Document ID: SEC-2010-1479-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2010-09-28T04:00Z

[Federal Register: September 28, 2010 (Volume 75, Number 187)]
[Notices]               
[Page 59777-59779]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28se10-122]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62969; File No. SR-BX-2010-064]

 
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Order Granting Accelerated Approval to a Proposed Rule 
Change To Establish Pricing for 10Gb Direct Circuit Connections and To 
Codify Pricing for Direct Circuit Connections Capable of Supporting Up 
to 1Gb for Customers Who Are Not Co-Located in the Exchange's 
Datacenter

September 22, 2010.
    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 September 10, 2010, The NASDAQ OMX BX, Inc. (the ``Exchange'' or 
``BX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II 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, and is approving the 
proposal on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange is filing with the Commission a proposed rule change 
to establish pricing for 10Gb direct circuit connections and to codify 
pricing for direct circuit connections capable of supporting up to 1Gb 
for customers who are not co-located in the Exchange's datacenter. The 
text of the proposed rule change is below. Proposed new language is 
underlined and proposed deletions are in brackets [sic].\3\
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    \3\ Changes are marked to the rule text that appears in the 
electronic manual of BX found at http://
nasdaqomxbx.cchwallstreet.com.
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* * * * *

                                         7051. Direct Connectivity to BX
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                          Description                               Installation Fee       Ongoing Monthly Fee
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Direct Circuit Connection to BX (10Gb)........................                   $1,000                    $5000
Direct Circuit Connection to BX (supports up to 1Gb)..........                    $1000                    $1000
Optional Cable Router.........................................                     $925
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[[Page 59778]]

     (b) and (c) Not applicable [sic].

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 III 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

a. Purpose
    The Exchange is re-proposing to establish fees for direct 10Gb 
circuit connections, and to codify fees for direct circuit connections 
capable of supporting up to 1Gb, for customers who are not co-located 
at the Exchange's datacenter.\4\ Currently, the Exchange already makes 
available to co-located customers a 10Gb circuit connection and charges 
for each a $1000 initial installation charge as well as an ongoing 
monthly fee of $5000. The Exchange is establishing the same fees for 
non co-located customers with a 10Gb circuit.\5\
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    \4\ The Exchange filed SR-BX-2010-043 seeking to establish and 
codify the fees set forth in this filing. That proposal was 
published for comment and approved by the Commission. The approval, 
however, pre-dated the BX Board's approval of the proposal. As such, 
BX is re-filing the proposal and seeking accelerated approval.
    \5\ BX provides an additional 1Gb copper connection option to 
the Exchange for co-located customers. Given the technological 
constraints of copper connections over longer distances, the 
Exchange does not offer a copper connection option to users outside 
of its datacenter.
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    The Exchange also already makes available to both co-located and 
non co-located customers direct connections capable of supporting up to 
1Gb, with per connection monthly fees of $500 for co-located customers 
and $1000 for non co-located customers. Monthly fees are higher for non 
co-located customers because direct connections require BX to provide 
cabinet space and middleware for those customers' third-party vendors 
to connect into the datacenter and, ultimately, to the trading system. 
Finally, for non co-located customers the Exchange charges an optional 
installation fee of $925 if the customer chooses to use an on-site 
router.
b. Statutory Basis
    BX believes that the proposed rule change is consistent with the 
provisions of Section 6 of the Act,\6\ in general, and with Sections 
6(b)(5) of the Act,\7\ in particular, in that the proposal is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, 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. In particular, the proposal 
will provide greater transparency into the connectivity options 
available to market participants.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange also believes that the proposed rule change is 
consistent with the provisions of Section 6 of the Act,\8\ in general, 
and with Section 6(b)(4) of the Act,\9\ 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 filing 
codifies and makes transparent the fees imposed for direct connections 
to non co-located customers. These fees are uniform for all such 
customers and are either comparable to fees charged to co-located 
customers or vary due to different costs associated with providing 
service to the two customer types.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    BX 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 on the proposed rule change were neither solicited 
nor received.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-BX-2010-064 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BX-2010-064. This file 
number should be included on the subject line if e-mail 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 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 
a.m. and 3 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-2010-064 and should be 
submitted on or before October 19, 2010.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities

[[Page 59779]]

exchange.\10\ In particular, the Commission finds that the proposed 
rule change is consistent with Section 6(b)(4) of the Act,\11\ which 
requires that the rules of a national securities exchange provide for 
the equitable allocation of reasonable dues, fees and other charges 
among its members and issuers and other persons using its facilities, 
and with Section 6(b)(5) of the Act,\12\ which requires, among other 
things, that the rules of a national securities exchange be 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 not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \10\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \11\ 15 U.S.C. 78f(b)(4).
    \12\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the proposed fees for 10Gb and 1Gb 
direct circuit connections are reasonable and equitably allocated 
insofar as they are applied on the same terms to similarly-situated 
market participants. In addition, the Commission believes that the 
connectivity options described in the proposed rule change are not 
unfairly discriminatory because BX makes the 10Gb and 1Gb direct 
circuit connections uniformly available to all non-co-located customers 
who voluntarily request them and pay the fees as detailed in the 
proposal. As represented by BX, these fees are uniform for all such 
customers and are either the same as fees charged to co-located 
customers, or vary due to different costs incurred by BX associated 
with providing service to the two different customer types. Finally, 
the Commission believes that the proposal will further the protection 
of investors and the public interest because it will provide greater 
transparency regarding the connectivity options available to market 
participants.
    The substance of the proposed rule has already been subject to full 
notice and public comment, and no comments were received.\13\ Moreover, 
similar pricing is already in effect for these same services being 
offered by BX's sister markets, the NASDAQ Stock Market, LLC and NASDAQ 
OMX PHLX, Inc.\14\ Accordingly, the Commission finds good cause, 
pursuant to Section 19(b)(2) of the Act, for approving the proposed 
rule change prior to the thirtieth day after the date of publication of 
notice of filing thereof in the Federal Register.
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    \13\ See supra note 4.
    \14\ See Securities Exchange Act Release Nos. 62663 (August 9, 
2010), 75 FR 49543 (August 13, 2010) (SR-NASDAQ-2010-77) (Order 
approving a NASDAQ Stock Market, LLC proposed rule change relating 
to pricing for direct circuit connections); 62639 (August 4, 2010), 
75 FR 48391 (August 10, 2010) (SR-Phlx-2010-89) (Order approving a 
NASDAQ OMX PHLX, Inc. proposed rule change relating to pricing for 
direct circuit connections).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\15\ that the proposed rule change (SR-BX-2010-064) be, and hereby 
is, approved on an accelerated basis.
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    \15\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading & Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-24259 Filed 9-27-10; 8:45 am]
BILLING CODE 8010-01-P