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)

Page Range		8554-8555
FR Document		2017-01719
Federal Register, Volume 82 Issue 16 (Thursday, 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
8554 Federal Register / Vol. 82, No. 16 / Thursday, January 26, 2017 / Notices

V. Conclusion II. Self-Regulatory Organization’s of the Act,6 in general, and furthers the
It is therefore ordered, pursuant to Statement of the Purpose of, and objectives of Sections 6(b)(4) and 6(b)(5)
Section 11A of the Act 23 and Rule 608 Statutory Basis for, the Proposed Rule of the Act,7 in particular, in that it
thereunder,24 that the Twelfth Change provides for the equitable allocation of
Amendment to the Plan (File No. 4– In its filing with the Commission, the reasonable dues, fees and other charges
631), as modified, be, and it hereby is, Exchange included statements among members and issuers and other
concerning the purpose of and basis for persons using any facility, and is not
approved.
the proposed rule change and discussed designed to permit unfair
For the Commission, by the Division of discrimination between customers,
Trading and Markets, pursuant to delegated any comments it received on the
proposed rule change. The text of these issuers, brokers, or dealers.
authority.25 The Exchange believes that
Eduardo A. Aleman, statements may be examined at the
elimination of the fees is reasonable
Assistant Secretary. places specified in Item IV below. The
because the Exchange no longer offers
Exchange has prepared summaries, set
[FR Doc. 2017–01717 Filed 1–25–17; 8:45 am] the service, thus making the fees
forth in sections A, B, and C below, of
BILLING CODE 8011–01–P irrelevant. The Exchange believes that
the most significant aspects of such
elimination of the fee and related rule
statements. text is an equitable allocation and is not
SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s unfairly discriminatory because there
COMMISSION Statement of the Purpose of, and are no longer subscribers to the service,
Statutory Basis for, the Proposed Rule and elimination of the fee and related
[Release No. 34–79849; File No. SR– Change rule text will not impact members
NASDAQ–2017–005] differently. Thus, the proposed change
1. Purpose will not discriminate among members in
Self-Regulatory Organizations; The The purpose of the proposed rule any way and will be allocated equitably.
NASDAQ Stock Market LLC; Notice of change is to eliminate VTE terminal fees
Filing and Immediate Effectiveness of under Rule 7015(h), since the Exchange B. Self-Regulatory Organization’s
Proposed Rule Change To Eliminate no longer offers VTE terminal Statement on Burden on Competition
Fees at Rule 7015(h) Assessed for VTE connectivity. A VTE terminal was a The Exchange does not believe that
Terminal Connectivity basic front-end user interface used by the proposed rule change will impose
Nasdaq members to connect to, and any burden on competition not
January 19, 2017.
enter orders in, The Nasdaq Market necessary or appropriate in furtherance
Pursuant to Section 19(b)(1) of the of the purposes of the Act. The
Securities Exchange Act of 1934 Center. Members using VTE terminals
paid the exchanges and market centers proposed change removes fees and
(‘‘Act’’), 1 and Rule 19b–4 thereunder,2 related text from the rules, which
notice is hereby given that on January separately for data feeds and services
provided by Nasdaq, other exchanges or applied to a connectivity service that
11, 2017, The NASDAQ Stock Market the Exchange no longer offers. The
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed market centers through VTE.3
Effective June 1, 2016, the Exchange Exchange notes that VTE connectivity
with the Securities and Exchange was entirely optional and members were
increased the fees assessed for VTE
Commission (‘‘SEC’’ or ‘‘Commission’’) able avail themselves of numerous other
connectivity, noting that the pricing
the proposed rule change as described means of accessing The Nasdaq Market
changes were warranted in order to
in Items I, II, and III, below, which Items Center. In fact, the Exchange determined
appropriately balance the decreasing
have been prepared by the Exchange. to decommission the connectivity
demand for the product with increasing
The Commission is publishing this option because of declining
platform, overhead, and technology
notice to solicit comments on the subscribership, the age of the
infrastructure costs.4 The Exchange also
proposed rule change from interested technology, and because members have
noted that, because VTE was based on
persons. other options for connecting to, and
outdated technology and that members
I. Self-Regulatory Organization’s have other options for connecting to, entering orders in, The Nasdaq Market
Statement of the Terms of Substance of and entering orders in, The Nasdaq Center. Members recognized the limited
the Proposed Rule Change Market Center, Nasdaq planned to phase utility of the connectivity option in light
out the service in its entirety on or of more modern options, and over time
The Exchange proposes to eliminate
before January 31, 2017.5 There are all subscribers chose to cancel their
the Exchange’s fees at Rule 7015(h)
currently no subscribers to VTE subscriptions. Thus, the proposed
assessed for VTE terminal connectivity,
terminals, and the Exchange has begun change is not burdening competition in
which is no longer offered by the
the process of decommissioning the any way, but rather reflects the
Exchange.
service. Accordingly, the Exchange is consequences of robust competition
The text of the proposed rule change
proposing to eliminate the VTE terminal where trading venues are compelled to
is available on the Exchange’s Web site
fees and related text from its rulebook. offer superior connectivity options,
at http://nasdaq.cchwallstreet.com, at
which ultimately supplant connectivity
the principal office of the Exchange, and 2. Statutory Basis based on old technology.
at the Commission’s Public Reference
The Exchange believes that its
Room. C. Self-Regulatory Organization’s
proposal is consistent with Section 6(b)
Statement on Comments on the
jstallworth on DSK7TPTVN1PROD with NOTICES

Commission expects the Participants to implement 3 Such fees are filed with the SEC and separately Proposed Rule Change Received From
the Twelfth Amendment, as modified, no later than assessed by the exchanges and market centers at the Members, Participants, or Others
six months after the date of this order. same rate irrespective of the method of accessing
23 15 U.S.C. 78k–1.
the data feeds.
No written comments were either
24 17 CFR 242.608. 4 Securities Exchange Act Release No. 78051 solicited or received.
25 17 CFR 200.30–3(a)(29).
(June 13, 2016), 81 FR 39739 (June 17, 2016) (SR–
1 15 U.S.C. 78s(b)(1). NASDAQ–2016–078). 6 15 U.S.C. 78f(b).
2 17 CFR 240.19b–4. 5 Id. 7 15 U.S.C. 78f(b)(4) and (5).

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Federal Register / Vol. 82, No. 16 / Thursday, January 26, 2017 / Notices 8555

III. Date of Effectiveness of the Washington, DC 20549, on official did not receive any comments on the
Proposed Rule Change and Timing for business days between the hours of advance notice. This publication serves
Commission Action 10:00 a.m. and 3:00 p.m. Copies of the as notice that the Commission does not
The foregoing rule change has become filing also will be available for object to the changes set forth in the
effective pursuant to Section inspection and copying at the principal advance notice.
office of the Exchange. All comments
19(b)(3)(A)(ii) of the Act.8 I. Description of the Advance Notice
received will be posted without change;
At any time within 60 days of the
the Commission does not edit personal
filing of the proposed rule change, the As described by FICC in the advance
identifying information from
Commission summarily may notice, FICC proposes to change the
submissions. You should submit only
temporarily suspend such rule change if methodology that it currently uses in
information that you wish to make
it appears to the Commission that such the Mortgage-Backed Securities
available publicly. All submissions
action is: (i) Necessary or appropriate in Division’s (‘‘MBSD’’) value-at-risk
should refer to File Number SR–
the public interest; (ii) for the protection (‘‘VaR’’) model from one that employs a
NASDAQ–2017–005 and should be
of investors; or (iii) otherwise in full revaluation approach to one that
submitted on or before February 16,
furtherance of the purposes of the Act. 2017. would employ a sensitivity approach.4
If the Commission takes such action, the In connection with this change, FICC
Commission shall institute proceedings For the Commission, by the Division of
Trading and Markets, pursuant to delegated also proposes to amend the MBSD
to determine whether the proposed rule
authority.9 Clearing Rules (‘‘MBSD Rules’’) to: (i)
should be approved or disapproved.
Eduardo A. Aleman, Amend the definition of VaR Charge 5 to
IV. Solicitation of Comments Assistant Secretary. reference an alternative volatility
Interested persons are invited to [FR Doc. 2017–01719 Filed 1–25–17; 8:45 am] calculation (‘‘Margin Proxy’’) that FICC
submit written data, views and BILLING CODE 8011–01–P would use in the event that data used
arguments concerning the foregoing, for the sensitivity approach is
including whether the proposed rule unavailable for an extended period of
change is consistent with the Act. SECURITIES AND EXCHANGE time; 6 (ii) revise the definition of VaR
Comments may be submitted by any of COMMISSION Charge to include a VaR floor that FICC
the following methods: [Release No. 34–79843; File No. SR–FICC– would use as an alternative to the
2016–801] amount calculated by the proposed VaR
Electronic Comments
model for portfolios where the VaR floor
• Use the Commission’s Internet Self-Regulatory Organizations; Fixed would be greater than the model-based
comment form (http://www.sec.gov/ Income Clearing Corporation; Notice of charge amount (‘‘VaR Floor’’); (iii)
rules/sro.shtml); or No Objection to Advance Notice Filing eliminate two components from the
• Send an email to rule-comments@ To Implement a Change to the Required Fund Deposit 7 calculation
sec.gov. Please include File Number SR– Methodology Used in the MBSD VaR that would no longer be necessary
NASDAQ–2017–005 on the subject line. Model
following implementation of the
Paper Comments January 19, 2017. proposed VaR Charge; and (iv) change
On November 23, 2016, the Fixed the margining approach that FICC may
• Send paper comments in triplicate
to Secretary, Securities and Exchange Income Clearing Corporation (‘‘FICC’’) use for certain securities with
Commission, 100 F Street NE., filed with the Securities and Exchange inadequate historical pricing data from
Washington, DC 20549–1090. Commission (‘‘Commission’’) the one that calculates charges using a
advance notice SR–FICC–2016–801 historic index volatility model to one
All submissions should refer to File pursuant to Section 806(e)(1) of the that would use a haircut method.
Number SR–NASDAQ–2017–005. This Payment, Clearing, and Settlement
file number should be included on the Supervision Act of 2010 (‘‘Clearing proposal. 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b–
subject line if email is used. To help the Supervision Act’’) 1 and Rule 19b– 4, respectively. The proposed rule change was
Commission process and review your 4(n)(1)(i) under the Securities Exchange published for comment in the Federal Register on
comments more efficiently, please use Act of 1934 (‘‘Exchange Act’’).2 The December 13, 2016. Securities Exchange Act
only one method. The Commission will advance notice was published for Release No. 79491 (December 7, 2016), 81 FR 90001
post all comments on the Commission’s (December 13, 2016) (SR–FICC–2016–007). The
comment in the Federal Register on Commission did not receive any comments on the
Internet Web site (http://www.sec.gov/ December 28, 2016.3 The Commission proposed rule change.
rules/sro.shtml). Copies of the 4 The proposed sensitivity approach methodology

submission, all subsequent 9 17 CFR 200.30–3(a)(12). would be reflected in the Methodology and Model
amendments, all written statements 1 12 U.S.C. 5465(e)(1). The Financial Stability Operations Document—MBSD Quantitative Risk
Model (‘‘QRM Methodology’’). FICC requested
with respect to the proposed rule Oversight Council designated FICC a systemically
confidential treatment of the QRM Methodology
change that are filed with the important financial market utility on July 18, 2012.
See Financial Stability Oversight Council 2012 and filed it separately with the Secretary of the
Commission, and all written Annual Report, Appendix A, http:// Commission, pursuant to Rule 24b–2 under the
communications relating to the www.treasury.gov/initiatives/fsoc/Documents/ Exchange Act. See 17 CFR 240.24b–2.
5 The term ‘‘VaR Charge’’ means, with respect to
proposed rule change between the 2012%20Annual%20Report.pdf. Therefore, FICC is
required to comply with the Clearing Supervision each margin portfolio, a calculation of the volatility
Commission and any person, other than of specified net unsettled positions of an MBSD
Act and file advance notices with the Commission.
jstallworth on DSK7TPTVN1PROD with NOTICES

those that may be withheld from the See 12 U.S.C. 5465(e). clearing member, as of the time of such calculation.
public in accordance with the 2 17 CFR 240.19b–4(n)(1)(i). See MBSD Rule 1.
provisions of 5 U.S.C. 552, will be 3 Securities Exchange Act Release No. 79643 6 Details of the Margin Proxy methodology would

available for Web site viewing and (December 21, 2016), 81 FR 95669 (December 28, be reflected in the QRM Methodology.
2016) (SR–FICC–2016–801) (‘‘Notice’’). FICC also 7 The term ‘‘Required Fund Deposit’’ means the
printing in the Commission’s Public
filed a proposed rule change with the Commission amount an MBSD clearing member is required to
Reference Room, 100 F Street NE., pursuant to Section 19(b)(1) of the Exchange Act deposit to the Clearing Fund pursuant to MBSD
and Rule 19b–4 thereunder, seeking approval of Rule 4. See MBSD Rule 1 and MBSD Rule 4 Section
8 15 U.S.C. 78s(b)(3)(A)(ii). changes to its rules necessary to implement the 2.

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Document Created: 2017-01-26 00:04:50
Document Modified: 2017-01-26 00:04:50
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 8554