Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices 78119 

18 15 U.S.C. 78s(b)(3)(A). 

19 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

provide the Commission with written notice of its 

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 met this requirement. 

20For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

the governance of the Exchange. By 

simplifying the governance structure in 

this way, the Proposed Rule Change 

promotes the maintenance of a fair and 

orderly market, the protection of 

investors and the protection of the 

public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the Proposed Rule Change would result 

in any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

The Exchange will continue to conduct 

regulated activities (including operating 

and regulating its market and Members) 

of the type it currently conducts, but 

will be able to do so in a more efficient 

manner to the benefit of its Members. 

Furthermore, the proposed Conversion 

is not a competitive proposal, but rather 

is intended to add efficiency with 

respect to the governance process for the 

Exchange and its affiliates. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has not solicited or 

received written comments on the 

Proposed Rule Change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (1) significantly affect 

the protection of investors or the public 

interest; (2) impose any significant 

burden on competition; and (3) by its 

terms does not become operative for 30 

days after the date of this filing, or such 

shorter time as the Commission may 

designate if consistent with the 

protection of investors and the public 

interest, the proposed rule change has 

become effective pursuant to section 

19(b)(3)(A) of the Act 18 and Rule 19b– 

4(f)(6) thereunder.19

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing. However, Rule 19b– 

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has asked the Commission to 

waive the 30-day operative delay so that 

the proposal may become operative 

immediately upon filing. The 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest as it will allow the 

Exchange to effect the Conversion upon 

filing with the Secretary of State of the 

State of Delaware and, according to the 

Exchange, simplify the administration 

associated with the Exchange’s overall 

corporate structure immediately.20

Accordingly, the Commission hereby 

grants the Exchange’s request and 

designates the proposal operative upon 

filing. 

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 rule-comments@

sec.gov. Please include File Number SR– 

EDGA–2014–33 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–EDGA–2014–33. 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 

10:00 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. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–EDGA– 

2014–33, and should be submitted on or 

before January 20, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30273 Filed 12–24–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73894; File No. SR–BX– 

2014–060] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Ports 

December 19, 2014. 

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 December 

15, 2014, NASDAQ OMX BX, Inc. (‘‘BX’’ 

or ‘‘Exchange’’) 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 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 


tkelley on DSK3SPTVN1PROD with NOTICES
78120 Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices 

3The Order Entry Port Fee is a connectivity fee 

in connection with routing orders to the Exchange 

via an external order entry port. BX Participants 

access the Exchange’s network through order entry 

ports. A BX Participant may have more than one 

order entry port. 

4CTI offers real-time clearing trade updates. A 

real-time clearing trade update is a message that is 

sent to a member after an execution has occurred 

and contains trade details. The message containing 

the trade details is also simultaneously sent to The 

Options Clearing Corporation. The trade messages 

are routed to a member’s connection containing 

certain information. The administrative and market 

event messages include, but are not limited to: 

system event messages to communicate operationalrelated events; options directory messages to relay 

basic option symbol and contract information for 

options traded on the Exchange; complex strategy 

messages to relay information for those strategies 

traded on the Exchange; trading action messages to 

inform market participants when a specific option 

or strategy is halted or released for trading on the 

Exchange; and an indicator which distinguishes 

electronic and non-electronically delivered orders. 

5BX Depth is a data feed that provides quotation 

information for individual orders on the BX book, 

last sale information for trades executed on BX, and 

Order Imbalance Information as set forth in BX 

Rules chapter VI, section 8. BX Depth is the options 

equivalent of the BX TotalView/ITCH data feed that 

BX offers under BX Rule 7023 with respect to 

equities traded on BX. As with TotalView, members 

use BX Depth to ‘‘build’’ their view of the BX book 

by adding individual orders that appear on the feed, 

and subtracting individual orders that are executed. 

See chapter VI, section 1 at subsection (a)(3)(A). 

6BX TOP Port is a data feed that provides the BX 

Best Bid and Offer (‘‘BBO’’) and last sale 

information for trades executed on BX. The BBO 

and last sale information are identical to the 

information that BX sends to the Options Price 

Regulatory Authority (‘‘OPRA’’) and which OPRA 

disseminates via the consolidated data feed for 

options. BX TOP Port is the options equivalent of 

the BX Basic data feed offered for equities under BX 

Rule 7047. See chapter VI, section 1 at subsection 

(a)(3)(B). 

7The DROP interface provides real time 

information regarding orders sent to BX and 

executions that occurred on BX. The DROP 

interface is not a trading interface and does not 

accept order messages. 

8SQF ports are ports that receive inbound quotes 

at any time within that month. The SQF Port allows 

a BX Participant to access information such as 

execution reports and other relevant data through 

a single feed. For example, this data would show 

which symbols are trading on BX and the current 

state of an options symbol (i.e., open for trading, 

trading, halted or closed). Auction notifications and 

execution reports are also available. BX Market 

Makers rely on data available through the SQF Port 

to provide them the necessary information to 

perform market making activities. 

9A mnemonic is a unique identifier consisting of 

a four character alpha code. 

10Account numbers are assigned by the Exchange 

and associated with particular BX Participants. 

11 15 U.S.C. 78f. 

12 15 U.S.C. 78f(b)(4) and (5). 

13Miami International Securities Exchange LLC 

(‘‘MIAX’’) assesses ports fees that range from $1,000 

to $5,000 depending on connectivity levels. See 

MIAX’s Fee Schedule. ISE Gemini, LLC (‘‘ISE 

Gemini’’) assesses port fees that range from $750– 

$12,500 depending on connectivity levels. See ISE 

Gemini’s Fee Schedule. Finally, C2 Options 

Exchange, Incorporated (‘‘C2’’) assesses port fees 

that range from $500–$1,000 depending on 

connectivity levels. See C2’s Fee Schedule. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

chapter XV, section 3 entitled ‘‘BX 

Options Market—Access Services.’’ 

Specifically, the Exchange is proposing 

to adopt additional port fees. 

While the changes proposed herein 

are effective upon filing, the Exchange 

has designated the amendments become 

operative on January 2, 2015. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://

nasdaqomxbx.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 this filing is to adopt 

Port Fees for the following ports: Order 

Entry Ports,3 CTI Ports,4 BX Depth 

Ports,5 BX TOP Ports,6 and Order Entry 

DROP Ports,7 (collectively ‘‘BX Ports’’). 

The Exchange proposes to assess a $200 

Port Fee for each of the BX Ports on a 

per port, per month, per mnemonic 

basis. The Exchange would also note 

that BX Depth and BX Top Port Fees 

will be assessed to non-BX Participants 

and BX Participants. Additionally, the 

Exchange will note that it will continue 

to assess no fee for SQF Ports 8 by 

placing the SQF Port Fee in new chapter 

XV, section 3(b) along with the new BX 

Port Fees. 

Each BX Options Participant is 

assigned a Market Participant Identifier 

or ‘‘mnemonic’’ 9 and in some cases, 

certain BX Participants request multiple 

mnemonics for purposes of accounting 

for trading activity. These mnemonics 

identify users at a particular BX 

Participant. The Exchange bills its Port 

Fees based on the number of 

mnemonics configured for each port. By 

way of example, if a BX Participant, 

ABC, requested 2 ports from the 

Exchange and further requested that 

each port be configured to be accessed 

by 4 mnemonics or in some cases 

account numbers,10 the BX Participant 

would be billed for 8 ports at the rate 

of $550 [sic] per port for that month. All 

billing is captured at the Participant 

level. BX Participants may choose to 

have multiple mnemonics or in some 

case multiple account numbers for the 

convenience of conducting their 

business, however only one mnemonic 

and one account number is required to 

conduct business on BX. 

Today, the NASDAQ Options Market 

LLC (‘‘NOM’’) assesses port fees for 

similar ports, with the exception of 

SQF. The Exchange desires to 

commence assessing such fees on BX at 

this time, with the exception of SQF as 

it desires to continue to encourage BX 

Market Makers to participate in this 

market. 

2. Statutory Basis 

BX believes that the proposed rule 

change is consistent with the provisions 

of section 6 of the Act,11 in general, and 

with section 6(b)(4) and 6(b)(5) of the 

Act,12 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 BX 

operates or controls, and is not designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes that adopting 

Port Fees for the BX Ports at $200 per 

port, per month, per mnemonic is 

reasonable because it would allow the 

Exchange to recoup fees associated with 

offering the BX Ports. The BX Port Fees 

reflect a portion of the costs that the 

Exchange bears with respect to offering 

and maintaining the BX Ports. The Port 

Fees are reasonable because they enable 

the Exchange to offset, in part, its 

connectivity costs associated with 

making such ports available, including 

costs based on gateway software and 

hardware enhancements and resources 

dedicated to gateway development, 

quality assurance, and support. The 

Exchanges port fees are lower than the 

costs for ports at other options 

exchanges 13 as BX Options is a 

relatively new market and the Exchange 

seeks to remain competitive with more 

mature options markets. 

The Exchange believes that Port Fees 

for the BX Ports at $200 per port, per 

month, per mnemonic is equitable and 

not unfairly discriminatory because the 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 248 / Monday, December 29, 2014 / Notices 78121 

14Pursuant to chapter VII (Market Participants), 

section 5 (Obligations of Market Makers), in 

registering as a market maker, an Options 

Participant commits himself to various obligations. 

Transactions of a Market Maker in its market 

making capacity must constitute a course of 

dealings reasonably calculated to contribute to the 

maintenance of a fair and orderly market, and 

Market Makers should not make bids or offers or 

enter into transactions that are inconsistent with 

such course of dealings. See chapter VII, section 5. 

15See chapter VII, section 5. 

16See note 14. 

17See note 15. 

18 15 U.S.C. 78s(b)(3)(A)(ii). 19 17 CFR 200.30–3(a)(12). 

Exchange will assess the same fees for 

all BX Ports to all BX Participants. 

The Exchange believes that 

continuing to assess no fee for SQF 

Ports, while assessing fees for other BX 

Ports, is reasonable because the 

Exchange desires to incentivize more 

BX Market Makers to engage in market 

marking activities on the Exchange. The 

proposal would provide all BX Market 

Makers with the opportunity to 

maintain lower costs while also 

obtaining and utilizing the appropriate 

number of SQF to conduct their 

business. 

The Exchange believes that 

continuing to assess no fee for SQF 

Ports, while assessing fees for other BX 

Ports, is equitable and not unfairly 

discriminatory because SQF Ports are 

utilized particularly by BX Market 

Makers in connection with their market 

making activities. Unlike other BX 

Participants, BX Market Makers add 

value to the market through continuous 

quoting 14 and a commitment of capital. 

The Exchange has traditionally assessed 

BX Market Makers lower transaction 

fees as compared to other BX 

Participants because BX Market Makers 

have obligations to make continuous 

markets, engage in a course of dealings 

reasonably calculated to contribute to 

the maintenance of a fair and orderly 

market, and not make bids or offers or 

enter into transactions that are 

inconsistent with a course of dealings.15

Also, because of the volume of message 

traffic, BX Market Makers that utilize 

SQF Ports require more technology 

infrastructure and more ports than BX 

Participants that are not engaged in 

market making. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

BX 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. The Exchange 

believes the proposed BX Port fees are 

fair and equitable, and therefore, will 

not unduly burden any particular group 

of market participants trading on the 

Exchange. The Exchange’s proposal to 

adopt fees for the BX Ports would be 

applied in a uniform manner to all BX 

Participants. The proposed fees are 

designed to ensure a fair and reasonable 

use of Exchange resources by allowing 

the Exchange to recoup a certain portion 

of connectivity costs, while continuing 

to offer competitive rates to BX 

Participants given the market is not a 

mature market. 

With respect to the SQF Port Fee, the 

Exchange believes that continuing to 

assess no fee for SQF Ports, while 

assessing fees for other BX Ports, does 

not impose an undue burden on 

competition because SQF Ports are 

utilized particularly by BX Market 

Makers that add value to the market 

through continuous quoting 16 and a 

commitment of capital. The Exchange 

has traditionally assessed BX Market 

Makers lower transaction fees as 

compared to other BX Participants 

because BX Market Makers have 

obligations to make continuous markets, 

engage in a course of dealings 

reasonably calculated to contribute to 

the maintenance of a fair and orderly 

market, and not make bids or offers or 

enter into transactions that are 

inconsistent with a course of dealings.17

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.18 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 rule-comments@

sec.gov. Please include File Number SR– 

BX–2014–060 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–BX–2014–060. 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 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 

10:00 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. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–BX– 

2014–060 and should be submitted on 

or before January 20, 2015.19

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30275 Filed 12–24–14; 8:45 am] 

BILLING CODE 8011–01–P 


tkelley on DSK3SPTVN1PROD with NOTICES