Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices 28671 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Exchange originally filed to amend the Fee 

Schedule on May 18, 2018 (SR–NYSENAT–2018– 

08) and withdrew such filing on May 25, 2018. The 

Exchange re-filed to amend the Fee Schedule on 

May 25, 2018 (SR–NYSENAT–2018–10) and 

withdrew such filing on June 6, 2018. This filing 

replaces SR–NYSENAT–2018–10 in its entirety. 

5See Securities Exchange Act Release No. 80018 

(February 10, 2017), 82 FR 10947 (February 16, 

2017) (SR–NSX–2017–04) (‘‘Termination Filing’’). 

On January 31, 2017, Intercontinental Exchange, 

Inc. (‘‘ICE’’), through its wholly-owned subsidiary 

NYSE Group, acquired all of the outstanding capital 

stock of the Exchange (the ‘‘Acquisition’’). See 

Securities Exchange Act Release No. 79902 (January 

30, 2017), 82 FR 9258 (February 3, 2017) (SR–NSX– 

2016–16). Prior to the Acquisition, the Exchange 

was named ‘‘National Stock Exchange, Inc.’’ 

6See Securities Exchange Act Release No. 83289 

(May 17, 2018) (SR–NYSENat–2018–02) (Approval 

Order) (‘‘Re-Launch Filing’’); see generally 

www.nyse.com/pillar. 

7See generally Re-Launch Filing. 

the list of Negotiated Service 

Agreements in the Mail Classification 

Schedule’s Competitive Products List. 

DATES: Date of required notice: June 20, 

2018. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth Reed, 202–268–3179. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

gives notice that, pursuant to 39 U.S.C. 

3642 and 3632(b)(3), on June 14, 2018, 

it filed with the Postal Regulatory 

Commission a USPS Request to Add 

Priority Mail & First-Class Package 

Service Contract 82 to Competitive 

Product List. Documents are available at 

www.prc.gov, Docket Nos. MC2018–175, 

CP2018–247. 

Elizabeth Reed, 

Attorney, Corporate and Postal Business Law. 

[FR Doc. 2018–13181 Filed 6–19–18; 8:45 am] 

BILLING CODE 7710–12–P 

POSTAL SERVICE 

Product Change—Priority Mail 

Express, Priority Mail, & First-Class 

Package Service Negotiated Service 

Agreement 

AGENCY: Postal ServiceTM. 

ACTION: Notice. 

SUMMARY: The Postal Service gives 

notice of filing a request with the Postal 

Regulatory Commission to add a 

domestic shipping services contract to 

the list of Negotiated Service 

Agreements in the Mail Classification 

Schedule’s Competitive Products List. 

DATES: Date of required notice: June 20, 

2018. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth Reed, 202–268–3179. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

gives notice that, pursuant to 39 U.S.C. 

3642 and 3632(b)(3), on June 14, 2018, 

it filed with the Postal Regulatory 

Commission a USPS Request to Add 

Priority Mail Express, Priority Mail, & 

First-Class Package Service Contract 39 

to Competitive Product List. Documents 

are available at www.prc.gov, Docket 

Nos. MC2018–180, CP2018–252. 

Elizabeth Reed, 

Attorney, Corporate and Postal Business Law. 

[FR Doc. 2018–13186 Filed 6–19–18; 8:45 am] 

BILLING CODE 7710–12–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83439; File No. SR– 

NYSENAT–2018–12] 

Self-Regulatory Organizations; NYSE 

National, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Adopt Transaction, 

Routing, and Port Fees In Connection 

With the Re-Launch of Trading on the 

Exchange 

June 14, 2018. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on June 6, 

2018, NYSE National, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE National’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to adopt 

transaction, routing, and port fees in 

connection with the re-launch of trading 

on the Exchange. The Exchange 

proposes to implement the rule change 

on June 6, 2018.4 The proposed rule 

change is available on the Exchange’s 

website at www.nyse.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 

self-regulatory organization 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 those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

On February 1, 2017, the Exchange 

ceased trading operations.5 On May 17, 

2018, the Commission approved rule 

changes to support re-launch of trading 

operations on Pillar, which is an 

integrated trading technology platform 

designed to use a single specification for 

connecting to the equities and options 

markets operated by the Exchange and 

its affiliates, NYSE Arca, Inc. (‘‘NYSE 

Arca’’), NYSE American LLC (‘‘NYSE 

American’’), and New York Stock 

Exchange LLC (‘‘NYSE’’).6

As described in the Re-Launch Filing, 

with Pillar, the Exchange will re-launch 

trading in all Tape A, Tape B, and Tape 

C securities on an unlisted trading 

privileges (‘‘UTP’’) basis on a fully 

automated price-time priority allocation 

model.7 The Exchange’s Pillar trading 

platform is based on the rules and 

trading model of the cash equities 

platforms of NYSE Arca, which operates 

as a fully automated price-time priority 

allocation exchange. However, unlike its 

affiliated exchanges, the Exchange is not 

a listing venue and therefore will not 

have any ‘‘lead’’ or ‘‘designated’’ market 

makers for listed securities and would 

not operate any auctions. In addition, 

the Exchange will not operate a retail 

liquidity program. 

In connection with its re-launch of 

operations, the Exchange proposes to 

amend its Schedule of Fees and Rebates 

to adopt a new pricing model for trading 

on the Pillar platform. 

The proposed changes would apply to 

transactions executed in all trading 

sessions in securities priced at or above 

and below $1.00. 

The Exchange proposes to implement 

these changes effective June 6, 2018. 


sradovich on DSK3GMQ082PROD with NOTICES
28672 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices 

8See NYSE American Equities Price List, 

available at https://www.nyse.com/publicdocs/nyse/ 

markets/nyse-american/NYSE_America_Equities_

Price_List.pdf; NYSE Arca Equities Price List, 

available at https://www.nyse.com/publicdocs/nyse/ 

markets/nyse-arca/NYSE_Arca_Marketplace_

Fees.pdf. 

9Currently, there are two other exchanges (Cboe 

BYX and Nasdaq BX) that have adopted a fee model 

that offers rebates to liquidity takers and charges 

fees to liquidity providers. See Cboe BYX U.S. 

Equities Exchange Fee Schedule, available at 

https://markets.cboe.com/us/equities/membership/ 

fee_schedule/byx/, and Nasdaq BX Fee Schedule, 

available at https://www.nasdaqtrader.com/ 

Trader.aspx?id=bx_pricing. 

10The term ‘‘BBO’’ is defined in Rule 1.1 to mean 

the best bid or offer that is a Protected Quotation 

on the Exchange. The term ‘‘BB’’ means the best bid 

that is a Protected Quotation on the Exchange and 

the term ‘‘BO’’ means the best offer that is a 

Protected Quotation on the Exchange. 

11The term ‘‘Away Market’’ is defined in Rule 1.1 

to mean any exchange, alternative trading system 

(‘‘ATS’’) or other broker-dealer (1) with which the 

Exchange maintains an electronic linkage and (2) 

that provides instantaneous responses to orders 

routed from the Exchange. 

12Firms receive confirmations of their orders and 

receive execution reports via the order/quote entry 

port that is used to enter the order or quote. A ‘‘drop 

copy’’ contains redundant information that a firm 

chooses to have ‘‘dropped’’ to another destination 

(e.g., to allow the firm’s back office and/or 

compliance department, or another firm—typically 

the firm’s clearing broker—to have immediate 

access to the information). Drop copies can only be 

sent via a drop copy port. Drop copy ports cannot 

be used to enter orders and/or quotes. 

Proposed Rule Change 

The Exchange proposes the following 

transaction fees for the re-launch of 

trading on its Pillar trading platform. 

General Information Applicable to the 

Fee Schedule 

The Exchange proposes to summarize 

general information applicable to the 

Fee Schedule in two bullets under the 

first heading in the Fee Schedule titled 

‘‘Fees and Credits Applicable to Market 

Participants.’’ 

The first bullet would provide that 

rebates are indicated by parentheses. 

The second bullet would provide that, 

for purposes of determining transaction 

fees and credits based on requirements 

based on quoting levels, average daily 

volume (‘‘ADV’’), and consolidated ADV 

(‘‘CADV’’), the Exchange may exclude 

shares traded any day that (1) the 

Exchange is not open for the entire 

trading day and/or (2) a disruption 

affects an Exchange system that lasts for 

more than 60 minutes during regular 

trading hours. The second proposed 

bullet would reproduce the language 

that appears in both the NYSE American 

Equities and NYSE Arca Equities price 

lists.8

Transaction Fees 

The Exchange proposes the following 

fees and credits for all transactions 

under new heading I titled ‘‘Transaction 

Fees’’: 

Liquidity Adding Fees 9

For securities priced at or above 

$1.00, the Exchange proposes the 

following charges for executions on the 

Exchange of displayed orders that add 

liquidity to the Exchange: 

• The Exchange proposes to charge 

$0.0023 per share for executions on the 

Exchange of displayed orders that add 

liquidity to the Exchange. 

• The Exchange proposes to charge 

$0.0021 per share for executions on the 

Exchange of orders that set a new 

BBO 10 and that add liquidity to the 

Exchange. 

• The Exchange proposes to charge 

$0.0025 per share for executions on the 

Exchange of non-displayed orders that 

add liquidity to the Exchange. 

• Finally, the Exchange proposes to 

charge $0.0010 per share for executions 

on the Exchange of Mid-Point Liquidity 

(‘‘MPL’’) orders that add liquidity to the 

Exchange. 

For securities priced below $1.00, the 

Exchange does not propose to charge a 

fee for executions on the Exchange of 

displayed orders and non-displayed 

orders that add liquidity to the 

Exchange. 

Liquidity Removing Fees 

The Exchange does not propose to 

charge a fee for executions on the 

Exchange of orders that remove 

liquidity from the Exchange. The 

proposal would apply to securities 

priced at or above $1.00. 

The Exchange also does not propose 

to charge a fee for executions on the 

Exchange of MPL orders that remove 

liquidity from the Exchange. The 

proposal would apply to securities 

priced at or above $1.00. 

For securities priced below $1.00, the 

Exchange does not propose to charge a 

fee for orders that remove liquidity from 

the Exchange. 

Adding and Remove Tiers for Securities 

at or Above $1.00 

The Exchange proposes tiered adding 

requirements for displayed and nondisplayed orders in securities priced at 

or above $1.00, as follows. 

Under the proposed Adding Tier, the 

Exchange would offer the following fees 

for transactions in stocks with a per 

share price of $1.00 or more when 

adding liquidity to the Exchange if the 

ETP Holder has at least 0.015% of 

Adding ADV as a percent of US CADV: 

• $0.0020 per share for displayed 

orders; 

• $0.0022 per share for non-displayed 

orders; 

• $0.0018 per share for orders that set 

a new Exchange BBO; and 

• $0.0005 per share for MPL orders. 

Under the proposed Taking Tier, the 

Exchange would offer the following 

credits for transactions in stocks with a 

per share price of $1.00 or more when 

removing liquidity from the Exchange if 

the ETP Holder has at least 50,000 

shares of Adding ADV: 

• ($0.0020) per share for orders; 

• ($0.0002) per share for MPL orders. 

The Exchange also proposes to waive 

the Adding Tier and Taking Tier volume 

requirements until June 1, 2018, which 

would be reflected in footnote *. 

Routing Fees 

Under a new heading II titled 

‘‘Routing Fees,’’ the Exchange proposes 

the following fees for routing, which 

would be applicable to all orders by ETP 

Holders that are routed. 

For all executions in securities with a 

price at or above $1.00 that route to and 

execute in an away market,11 the 

Exchange proposes to charge a fee of 

$0.0030 per share for executions. 

For securities priced below $1.00 that 

route to and execute in an away market, 

the Exchange proposes to charge a fee of 

0.30% of the total dollar value of the 

transaction. 

Port Fees 

Under proposed new heading III titled 

‘‘Port Fees,’’ the Exchange proposes fees 

for the use of ports that: 

(1) Provide connectivity to the 

Exchange’s trading systems (i.e., ports 

for entry of orders and/or quotes 

(‘‘order/quote entry ports’’)), and 

(2) allow for the receipt of ‘‘drop 

copies’’ of order or transaction 

information (‘‘drop copy ports’’ and, 

together with order/quote entry ports, 

‘‘ports’’).12

For order/quote entry ports, the 

Exchange proposes to charge $250 per 

port per month. The fee would apply to 

all market participants. 

The Exchange proposes not to charge 

for order/quote entry ports until June 1, 

2018. Thereafter, the Exchange proposes 

to implement the $250 per port per 

month fee. 

Similarly, the Exchange proposes to 

charge $250 per drop copy port per 

month. The fee would apply to all 

market participants. Additionally, the 

Exchange proposes to specify that only 

one fee per drop copy port would apply, 

even if the port receives drop copies 

from multiple order/quote entry ports. 

The Exchange proposes not to charge 

for drop copy ports until June 1, 2018. 

Thereafter, the Exchange proposes to 

implement the $250 per port per month 

fee. 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices 28673 

13ETP refers to an Equity Trading Permit issued 

by the Exchange for effecting approved securities 

transactions on the Exchange. See Rule 1.1 

(definition of ETP). 

14 15 U.S.C. 78f(b). 

15 15 U.S.C. 78f(b)(4) & (5). 

16Nasdaq BX, for instance, charges a fee of 

$0.0030 per share for providing non-displayed 

liquidity for securities priced at or above $1.00 for 

all other firms. See Nasdaq BX Exchange Fee 

Schedule 2018, available at https://

www.nasdaqtrader.com/Trader.aspx?id=bx_pricing. 

17See CBOE BYX Exchange Fee Schedule at 

https://markets.cboe.com/us/equities/membership/ 

fee_schedule/byx/. 

18See Nasdaq Exchange Fee Schedule at http:// 

nasdaqtrader.com/Trader.aspx?id=PriceList

Trading2. 

Equity Trading Permit (‘‘ETP’’) Fee 

The Exchange proposes a new 

heading IV titled ‘‘ETP Fee.’’ The 

Exchange does not propose to charge a 

fee to obtain an ETP.13

The proposed changes are not 

otherwise intended to address any other 

issues, and the Exchange is not aware of 

any problems that ETP Holders would 

have in complying with the proposed 

change. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,14 in general, and 

furthers the objectives of Sections 

6(b)(4) and 6(b)(5) of the Act,15 in 

particular, because it provides for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

members, issuers and other persons 

using its facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. 

Liquidity Removing Fees 

The Exchange believes that not 

charging a fee for removing liquidity in 

securities priced at or above $1.00 and 

securities priced below $1.00 is 

reasonable, equitable and not unfairly 

discriminatory because it would provide 

a financial incentive to bring additional 

removing flow to a public market. 

Liquidity Adding Fees 

The Exchange believes that charging a 

fee of $0.0023 per share for liquidity 

adding displayed orders in securities 

priced at or above $1.00 is reasonable, 

equitable and not unfairly 

discriminatory because the Exchange 

must balance the cost of credits for 

orders that remove liquidity and the fees 

to provide displayed liquidity. The 

Exchange believes that the proposed 

change is both equitable and not 

unfairly discriminatory because the fee 

would apply uniformly to all similarlysituated market participants. 

The Exchange believes that charging a 

fee of $0.0021 per share for liquidity 

adding orders that set a new Exchange 

BBO in securities priced at or above 

$1.00 is reasonable, equitable and not 

unfairly discriminatory because the 

lower fee, compared with the fee of 

$0.0023 per share for liquidity adding 

displayed orders that do not set a new 

Exchange BBO, will provide an 

incentive for ETP Holders to improve 

displayed quotes on the Exchange, 

which would benefit all market 

participants. 

The Exchange believes that charging a 

fee of $0.0025 per share for liquidity 

adding non-displayed orders in 

securities priced at or above $1.00 is 

reasonable and not unfairly 

discriminatory because the proposed 

rate would be lower than the fee 

charged by other exchanges.16 The 

Exchange further believes that the 

proposed fee is equitable and not 

unfairly discriminatory because it 

would apply to all non-displayed orders 

that add liquidity to the Exchange. 

The Exchange believes that charging a 

lower fee of $0.0010 per share for 

liquidity adding MPL orders in 

securities priced at or above $1.00 is 

reasonable, equitable and not unfairly 

discriminatory because the lower fee 

would provide an incentive for 

participation and provide price 

improvement, which would benefit all 

market participants. 

The Exchange believes that not 

charging a fee for orders that remove 

liquidity in securities priced below 

$1.00 is reasonable, equitable and not 

unfairly discriminatory. The Exchange 

believes that not charging a fee for 

orders that remove liquidity would 

encourage price discovery and enhance 

market quality by encouraging more 

competitive quoting of displayed orders 

that add liquidity. The Exchange further 

believes that not charging a fee for 

orders that remove liquidity is equitable 

and not unfairly discriminatory because 

it is designed to facilitate execution of, 

and enhance trading opportunities for, 

displayed orders that add liquidity and 

that would execute against those orders 

that remove liquidity, thereby further 

incentivizing entry of displayed adding 

orders on the Exchange. The Exchange 

believes that not charging a fee for 

orders that remove liquidity would also 

reduce costs for market participants and 

investors. 

Adding and Remove Tiers for Securities 

at or Above $1.00 

The Exchange believes that the 

proposed tiered adding requirements for 

displayed and non-displayed orders in 

securities priced at or above $1.00 are 

reasonable, equitable and not unfairly 

discriminatory, as follows. 

The proposed Adding Tier fees for 

adding liquidity ($0.0020 per share for 

displayed orders, $0.0022 per share for 

non-displayed orders, $0.0018 per share 

for orders that set a new Exchange BBO, 

and $0.0005 per share for MPL orders) 

for ETP Holders with at least 0.015% of 

Adding CADV in securities with a per 

share price of $1.00 or more when 

adding liquidity are reasonable because 

it would further contribute to incent 

ETP Holders to provide increased 

liquidity on the Exchange, benefiting all 

ETP Holders. In addition, the Exchange 

believes that the proposed Adding Tier 

credits are equitable and not unfairly 

discriminatory as all similarly situated 

market participants will be subject to 

the same credits on an equal and nondiscriminatory basis. 

Similarly, the proposed Taking Tier 

credits (($0.0020) per share for orders 

that remove liquidity and ($0.0002) per 

share for MPL orders) that remove 

liquidity for ETP Holders with an 

Adding ADV of at least 50,000 shares in 

securities with a per share price of $1.00 

or more when removing liquidity from 

the Exchange is reasonable, equitable 

and not unfairly discriminatory because 

the proposed fees are in line with the 

fees for removing liquidity on other 

exchanges.17

Finally, the Exchange believes it is 

reasonable to waive the Adding Tier and 

Taking Tier volume requirements until 

June 1, 2018, because the waiver for a 

limited period of time will enable the 

Exchange to improve its overall 

competitiveness and strengthen its 

market quality for all market 

participants. The proposed waiver is not 

unfairly discriminatory because it will 

apply equally to all similarly situated 

ETP Holders. 

Routing Fees 

The Exchange believes that its 

proposed routing fees are reasonable 

and not an unfairly discriminatory 

allocation of fees because the fee would 

be applicable to all ETP Holders in an 

equivalent manner. Moreover, the 

proposed fees for routing shares are also 

reasonable and not unfairly 

discriminatory because they are 

consistent with fees charged on other 

exchanges. In particular, the Exchange’s 

proposal to charge a fee of $0.0030 per 

share for all executions that route to and 

execute on away markets in securities 

priced at or above $1.00 is reasonable 

and not unfairly discriminatory because 

it is consistent with fees charged on 

other exchanges.18


sradovich on DSK3GMQ082PROD with NOTICES
28674 Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices 

19NASDAQ, for example, charges a fee of 0.30% 

(i.e., 30 basis points) of total dollar volume to 

remove liquidity for shares executed below $1.00. 

See NASDAQ Fee Schedule at http://

www.nasdaqtrader.com/Trader.aspx?id=PriceList

Trading2. 

20For example, NASDAQ charges $575 for order 

entry ports and $550 for DROP ports. See NASDAQ 

Fee Schedule at http://www.nasdaqtrader.com/ 

Trader.aspx?id=PriceListTrading2#connectivity. 

Also, Cboe BZX charges $550 per month per pair 

for logical ports. See Cboe BZX U.S. Equities 

Exchange Fee Schedule at https://

markets.cboe.com/us/equities/membership/fee_

schedule/bzx/. Additionally, Cboe EDGA and Cboe 

EDGX each charge $550 per port per month. See 

Cboe EDGA U.S. Equities Exchange Fee Schedule 

at https://markets.cboe.com/us/equities/ 

membership/fee_schedule/edga/ and Cboe EDGX 

U.S. Equities Exchange Fee Schedule at https://

markets.cboe.com/us/equities/membership/fee_

schedule/edgx/. 

21See note 20, supra. 

22 15 U.S.C. 78f(b)(8). 

23 15 U.S.C. 78s(b)(3)(A). 

24 17 CFR 240.19b–4(f)(2). 

25 15 U.S.C. 78s(b)(2)(B). 

Finally, the proposal to charge a fee 

for all executions of 0.30% of total 

dollar value for transactions in 

securities with a price under $1.00 that 

route to and execute on away markets is 

reasonable and not unfairly 

discriminatory because it is consistent 

with fees charged on other exchanges.19

Port Fees 

The Exchange believes that the 

proposed rates for order/quote entry 

ports and drop copy ports are 

reasonable because the fees charged for 

both types of ports are expected to 

permit the Exchange to offset, in part, its 

connectivity costs associated with 

making such ports available, including 

costs based on software and hardware 

enhancements and resources dedicated 

to gateway development, quality 

assurance, and support. The proposed 

port fees are also reasonable because the 

proposed fees are comparable to the 

rates charged by other venues, and in 

some cases are less expensive than 

many of the Exchange’s competitors.20

The Exchange believes that the 

proposed fee for order/quote entry ports 

is equitable and not unfairly 

discriminatory because charges for 

order/entry ports will be based on the 

number of ports utilized. This aspect of 

the proposed rule change is also 

equitable and not unfairly 

discriminatory because it will apply on 

an equal basis for all ports on the 

Exchange. The Exchange also believes 

that these fees are equitable and not 

unfairly discriminatory because they 

would apply to all users of order/quote 

entry ports on the Exchange. 

The Exchange believes that the 

proposed fee for drop copy ports is 

reasonable because it will result in a fee 

being charged for the use of technology 

and infrastructure provided by the 

Exchange. In this regard, the Exchange 

believes that the rate is reasonable 

because it is comparable to the rate 

charged by other exchanges for drop 

copy ports.21

The Exchange also believes that it is 

reasonable that only one fee per drop 

copy port would apply, even if the port 

receives drop copies from multiple 

order/quote entry ports, because the 

purpose of drop copies is such that a 

trading unit’s or a firm’s entire order 

and execution activity is captured. The 

Exchange believes that the proposed 

new fee for drop copy ports is equitable 

and not unfairly discriminatory because 

it will apply on an equal basis to all 

users of drop copy ports and to all drop 

copy ports on the Exchange. In this 

regard, all firms will be able to request 

drop copy ports, as would be the case 

with order/quote entry ports. 

ETP Fee 

The Exchange believes that not 

charging a fee to obtain an ETP on the 

Exchange is reasonable because it may 

incentivize broker-dealers to become 

Exchange permit holders and to direct 

order flow to the Exchange, which 

benefits all market participants through 

increased liquidity and enhanced price 

discovery. 

Finally, the Exchange believes that it 

is subject to significant competitive 

forces, as described below in the 

Exchange’s statement regarding the 

burden on competition. 

For the foregoing reasons, the 

Exchange believes that the proposal is 

consistent with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,22 the Exchange believes that the 

proposed rule change would not impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Instead, the 

Exchange believes that the proposed 

changes would encourage the 

submission of additional liquidity to a 

public exchange, thereby promoting 

price discovery and transparency and 

enhancing order execution 

opportunities for ETP Holders. The 

Exchange believes that this could 

promote competition between the 

Exchange and other execution venues, 

including those that currently offer 

similar order types and comparable 

transaction pricing, by encouraging 

additional orders to be sent to the 

Exchange for execution. 

Finally, 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 and rebates 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 and credits in 

response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. As a result of all of these 

considerations, the Exchange does not 

believe that the proposed changes will 

impair the ability of ETP Holders or 

competing order execution venues to 

maintain their competitive standing in 

the financial markets. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 23 of the Act and 

subparagraph (f)(2) of Rule 19b–4 24

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such 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 

under Section 19(b)(2)(B) 25 of the Act to 

determine whether the proposed rule 

change 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 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 119 / Wednesday, June 20, 2018 / Notices 28675 

26 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

5The term ‘‘Member’’ is defined as ‘‘any 

registered broker or dealer that has been admitted 

to membership in the Exchange.’’ See Exchange 

Rule 1.5(n). 

6See e.g., NYSE Arca Equities Fees and Charges, 

NYSE Arca Marketplace: Other Fees and Charges, 

Connectivity Fees. See also, Nasdaq Phlx LLC 

Pricing Schedule, Section XI, Direct Connectivity to 

Phlx. 

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 rule-comments@

sec.gov. Please include File Number SR– 

NYSENAT–2018–12 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE, Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSENAT–2018–12. 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; 

the Commission does not edit personal 

identifying information from 

submissions. 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–NYSENAT–2018–12 

and should be submitted on or before 

July 11, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–13165 Filed 6–19–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83442; File No. SR– 

CboeBZX–2018–037] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change Related to 

Physical Port Fees for BZX 

June 14, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on June 1, 

2018, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II and III 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated the proposed rule change as 

one establishing or changing a member 

due, fee, or other charge imposed by the 

Exchange under Section 19(b)(3)(A)(ii) 

of the Act 3 and Rule 19b–4(f)(2) 

thereunder,4 which renders the 

proposed rule change effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange filed a proposal to 

amend its fees and rebates applicable to 

Members 5 and non-Members of the 

Exchange pursuant to BZX Rule 15.1(a) 

and (c) to modify its fees for physical 

ports. 

The text of the proposed rule change 

is available at the Exchange’s website at 

www.markets.cboe.com, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to implement 

proposed changes to its fee schedule 

relating to physical connectivity fees, 

effective June 1, 2018. By way of 

background, a physical port is utilized 

by a Member or non-Member to connect 

to the Exchange at the data centers 

where the Exchange’s servers are 

located. The Exchange currently 

maintains a presence in two third-party 

data centers: (i) The primary data center 

where the Exchange’s business is 

primarily conducted on a daily basis, 

and (ii) a secondary data center, which 

is predominantly maintained for 

business continuity purposes. The 

Exchange currently assesses the 

following physical connectivity fees for 

Members and non-Members on a 

monthly basis: $2,000 per physical port 

for a 1 gigabyte circuit and $7,000 per 

physical port for a 10 gigabyte circuit. 

The Exchange proposes to increase the 

fees per physical ports from (i) $2,000 

to $2,500 per month, per port for a 1 

gigabyte circuit and (ii) $7,000 to $7,500 

per month, per port for a 10 gigabyte 

circuit. The Exchange notes the 

proposed fees enable it to continue to 

maintain and improve its market 

technology and services and also notes 

that the proposed fee changes are in line 

with the amounts assessed by other 

exchanges for similar connections.6

The Exchange also proposes to adopt 

separate physical port fees for 

connection to its secondary data center, 

which is predominantly maintained for 

business continuity purposes (‘‘Disaster 

Recovery Systems’’). Particularly, the 

Disaster Recovery Systems can be 


sradovich on DSK3GMQ082PROD with NOTICES