12096 Federal Register / Vol. 77, No. 39 / Tuesday, February 28, 2012 / Notices 

10 15 U.S.C. 78s(b)(3)(a)(ii) [sic]. 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 66013 

(December 20, 2011), 76 FR 80992 (December 27, 

2011) (SR–NASDAQ–2011–146). 

4 Id. at 80992. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

Moreover, the Exchange believes that its 

changes with respect to fees for the 1Gb 

connectivity will not burden 

competition because the applicable fees 

remain competitive with those charged 

by other venues. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor 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.10 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 rulecomments@sec.gov. Please include File 

Number SR–BX–2012–010 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–BX–2012–010. 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 Web site 

(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 Web site 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 

a.m. and 3 p.m. Copies of such 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. You should submit only 

information that you wish to make 

publicly available. All submissions 

should refer to File Number SR–BX– 

2012–010, and should be submitted on 

or before March 20, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–4687 Filed 2–27–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66439; File No. SR– 

NASDAQ–2012–025] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify 

Certain External and Inter-Cabinet 

Connectivity Fees 

February 22, 2012. 

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 February 

14, 2012, The NASDAQ Stock Market 

LLC (‘‘NASDAQ’’ 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to modify 

certain external and inter-cabinet 

connectivity fees. The text of the 

proposed rule change is available at 

http://nasdaq.cchwallstreet.com/, at the 

Exchange’s principal office, 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Rule 7034(b) to reduce fees for low 

latency connectivity to Toronto and 

Chicago venues; and to increase certain 

fees for other forms of connectivity. 

Low Latency Connectivity 

On December 20, 2011, the 

Commission approved the Exchange’s 

offering of low latency point-to-point 

telecommunications connectivity from 

the Exchange’s co-location facility to 

select financial trading and co-location 

venues in the metropolitan New York/ 

New Jersey area, Toronto, and Chicago.3

The enhanced point-to-point 

connectivity provides the Exchange’s 

co-location customers the opportunity 

to obtain low latency network 

connectivity with greater ease and at a 

competitive price.4


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 39 / Tuesday, February 28, 2012 / Notices 12097 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(4). 

7Securities Exchange Act Release No. 66013 

(December 20, 2011), 76 FR 80992 (December 27, 

2011) (SR–NASDAQ–2011–146). 

The Exchange now proposes a passthrough reduction in the fees for 

connectivity to Toronto and Chicago 

venues as follows: (1) For 100MB 

connectivity to the Toronto area, a 

reduction of the installation fee from 

$5,150 to $4,850, and a reduction of the 

per-month connectivity fee from $4,350 

to $4,100; (2) for 1G connectivity to the 

Toronto area, a reduction of the 

installation fee from $8,200 to $7,700, 

and a reduction of the per-month 

connectivity fee from $10,450 to $9,850; 

(3) for 10G connectivity to the Toronto 

area, a reduction of the installation fee 

from $15,150 to $14,200, and a 

reduction of the per-month connectivity 

fee from $32,400 to $28,400; (4) for 

100MB connectivity to the Chicago area, 

a reduction of the installation fee from 

$4,850 to $3,500, and a reduction of the 

per-month connectivity fee from $8,350 

to $7,350; (5) for 1G connectivity to the 

Chicago area, a reduction of the 

installation fee from $5,900 to $4,900, 

and a reduction of the per-month 

connectivity fee from $16,400 to 

$12,800; (6) for 10G connectivity to the 

Chicago area, a reduction of the 

installation fee from of [sic] $12,050 to 

$10,650, and a reduction of the permonth connectivity fee from $39,750 to 

$26,900. 

The reductions in fees are the result 

of the Exchange obtaining a reduction in 

the fees charged to the Exchange by the 

Toronto and Chicago low latency 

telecommunication carriers. The 

Exchange is passing along the entire 

savings of the reduction in fees to the 

subscribers of the Toronto and Chicago 

low latency connectivity service. 

Increasing the 1Gb Connectivity Fees to 

NASDAQ 

The Exchange further proposes to 

raise the per-month 1Gb fiber 

connectivity fee to the NASDAQ data 

center from $500 to $1,000. The 

Exchange also proposes to raise the onetime installation fee for the 1Gb copper 

connectivity to the NASDAQ data center 

from $100 to $1,000, and the per-month 

connectivity fee from $250 to $1,000. 

Due to the Exchange’s continued efforts 

to upgrade its networks, the cost to 

maintain the 1G network connections 

and infrastructure continues to grow. 

The increased fees serve to cover the 

increased costs associated with 

maintaining the 1Gb connections and 

the related infrastructure. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,5

in general, and with Section 6(b)(4) 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 or system 

which the Exchange operates or 

controls. The Exchange believes the 

proposed fees are reasonable and 

equitable for the reasons below. 

Low Latency Connectivity 

In SR–NASDAQ–2011–146,7 the 

Commission determined that the 

original fees established for low latency 

connectivity were reasonable, equitable, 

and not unfairly discriminatory because 

the connectivity options are uniformly 

available to all members that opt to pay 

for them, because they enable the 

Exchange to cover its costs, because 

they are comparable to fees charged by 

other trading venues for comparable 

services, and because they are designed 

to promote competition by offering 

members additional service options. 

These determinations apply with equal 

weight to the reduced fees, which 

enhance the reasonableness and 

competitiveness of the service by 

passing on the reduction in low latency 

connectivity fees to the Toronto and 

Chicago venues to the members that opt 

to receive the connectivity options in 

question. 

Increasing the 1Gb Connectivity Fee 

The Exchange believes the proposal to 

increase the 1Gb connectivity to 

NASDAQ is reasonable because the 

costs are associated with the Exchange’s 

continued efforts to upgrade its 

networks by maintaining the 1Gb 

network connections and infrastructure 

as the need for such connections 

continues to grow. The costs associated 

with operating a co-location facility, like 

the costs of operating the electronic 

trading facility with which the colocation facility is associated, are 

primarily fixed costs, and in the case of 

co-location are primarily the costs of 

renting or owning data center space and 

retaining a staff of technical personnel. 

Accordingly, the Exchange establishes a 

range of co-location fees with the goal 

of covering these fixed costs, covering 

less significant marginal costs, such as 

the cost of electricity, and providing the 

Exchange a profit to the extent the costs 

are covered. In this instance, the current 

fees charged for the 1Gb network 

connections does [sic] not cover the 

costs of maintaining the connections, 

resulting in a loss for the Exchange on 

this service. The Exchange is proposing 

to raise the fees for the 1Gb network 

connections to cover its costs, and to the 

extent the costs are covered, allow the 

Exchange to earn a profit. 

More specifically, the Exchange 

proposes to raise the per-month 1Gb 

fiber connectivity fee to the NASDAQ 

data center from $500 to $1,000 to cover 

the increasing cost to continually 

improve this lower bandwidth network, 

which includes continuous 

improvements in reducing latency, 

upgrading equipment, and adding 

functionality to this network. The cost 

to maintain this lower bandwidth 

network also continues to rise as the 

network gets older, equipment must be 

replaced and resources must be 

dedicated to monitor and ensure any 

issues are dealt with quickly and do not 

cause any client outages or connectivity 

issues. Due to the continuous growth of 

the size of consolidated and proprietary 

market data feeds that can be provided 

over these 1G network connections, as 

per client request, additional NASDAQ 

network resources are required to 

monitor and interface with clients when 

data spikes and data gapping issues 

occur. The Exchange has not increased 

the fees for these services in over six 

years, while the costs have continued to 

rise. 

The Exchange also proposes to raise 

the one-time installation fee for the 1Gb 

copper connectivity to the NASDAQ 

data center from $100 to $1,000 to cover 

the increasing costs to install 

connections to this lower bandwidth 

network. The copper installation 

requires the same amount of resources, 

tools, and time to install, enable data 

and test connectivity as the fiber 

installation which is already priced at 

$1,000. While the costs have increased, 

the Exchange has not adjusted the price 

on this connection for more than six 

years. 

Additionally, the Exchange proposes 

to raise the per-month 1Gb copper 

connectivity to the NASDAQ data center 

from $250 to $1,000 to cover the 

increasing costs to improve and 

maintain this lower bandwidth network, 

which includes continuous 

improvements in reducing latency, 

upgrading equipment, and adding 

functionality to this network. The cost 

to maintain this lower bandwidth 

network also continues to rise as the 

network gets older, equipment must be 

replaced and resources must be 

dedicated to monitor and ensure any 

issues are dealt with quickly and do not 

cause any client outages or connectivity 

issues. Due to the continuous growth of 

the size of consolidated and proprietary 


tkelley on DSK3SPTVN1PROD with NOTICES
12098 Federal Register / Vol. 77, No. 39 / Tuesday, February 28, 2012 / Notices 

8See Securities Exchange Act Release No. 63275 

(November 8, 2010), 75 FR 70048 (November 16, 

2010)(SR–NYSEArca–2010–100) at page 70049. The 

Exchange’s proposed monthly fee of $1,000 for a 

1Gb is less than NYSE’s fee of $5,000 for the same 

bandwidth connection to the data center. 

9 15 U.S.C. 78s(b)(3)(a)(ii) [sic]. 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

market data feeds that can be provided 

over these 1G network connections, as 

per client request, additional NASDAQ 

network resources are required to 

monitor and interface with clients when 

data spikes and data gapping issues 

occur. The Exchange has not increased 

the fees for these services in over six 

years, while the costs have continued to 

rise. In addition, the copper connections 

provide the same services and latency as 

the fiber connections. NASDAQ 

proposes to standardize the fees for 

these connections as it does with the 

inter-cabinet connectivity fees of this 

rule. 

The Exchange further believes that the 

proposed fees are reasonable in that 

NASDAQ’s proposed fees are less than 

those charged by other trading venues 

for comparable services.8

The Exchange also believes the 

proposed increase in the fees for the 

1Gb connectivity to NASDAQ, both 

fiber and copper, is equitably allocated 

and non-discriminatory in that all 

NASDAQ members have the option of 

selecting the 1Gb connections to 

NASDAQ and there is no differentiation 

among members with regard to the fees 

charged for such costs. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

Moreover, the Exchange believes that its 

changes with respect to fees for the 1Gb 

connectivity will not burden 

competition because the applicable fees 

remain competitive with those charged 

by other venues. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor 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 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 rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2012–025 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2012–025. 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 Web site 

(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 Web site 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 

a.m. and 3 p.m. Copies of such 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. You should submit only 

information that you wish to make 

publicly available. All submissions 

should refer to File Number SR– 

NASDAQ–2012–025, and should be 

submitted on or before March 20, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–4686 Filed 2–27–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66441; File No. SR–FINRA– 

2012–011] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change Relating to 

Mediator Selection 

February 22, 2012. 

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 February 

9, 2012, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I, II, 

and III below, which Items have been 

substantially prepared by FINRA. 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 

FINRA is proposing to amend FINRA 

Rule 14107 of the Code of Mediation 

Procedure (‘‘Mediation Code’’) to 

provide the Director of Mediation 

(‘‘Mediation Director’’) with discretion 

to determine whether parties to a FINRA 

mediation may select a mediator who is 

not on FINRA’s mediator roster. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA 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, 

FINRA included statements concerning 

the purpose of and basis for the 


tkelley on DSK3SPTVN1PROD with NOTICES