82_FR_55359 82 FR 55137 - Joint Industry Plan; Notice of Filing and Immediate Effectiveness of the Fortieth Amendment to the Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privileges Basis

82 FR 55137 - Joint Industry Plan; Notice of Filing and Immediate Effectiveness of the Fortieth Amendment to the Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privileges Basis

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 222 (November 20, 2017)

Page Range55137-55139
FR Document2017-25028

Federal Register, Volume 82 Issue 222 (Monday, November 20, 2017)
[Federal Register Volume 82, Number 222 (Monday, November 20, 2017)]
[Notices]
[Pages 55137-55139]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-25028]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82072; File No. S7-24-89]


Joint Industry Plan; Notice of Filing and Immediate Effectiveness 
of the Fortieth Amendment to the Joint Self-Regulatory Organization 
Plan Governing the Collection, Consolidation and Dissemination of 
Quotation and Transaction Information for Nasdaq-Listed Securities 
Traded on Exchanges on an Unlisted Trading Privileges Basis

November 14, 2017.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on October 19, 2017, the Participants \3\ in the Joint Self-Regulatory 
Organization Plan Governing the Collection, Consolidation and 
Dissemination of Quotation and Transaction Information for Nasdaq-
Listed Securities Traded on Exchanges on an Unlisted Trading Privileges 
Basis (``NASDAQ/UTP Plan'' or ``Plan'') filed with the Securities and 
Exchange Commission (``Commission'') a proposal to amend the NASDAQ/UTP 
Plan.\4\ The amendment is the 40th Amendment to the NASDAQ/UTP Plan 
(``Amendment'').\5\ The Amendment proposes to modify the text of the 
fee schedule of the Plan to conform the text of the Plan to what was 
described in both the transmittal letter for the Thirty-Third Amendment 
to the Plan and the Commission's public notice of the filing of the 
Thirty-Third Amendment to the Plan.\6\
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 242.608.
    \3\ The Participants are: Bats BYX Exchange, Inc.; Bats BZX 
Exchange, Inc.; Bats EDGA Exchange, Inc.; Bats EDGX Exchange, Inc.; 
Chicago Board Options Exchange, Incorporated; Chicago Stock 
Exchange, Inc.; Financial Industry Regulatory Authority, Inc.; 
Investors Exchange LLC; Nasdaq BX, Inc.; Nasdaq ISE, LLC; Nasdaq 
PHLX LLC; The Nasdaq Stock Market LLC; New York Stock Exchange LLC; 
NYSE Arca, Inc.; NYSE American LLC; and NYSE National, Inc. 
(collectively, the ``Participants'').
    \4\ The Plan governs the collection, processing, and 
dissemination on a consolidated basis of quotation information and 
transaction reports in Eligible Securities for each of its 
Participants. This consolidated information informs investors of the 
current quotation and recent trade prices of Nasdaq securities. It 
enables investors to ascertain from one data source the current 
prices in all the markets trading Nasdaq securities. The Plan serves 
as the required transaction reporting plan for its Participants, 
which is a prerequisite for their trading Eligible Securities. See 
Securities Exchange Act Release No. 55647 (April 19, 2007), 72 FR 
20891 (April 26, 2007).
    \5\ See Letter from Emily Kasparov to Brent J. Fields, dated 
October 18, 2017 (``Transmittal Letter'').
    \6\ See, e.g., Transmittal Letter at 1, 3; Securities Exchange 
Act Release No. 73279 (October 1, 2014), 79 FR 60522, (October 7, 
2014) (``October 2014 Non-Display Filing'').
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    The original filing and notice included the following language 
designed to direct Participants to look to the regular fee schedule: 
``but the data may be fee liable under the regular fee schedule.'' \7\ 
Due to what the Participants state was an inadvertent omission, the 
language described in the transmittal letter and included in the public 
notice of the filing was omitted from the text of the Plan.\8\ The 
Participants propose to amend the Plan language to state that the Non-
Display fees do not apply when data is used to create derived data and 
the derived data is used for the purposes of solely displaying the 
derived data, and also to conform the Plan language to the original 
filing and notice directing subscribers to separate provisions of the 
Plan that still apply.\9\ Thus, the following conforming language would 
be added: ``but the data may be fee liable under the regular fee 
schedule.'' \10\ No comments were received on this topic when the 
Thirty-Third Amendment was noticed.
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    \7\ See October 2014 Non-Display Filing, 79 FR at 60525.
    \8\ See Transmittal Letter at 1, 3.
    \9\ See Transmittal Letter at 3.
    \10\ See Addendum 1 to the Thirty-Third Amendment to the Plan. 
The Addendum is marked to show the changes to the text of the Plan 
that the Participants proposed in the Thirty-Third Amendment.
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    Pursuant to Rule 608(b)(3)(i) under Regulation NMS,\11\ the 
Participants designate the Amendment as establishing or changing a fee 
or other charge collected on behalf of the Participants in connection 
with access to, or use of, any facility contemplated by the Nasdaq/UTP 
Plan and are submitting the amendment for immediate effectiveness.
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    \11\ 17 CFR 242.608(b)(3)(i).
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    The Commission is publishing this notice to solicit comments from 
interested persons on the Amendment. Set forth in Sections I and II is 
the statement of the purpose and summary of the Amendments, along with 
the information required by Rules 608(a) and 601(a) under the Act, 
prepared and submitted by the Participants to the Commission.

[[Page 55138]]

I. Rule 608(a)

A. Purpose of the Amendment

1. Background
    Derived data consists of pricing data or other information that is 
created in whole or part from consolidated quotation or last sale 
information and:
     Cannot be reverse-engineered to recreate the information, 
or
     Cannot be used to create other data that is recognized by 
NASDAQ to be a reasonable facsimile for the consolidated quotation or 
last sale information.
    Historically, derived data that contains price data and is based 
upon a single security symbol is fee liable at the underlying product 
rates. If derived real-time volume data for a single security does not 
also include price data, however, it is not fee liable. Additionally, 
derived data that contains price and/or volume data based upon multiple 
security symbols is not fee liable. This approach as to when derived 
data may be considered fee liable is due to the similarity between 
single security derived data containing price data and the consolidated 
quotation or last sale information.
    The application of the above-described derived data policy has been 
in place since at least 2007.\12\ The derived data policy for UTP 
market data paralleled the derived data policy adopted by Nasdaq for 
its proprietary data.\13\
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    \12\ See NASDAQ and UTP Market Data Policies V. 2007-02 
(September 13, 2007). The Plan's derived data policy differs from 
the treatment of derived data by the CTA and CQ Plan. Under the CTA 
and CQ Plan, derived data is never fee liable, even at the 
underlying product rates, regardless of how the derived data is 
used.
    \13\ As part of the Non-Display amendment in October 2014, the 
Participants stated that the fee changes proposed therein would 
``move in the direction of continuing to harmonize fee structures 
under the Plan with fee structures under the CTA Plan, CQ Plan, and 
the OPRA Plan.'' See October 2014 Non-Display Filing, 79 FR at 
60523. This language in the October 2014 Non-Display Filing was 
intended for the Professional Subscriber device fees, the Non-
Display fees, and the per-query fees and did harmonize these aspects 
of the various market data plans' fee structure. It was not intended 
to remove all differences that existed at the time the 2014 Non-
Display Filing was submitted to the Commission and that continue 
today. For instance, the CTA and CQ Plans have a tiered fee 
structure for Professional Subscribers based on the number of 
devices while the Plan has a single tier for Professional Subscriber 
fees. Conversely, the UTP Plan has a tiered fee structure for its 
Cable Television Ticker fee while the CTA and CQ Plan have a single 
tier with a set maximum for the same fee. These differences, along 
with a difference in the various market data plans'approaches to the 
fee liability of derived data, is due to the longstanding historical 
differences between the administration of each market data plan.
---------------------------------------------------------------------------

2. Correcting Oversight in 2014 Non-Display Amendments
    In October 2014, the Participants amended the Plan's fee schedule 
to establish fees for Non-Display Uses and to reduce the Subscriber 
fees assessed on Professional Subscribers.\14\ As part of the 
amendment, the Participants made clear in their submission that, 
although Non-Display fees were not applicable when using the data in 
Non-Display to create derived data and the derived data was used for 
the purposes of solely displaying the derived data, the data still 
could be fee liable under the regular fee schedule.\15\ The 
Participants included this language to resolve a potential ambiguity 
between the existing derived data policy and the Non-Display fees. This 
language was designed to make clear that simply creating derived data 
would not result in Non-Display fees because the creation of derived 
data could conceivably fall within the definition of a Non-Display Use. 
Instead, like the derived data policy since at least 2007, derived data 
is meant to be fee liable at the underlying product rates.
---------------------------------------------------------------------------

    \14\ See generally October 2014 Non-Display Filing.
    \15\ Id. at 60525.
---------------------------------------------------------------------------

    Although this language was a part of the transmittal letter and 
notice for the October 2014 amendments, the language was inadvertently 
left out of the text of the Plan in that amendment. Currently, Exhibit 
2 of the Plan states that ``Non-Display Use does not apply to the 
creation and use of derived data.'' The Participants are proposing to 
correct this inadvertent clerical omission to include in the Plan 
language the detail contained in the October 2014 submission. 
Therefore, the Participants are proposing to amend the text of the 
Plan's fee schedule to insert the Plan's historical derived data policy 
that derived data will be subject to the underlying products fee 
schedule. As such, the use of data will be excepted from the Non-
Display fees when such data is used to create derived data and such 
derived data is used for the purpose of solely displaying the derived 
data.
    The Participants believe that this proposed change will align the 
October 2014 submission and text of the Plan and maintain the 
historical approach of the fee liability of derived data. As such, 
instances where a data recipient is using the data in Non-Display to 
create derived data, such as Indications of Interest or Volume-Weighted 
Average Prices, for the purpose of solely displaying such data, then 
the Non-Display fee schedule does not apply. Such use may be fee liable 
for the Subscriber fees, and other fees such as Access and/or 
Redistributor fees, if applicable.

B. Governing or Constituent Documents

    Not applicable.

C. Implementation of the Amendments

    Because the Participants have designated the Amendment as one 
establishing or changing fee or other charge collected on behalf of the 
Participants in connection with access to, or use of, any facility 
contemplated by the Nasdaq/UTP Plan,\16\ the Amendment became effective 
upon filing with the Commission.
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    \16\ See 17 CFR 242.608(b)(3)(i)
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D. Development and Implementation Phases

    See Item I.C. above.

E. Analysis of Impact on Competition

    The Participants assert that the Amendment does not impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Securities Exchange Act of 1934 (the 
``Act''). Additionally, the Participants do not believe that the 
proposed amendment introduces terms that are unreasonably 
discriminatory for the purposes of Section 11A(c)(1)(D) of the Act. The 
Participants have submitted this amendment to simply correct an 
inadvertent omission in the Plan language to correspond to language 
previously contained in a submission to the Commission. This amendment 
simply aligns the text of the Plan with the language contained in the 
October 2014 submission and the longstanding practice of the Plan's 
application of fees to derived data.
    Furthermore, the Participants believe that this longstanding 
derived data policy is reasonable in order to protect the Plan's 
proprietary rights over consolidated quotation and last sale 
information. As previously stated, derived data that contains price 
data and is based upon a single security symbol is fee liable at the 
underlying product rates. Derived data that contains volume data but no 
price data and derived data that is based upon multiple security 
symbols is not currently fee liable. Such an approach is logical given 
the similarity between derived data that contains price data and is 
based upon a single security symbol to the consolidated quotation and 
last sale information disseminated by the Plan.

[[Page 55139]]

F. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plan

    Not applicable.

G. Approval by Sponsors in Accordance With Plan

    See Item I.C. above.

H. Description of Operation of Facility Contemplated by the Proposed 
Amendments

    Not applicable.

I. Terms and Conditions of Access

    Not applicable.

J. Method of Determination and Imposition, and Amount of, Fees and 
Charges

    The Participants believe that the amendment proposed herein is fair 
and reasonable since it corrects an inadvertent omission in order to 
ensure the continued implementation of the derived data policy that has 
been in place for at least ten years.
    The longstanding derived data policy is reasonable in order to 
protect the Plan's proprietary rights over consolidated quotation and 
last sale information. As previously stated, derived data that contains 
price data and is based upon a single security symbol is fee liable at 
the underlying product rates. Derived data that contains volume data 
but no price data and derived data that is based upon multiple security 
symbols is not currently fee liable. Such an approach is logical given 
the similarity between derived data that contains price data and is 
based upon a single security symbol to the consolidated quotation and 
last sale information disseminated by the Plans.

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

II. Rule 601(a)

A. Equity Securities for Which Transaction Reports Shall Be Required by 
the Plan

    Not applicable.

B. Reporting Requirements

    Not applicable.

C. Manner of Collecting, Processing, Sequencing, Making Available and 
Disseminating Last Sale Information

    Not applicable.

D. Manner of Consolidation

    Not applicable.

E. Standards and Methods Ensuring Promptness, Accuracy and Completeness 
of Transaction Reports

    Not applicable

F. Rules and Procedures Addressed to Fraudulent or Manipulative 
Dissemination

    Not applicable.

G. Terms of Access to Transaction Reports

    Not applicable.

H. Identification of Marketplace of Execution

    Not applicable.

III. Solicitation of Comments

    The Commission seeks comments on the Amendment. Interested persons 
are invited to submit written data, views, and arguments concerning the 
foregoing, including whether the proposed Amendment 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 Number S7-24-89 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number File No. S7-24-89. 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies 
of the submission, all written statements with respect to the proposed 
Amendment that are filed with the Commission, and all written 
communications relating to the proposed Amendment 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 on official business days between the hours of 10:00 
a.m. and 3:00 p.m. Copies of the Amendment also will be available for 
Web site viewing and printing at the principal office of the Plan. 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 S7-24-89 and should be 
submitted on or before December 11, 2017.

    By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2017-25028 Filed 11-17-17; 8:45 am]
 BILLING CODE 8011-01-P



                                                                           Federal Register / Vol. 82, No. 222 / Monday, November 20, 2017 / Notices                                                        55137

                                                market data users has been consistent                   and should be submitted on or before                     proposes to modify the text of the fee
                                                with the representations of the                         December 11, 2017.                                       schedule of the Plan to conform the text
                                                Participants; (2) the number of market                    By the Commission.                                     of the Plan to what was described in
                                                data users that would be impacted by                    Brent J. Fields,                                         both the transmittal letter for the Thirty-
                                                these Amendments; (3) the impact these                  Secretary.
                                                                                                                                                                 Third Amendment to the Plan and the
                                                Amendments would have on, for                                                                                    Commission’s public notice of the filing
                                                                                                        [FR Doc. 2017–25027 Filed 11–17–17; 8:45 am]
                                                example, the fees paid by market data                                                                            of the Thirty-Third Amendment to the
                                                                                                        BILLING CODE 8011–01–P
                                                users; and (4) whether the Amendments                                                                            Plan.6
                                                would have a disproportionally greater                                                                              The original filing and notice
                                                impact on certain segments of users                     SECURITIES AND EXCHANGE                                  included the following language
                                                (e.g., small and midsize trading firms).                COMMISSION                                               designed to direct Participants to look to
                                                Interested persons are invited to submit                                                                         the regular fee schedule: ‘‘but the data
                                                written data, views, and arguments                      [Release No. 34–82072; File No. S7–24–89]                may be fee liable under the regular fee
                                                concerning the foregoing, including                                                                              schedule.’’ 7 Due to what the
                                                whether the proposed Amendments are                     Joint Industry Plan; Notice of Filing                    Participants state was an inadvertent
                                                consistent with the Act. Comments may                   and Immediate Effectiveness of the                       omission, the language described in the
                                                be submitted by any of the following                    Fortieth Amendment to the Joint Self-
                                                                                                                                                                 transmittal letter and included in the
                                                methods:                                                Regulatory Organization Plan
                                                                                                                                                                 public notice of the filing was omitted
                                                                                                        Governing the Collection,
                                                Electronic Comments                                                                                              from the text of the Plan.8 The
                                                                                                        Consolidation and Dissemination of
                                                                                                                                                                 Participants propose to amend the Plan
                                                  • Use the Commission’s Internet                       Quotation and Transaction Information
                                                                                                                                                                 language to state that the Non-Display
                                                comment form (http://www.sec.gov/                       for Nasdaq-Listed Securities Traded on
                                                                                                                                                                 fees do not apply when data is used to
                                                rules/sro.shtml); or                                    Exchanges on an Unlisted Trading
                                                                                                                                                                 create derived data and the derived data
                                                  • Send an email to rule-comments@                     Privileges Basis
                                                                                                                                                                 is used for the purposes of solely
                                                sec.gov. Please include File Number SR–                 November 14, 2017.                                       displaying the derived data, and also to
                                                CTA/CQ–2017–04 on the subject line.                        Pursuant to Section 11A of the                        conform the Plan language to the
                                                Paper Comments                                          Securities Exchange Act of 1934                          original filing and notice directing
                                                                                                        (‘‘Act’’),1 and Rule 608 thereunder,2                    subscribers to separate provisions of the
                                                   • Send paper comments in triplicate                  notice is hereby given that on October                   Plan that still apply.9 Thus, the
                                                to Brent J. Fields, Secretary, Securities               19, 2017, the Participants 3 in the Joint                following conforming language would
                                                and Exchange Commission, 100 F Street                   Self-Regulatory Organization Plan                        be added: ‘‘but the data may be fee
                                                NE., Washington, DC 20549–1090.                         Governing the Collection, Consolidation                  liable under the regular fee schedule.’’ 10
                                                All submissions should refer to File                    and Dissemination of Quotation and                       No comments were received on this
                                                Number SR–CTA/CQ–2017–04. This file                     Transaction Information for Nasdaq-                      topic when the Thirty-Third
                                                number should be included on the                        Listed Securities Traded on Exchanges                    Amendment was noticed.
                                                subject line if email is used. To help the              on an Unlisted Trading Privileges Basis                     Pursuant to Rule 608(b)(3)(i) under
                                                Commission process and review your                      (‘‘NASDAQ/UTP Plan’’ or ‘‘Plan’’) filed                  Regulation NMS,11 the Participants
                                                comments more efficiently, please use                   with the Securities and Exchange                         designate the Amendment as
                                                only one method. The Commission will                    Commission (‘‘Commission’’) a proposal                   establishing or changing a fee or other
                                                post all comments on the Commission’s                   to amend the NASDAQ/UTP Plan.4 The                       charge collected on behalf of the
                                                Internet Web site (http://www.sec.gov/                  amendment is the 40th Amendment to                       Participants in connection with access
                                                rules/sro.shtml). Copies of the                         the NASDAQ/UTP Plan                                      to, or use of, any facility contemplated
                                                submission, all subsequent                              (‘‘Amendment’’).5 The Amendment                          by the Nasdaq/UTP Plan and are
                                                amendments, all written statements                                                                               submitting the amendment for
                                                                                                          1 15  U.S.C. 78k–1.
                                                with respect to the Amendments that                                                                              immediate effectiveness.
                                                                                                          2 17  CFR 242.608.
                                                are filed with the Commission, and all                     3 The Participants are: Bats BYX Exchange, Inc.;
                                                                                                                                                                    The Commission is publishing this
                                                written communications relating to the                  Bats BZX Exchange, Inc.; Bats EDGA Exchange,             notice to solicit comments from
                                                Amendments between the Commission                       Inc.; Bats EDGX Exchange, Inc.; Chicago Board            interested persons on the Amendment.
                                                and any person, other than those that                   Options Exchange, Incorporated; Chicago Stock            Set forth in Sections I and II is the
                                                may be withheld from the public in                      Exchange, Inc.; Financial Industry Regulatory
                                                                                                        Authority, Inc.; Investors Exchange LLC; Nasdaq
                                                                                                                                                                 statement of the purpose and summary
                                                accordance with the provisions of 5                     BX, Inc.; Nasdaq ISE, LLC; Nasdaq PHLX LLC; The          of the Amendments, along with the
                                                U.S.C. 552, will be available for Web                   Nasdaq Stock Market LLC; New York Stock                  information required by Rules 608(a)
                                                site viewing and printing in the                        Exchange LLC; NYSE Arca, Inc.; NYSE American             and 601(a) under the Act, prepared and
                                                                                                        LLC; and NYSE National, Inc. (collectively, the
                                                Commission’s Public Reference Room                      ‘‘Participants’’).
                                                                                                                                                                 submitted by the Participants to the
                                                on official business days between the                      4 The Plan governs the collection, processing, and    Commission.
                                                hours of 10:00 a.m. and 3:00 p.m.                       dissemination on a consolidated basis of quotation
                                                Copies of the Amendments also will be                   information and transaction reports in Eligible            6 See, e.g., Transmittal Letter at 1, 3; Securities

                                                available for inspection and copying at                 Securities for each of its Participants. This            Exchange Act Release No. 73279 (October 1, 2014),
                                                                                                        consolidated information informs investors of the        79 FR 60522, (October 7, 2014) (‘‘October 2014 Non-
                                                the principal office of the CTA.                        current quotation and recent trade prices of Nasdaq      Display Filing’’).
                                                   All comments received will be posted                 securities. It enables investors to ascertain from one     7 See October 2014 Non-Display Filing, 79 FR at
                                                without change. Persons submitting                      data source the current prices in all the markets
nshattuck on DSK9F9SC42PROD with NOTICES




                                                                                                                                                                 60525.
                                                                                                        trading Nasdaq securities. The Plan serves as the
                                                comments are cautioned that we do not                   required transaction reporting plan for its
                                                                                                                                                                   8 See Transmittal Letter at 1, 3.

                                                redact or edit personal identifying                     Participants, which is a prerequisite for their            9 See Transmittal Letter at 3.

                                                information from comment submissions.                   trading Eligible Securities. See Securities Exchange       10 See Addendum 1 to the Thirty-Third

                                                You should submit only information                      Act Release No. 55647 (April 19, 2007), 72 FR            Amendment to the Plan. The Addendum is marked
                                                                                                        20891 (April 26, 2007).                                  to show the changes to the text of the Plan that the
                                                that you wish to make available                            5 See Letter from Emily Kasparov to Brent J.          Participants proposed in the Thirty-Third
                                                publicly. All submissions should refer                  Fields, dated October 18, 2017 (‘‘Transmittal            Amendment.
                                                to File Number SR–CTA/CQ–2017–04                        Letter’’).                                                 11 17 CFR 242.608(b)(3)(i).




                                           VerDate Sep<11>2014   15:15 Nov 17, 2017   Jkt 244001   PO 00000   Frm 00060   Fmt 4703   Sfmt 4703   E:\FR\FM\20NON1.SGM     20NON1


                                                55138                       Federal Register / Vol. 82, No. 222 / Monday, November 20, 2017 / Notices

                                                I. Rule 608(a)                                           2. Correcting Oversight in 2014 Non-                    Such use may be fee liable for the
                                                                                                         Display Amendments                                      Subscriber fees, and other fees such as
                                                A. Purpose of the Amendment
                                                                                                            In October 2014, the Participants                    Access and/or Redistributor fees, if
                                                1. Background                                            amended the Plan’s fee schedule to                      applicable.
                                                   Derived data consists of pricing data                 establish fees for Non-Display Uses and                 B. Governing or Constituent Documents
                                                or other information that is created in                  to reduce the Subscriber fees assessed
                                                whole or part from consolidated                          on Professional Subscribers.14 As part of                 Not applicable.
                                                quotation or last sale information and:                  the amendment, the Participants made                    C. Implementation of the Amendments
                                                                                                         clear in their submission that, although
                                                   • Cannot be reverse-engineered to
                                                                                                         Non-Display fees were not applicable                       Because the Participants have
                                                recreate the information, or
                                                                                                         when using the data in Non-Display to                   designated the Amendment as one
                                                   • Cannot be used to create other data                 create derived data and the derived data                establishing or changing fee or other
                                                that is recognized by NASDAQ to be a                     was used for the purposes of solely                     charge collected on behalf of the
                                                reasonable facsimile for the                             displaying the derived data, the data                   Participants in connection with access
                                                consolidated quotation or last sale                      still could be fee liable under the regular             to, or use of, any facility contemplated
                                                information.                                             fee schedule.15 The Participants                        by the Nasdaq/UTP Plan,16 the
                                                   Historically, derived data that                       included this language to resolve a                     Amendment became effective upon
                                                contains price data and is based upon a                  potential ambiguity between the                         filing with the Commission.
                                                single security symbol is fee liable at the              existing derived data policy and the
                                                                                                                                                                 D. Development and Implementation
                                                underlying product rates. If derived                     Non-Display fees. This language was
                                                                                                                                                                 Phases
                                                real-time volume data for a single                       designed to make clear that simply
                                                security does not also include price                     creating derived data would not result                    See Item I.C. above.
                                                data, however, it is not fee liable.                     in Non-Display fees because the creation
                                                Additionally, derived data that contains                 of derived data could conceivably fall                  E. Analysis of Impact on Competition
                                                price and/or volume data based upon                      within the definition of a Non-Display                     The Participants assert that the
                                                multiple security symbols is not fee                     Use. Instead, like the derived data                     Amendment does not impose any
                                                liable. This approach as to when                         policy since at least 2007, derived data                burden on competition that is not
                                                derived data may be considered fee                       is meant to be fee liable at the                        necessary or appropriate in furtherance
                                                liable is due to the similarity between                  underlying product rates.                               of the purposes of the Securities
                                                single security derived data containing                     Although this language was a part of                 Exchange Act of 1934 (the ‘‘Act’’).
                                                price data and the consolidated                          the transmittal letter and notice for the               Additionally, the Participants do not
                                                quotation or last sale information.                      October 2014 amendments, the language                   believe that the proposed amendment
                                                   The application of the above-                         was inadvertently left out of the text of               introduces terms that are unreasonably
                                                described derived data policy has been                   the Plan in that amendment. Currently,                  discriminatory for the purposes of
                                                in place since at least 2007.12 The                      Exhibit 2 of the Plan states that ‘‘Non-                Section 11A(c)(1)(D) of the Act. The
                                                derived data policy for UTP market data                  Display Use does not apply to the                       Participants have submitted this
                                                paralleled the derived data policy                       creation and use of derived data.’’ The                 amendment to simply correct an
                                                adopted by Nasdaq for its proprietary                    Participants are proposing to correct this              inadvertent omission in the Plan
                                                data.13                                                  inadvertent clerical omission to include                language to correspond to language
                                                                                                         in the Plan language the detail                         previously contained in a submission to
                                                   12 See NASDAQ and UTP Market Data Policies V.         contained in the October 2014                           the Commission. This amendment
                                                2007–02 (September 13, 2007). The Plan’s derived         submission. Therefore, the Participants                 simply aligns the text of the Plan with
                                                data policy differs from the treatment of derived        are proposing to amend the text of the                  the language contained in the October
                                                data by the CTA and CQ Plan. Under the CTA and           Plan’s fee schedule to insert the Plan’s
                                                CQ Plan, derived data is never fee liable, even at                                                               2014 submission and the longstanding
                                                the underlying product rates, regardless of how the      historical derived data policy that                     practice of the Plan’s application of fees
                                                derived data is used.                                    derived data will be subject to the                     to derived data.
                                                   13 As part of the Non-Display amendment in            underlying products fee schedule. As
                                                October 2014, the Participants stated that the fee       such, the use of data will be excepted                     Furthermore, the Participants believe
                                                changes proposed therein would ‘‘move in the
                                                                                                         from the Non-Display fees when such                     that this longstanding derived data
                                                direction of continuing to harmonize fee structures                                                              policy is reasonable in order to protect
                                                under the Plan with fee structures under the CTA         data is used to create derived data and
                                                Plan, CQ Plan, and the OPRA Plan.’’ See October          such derived data is used for the                       the Plan’s proprietary rights over
                                                2014 Non-Display Filing, 79 FR at 60523. This            purpose of solely displaying the derived                consolidated quotation and last sale
                                                language in the October 2014 Non-Display Filing
                                                                                                         data.                                                   information. As previously stated,
                                                was intended for the Professional Subscriber device                                                              derived data that contains price data
                                                fees, the Non-Display fees, and the per-query fees          The Participants believe that this
                                                and did harmonize these aspects of the various           proposed change will align the October                  and is based upon a single security
                                                market data plans’ fee structure. It was not intended    2014 submission and text of the Plan                    symbol is fee liable at the underlying
                                                to remove all differences that existed at the time the
                                                                                                         and maintain the historical approach of                 product rates. Derived data that contains
                                                2014 Non-Display Filing was submitted to the                                                                     volume data but no price data and
                                                Commission and that continue today. For instance,        the fee liability of derived data. As such,
                                                the CTA and CQ Plans have a tiered fee structure         instances where a data recipient is using               derived data that is based upon multiple
                                                for Professional Subscribers based on the number of      the data in Non-Display to create                       security symbols is not currently fee
                                                devices while the Plan has a single tier for
                                                                                                         derived data, such as Indications of                    liable. Such an approach is logical given
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                                                Professional Subscriber fees. Conversely, the UTP                                                                the similarity between derived data that
                                                Plan has a tiered fee structure for its Cable            Interest or Volume-Weighted Average
                                                Television Ticker fee while the CTA and CQ Plan          Prices, for the purpose of solely                       contains price data and is based upon a
                                                have a single tier with a set maximum for the same       displaying such data, then the Non-                     single security symbol to the
                                                fee. These differences, along with a difference in the
                                                                                                         Display fee schedule does not apply.                    consolidated quotation and last sale
                                                various market data plans’approaches to the fee                                                                  information disseminated by the Plan.
                                                liability of derived data, is due to the longstanding
                                                                                                          14 See    generally October 2014 Non-Display Filing.
                                                historical differences between the administration of
                                                each market data plan.                                    15 Id.   at 60525.                                      16 See   17 CFR 242.608(b)(3)(i)



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                                                                           Federal Register / Vol. 82, No. 222 / Monday, November 20, 2017 / Notices                                                 55139

                                                F. Written Understanding or Agreements                  E. Standards and Methods Ensuring                     Persons submitting comments are
                                                Relating to Interpretation of, or                       Promptness, Accuracy and                              cautioned that we do not redact or edit
                                                Participation in, Plan                                  Completeness of Transaction Reports                   personal identifying information from
                                                  Not applicable.                                         Not applicable                                      comment submissions. You should
                                                                                                                                                              submit only information that you wish
                                                G. Approval by Sponsors in Accordance                   F. Rules and Procedures Addressed to                  to make available publicly. All
                                                With Plan                                               Fraudulent or Manipulative                            submissions should refer to File
                                                  See Item I.C. above.                                  Dissemination                                         Number S7–24–89 and should be
                                                                                                          Not applicable.                                     submitted on or before December 11,
                                                H. Description of Operation of Facility                                                                       2017.
                                                Contemplated by the Proposed                            G. Terms of Access to Transaction
                                                                                                                                                                By the Commission.
                                                Amendments                                              Reports
                                                                                                                                                              Brent J. Fields,
                                                  Not applicable.                                         Not applicable.                                     Secretary.
                                                I. Terms and Conditions of Access                       H. Identification of Marketplace of                   [FR Doc. 2017–25028 Filed 11–17–17; 8:45 am]

                                                   Not applicable.                                      Execution                                             BILLING CODE 8011–01–P

                                                                                                          Not applicable.
                                                J. Method of Determination and
                                                Imposition, and Amount of, Fees and                     III. Solicitation of Comments                         SECURITIES AND EXCHANGE
                                                Charges                                                    The Commission seeks comments on                   COMMISSION
                                                   The Participants believe that the                    the Amendment. Interested persons are                 [Release No. 34–82076; File No. SR–LCH
                                                amendment proposed herein is fair and                   invited to submit written data, views,                SA–2017–008]
                                                reasonable since it corrects an                         and arguments concerning the
                                                inadvertent omission in order to ensure                 foregoing, including whether the                      Self-Regulatory Organizations; LCH
                                                the continued implementation of the                     proposed Amendment is consistent with                 SA; Notice of Filing and Immediate
                                                derived data policy that has been in                    the Act. Comments may be submitted by                 Effectiveness of a Proposed Rule
                                                place for at least ten years.                           any of the following methods:                         Change Relating to Margin Framework
                                                   The longstanding derived data policy                                                                       and Default Fund Methodology for
                                                                                                        Electronic Comments                                   Options on Index Credit Default Swaps
                                                is reasonable in order to protect the
                                                Plan’s proprietary rights over                            • Use the Commission’s Internet
                                                                                                                                                              November 14, 2017.
                                                consolidated quotation and last sale                    comment form (http://www.sec.gov/
                                                                                                                                                                 Pursuant to Section 19(b)(1) of the
                                                information. As previously stated,                      rules/sro.shtml); or
                                                                                                                                                              Securities Exchange Act of 1934
                                                derived data that contains price data                     • Send an email to rule-comments@
                                                                                                                                                              (‘‘Act’’) 1 and Rule 19b–4 thereunder 2
                                                and is based upon a single security                     sec.gov. Please include File Number S7–
                                                                                                                                                              notice is hereby given that on November
                                                symbol is fee liable at the underlying                  24–89 on the subject line.
                                                                                                                                                              6, 2017, Banque Centrale de
                                                product rates. Derived data that contains               Paper Comments                                        Compensation, which conducts
                                                volume data but no price data and                                                                             business under the name LCH SA (‘‘LCH
                                                derived data that is based upon multiple                  • Send paper comments in triplicate
                                                                                                        to Brent J. Fields, Secretary, Securities             SA’’), filed with the Securities and
                                                security symbols is not currently fee                                                                         Exchange Commission (‘‘Commission’’)
                                                liable. Such an approach is logical given               and Exchange Commission, 100 F Street
                                                                                                        NE., Washington, DC 20549–1090.                       the proposed rule change described in
                                                the similarity between derived data that                                                                      Items I, II, and III below, which Items
                                                contains price data and is based upon a                   All submissions should refer to File
                                                                                                        Number File No. S7–24–89. This file                   have been prepared primarily by LCH
                                                single security symbol to the                                                                                 SA. LCH SA filed the proposed rule
                                                consolidated quotation and last sale                    number should be included on the
                                                                                                        subject line if email is used. To help the            changes pursuant to Section
                                                information disseminated by the Plans.                                                                        19(b)(3)(A) 3 of the Act and Rule 19b–
                                                                                                        Commission process and review your
                                                K. Method and Frequency of Processor                    comments more efficiently, please use                 4(f)(2) 4 thereunder, so that the proposal
                                                Evaluation                                              only one method. The Commission will                  was effective upon filing with the
                                                                                                        post all comments on the Commission’s                 Commission. The Commission is
                                                  Not applicable.                                                                                             publishing this notice to solicit
                                                                                                        Web site (http://www.sec.gov/rules/
                                                L. Dispute Resolution                                   sro.shtml). Copies of the submission, all             comments on the proposed rule change
                                                                                                        written statements with respect to the                from interested persons.
                                                   Not applicable.
                                                                                                        proposed Amendment that are filed                     I. Clearing Agency’s Statement of the
                                                II. Rule 601(a)                                         with the Commission, and all written                  Terms of Substance of the Proposed
                                                A. Equity Securities for Which                          communications relating to the                        Rule Change
                                                Transaction Reports Shall Be Required                   proposed Amendment between the                           LCH SA is filing the new fee grid in
                                                by the Plan                                             Commission and any person, other than                 connection with the proposed extension
                                                                                                        those that may be withheld from the                   of the CDSClear service to the clearing
                                                  Not applicable.
                                                                                                        public in accordance with the                         of options on index credit default swaps
                                                B. Reporting Requirements                               provisions of 5 U.S.C. 552, will be                   (‘‘CDS Options’’). The text of the
                                                  Not applicable.                                       available for Web site viewing and                    proposed rule change has been annexed
                                                                                                        printing in the Commission’s Public
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                                                C. Manner of Collecting, Processing,                                                                          as Exhibit 5.
                                                                                                        Reference Room on official business                      Two separate proposed rule changes
                                                Sequencing, Making Available and                        days between the hours of 10:00 a.m.                  have been submitted concurrently (SR–
                                                Disseminating Last Sale Information                     and 3:00 p.m. Copies of the Amendment
                                                  Not applicable.                                       also will be available for Web site                     1 15 U.S.C. 78s(b)(1).
                                                                                                        viewing and printing at the principal                   2 17 CFR 240.19b–4.
                                                D. Manner of Consolidation                              office of the Plan. All comments                        3 15 U.S.C. 78s(b)(3)(A).

                                                  Not applicable.                                       received will be posted without change.                 4 17 CFR 240.19b–4(f)(2).




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Document Created: 2018-10-25 10:40:38
Document Modified: 2018-10-25 10:40:38
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation82 FR 55137 

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