82 FR 8554 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Eliminate Fees at Rule 7015(h) Assessed for VTE Terminal Connectivity

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 16 (January 26, 2017)

[Federal Register Volume 82, Number 16 (Thursday, January 26, 2017)]
[Notices]
[Pages 8554-8555]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-01719]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79849; File No. SR-NASDAQ-2017-005]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Eliminate Fees at Rule 7015(h) Assessed for VTE Terminal Connectivity

January 19, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on January 11, 2017, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III, below, which Items have been prepared by the 
Exchange. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to eliminate the Exchange's fees at Rule 
7015(h) assessed for VTE terminal connectivity, which is no longer 
offered by the Exchange.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaq.cchwallstreet.com, at the principal office of 
the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    The purpose of the proposed rule change is to eliminate VTE 
terminal fees under Rule 7015(h), since the Exchange no longer offers 
VTE terminal connectivity. A VTE terminal was a basic front-end user 
interface used by Nasdaq members to connect to, and enter orders in, 
The Nasdaq Market Center. Members using VTE terminals paid the 
exchanges and market centers separately for data feeds and services 
provided by Nasdaq, other exchanges or market centers through VTE.\3\
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    \3\ Such fees are filed with the SEC and separately assessed by 
the exchanges and market centers at the same rate irrespective of 
the method of accessing the data feeds.
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    Effective June 1, 2016, the Exchange increased the fees assessed 
for VTE connectivity, noting that the pricing changes were warranted in 
order to appropriately balance the decreasing demand for the product 
with increasing platform, overhead, and technology infrastructure 
costs.\4\ The Exchange also noted that, because VTE was based on 
outdated technology and that members have other options for connecting 
to, and entering orders in, The Nasdaq Market Center, Nasdaq planned to 
phase out the service in its entirety on or before January 31, 2017.\5\ 
There are currently no subscribers to VTE terminals, and the Exchange 
has begun the process of decommissioning the service. Accordingly, the 
Exchange is proposing to eliminate the VTE terminal fees and related 
text from its rulebook.
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    \4\ Securities Exchange Act Release No. 78051 (June 13, 2016), 
81 FR 39739 (June 17, 2016) (SR-NASDAQ-2016-078).
    \5\ Id.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\6\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\7\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees and other charges 
among members and issuers and other persons using any facility, and is 
not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that elimination of the fees is reasonable 
because the Exchange no longer offers the service, thus making the fees 
irrelevant. The Exchange believes that elimination of the fee and 
related rule text is an equitable allocation and is not unfairly 
discriminatory because there are no longer subscribers to the service, 
and elimination of the fee and related rule text will not impact 
members differently. Thus, the proposed change will not discriminate 
among members in any way and will be allocated equitably.

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. The proposed change removes 
fees and related text from the rules, which applied to a connectivity 
service that the Exchange no longer offers. The Exchange notes that VTE 
connectivity was entirely optional and members were able avail 
themselves of numerous other means of accessing The Nasdaq Market 
Center. In fact, the Exchange determined to decommission the 
connectivity option because of declining subscribership, the age of the 
technology, and because members have other options for connecting to, 
and entering orders in, The Nasdaq Market Center. Members recognized 
the limited utility of the connectivity option in light of more modern 
options, and over time all subscribers chose to cancel their 
subscriptions. Thus, the proposed change is not burdening competition 
in any way, but rather reflects the consequences of robust competition 
where trading venues are compelled to offer superior connectivity 
options, which ultimately supplant connectivity based on old 
technology.

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

    No written comments were either solicited or received.

[[Page 8555]]

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\8\
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic 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 SR-NASDAQ-2017-005 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2017-005. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NASDAQ-2017-005 and should 
be submitted on or before February 16, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-01719 Filed 1-25-17; 8:45 am]
BILLING CODE 8011-01-P