[Federal Register Volume 83, Number 94 (Tuesday, May 15, 2018)]
[Notices]
[Pages 22552-22554]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10259]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83199; File No. SR-BX-2018-016]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Memorialize 
Its Order and Execution Information Into Chapter VI, Section 19, 
Entitled Data Feeds

May 9, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on April 27, 2018, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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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 a proposal to memorialize its order and 
execution information into Chapter VI, Section 19, entitled ``Data 
Feeds.''
    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 the 
Statutory Basis for, the Proposed Rule Change

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

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

1. Purpose
    The Exchange proposes to memorialize its order and execution 
information into Chapter VI, Section 19, entitled ``Data Feeds.'' The 
Exchange proposes to rename this rule ``Data Feeds and Trade 
Information.'' The Exchange proposes other grammatical corrections in 
Section 19(a) as well.
Section 19(b)
    First, the Exchange proposes to adopt a new Section 19(b) and 
memorialize the following order and execution information which were 
previously filed by the Exchange: (1) CTI; \3\ (2) TradeInfo \4\; and 
(3) FIX DROP.\5\
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    \3\ See Securities Exchange Act Release No. 73894 (December 19, 
2014), 79 FR 78119 (December 29, 1014) (SR-BX-2014-060) (``CTI and 
FIX DROP Filing'').
    \4\ See Securities Exchange Act Release No. 60826 (October 14, 
2009), 74 FR 54605 (October 22, 2009) (SR-BX-2009-062) (``TradeInfo 
Filing'').
    \5\ See note 3 above.
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    The Exchange originally noted in the CTI and FIX DROP Filing that 
CTI offers real-time clearing trade updates.\6\ The message containing 
the trade details is also simultaneously sent to The Options Clearing 
Corporation. The trade messages are routed to a member's connection 
containing certain information. The administrative and market event 
messages include, but are not limited to: System event messages to 
communicate operational-related events; options directory messages to 
relay basic option symbol and contract information for options traded 
on the Exchange; complex strategy messages to relay information for 
those strategies traded on the Exchange; trading action messages to 
inform market participants when a specific option or strategy is halted 
or released for trading on the Exchange; and an indicator which 
distinguishes electronic and non-electronically delivered orders.
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    \6\ A real-time clearing trade update is a message that is sent 
to a member after an execution has occurred and contains trade 
details. See Securities Exchange Act Release No. 73894 (December 19, 
2014), 79 FR 78119 (December 29, 1014) (SR-BX-2014-060).

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[[Page 22553]]

    The Exchange is proposing to more specifically describe the CTI 
offering and memorialize it within Section 19(b)(1). The description 
provides more detail as to the current functionality of CTI, which is 
not changing. The description would continue to state that CTI is a 
real-time clearing trade update message that is sent to a Participant 
after an execution has occurred and contains trade details specific to 
that Participant. The information includes, among other things, the 
following: (i) The Clearing Member Trade Agreement or ``CMTA'' or The 
Options Clearing Corporation or ``OCC'' number; (ii) Exchange badge or 
house number; (iii) the Exchange internal firm identifier; (iv) an 
indicator which will distinguish electronic and non-electronically 
delivered orders; (v) liquidity indicators and transaction type for 
billing purposes; and (vi) capacity. The Exchange proposes to not add 
the sentence which states, ``The message containing the trade details 
is also simultaneously sent to The Options Clearing Corporation.'' The 
Exchange's System sends clearing information to OCC for each 
transaction. This sentence does not add information that is useful or 
relevant and therefore the Exchange proposes to remove it. The Exchange 
notes that while the description is being amended, it retains more 
broadly the former descriptions. The information provided is specific 
to a market participant. The Exchange is expressing more specifically 
the type of data contained in CTI. The CTI offering is not changing. 
The Exchange is providing more details regarding the CTI offering than 
was originally filed in the CTI and FIX DROP Filing.
    The Exchange originally noted in the TradeInfo Filing that 
TradeInfo allows subscribing members to scan for their orders submitted 
to BX. Members can scan for all orders in a particular security or all 
orders of a particular type, regardless of their status (open, 
canceled, executed, etc.). Members are also able to cancel open orders 
at the order, port or MPID level (an MPID is a firm mnemonic). For 
example, after scanning for open orders, the member is then able to 
select an open order and cancel the order. TradeInfo BX also allows 
members to scan other order statuses, such as executed, cancelled, 
broken, rejected and suspended orders. TradeInfo BX enables members to 
generate reports of execution, order or cancel information, which can 
be exported into a spreadsheet for review.
    The Exchange proposes to amend and memorialize TradeInfo within 
Section 19(b)(2). The Exchange proposes to note that TradeInfo is a 
user interface, as compared to a data stream, to add more detail to the 
description. While some descriptive language is being removed from the 
rules, such as permitting a subscribing member to scan other order 
statuses, such as executed, cancelled, broken, rejected and suspended 
orders, the Exchange believes that this language is covered in the 
current description in that the text indicates that all orders may be 
searched regardless of their status. Similarly, the description which 
provides that a subscribing member may generate reports of execution, 
order or cancel information, which can be exported into a spreadsheet 
for review is covered in that the Exchange notes that a view of the 
orders and execution may be downloaded.
    The Exchange originally noted in its FIX DROP filing that the Order 
Entry DROP provides real time information regarding orders sent to BX 
and executions that occurred on BX. The DROP interface is not a trading 
interface and does not accept order messages. The ``Order Entry DROP'' 
interface is being renamed ``FIX DROP'' for clarity as it relates to 
FIX ports.
    The Exchange is now expanding on the original description by 
providing more detail by stating that it is a real-time order and 
execution update message that is sent to a Participant after an order 
has been received/modified or an execution has occurred and contains 
trade details specific to that Participant. The information includes, 
among other things, the following: (1) Executions; (2) cancellations; 
(3) modifications to an existing order (4) busts or post-trade 
corrections. The Exchange believes that the additional specificity will 
provide more information to Participants.
    The Exchange considers it appropriate to memorialize the order and 
execution information available on BX within a rule so that 
Participants may understand the trade information which is available on 
the Exchange as it pertains to a firm's trading information. This data 
is available to all Participants regarding that Participant's 
transactions. Pricing for these products is included in the Exchange's 
fee schedule at Chapter XV, Section 3.\7\
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    \7\ See also SR-BX-2018-017 (not yet published) which proposes 
conforming changes to the fee schedule.
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Section 19(a)
    The Exchange proposes minor changes to Section 19(a)(1) and (2) to 
change the language to indicate the BX Depth of Market and BX Top of 
Market each separately are data feeds and removing the ``A'' before the 
description.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Securities Exchange Act of 1934 (the 
``Act''),\8\ in general, and furthers the objectives of Section 6(b)(5) 
of the Act,\9\ in particular, in that it is designed to promote just 
and equitable principles of trade, to remove impediments to and perfect 
the mechanism for a free and open market and a national market system, 
and, in general, to protect investors and the public interest, by 
providing greater transparency as to the order and execution 
information offered on BX. The Exchange notes that it described this 
information in prior rule changes.\10\ The Exchange believes that 
memorializing this information within a rule and updating the 
information will provide market participants with a list of information 
available specific to their trading on BX. The Exchange believes that 
this proposal is consistent with the Act because it provides 
information on the content available to market participants regarding 
the trades they execute on BX.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ See notes 3 and 4 above.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\11\ the Exchange 
does not believe that the proposed rule change will impose any burden 
on intermarket or intra-market competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange's 
proposal does not impose an undue burden on competition, rather the 
Exchange is seeking to provide greater transparency within its rules 
with respect to the various order and execution information offered on 
BX.
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    \11\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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

    Because the proposed rule change does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, if

[[Page 22554]]

consistent with the protection of investors and the public interest, 
the proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change at least five 
business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\10\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange states that 
such waiver will allow it to update its rules immediately to provide 
more information regarding the order and execution information it 
offers and further the protection of investors and the public interest 
because it will provide greater transparency as to the trade detail 
available to members. For this reason, the Commission believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest and, therefore, the Commission 
designates the proposed rule change to be operative upon filing.\14\
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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 necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-BX-2018-016 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-2018-016. 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-2018-016 and should be submitted on 
or before June 5, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10259 Filed 5-14-18; 8:45 am]
BILLING CODE 8011-01-P