83_FR_28794 83 FR 28675 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Physical Port Fees for BZX

83 FR 28675 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Physical Port Fees for BZX

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 119 (June 20, 2018)

Page Range28675-28677
FR Document2018-13168

Federal Register, Volume 83 Issue 119 (Wednesday, June 20, 2018)
[Federal Register Volume 83, Number 119 (Wednesday, June 20, 2018)]
[Notices]
[Pages 28675-28677]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-13168]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83442; File No. SR-CboeBZX-2018-037]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Related to 
Physical Port Fees for BZX

June 14, 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 June 1, 2018, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by the Exchange. The 
Exchange has designated the proposed rule change as one establishing or 
changing a member due, fee, or other charge imposed by the Exchange 
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposed rule change effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend its fees and rebates 
applicable to Members \5\ and non-Members of the Exchange pursuant to 
BZX Rule 15.1(a) and (c) to modify its fees for physical ports.
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    \5\ The term ``Member'' is defined as ``any registered broker or 
dealer that has been admitted to membership in the Exchange.'' See 
Exchange Rule 1.5(n).
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    The text of the proposed rule change is available at the Exchange's 
website at www.markets.cboe.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to implement proposed changes to its fee 
schedule relating to physical connectivity fees, effective June 1, 
2018. By way of background, a physical port is utilized by a Member or 
non-Member to connect to the Exchange at the data centers where the 
Exchange's servers are located. The Exchange currently maintains a 
presence in two third-party data centers: (i) The primary data center 
where the Exchange's business is primarily conducted on a daily basis, 
and (ii) a secondary data center, which is predominantly maintained for 
business continuity purposes. The Exchange currently assesses the 
following physical connectivity fees for Members and non-Members on a 
monthly basis: $2,000 per physical port for a 1 gigabyte circuit and 
$7,000 per physical port for a 10 gigabyte circuit. The Exchange 
proposes to increase the fees per physical ports from (i) $2,000 to 
$2,500 per month, per port for a 1 gigabyte circuit and (ii) $7,000 to 
$7,500 per month, per port for a 10 gigabyte circuit. The Exchange 
notes the proposed fees enable it to continue to maintain and improve 
its market technology and services and also notes that the proposed fee 
changes are in line with the amounts assessed by other exchanges for 
similar connections.\6\
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    \6\ See e.g., NYSE Arca Equities Fees and Charges, NYSE Arca 
Marketplace: Other Fees and Charges, Connectivity Fees. See also, 
Nasdaq Phlx LLC Pricing Schedule, Section XI, Direct Connectivity to 
Phlx.
---------------------------------------------------------------------------

    The Exchange also proposes to adopt separate physical port fees for 
connection to its secondary data center, which is predominantly 
maintained for business continuity purposes (``Disaster Recovery 
Systems''). Particularly, the Disaster Recovery Systems can be

[[Page 28676]]

accessed via physical ports in Chicago. Members and Non-Members may 
maintain physical ports in order to be able to connect to the Disaster 
Recovery Systems in case of a disaster. Currently, physical ports that 
are used to connect to the Disaster Recovery Systems are assessed the 
same fees as physical ports used to connect to the Exchange's trading 
system. The Exchange proposes to establish separate pricing for 
physical ports that are used to connect to the Disaster Recovery 
Systems (``Disaster Recovery Physical Ports''). Specifically, the 
Exchange proposes to assess a monthly fee of $2,000 per 1 gigabyte 
Disaster Recovery Physical Port and a monthly fee of $6,000 per 10 
gigabyte Disaster Recovery Physical Port. This amount will continue to 
enable the Exchange to maintain the Disaster Recovery Physical Ports in 
case they become necessary. The Exchange notes that the Disaster 
Recovery Physical Ports may also be used to access the Disaster 
Recovery Systems for the following affiliate exchanges Cboe BZX 
Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe EDGA Exchange, Inc., 
Cboe C2 Exchange, Inc., Cboe Exchange, Inc. and Cboe Futures Exchange, 
LLC as well. The Exchange proposes to provide that market participants 
will only be assessed a single fee for any Disaster Recovery Physical 
Port that also accesses the Disaster Recovery Systems for these 
exchanges.\7\
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    \7\ For example, if a market participant uses a 1 gigabyte 
Disaster Recovery Physical Port to connect to the Disaster Recovery 
Systems for both BZX and EDGX, the market participant would only be 
assessed one monthly fee of $2,000.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\8\ in general, and 
furthers the objectives of Section 6(b)(4),\9\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities. The Exchange also notes that it operates in a highly-
competitive market in which market participants can readily direct 
order flow to competing venues if they deem fee levels at a particular 
venue to be excessive. The proposed rule change reflects a competitive 
pricing structure designed to incent market participants to direct 
their order flow to the Exchange.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed changes are equitable and 
non-discriminatory in that it applies uniformly to all Members. Members 
and non-Members will continue to choose whether they want more than one 
physical port and/or Disaster Recovery Physical Port and choose the 
method of connectivity based on their specific needs. All Members that 
voluntarily select various service options will be charged the same 
amount for the same services.
    The Exchange believes that the proposal represents an equitable 
allocation of reasonable dues, fees, and other charges as its fees for 
physical connectivity are reasonably constrained by competitive 
alternatives. If a particular exchange charges excessive fees for 
connectivity, affected Members and non-Members may opt to terminate 
their connectivity arrangements with that exchange, and adopt a 
possible range of alternative strategies, including routing to the 
applicable exchange through another participant or market center or 
taking that exchange's data indirectly. Accordingly, if the Exchange 
charges excessive fees, it would stand to lose not only connectivity 
revenues but also revenues associated with the execution of orders 
routed to it, and, to the extent applicable, market data revenues. The 
Exchange believes that this competitive dynamic imposes powerful 
restraints on the ability of any exchange to charge unreasonable fees 
for connectivity.
    Furthermore, the proposed rule change is also an equitable 
allocation of reasonable dues, fees, and other charges as the Exchange 
believes that the proposed increased physical port fees will enable it 
to cover its infrastructure costs associated with establishing physical 
ports to connect to the Exchange's systems. The additional revenue from 
the increased fees will also enable the Exchange to continue to 
maintain and improve its market technology and services. Similarly, the 
Exchange believes the proposed fees for the Disaster Recovery Physical 
Ports will allow the Exchange to maintain the Disaster Recovery 
Physical Ports in case they become necessary.
    Lastly, the Exchange believes the fees remain competitive with 
those charged by other venues and therefore continue to be reasonable 
and equitably allocated to Members.\10\
---------------------------------------------------------------------------

    \10\ See e.g., NYSE Arca Equities Fees and Charges, NYSE Arca 
Marketplace: Other Fees and Charges, Connectivity Fees. See also, 
Nasdaq Phlx LLC Pricing Schedule, Section XI, Direct Connectivity to 
Phlx.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. As discussed above, the 
Exchange believes that fees for connectivity are constrained by the 
robust competition for order flow among exchanges and non-exchange 
markets. The Exchange does not believe that the proposed changes 
represent a significant departure from previous pricing offered by the 
Exchange or pricing offered by the Exchange's competitors. 
Additionally, Members may opt to disfavor the Exchange's pricing if 
they believe that alternatives offer them better value. Further, 
excessive fees for connectivity would serve to impair an exchange's 
ability to compete for order flow rather than burdening competition.

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

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

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \11\ and paragraph (f) of Rule 19b-4 
thereunder.\12\ At any time within 60 days of the filing of the 
proposed rule change, the Commission summarily may temporarily suspend 
such rule change if it appears to the Commission that such action is 
necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CboeBZX-2018-037 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange

[[Page 28677]]

Commission, 100 F Street NE, Washington, DC 20549-1090.

    All submissions should refer to File Number SR-CboeBZX-2018-037. 
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 this filing will also be 
available for inspection and copying at the principal office of the 
Exchange. All comments received will be posted without change. Persons 
submitting comments are cautioned that we do not redact or edit 
personal identifying information from comment submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-CboeBZX-2018-037 and should 
be submitted on or before July 11, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-13168 Filed 6-19-18; 8:45 am]
BILLING CODE 8011-01-P



                                                                             Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices                                                    28675

                                                change is consistent with the Act.                        For the Commission, by the Division of               II. Self-Regulatory Organization’s
                                                Comments may be submitted by any of                     Trading and Markets, pursuant to delegated             Statement of the Purpose of, and
                                                the following methods:                                  authority.26                                           Statutory Basis for, the Proposed Rule
                                                                                                        Eduardo A. Aleman,                                     Change
                                                Electronic Comments                                     Assistant Secretary.                                      In its filing with the Commission, the
                                                  • Use the Commission’s internet                       [FR Doc. 2018–13165 Filed 6–19–18; 8:45 am]            Exchange included statements
                                                comment form (http://www.sec.gov/                       BILLING CODE 8011–01–P                                 concerning the purpose of and basis for
                                                rules/sro.shtml); or                                                                                           the proposed rule change and discussed
                                                                                                                                                               any comments it received on the
                                                  • Send an email to rule-comments@                     SECURITIES AND EXCHANGE                                proposed rule change. The text of these
                                                sec.gov. Please include File Number SR–                 COMMISSION                                             statements may be examined at the
                                                NYSENAT–2018–12 on the subject line.                                                                           places specified in Item IV below. The
                                                Paper Comments                                          [Release No. 34–83442; File No. SR–                    Exchange has prepared summaries, set
                                                                                                        CboeBZX–2018–037]                                      forth in Sections A, B, and C below, of
                                                  • Send paper comments in triplicate                                                                          the most significant parts of such
                                                to Brent J. Fields, Secretary, Securities               Self-Regulatory Organizations; Cboe                    statements.
                                                and Exchange Commission, 100 F Street                   BZX Exchange, Inc.; Notice of Filing
                                                                                                        and Immediate Effectiveness of                         A. Self-Regulatory Organization’s
                                                NE, Washington, DC 20549–1090.                                                                                 Statement of the Purpose of, and the
                                                                                                        Proposed Rule Change Related to
                                                All submissions should refer to File                    Physical Port Fees for BZX                             Statutory Basis for, the Proposed Rule
                                                Number SR–NYSENAT–2018–12. This                                                                                Change
                                                                                                        June 14, 2018.
                                                file number should be included on the                                                                          1. Purpose
                                                subject line if email is used. To help the                 Pursuant to Section 19(b)(1) of the
                                                                                                        Securities Exchange Act of 1934 (the                      The Exchange proposes to implement
                                                Commission process and review your
                                                                                                        ‘‘Act’’),1 and Rule 19b–4 thereunder,2                 proposed changes to its fee schedule
                                                comments more efficiently, please use                                                                          relating to physical connectivity fees,
                                                only one method. The Commission will                    notice is hereby given that on June 1,
                                                                                                        2018, Cboe BZX Exchange, Inc. (the                     effective June 1, 2018. By way of
                                                post all comments on the Commission’s                                                                          background, a physical port is utilized
                                                internet website (http://www.sec.gov/                   ‘‘Exchange’’ or ‘‘BZX’’) filed with the
                                                                                                        Securities and Exchange Commission                     by a Member or non-Member to connect
                                                rules/sro.shtml). Copies of the                                                                                to the Exchange at the data centers
                                                submission, all subsequent                              (‘‘Commission’’) the proposed rule
                                                                                                                                                               where the Exchange’s servers are
                                                amendments, all written statements                      change as described in Items I, II and III
                                                                                                                                                               located. The Exchange currently
                                                                                                        below, which Items have been prepared
                                                with respect to the proposed rule                                                                              maintains a presence in two third-party
                                                                                                        by the Exchange. The Exchange has
                                                change that are filed with the                                                                                 data centers: (i) The primary data center
                                                                                                        designated the proposed rule change as
                                                Commission, and all written                                                                                    where the Exchange’s business is
                                                                                                        one establishing or changing a member
                                                communications relating to the                                                                                 primarily conducted on a daily basis,
                                                                                                        due, fee, or other charge imposed by the
                                                proposed rule change between the                                                                               and (ii) a secondary data center, which
                                                                                                        Exchange under Section 19(b)(3)(A)(ii)
                                                Commission and any person, other than                                                                          is predominantly maintained for
                                                                                                        of the Act 3 and Rule 19b–4(f)(2)
                                                those that may be withheld from the                                                                            business continuity purposes. The
                                                                                                        thereunder,4 which renders the                         Exchange currently assesses the
                                                public in accordance with the                           proposed rule change effective upon
                                                provisions of 5 U.S.C. 552, will be                                                                            following physical connectivity fees for
                                                                                                        filing with the Commission. The                        Members and non-Members on a
                                                available for website viewing and                       Commission is publishing this notice to                monthly basis: $2,000 per physical port
                                                printing in the Commission’s Public                     solicit comments on the proposed rule                  for a 1 gigabyte circuit and $7,000 per
                                                Reference Room, 100 F Street NE,                        change from interested persons.                        physical port for a 10 gigabyte circuit.
                                                Washington, DC 20549 on official                                                                               The Exchange proposes to increase the
                                                                                                        I. Self-Regulatory Organization’s
                                                business days between the hours of                                                                             fees per physical ports from (i) $2,000
                                                                                                        Statement of the Terms of Substance of
                                                10:00 a.m. and 3:00 p.m. Copies of the                                                                         to $2,500 per month, per port for a 1
                                                                                                        the Proposed Rule Change
                                                filing also will be available for                                                                              gigabyte circuit and (ii) $7,000 to $7,500
                                                inspection and copying at the principal                    The Exchange filed a proposal to                    per month, per port for a 10 gigabyte
                                                office of the Exchange. All comments                    amend its fees and rebates applicable to               circuit. The Exchange notes the
                                                received will be posted without change;                 Members 5 and non-Members of the                       proposed fees enable it to continue to
                                                the Commission does not edit personal                   Exchange pursuant to BZX Rule 15.1(a)                  maintain and improve its market
                                                identifying information from                            and (c) to modify its fees for physical                technology and services and also notes
                                                submissions. Persons submitting                         ports.                                                 that the proposed fee changes are in line
                                                comments are cautioned that we do not                      The text of the proposed rule change                with the amounts assessed by other
                                                redact or edit personal identifying                     is available at the Exchange’s website at              exchanges for similar connections.6
                                                information from comment submissions.                   www.markets.cboe.com, at the principal                    The Exchange also proposes to adopt
                                                You should submit only information                      office of the Exchange, and at the                     separate physical port fees for
                                                that you wish to make available                         Commission’s Public Reference Room.                    connection to its secondary data center,
                                                publicly. All submissions should refer                                                                         which is predominantly maintained for
                                                                                                                                                               business continuity purposes (‘‘Disaster
sradovich on DSK3GMQ082PROD with NOTICES




                                                to File Number SR–NYSENAT–2018–12                         26 17 CFR 200.30–3(a)(12).
                                                and should be submitted on or before
                                                                                                          1 15 U.S.C. 78s(b)(1).                               Recovery Systems’’). Particularly, the
                                                                                                          2 17 CFR 240.19b–4.                                  Disaster Recovery Systems can be
                                                July 11, 2018.                                            3 15 U.S.C. 78s(b)(3)(A)(ii).
                                                                                                          4 17 CFR 240.19b–4(f)(2).                              6 See e.g., NYSE Arca Equities Fees and Charges,
                                                                                                          5 The term ‘‘Member’’ is defined as ‘‘any            NYSE Arca Marketplace: Other Fees and Charges,
                                                                                                        registered broker or dealer that has been admitted     Connectivity Fees. See also, Nasdaq Phlx LLC
                                                                                                        to membership in the Exchange.’’ See Exchange          Pricing Schedule, Section XI, Direct Connectivity to
                                                                                                        Rule 1.5(n).                                           Phlx.



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                                                28676                        Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices

                                                accessed via physical ports in Chicago.                 non-Members will continue to choose                    necessary or appropriate in furtherance
                                                Members and Non-Members may                             whether they want more than one                        of the purposes of the Act. As discussed
                                                maintain physical ports in order to be                  physical port and/or Disaster Recovery                 above, the Exchange believes that fees
                                                able to connect to the Disaster Recovery                Physical Port and choose the method of                 for connectivity are constrained by the
                                                Systems in case of a disaster. Currently,               connectivity based on their specific                   robust competition for order flow among
                                                physical ports that are used to connect                 needs. All Members that voluntarily                    exchanges and non-exchange markets.
                                                to the Disaster Recovery Systems are                    select various service options will be                 The Exchange does not believe that the
                                                assessed the same fees as physical ports                charged the same amount for the same                   proposed changes represent a significant
                                                used to connect to the Exchange’s                       services.                                              departure from previous pricing offered
                                                trading system. The Exchange proposes                      The Exchange believes that the                      by the Exchange or pricing offered by
                                                to establish separate pricing for physical              proposal represents an equitable                       the Exchange’s competitors.
                                                ports that are used to connect to the                   allocation of reasonable dues, fees, and               Additionally, Members may opt to
                                                Disaster Recovery Systems (‘‘Disaster                   other charges as its fees for physical                 disfavor the Exchange’s pricing if they
                                                Recovery Physical Ports’’). Specifically,               connectivity are reasonably constrained                believe that alternatives offer them
                                                the Exchange proposes to assess a                       by competitive alternatives. If a                      better value. Further, excessive fees for
                                                monthly fee of $2,000 per 1 gigabyte                    particular exchange charges excessive                  connectivity would serve to impair an
                                                Disaster Recovery Physical Port and a                   fees for connectivity, affected Members                exchange’s ability to compete for order
                                                monthly fee of $6,000 per 10 gigabyte                   and non-Members may opt to terminate                   flow rather than burdening competition.
                                                Disaster Recovery Physical Port. This                   their connectivity arrangements with
                                                amount will continue to enable the                      that exchange, and adopt a possible                    C. Self-Regulatory Organization’s
                                                Exchange to maintain the Disaster                       range of alternative strategies, including             Statement on Comments on the
                                                Recovery Physical Ports in case they                    routing to the applicable exchange                     Proposed Rule Change Received From
                                                become necessary. The Exchange notes                    through another participant or market                  Members, Participants, or Others
                                                that the Disaster Recovery Physical                     center or taking that exchange’s data                    The Exchange has not solicited, and
                                                Ports may also be used to access the                    indirectly. Accordingly, if the Exchange               does not intend to solicit, comments on
                                                Disaster Recovery Systems for the                       charges excessive fees, it would stand to              this proposed rule change. The
                                                following affiliate exchanges Cboe BZX                  lose not only connectivity revenues but                Exchange has not received any
                                                Exchange, Inc., Cboe EDGX Exchange,                     also revenues associated with the                      unsolicited written comments from
                                                Inc., Cboe EDGA Exchange, Inc., Cboe                    execution of orders routed to it, and, to              Members or other interested parties.
                                                C2 Exchange, Inc., Cboe Exchange, Inc.                  the extent applicable, market data
                                                and Cboe Futures Exchange, LLC as                       revenues. The Exchange believes that                   III. Date of Effectiveness of the
                                                well. The Exchange proposes to provide                  this competitive dynamic imposes                       Proposed Rule Change and Timing for
                                                that market participants will only be                   powerful restraints on the ability of any              Commission Action
                                                assessed a single fee for any Disaster                  exchange to charge unreasonable fees                      The foregoing rule change has become
                                                Recovery Physical Port that also                        for connectivity.                                      effective pursuant to Section 19(b)(3)(A)
                                                accesses the Disaster Recovery Systems                     Furthermore, the proposed rule                      of the Act 11 and paragraph (f) of Rule
                                                for these exchanges.7                                   change is also an equitable allocation of              19b–4 thereunder.12 At any time within
                                                                                                        reasonable dues, fees, and other charges               60 days of the filing of the proposed rule
                                                2. Statutory Basis                                      as the Exchange believes that the                      change, the Commission summarily may
                                                   The Exchange believes that the                       proposed increased physical port fees                  temporarily suspend such rule change if
                                                proposed rule change is consistent with                 will enable it to cover its infrastructure             it appears to the Commission that such
                                                the objectives of Section 6 of the Act,8                costs associated with establishing                     action is necessary or appropriate in the
                                                in general, and furthers the objectives of              physical ports to connect to the                       public interest, for the protection of
                                                Section 6(b)(4),9 in particular, as it is               Exchange’s systems. The additional                     investors, or otherwise in furtherance of
                                                designed to provide for the equitable                   revenue from the increased fees will                   the purposes of the Act.
                                                allocation of reasonable dues, fees and                 also enable the Exchange to continue to
                                                other charges among its Members and                     maintain and improve its market                        IV. Solicitation of Comments
                                                other persons using its facilities. The                 technology and services. Similarly, the                  Interested persons are invited to
                                                Exchange also notes that it operates in                 Exchange believes the proposed fees for                submit written data, views, and
                                                a highly-competitive market in which                    the Disaster Recovery Physical Ports                   arguments concerning the foregoing,
                                                market participants can readily direct                  will allow the Exchange to maintain the                including whether the proposed rule
                                                order flow to competing venues if they                  Disaster Recovery Physical Ports in case               change is consistent with the Act.
                                                deem fee levels at a particular venue to                they become necessary.                                 Comments may be submitted by any of
                                                be excessive. The proposed rule change                     Lastly, the Exchange believes the fees              the following methods:
                                                reflects a competitive pricing structure                remain competitive with those charged
                                                designed to incent market participants                  by other venues and therefore continue                 Electronic Comments
                                                to direct their order flow to the                       to be reasonable and equitably allocated                 • Use the Commission’s internet
                                                Exchange.                                               to Members.10                                          comment form (http://www.sec.gov/
                                                   The Exchange believes that the                                                                              rules/sro.shtml); or
                                                                                                        B. Self-Regulatory Organization’s
                                                proposed changes are equitable and
                                                                                                        Statement on Burden on Competition                       • Send an email to rule-comments@
                                                non-discriminatory in that it applies                                                                          sec.gov. Please include File Number SR–
                                                                                                          The Exchange does not believe that
sradovich on DSK3GMQ082PROD with NOTICES




                                                uniformly to all Members. Members and                                                                          CboeBZX–2018–037 on the subject line.
                                                                                                        the proposed rule change will impose
                                                  7 For example, if a market participant uses a 1       any burden on competition not                          Paper Comments
                                                gigabyte Disaster Recovery Physical Port to connect
                                                to the Disaster Recovery Systems for both BZX and
                                                                                                                                                                 • Send paper comments in triplicate
                                                                                                          10 See e.g., NYSE Arca Equities Fees and Charges,
                                                EDGX, the market participant would only be              NYSE Arca Marketplace: Other Fees and Charges,
                                                                                                                                                               to Secretary, Securities and Exchange
                                                assessed one monthly fee of $2,000.                     Connectivity Fees. See also, Nasdaq Phlx LLC
                                                  8 15 U.S.C. 78f.                                                                                              11 15   U.S.C. 78s(b)(3)(A).
                                                                                                        Pricing Schedule, Section XI, Direct Connectivity to
                                                  9 15 U.S.C. 78f(b)(4).                                Phlx.                                                   12 17   CFR 240.19b–4(f).



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                                                                                 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices                                                   28677

                                                Commission, 100 F Street NE,                              SECURITIES AND EXCHANGE                                 fees set forth in Section II.A of the
                                                Washington, DC 20549–1090.                                COMMISSION                                              Schedule of Fees. Today, the Exchange
                                                                                                                                                                  charges all market participants route-out
                                                   All submissions should refer to File                   [Release No. 34–83444; File No. SR–MRX–
                                                                                                                                                                  fees of $0.96 per contract for orders in
                                                Number SR–CboeBZX–2018–037. This                          2018–19]
                                                                                                                                                                  Non-Penny Symbols that are routed to
                                                file number should be included on the                                                                             away exchanges in connection with the
                                                                                                          Self-Regulatory Organizations; Nasdaq
                                                subject line if email is used. To help the                                                                        Options Order Protection and Locked/
                                                                                                          MRX, LLC; Notice of Filing and
                                                Commission process and review your                        Immediate Effectiveness of Proposed                     Crossed Market Plan (the ‘‘Plan’’). The
                                                comments more efficiently, please use                     Rule Change To Increase Certain                         Exchange now proposes to increase this
                                                only one method. The Commission will                      Route-Out Fees Set Forth in Section                     fee to $1.09 per contract for all market
                                                post all comments on the Commission’s                     II.A of the Schedule of Fees                            participant orders in Non-Penny
                                                internet website (http://www.sec.gov/                                                                             Symbols that are routed to away
                                                rules/sro.shtml). Copies of the                           June 14, 2018.                                          exchanges in connection with the Plan.
                                                submission, all subsequent                                   Pursuant to Section 19(b)(1) of the                  The Exchange believes that the
                                                amendments, all written statements                        Securities Exchange Act of 1934                         proposed increase will help offset the
                                                with respect to the proposed rule                         (‘‘Act’’),1 and Rule 19b–4 thereunder,2                 costs associated with routing orders
                                                change that are filed with the                            notice is hereby given that on June 1,                  through the Plan, such as paying the
                                                Commission, and all written                               2018, Nasdaq MRX, LLC (‘‘MRX’’ or                       transaction fees for such executions at
                                                                                                          ‘‘Exchange’’) filed with the Securities                 other exchanges.
                                                communications relating to the
                                                                                                          and Exchange Commission
                                                proposed rule change between the                                                                                  2. Statutory Basis
                                                                                                          (‘‘Commission’’) the proposed rule
                                                Commission and any person, other than                     change as described in Items I and II                      The Exchange believes that its
                                                those that may be withheld from the                       below, which Items have been prepared                   proposal is consistent with Section 6(b)
                                                public in accordance with the                             by the Exchange. The Commission is                      of the Act,3 in general, and furthers the
                                                provisions of 5 U.S.C. 552, will be                       publishing this notice to solicit                       objectives of Sections 6(b)(4) and 6(b)(5)
                                                available for website viewing and                         comments on the proposed rule change                    of the Act,4 in particular, in that it
                                                printing in the Commission’s Public                       from interested persons.                                provides for the equitable allocation of
                                                Reference Room, 100 F Street NE,                                                                                  reasonable dues, fees, and other charges
                                                Washington, DC 20549, on official                         I. Self-Regulatory Organization’s
                                                                                                                                                                  among members and issuers and other
                                                                                                          Statement of the Terms of Substance of
                                                business days between the hours of                                                                                persons using any facility, and is not
                                                                                                          the Proposed Rule Change
                                                10:00 a.m. and 3:00 p.m. Copies of this                                                                           designed to permit unfair
                                                filing will also be available for                            The Exchange proposes to a proposal                  discrimination between customers,
                                                inspection and copying at the principal                   to increase certain route-out fees set                  issuers, brokers, or dealers.
                                                office of the Exchange. All comments                      forth in Section II.A of the Schedule of                   The Exchange believes that proposed
                                                received will be posted without change.                   Fees.                                                   increase in the route-out fees from $0.96
                                                                                                             The text of the proposed rule change                 to $1.09 per contract for all market
                                                Persons submitting comments are
                                                                                                          is available on the Exchange’s website at               participant orders in Non-Penny
                                                cautioned that we do not redact or edit                   http://nasdaqmrx.cchwallstreet.com/, at
                                                personal identifying information from                                                                             Symbols is reasonable because it is
                                                                                                          the principal office of the Exchange, and               designed to help recoup costs associated
                                                comment submissions. You should                           at the Commission’s Public Reference
                                                submit only information that you wish                                                                             with routing orders to away exchanges
                                                                                                          Room.                                                   in connection with the Plan, such as
                                                to make available publicly. All
                                                                                                          II. Self-Regulatory Organization’s                      paying the transaction fees for such
                                                submissions should refer to File
                                                                                                          Statement of the Purpose of, and                        executions at other exchanges.
                                                Number SR–CboeBZX–2018–037 and
                                                                                                          Statutory Basis for, the Proposed Rule                  Furthermore, the Exchange notes that
                                                should be submitted on or before July                                                                             the proposed fees remain competitive
                                                11, 2018.                                                 Change
                                                                                                                                                                  with the fees of other options exchanges
                                                                                                             In its filing with the Commission, the
                                                  For the Commission, by the Division of                                                                          which, in addition to a fixed routing fee,
                                                                                                          Exchange included statements
                                                Trading and Markets, pursuant to delegated                                                                        assess the actual transaction fees.5
                                                authority.13
                                                                                                          concerning the purpose of and basis for                    The Exchange believes that proposed
                                                                                                          the proposed rule change and discussed                  increase in the route-out fees is
                                                Eduardo A. Aleman,                                        any comments it received on the
                                                Assistant Secretary.
                                                                                                                                                                  equitable and not unfairly
                                                                                                          proposed rule change. The text of these                 discriminatory because the Exchange
                                                [FR Doc. 2018–13168 Filed 6–19–18; 8:45 am]               statements may be examined at the                       will apply the same route-out fees to all
                                                BILLING CODE 8011–01–P                                    places specified in Item IV below. The                  similarly situated members.
                                                                                                          Exchange has prepared summaries, set
                                                                                                          forth in sections A, B, and C below, of                 B. Self-Regulatory Organization’s
                                                                                                          the most significant aspects of such                    Statement on Burden on Competition
                                                                                                          statements.                                               The Exchange does not believe that
                                                                                                          A. Self-Regulatory Organization’s                       the proposed rule change will impose
                                                                                                          Statement of the Purpose of, and                        any burden on competition not
                                                                                                          Statutory Basis for, the Proposed Rule                  necessary or appropriate in furtherance
sradovich on DSK3GMQ082PROD with NOTICES




                                                                                                          Change                                                  of the purposes of the Act. In particular,
                                                                                                          1. Purpose                                                3 15 U.S.C. 78f(b).
                                                                                                                                                                    4 15 U.S.C. 78f(b)(4) and (5).
                                                                                                             The purpose of the proposed rule
                                                                                                                                                                    5 For example, CBOE C2 Exchange, Inc. (‘‘C2’’)
                                                                                                          change is to increase certain route-out                 charges $1.63 per routed contract for non-public
                                                                                                                                                                  customer, non-C2 market-maker orders in non-
                                                                                                            1 15   U.S.C. 78s(b)(1).                              penny classes. See C2 Fees Schedule, Section 1.A
                                                  13 17   CFR 200.30–3(a)(12).                              2 17   CFR 240.19b–4.                                 (Transaction Fees) and Section 2 (Linkage Routing).



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Document Created: 2018-06-20 00:20:25
Document Modified: 2018-06-20 00:20:25
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 Citation83 FR 28675 

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