[Federal Register Volume 83, Number 28 (Friday, February 9, 2018)]
[Notices]
[Pages 5818-5822]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-02567]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82628; File No. SR-BX-2018-006]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Exchange 
Rules 7030, 7034, and 7051

February 5, 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 January 22, 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.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to amend Exchange Rules 7030, 7034, and 7051, 
as described below.
    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

[[Page 5819]]

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 amend several sections of its Rules to 
harmonize its colocation, connectivity, and direct connectivity 
services and fees with those of its sister exchanges, including The 
Nasdaq Stock Market LLC (``Nasdaq''), Nasdaq ISE, LLC (``Nasdaq ISE''), 
Nasdaq MRX, LLC (``Nasdaq MRX''), and Nasdaq GEMX, LLC (``Nasdaq 
GEMX'') (collectively, the ``Nasdaq, Inc. Exchanges'').\3\ The Exchange 
also proposes to update or eliminate certain obsolete or extraneous 
language from its Rules.
---------------------------------------------------------------------------

    \3\ In the near future, Nasdaq PHLX LLC (``Phlx'') plans to file 
a proposal with the Commission to make similar conforming changes to 
its rules.
---------------------------------------------------------------------------

    The Nasdaq, Inc. Exchanges offer certain colocation, connectivity, 
and direct connectivity services to their customers on a shared basis, 
meaning that a customer may utilize these services to gain access to 
any or all of the Nasdaq, Inc. Exchanges. The Nasdaq, Inc. Exchanges 
only charge customers once for these shared services, even to the 
extent that customers use the services to connect to more than one of 
the Nasdaq, Inc. Exchanges.
    The amendments that the Exchange proposes herein are intended 
principally to ensure that the shared services that the Exchange 
offers, and the fees that it charges for such services, are uniform 
across the Nasdaq, Inc. Exchanges' rulebooks and reflect relevant 
changes that have been made already to the rules of other Nasdaq, Inc. 
Exchanges. The amendments also remove certain language from the 
Exchange's Rules that refers to obsolete terms or expired time-limited 
programs or that is otherwise extraneous.
    First, the Exchange proposes to amend Rule 7030(d), entitled 
``Testing Facilities,'' to eliminate extraneous provisions that were 
inadvertently and erroneously included in the Rule but have no intended 
meaning or purpose there. These provisions are subsections (d)(2)-
(d)(3). Subsection (d)(2) defines terms, such as ``Active Connection,'' 
``Idle Connection,'' and ``Period of Inactivity,'' that are not 
utilized elsewhere in the Rule, Subsection (d)(3) lists exceptions to 
the testing fees that are not applicable to the Exchange's Test 
Facility. The Exchange proposes that existing subsection (d)(4) be 
renumbered as new subsection (d)(2). The Exchange also proposes that 
new subsection (d)(2) delete reference to an obsolete waiver of 
installation fees for installations ordered prior to March 2014. 
Lastly, the Exchange proposes to clarify that connectivity to the 
Exchange's testing facility will also provide for connectivity to the 
testing facilities of any or all of the other Nasdaq, Inc. Exchanges, 
including those of not only Nasdaq and Phlx (as is stated in the 
existing Rule), but also those of Nasdaq ISE, Nasdaq MRX, and Nasdaq 
GEMX.
    Second, the Exchange proposes to amend BX Rule 7034, which lists 
the schedule of fees that the Exchange charges for colocation services, 
to harmonize that schedule with the existing rules of other Nasdaq, 
Inc. Exchanges, including Nasdaq Rule 7034, Chapter VI.E of the Nasdaq 
ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees, 
and Chapter IV.F of the Nasdaq GEMX Schedule of Fees. The proposed 
changes are as follows:
     The Exchange proposes to amend Rule 7034(a), under the 
heading ``Cabinet with Power,'' to update the installation and monthly 
fees it charges to customers to rent powered cabinet space in its 
colocation facilities. The proposed changes are as follows: (i) For 
super high density cabinets, the Exchange proposes to decrease its 
installation fee from $7,000 to $4,500 and its monthly fee from $13,000 
to $8,000; (ii) for high density cabinets, it proposes to decrease its 
monthly fee from $7,000 to $4,500; (iii) for medium-high density 
cabinets, it proposes to decrease its monthly fees from $6,000 to 
$3,500; (iv) for medium density cabinets, it proposes to decrease its 
monthly fees from $5,000 to $2,500; (v) for low density cabinets, it 
proposes to decrease its monthly fees from $4,000 to $2,000; and (vi) 
for half cabinets, it proposes to decrease its monthly fees from $3,000 
to $2,000. These changes will render this subsection of the Rules 
consistent with the existing rules of other Nasdaq, Inc. Exchanges, 
including Nasdaq Rule 7034(a), Chapter VI.E of the Nasdaq ISE Schedule 
of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees, and Chapter 
IV.F of the Nasdaq GEMX Schedule of Fees.
     The Exchange proposes to amend Rule 7034(a) to remove the 
paragraph entitled ``Temporary Fee Reduction for Cabinets with Power,'' 
as this fee reduction program has expired.
     The Exchange proposes to amend Rule 7034(b), under the 
heading ``External Telco/Inter-Cabinet Connectivity,'' to update the 
monthly fees it charges for external telecommunications and inter-
cabinet connectivity, as follows: (i) For a category 6 cable patch, a 
DS-3 connection, and a fiber connection, the Exchange proposes to 
increase its monthly fees from $300 to $350; and (ii) for a POTS Line, 
the Exchange proposes to increase the monthly fee from $0 to $50. These 
changes will render this paragraph of the Rules consistent with a 
corresponding paragraph in the existing rules of other Nasdaq, Inc. 
Exchanges, including Nasdaq Rule 7034(b), Chapter VI.E of the Nasdaq 
ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees, 
and Chapter IV.F of the Nasdaq GEMX Schedule of Fees.
     The Exchange proposes to amend Rule 7034(b), under the 
heading ``Connectivity to BX,'' to update the fees it charges for fiber 
connectivity to the Exchange, as follows: (i) For a 10Gb fiber 
connection to the Exchange, the Exchange proposes to increase the 
monthly fee from $5,000 to $10,000; (ii) for a 40Gb fiber connection to 
the Exchange, it proposes to increase the monthly fee from $15,000 to 
$20,000; (iii) for a 1Gb fiber connection to the Exchange, it proposes 
to increase the monthly fee from $1,000 to $2,500; (iv) for a 1Gb 
copper connection to the Exchange, it proposes to increase the monthly 
fee from $1,000 to $2,500; (v) the Exchange proposes to add a 1Gb Ultra 
fiber connection to the Exchange for an installation fee of $1,500 and 
a monthly fee of $2,500; and (vi) the Exchange proposes to remove 
obsolete language regarding an expired fee waiver program. These 
changes will render this paragraph of the Rules consistent with 
corresponding paragraphs in the existing rules of other Nasdaq, Inc. 
Exchanges, including Nasdaq Rule 7034(b), Chapter VI.E of the Nasdaq 
ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees, 
and Chapter IV.F of the Nasdaq GEMX Schedule of Fees. The Exchange also 
proposes an amendment to this provision to clarify that connectivity to 
the Exchange will also provide for connectivity to any or all of the 
other Nasdaq, Inc. Exchanges, including not only Nasdaq and Phlx (as 
the existing Rule provides), but also Nasdaq ISE, Nasdaq MRX, and 
Nasdaq GEMX. This proposal mirrors existing language in Chapter VI.E of 
the Nasdaq

[[Page 5820]]

ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees, 
and Chapter IV.F of the Nasdaq GEMX Schedule of Fees.
     The Exchange proposes to amend Rule 7034(b) to add a new 
paragraph under a heading entitled ``Connectivity to Third Party 
Services.'' This proposed paragraph will provide for connectivity via 
colocation to market data feeds from other markets and exchanges,\4\ 
Securities Information Processors (``SIPs'') \5\ data, and other non-
exchange services. The proposed connectivity and associated fees are as 
follows: (i) For a 10Gb Ultra fiber connection, the Exchange proposes 
to charge a $1,500 installation fee and an ongoing monthly fee of 
$5,000; (ii) for a 1Gb Ultra fiber connection, it proposes to charge a 
$1,500 installation fee and an ongoing monthly fee of $2,000; and (iii) 
for a 1Gb Ultra or a 10Gb Ultra connection for UTP only, it proposes to 
charge a $100 installation fee and an ongoing monthly fee of $100. All 
of the foregoing fees will be waived for two connections per client to 
UTP SIP feeds only (UQDF and UTDF). The Exchange notes that the 
proposed paragraph parallels the existing rules of other Nasdaq, Inc. 
Exchanges, including Nasdaq Rule 7034(b), Chapter VI.E of the Nasdaq 
ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees, 
and Chapter IV.F of the Nasdaq GEMX Schedule of Fees.
---------------------------------------------------------------------------

    \4\ For example, Third Party Connectivity will support 
connectivity to the FINRA/Nasdaq Trade Reporting Facility, BZX and 
BYX Depth Feeds, and NYSE Feeds. A customer must separately 
subscribe to the third party services to which it connects with a 
Third Party Connectivity subscription.
    \5\ The SIPs link the U.S. markets by processing and 
consolidating all protected bid/ask quotes and trades from every 
registered exchange trading venue and FINRA into a single data feed, 
and they disseminate and calculate critical regulatory information, 
including the National Best Bid and Offer, Limit Up Limit Down price 
bands, short sale restrictions and regulatory halts.
---------------------------------------------------------------------------

     The Exchange proposes to amend Rule 7034(b), under the 
heading ``Market Data Connectivity,'' to add prefatory language that 
exists in the analogous portion of Nasdaq Rule 7034(b). The language 
merely notes that the Market Data feeds listed in the provision are 
delivered to the Nasdaq Data Center via a fiber optic network. 
Additionally, the Exchange proposes to re-categorize and update the 
names of the certain CBOE/Bats/Direct Edge data feeds insofar as the 
names listed in the current Rule are obsolete. Similarly, the Exchange 
proposes to delete a $1,000 installation fee that presently applies to 
the Direct Edge feeds insofar as the Direct Edge feeds are now 
offerings of CBOE, along with the BZX and BYX feeds. Going forward, a 
single, one-time $1,000 installation fee will apply to subscribers to 
any or all of the CBOE data feeds.
     The Exchange proposes to amend Rule 7034(b) to add a new 
paragraph that will provide for multicast market data feeds from other 
markets to be delivered to the Exchange's customers via wireless 
microwave or millimeter wave networks. The Exchange notes that Nasdaq 
already provides such data feeds to its customers pursuant to an 
analogous paragraph in Nasdaq Rule 7034(b). The proposed data feeds, 
and their corresponding installation and monthly fees, are as follows: 
(i) NYSE Equities (Arca Integrated), for an installation fee of $5,000 
and a monthly fee of $10,000; (ii) NYSE Equities (NYSE Integrated), for 
an installation fee of $5,000 and a monthly fee of $10,000; (iii) BATS 
Multicast PITCH (BZX and BYZ), for an installation fee of $2,500 and a 
monthly fee of $7,500; (iv) Direct EDGE Depth of Book (EDGA, EDGX), for 
an installation fee of $2,500 and a monthly fee of $7,500; (v) CME 
Multicast Total (including CME Equities Futures Data, CME Fixed Income 
Futures Data, and CME Metal Futures Data), for an installation fee of 
$5,000 and a monthly fee of $23,500; (vi) CME Equities Futures Data 
Only, for a $5,000 installation fee and a monthly fee of $10,000; (vii) 
CME Fixed Income Futures Data Only, for a $5,000 installation fee and a 
monthly fee of $10,000; and (viii) CME Metals Futures Data Only, for a 
$5,000 installation fee and a monthly fee of $3,500.\6\ As to the 
monthly fee for these services, the proposal provides that subscribers 
will receive discounts based upon the number of subscriptions they 
maintain.\7\ The Exchange proposes to add this paragraph to render the 
Rules consistent with corresponding paragraphs in the existing rules of 
other Nasdaq, Inc. Exchanges, including Nasdaq Rule 7034(b), Chapter 
VI.E of the Nasdaq ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX 
Schedule of Fees, and Chapter IV.F of the Nasdaq GEMX Schedule of Fees.
---------------------------------------------------------------------------

    \6\ The Exchange proposes to charge subscribers to any or all of 
the CME Data Feeds a single $5,000 installation fee. In other words, 
a subscriber to the CME Fixed Income Futures Data Feed and the CME 
Metals Futures Data Feed will only pay a single $5,000 installation 
fee for access to both feeds.
    \7\ The proposed Rule paragraph provides that subscribers with 
three to five microwave or millimeter wave wireless subscriptions 
under Rule 7015 and/or Rule 7034(b) will receive a 5% discount on 
all such subscriptions. Meanwhile, subscribers with six to ten 
microwave or millimeter wave wireless subscriptions under Rule 7015 
and/or Rule 7034(b) will receive a 10% discount on all such 
subscriptions. Subscribers with eleven to fourteen microwave or 
millimeter wave wireless subscriptions under Rule 7015 and/or Rule 
7034(b) will receive a 15% discount on all such subscriptions. 
Finally, subscribers with fifteen or more microwave or millimeter 
wave wireless subscriptions under Rule 7015 and/or Rule 7034(b) will 
receive a 20% discount on all such subscriptions.
---------------------------------------------------------------------------

     The Exchange proposes to amend Rule 7034(d), under the 
heading ``Additional Charges/Services,'' to update the installation fee 
it charges for super high density cabinet kits. Specifically, the 
Exchange proposes to decrease the fee from $7,000 to $4,500. This 
change will render this paragraph of the Rules consistent with 
corresponding paragraphs in the existing rules of other Nasdaq, Inc. 
Exchanges, including Nasdaq Rule 7034(d), Chapter VI.E of the Nasdaq 
ISE Schedule of Fees, Chapter IV.A of the Nasdaq MRX Schedule of Fees, 
and Chapter IV.F of the Nasdaq GEMX Schedule of Fees, entitled 
``Additional Items.''
    Third, the Exchange proposes to amend Rule 7051, entitled ``Direct 
Connectivity to BX.'' This Rule describes the means by which customers 
may connect directly to the Exchange's main or satellite data centers 
via a third party vendor's telecommunications circuit. The proposed 
changes to this Section are as follows:
     The Exchange proposes to update the structure of Rule 7051 
so that it will parallel the structure of the existing rules of other 
Nasdaq, Inc. Exchanges, including Nasdaq Rule 7051, Chapter VI.F, G, 
and H of the Nasdaq ISE Schedule of Fees, Chapter IV.B, C, and D of the 
Nasdaq MRX Schedule of Fees, and Chapter IV.G, H, and I of the Nasdaq 
GEMX Schedule of Fees. Specifically, the Exchange proposes to place the 
existing text of Rule 7051 into a subsection (a), to be entitled 
``Direct Circuit Connection to BX.'' It also proposes to add two 
additional subsections, as described below.
     The Exchange proposes to amend the text of Rule 7051 (as 
reorganized in proposed subsection (a) and re-titled ``Direct Circuit 
Connection to BX'') so that it is fully consistent with the existing 
rules of other Nasdaq, Inc. Exchanges, including Nasdaq Rule 7051(a), 
Chapter VI.F of the Nasdaq ISE Schedule of Fees, Chapter IV.B of the 
Nasdaq MRX Schedule of Fees, and Chapter IV.G of the Nasdaq GEMX 
Schedule of Fees in terms of both the direct circuit connections that 
it offers to its customers as well as the associated fees that it 
charges for such connections. The proposed changes are as follows: (i) 
For 10Gb direct circuit connections to BX, the Exchange proposes to 
increase the installation fee from $1,000 to

[[Page 5821]]

$1,500 and the monthly fee from $5,000 to $7,500; (ii) for 1Gb direct 
circuit connections to BX, the Exchange proposes to increase the 
installation fee from $1,000 to $1,500 and the monthly fee from $1,000 
to $2,500; (iii) the Exchange proposes to add a 1Gb Ultra direct 
circuit connection for an installation fee of $1,500 and a monthly fee 
from $2,500; and (iv) the Exchange proposes to clarify that direct 
circuit connectivity to the Exchange will also provide for direct 
circuit connectivity to any or all of the other Nasdaq, Inc. Exchanges, 
including not only Nasdaq and Phlx (as the existing Rule provides), but 
also Nasdaq ISE, Nasdaq MRX, and Nasdaq GEMX.
     The Exchange proposes to add a new subsection (b) to Rule 
7051, entitled ``Direct Circuit Connection to Third Party Services.'' 
Through this subsection, which is an analogue to the existing rules of 
other Nasdaq, Inc. Exchanges, including Nasdaq Rule 7051(b), Chapter 
VI.G of the Nasdaq ISE Schedule of Fees, Chapter IV.C of the Nasdaq MRX 
Schedule of Fees, and Chapter IV.H of the Nasdaq GEMX Schedule of Fees, 
the Exchange will offer its customers direct circuit connections to 
third party services, including the same third party services to which 
it proposes to connect customers through colocation, as set forth in 
proposed Rule 7034(b) (described above). Specifically, the Exchange 
proposes to offer the following services and charge the following fees 
for them: (i) A 10Gb Ultra direct circuit connection for an 
installation fee of $1,500 and a monthly fee of $5,000; (ii) a 1Gb 
Ultra direct circuit connection for an installation fee of $1,500 and a 
monthly fee of $2,000; (iii) a 1Gb Ultra or 10Gb direct circuit 
connection (for UTP only) for an installation fee of $100 and a monthly 
fee of $100; (iv) an optional cable router for a $925 installation fee; 
and (v) a monthly fee of $150 per ``U'' of cabinet space rented. For 
direct circuit connectivity to UTP SIP feeds only, the installation and 
monthly fees will be waived for the first two connections.
    The Exchange proposes to add a new subsection (c) to Rule 7051, 
entitled ``Point of Presence (POP) Connectivity.'' This subsection, 
which is an analogue to the existing rules of other Nasdaq, Inc. 
Exchanges, including Nasdaq Rule 7051(c), Chapter VI.H of the Nasdaq 
ISE Schedule of Fees, Chapter IV.D of the Nasdaq MRX Schedule of Fees, 
and Chapter IV.I of the Nasdaq GEMX Schedule of Fees, provides for 
customers to connect directly to the Exchange through a ``Point of 
Presence'' or ``POP'' that is located at one of the Exchange's 
satellite data centers, rather than in the Exchange's main data center. 
Each such POP, in turn, has a fully redundant connection to the 
Exchange's primary data center. The proposed services and associated 
fees are as follows: (i) The Exchange proposes to offering a 10Gb POP 
connection to BX for an installation fee of $1,500 and a monthly of 
$7,500; (ii) it proposes to offer a 1Gb Ultra POP connection to BX for 
an installation fee of $1,500 and a monthly fee of $2,500; and (iii) 
the Exchange proposes to state that the POP connectivity provided under 
this subsection also applies to connectivity to any or all of the other 
Nasdaq, Inc. Exchanges.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\9\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees and other charges 
among members and issuers and other persons using any facility, and is 
not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that its proposals to update its schedule of 
shared connectivity, direct circuit connectivity, and colocation 
services that it provides in concert with its sister Nasdaq, Inc. 
Exchanges, and for which the Nasdaq, Inc. Exchanges charge a single 
fee, is reasonable insofar as the proposals will ensure that the 
Exchange's Rules, as they apply to such services and fees, are 
consistent with the applicable schedules and rules of other Nasdaq, 
Inc. Exchanges, including Nasdaq, Nasdaq ISE, Nasdaq MRX, and Nasdaq 
GEMX. In this regard, the Exchange notes that the proposed amendments 
to its Rules largely reflect changes and updates that have been made 
already to the schedules and rules of these other Nasdaq, Inc. 
Exchanges. For example, each of the proposed changes to the Exchange's 
connectivity, direct connectivity, and colocation fees will harmonize 
the Exchange's fees with those of Nasdaq, Nasdaq ISE, Nasdaq MRX, and 
Nasdaq GEMX.
    In a few instances, however, the Exchange proposes amendments to 
its rules that are not reflected in the rules of the other Nasdaq, Inc. 
Exchanges. These proposals seek to eliminate certain language from its 
Rules that is extraneous, eliminate references to expired fee reduction 
or waiver programs, update references to third party data feeds to 
reflect their current names, and eliminate an obsolete installation fee 
for Direct Edge data feeds. The Exchange believes that these proposals 
are non-controversial because it serves the interests of the public and 
investors for the Exchange to maintain a current and accurate Rulebook 
and because the proposals will not impact competition or limit access 
to or availability of the Exchange or its systems.
    The Exchange believes that the foregoing proposals provide for the 
equitable allocation of fees because the connectivity and colocation 
services to which these fees apply are shared services for which 
customers pay once, regardless of whether the customers choose to use 
these services to connect only to BX or also to any or all of the other 
Nasdaq, Inc. Exchanges. Moreover, the other Nasdaq, Inc. Exchanges 
already offer these shared services to their customers and do so at the 
same prices that the Exchange now proposes to charge. As such, the 
proposals will ensure that the fees that the Exchanges charges its 
customers for shared services are the same fees that the other Nasdaq, 
Inc. Exchanges charges their customers (including their customers who 
are also BX Members) for the same shared services. In other words, the 
proposals would ensure that a customer of the Exchange that wishes to, 
say, purchase direct connectivity to all of the Nasdaq, Inc. Exchanges 
will not pay more to do so through BX than it would pay if it purchased 
that same connectivity from Nasdaq, and vice versa.
    The proposed fees and fee changes, moreover, are equitably 
allocated because the proposals align these fees with the costs that 
the Exchange incurs to provide the shared services, including the costs 
of developing, installing, maintaining, and upgrading equipment and 
systems relating to connectivity and colocation services. Finally, the 
proposed fees are equitably allocated because all member firms that 
subscribe to a particular connectivity option under the amended Rules 
will be assessed the same fee.
    The proposals, similarly, are not unfairly discriminatory because 
the shared services they entail will be available to all similarly 
situated clients, while the fees and fee changes they entail will apply 
uniformly to such clients to the extent that they choose to utilize the 
shared services.

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

    The Exchange does not believe that the proposed rule change will 
impose

[[Page 5822]]

any burden on competition not necessary or appropriate in furtherance 
of the purposes of the Act.
    In terms of inter-market competition, the Exchange notes that it 
operates in a highly competitive market in which market participants 
can readily favor competing venues if they deem fee levels at a 
particular venue to be excessive, or rebate opportunities available at 
other venues to be more favorable. In such an environment, the Exchange 
must continually adjust its fees to remain competitive with other 
exchanges and with alternative trading systems that have been exempted 
from compliance with the statutory standards applicable to exchanges. 
Because competitors are free to modify their own fees in response, and 
because market participants may connect to third parties instead of 
directly connecting to the Exchange, the Exchange believes that the 
degree to which fee changes in this market may impose any burden on 
competition is extremely limited.
    In this instance, the proposed changes to the charges assessed for 
colocation, connectivity, and direct circuit connectivity are 
consistent with the fees already assessed by other Nasdaq, Inc. 
Exchanges for the same shared services. To the extent that any of these 
fees are [sic] unattractive to market participants, it is likely that 
the Exchange, and its sister Nasdaq, Inc. Exchanges, will lose market 
share as a result. The Exchange does not believe that the proposed 
changes will impair the ability of members or competing order execution 
venues to maintain their competitive standing in the financial markets.
    Furthermore, the Exchange does not expect that its proposals to 
eliminate or replace expired or obsolete language from its Rulebook 
will have any impact on competition.

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 \10\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 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.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BX-2018-006 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-2018-006. 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-2018-006, and should be submitted on 
or before March 2, 2018.
---------------------------------------------------------------------------

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

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-02567 Filed 2-8-18; 8:45 am]
 BILLING CODE 8011-01-P