82 FR 52955 - Self-Regulatory Organizations; Nasdaq BX, Inc.; 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 | 52955-52958 | |
| FR Document | 2017-24657 |
[Federal Register Volume 82, Number 219 (Wednesday, November 15, 2017)] [Notices] [Pages 52955-52958] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-24657] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82036; File No. SR-BX-2017-048] Self-Regulatory Organizations; Nasdaq BX, Inc.; 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 BX, Inc. (``BX'' 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 BX Equities Rule 7025 and Chapter XV, Section 3(c) of the Exchange's Options Rules, to define key terms; to clarify the rule language; and to clarify its application to Extranet Providers and Distributors in various contexts. The text of the proposed rule change is available on the Exchange's Web site at http://nasdaqbx.cchwallstreet.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 [[Page 52956]] 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 BX Rule 7025 (the ``Equities Rule'') and Chapter XV, Section 3(c) of the Exchange's Options Rules (the ``Options Rule,'' collectively the ``Rules''), currently entitled ``Extranet Access Fee.'' The Exchange first imposed an Extranet Access Fee in 2009.\3\ The Exchange last amended the Extranet Access Fee in January of 2015.\4\ 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. 59307 (Jan. 28, 2009), 74 FR 6069 (Feb. 4, 2009) (SR-BX-2009-005). \4\ See Securities Exchange Act Release No. 74045 (Jan. 13, 2015); 80 FR 2766 (Jan. 20, 2015) (SR-BX-2015-003). --------------------------------------------------------------------------- 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 subsections 7025(a) of the Equities Rule and Sec. 3(c)(1) of the Options Rule. The Exchange is also cross-referencing the definition of Distributors currently set forth in Exchange Rule 7019(b). 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 \5\ 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. --------------------------------------------------------------------------- \5\ 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. Rule 7019(b) currently defines Distributor as: [A]ny entity that receives a feed or data file of Exchange data directly from the Exchange or indirectly through another entity and then distributes it either internally (within that entity) or externally (outside that entity). All distributors shall execute an Exchange distributor agreement. The Exchange itself is a vendor of its data feed(s) and has executed an Exchange distributor agreement and pays the distributor charge. 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 7025(b) of the Equities Rule and Sec. 3(c)(1) of the Options Rule. The Exchange also proposes to improve the clarity of subsection 7025(b) of the Equities Rule and Sec. 3(c)(2) of the Options Rule 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, respectively, to paragraphs (1) and (A) of new subsections 7025(a) of the Equities Rule and Sec. 3(c)(1) of the Options Rule as the improved definition of ``Equipment Configuration.'' The fourth and fifth sentences of existing rule text will move to new subsection 7025(d) of the Equities Rule and Sec. 3(c)(4) of the Options Rule 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 7025(b) and (c) of the Equities Rule and Sec. 3(c)(2) and (c)(3) of the Options Rule with minor textual enhancements to apply it with equal effect to Extranet Providers and Distributors. Lastly, the Exchange proposes to add new subsection 7025(c) to the Equities Rule and Sec. 3(c)(3) to the Options Rule to specify and codify that similarly situated Distributors and Extranet Providers will pay similar fees. Under subsection 7025(b) of the Equities Rule and Sec. 3(c)(2) of the Options Rule, Extranet Providers are assessed a monthly fee of $1,000 for each Equipment Configuration that offers Exchange market data feeds. Similarly, under proposed subsection 7025(c) of the Equities Rule and Sec. 3(c)(3) of the Options Rule, 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.\6\ Likewise, the customers of Extranet Providers and Distributors are similarly situated in that they receive the same Exchange market data feeds through similar means. --------------------------------------------------------------------------- \6\ Proposed Rules 7025(c) and Section 3(c) of Chapter XV of the Otpions [sic] Rules apply only to Distributors that connect to Nasdaq [sic] via a Direct Circuit Connection pursuant to Rule 7051(a). They do not apply to Distributors that are co-located with Nasdaq [sic] pursuant to Rule 7034 and that connect to Nasdaq [sic] as specified under that Rule. Nor do they apply to entities that connect to Nasdaq [sic] remotely via Point of Presence Connectivity under Rule 7051(c) as set forth in SR-NASDAQ-2017-97. --------------------------------------------------------------------------- For example, a Distributor with two Direct Circuit Connections to the [[Page 52957]] 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. 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. 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 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 those 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 Rule 7025 and Section 3(c) of Chapter XV of the Otpions [sic] Rules 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 Rule 7034 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 Rule 7025 and Section 3(c) of Chapter XV of the Options Rules. 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 [[Page 52958]] 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-BX-2017-048 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-BX-2017-048. 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-BX-2017-048 and should be submitted on or before December 6, 2017. --------------------------------------------------------------------------- \11\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-24657 Filed 11-14-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 219 / Wednesday, November 15, 2017 / Notices 52955
technology has changed and continues to determine whether the proposed rule For the Commission, by the Division of
to change. Nasdaq believes that should be approved or disapproved. Trading and Markets, pursuant to delegated
customers support the continued authority.12
evolution of its rules, and that regulators IV. Solicitation of Comments Eduardo A. Aleman,
do and should support and facilitate Assistant Secretary.
Interested persons are invited to
this evolution. submit written data, views, and [FR Doc. 2017–24658 Filed 11–14–17; 8:45 am]
B. Self-Regulatory Organization’s arguments concerning the foregoing, BILLING CODE 8011–01–P
Statement on Burden on Competition including whether the proposed rule
change is consistent with the Act.
The Exchange believes that the SECURITIES AND EXCHANGE
proposed rule change will not impose Comments may be submitted by any of
the following methods: COMMISSION
any burden on competition not
[Release No. 34–82036; File No. SR–BX–
necessary or appropriate in furtherance Electronic Comments 2017–048]
of the purposes of the Act. To the
contrary, the Exchange believes that • Use the Commission’s Internet Self-Regulatory Organizations; Nasdaq
applying equal fees to similarly situated comment form (http://www.sec.gov/ BX, Inc.; Notice of Filing and
Extranet Providers and Distributors, rules/sro.shtml); or Immediate Effectiveness of Proposed
enhancing the clarity of the Rules, and • Send an email to rule-comments@ Rule Change Relating to the Access
eliminating ambiguity imposes no sec.gov. Please include File Number SR– and Redistribution Fee
burden on competition and is, in fact, NASDAQ–2017–114 on the subject line.
pro-competitive. Extranet Providers and November 8, 2017.
Distributors benefit from having a more Paper Comments Pursuant to Section 19(b)(1) of the
accurate and complete understanding of Securities Exchange Act of 1934
• Send paper comments in triplicate (‘‘Act’’) 1, and Rule 19b–4 thereunder,2
Nasdaq’s services and fees when
to Secretary, Securities and Exchange notice is hereby given that on October
determining which if any of those
Commission, 100 F Street NE., 26, 2017, Nasdaq BX, Inc. (‘‘BX’’ or
competing services to purchase
voluntarily. Washington, DC 20549–1090. ‘‘Exchange’’) filed with the Securities
Nasdaq believes that the proposed All submissions should refer to File and Exchange Commission (‘‘SEC’’ or
rule change places no burden on Number SR–NASDAQ–2017–114. This ‘‘Commission’’) the proposed rule
competition because it specifies that file number should be included on the change as described in Items I, II, and
identical fees will apply to all similarly subject line if email is used. To help the III, below, which Items have been
situated Distributors and Extranet Commission process and review your prepared by the Exchange. The
Providers that provide Exchange market comments more efficiently, please use Commission is publishing this notice to
data feeds to their own customers. As only one method. The Commission will solicit comments on the proposed rule
described above, such Distributors and post all comments on the Commission’s change from interested persons.
Extranet Providers offer the same Internet Web site (http://www.sec.gov/ I. Self-Regulatory Organization’s
Exchange market data feeds in the same rules/sro.shtml). Copies of the Statement of the Terms of Substance of
manner to similarly situated customers. submission, all subsequent the Proposed Rule Change
Nasdaq offers similar benefits to amendments, all written statements
Distributors and Extranet Providers by with respect to the proposed rule The Exchange proposes to amend and
offering them such access to Exchange change that are filed with the conform BX Equities Rule 7025 and
market data feeds. Commission, and all written Chapter XV, Section 3(c) of the
communications relating to the Exchange’s Options Rules, to define key
C. Self-Regulatory Organization’s terms; to clarify the rule language; and
Statement on Comments on the proposed rule change between the
Commission and any person, other than to clarify its application to Extranet
Proposed Rule Change Received From Providers and Distributors in various
Members, Participants, or Others those that may be withheld from the
public in accordance with the contexts.
No written comments were either The text of the proposed rule change
provisions of 5 U.S.C. 552, will be
solicited or received. is available on the Exchange’s Web site
available for Web site viewing and
III. Date of Effectiveness of the printing in the Commission’s Public at http://nasdaqbx.cchwallstreet.com/,
Proposed Rule Change and Timing for Reference Room, 100 F Street NE., at the principal office of the Exchange,
Commission Action Washington, DC 20549, on official and at the Commission’s Public
business days between the hours of Reference Room.
The foregoing rule change has become
effective pursuant to Section 10:00 a.m. and 3:00 p.m. Copies of the II. Self-Regulatory Organization’s
19(b)(3)(A)(ii) of the Act.11 filing also will be available for Statement of the Purpose of, and
At any time within 60 days of the inspection and copying at the principal Statutory Basis for, the Proposed Rule
filing of the proposed rule change, the office of the Exchange. All comments Change
Commission summarily may received will be posted without change.
In its filing with the Commission, the
temporarily suspend such rule change if Persons submitting comments are
Exchange included statements
it appears to the Commission that such cautioned that we do not redact or edit
concerning the purpose of and basis for
personal identifying information from
sradovich on DSK3GMQ082PROD with NOTICES
action is: (i) Necessary or appropriate in the proposed rule change and discussed
the public interest; (ii) for the protection comment submissions. You should
any comments it received on the
of investors; or (iii) otherwise in submit only information that you wish
proposed rule change. The text of these
furtherance of the purposes of the Act. to make available publicly. All
statements may be examined at the
If the Commission takes such action, the submissions should refer to File
Commission shall institute proceedings Number SR–NASDAQ–2017–114 and 12 17 CFR 200.30–3(a)(12).
should be submitted on or before 1 15 U.S.C. 78s(b)(1).
11 15 U.S.C. 78s(b)(3)(A)(ii). December 6, 2017. 2 17 CFR 240.19b–4.
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places specified in Item IV below. The the number of monthly access and proposes to improve the clarity of
Exchange has prepared summaries, set redistribution fees to be assessed. subsection 7025(b) of the Equities Rule
forth in sections A, B, and C below, of For example, if an Extranet Provider and Sec. 3(c)(2) of the Options Rule by
the most significant aspects of such supplies market data to five recipients using the new definitions outlined
statements. via five configurations, two of which are above and by specifying that the
located in a single Exchange facility monthly fees referred to are the monthly
A. Self-Regulatory Organization’s (such as Carteret, New Jersey) and three access and redistribution fees. As
Statement of the Purpose of, and of which are located at different described earlier, the third sentence of
Statutory Basis for, the Proposed Rule customer facilities, the Extranet existing rule text is being modified and
Change Provider will be assessed access and moved, respectively, to paragraphs (1)
1. Purpose redistribution fees of $5,000 per month. and (A) of new subsections 7025(a) of
If an Extranet Provider supplies market the Equities Rule and Sec. 3(c)(1) of the
The proposed rule change concerns data to one customer at two separate Options Rule as the improved definition
BX Rule 7025 (the ‘‘Equities Rule’’) and locations via two configurations—one of ‘‘Equipment Configuration.’’ The
Chapter XV, Section 3(c) of the within a Exchange facility and one fourth and fifth sentences of existing
Exchange’s Options Rules (the ‘‘Options located elsewhere—the Extranet rule text will move to new subsection
Rule,’’ collectively the ‘‘Rules’’), Provider will be assessed access and 7025(d) of the Equities Rule and Sec.
currently entitled ‘‘Extranet Access redistribution fees of $2,000 per month. 3(c)(4) of the Options Rule with modest
Fee.’’ The Exchange first imposed an If an Extranet Provider supplies market textual improvements but no change in
Extranet Access Fee in 2009.3 The data to four customers via four application of fees. The sixth sentence
Exchange last amended the Extranet configurations all located within an of existing rule text will move to the
Access Fee in January of 2015.4 Today, Exchange co-location facility, the final sentences of subsections 7025(b)
technology and the ecosystem have Extranet Provider will be assessed and (c) of the Equities Rule and Sec.
changed such that the Rules need $4,000 per month in access and 3(c)(2) and (c)(3) of the Options Rule
updating and clarification. Therefore, redistribution fees. The Exchange is with minor textual enhancements to
the Exchange is proposing several proposing to define the term ‘‘Extranet apply it with equal effect to Extranet
parallel changes to the Rules. Provider’’ as ‘‘any entity that has signed Providers and Distributors.
First, the Exchange is proposing to the Exchange Extranet Connection Lastly, the Exchange proposes to add
rename both Rules and to clarify their Agreement and that establishes a new subsection 7025(c) to the Equities
meaning through the use of defined telecommunications connection in the Rule and Sec. 3(c)(3) to the Options
terms. The Exchange is adding Exchange’s co-location facility.’’ The Rule to specify and codify that similarly
definitions of the terms Equipment Exchange requires entities to sign the situated Distributors and Extranet
Configuration and Extranet Provider to Exchange Extranet Connection Providers will pay similar fees. Under
new subsections 7025(a) of the Equities Agreement 5 for the purpose of setting subsection 7025(b) of the Equities Rule
Rule and Sec. 3(c)(1) of the Options the terms and conditions for those and Sec. 3(c)(2) of the Options Rule,
Rule. The Exchange is also cross- entities to place equipment in the Extranet Providers are assessed a
referencing the definition of Distributors Exchange’s co-location facility in order monthly fee of $1,000 for each
currently set forth in Exchange Rule to establish a telecommunications Equipment Configuration that offers
7019(b). connection directly to the Exchange and Exchange market data feeds. Similarly,
to provide its own customers with under proposed subsection 7025(c) of
The term ‘‘Equipment Configuration’’
access to the Exchange market data the Equities Rule and Sec. 3(c)(3) of the
will be defined to mean ‘‘any line,
feeds. Options Rule, the same $1,000 monthly
circuit, router package, or other
Finally, in order to further enhance fee applies to Distributors to whom the
technical configuration used to provide
the clarity of the Exchange’s rules, the same Exchange market data feeds are
a connection to the Exchange market
Exchange is proposing to cross-reference published via a Direct Circuit
data feeds.’’ The term Equipment
the definition of ‘‘Distributor’’ for Connection to the Exchange. The
Configuration replaces the term
purposes of this rule. Rule 7019(b) Exchange believes that, as defined,
‘‘Customer Premises Equipment
currently defines Distributor as: Extranet Providers and Distributors are
Configuration’’ set forth in the current
similarly situated because both entities
rules. The Exchange believes that the [A]ny entity that receives a feed or data file connect directly to the Exchange, and
term ‘‘Customer Premises Equipment of Exchange data directly from the Exchange both provide Exchange market data
Configuration’’ is ambiguous and creates or indirectly through another entity and then
feeds to their customers via those
confusion about the ownership and distributes it either internally (within that
entity) or externally (outside that entity). All connections.6 Likewise, the customers
location of equipment through which of Extranet Providers and Distributors
direct access to market data feeds is distributors shall execute an Exchange
distributor agreement. The Exchange itself is are similarly situated in that they
provided. By referring instead to receive the same Exchange market data
a vendor of its data feed(s) and has executed
‘‘Equipment Configuration,’’ the an Exchange distributor agreement and pays feeds through similar means.
Exchange intends to specify that the the distributor charge. For example, a Distributor with two
ownership and location of the Direct Circuit Connections to the
equipment is inconsequential to the The Exchange is proposing to
application of access and redistribution renumber and rearrange the existing 6 Proposed Rules 7025(c) and Section 3(c) of
fees. Rather, it is the number of rule text of the Rules. The first two Chapter XV of the Otpions [sic] Rules apply only
sradovich on DSK3GMQ082PROD with NOTICES
configurations that matters, determining sentences of existing rule text will to Distributors that connect to Nasdaq [sic] via a
become new subsection 7025(b) of the Direct Circuit Connection pursuant to Rule 7051(a).
Equities Rule and Sec. 3(c)(1) of the They do not apply to Distributors that are co-
3 See Securities Exchange Act Release No. 59307
located with Nasdaq [sic] pursuant to Rule 7034
(Jan. 28, 2009), 74 FR 6069 (Feb. 4, 2009) (SR–BX– Options Rule. The Exchange also and that connect to Nasdaq [sic] as specified under
2009–005). that Rule. Nor do they apply to entities that connect
4 See Securities Exchange Act Release No. 74045 5 Available at http://www.nasdaqtrader.com/ to Nasdaq [sic] remotely via Point of Presence
(Jan. 13, 2015); 80 FR 2766 (Jan. 20, 2015) (SR–BX– Content/AdministrationSupport/AgreementsData/ Connectivity under Rule 7051(c) as set forth in SR–
2015–003). NASDAQOMXExtranetAgreement.pdf. NASDAQ–2017–97.
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Exchange, both of which emanate from those customers, whether receiving The Exchange is proposing to enhance
a single Exchange co-location facility Exchange market data feeds via a the clarity of the language of the Rules
(such as Carteret, New Jersey) and both Distributor or an Extranet Provider to ensure that customers understand the
of which receive Exchange market data receive those market data feeds in a proper application of the Rules as
feeds, will be assessed access and similar fashion and with similar technology has changed and continues
redistribution fees of $2,000 per month. benefits. Those benefits are to change. The Exchange believes that
A Distributor with two Direct Circuit considerable: Secure, rapid, reliable customers support the continued
Connections to the Exchange that access to the highest quality market data evolution of its rules, and that regulators
emanate from two separate locations feeds on the trading of equities and do and should support and facilitate
and that receives Exchange market data options on the Exchange. this evolution.
feeds over each connection will be The Commission and the courts have
assessed access and redistribution fees repeatedly expressed their preference B. Self-Regulatory Organization’s
of $2,000 per month. A Distributor with for competition over regulatory Statement on Burden on Competition
two Direct Circuit Connections to the intervention in determining prices, The Exchange believes that the
Exchange that emanate from two products, and services in the securities proposed rule change will not impose
separate locations and that receives markets. In regulation NMS, while any burden on competition not
Exchange market data feeds over only adopting a series of steps to improve the necessary or appropriate in furtherance
one of the connections will be assessed current market model, the Commission of the purposes of the Act. To the
access and redistribution fees of $1,000 highlighted the importance of market contrary, the Exchange believes that
per month. forces in determining prices and SRO applying equal fees to similarly situated
The Exchange previously assessed revenues and, also, recognized that Extranet Providers and Distributors,
and currently assesses this fee in its current regulation of the market system enhancing the clarity of the Rules, and
capacity as operator of Nasdaq ‘‘has been remarkably successful in eliminating ambiguity imposes no
Technology Services, which had been promoting market competition in its burden on competition and is, in fact,
considered an Extranet Provider. The broader forms that are most important to pro-competitive. Extranet Providers and
Exchange believes that defining Extranet investors and listed companies.’’ 9 Distributors benefit from having a more
Providers and codifying the fee to The Exchange believes it is fair and accurate and complete understanding of
Distributors (other than Extranet equitable and not discriminatory to the Exchange’s services and fees when
Providers) is clearer to market apply equal access and redistribution determining which if any of those
participants. The Exchange also fees to Distributors, as it does to competing services to purchase
understands that Distributors, like Extranet Providers. As stated above, voluntarily.
Extranet Providers, commonly pass the Distributors and Extranet Providers are The Exchange believes that the
fee on to their customers and therefore similarly situated in that they receive proposed rule change places no burden
specifying that Distributors employing a Exchange market data feeds directly on competition because it specifies that
Direct Circuit Connection also pay the from the Exchange and they redistribute identical fees will apply to all similarly
fee will ensure consistent treatment that data to their own customers. situated Distributors and Extranet
between users enjoying the same Likewise, the Exchange believes that the Providers that provide Exchange market
benefits via Extranet Providers on the customers of Extranet Providers and of data feeds to their own customers. As
one hand and Distributors on the other, Distributors are similarly situated in the described above, such Distributors and
as described above. manner in which they receive Exchange Extranet Providers offer the same
2. Statutory Basis market data feeds. Exchange market data feeds in the same
The Exchange believes that it is manner to similarly situated customers.
The Exchange believes that this consistent with an equitable allocation The Exchange offers similar benefits to
proposal is consistent with Section 6(b) of reasonable dues and fees and not Distributors and Extranet Providers by
of the Act,7 in general, and furthers the unfairly discriminatory to charge the offering them such access to Exchange
objectives of Sections 6(b)(4) and 6(b)(5) fees proposed under Rule 7025 and market data feeds.
of the Act,8 in particular, in that it Section 3(c) of Chapter XV of the
provides for an equitable allocation of C. Self-Regulatory Organization’s
Otpions [sic] Rules to Extranet Providers
reasonable dues, fees and other charges Statement on Comments on the
and Distributors that are not co-located,
among members and issuers and other Proposed Rule Change Received From
but not to charge those same fees to
persons using its facility, and to specify Members, Participants, or Others
Distributors that are co-located. First,
that the fees are not designed to permit Distributors that are co-located already No written comments were either
unfair discrimination between pay fees set forth in Rule 7034 which solicited or received.
customers, issuers, brokers, or dealers. include connectivity and access to data.
The Exchange believes that the III. Date of Effectiveness of the
Second, if a co-located Distributor were Proposed Rule Change and Timing for
application of identical Access and to send data feeds out of the co-location
Redistribution fees to Distributors and Commission Action
facility, the feeds would be processed
Extranet Providers as described in the and normalized by the Distributor as The foregoing rule change has become
proposed rule change is fair and opposed to by the Exchange; in that effective pursuant to Section
equitable and non-discriminatory. As case, the Distributor would not be using 19(b)(3)(A)(ii) of the Act.10
stated above, Distributors and Extranet the proximity for which Extranets and At any time within 60 days of the
sradovich on DSK3GMQ082PROD with NOTICES
Providers both connect to the Exchange Direct Circuit Connection Distributors filing of the proposed rule change, the
directly for the purpose of re- are being assessed fees under Rule 7025 Commission summarily may
distributing Exchange market data feeds and Section 3(c) of Chapter XV of the temporarily suspend such rule change if
to their own customers and both enjoy Options Rules. it appears to the Commission that such
similar benefits in doing so. Likewise, action is: (i) Necessary or appropriate in
9 Securities Exchange Act Release No. 51808 the public interest; (ii) for the protection
7 15 U.S.C. 78f(b). (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
8 15 U.S.C. 78f(b)(4) and (5). (‘‘Regulation NMS Adopting Release’’). 10 15 U.S.C. 78s(b)(3)(A)(ii).
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![52958 Federal Register / Vol. 82, No. 219 / Wednesday, November 15, 2017 / Notices
of investors; or (iii) otherwise in be submitted on or before December 6, publication of the notice for this
furtherance of the purposes of the Act. 2017. proposed rule change is November 17,
If the Commission takes such action, the For the Commission, by the Division of 2017. The Commission is extending this
Commission shall institute proceedings Trading and Markets, pursuant to delegated 45-day time period.
to determine whether the proposed rule authority.11 The Commission finds it appropriate
should be approved or disapproved. Eduardo A. Aleman, to designate a longer period within
Assistant Secretary. which to take action on the proposed
IV. Solicitation of Comments
[FR Doc. 2017–24657 Filed 11–14–17; 8:45 am] rule change so that it has sufficient time
Interested persons are invited to BILLING CODE 8011–01–P
to consider this proposed rule change,
submit written data, views, and as modified by the recently filed
arguments concerning the foregoing, amendment. Accordingly, the
including whether the proposed rule SECURITIES AND EXCHANGE Commission, pursuant to Section
change is consistent with the Act. COMMISSION 19(b)(2) of the Act,6 designates January
Comments may be submitted by any of 1, 2018, as the date by which the
the following methods: [Release No. 34–82031; File No. SR– Commission shall either approve or
NYSEArca–2017–112]
Electronic Comments disapprove, or institute proceedings to
Self-Regulatory Organizations; NYSE determine whether to disapprove, the
• Use the Commission’s Internet Arca, Inc.; Notice of Designation of a proposed rule change (File No. SR–
comment form (http://www.sec.gov/ Longer Period for Commission Action NYSEArca-2017–112), as modified by
rules/sro.shtml); or on Proposed Rule, as Modified by Amendment No. 1.
• Send an email to rule-comments@ Amendment No. 1 Thereto, to List and For the Commission, by the Division of
sec.gov. Please include File Number SR– Trade Shares of the GraniteShares Trading and Markets, pursuant to delegated
BX–2017–048 on the subject line. Palladium Trust under NYSE Arca Rule authority.7
Paper Comments 8.201–E Eduardo A. Aleman,
Assistant Secretary.
• Send paper comments in triplicate November 8, 2017.
[FR Doc. 2017–24654 Filed 11–14–17; 8:45 am]
to Secretary, Securities and Exchange On September 12, 2017, NYSE Arca,
Commission, 100 F Street NE., BILLING CODE 8011–01–P
Inc. (‘‘Exchange’’) filed with the
Washington, DC 20549–1090. Securities and Exchange Commission
All submissions should refer to File (‘‘Commission’’), pursuant to Section
SECURITIES AND EXCHANGE
Number SR–BX–2017–048. This file 19(b)(1) of the Securities Exchange Act
COMMISSION
number should be included on the of 1934 (‘‘Act’’) 1 and Rule 19b–4
subject line if email is used. To help the thereunder,2 a proposed rule change to [Release No. 34–82040; File No. SR–
Commission process and review your list and trade shares of the NYSEArca–2017–111]
comments more efficiently, please use GraniteShares Palladium Trust under
only one method. The Commission will NYSE Arca Rule 8.201–E. The proposed Self-Regulatory Organizations; NYSE
post all comments on the Commission’s rule change was published for comment Arca, Inc.; Notice of Designation of a
Internet Web site (http://www.sec.gov/ in the Federal Register on October 3, Longer Period for Commission Action
rules/sro.shtml). Copies of the 2017.3 On October 24, 2017, the on a Proposed Rule Change, as
submission, all subsequent Exchange filed Amendment No. 1 to the Modified by Amendment No. 1, To List
amendments, all written statements proposed rule change.4 The Commission and Trade Shares of the GraniteShares
with respect to the proposed rule has not received any comments on the Silver Trust Under NYSE Arca Rule
change that are filed with the proposed rule change. 8.201–E
Commission, and all written Section 19(b)(2) of the Act 5 provides
November 8, 2017.
communications relating to the that within 45 days of the publication of
notice of the filing of a proposed rule On September 12, 2017, NYSE Arca,
proposed rule change between the Inc. (‘‘Exchange’’) filed with the
Commission and any person, other than change, or within such longer period up
to 90 days as the Commission may Securities and Exchange Commission
those that may be withheld from the (‘‘Commission’’), pursuant to Section
public in accordance with the designate if it finds such longer period
to be appropriate and publishes its 19(b)(1) of the Securities Exchange Act
provisions of 5 U.S.C. 552, will be of 1934 (‘‘Act’’) 1 and Rule 19b–4
available for Web site viewing and reasons for so finding, or as to which the
self-regulatory organization consents, thereunder,2 a proposed rule change to
printing in the Commission’s Public list and trade shares of the
Reference Room, 100 F Street NE., the Commission shall either approve the
proposed rule change, disapprove the GraniteShares Silver Trust under NYSE
Washington, DC 20549, on official Arca Rule 8.201–E. The proposed rule
business days between the hours of proposed rule change, or institute
proceedings to determine whether the change was published for comment in
10:00 a.m. and 3:00 p.m. Copies of the the Federal Register on September 29,
filing also will be available for proposed rule change should be
disapproved. The 45th day after 2017.3 On October 24, 2017, the
inspection and copying at the principal Exchange filed Amendment No. 1 to the
office of the Exchange. All comments proposed rule change.4 The Commission
11 17 CFR 200.30–3(a)(12).
received will be posted without change. 1 15 U.S.C. 78s(b)(1).
Persons submitting comments are
sradovich on DSK3GMQ082PROD with NOTICES
2 17 CFR 240.19b–4. 6 Id.
cautioned that we do not redact or edit 3 See Securities Exchange Act Release No. 81737 7 17 CFR 200.30–3(a)(31).
personal identifying information from (September 27, 2017), 82 FR 46106. 1 15 U.S.C. 78s(b)(1).
comment submissions. You should 4 Amendment No. 1, which replaced and 2 17 CFR 240.19b–4.
submit only information that you wish superseded the proposed rule change as originally 3 See Securities Exchange Act Release No. 81699
to make available publicly. All filed, is available at: https://www.sec.gov/ (Sept. 25, 2017), 82 FR 45634.
comments/sr-nysearca-2017-112/nysearca2017112- 4 Amendment No. 1, which amended and
submissions should refer to File 2653769-161363.pdf. replaced the proposed rule change in its entirety,
Number SR–BX–2017–048 and should 5 15 U.S.C. 78s(b)(2). is available on the Commission’s Web site at:
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Document Created: 2018-10-25 10:36:52
Document Modified: 2018-10-25 10:36:52
| 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 52955 |
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