Federal Register / Vol. 82, No. 219 / Wednesday, November 15, 2017 / Notices 52953 

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. 50483 

(Oct. 1, 2004), 69 FR 60448 (Oct. 8, 2004) (SR– 

NASD–2004–118). 

4See Securities Exchange Act Release No. 74077 

(Jan. 16, 2015); 80 FR 3683 (Jan. 23, 2015) (SR– 

NASDAQ–2015–002). 

5Available at http://www.nasdaqtrader.com/ 

Content/AdministrationSupport/AgreementsData/ 

NASDAQOMXExtranetAgreement.pdf. 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–Phlx–2017–84 and should 

be submitted on or before December 6, 

2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–24655 Filed 11–14–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82037; File No. SR– 

NASDAQ–2017–114] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to the 

Access and Redistribution Fee 

November 8, 2017. 

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 October 

25, 2017, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend and 

conform Nasdaq Equities Rule 7025 and 

Chapter XV, Section 12 of Nasdaq’s 

Options Rules, to define key terms; to 

improve the rule language; and to 

specify its application to Extranet 

Providers and Distributors in various 

contexts. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaq.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 proposed rule change concerns 

Nasdaq Rule 7025 (the ‘‘Equities Rule’’) 

and Chapter XV, Section 12, of Nasdaq’s 

Options Rules (the ‘‘Options Rule,’’ 

collectively the ‘‘Rules’’), currently 

entitled ‘‘Extranet Access Fee.’’ The 

Exchange first imposed an Extranet 

Access Fee in 2004.3 The Exchange last 

amended the Extranet Access Fee in 

January of 2015.4 Today, technology and 

the ecosystem have changed such that 

the Rules need updating and 

clarification. Therefore, Nasdaq is 

proposing several parallel changes to 

the Rules. 

First, Nasdaq is proposing to rename 

both Rules and to clarify their meaning 

through the use of defined terms. 

Nasdaq is adding definitions of the 

terms Equipment Configuration, and 

Extranet Provider to new subsection (a) 

of the Rules. Nasdaq is also crossreferencing the definition of Distributors 

currently set forth in Nasdaq Rule 

7019(c). 

The term ‘‘Equipment Configuration’’ 

will be defined to mean ‘‘any line, 

circuit, router package, or other 

technical configuration used to provide 

a connection to the Exchange market 

data feeds.’’ The term Equipment 

Configuration replaces the term 

‘‘Customer Premises Equipment 

Configuration’’ set forth in the current 

rules. Nasdaq believes that the term 

‘‘Customer Premises Equipment 

Configuration’’ is ambiguous and creates 

confusion about the ownership and 

location of equipment through which 

direct access to market data feeds is 

provided. By referring instead to 

‘‘Equipment Configuration,’’ Nasdaq 

intends to specify that the ownership 

and location of the equipment is 

inconsequential to the application of 

access and redistribution fees. Rather, it 

is the number of configurations that 

matters, determining the number of 

monthly access and redistribution fees 

to be assessed. 

For example, if an Extranet Provider 

supplies market data to five recipients 

via five configurations, two of which are 

located in a single Nasdaq facility (such 

as Carteret, New Jersey) and three of 

which are located at different customer 

facilities, the Extranet Provider will be 

assessed access and redistribution fees 

of $5,000 per month. If an Extranet 

Provider supplies market data to one 

customer at two separate locations via 

two configurations—one within a 

Nasdaq facility and one located 

elsewhere—the Extranet Provider will 

be assessed access and redistribution 

fees of $2,000 per month. If an Extranet 

Provider supplies market data to four 

customers via four configurations all 

located within a Nasdaq co-location 

facility, the Extranet Provider will be 

assessed $4,000 per month in access and 

redistribution fees. Nasdaq is proposing 

to define the term ‘‘Extranet Provider’’ 

as ‘‘any entity that has signed the 

Nasdaq Extranet Connection Agreement 

and that establishes a 

telecommunications connection in the 

Exchange’s co-location facility.’’ Nasdaq 

requires entities to sign the Nasdaq 

Extranet Connection Agreement 5 for the 

purpose of setting the terms and 

conditions for those entities to place 

equipment in Nasdaq’s co-location 

facility in order to establish a 

telecommunications connection directly 

to Nasdaq and to provide its own 

customers with access to Nasdaq market 

data feeds. 

Finally, in order to further enhance 

the clarity of Nasdaq’s rules, Nasdaq is 

proposing to cross-reference the 

definition of ‘‘Distributor’’ for purposes 

of this rule. Rule 7019(c) currently 

defines Distributor as: 

[A]ny entity that receives a feed or data file 

of Nasdaq data directly from Nasdaq or 

indirectly through another entity and then 

distributes it either internally (within that 


sradovich on DSK3GMQ082PROD with NOTICES
52954 Federal Register / Vol. 82, No. 219 / Wednesday, November 15, 2017 / Notices 

6Proposed Rules 7025(c) and Section 12(c) of 

Chapter XV of the Options Rules apply only to 

Distributors that connect to Nasdaq via a Direct 

Circuit Connection pursuant to Rule 7051(a). They 

do not apply to Distributors that are co-located with 

Nasdaq pursuant to Rule 7034 and that connect to 

Nasdaq as specified under that Rule. Nor do they 

apply to entities that connect to Nasdaq remotely 

via Point of Presence Connectivity under Rule 

7051(c) as set forth in SR–NASDAQ–2017–97. 

7See SR–NASDAQ–2015–002 at footnote 11. 

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

9 15 U.S.C. 78f(b)(4) and (5). 

10Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

entity) or externally (outside that entity). All 

distributors shall execute a Nasdaq 

distributor agreement. Nasdaq itself is a 

vendor of its data feed(s) and has executed 

a Nasdaq distributor agreement and pays the 

distributor charge. 

Nasdaq is proposing to renumber and 

rearrange the existing rule text of the 

Rules. The first two sentences of 

existing rule text will become new 

subsection (b). Nasdaq also proposes to 

improve the clarity of subsection (b) by 

using the new definitions outlined 

above and by specifying that the 

monthly fees referred to are the monthly 

access and redistribution fees. As 

described earlier, the third sentence of 

existing rule text is being modified and 

moved to paragraph (1) of new 

subsection (a) as the improved 

definition of ‘‘Equipment 

Configuration.’’ The fourth and fifth 

sentences of existing rule text will move 

to new subsection (d) with modest 

textual improvements but no change in 

application of fees. The sixth sentence 

of existing rule text will move to the 

final sentences of subsections (b) and (c) 

with minor textual enhancements to 

apply it with equal effect to Extranet 

Providers and Distributors. 

Lastly, Nasdaq proposes to add new 

subsection (c) to specify and codify that 

similarly situated Distributors and 

Extranet Providers will pay similar fees. 

Under subsection (b), Extranet Providers 

are assessed a monthly fee of $1,000 for 

each Equipment Configuration that 

offers Exchange market data feeds. 

Similarly, under proposed subsection 

(c), the same $1,000 monthly fee applies 

to Distributors to whom the same 

Exchange market data feeds is published 

via a Direct Circuit Connection to 

Nasdaq. Nasdaq believes that, as 

defined, Extranet Providers and 

Distributors are similarly situated 

because both entities connect directly to 

Nasdaq, and both provide Exchange 

market data feeds to their customers via 

those connections.6 Likewise, the 

customers of Extranet Providers and 

Distributors are similarly situated in 

that they receive the same Exchange 

market data feeds through similar 

means. 

For example, a Distributor with two 

Direct Circuit Connections to Nasdaq, 

both of which emanate from a single 

Nasdaq co-location facility (such as 

Carteret, New Jersey) and both of which 

receive Exchange market data feeds, will 

be assessed access and redistribution 

fees of $2,000 per month. A Distributor 

with two Direct Circuit Connections to 

Nasdaq that emanate from two separate 

locations and that receives Exchange 

market data feeds over each connection 

will be assessed access and 

redistribution fees of $2,000 per month. 

A Distributor with two Direct Circuit 

Connections to Nasdaq that emanate 

from two separate locations and that 

receives Exchange market data feeds 

over only one of the connections will be 

assessed access and redistribution fees 

of $1,000 per month. 

Nasdaq previously assessed and 

currently assesses this fee in its capacity 

as operator of Nasdaq Technology 

Services, which had been considered an 

Extranet Provider.7 Nasdaq believes that 

defining Extranet Providers and 

codifying the fee to Distributors (other 

than Extranet Providers) is clearer to 

market participants. Nasdaq also 

understands that Distributors, like 

Extranet Providers, commonly pass the 

fee on to their customers and therefore 

specifying that Distributors employing a 

Direct Circuit Connection also pay the 

fee will ensure consistent treatment 

between users enjoying the same 

benefits via Extranet Providers on the 

one hand and Distributors on the other, 

as described above. 

2. Statutory Basis 

The Exchange believes that this 

proposal is consistent with Section 6(b) 

of the Act,8 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,9 in particular, in that it 

provides for an equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using its facility, and to specify 

that the fees are not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

Nasdaq believes that the application 

of identical Access and Redistribution 

fees to Distributors and Extranet 

Providers as described in the proposed 

rule change is fair and equitable and 

non-discriminatory. As stated above, 

Distributors and Extranet Providers both 

connect to the Exchange directly for the 

purpose of re-distributing Exchange 

market data feeds to their own 

customers and both enjoy similar 

benefits in doing so. Likewise, those 

customers, whether receiving Exchange 

market data feeds via a Distributor or an 

Extranet Provider receive that market 

data feeds in a similar fashion and with 

similar benefits. Those benefits are 

considerable: Secure, rapid, reliable 

access to the highest quality market data 

feeds on the trading of equities and 

options on the Exchange. 

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In regulation NMS, while 

adopting a series of steps to improve the 

current market model, the Commission 

highlighted the importance of market 

forces in determining prices and SRO 

revenues and, also, recognized that 

current regulation of the market system 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 10

Nasdaq believes it is fair and 

equitable and not discriminatory to 

apply equal access and redistribution 

fees to Distributors, as it does to 

Extranet Providers. As stated above, 

Distributors and Extranet Providers are 

similarly situated in that they receive 

Exchange market data feeds directly 

from the Exchange and they redistribute 

that data to their own customers. 

Likewise, the Exchange believes that the 

customers of Extranet Providers and of 

Distributors are similarly situated in the 

manner in which they receive Exchange 

market data feeds. 

The Exchange believes that it is 

consistent with an equitable allocation 

of reasonable dues and fees and not 

unfairly discriminatory to charge the 

fees proposed under Rule 7025 and 

Section 12(c) of Chapter XV of the 

Options Rules to Extranet Providers and 

Distributors that are not co-located, but 

not to charge those same fees to 

Distributors that are co-located. First, 

Distributors that are co-located already 

pay fees set forth in Rule 7034 which 

include connectivity and access to data. 

Second, if a co-located Distributor were 

to send data feeds out of the co-location 

facility, the feeds would be processed 

and normalized by the Distributor as 

opposed to by the Exchange; in that 

case, the Distributor would not be using 

the proximity for which Extranets and 

Direct Circuit Connection Distributors 

are being assessed fees under Rule 7025 

and Section 12(c) of Chapter XV of the 

Options Rules. 

Nasdaq is proposing to enhance the 

clarity of the language of the Rules to 

ensure that customers understand the 

proper application of the Rules as 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 82, No. 219 / Wednesday, November 15, 2017 / Notices 52955 

11 15 U.S.C. 78s(b)(3)(A)(ii). 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

technology has changed and continues 

to change. Nasdaq believes that 

customers support the continued 

evolution of its rules, and that regulators 

do and should support and facilitate 

this evolution. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange believes that the 

proposed rule change will not impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. To the 

contrary, the Exchange believes that 

applying equal fees to similarly situated 

Extranet Providers and Distributors, 

enhancing the clarity of the Rules, and 

eliminating ambiguity imposes no 

burden on competition and is, in fact, 

pro-competitive. Extranet Providers and 

Distributors benefit from having a more 

accurate and complete understanding of 

Nasdaq’s services and fees when 

determining which if any of those 

competing services to purchase 

voluntarily. 

Nasdaq believes that the proposed 

rule change places no burden on 

competition because it specifies that 

identical fees will apply to all similarly 

situated Distributors and Extranet 

Providers that provide Exchange market 

data feeds to their own customers. As 

described above, such Distributors and 

Extranet Providers offer the same 

Exchange market data feeds in the same 

manner to similarly situated customers. 

Nasdaq offers similar benefits to 

Distributors and Extranet Providers by 

offering them such access to Exchange 

market data feeds. 

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.11

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2017–114 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–NASDAQ–2017–114. 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. 

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–NASDAQ–2017–114 and 

should be submitted on or before 

December 6, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–24658 Filed 11–14–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82036; File No. SR–BX– 

2017–048] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to the Access 

and Redistribution Fee 

November 8, 2017. 

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 October 

26, 2017, Nasdaq 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend and 

conform BX Equities Rule 7025 and 

Chapter XV, Section 3(c) of the 

Exchange’s Options Rules, to define key 

terms; to clarify the rule language; and 

to clarify its application to Extranet 

Providers and Distributors in various 

contexts. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaqbx.cchwallstreet.com/, 

at the principal office of the Exchange, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 


sradovich on DSK3GMQ082PROD with NOTICES