Federal Register / Vol. 77, No. 50 / Wednesday, March 14, 2012 / Notices 15169 

9 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3All co-location services are provided by 

NASDAQ Technology Services LLC. 

4See Exchange Rule 7034(b), Connectivity to 

Nasdaq. 

NASDAQ believes that the proposed 

rule change does not significantly affect 

the protection of investors or the public 

interest, and does not impose any 

significant burden on competition 

because (i) the proposal seeks to 

enhance market quality by providing a 

means to encourage market participants 

to offer greater liquidity at the NBBO, 

and (ii) the proposal enhances 

NASDAQ’s ability to compete with 

comparable functionality that is already 

being offered by NYSEArca. 

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–2012–031 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–2012–031. 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 

available publicly. All submissions 

should refer to File No. SR–NASDAQ– 

2012–031 and should be submitted on 

or before April 4, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6183 Filed 3–13–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66542; File No. SR–BX– 

2012–012] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Modify 

Connectivity Options and Fees 

March 8, 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 March 2, 

2012, The NASDAQ OMX BX, Inc. 

(‘‘BX’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II, 

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 

Exchange connectivity options and fees. 

The text of the proposed rule change is 

available at http:// 

nasdaqomxbx.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 modify 

Rule 7034(b) regarding connectivity to 

The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’).3 Specifically, the 

Exchange proposes to (i) establish a 

connectivity fee for a 40Gb enhanced 

bandwidth option; and (ii) provide a 

waiver of installation fees for upgrades. 

Enhanced Bandwidth Option 

The Exchange currently offers various 

bandwidth options for connectivity to 

the Exchange, including a 10Gb fiber 

connection, a 1Gb copper connection, 

and a 100 MB connection.4 In keeping 

with changes in technology, the 

Exchange now proposes to provide an 

enhanced bandwidth option to enable 

its clients a more efficient connection to 

the Exchange. The Exchange proposes a 

40G [sic] fiber connection with a onetime installation fee of $1,500, and a 

per-month connectivity fee of $15,000. 

The growth in the size of consolidated 

and proprietary data feeds has resulted 

in demand for higher bandwidth. As the 

number of feeds available and the size 

of the feeds increases, the bandwidth 

required for market data feeds steadily 

rises. The Exchange’s proposal provides 

the co-located client the option to select 

the bandwidth that is appropriate for 

the firm’s current needs and enables it 

to add or change services as its needs 

change. 

Waiver of Installation Fees 

The Exchange also proposes to 

provide a waiver of the installation fees 


srobinson on DSK4SPTVN1PROD with NOTICES
15170 Federal Register / Vol. 77, No. 50 / Wednesday, March 14, 2012 / Notices 

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

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

7 15 U.S.C. 78f(b)(5). 

8NYSE charges $10,000 per month for 10Gb LCN 

(Liquidity Center Network) Connection. See https:// 

usequities.nyx.com/sites/usequities.nyx.com/files/ 

nyse_arca_marketplace_fees_1.3.2012.pdf, page 13. 

Furthermore, ISE charges $4,000 per month for 

10Gb Ethernet network connections. See http:// 

www.ise.com/assets/documents/OptionsExchange/ 

legal/fee/fee_schedule.pdf, page 9. By contrast, the 

Exchange is proposing to offer four times the 

bandwidth for a monthly fee of $15,000. 

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(4). 

for client orders of 10Gb and 40Gb fiber 

connectivity to the Exchange completed 

between the effectiveness of this 

proposal and May 31, 2012. The 

Exchange is providing the waiver to 

assist its co-located clients in upgrading 

to higher bandwidth connections to 

meet the growing needs of co-located 

clients’ business operations. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

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 also believes the 

proposal furthers the objectives of 

Section 6(b)(5) of the Act 7 in that it is 

designed to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general to protect investors and the 

public interest and are [sic] not 

designed to permit unfair 

discrimination between customer, 

issuers, brokers and dealers. 

Enhanced Bandwidth Option 

The Exchange believes that its 

proposal is consistent with Section 

6(b)(4) of the Act 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. 

Reasonable Fees 

The Exchange’s proposal for 40Gb 

fiber connectivity will provide colocation clients the ability to increase 

data transmission and reduce latency, 

thereby enhancing their operations. The 

Exchange believes the proposed fees for 

40B [sic] fiber connectivity to the 

Exchange are reasonable because the 

fees charged for the higher bandwidth 

allow the Exchange to cover the 

hardware, installation, testing and 

connection costs to maintain and 

manage the enhanced connection. The 

proposed fees allow the Exchange to 

recoup costs associated with providing 

the 40Gb connection and provide the 

Exchange a profit while providing 

customers the possibility of reducing 

the number of their connections to the 

Exchange. While no other Exchange 

currently offers the proposed 40Gb 

bandwidth connection, the Exchange 

further believes that the proposed fees 

are reasonable in that the proposed fees 

are proportionately less than the fees 

charged by other trading venues for 

similar connectivity services.8

Equitable Allocation 

The Exchange also believes the 

proposed 40Gb fiber fee for connectivity 

to the Exchange is equitably allocated in 

that all Exchange members that 

voluntarily select this service option 

will be charged the same amount to 

cover the hardware, installation, testing 

and connection costs to maintain and 

manage the enhanced connection. The 

proposed fees allow the Exchange to 

recoup costs associated with providing 

the 40Gb connection and provide the 

Exchange a profit while providing 

customers the possibility of reducing 

the number of their connections to the 

Exchange. All Exchange members have 

the option to select this voluntary colocation service. 

The Exchange also believes the 

proposal furthers the objectives of 

Section 6(b)(5) of the Act 9 in that it is 

designed to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general to protect investors and the 

public interest and are [sic] not 

designed to permit unfair 

discrimination between customer, 

issuers, brokers and dealers. 

Removes Impediments and Perfects 

Mechanism of a Free and Open Market 

Furthermore, the enhanced 40Gb fiber 

connectivity assists the co-located 

clients in making their network 

connectivity more efficient, as clients 

could consolidate the number of 

connections to the Exchange. Due to the 

continuous growth of the size of 

consolidated and proprietary market 

data feeds transmitted over the 

Exchange connections, clients need to 

monitor their connections for data 

spikes and data gapping issues which 

can result in potential trading errors, 

trading losses and may require network 

resource intervention to resolve. The 

Exchange believes the enhanced 40Gb 

connection will remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system because the enhanced 

connectivity option will remove the 

potential for data spikes and data 

gapping issues that result from the 

transmission of the growing size of the 

consolidated and proprietary market 

data feeds. 

Protects Investors and the Public 

Interest 

The Exchange also believes that the 

reduction in latencies attributed to the 

enhanced 40Gb connection option 

further serves to protect investors and 

the public interest. The reduction in 

latencies will remove the potential for 

data spikes and data gapping issues that 

result from the transmission of the 

growing size of the consolidated and 

proprietary market data feeds. Such data 

spiking and data gapping issues have 

the potential of disrupting the 

marketplace which could negatively 

impact the investors as well as the 

public interest. 

Not Unfairly Discriminatory 

The Exchange also believes the 

proposed 40Gb fiber fee for connectivity 

to the Exchange is not unfairly 

discriminatory in that all Exchange 

members have the option of selecting 

the 40Gb connection to the Exchange, 

and there is no differentiation among 

members with regard to the fees charged 

for this option. Furthermore, the 

Exchange believes the [sic] providing all 

Exchange Members the proposed 

connectivity option for the proposed 

fees, which covers [sic] the hardware, 

installation, testing and connection 

costs to maintain and manage the 

enhanced connection, promotes just and 

equitable principles of trade. 

Waiver of Installation Fees 

The Exchange believes that its 

proposal for the waiver of installation 

fees is consistent with Section 6(b) of 

the Act 10 in general, and with Section 

6(b)(4) of the Act,11 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. 

Reasonable Waiver of Fees 

The Exchange believes that its 

proposal to waive the 10Gb and 40Gb 

fiber connection installation fees is 

reasonable because it is being provided 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 77, No. 50 / Wednesday, March 14, 2012 / Notices 15171 

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 of 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. 

14For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

15 17 CFR 200.30–3(a)(12). 

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

to assist its co-located clients in 

upgrading to higher bandwidth 

connections to meet the growing needs 

of the co-located clients’ business 

operations at a time in the industry 

when the ever-increasing size of 

consolidated and proprietary data fees 

are [sic] causing higher demand for 

larger bandwidth options to reduce 

potential disruption in the marketplace. 

Equitably Allocated 

The Exchange also believes the 

proposal to waive the 10Gb and 40Gb 

fiber connection installation fee is 

equitably allocated in that all Exchange 

members that voluntarily select these 

service options will be afforded the 

waiver of fees until May 31, 2012. All 

Exchange members have the option to 

select these voluntary co-location 

services. 

Not Unfairly Discriminatory 

The Exchange also believes the 

proposal to waive the 10Gb and 40Gb 

fiber connection installation fee is not 

unfairly discriminatory in that the 

waiver of fees is provided to all 

Exchange members that volunteer for 

these particular service options, and 

there is no differentiation among 

members with regard to the waiver of 

fees for these options. 

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. 

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 

Because the foregoing proposed rule 

change does not significantly affect the 

protection of investors or the public 

interest, does not impose any significant 

burden on competition, and, by its 

terms, does not 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) of the Act 12 and Rule 19b– 

4(f)(6) thereunder.13

The Exchange has requested that the 

Commission waive the 30-day operative 

delay. The Commission believes that 

waiver of the operative delay is 

consistent with the protection of 

investors and the public interest 

because such waiver will facilitate 

trading activities by providing members 

an option to enhance the efficiency of 

their trading through the 40Gb 

connectivity. Therefore, the 

Commission designates the proposal 

operative upon filing.14

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. 

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–2012–012 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–2012–012. 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– 

2012–012 and should be submitted on 

or before April 4, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–6113 Filed 3–13–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66539; File No. SR–NSCC– 

2012–03] 

Self-Regulatory Organizations; The 

National Securities Clearing 

Corporation; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Messaging 

and Settlement Enhancements to the 

In Force Transactions Product Service 

of NSCC’s Insurance and Retirement 

Services and the Establishment of 

Fees Applicable Thereto 

March 8, 2012. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

February 29, 2012, the National 

Securities Clearing Corporation 

(‘‘NSCC’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change described in 

Items I, II and III below, which Items 

have been prepared primarily by NSCC. 

NSCC filed the proposal pursuant to 


srobinson on DSK4SPTVN1PROD with NOTICES