82 FR 52950 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Access and Redistribution Fee
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 219 (November 15, 2017)
Federal Register Volume 82, Issue 219 (November 15, 2017)
| Page Range | 52950-52953 | |
| FR Document | 2017-24655 |
[Federal Register Volume 82, Number 219 (Wednesday, November 15, 2017)] [Notices] [Pages 52950-52953] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-24655] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82032; File No. SR-Phlx-2017-84] Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Access and Redistribution Fee November 8, 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 26, 2017, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend and conform Sections VIII and XIII of the Exchange's Pricing Schedule, to define key terms; to clarify the rule language; to clarify its application to Extranet Providers, Members, and Non-members in various contexts; and to make conforming changes to the Pricing Schedule's Table of Contents. The text of the proposed rule change is available on the Exchange's Web site at http://nasdaqphlx.cchwallstreet.com/ 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 proposed rule change concerns Section VIII of the Exchange's Pricing Schedule (the ``Equities Rule'') and Section XIII of the Exchange's Pricing Schedule (collectively, the ``Rules''), currently entitled ``Extranet Access Fee.'' The Exchange first imposed an Extranet Access Fee in January of 2015.\3\ Today, technology and the ecosystem have changed such that the Rules need updating and clarification. Therefore, the Exchange is proposing several parallel changes to the Rules. --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 74022 (Jan. 9, 2015); 80 FR 2157 (Jan. 15, 2015) (SR-Phlx-2015-04). --------------------------------------------------------------------------- First, the Exchange is proposing to rename both Rules and to clarify their meaning through the use of defined terms. The Exchange is adding definitions of the terms Equipment Configuration, and Extranet Provider to new subsection (a) of the Rules. The Exchange is also cross-referencing the definition of Distributors currently set forth in Section IX of the Exchange's Pricing Schedule. [[Page 52951]] The term ``Equipment Configuration'' will be defined to mean ``any line, circuit, router package, or other technical configuration used to provide a connection to the Exchange market data feeds.'' The term Equipment Configuration replaces the term ``Customer Premises Equipment Configuration'' set forth in the current rules. The Exchange believes that the term ``Customer Premises Equipment Configuration'' is ambiguous and creates confusion about the ownership and location of equipment through which direct access to market data feeds is provided. By referring instead to ``Equipment Configuration,'' the Exchange intends to specify that the ownership and location of the equipment is inconsequential to the application of access and redistribution fees. Rather, it is the number of configurations that matters, determining the number of monthly access and redistribution fees to be assessed. For example, if an Extranet Provider supplies market data to five recipients via five configurations, two of which are located in a single Exchange facility (such as Carteret, New Jersey) and three of which are located at different customer facilities, the Extranet Provider will be assessed access and redistribution fees of $5,000 per month. If an Extranet Provider supplies market data to one customer at two separate locations via two configurations--one within a Exchange facility and one located elsewhere--the Extranet Provider will be assessed access and redistribution fees of $2,000 per month. If an Extranet Provider supplies market data to four customers via four configurations all located within an Exchange co-location facility, the Extranet Provider will be assessed $4,000 per month in access and redistribution fees. The Exchange is proposing to define the term ``Extranet Provider'' as ``any entity that has signed the Exchange Extranet Connection Agreement and that establishes a telecommunications connection in the Exchange's co-location facility.'' The Exchange requires entities to sign the Exchange Extranet Connection Agreement \4\ for the purpose of setting the terms and conditions for those entities to place equipment in the Exchange's co-location facility in order to establish a telecommunications connection directly to the Exchange and to provide its own customers with access to the Exchange market data feeds. --------------------------------------------------------------------------- \4\ Available at http://www.nasdaqtrader.com/Content/AdministrationSupport/AgreementsData/NASDAQOMXExtranetAgreement.pdf. --------------------------------------------------------------------------- Finally, in order to further enhance the clarity of the Exchange's rules, the Exchange is proposing to cross-reference the definition of ``Distributor'' for purposes of this rule. Section IX of the Exchange's Pricing Schedule currently defines Distributor as: [A]ny entity that receives a feed or data file of NASDAQ PHLX data directly from NASDAQ PHLX or indirectly through another entity and then distributes it either internally (within that entity) or externally (outside that entity). All distributors shall execute a NASDAQ PHLX distributor agreement. The Exchange is proposing to renumber and rearrange the existing rule text of the Rules. The first two sentences of existing rule text will become new subsection (b). The Exchange also proposes to improve the clarity of subsection (b) by using the new definitions outlined above and by specifying that the monthly fees referred to are the monthly access and redistribution fees. As described earlier, the third sentence of existing rule text is being modified and moved to paragraph (1) of new subsection (a) as the improved definition of ``Equipment Configuration.'' The fourth and fifth sentences of existing rule text will move to new subsection (d) with modest textual improvements but no change in application of fees. The sixth sentence of existing rule text will move to the final sentences of subsections (b) and (c) with minor textual enhancements to apply it with equal effect to Extranet Providers and Distributors. The Exchange also proposes to add new subsection (c) to specify and codify that similarly situated Distributors and Extranet Providers will pay similar fees. Under subsection (b), Extranet Providers are assessed a monthly fee of $1,000 for each Equipment Configuration that offers Exchange market data feeds. Similarly, under proposed subsection (c), the same $1,000 monthly fee applies to Distributors to whom the same Exchange market data feeds are published via a Direct Circuit Connection to the Exchange. The Exchange believes that, as defined, Extranet Providers and Distributors are similarly situated because both entities connect directly to the Exchange, and both provide Exchange market data feeds to their customers via those connections.\5\ Likewise, the customers of Extranet Providers and Distributors are similarly situated in that they receive the same Exchange market data feeds through similar means. --------------------------------------------------------------------------- \5\ Proposed Subsection (c) of Chapters VIII and XIII apply only to Distributors that connect to the Exchange via a Direct Circuit Connection pursuant to Section XI of the Pricing Schedule. They do not apply to Distributors that are co-located with the Exchange pursuant to Section X of the Pricing Schedule and that connect to the Exchange as specified under that Rule. Nor do they apply to entities that connect to Nasdaq [sic] remotely via Point of Presence Connectivity under Nasdaq Rule 7051(c) as set forth in SR-NASDAQ- 2017-97. --------------------------------------------------------------------------- For example, a Distributor with two Direct Circuit Connections to the Exchange, both of which emanate from a single Exchange co-location facility (such as Carteret, New Jersey) and both of which receive Exchange market data feeds, will be assessed access and redistribution fees of $2,000 per month. A Distributor with two Direct Circuit Connections to the Exchange that emanate from two separate locations and that receives Exchange market data feeds over each connection will be assessed access and redistribution fees of $2,000 per month. A Distributor with two Direct Circuit Connections to the Exchange that emanate from two separate locations and that receives Exchange market data feeds over only one of the connections will be assessed access and redistribution fees of $1,000 per month. The Exchange previously assessed and currently assesses this fee in its capacity as operator of Nasdaq Technology Services, which had been considered an Extranet Provider.\6\ The Exchange believes that defining Extranet Providers and codifying the fee to Distributors (other than Extranet Providers) is clearer to market participants. The Exchange also understands that Distributors, like Extranet Providers, commonly pass the fee on to their customers and therefore specifying that Distributors employing a Direct Circuit Connection also pay the fee will ensure consistent treatment between users enjoying the same benefits via Extranet Providers on the one hand and Distributors on the other, as described above. --------------------------------------------------------------------------- \6\ See SR-Phlx-2015-04 at footnote 16. --------------------------------------------------------------------------- Finally, the Exchange proposes to amend the Pricing Schedule's Table of Contents to make conforming changes to Section XIII's title. 2. Statutory Basis The Exchange believes that this proposal is consistent with Section 6(b) of the Act,\7\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\8\ in particular, in that it provides for an equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using its facility, and to specify [[Page 52952]] that the fees are not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78f(b). \8\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- The Exchange believes that the application of identical Access and Redistribution fees to Distributors and Extranet Providers as described in the proposed rule change is fair and equitable and non- discriminatory. As stated above, Distributors and Extranet Providers both connect to the Exchange directly for the purpose of re- distributing Exchange market data feeds to their own customers and both enjoy similar benefits in doing so. Likewise, those customers, whether receiving Exchange market data feeds via a Distributor or an Extranet Provider receive that market data feeds in a similar fashion and with similar benefits. Those benefits are considerable: secure, rapid, reliable access to the highest quality market data feeds on the trading of equities and options on the Exchange. The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. In regulation NMS, while adopting a series of steps to improve the current market model, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system ``has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.'' \9\ --------------------------------------------------------------------------- \9\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting Release''). --------------------------------------------------------------------------- The Exchange believes it is fair and equitable and not discriminatory to apply equal access and redistribution fees to Distributors, as it does to Extranet Providers. As stated above, Distributors and Extranet Providers are similarly situated in that they receive Exchange market data feeds directly from the Exchange and they redistribute that data to their own customers. Likewise, the Exchange believes that the customers of Extranet Providers and of Distributors are similarly situated in the manner in which they receive Exchange market data feeds. The Exchange believes that it is consistent with an equitable allocation of reasonable dues and fees and not unfairly discriminatory to charge the fees proposed under subsection (c) of Chapters VIII and XIII of the PHLX Pricing Schedule to Extranet Providers and Distributors that are not co-located, but not to charge those same fees to Distributors that are co-located. First, Distributors that are co- located already pay fees set forth in Section X of the Pricing Schedule which include connectivity and access to data. Second, if a co-located Distributor were to send data feeds out of the co-location facility, the feeds would be processed and normalized by the Distributor, as opposed to by the Exchange; in that case, the Distributor would not be using the proximity for which Extranets and Direct Circuit Connection Distributors are being assessed fees under subsection (c) of Chapters VIII and XIII of the PHLX Pricing Schedule. The Exchange is proposing to enhance the clarity of the language of the Rules to ensure that customers understand the proper application of the Rules as technology has changed and continues to change. The Exchange believes that customers support the continued evolution of its rules, and that regulators do and should support and facilitate this evolution. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes that the proposed rule change will not impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes that applying equal fees to similarly situated Extranet Providers and Distributors, enhancing the clarity of the Rules, and eliminating ambiguity imposes no burden on competition and is, in fact, pro- competitive. Extranet Providers and Distributors benefit from having a more accurate and complete understanding of the Exchange's services and fees when determining which if any of those competing services to purchase voluntarily. The Exchange believes that the proposed rule change places no burden on competition because it specifies that identical fees will apply to all similarly situated Distributors and Extranet Providers that provide Exchange market data feeds to their own customers. As described above, such Distributors and Extranet Providers offer the same Exchange market data feeds in the same manner to similarly situated customers. The Exchange offers similar benefits to Distributors and Extranet Providers by offering them such access to Exchange market data feeds. 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.\10\ --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(3)(A)(ii). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic 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-Phlx-2017-84 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-Phlx-2017-84. 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., [[Page 52953]] 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-Phlx-2017-84 and should be submitted on or before December 6, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\ --------------------------------------------------------------------------- \11\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-24655 Filed 11-14-17; 8:45 am] BILLING CODE 8011-01-P
![52950 Federal Register / Vol. 82, No. 219 / Wednesday, November 15, 2017 / Notices
ACTION: Notice of meeting of Securities except during that portion of the I. Self-Regulatory Organization’s
and Exchange Commission Dodd-Frank meeting reserved for an administrative Statement of the Terms of Substance of
Investor Advisory Committee. work session during lunch. Persons the Proposed Rule Change
needing special accommodations to take The Exchange proposes to amend and
SUMMARY: The Securities and Exchange part because of a disability should
Commission Investor Advisory conform Sections VIII and XIII of the
notify the contact person listed in the Exchange’s Pricing Schedule, to define
Committee, established pursuant to section above entitled FOR FURTHER
Section 911 of the Dodd-Frank Wall key terms; to clarify the rule language;
INFORMATION CONTACT. to clarify its application to Extranet
Street Reform and Consumer Protection
Act of 2010, is providing notice that it The agenda for the meeting includes: Providers, Members, and Non-members
will hold a public meeting. The public Remarks from Commissioners; a in various contexts; and to make
discussion of a recommendation of the conforming changes to the Pricing
is invited to submit written statements
Investor as Purchaser Subcommittee Schedule’s Table of Contents.
to the Committee.
regarding electronic delivery of The text of the proposed rule change
DATES: The meeting will be held on is available on the Exchange’s Web site
information to retail investors; a
Thursday, December 7, 2017 from 9:00 at http://nasdaqphlx.cchwallstreet.
discussion regarding retail investor
a.m. until 3:30 p.m. (ET). Written com/, at the principal office of the
protections and transparency in
statements should be received on or Exchange, and at the Commission’s
municipal and corporate bond markets;
before December 7, 2017. Public Reference Room.
a discussion regarding cybersecurity
ADDRESSES: The meeting will be held in risk disclosures (which may include a
Multi-Purpose Room LL–006 at the II. Self-Regulatory Organization’s
recommendation of the Investor as Statement of the Purpose of, and
Commission’s headquarters, 100 F Owner Subcommittee); a discussion Statutory Basis for, the Proposed Rule
Street NE., Washington, DC 20549. The regarding dual-class share structures Change
meeting will be webcast on the (which may include a Recommendation
Commission’s Web site at www.sec.gov. In its filing with the Commission, the
of the Investor as Owner
Written statements may be submitted by Exchange included statements
Subcommittee); a discussion regarding
any of the following methods: concerning the purpose of and basis for
retail investor disclosure: What works,
the proposed rule change and discussed
Electronic Statements what doesn’t, and best practices;
any comments it received on the
subcommittee reports; and a nonpublic
D Use the Commission’s Internet administrative work session during
proposed rule change. The text of these
submission form (http://www.sec.gov/ statements may be examined at the
lunch.
rules/other.shtml); or places specified in Item IV below. The
D Send an email message to rules- Dated: November 9, 2017. Exchange has prepared summaries, set
comments@sec.gov. Please include File Brent J. Fields, forth in sections A, B, and C below, of
No. 265–28 on the subject line; or Secretary. the most significant aspects of such
[FR Doc. 2017–24692 Filed 11–14–17; 8:45 am] statements.
Paper Statements
BILLING CODE 8011–01–P A. Self-Regulatory Organization’s
D Send paper statements to Brent J.
Statement of the Purpose of, and
Fields, Secretary, Securities and
Statutory Basis for, the Proposed Rule
Exchange Commission, 100 F Street NE., SECURITIES AND EXCHANGE Change
Washington, DC 20549–1090. COMMISSION
All submissions should refer to File No. 1. Purpose
265–28. This file number should be The proposed rule change concerns
[Release No. 34–82032; File No. SR–Phlx–
included on the subject line if email is 2017–84] Section VIII of the Exchange’s Pricing
used. To help us process and review Schedule (the ‘‘Equities Rule’’) and
your statement more efficiently, please Self-Regulatory Organizations; Nasdaq Section XIII of the Exchange’s Pricing
use only one method. PHLX LLC; Notice of Filing and Schedule (collectively, the ‘‘Rules’’),
Statements also will be available for Immediate Effectiveness of Proposed currently entitled ‘‘Extranet Access
Web site viewing and printing in the Rule Change Relating to the Access Fee.’’ The Exchange first imposed an
Commission’s Public Reference Room, and Redistribution Fee Extranet Access Fee in January of 2015.3
100 F Street NE., Room 1503, Today, technology and the ecosystem
Washington, DC 20549, on official November 8, 2017. have changed such that the Rules need
business days between the hours of Pursuant to Section 19(b)(1) of the updating and clarification. Therefore,
10:00 a.m. and 3:00 p.m. All statements Securities Exchange Act of 1934 the Exchange is proposing several
received will be posted without change. (‘‘Act’’), 1 and Rule 19b–4 thereunder, 2 parallel changes to the Rules.
Persons submitting comments are notice is hereby given that on October First, the Exchange is proposing to
cautioned that we do not redact or edit 26, 2017, Nasdaq PHLX LLC (‘‘Phlx’’ or rename both Rules and to clarify their
personal identifying information from ‘‘Exchange’’) filed with the Securities meaning through the use of defined
comment submissions. You should and Exchange Commission (‘‘SEC’’ or terms. The Exchange is adding
submit only information that you wish ‘‘Commission’’) the proposed rule definitions of the terms Equipment
to make available publicly. change as described in Items I, II, and Configuration, and Extranet Provider to
FOR FURTHER INFORMATION CONTACT: new subsection (a) of the Rules. The
III, below, which Items have been
sradovich on DSK3GMQ082PROD with NOTICES
Marc Oorloff Sharma, Chief Counsel, Exchange is also cross-referencing the
prepared by the Exchange. The
Office of the Investor Advocate, at (202) definition of Distributors currently set
Commission is publishing this notice to
551–3302, Securities and Exchange forth in Section IX of the Exchange’s
solicit comments on the proposed rule
Commission, 100 F Street NE., Pricing Schedule.
change from interested persons.
Washington, DC 20549. 3 See Securities Exchange Act Release No. 74022
SUPPLEMENTARY INFORMATION: The 1 15 U.S.C. 78s(b)(1). (Jan. 9, 2015); 80 FR 2157 (Jan. 15, 2015) (SR–Phlx–
meeting will be open to the public, 2 17 CFR 240.19b–4. 2015–04).
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The term ‘‘Equipment Configuration’’ access to the Exchange market data of Extranet Providers and Distributors
will be defined to mean ‘‘any line, feeds. are similarly situated in that they
circuit, router package, or other Finally, in order to further enhance receive the same Exchange market data
technical configuration used to provide the clarity of the Exchange’s rules, the feeds through similar means.
a connection to the Exchange market Exchange is proposing to cross-reference For example, a Distributor with two
data feeds.’’ The term Equipment the definition of ‘‘Distributor’’ for Direct Circuit Connections to the
Configuration replaces the term purposes of this rule. Section IX of the Exchange, both of which emanate from
‘‘Customer Premises Equipment Exchange’s Pricing Schedule currently a single Exchange co-location facility
Configuration’’ set forth in the current defines Distributor as: (such as Carteret, New Jersey) and both
rules. The Exchange believes that the [A]ny entity that receives a feed or data file of which receive Exchange market data
term ‘‘Customer Premises Equipment of NASDAQ PHLX data directly from feeds, will be assessed access and
Configuration’’ is ambiguous and creates NASDAQ PHLX or indirectly through redistribution fees of $2,000 per month.
confusion about the ownership and
another entity and then distributes it either A Distributor with two Direct Circuit
internally (within that entity) or externally Connections to the Exchange that
location of equipment through which (outside that entity). All distributors shall emanate from two separate locations
direct access to market data feeds is execute a NASDAQ PHLX distributor and that receives Exchange market data
provided. By referring instead to agreement.
feeds over each connection will be
‘‘Equipment Configuration,’’ the The Exchange is proposing to assessed access and redistribution fees
Exchange intends to specify that the renumber and rearrange the existing of $2,000 per month. A Distributor with
ownership and location of the rule text of the Rules. The first two two Direct Circuit Connections to the
equipment is inconsequential to the sentences of existing rule text will Exchange that emanate from two
application of access and redistribution become new subsection (b). The separate locations and that receives
fees. Rather, it is the number of Exchange also proposes to improve the Exchange market data feeds over only
configurations that matters, determining clarity of subsection (b) by using the one of the connections will be assessed
the number of monthly access and new definitions outlined above and by access and redistribution fees of $1,000
redistribution fees to be assessed. specifying that the monthly fees referred per month.
For example, if an Extranet Provider to are the monthly access and The Exchange previously assessed
supplies market data to five recipients redistribution fees. As described earlier, and currently assesses this fee in its
via five configurations, two of which are the third sentence of existing rule text capacity as operator of Nasdaq
located in a single Exchange facility is being modified and moved to Technology Services, which had been
(such as Carteret, New Jersey) and three paragraph (1) of new subsection (a) as considered an Extranet Provider.6 The
of which are located at different the improved definition of ‘‘Equipment Exchange believes that defining Extranet
Configuration.’’ The fourth and fifth Providers and codifying the fee to
customer facilities, the Extranet
sentences of existing rule text will move Distributors (other than Extranet
Provider will be assessed access and
to new subsection (d) with modest Providers) is clearer to market
redistribution fees of $5,000 per month.
textual improvements but no change in participants. The Exchange also
If an Extranet Provider supplies market application of fees. The sixth sentence
data to one customer at two separate understands that Distributors, like
of existing rule text will move to the Extranet Providers, commonly pass the
locations via two configurations—one final sentences of subsections (b) and (c)
within a Exchange facility and one fee on to their customers and therefore
with minor textual enhancements to specifying that Distributors employing a
located elsewhere—the Extranet apply it with equal effect to Extranet
Provider will be assessed access and Direct Circuit Connection also pay the
Providers and Distributors. fee will ensure consistent treatment
redistribution fees of $2,000 per month. The Exchange also proposes to add between users enjoying the same
If an Extranet Provider supplies market new subsection (c) to specify and codify benefits via Extranet Providers on the
data to four customers via four that similarly situated Distributors and one hand and Distributors on the other,
configurations all located within an Extranet Providers will pay similar fees. as described above.
Exchange co-location facility, the Under subsection (b), Extranet Providers Finally, the Exchange proposes to
Extranet Provider will be assessed are assessed a monthly fee of $1,000 for amend the Pricing Schedule’s Table of
$4,000 per month in access and each Equipment Configuration that Contents to make conforming changes to
redistribution fees. The Exchange is offers Exchange market data feeds. Section XIII’s title.
proposing to define the term ‘‘Extranet Similarly, under proposed subsection
Provider’’ as ‘‘any entity that has signed (c), the same $1,000 monthly fee applies 2. Statutory Basis
the Exchange Extranet Connection to Distributors to whom the same The Exchange believes that this
Agreement and that establishes a Exchange market data feeds are proposal is consistent with Section 6(b)
telecommunications connection in the published via a Direct Circuit of the Act,7 in general, and furthers the
Exchange’s co-location facility.’’ The Connection to the Exchange. The objectives of Sections 6(b)(4) and 6(b)(5)
Exchange requires entities to sign the Exchange believes that, as defined, of the Act,8 in particular, in that it
Exchange Extranet Connection Extranet Providers and Distributors are provides for an equitable allocation of
Agreement 4 for the purpose of setting similarly situated because both entities reasonable dues, fees and other charges
the terms and conditions for those connect directly to the Exchange, and among members and issuers and other
entities to place equipment in the both provide Exchange market data persons using its facility, and to specify
sradovich on DSK3GMQ082PROD with NOTICES
Exchange’s co-location facility in order feeds to their customers via those
to establish a telecommunications connections.5 Likewise, the customers Schedule and that connect to the Exchange as
specified under that Rule. Nor do they apply to
connection directly to the Exchange and entities that connect to Nasdaq [sic] remotely via
5 Proposed Subsection (c) of Chapters VIII and
to provide its own customers with Point of Presence Connectivity under Nasdaq Rule
XIII apply only to Distributors that connect to the
Exchange via a Direct Circuit Connection pursuant 7051(c) as set forth in SR–NASDAQ–2017–97.
4 Available at http://www.nasdaqtrader.com/ 6 See SR–Phlx–2015–04 at footnote 16.
to Section XI of the Pricing Schedule. They do not
7 15 U.S.C. 78f(b).
Content/AdministrationSupport/AgreementsData/ apply to Distributors that are co-located with the
NASDAQOMXExtranetAgreement.pdf. Exchange pursuant to Section X of the Pricing 8 15 U.S.C. 78f(b)(4) and (5).
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![Federal Register / Vol. 82, No. 219 / Wednesday, November 15, 2017 / Notices 52953
Washington, DC 20549, on official The text of the proposed rule change Configuration’’ set forth in the current
business days between the hours of is available on the Exchange’s Web site rules. Nasdaq believes that the term
10:00 a.m. and 3:00 p.m. Copies of the at http://nasdaq.cchwallstreet.com/, at ‘‘Customer Premises Equipment
filing also will be available for the principal office of the Exchange, and Configuration’’ is ambiguous and creates
inspection and copying at the principal at the Commission’s Public Reference confusion about the ownership and
office of the Exchange. All comments Room. location of equipment through which
received will be posted without change. direct access to market data feeds is
II. Self-Regulatory Organization’s provided. By referring instead to
Persons submitting comments are
Statement of the Purpose of, and ‘‘Equipment Configuration,’’ Nasdaq
cautioned that we do not redact or edit
Statutory Basis for, the Proposed Rule intends to specify that the ownership
personal identifying information from
Change and location of the equipment is
comment submissions. You should
submit only information that you wish In its filing with the Commission, the inconsequential to the application of
to make available publicly. All Exchange included statements access and redistribution fees. Rather, it
submissions should refer to File concerning the purpose of and basis for is the number of configurations that
Number SR–Phlx–2017–84 and should the proposed rule change and discussed matters, determining the number of
be submitted on or before December 6, any comments it received on the monthly access and redistribution fees
2017. proposed rule change. The text of these to be assessed.
statements may be examined at the For example, if an Extranet Provider
For the Commission, by the Division of
Trading and Markets, pursuant to delegated places specified in Item IV below. The supplies market data to five recipients
authority.11 Exchange has prepared summaries, set via five configurations, two of which are
Eduardo A. Aleman, forth in sections A, B, and C below, of located in a single Nasdaq facility (such
the most significant aspects of such as Carteret, New Jersey) and three of
Assistant Secretary.
statements. which are located at different customer
[FR Doc. 2017–24655 Filed 11–14–17; 8:45 am]
facilities, the Extranet Provider will be
BILLING CODE 8011–01–P A. Self-Regulatory Organization’s assessed access and redistribution fees
Statement of the Purpose of, and of $5,000 per month. If an Extranet
Statutory Basis for, the Proposed Rule Provider supplies market data to one
SECURITIES AND EXCHANGE Change customer at two separate locations via
COMMISSION
1. Purpose two configurations—one within a
[Release No. 34–82037; File No. SR– The proposed rule change concerns Nasdaq facility and one located
NASDAQ–2017–114] Nasdaq Rule 7025 (the ‘‘Equities Rule’’) elsewhere—the Extranet Provider will
and Chapter XV, Section 12, of Nasdaq’s be assessed access and redistribution
Self-Regulatory Organizations; The fees of $2,000 per month. If an Extranet
Options Rules (the ‘‘Options Rule,’’
Nasdaq Stock Market LLC; Notice of Provider supplies market data to four
collectively the ‘‘Rules’’), currently
Filing and Immediate Effectiveness of customers via four configurations all
entitled ‘‘Extranet Access Fee.’’ The
Proposed Rule Change Relating to the located within a Nasdaq co-location
Exchange first imposed an Extranet
Access and Redistribution Fee facility, the Extranet Provider will be
Access Fee in 2004.3 The Exchange last
amended the Extranet Access Fee in assessed $4,000 per month in access and
November 8, 2017.
January of 2015.4 Today, technology and redistribution fees. Nasdaq is proposing
Pursuant to Section 19(b)(1) of the to define the term ‘‘Extranet Provider’’
Securities Exchange Act of 1934 the ecosystem have changed such that
the Rules need updating and as ‘‘any entity that has signed the
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Nasdaq Extranet Connection Agreement
notice is hereby given that on October clarification. Therefore, Nasdaq is
proposing several parallel changes to and that establishes a
25, 2017, The Nasdaq Stock Market LLC telecommunications connection in the
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the the Rules.
First, Nasdaq is proposing to rename Exchange’s co-location facility.’’ Nasdaq
Securities and Exchange Commission requires entities to sign the Nasdaq
(‘‘SEC’’ or ‘‘Commission’’) the proposed both Rules and to clarify their meaning
through the use of defined terms. Extranet Connection Agreement 5 for the
rule change as described in Items I, II, purpose of setting the terms and
and III, below, which Items have been Nasdaq is adding definitions of the
terms Equipment Configuration, and conditions for those entities to place
prepared by the Exchange. The equipment in Nasdaq’s co-location
Commission is publishing this notice to Extranet Provider to new subsection (a)
of the Rules. Nasdaq is also cross- facility in order to establish a
solicit comments on the proposed rule telecommunications connection directly
change from interested persons. referencing the definition of Distributors
currently set forth in Nasdaq Rule to Nasdaq and to provide its own
I. Self-Regulatory Organization’s 7019(c). customers with access to Nasdaq market
Statement of the Terms of Substance of The term ‘‘Equipment Configuration’’ data feeds.
the Proposed Rule Change will be defined to mean ‘‘any line, Finally, in order to further enhance
circuit, router package, or other the clarity of Nasdaq’s rules, Nasdaq is
The Exchange proposes to amend and proposing to cross-reference the
conform Nasdaq Equities Rule 7025 and technical configuration used to provide
a connection to the Exchange market definition of ‘‘Distributor’’ for purposes
Chapter XV, Section 12 of Nasdaq’s of this rule. Rule 7019(c) currently
Options Rules, to define key terms; to data feeds.’’ The term Equipment
Configuration replaces the term defines Distributor as:
sradovich on DSK3GMQ082PROD with NOTICES
improve the rule language; and to
specify its application to Extranet ‘‘Customer Premises Equipment [A]ny entity that receives a feed or data file
of Nasdaq data directly from Nasdaq or
Providers and Distributors in various
3 See Securities Exchange Act Release No. 50483 indirectly through another entity and then
contexts. distributes it either internally (within that
(Oct. 1, 2004), 69 FR 60448 (Oct. 8, 2004) (SR–
NASD–2004–118).
11 17 CFR 200.30–3(a)(12). 4 See Securities Exchange Act Release No. 74077 5 Available at http://www.nasdaqtrader.com/
1 15 U.S.C. 78s(b)(1). (Jan. 16, 2015); 80 FR 3683 (Jan. 23, 2015) (SR– Content/AdministrationSupport/AgreementsData/
2 17 CFR 240.19b–4. NASDAQ–2015–002). NASDAQOMXExtranetAgreement.pdf.
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Document Created: 2018-10-25 10:38:04
Document Modified: 2018-10-25 10:38:04
| 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 52950 |
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