82 FR 54440 - Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Modify Its Fees for Physical Ports

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 221 (November 17, 2017)

Page Range		54440-54441
FR Document		2017-24933
Federal Register, Volume 82 Issue 221 (Friday, November 17, 2017)
[Federal Register Volume 82, Number 221 (Friday, November 17, 2017)]
[Notices]
[Pages 54440-54441]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-24933]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82061; File No. SR-BatsEDGA-2017-30]


Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Modify Its Fees for Physical Ports

November 13, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on November 7, 2017, Cboe EDGA Exchange, Inc. (the ``Exchange'' or 
``EDGA'') (formerly known as Bats EDGA Exchange, Inc.) filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I, II and III below, which Items have been 
prepared by the Exchange. The Exchange has designated the proposed rule 
change as one establishing or changing a member due, fee, or other 
charge imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act 
\3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposed rule 
change effective upon filing with the Commission. The Commission is 
publishing this notice to solicit comments on the proposed rule change 
from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend the fee schedule applicable 
to Members \5\ and non-Members of the Exchange pursuant to EDGA Rules 
15.1(a) and (c).
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    \5\ The term ``Member'' is defined as ``any registered broker or 
dealer that has been admitted to membership in the Exchange.'' See 
Exchange Rule 1.5(n).
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.markets.cboe.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 parts of such 
statements.

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    A physical port is utilized by a Member or non-Member to connect to 
the Exchange at the data centers where the Exchange's servers are 
located. The Exchange currently maintains a presence in two third-party 
data centers: (i) The primary data center where the Exchange's business 
is primarily conducted on a daily basis, and (ii) a secondary data 
center, which is predominantly maintained for business continuity 
purposes. The Exchange currently assesses the following physical 
connectivity fees for Members and non-Members on a monthly basis: 
$2,000 per physical port that connects to the System \6\ via 1 gigabyte 
circuit; and $6,000 per physical port that connects to the System via 
10 gigabyte circuit. The Exchange proposes to increase the fee per 
physical port that connects to the System via a 10 gigabyte circuit 
from $6,000 per month to $7,000 per month in order to cover its 
increased infrastructure costs associated with establishing physical 
ports to connect to the Exchange's Systems and enable it to continue to 
maintain and improve its market technology and services.\7\ The 
Exchange does not propose to amend the fee for a 1 gigabyte circuit, 
which will remain $2,000 per month. The Exchange proposes to implement 
this amendment to its fee schedule on January 2, 2018.
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    \6\ The term ``System'' is defined as ``the electronic 
communications and trading facility designated by the Board through 
which securities orders of Users are consolidated for ranking, 
execution and, when applicable, routing away.'' See Exchange Rule 
1.5(cc).
    \7\ The Exchange also proposes a minor technical amendment to 
change the title of the first column from ``Connection Service 
Type'' to ``Service''.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\8\ in general, and 
furthers the objectives of Section 6(b)(4),\9\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities. The Exchange also notes that it operates in a highly-
competitive market in which market participants can readily direct 
order flow to competing venues if they deem fee levels at a particular 
venue to be excessive. The proposed rule change reflects a competitive 
pricing structure designed to incent market participants to direct 
their order flow to the Exchange.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed rate is equitable and non-
discriminatory in that it applies uniformly to all Members. Members and 
non-Members will continue to choose whether they want more than one 
physical port and choose the method of

[[Page 54441]]

connectivity based on their specific needs. All Members that 
voluntarily select various service options will be charged the same 
amount for the same services. As is true of all physical connectivity, 
all Members and non-Members have the option to select any connectivity 
option, and there is no differentiation with regard to the fees charged 
for the service.
    The Exchange believes that the proposal represents an equitable 
allocation of reasonable dues, fees, and other charges as its fees for 
physical connectivity are reasonably constrained by competitive 
alternatives. If a particular exchange charges excessive fees for 
connectivity, affected Members and non-Members may opt to terminate 
their connectivity arrangements with that exchange, and adopt a 
possible range of alternative strategies, including routing to the 
applicable exchange through another participant or market center or 
taking that exchange's data indirectly. Accordingly, if the Exchange 
charges excessive fees, it would stand to lose not only connectivity 
revenues but also revenues associated with the execution of orders 
routed to it, and, to the extent applicable, market data revenues. The 
Exchange believes that this competitive dynamic imposes powerful 
restraints on the ability of any exchange to charge unreasonable fees 
for connectivity.
    Furthermore, the proposed rule change is also an equitable 
allocation of reasonable dues, fees, and other charges as the Exchange 
believes that the increased fees obtained will enable it to cover its 
increased infrastructure costs associated with establishing physical 
ports to connect to the Exchange's Systems. The additional revenue from 
the increased fee will also enable the Exchange to continue to maintain 
and improve its market technology and services.
    Lastly, the Exchange believes the fees and credits remain 
competitive with those charged by other venues and therefore continue 
to be reasonable and equitably allocated to Members. For instance, the 
proposed fees for a 10 gigabyte circuit of $7,000 per month is less 
than analogous fees charged by the Nasdaq Stock Market LLC (``Nasdaq'') 
and NYSE Arca, Inc. (``Arca''), which range from $10,000-$15,000 per 
month for 10 gigabyte circuits.\10\
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    \10\ See Nasdaq Rule 7034(b) and the NYSE Arca fee schedule 
available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf (dated October 11, 2017).
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(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. As discussed above, the 
Exchange believes that fees for connectivity are constrained by the 
robust competition for order flow among exchanges and non-exchange 
markets. The Exchange does not believe that the proposed changes 
represent a significant departure from previous pricing offered by the 
Exchange or pricing offered by the Exchange's competitors. 
Additionally, Members may opt to disfavor the Exchange's pricing if 
they believe that alternatives offer them better value. Further, 
excessive fees for connectivity would serve to impair an exchange's 
ability to compete for order flow rather than burdening competition.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from Members or other interested 
parties.

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) of the Act \11\ and paragraph (f) of Rule 19b-4 
thereunder.\12\ At any time within 60 days of the filing of the 
proposed rule change, the Commission summarily may temporarily suspend 
such rule change if it appears to the Commission that such action is 
necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File No. SR-BatsEDGA-2017-30 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 No. SR-BatsEDGA-2017-30. 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 such filing will also 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 No. SR-BatsEDGA-2017-30 and should be 
submitted on or before December 8, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-24933 Filed 11-16-17; 8:45 am]
 BILLING CODE 8011-01-P
54440 Federal Register / Vol. 82, No. 221 / Friday, November 17, 2017 / Notices

of Statements on Review (‘‘Corrected 7, 2017, Cboe EDGA Exchange, Inc. (the Exchange currently maintains a
Order’’).3 The Petitioners represent that ‘‘Exchange’’ or ‘‘EDGA’’) (formerly presence in two third-party data centers:
the motion is unopposed by the Options known as Bats EDGA Exchange, Inc.) (i) The primary data center where the
Clearing Corporation (‘‘OCC’’). The filed with the Securities and Exchange Exchange’s business is primarily
Petitioners also represent that they have Commission (‘‘Commission’’) the conducted on a daily basis, and (ii) a
entered into a confidentiality agreement proposed rule change as described in secondary data center, which is
with OCC on November 1, 2017 to Items I, II and III below, which Items predominantly maintained for business
obtain access to the confidential filings have been prepared by the Exchange. continuity purposes. The Exchange
that OCC submitted to the Commission The Exchange has designated the currently assesses the following
on October 13, 2017 to support OCC’s proposed rule change as one physical connectivity fees for Members
proposed rule change. The Petitioners establishing or changing a member due, and non-Members on a monthly basis:
request an extension of time so that they fee, or other charge imposed by the $2,000 per physical port that connects
may review these confidential materials Exchange under Section 19(b)(3)(A)(ii) to the System 6 via 1 gigabyte circuit;
and provide the Commission with of the Act 3 and Rule 19b–4(f)(2) and $6,000 per physical port that
informed and deliberate comments. The thereunder,4 which renders the connects to the System via 10 gigabyte
Petitioners further represent that proposed rule change effective upon circuit. The Exchange proposes to
extending the time for comment would filing with the Commission. The increase the fee per physical port that
allow them the same amount of time, Commission is publishing this notice to connects to the System via a 10 gigabyte
thirty days, to review the materials as solicit comments on the proposed rule circuit from $6,000 per month to $7,000
was contemplated by the Corrected change from interested persons. per month in order to cover its
Order. Given the unopposed nature of increased infrastructure costs associated
the request and the surrounding facts I. Self-Regulatory Organization’s with establishing physical ports to
regarding this matter, the Commission Statement of the Terms of Substance of connect to the Exchange’s Systems and
believes that granting the extension will the Proposed Rule Change enable it to continue to maintain and
serve the interests of justice. The Exchange filed a proposal to improve its market technology and
Accordingly, it is ordered, that the amend the fee schedule applicable to services.7 The Exchange does not
Unopposed Motion to Substitute Virtu Members 5 and non-Members of the propose to amend the fee for a 1
Financial Inc. and Virtu Americas LLC Exchange pursuant to EDGA Rules gigabyte circuit, which will remain
for Petitioner KCG Holdings, Inc., is 15.1(a) and (c). $2,000 per month. The Exchange
hereby granted; and The text of the proposed rule change proposes to implement this amendment
It is further ordered, that the is available at the Exchange’s Web site to its fee schedule on January 2, 2018.
Unopposed Motion for Extension of at www.markets.cboe.com, at the
Time is hereby granted. The time for 2. Statutory Basis
principal office of the Exchange, and at
any party or other person to file any the Commission’s Public Reference The Exchange believes that the
additional statement, which may Room. proposed rule change is consistent with
include statements previously the objectives of Section 6 of the Act,8
submitted or otherwise available, or any II. Self-Regulatory Organization’s in general, and furthers the objectives of
new information such party or other Statement of the Purpose of, and Section 6(b)(4),9 in particular, as it is
person considers relevant, is extended Statutory Basis for, the Proposed Rule designed to provide for the equitable
from November 13, 2017 to November Change allocation of reasonable dues, fees and
30, 2017. In its filing with the Commission, the other charges among its Members and
By the Commission. Exchange included statements other persons using its facilities. The
concerning the purpose of and basis for Exchange also notes that it operates in
Brent J. Fields,
the proposed rule change and discussed a highly-competitive market in which
Secretary.
any comments it received on the market participants can readily direct
[FR Doc. 2017–24939 Filed 11–16–17; 8:45 am] order flow to competing venues if they
proposed rule change. The text of these
BILLING CODE 8011–01–P
statements may be examined at the deem fee levels at a particular venue to
places specified in Item IV below. The be excessive. The proposed rule change
Exchange has prepared summaries, set reflects a competitive pricing structure
SECURITIES AND EXCHANGE designed to incent market participants
COMMISSION forth in Sections A, B, and C below, of
the most significant parts of such to direct their order flow to the
[Release No. 34–82061; File No. SR– statements. Exchange.
BatsEDGA–2017–30] The Exchange believes that the
(A) Self-Regulatory Organization’s proposed rate is equitable and non-
Self-Regulatory Organizations; Cboe Statement of the Purpose of, and discriminatory in that it applies
EDGA Exchange, Inc.; Notice of Filing Statutory Basis for, the Proposed Rule uniformly to all Members. Members and
and Immediate Effectiveness of a Change non-Members will continue to choose
Proposed Rule Change To Modify Its whether they want more than one
Fees for Physical Ports 1. Purpose
physical port and choose the method of
A physical port is utilized by a
November 13, 2017.
Member or non-Member to connect to 6 The term ‘‘System’’ is defined as ‘‘the electronic
Pursuant to Section 19(b)(1) of the the Exchange at the data centers where communications and trading facility designated by
sradovich on DSK3GMQ082PROD with NOTICES

Securities Exchange Act of 1934 (the the Exchange’s servers are located. The the Board through which securities orders of Users
‘‘Act’’),1 and Rule 19b–4 thereunder,2 are consolidated for ranking, execution and, when
applicable, routing away.’’ See Exchange Rule
notice is hereby given that on November 3 15 U.S.C. 78s(b)(3)(A)(ii). 1.5(cc).
4 17 CFR 240.19b–4(f)(2). 7 The Exchange also proposes a minor technical
3 Exchange Act Release No. 81629 (September 14, 5 The term ‘‘Member’’ is defined as ‘‘any amendment to change the title of the first column
2017), File No. SR–OCC–2015–02. registered broker or dealer that has been admitted from ‘‘Connection Service Type’’ to ‘‘Service’’.
1 15 U.S.C. 78s(b)(1). 8 15 U.S.C. 78f.
to membership in the Exchange.’’ See Exchange
2 17 CFR 240.19b–4. Rule 1.5(n). 9 15 U.S.C. 78f(b)(4).

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Federal Register / Vol. 82, No. 221 / Friday, November 17, 2017 / Notices 54441

connectivity based on their specific (B) Self-Regulatory Organization’s • Send an email to rule-comments@
needs. All Members that voluntarily Statement on Burden on Competition sec.gov. Please include File No. SR–
select various service options will be BatsEDGA–2017–30 on the subject line.
The Exchange does not believe that
charged the same amount for the same
the proposed rule change will impose Paper Comments
services. As is true of all physical
any burden on competition not
connectivity, all Members and non-
necessary or appropriate in furtherance • Send paper comments in triplicate
Members have the option to select any of the purposes of the Act. As discussed to Secretary, Securities and Exchange
connectivity option, and there is no above, the Exchange believes that fees Commission, 100 F Street NE.,
differentiation with regard to the fees for connectivity are constrained by the Washington, DC 20549–1090.
charged for the service. robust competition for order flow among All submissions should refer to File No.
The Exchange believes that the exchanges and non-exchange markets. SR–BatsEDGA–2017–30. This file
proposal represents an equitable The Exchange does not believe that the
number should be included on the
allocation of reasonable dues, fees, and proposed changes represent a significant
subject line if email is used. To help the
other charges as its fees for physical departure from previous pricing offered
Commission process and review your
connectivity are reasonably constrained by the Exchange or pricing offered by
the Exchange’s competitors. comments more efficiently, please use
by competitive alternatives. If a
Additionally, Members may opt to only one method. The Commission will
particular exchange charges excessive
disfavor the Exchange’s pricing if they post all comments on the Commission’s
fees for connectivity, affected Members
believe that alternatives offer them Internet Web site (http://www.sec.gov/
and non-Members may opt to terminate
better value. Further, excessive fees for rules/sro.shtml). Copies of the
their connectivity arrangements with
connectivity would serve to impair an submission, all subsequent
that exchange, and adopt a possible
exchange’s ability to compete for order amendments, all written statements
range of alternative strategies, including
flow rather than burdening competition. with respect to the proposed rule
routing to the applicable exchange
change that are filed with the
through another participant or market (C) Self-Regulatory Organization’s
center or taking that exchange’s data Commission, and all written
Statement on Comments on the
indirectly. Accordingly, if the Exchange communications relating to the
Proposed Rule Change Received From
charges excessive fees, it would stand to proposed rule change between the
Members, Participants or Others
lose not only connectivity revenues but Commission and any person, other than
also revenues associated with the The Exchange has not solicited, and those that may be withheld from the
execution of orders routed to it, and, to does not intend to solicit, comments on public in accordance with the
the extent applicable, market data this proposed rule change. The provisions of 5 U.S.C. 552, will be
Exchange has not received any available for Web site viewing and
revenues. The Exchange believes that
unsolicited written comments from printing in the Commission’s Public
this competitive dynamic imposes
Members or other interested parties. Reference Room, 100 F Street NE.,
powerful restraints on the ability of any
exchange to charge unreasonable fees III. Date of Effectiveness of the Washington, DC 20549, on official
for connectivity. Proposed Rule Change and Timing for business days between the hours of
Commission Action 10:00 a.m. and 3:00 p.m. Copies of such
Furthermore, the proposed rule filing will also be available for
change is also an equitable allocation of The foregoing rule change has become inspection and copying at the principal
reasonable dues, fees, and other charges effective pursuant to Section 19(b)(3)(A) office of the Exchange. All comments
as the Exchange believes that the of the Act 11 and paragraph (f) of Rule received will be posted without change.
increased fees obtained will enable it to 19b–4 thereunder.12 At any time within Persons submitting comments are
cover its increased infrastructure costs 60 days of the filing of the proposed rule cautioned that we do not redact or edit
associated with establishing physical change, the Commission summarily may personal identifying information from
ports to connect to the Exchange’s temporarily suspend such rule change if
comment submissions. You should
Systems. The additional revenue from it appears to the Commission that such
submit only information that you wish
the increased fee will also enable the action is necessary or appropriate in the
public interest, for the protection of to make available publicly. All
Exchange to continue to maintain and
investors, or otherwise in furtherance of submissions should refer to File No.
improve its market technology and
the purposes of the Act. SR–BatsEDGA–2017–30 and should be
services.
submitted on or before December 8,
Lastly, the Exchange believes the fees IV. Solicitation of Comments 2017.
and credits remain competitive with
those charged by other venues and Interested persons are invited to For the Commission, by the Division of
submit written data, views and Trading and Markets, pursuant to delegated
therefore continue to be reasonable and
arguments concerning the foregoing, authority.13
equitably allocated to Members. For
instance, the proposed fees for a 10 including whether the proposed rule Eduardo A. Aleman,
change is consistent with the Act. Assistant Secretary.
gigabyte circuit of $7,000 per month is
Comments may be submitted by any of
less than analogous fees charged by the [FR Doc. 2017–24933 Filed 11–16–17; 8:45 am]
the following methods:
Nasdaq Stock Market LLC (‘‘Nasdaq’’) BILLING CODE 8011–01–P
sradovich on DSK3GMQ082PROD with NOTICES

and NYSE Arca, Inc. (‘‘Arca’’), which Electronic Comments
range from $10,000–$15,000 per month
• Use the Commission’s Internet
for 10 gigabyte circuits.10
comment form (http://www.sec.gov/
10 See Nasdaq Rule 7034(b) and the NYSE Arca
rules/sro.shtml); or
fee schedule available at https://www.nyse.com/
11 15 U.S.C. 78s(b)(3)(A).
publicdocs/nyse/markets/nyse-arca/NYSE_Arca_
Marketplace_Fees.pdf (dated October 11, 2017). 12 17 CFR 240.19b–4(f). 13 17 CFR 200.30–3(a)(12).

VerDate Sep<11>2014 18:32 Nov 16, 2017 Jkt 244001 PO 00000 Frm 00126 Fmt 4703 Sfmt 9990 E:\FR\FM\17NON1.SGM 17NON1
Document Created: 2017-11-17 05:14:46
Document Modified: 2017-11-17 05:14:46
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		82 FR 54440