections Exchange releases and product
various bandwidths; fees for cabinet will be $1,500 and the monthly fee will enhancements, as well as test software
space usage, or options for future space be $7,500 for 10 GB connections and prior to implementation. The Exchange
usage; installation and related power $2,500 for 1 GB Ultra connections.3 proposes to assess certain fees for use of
provision for hosted equipment; the Test Facility. Specifically, the
connectivity among multiple cabinets Additionally, the Exchange proposes
Exchange proposes that subscribers to
being used by the same customer as well to offer connectivity to third party
the Test Facility located in Carteret,
as customer connectivity to the services. The Exchange is proposing to
New Jersey shall pay a fee of $1,000 per
Exchange and telecommunications offer this service to both non-co-location
hand-off, per month for connection to
providers; and related maintenance and customers (via a direct circuit
the Test Facility. The hand-off fee will
consulting services. Fees related to connection) and co-location customers
includes [sic] either a 1 GB or 10 GB
cabinet and power usage are alike. This connectivity will enable
switch port and a cross connect to the
incremental, with additional charges customers to receive third party market
Test Facility. Subscribers will also pay
being imposed based on higher levels of data feeds, including Securities
a one-time installation fee of $1,000 per
cabinet and/or power usage, the use of Information Processors (‘‘SIPs’’) 4 data,
handoff.
non-standard cabinet sizes or special and other non-exchange services.5 The
Exchange will offer this service to Finally, for each of the connectivity
cabinet cooling equipment, or the re-
customers in both 10 GB Ultra and 1 GB options discussed above, the Exchange
selling of cabinet space.
Ultra connections. The installation fee proposes to include language in the fee
In addition to co-location services, the
Exchange proposes to offer several other for both 10 GB Ultra and 1 GB Ultra schedule which states that connectivity
connectivity options for customers that direct connections will be $1,500. to the Exchange also applies to
are located outside of the Exchange’s Meanwhile, the monthly fee will be connectivity to all of the other Nasdaq,
primary data center in Carteret, New $5,000 for 10 GB Ultra connections and Inc. markets, including Nasdaq, BX,
Jersey. $2,000 for 1 GB Ultra connections. For Phlx, ISE, and GEMX. This purpose of
First, the Exchange proposes to offer 1 GB Ultra or 10 GB Ultra connections this proposal is to specify that a client
a ‘‘Direct Circuit Connectivity’’ service, for UTP only, the installation fee and can use the connections it establishes
whereby subscribers may connect their monthly fee will be waived for the first and maintains to connect, not only to
facilities directly to the Exchange’s two connections and thereafter the the Exchange, but also to any or all of
primary data center using a circuit they installation fee will be $100 and the its sister exchanges, and in doing so, it
obtain from an external monthly fee also will be $100. As with will be billed only once.
telecommunications provider. For this Direct Circuit Connectivity, the 2. Statutory Basis
form of connectivity, the Exchange’s Exchange proposes to charge a $925 fee
proposal offers customers the choice of to customers that choose to install a The Exchange believes that its
1 GB, 1 GB Ultra, and 10 GB cable router in its data center for proposal is consistent with Section 6(b)
connections. The installation fee for all purposes of receiving the third party of the Act,6 in general, and furthers the
such connections will be $1,500 and the services as well as a monthly fee of $150 objectives of Section 6(b)(5) of the Act,7
monthly fee will be $7,500 for 10 GB for customers that choose to install in particular, in that it is designed to
connections and $2,500 for both 1 GB equipment in the Exchange’s data center promote just and equitable principles of
and 1 GB connections. The Exchange to support that connectivity. trade, to remove impediments to and
also proposes to charge a fee to perfect the mechanism of a free and
customers that choose to install a cable 3 Clients will not be permitted to install routers
open market and a national market
router in its data center and a monthly in or rent cabinet space directly from the Exchange system, and, in general to protect
fee for customers that choose to install at the POPs. Accordingly, the fee schedule for POP investors and the public interest.
equipment in the Exchange’s data center connectivity will not include fees for these services. The Exchange believes that proposed
4 The SIPs link the U.S. markets by processing
to support the connectivity. and consolidating all protected bid/ask quotes and
new connectivity fees are reasonable as
Specifically, the Exchange proposes an trades from every registered exchange trading venue a means of covering its costs associated
installation fee of $925 per router, and FINRA into a single data feed, and they with providing new connectivity
switch or modem, and a monthly fee of disseminate and calculate critical regulatory options. Moreover, these new fees are
information, including the National Best Bid and
$150 to rent cabinet space based on a Offer, Limit Up Limit Down price bands, short sale
reasonable because they are similar to or
unit height of approximately 1.75 inches restrictions and regulatory halts. the same as the connectivity fees that
(commonly called a ‘‘U’’ space) and a 5 Third Party Services includes not only SIP data the Exchange’s sister exchanges,
maximum power of 125 Watts per U feeds, but also data feeds from other exchanges and including Nasdaq, BX, and Phlx, charge
markets. For example, Third Party Connectivity will
sradovich on DSK3GMQ082PROD with NOTICES
space. under their respective rules.8 They are
support connectivity to the FINRA/Nasdaq Trade
Next, the Exchange proposes to offer Reporting Facility, BATS Depth Feeds, and NYSE
a ‘‘POP Connectivity’’ service, whereby Feeds. A customer must separately subscribe to the
6 15 U.S.C. 78f(b).
subscribers may use external third party services to which it connects with a 7 15 U.S.C. 78f(b)(5).
telecommunication circuits to connect Third Party Connectivity subscription. The 8 See Nasdaq Rule 7030, BX Rule 7030, and
Exchange notes that customers that do not wish to Nasdaq Phlx LLC Pricing Schedule Section VII.E
directly to one or more of the subscribe to Direct Circuit Connectivity to Third (Test Facility); Nasdaq Rule 7034(b), BX Rule
Exchange’s satellite data centers (each, a Party Services may alternatively connect through an 7034(b), and Nasdaq Phlx LLC Pricing Schedule
‘‘POP’’) that are located in places other extranet provider or a market data redistributor. Section X (co-location); Nasdaq Rule 7051, BX Rule
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![49450 Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Notices
with respect to the proposed rule I. Self-Regulatory Organization’s month, a 10 Gb low latency connection
change that are filed with the Statement of the Terms of Substance of at a cost of $8,000 per month, and a 40
Commission, and all written the Proposed Rule Change Gb low latency connection at a cost of
communications relating to the The Exchange proposes to: (i) Delete $15,000 per month.
proposed rule change between the fees and descriptions thereof for Additionally, the Exchange proposes
Commission and any person, other than connectivity no longer used by the to stop offering customers the ability to
those that may be withheld from the connect to the Exchange via an
Exchange; and (ii) add new fees for co-
public in accordance with the Application Programming Interface
location services, direct circuit
provisions of 5 U.S.C. 552, will be (‘‘API’’) session or a Financial
connections to the Exchange, direct
available for Web site viewing and Information eXchange (‘‘FIX’’) session,
circuit connections to third party
printing in the Commission’s Public as these connection options are
services, point of presence (‘‘POP’’)
Reference Room, 100 F Street NE., becoming obsolete with respect to the
connectivity, and connectivity to the
Washington, DC 20549, on official new trading system. The Exchange
Exchange’s Test Facility (the ‘‘Test
business days between the hours of correspondingly proposes to eliminate
Facility’’).
10:00 a.m. and 3:00 p.m. Copies of the entirely Section V.C of its Fee Schedule,
The text of the proposed rule change
filing also will be available for entitled ‘‘FIX Session/Session Fees.’’
is available on the Exchange’s Web site
inspection and copying at the principal The Exchange presently charges Market
at www.ise.com, at the principal office
office of the Exchange. All comments Makers monthly per API fees that
of the Exchange, and at the
received will be posted without change. depend upon the functionality of API
Commission’s Public Reference Room.
Persons submitting comments are and, if used for quoting, the amount of
cautioned that we do not redact or edit II. Self-Regulatory Organization’s usage per day per user. The Exchange
personal identifying information from Statement of the Purpose of, and also charges Electronic Access Members
comment submissions. You should Statutory Basis for, the Proposed Rule monthly API and FIX fees based upon
submit only information that you wish Change the number of sessions.
to make available publicly. All In its filing with the Commission, the In lieu of the above, the Exchange
submissions should refer to File Exchange included statements proposes to offer customers various new
Number SR–MRX–2017–21 and should options to connect to the Exchange and
concerning the purpose of and basis for
be submitted on or before November 15, to assess fees for such connectivity. The
the proposed rule change and discussed
2017. connectivity options that the Exchange
any comments it received on the
proposes to offer—colocation, direct
For the Commission, by the Division of proposed rule change. The text of these
circuit connectivity, connectivity to
Trading and Markets, pursuant to delegated statements may be examined at the
third party services, POP connectivity,
authority.14 places specified in Item IV below. The
and connectivity to the Exchange’s Test
Eduardo A. Aleman, Exchange has prepared summaries, set
Facility—and the fees that the Exchange
Assistant Secretary. forth in sections A, B, and C below, of
proposes to assess for such connectivity
the most significant aspects of such
[FR Doc. 2017–23120 Filed 10–24–17; 8:45 am] are similar to those that ISE’s affiliated
statements. Nasdaq, Inc. markets—including The
BILLING CODE 8011–01–P
A. Self-Regulatory Organization’s NASDAQ Stock Market, LLC
Statement of the Purpose of, and (‘‘Nasdaq’’), Nasdaq BX, Inc. (‘‘BX’’),
SECURITIES AND EXCHANGE Statutory Basis for, the Proposed Rule and Nasdaq Phlx LLC (‘‘Phlx’’)—
COMMISSION Change presently offer and assess to their
customers under their respective rules.
[Release No. 34–81903; File No. SR–ISE– 1. Purpose
2017–91] They are also the same as the
The Exchange proposes to amend its connectivity options and fees that
Self-Regulatory Organizations; Nasdaq Fee Schedule to eliminate certain fees Nasdaq GEMX, LLC (‘‘GEMX’’) and
ISE, LLC; Notice of Filing and associated with legacy options for Nasdaq MRX, LLC (‘‘MRX’’) propose to
Immediate Effectiveness of Proposed connecting to ISE and to replace them offer and assess under their respective
Rule Change To Amend the with fees associated with new options rules in tandem with this filing. This
Exchange’s Schedule of Fees for connecting to the Exchange that are proposal, in other words, seeks to
similar to those that ISE’s sister harmonize the Exchange’s connectivity
October 19, 2017. exchanges presently offer. offerings and fees with those of its sister
Pursuant to Section 19(b)(1) of the ISE is engaged in an initiative to exchanges.
Securities Exchange Act of 1934 migrate the Exchange’s trading system The first new connectivity option that
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 to the Nasdaq INET architecture. As part the Exchange proposes to offer its
notice is hereby given that on October of that initiative, ISE proposes to retire customers is co-location. Co-location is
5, 2017, Nasdaq ISE, LLC (‘‘ISE’’ or certain obsolete connectivity associated a suite of hardware, power,
‘‘Exchange’’) filed with the Securities with the Exchange’s legacy trading telecommunication, and other ancillary
and Exchange Commission (‘‘SEC’’ or system and the fees associated with products and services that allow market
‘‘Commission’’) the proposed rule such connectivity. participants and vendors to place their
change as described in Items I and II Specifically, the Exchange proposes to trading and communications equipment
below, which Items have been prepared discontinue offering Ethernet in close physical proximity to the
connectivity to the Exchange and also quoting and execution facilities of the
sradovich on DSK3GMQ082PROD with NOTICES
by the Exchange. The Commission is
publishing this notice to solicit eliminate the fees it charges for such Exchange and other Nasdaq, Inc.
comments on the proposed rule change connectivity in Section VI.B of its Fee markets. The Exchange provides co-
from interested persons. Schedule, entitled ‘‘Network Fees.’’ The location services and imposes fees
Exchange currently offers four Ethernet through Nasdaq Technology Services
14 17 CFR 200.30–3(a)(12). connection options: A 1 Gb connection LLC and pursuant to agreements with
1 15 U.S.C. 78s(b)(1). at a cost of $1,000 per month, a 10 Gb the owner/operator of its data center
2 17 CFR 240.19b–4. connection at a cost of $4,500 per where both the Exchange’s quoting and
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Document Created: 2017-10-25 01:16:46
Document Modified: 2017-10-25 01:16:46
| 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 49447 |
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