82 FR 49450 - Self-Regulatory Organizations; Nasdaq ISE, 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 | 49450-49453 | |
| FR Document | 2017-23118 |
[Federal Register Volume 82, Number 205 (Wednesday, October 25, 2017)] [Notices] [Pages 49450-49453] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-23118] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-81903; File No. SR-ISE-2017-91] Self-Regulatory Organizations; Nasdaq ISE, 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 ISE, LLC (``ISE'' 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: (i) Delete fees and descriptions thereof for connectivity no longer used by the Exchange; and (ii) add new fees for co-location services, direct circuit connections to the Exchange, direct circuit 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 ISE's sister exchanges presently offer. ISE is engaged in an initiative to migrate the Exchange's trading system to the Nasdaq INET architecture. As part of that initiative, ISE proposes to retire certain obsolete connectivity associated with the Exchange's legacy trading system and the fees associated with such connectivity. Specifically, the Exchange proposes to discontinue offering Ethernet connectivity to the Exchange and also eliminate the fees it charges for such connectivity in Section VI.B of its Fee Schedule, entitled ``Network Fees.'' The Exchange currently offers four Ethernet connection options: A 1 Gb connection at a cost of $1,000 per month, a 10 Gb connection at a cost of $4,500 per month, a 10 Gb low latency connection at a cost of $8,000 per month, and a 40 Gb low latency connection at a cost of $15,000 per month. Additionally, the Exchange proposes to stop offering customers the ability to connect to the Exchange via an Application Programming Interface (``API'') session or a Financial Information eXchange (``FIX'') session, as these connection options are becoming obsolete with respect to the new trading system. The Exchange correspondingly proposes to eliminate entirely Section V.C of its Fee Schedule, entitled ``FIX Session/Session Fees.'' The Exchange presently charges Market Makers monthly per API fees that depend upon the functionality of API and, if used for quoting, the amount of usage per day per user. The Exchange also charges Electronic Access Members monthly API and FIX fees based upon the number of sessions. In lieu of the above, 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 ISE'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 MRX, LLC (``MRX'') 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 [[Page 49451]] 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-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 Ultra 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 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 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, MRX, 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 it is reasonable to eliminate its existing Ethernet, FIX, and API connectivity offerings and their associated fees as the Exchange is migrating to a new platform that will offer new connectivity options. The Exchange notes that its customers have had ample prior notice of this transition. The Exchange believes that proposed new connectivity fees are reasonable as a means of covering its costs associated [[Page 49452]] 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 also the same as those connectivity fees that GEMX and MRX 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-ISE-2017-91 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. [[Page 49453]] All submissions should refer to File Number SR-ISE-2017-91. 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. 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-ISE-2017-91 and should be submitted on or before November 15, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-23118 Filed 10-24-17; 8:45 am] BILLING CODE 8011-01-P
![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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![Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Notices 49451
trading facilities and co-located subscribers may use external fee of $150 for customers that choose to
customer equipment are housed. Users telecommunication circuits to connect install equipment in the Exchange’s data
of colocation services include private directly to one or more of the center to support that connectivity.
extranet providers, data vendors, as well Exchange’s satellite data centers (each, a Furthermore, the Exchange proposes
as Exchange members and non- ‘‘POP’’) that are located in places other to offer connectivity to its Test Facility.
members. The use of co-location than Carteret. Each POP, in turn, has a The Test Facility provides subscribers
services is entirely voluntary. fully redundant connection to the with a virtual system test environment
Like its sister exchanges, and as Exchange’s primary data center, such that closely approximates the
detailed in the proposed co-location fee that subscribers may connect to the production environment and on which
schedule, the Exchange proposes to primary data center through its they may test their automated systems
impose a uniform, non-discriminatory connection to a POP. For POP that integrate with the Exchange. For
set of fees for various co-location Connectivity to the Exchange, the example, subscribers may test upcoming
services, including: Fees for co-located Exchange proposes to offer 1 GB Ultra Exchange releases and product
connections to the Exchange and to and 10 GB connections. The installation enhancements, as well as test software
third party services (described below) in fee for all such connections will be prior to implementation. The Exchange
various bandwidths; Fees for cabinet $1,500 and the monthly fee will be proposes to assess certain fees for use of
space usage, or options for future space $7,500 for 10 GB connections and the Test Facility. Specifically, the
usage; installation and related power $2,500 for 1 GB Ultra connections.3 Exchange proposes that subscribers to
provision for hosted equipment; Additionally, the Exchange proposes the Test Facility located in Carteret,
connectivity among multiple cabinets to offer connectivity to third party New Jersey shall pay a fee of $1,000 per
being used by the same customer as well services. The Exchange is proposing to hand-off, per month for connection to
as customer connectivity to the offer this service to both non-co-location the Test Facility. The hand-off fee will
Exchange and telecommunications customers (via a direct circuit includes [sic] either a 1 GB or 10 GB
providers; and related maintenance and connection) and co-location customers switch port and a cross connect to the
consulting services. Fees related to alike. This connectivity will enable Test Facility. Subscribers will also pay
cabinet and power usage are customers to receive third party market a one-time installation fee of $1,000 per
incremental, with additional charges data feeds, including Securities handoff.
being imposed based on higher levels of Information Processors (‘‘SIPs’’) 4 data, Finally, for each of the connectivity
cabinet and/or power usage, the use of and other non-exchange services.5 The options discussed above, the Exchange
non-standard cabinet sizes or special Exchange will offer this service to proposes to include language in the fee
cabinet cooling equipment, or the re- customers in both 10 GB Ultra and 1 GB schedule which states that connectivity
selling of cabinet space. Ultra connections. The installation fee to the Exchange also applies to
In addition to co-location services, the for both 10 GB Ultra and 1 GB Ultra connectivity to all of the other Nasdaq,
Exchange proposes to offer several other connections will be $1,500. Meanwhile, Inc. markets, including Nasdaq, BX,
connectivity options for customers that the monthly fee will be $5,000 for 10 GB Phlx, MRX, and GEMX. This purpose of
are located outside of the Exchange’s Ultra connections and $2,000 for 1 GB this proposal is to specify that a client
primary data center in Carteret, New Ultra connections. For 1 GB Ultra or 10 can use the connections it establishes
Jersey. GB Ultra connections for UTP only, the and maintains to connect, not only to
First, the Exchange proposes to offer installation fee and monthly fee will be the Exchange, but also to any or all of
a ‘‘Direct Circuit Connectivity’’ service, waived for the first two connections and its sister exchanges, and in doing so, it
whereby subscribers may connect their thereafter the installation fee will be will be billed only once.
facilities directly to the Exchange’s $100 and the monthly fee also will be
primary data center using a circuit they 2. Statutory Basis
$100. As with Direct Circuit
obtain from an external Connectivity, the Exchange proposes to The Exchange believes that its
telecommunications provider. For this charge a $925 fee to customers that proposal is consistent with Section 6(b)
form of connectivity, the Exchange’s choose to install a cable router in its of the Act,6 in general, and furthers the
proposal offers customers the choice of data center for purposes of receiving the objectives of Section 6(b)(5) of the Act,7
1 GB, 1 GB Ultra, and 10 GB third party services as well as a monthly in particular, in that it is designed to
connections. The installation fee for all promote just and equitable principles of
such connections will be $1,500 and the 3 Clients will not be permitted to install routers trade, to remove impediments to and
monthly fee will be $7,500 for 10 GB in or rent cabinet space directly from the Exchange perfect the mechanism of a free and
connections and $2,500 for both 1 GB at the POPs. Accordingly, the fee schedule for POP open market and a national market
and 1 GB Ultra connections. The connectivity will not include fees for these services.
4 The SIPs link the U.S. markets by processing system, and, in general to protect
Exchange also proposes to charge a fee and consolidating all protected bid/ask quotes and investors and the public interest.
to customers that choose to install a trades from every registered exchange trading venue The Exchange believes that it is
cable router in its data center and a and FINRA into a single data feed, and they reasonable to eliminate its existing
monthly fee for customers that choose to disseminate and calculate critical regulatory Ethernet, FIX, and API connectivity
information, including the National Best Bid and
install equipment in the Exchange’s data Offer, Limit Up Limit Down price bands, short sale offerings and their associated fees as the
center to support the connectivity. restrictions and regulatory halts. Exchange is migrating to a new platform
Specifically, the Exchange proposes an 5 Third Party Services includes not only SIP data that will offer new connectivity options.
installation fee of $925 per router, feeds, but also data feeds from other exchanges and The Exchange notes that its customers
markets. For example, Third Party Connectivity will
sradovich on DSK3GMQ082PROD with NOTICES
switch or modem, and a monthly fee of have had ample prior notice of this
support connectivity to the FINRA/Nasdaq Trade
$150 to rent cabinet space based on a Reporting Facility, BATS Depth Feeds, and NYSE transition.
unit height of approximately 1.75 inches Feeds. A customer must separately subscribe to the The Exchange believes that proposed
(commonly called a ‘‘U’’ space) and a third party services to which it connects with a new connectivity fees are reasonable as
maximum power of 125 Watts per U Third Party Connectivity subscription. The
Exchange notes that customers that do not wish to
a means of covering its costs associated
space. subscribe to Direct Circuit Connectivity to Third
Next, the Exchange proposes to offer Party Services may alternatively connect through an 6 15 U.S.C. 78f(b).
a ‘‘POP Connectivity’’ service, whereby extranet provider or a market data redistributor. 7 15 U.S.C. 78f(b)(5).
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![Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Notices 49453
All submissions should refer to File notice is hereby given that on October Specifically, the Exchange proposes to
Number SR–ISE–2017–91. This file 16, 2017, Nasdaq GEMX, LLC (‘‘GEMX’’ discontinue offering Ethernet
number should be included on the or ‘‘Exchange’’) filed with the Securities connectivity to the Exchange and also
subject line if email is used. To help the and Exchange Commission (‘‘SEC’’ or eliminate the fees it charges for such
Commission process and review your ‘‘Commission’’) the proposed rule connectivity in Section IV.C of its Fee
comments more efficiently, please use change as described in Items I and II Schedule, entitled ‘‘Network Fees.’’ 3
only one method. The Commission will below, which Items have been prepared The Exchange currently offers four
post all comments on the Commission’s by the Exchange. The Commission is Ethernet connection options: A 1 Gb
Internet Web site (http://www.sec.gov/ publishing this notice to solicit connection at a cost of $1,000 per
rules/sro.shtml). Copies of the comments on the proposed rule change month, a 10 Gb connection at a cost of
submission, all subsequent from interested persons. $4,500 per month, a 10 Gb low latency
amendments, all written statements connection at a cost of $8,000 per
I. Self-Regulatory Organization’s
with respect to the proposed rule month, and a 40 Gb low latency
Statement of the Terms of Substance of
change that are filed with the connection at a cost of $15,000 per
the Proposed Rule Change
Commission, and all written month.
communications relating to the The Exchange proposes to: (i) Delete Additionally, the Exchange proposes
proposed rule change between the fees and descriptions thereof for to stop offering customers the ability to
Commission and any person, other than connectivity no longer used by the connect to the Exchange via an
those that may be withheld from the Exchange; and (ii) add new fees for co- Application Programming Interface
public in accordance with the location services, direct circuit (‘‘API’’) session or a Financial
provisions of 5 U.S.C. 552, will be connections to the Exchange, Information eXchange (‘‘FIX’’) session,
available for Web site viewing and connections to third party services, as these connection options are
printing in the Commission’s Public point of presence (‘‘POP’’) connectivity, becoming obsolete with respect to the
Reference Room, 100 F Street NE., and connectivity to the Exchange’s Test new trading system. The Exchange
Washington, DC 20549, on official Facility (the ‘‘Test Facility’’). correspondingly proposes to eliminate
business days between the hours of The text of the proposed rule change paragraphs 1 and 2 of Section IV.E of its
10:00 a.m. and 3:00 p.m. Copies of the is available on the Exchange’s Web site Fee Schedule, entitled ‘‘Port Fees.’’ The
filing also will be available for at www.ise.com, at the principal office Exchange presently charges Electronic
inspection and copying at the principal of the Exchange, and at the Access Members (‘‘EAMs’’) monthly per
office of the Exchange. All comments Commission’s Public Reference Room. session API fees and FIX session fees.
received will be posted without change. II. Self-Regulatory Organization’s In lieu of the above, the Exchange
Persons submitting comments are Statement of the Purpose of, and proposes to offer customers various new
cautioned that we do not redact or edit Statutory Basis for, the Proposed Rule options to connect to the Exchange and
personal identifying information from Change to assess fees for such connectivity. The
comment submissions. You should connectivity options that the Exchange
submit only information that you wish In its filing with the Commission, the
proposes to offer—colocation, direct
to make available publicly. All Exchange included statements
circuit connectivity, connectivity to
submissions should refer to File concerning the purpose of and basis for
third party services, POP connectivity,
Number SR–ISE–2017–91 and should be the proposed rule change and discussed
and connectivity to the Exchange’s Test
submitted on or before November 15, any comments it received on the
Facility—and the fees that the Exchange
2017. proposed rule change. The text of these
proposes to assess for such connectivity
statements may be examined at the
For the Commission, by the Division of places specified in Item IV below. The are similar to those that ISE’s affiliated
Trading and Markets, pursuant to delegated Exchange has prepared summaries, set Nasdaq, Inc. markets—including The
authority.14 NASDAQ Stock Market, LLC
forth in sections A, B, and C below, of
Eduardo A. Aleman,
the most significant aspects of such (‘‘Nasdaq’’), Nasdaq BX, Inc. (‘‘BX’’),
Assistant Secretary. statements. and Nasdaq Phlx LLC (‘‘Phlx’’)—
[FR Doc. 2017–23118 Filed 10–24–17; 8:45 am] presently offer and assess to their
BILLING CODE 8011–01–P
A. Self-Regulatory Organization’s customers under their respective rules.
Statement of the Purpose of, and They are also the same as the
Statutory Basis for, the Proposed Rule connectivity options and fees that
SECURITIES AND EXCHANGE Change Nasdaq ISE, LLC (‘‘ISE’’) and Nasdaq
COMMISSION 1. Purpose MRX, LLC (‘‘MRX’’) propose to offer and
assess under their respective rules in
[Release No. 34–81902; File No. SR–GEMX– The Exchange proposes to amend its
2017–48] tandem with this filing. This proposal,
Fee Schedule to eliminate certain fees in other words, seeks to harmonize the
associated with legacy options for Exchange’s connectivity offerings and
Self-Regulatory Organizations; Nasdaq
connecting to GEMX and to replace fees with those of its sister exchanges.
GEMX, LLC; Notice of Filing and
them with fees associated with new The first new connectivity option that
Immediate Effectiveness of Proposed
options for connecting to the Exchange the Exchange proposes to offer its
Rule Change To Amend the
that are similar to those that GEMX’s customers is co-location. Co-location is
Exchange’s Schedule of Fees
sister exchanges presently offer. a suite of hardware, power,
sradovich on DSK3GMQ082PROD with NOTICES
October 19, 2017. GEMX is engaged in an initiative to telecommunication, and other ancillary
Pursuant to Section 19(b)(1) of the migrate the Exchange’s trading system products and services that allow market
Securities Exchange Act of 1934 to the Nasdaq INET architecture. As part participants and vendors to place their
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 of that initiative, GEMX proposes to trading and communications equipment
retire certain obsolete connectivity
14 17 CFR 200.30–3(a)(12). associated with the Exchange’s legacy 3 The Exchange proposes to change the title of
1 15 U.S.C. 78s(b)(1). trading system and the fees associated Section IV from ‘‘Access Services’’ to ‘‘Connectivity
2 17 CFR 240.19b–4. with such connectivity. Fees.’’
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Document Created: 2017-10-25 01:16:38
Document Modified: 2017-10-25 01:16:38
| 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 49450 |
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