[Federal Register Volume 83, Number 238 (Wednesday, December 12, 2018)]
[Notices]
[Pages 63916-63918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26911]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84749; File No. SR-BX-2018-060]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Port Fees
December 7, 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 November 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, 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 a proposal to amend port fees within
Options 7, Section 3, titled ``BX Options Market--Ports and Other
Services.''
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 purpose of the proposed rule change is to define ``account
number'' and utilize that term within Options 7, Section 3. Each change
will be described in more detail below.
New Defined Term ``Account'' [sic]
The Exchange proposes to adopt a new definition within Options 7,
Section 3 and apply this definition within the rule. The purpose of
this defined new term ``account number'' is to conform the Exchange's
use of certain terms within BX Rules. This term would be utilized in
Options 7, Section 3 to describe the manner in which pricing is
calculated. Recently, the Nasdaq affiliated exchanges filed rule
changes to conform the usage of various terms across its 6 affiliated
options markets within the various rulebooks.\3\ The Exchange believes
that utilizing the same defined terms, where possible, across its 6
affiliated options markets will avoid confusion for certain rules and
pricing purposes. The term ``account number'' can be defined
identically across Nasdaq's 6 affiliated options markets for purposes
of pricing ports. The Exchange is not amending the manner in which
pricing will be applied with respect to this particular change. The
Exchange proposes to utilize the defined term ``account number'' in
place of the term ``mnemonic,'' which was not defined in the pricing
rules. The insertion of the new defined term is intended to add more
specificity and clarity to the current pricing.
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\3\ BX filed to define the terms ``account number,'' ``badge''
and ``mnemonic'' at Chapter I, Section 1(a)(70), (71) and (72)
respectively. See Securities Exchange Act Release No. 84520
(November 1, 2018), 83 FR 55765 (November 7, 2018) (SR-BX-2018-050).
The Nasdaq Stock Market LLC filed to amend The Nasdaq Options Market
LLC rules to define the terms ``account number,'' ``badge'' and
``mnemonic'' at Chapter I, Section 1(a)(69), (70) and (71)
respectively. See Securities Exchange Act Release No. 84571
(November 9, 2018), 83 FR 57758 (November 16, 2018) (SR-NASDAQ-2018-
086). Nasdaq Phlx LLC has filed to define the terms ``account
number,'' ``badge'' and ``mnemonic'' at Rule 1000(b)(51), (52) and
(53) respectively. See Securities Exchange Act Release No. 84620
(November 19, 2018), 83 FR 60512 (November 6, 2018) (SR-Phlx-2018-
71). See also ISE Rule 100(a)(1), (5) and (34) which defines the
terms ``account number,'' ``badge'' and ``mnemonic,'' respectively.
See also GEMX Rule 100(a)(1), (5) and (35) which defines the terms
``account number,'' ``badge'' and ``mnemonic,'' respectively. See
also MRX Rule 100(a)(1), (5) and (36) which defines the terms
``account number,'' ``badge'' and ``mnemonic,'' respectively.
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At this time, the Exchange proposes to define an ``account number''
within Options 7, Section 3 to mean a number assigned to a Participant.
Participants may have more than one account number. The term
``mnemonic'' has been used frequently throughout Options 7 without
being defined. The Exchange proposes to remove the term ``mnemonic''
from Options 7, Section 3 and replace the term with the defined term
``account number'' for the FIX protocol. The Exchange notes that the
terms mnemonic and account number were being used interchangeably. The
Exchange recently defined both terms in its rules.\4\ The term account
number is appropriate to describe these fees. The Exchange is not
amending the manner in which it assesses the FIX port, rather the
Exchange simply proposes to utilize the new term to better describe its
current pricing.
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\4\ A ``mnemonic'' is defined as an acronym comprised of letters
and/or numbers assigned to Participants. A Participant account may
be associated with multiple mnemonics. See Securities Exchange Act
Release No. 84520 (November 1, 2018), 83 FR 55765 (November 7, 2018)
(SR-BX-2018-050). Mnemonics are issued to Participants to identify
associated persons of Participants.
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Also, the Exchange proposes to remove the term ``mnemonic'' from
the CTI Port Fee, FIX DROP Port Fee, BX Depth Port Fee and BX Top Port
Fee. Today, these ports are assessed only one fee per port, per month
and therefore adding the term ``per account number'' would be redundant
and unnecessary. These ports are associated with one account number.
The Exchange is not proposing to amend the manner in which these ports
are assessed, rather the Exchange proposes to eliminate the ``per
mnemonic'' description. The Exchange believes that the billing is
clearly defined as ``per port, per month.''
The Exchange also proposes to amend current ``(c) Access and
Redistribution Fee'' as ``v'' to conform to the remainder of the rule.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\5\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\6\ 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.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4) and (5).
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New Defined Term ``Account'' [sic]
The Exchange's proposal to define the term ``account number''
within Options, Section 3 and apply that term within the rule in place
of the term ``mnemonic'' as to the manner in which FIX Port Fees are
priced is reasonable because the term is defined and will be utilized
consistently throughout Options 7, where applicable. The usage of the
defined term ``account number'' will
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bring uniformity to the term and its usage across the 6 affiliated
options markets. The proposed change to utilize the defined term will
not amend the manner in which the ports are billed, rather it will also
bring greater clarity to pricing in Options 7, Section 3.
The Exchange's proposal to define the term ``account number''
within Options 7, Section 3 and apply that term within Options 7,
Section 3, in place of the term ``mnemonic'' for the FIX Port Fee is
equitable and not unfairly discriminatory because the Exchange proposes
to apply that term uniformly in billing Participants utilizing those
ports.
The Exchange's proposal to remove the term ``mnemonic'' for the
pricing of the CTI Port Fee, FIX DROP Port Fee, BX Depth Port Fee and
BX Top Port Fee is reasonable because, today, these ports are assessed
only one fee per port, per month and this change will bring greater
clarity to the manner in which these services are billed. The term
``mnemonic'' was undefined until the Exchange filed to define that term
within the BX Rules.\7\ The manner in which the term ``mnemonic'' was
defined for purposes of BX's Rules is not the manner that was intended
for pricing these ports. To that end, the Exchange proposes to remove
the term ``mnemonic'' and replace that term with ``account number,''
where applicable, to convey the intended manner in which the Exchange
prices ports. This proposal will conform the defined term across BX
Rules.\8\ Today, these ports are assessed only one fee per port, per
month and therefore adding the term ``per account number'' would be
redundant and unnecessary. These ports are associated with one account
number. This proposal will conform the defined term across BX Rules.
The Exchange is not proposing to amend the manner in which these ports
are assessed, rather the Exchange proposes to eliminate the ``per
mnemonic'' description and more clearly define the manner in which
these services are billed as ``per port, per month.''
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\7\ See Securities Exchange Act Release No. 84520 (November 1,
2018), 83 FR 55765 (November 7, 2018) (SR-BX-2018-050).
\8\ See Chapter I, Section 1(a)(70).
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The Exchange's proposal to remove the term ``mnemonic'' for the
pricing of the CTI Port Fee, FIX DROP Port Fee, BX Depth Port Fee and
BX Top Port Fee is equitable and not unfairly discriminatory because
the Exchange will continue to uniformly assess all market participants
these services in a uniform manner. The proposed change does not amend
the manner in which these services are billed.
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. In terms of inter-market
competition, the Exchange notes that this proposal does not amend
actual fees, rather the Exchange proposes to amend the name of a port
fee and define a new term to be used more accurately to describe the
manner in which certain services within Options 7, Section 3 are
billed.
New Defined Term ``Account'' [sic]
The Exchange's proposal to define the term ``account number''
within Options 7, Section 3 and apply that term within that rule in
place of the term ``mnemonic'' with respect to the manner in which FIX
protocols are priced does not impose an undue burden on intra-market
competition because the Exchange proposes to apply that term uniformly
in billing Participants utilizing those ports. No changes are being
made to the manner in which the Exchange bills these ports.
The Exchange's proposal to remove the term ``mnemonic'' for the
pricing of the CTI Port Fee, FIX DROP Port Fee, BX Depth Port Fee and
BX Top Port Fee does not impose an undue burden on intra-market
competition because the Exchange will continue to uniformly assess all
market participants these services in a uniform manner. The proposed
change does not amend the manner in which these services are billed.
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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\9\
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\9\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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. 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-2018-060 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-2018-060. 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-2018-060 and should
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be submitted on or before January 2, 2019.
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\10\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-26911 Filed 12-11-18; 8:45 am]
BILLING CODE 8011-01-P