83_FR_42899 83 FR 42735 - Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Codify the Definitions of the Protocols To Enter Quotes and Orders

83 FR 42735 - Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Codify the Definitions of the Protocols To Enter Quotes and Orders

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 164 (August 23, 2018)

Page Range42735-42737
FR Document2018-18157

Federal Register, Volume 83 Issue 164 (Thursday, August 23, 2018)
[Federal Register Volume 83, Number 164 (Thursday, August 23, 2018)]
[Notices]
[Pages 42735-42737]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-18157]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83869; File No. SR-BX-2018-038]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Codify the 
Definitions of the Protocols To Enter Quotes and Orders

August 17, 2018.
    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 August 14, 2018, Nasdaq BX, Inc. (``BX'' or ``Exchange'') 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 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 adopt new text at Chapter VI, Section 21 
to codify the definitions of the protocols that Participants can use to 
enter quotes and orders on the Exchange.
    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaqbx.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 Exchange proposes to adopt new rule text at Chapter VI, Section 
21 to codify the Financial Information eXchange (``FIX'') and 
Specialized Quote Feed (``SQF'') protocols. The Exchange believes that 
codifying definitions of these protocols in its rules will increase 
transparency around its operations. The protocols used by Participants 
to submit quotes and orders play an important role in the operation of 
the System. The Exchange therefore believes that codifying definitions 
of these protocols in its rules will increase transparency around its 
operations. Furthermore, the proposed definitions will be harmonized 
where appropriate with definitions to be included in the rules of the 
Exchange's affiliated options markets,\3\ including by using consistent 
terms to define the buckets of information transmitted, or the features 
available, on each protocol.
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    \3\ See Securities Exchange Act Release Nos. 83729 (July 27, 
2018) 83 FR 37870 (August 2, 2018) (SR-ISE-2018-65); 83731 (July 27, 
2018), 83 FR 37867 (August 2, 2018) (SR-GEMX-2018-26); and 83730 
(July 27, 2018), 83 FR 37873 (August 2, 2018) (SR-MRX-2018-25). 
Nasdaq Phlx LLC was filed as SR-Phlx-2018-54. The Nasdaq Stock 
Market LLC will submit a similar filing to amend The Nasdaq Options 
Market LLC ports.
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    The Exchange proposes to title Section 21 as ``Order and Quote 
Protocols'' and codify descriptions of the various protocols that 
Participants may use to enter quotes and orders on BX. The Exchange 
proposes to add a

[[Page 42736]]

new section (a) to Chapter VI, Section 21 entitled ``Entry and Display 
of Orders and Quotes.'' The Exchange proposes to state in proposed new 
Chapter VI, Section 21(a) ``Participants may enter orders and quotes 
into the System as specified below.'' The Exchange proposes to add a 
section Chapter VI, Section 21(a)(i) which provides, ``The Exchange 
offers Participants the following protocols for entering orders and 
quotes respectively.''

A. Financial Information eXchange Ports

    This protocol is not memorialized within the Exchange's Rulebook, 
however rule changes describing FIX have been filed.\4\ The Exchange 
proposes to codify a description of this protocol to add even greater 
specificity within the Rulebook. The Exchange proposes to state that 
FIX is an interface that allows Participants and their Sponsored 
Customers to connect, send and receive messages related to orders and 
auction orders and responses to and from the Exchange. Features include 
the following: (1) Execution messages; (2) order messages; and (3) risk 
protection triggers and cancel notifications.
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    \4\ See Securities Exchange Act Release No. 80055 (February 16, 
2018), 82 FR 11381 (February 22, 2017) (SR-BX-2017-009). The FIX 
port was previously referred to as the ``Order Entry Port'' and 
described as a connection to routing orders to the Exchange via an 
external order entry port. Participants access the Exchange's 
network through order entry ports. A BX Options Market Participant 
may have more than one order entry port. The Exchange recently 
renamed the ``Order Entry Port'' as the ``FIX Port'' in the 
Exchange's Pricing Schedule. See Securities Exchange Act Release No. 
83192 (May 9, 2018), 83 FR 22563 (May 15, 2018) (SR-BX-2018-017).
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B. Specialized Quote Feed Ports

    This protocol is not memorialized within the Exchange's Rulebook, 
however rule changes describing SQF have been filed.\5\ At this time, 
the Exchange proposes to more specifically define the SQF Port. The 
Exchange proposes the following definition:
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 76952 (January 21, 
2016), 81 FR 4721 (January 27, 2016) (SR-BX-2016-003). This rule 
change generally described SQF as The SQF Port is a port that allows 
a Participant acting as a BX Options Market Maker to enter his 
markets into the BX Options markets. The SQF Port also allows a 
Market Maker to access information such as execution reports and 
other relevant data through a single feed. Market Makers rely on 
data available through the SQF Port to provide them the necessary 
information to perform market making activities in a swift and 
meaningful way.

    SQF is an interface that allows Market Makers to connect, send, 
and receive messages related to quotes, Immediate-or-Cancel Orders, 
and auction responses into and from the Exchange. Features include 
the following: (1) Options symbol directory messages (e.g underlying 
instruments); (2) system event messages (e.g., start of trading 
hours messages and start of opening); (3) trading action messages 
(e.g., halts and resumes); (4) execution messages; (5) quote 
messages; (6) Immediate-or-Cancel Order messages; (7) risk 
protection triggers and purge notifications; (8) opening imbalance 
messages; (9) auction notifications; and (10) auction responses. The 
SQF Purge Interface only receives and notifies of purge request from 
the Market Maker.\6\
---------------------------------------------------------------------------

    \6\ All of the notification messages available on SQF ports as 
described above (i.e., options symbol directory messages, system 
event messages, trading action messages, etc.) are configurable in 
that BX Market Makers can select the specific types of notifications 
they wish to receive on their SQF ports. As such, SQF Purge 
Interface ports are a subpart of SQF ports that have been configured 
to only receive and notify of purge requests.

The Exchange believes that this information provides a more thorough 
description of the SQF protocol.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\8\ in particular, in that it is designed to promote 
just and equitable principles of trade and to protect investors and the 
public interest by adding greater transparency to the order and quote 
protocols available on BX.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change is consistent 
with the protection of investors and the public interest as it codifies 
the protocols used to connect to the Exchange's System. While no 
functional changes to the protocols are proposed in this filing, the 
Exchange believes that including a description of the various order 
entry protocols in its rulebook will benefit Participants by increasing 
transparency around the operation of the Exchange. Furthermore, the 
proposed descriptions of the order entry protocols in one rule will 
more clearly and accurately reflect the information included on the 
protocols, and will be harmonized with language to be included in the 
rules of its affiliated exchanges to the extent that the protocols 
operate in the same manner. The protocols described in this filing 
provide a range of important features to Participants, including the 
ability to submit quotes and orders, and perform other functions 
necessary to manage trading on the Exchange. The Exchange believes 
codifying the quote and order entry protocols will increase 
transparency to the Participants that use these protocols to connect to 
the Exchange.

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 explained above, the 
Exchange is codifying the quote and order entry protocols that 
Participants use to connect to the Exchange's System.
    The Exchange does not believe that codifying the order entry 
protocols in the rulebook will have any competitive impact. Locating 
all the descriptions within a single rule and adding context around 
each order entry protocol will increase transparency around the 
operation of the Exchange without having any impact on inter-market or 
intra-market competition. All market participants have the ability to 
subscribe to the protocols for order entry. The quoting protocols are 
limited to the market participants who are permitted by rule to quote 
on BX, but the function is uniformly available to these eligible 
participants.

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 foregoing 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, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \9\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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.
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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.

[[Page 42737]]

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-BX-2018-038 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-BX-2018-038. 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-BX-2018-038 and should be submitted on 
or before September 13, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-18157 Filed 8-22-18; 8:45 am]
 BILLING CODE 8011-01-P



                                                                           Federal Register / Vol. 83, No. 164 / Thursday, August 23, 2018 / Notices                                                   42735

                                               C. Self-Regulatory Organization’s                       provisions of 5 U.S.C. 552, will be                   Participants can use to enter quotes and
                                               Statement on Comments on the                            available for website viewing and                     orders on the Exchange.
                                               Proposed Rule Change Received From                      printing in the Commission’s Public                      The text of the proposed rule change
                                               Members, Participants, or Others                        Reference Room, 100 F Street NE,                      is available on the Exchange’s website at
                                                                                                       Washington, DC 20549 on official                      http://nasdaqbx.cchwallstreet.com/, at
                                                 Written comments were neither
                                                                                                       business days between the hours of                    the principal office of the Exchange, and
                                               solicited nor received.
                                                                                                       10:00 a.m. and 3:00 p.m. Copies of such               at the Commission’s Public Reference
                                               III. Date of Effectiveness of the                       filing also will be available for                     Room.
                                               Proposed Rule Change and Timing for                     inspection and copying at the principal               II. Self-Regulatory Organization’s
                                               Commission Action                                       office of FINRA. All comments received                Statement of the Purpose of, and
                                                  Within 45 days of the date of                        will be posted without change. Persons                Statutory Basis for, the Proposed Rule
                                               publication of this notice in the Federal               submitting comments are cautioned that                Change
                                               Register or within such longer period (i)               we do not redact or edit personal
                                                                                                       identifying information from comment                     In its filing with the Commission, the
                                               as the Commission may designate up to                                                                         Exchange included statements
                                               90 days of such date if it finds such                   submissions. You should submit only
                                                                                                       information that you wish to make                     concerning the purpose of and basis for
                                               longer period to be appropriate and                                                                           the proposed rule change and discussed
                                               publishes its reasons for so finding or                 available publicly. All submissions
                                                                                                       should refer to File Number SR–FINRA–                 any comments it received on the
                                               (ii) as to which the self-regulatory                                                                          proposed rule change. The text of these
                                               organization consents, the Commission                   2018–032, and should be submitted on
                                                                                                       or before September 13, 2018.                         statements may be examined at the
                                               will:                                                                                                         places specified in Item IV below. The
                                                  (A) By order approve or disapprove                     For the Commission, by the Division of              Exchange has prepared summaries, set
                                               such proposed rule change, or                           Trading and Markets, pursuant to delegated
                                                                                                                                                             forth in sections A, B, and C below, of
                                                  (B) institute proceedings to determine               authority.16
                                                                                                                                                             the most significant aspects of such
                                               whether the proposed rule change                                                                              statements.
                                               should be disapproved.                                  Eduardo A. Aleman,
                                                                                                       Assistant Secretary.                                  A. Self-Regulatory Organization’s
                                               IV. Solicitation of Comments                                                                                  Statement of the Purpose of, and
                                                                                                       [FR Doc. 2018–18167 Filed 8–22–18; 8:45 am]
                                                 Interested persons are invited to                     BILLING CODE 8011–01–P                                Statutory Basis for, the Proposed Rule
                                               submit written data, views, and                                                                               Change
                                               arguments concerning the foregoing,                                                                           1. Purpose
                                               including whether the proposed rule                     SECURITIES AND EXCHANGE
                                               change is consistent with the Act.                      COMMISSION                                               The Exchange proposes to adopt new
                                               Comments may be submitted by any of                                                                           rule text at Chapter VI, Section 21 to
                                               the following methods:                                  [Release No. 34–83869; File No. SR–BX–                codify the Financial Information
                                                                                                       2018–038]                                             eXchange (‘‘FIX’’) and Specialized
                                               Electronic Comments                                                                                           Quote Feed (‘‘SQF’’) protocols. The
                                                 • Use the Commission’s internet                       Self-Regulatory Organizations; Nasdaq                 Exchange believes that codifying
                                               comment form (http://www.sec.gov/                       BX, Inc.; Notice of Filing and                        definitions of these protocols in its rules
                                               rules/sro.shtml); or                                    Immediate Effectiveness of Proposed                   will increase transparency around its
                                                 • Send an email to rule-comments@                     Rule Change To Codify the Definitions                 operations. The protocols used by
                                               sec.gov. Please include File Number SR–                 of the Protocols To Enter Quotes and                  Participants to submit quotes and orders
                                               FINRA–2018–032 on the subject line.                     Orders                                                play an important role in the operation
                                                                                                       August 17, 2018.                                      of the System. The Exchange therefore
                                               Paper Comments                                                                                                believes that codifying definitions of
                                                                                                          Pursuant to Section 19(b)(1) of the
                                                 • Send paper comments in triplicate                   Securities Exchange Act of 1934
                                                                                                                                                             these protocols in its rules will increase
                                               to Secretary, Securities and Exchange                                                                         transparency around its operations.
                                                                                                       (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                               Commission, 100 F Street NE,                                                                                  Furthermore, the proposed definitions
                                                                                                       notice is hereby given that on August
                                               Washington, DC 20549–1090.                                                                                    will be harmonized where appropriate
                                                                                                       14, 2018, Nasdaq BX, Inc. (‘‘BX’’ or
                                               All submissions should refer to File                                                                          with definitions to be included in the
                                                                                                       ‘‘Exchange’’) filed with the Securities
                                               Number SR–FINRA–2018–032. This file                                                                           rules of the Exchange’s affiliated options
                                                                                                       and Exchange Commission
                                               number should be included on the                                                                              markets,3 including by using consistent
                                                                                                       (‘‘Commission’’) the proposed rule
                                               subject line if email is used. To help the                                                                    terms to define the buckets of
                                                                                                       change as described in Items I, II, and
                                               Commission process and review your                                                                            information transmitted, or the features
                                                                                                       III, below, which Items have been
                                               comments more efficiently, please use                                                                         available, on each protocol.
                                                                                                       prepared by the Exchange. The
                                               only one method. The Commission will                                                                             The Exchange proposes to title
                                                                                                       Commission is publishing this notice to
                                               post all comments on the Commission’s                                                                         Section 21 as ‘‘Order and Quote
                                                                                                       solicit comments on the proposed rule
                                               internet website (http://www.sec.gov/                                                                         Protocols’’ and codify descriptions of
                                                                                                       change from interested persons.
                                               rules/sro.shtml). Copies of the                                                                               the various protocols that Participants
                                               submission, all subsequent                              I. Self-Regulatory Organization’s                     may use to enter quotes and orders on
                                               amendments, all written statements                      Statement of the Terms of Substance of                BX. The Exchange proposes to add a
                                               with respect to the proposed rule                       the Proposed Rule Change
daltland on DSKBBV9HB2PROD with NOTICES




                                                                                                                                                                3 See Securities Exchange Act Release Nos. 83729
                                               change that are filed with the                            The Exchange proposes to adopt new                  (July 27, 2018) 83 FR 37870 (August 2, 2018) (SR–
                                               Commission, and all written                             text at Chapter VI, Section 21 to codify              ISE–2018–65); 83731 (July 27, 2018), 83 FR 37867
                                               communications relating to the                          the definitions of the protocols that                 (August 2, 2018) (SR–GEMX–2018–26); and 83730
                                               proposed rule change between the                                                                              (July 27, 2018), 83 FR 37873 (August 2, 2018) (SR–
                                                                                                                                                             MRX–2018–25). Nasdaq Phlx LLC was filed as SR–
                                               Commission and any person, other than                     16 17 CFR 200.30–3(a)(12).                          Phlx–2018–54. The Nasdaq Stock Market LLC will
                                               those that may be withheld from the                       1 15 U.S.C. 78s(b)(1).                              submit a similar filing to amend The Nasdaq
                                               public in accordance with the                             2 17 CFR 240.19b–4.                                 Options Market LLC ports.



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                                               42736                        Federal Register / Vol. 83, No. 164 / Thursday, August 23, 2018 / Notices

                                               new section (a) to Chapter VI, Section                   messages (e.g underlying instruments); (2)           B. Self-Regulatory Organization’s
                                               21 entitled ‘‘Entry and Display of Orders                system event messages (e.g., start of trading        Statement on Burden on Competition
                                               and Quotes.’’ The Exchange proposes to                   hours messages and start of opening); (3)
                                                                                                        trading action messages (e.g., halts and                The Exchange does not believe that
                                               state in proposed new Chapter VI,                                                                             the proposed rule change will impose
                                                                                                        resumes); (4) execution messages; (5) quote
                                               Section 21(a) ‘‘Participants may enter                   messages; (6) Immediate-or-Cancel Order              any burden on competition not
                                               orders and quotes into the System as                     messages; (7) risk protection triggers and           necessary or appropriate in furtherance
                                               specified below.’’ The Exchange                          purge notifications; (8) opening imbalance           of the purposes of the Act. As explained
                                               proposes to add a section Chapter VI,                    messages; (9) auction notifications; and (10)        above, the Exchange is codifying the
                                               Section 21(a)(i) which provides, ‘‘The                   auction responses. The SQF Purge Interface           quote and order entry protocols that
                                               Exchange offers Participants the                         only receives and notifies of purge request
                                                                                                                                                             Participants use to connect to the
                                               following protocols for entering orders                  from the Market Maker.6
                                                                                                                                                             Exchange’s System.
                                               and quotes respectively.’’                               The Exchange believes that this                         The Exchange does not believe that
                                               A. Financial Information eXchange                        information provides a more thorough                 codifying the order entry protocols in
                                               Ports                                                    description of the SQF protocol.                     the rulebook will have any competitive
                                                                                                                                                             impact. Locating all the descriptions
                                                  This protocol is not memorialized                     2. Statutory Basis
                                                                                                                                                             within a single rule and adding context
                                               within the Exchange’s Rulebook,                             The Exchange believes that its                    around each order entry protocol will
                                               however rule changes describing FIX                      proposal is consistent with Section 6(b)             increase transparency around the
                                               have been filed.4 The Exchange                           of the Act,7 in general, and furthers the            operation of the Exchange without
                                               proposes to codify a description of this                 objectives of Section 6(b)(5) of the Act,8           having any impact on inter-market or
                                               protocol to add even greater specificity                 in particular, in that it is designed to             intra-market competition. All market
                                               within the Rulebook. The Exchange                        promote just and equitable principles of             participants have the ability to subscribe
                                               proposes to state that FIX is an interface               trade and to protect investors and the               to the protocols for order entry. The
                                               that allows Participants and their                       public interest by adding greater                    quoting protocols are limited to the
                                               Sponsored Customers to connect, send                     transparency to the order and quote                  market participants who are permitted
                                               and receive messages related to orders                   protocols available on BX.                           by rule to quote on BX, but the function
                                               and auction orders and responses to and                     The Exchange believes that the                    is uniformly available to these eligible
                                               from the Exchange. Features include the                  proposed rule change is consistent with              participants.
                                               following: (1) Execution messages; (2)                   the protection of investors and the
                                               order messages; and (3) risk protection                  public interest as it codifies the                   C. Self-Regulatory Organization’s
                                               triggers and cancel notifications.                       protocols used to connect to the                     Statement on Comments on the
                                                                                                        Exchange’s System. While no functional               Proposed Rule Change Received From
                                               B. Specialized Quote Feed Ports                                                                               Members, Participants, or Others
                                                                                                        changes to the protocols are proposed in
                                                 This protocol is not memorialized                                                                             No written comments were either
                                                                                                        this filing, the Exchange believes that
                                               within the Exchange’s Rulebook,                                                                               solicited or received.
                                                                                                        including a description of the various
                                               however rule changes describing SQF
                                                                                                        order entry protocols in its rulebook                III. Date of Effectiveness of the
                                               have been filed.5 At this time, the
                                                                                                        will benefit Participants by increasing              Proposed Rule Change and Timing for
                                               Exchange proposes to more specifically
                                                                                                        transparency around the operation of                 Commission Action
                                               define the SQF Port. The Exchange
                                                                                                        the Exchange. Furthermore, the
                                               proposes the following definition:                                                                               Because the foregoing proposed rule
                                                                                                        proposed descriptions of the order entry
                                                 SQF is an interface that allows Market                 protocols in one rule will more clearly              change does not: (i) Significantly affect
                                               Makers to connect, send, and receive                     and accurately reflect the information               the protection of investors or the public
                                               messages related to quotes, Immediate-or-                                                                     interest; (ii) impose any significant
                                                                                                        included on the protocols, and will be
                                               Cancel Orders, and auction responses into                                                                     burden on competition; and (iii) become
                                               and from the Exchange. Features include the              harmonized with language to be
                                                                                                        included in the rules of its affiliated              operative for 30 days from the date on
                                               following: (1) Options symbol directory
                                                                                                        exchanges to the extent that the                     which it was filed, or such shorter time
                                                  4 See Securities Exchange Act Release No. 80055       protocols operate in the same manner.                as the Commission may designate, it has
                                               (February 16, 2018), 82 FR 11381 (February 22,           The protocols described in this filing               become effective pursuant to Section
                                               2017) (SR–BX–2017–009). The FIX port was                 provide a range of important features to             19(b)(3)(A)(iii) of the Act 9 and
                                               previously referred to as the ‘‘Order Entry Port’’ and
                                                                                                        Participants, including the ability to               subparagraph (f)(6) of Rule 19b–4
                                               described as a connection to routing orders to the                                                            thereunder.10
                                               Exchange via an external order entry port.               submit quotes and orders, and perform
                                               Participants access the Exchange’s network through       other functions necessary to manage                     At any time within 60 days of the
                                               order entry ports. A BX Options Market Participant       trading on the Exchange. The Exchange                filing of the proposed rule change, the
                                               may have more than one order entry port. The
                                                                                                        believes codifying the quote and order               Commission summarily may
                                               Exchange recently renamed the ‘‘Order Entry Port’’                                                            temporarily suspend such rule change if
                                               as the ‘‘FIX Port’’ in the Exchange’s Pricing            entry protocols will increase
                                               Schedule. See Securities Exchange Act Release No.        transparency to the Participants that use            it appears to the Commission that such
                                               83192 (May 9, 2018), 83 FR 22563 (May 15, 2018)          these protocols to connect to the                    action is: (i) Necessary or appropriate in
                                               (SR–BX–2018–017).
                                                                                                        Exchange.                                            the public interest; (ii) for the protection
                                                  5 See Securities Exchange Act Release No. 76952
                                                                                                                                                             of investors; or (iii) otherwise in
                                               (January 21, 2016), 81 FR 4721 (January 27, 2016)
                                               (SR–BX–2016–003). This rule change generally
                                                                                                          6 All of the notification messages available on    furtherance of the purposes of the Act.
                                               described SQF as The SQF Port is a port that allows      SQF ports as described above (i.e., options symbol
daltland on DSKBBV9HB2PROD with NOTICES




                                               a Participant acting as a BX Options Market Maker        directory messages, system event messages, trading     9 15  U.S.C. 78s(b)(3)(A)(iii).
                                               to enter his markets into the BX Options markets.        action messages, etc.) are configurable in that BX     10 17  CFR 240.19b–4(f)(6). In addition, Rule 19b–
                                               The SQF Port also allows a Market Maker to access        Market Makers can select the specific types of       4(f)(6) requires a self-regulatory organization to give
                                               information such as execution reports and other          notifications they wish to receive on their SQF      the Commission written notice of its intent to file
                                               relevant data through a single feed. Market Makers       ports. As such, SQF Purge Interface ports are a      the proposed rule change at least five business days
                                               rely on data available through the SQF Port to           subpart of SQF ports that have been configured to    prior to the date of filing of the proposed rule
                                               provide them the necessary information to perform        only receive and notify of purge requests.           change, or such shorter time as designated by the
                                                                                                          7 15 U.S.C. 78f(b).
                                               market making activities in a swift and meaningful                                                            Commission. The Exchange has satisfied this
                                               way.                                                       8 15 U.S.C. 78f(b)(5).                             requirement.



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                                                                           Federal Register / Vol. 83, No. 164 / Thursday, August 23, 2018 / Notices                                                    42737

                                               If the Commission takes such action, the                  For the Commission, by the Division of               the proposed rule change and discussed
                                               Commission shall institute proceedings                  Trading and Markets, pursuant to delegated             any comments it received on the
                                               to determine whether the proposed rule                  authority.11                                           proposed rule change. The text of these
                                               should be approved or disapproved.                      Eduardo A. Aleman,                                     statements may be examined at the
                                                                                                       Assistant Secretary.                                   places specified in Item IV below. The
                                               IV. Solicitation of Comments                                                                                   Exchange has prepared summaries, set
                                                                                                       [FR Doc. 2018–18157 Filed 8–22–18; 8:45 am]
                                                 Interested persons are invited to                     BILLING CODE 8011–01–P                                 forth in Sections A, B, and C below, of
                                               submit written data, views, and                                                                                the most significant parts of such
                                               arguments concerning the foregoing,                                                                            statements.
                                               including whether the proposed rule                     SECURITIES AND EXCHANGE
                                                                                                                                                              A. Self-Regulatory Organization’s
                                               change is consistent with the Act.                      COMMISSION
                                                                                                                                                              Statement of the Purpose of, and the
                                               Comments may be submitted by any of
                                                                                                       [Release No. 34–83881; File No. SR–                    Statutory Basis for, the Proposed Rule
                                               the following methods:                                  CboeEDGX–2018–034]                                     Change
                                               Electronic Comments
                                                                                                       Self-Regulatory Organizations; Cboe                    1. Purpose
                                                 • Use the Commission’s internet                       EDGX Exchange, Inc.; Notice of Filing                     The Exchange proposes to modify the
                                               comment form (http://www.sec.gov/                       and Immediate Effectiveness of a                       fee schedule applicable to the
                                               rules/sro.shtml); or                                    Proposed Rule Change To Amend the                      Exchange’s options platform (‘‘EDGX
                                                 • Send an email to rule-comments@                     Options Regulatory Fee                                 Options’’) to amend the rate of its
                                               sec.gov. Please include File Number SR–                                                                        Options Regulatory Fee (‘‘ORF’’).5
                                               BX–2018–038 on the subject line.                        August 17, 2018.
                                                                                                                                                              Currently, the Exchange charges an ORF
                                                                                                          Pursuant to Section 19(b)(1) of the                 in the amount of $0.0004 per contract
                                               Paper Comments
                                                                                                       Securities Exchange Act of 1934 (the                   side. The Exchange proposes to decrease
                                                  • Send paper comments in triplicate                  ‘‘Act’’),1 and Rule 19b–4 thereunder,2                 the amount of ORF from $0.0004 per
                                               to Secretary, Securities and Exchange                   notice is hereby given that on August 9,               contract side to $0.0001 per contract
                                               Commission, 100 F Street NE,                            2018, Cboe EDGX Exchange, Inc. (the                    side. The proposed change to ORF
                                               Washington, DC 20549–1090.                              ‘‘Exchange’’ or ‘‘EDGX’’) filed with the               should continue to balance the
                                               All submissions should refer to File                    Securities and Exchange Commission                     Exchange’s regulatory expenses against
                                               Number SR–BX–2018–038. This file                        (‘‘Commission’’) the proposed rule                     the anticipated revenue.
                                               number should be included on the                        change as described in Items I, II and III                The ORF is assessed by the Exchange
                                               subject line if email is used. To help the              below, which Items have been prepared                  on each Member for options
                                               Commission process and review your                      by the Exchange. The Exchange has                      transactions cleared by the Member that
                                               comments more efficiently, please use                   designated the proposed rule change as                 are cleared by the Options Clearing
                                               only one method. The Commission will                    one establishing or changing a member                  Corporation (OCC) in the customer
                                               post all comments on the Commission’s                   due, fee, or other charge imposed by the               range, regardless of the exchange on
                                               internet website (http://www.sec.gov/                   Exchange under Section 19(b)(3)(A)(ii)                 which the transaction occurs. In other
                                               rules/sro.shtml). Copies of the                         of the Act 3 and Rule 19b–4(f)(2)                      words, the Exchange imposes the ORF
                                               submission, all subsequent                              thereunder,4 which renders the                         on all customer-range transactions
                                               amendments, all written statements                      proposed rule change effective upon                    cleared by a Member, even if the
                                               with respect to the proposed rule                       filing with the Commission. The                        transactions do not take place on the
                                               change that are filed with the                          Commission is publishing this notice to                Exchange. The ORF is collected by OCC
                                               Commission, and all written                             solicit comments on the proposed rule                  on behalf of the Exchange from the
                                               communications relating to the                          change from interested persons.                        Clearing Member or non-Clearing
                                               proposed rule change between the                        I. Self-Regulatory Organization’s                      Member that ultimately clears the
                                               Commission and any person, other than                   Statement of the Terms of Substance of                 transaction. With respect to linkage
                                               those that may be withheld from the                     the Proposed Rule Change                               transactions, the Exchange reimburses
                                               public in accordance with the                                                                                  its routing broker providing Routing
                                               provisions of 5 U.S.C. 552, will be                        The Exchange filed a proposal to                    Services for options regulatory fees it
                                               available for website viewing and                       amend its fee schedule related to the                  incurs in connection with the Routing
                                               printing in the Commission’s Public                     Options Regulatory Fee.                                Services it provides.
                                               Reference Room, 100 F Street NE,                           The text of the proposed rule change                   Revenue generated from ORF, when
                                               Washington, DC 20549, on official                       is available at the Exchange’s website at              combined with all of the Exchange’s
                                               business days between the hours of                      www.markets.cboe.com, at the principal                 other regulatory fees and fines, is
                                               10:00 a.m. and 3:00 p.m. Copies of the                  office of the Exchange, and at the                     designed to recover a material portion of
                                               filing also will be available for                       Commission’s Public Reference Room.                    the regulatory costs to the Exchange of
                                               inspection and copying at the principal                 II. Self-Regulatory Organization’s                     the supervision and regulation of
                                               office of the Exchange. All comments                    Statement of the Purpose of, and                       Member customer options business.
                                               received will be posted without change.                 Statutory Basis for, the Proposed Rule                 Regulatory costs include direct
                                               Persons submitting comments are                         Change                                                 regulatory expenses and certain indirect
                                               cautioned that we do not redact or edit                                                                        expenses for work allocated in support
                                               personal identifying information from                     In its filing with the Commission, the               of the regulatory function. The direct
                                                                                                       Exchange included statements
daltland on DSKBBV9HB2PROD with NOTICES




                                               comment submissions. You should                                                                                expenses include in-house and third
                                               submit only information that you wish                   concerning the purpose of and basis for                party service provider costs to support
                                               to make available publicly. All                           11 17 CFR 200.30–3(a)(12).
                                               submissions should refer to File                          1 15
                                                                                                                                                                 5 The Exchange initially filed the proposed fee
                                                                                                              U.S.C. 78s(b)(1).                               change on August 1, 2018 (SR–CboeEDGX–2018–
                                               Number SR–BX–2018–038 and should                          2 17 CFR 240.19b–4.
                                                                                                                                                              028) for August 1, 2018 effectiveness. On business
                                               be submitted on or before September 13,                   3 15 U.S.C. 78s(b)(3)(A)(ii).
                                                                                                                                                              date August 9, 2018, the Exchange withdrew that
                                               2018.                                                     4 17 CFR 240.19b–4(f)(2).                            filing and submitted this filing.



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Document Created: 2018-08-23 00:34:26
Document Modified: 2018-08-23 00:34:26
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 42735 

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