83 FR 22555 - Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Reorganize and Amend the Exchange's Pricing Schedule at Section VII, B, Entitled “Port Fees”

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 94 (May 15, 2018)

[Federal Register Volume 83, Number 94 (Tuesday, May 15, 2018)]
[Notices]
[Pages 22555-22557]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-10254]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83194; File No. SR-Phlx-2018-34]


Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Reorganize and 
Amend the Exchange's Pricing Schedule at Section VII, B, Entitled 
``Port Fees''

May 9, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on April 27, 2018, Nasdaq PHLX LLC (``Phlx'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to reorganize and amend the Exchange's 
Pricing Schedule at Section VII, B, entitled ``Port Fees.''
    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaqphlx.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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to reorganize and amend the Exchange's 
Pricing Schedule at Section VII, B, entitled ``Port Fees.'' The 
Exchange offers various services across its 6 affiliated options 
markets, Phlx, Nasdaq BX, Inc., The Nasdaq Options Market LLC, Nasdaq 
ISE, LLC, Nasdaq GEMX, LLC and Nasdaq MRX, LLC (``Nasdaq Affiliated 
Markets'').\3\ The Exchange desires to rename services to conform the 
naming of the offerings across all Nasdaq Affiliated Markets. The 
Exchange proposes to reorganize Section VII, B to list order and quote 
protocols first, order and execution offerings next, followed by data 
ports and other ports as the last section. The Exchange proposes to 
list data offerings which are offered at no cost. The Exchange believes 
that aligning its offerings, where relevant, across the Nasdaq 
Affiliated Markets will provide more transparency as to the offerings 
for market participants.
---------------------------------------------------------------------------

    \3\ The Exchange will file a similar rule change on each Nasdaq 
Affiliated Market to conform the offerings by amending naming to 
make them similar and delineating each offering on the fee schedule 
where no fee is assessed.
---------------------------------------------------------------------------

Ports
    The Exchange proposes to define a port within Section VII, B to 
provide additional clarity to the Pricing Schedule as ``a logical 
connection or session that enables a market participant to send inbound 
messages and/or receive outbound messages from the Exchange using 
various communication protocols.'' The Exchange believes this 
definition will assist members in distinguishing ports from other 
offerings.
Order and Quote Protocols
    The Exchange proposes to add a new section (i) and include the 
following introductory sentence, ``The following order and quote 
protocols are available on Phlx.''
    Today, Phlx offers members an Order Entry order protocol, an Active 
SQF quote protocol as well as an SQF Purge Port. These fees currently 
exist on the Pricing Schedule. The Exchange is not amending any pricing 
related to these protocols. The Exchange proposes to rename ``Order 
Entry Port Fee'' as ``FIX Port Fee.'' This description is more accurate 
as ``FIX'' is the name of the order entry protocol. Nasdaq ISE, LLC 
calls this protocol ``FIX'' in its fee schedule.\4\ The Exchange 
proposes to remove the word ``Active'' before SQF Port from the title 
of the offering. The term ``active'' refers to the manner in which the 
port is billed. For consistency the Exchange proposes to refer the SQF 
Port without the ``Active'' to conform the naming of the offering to 
that of the Nasdaq Affiliated Markets. The Exchange will continue to 
use the word ``active,'' which is proposed to be lowercase, to describe 
the manner in which the port will be billed. The Exchange proposes to 
define the term ``active'' to mean that the port was utilized to submit 
a quote to the System during a given month. The Exchange believes that 
this definition will provide greater transparency as to the manner in 
which the term ``active'' is applied today by the Exchange.
---------------------------------------------------------------------------

    \4\ See ISE's Fee Schedule at Chapter V, Part D.

---------------------------------------------------------------------------

[[Page 22556]]

    The Exchange believes that grouping the available order and quote 
protocols together into their own subsection will provide greater 
transparency within its Pricing Schedule as to the available protocols.
Order and Execution Information
    The Exchange proposes to add a new section (ii) and add the 
following introductory sentence, ``The following order and execution 
information is available to members.'' The Exchange proposes to group 
the available order and execution information that is particular to a 
member's transactions on Phlx into its own subsection. Today, Phlx 
offers CTI and TradeInfo PHLX. The Exchange proposes to relocate the 
TradeInfo offering from Section XII of the Pricing Schedule to Section 
VII, B. The Exchange proposes to rename ``TradeInfo PHLX'' as 
``TradeInfo Interface'' to conform the naming on the Nasdaq Affiliated 
Markets. This also makes clear that this particular offering is an 
interface. No changes are proposed to amend pricing for CTI or the 
TradeInfo offering. Finally, the Exchange proposes to delete the 
definition of the TradeInfo offering. The Exchange is instead defining 
this offering within Rule 1070(b).
Data Ports
    The Exchange proposes to add a new section (iii) and include the 
following information, ``The following data port fees apply in 
connection with data subscriptions pursuant to Phlx's Pricing Schedule 
at Section IX. These ports are available to non-Phlx members and Phlx 
members.'' The Exchange believes the addition of this sentence makes 
clear where the related applicable data fees can be located within the 
Pricing Schedule. Today, no data port fees are listed on Phlx's Pricing 
Schedule as these services are offered at no cost. The Exchange 
proposes to list the relevant data ports which are offered today in 
order to provide information as to the available offerings. Today, the 
Exchange offers TOPO Ports, PHLX Orders Ports and PHLX Depth of Market 
Ports at no cost. The Exchange believes listing these offerings on the 
Pricing Schedule at $0 will add more transparency to the Pricing 
Schedule. No changes are being made to the fees.
Other Ports
    The Exchange proposes to adopt a new section (iv) entitled ``Other 
Ports'' to include Disaster Recovery Ports. Today, the Exchange offers 
Disaster Recovery Ports for all the ports reorganized into proposed 
subsections (i), (ii) and (iii). The Exchange is noting that these 
ports are available at no cost to make clear their availability.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Securities Exchange Act of 1934,\5\ in 
general, and furthers the objectives of Section 6(b)(5) of the Act,\6\ 
in particular, in that it is designed to promote just and equitable 
principles of trade, to remove impediments to and perfect the mechanism 
for a free and open market and a national market system, and, in 
general, to protect investors and the public interest, by providing 
greater transparency as to the order and execution information offered 
on Phlx. The Exchange's proposal to reorganize Section VII, B and 
rename certain offerings to conform to other Nasdaq Affiliated Markets 
will provide clarity as to the offerings and uniformity in naming 
similar offerings. The Exchange believes that its new structure makes 
clear the differences in its offerings and the availability of various 
options within each type of offering. The Exchange's proposal is 
consistent with the protection of investors and the public interest in 
that the proposal provides greater transparency as to the offerings, 
the application of fees and the availability of offerings which are 
offered at no cost. The Exchange's proposal to define a port should 
also provide members with greater insight into the terminology utilized 
within Section VII, B.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\7\ the Exchange does 
not believe that the proposed rule change will impose any burden on 
intermarket or intra-market competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange's 
proposal does not impose an undue burden on competition, rather the 
Exchange is seeking to provide greater transparency within its rules 
with respect to the various order and execution information offered on 
Phlx. The offerings are available to all members. The Exchange does not 
intend to amend pricing, rather it proposes to make clear the 
application of the current pricing.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

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

    No written comments were either solicited or received.

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

    Because the proposed rule change does not (i) significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) 
thereunder.\9\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange states that 
such waiver will allow it to update its rules immediately to provide 
more detailed and reorganized information regarding its offerings and 
further the protection of investors and the public interest because it 
will provide greater transparency as to the offerings available to 
members. For this reason, the Commission believes that waiving the 30-
day operative delay is consistent with the protection of investors and 
the public interest and, therefore, the Commission designates the 
proposed rule change to be operative upon filing.\12\
---------------------------------------------------------------------------

    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the

[[Page 22557]]

Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act. 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-Phlx-2018-34 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-Phlx-2018-34. 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 website (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 website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-Phlx-2018-34, and should be submitted on 
or before June 5, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10254 Filed 5-14-18; 8:45 am]
BILLING CODE 8011-01-P