Document ID: SEC-2018-1907-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq BX, Inc.
Posted Date: 2018-12-12T05:00Z

[Federal Register Volume 83, Number 238 (Wednesday, December 12, 2018)]
[Notices]
[Pages 63916-63918]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-26911]

[[Page 63916]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84749; File No. SR-BX-2018-060]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Port Fees

December 7, 2018.
    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 November 27, 2018, Nasdaq BX, Inc. (``BX'' 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.
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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 Substance 
of the Proposed Rule Change

    The Exchange proposes to a proposal to amend port fees within 
Options 7, Section 3, titled ``BX Options Market--Ports and Other 
Services.''
    The text of the proposed rule change is available on the Exchange's 
website 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 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 the proposed rule change is to define ``account 
number'' and utilize that term within Options 7, Section 3. Each change 
will be described in more detail below.
New Defined Term ``Account'' [sic]
    The Exchange proposes to adopt a new definition within Options 7, 
Section 3 and apply this definition within the rule. The purpose of 
this defined new term ``account number'' is to conform the Exchange's 
use of certain terms within BX Rules. This term would be utilized in 
Options 7, Section 3 to describe the manner in which pricing is 
calculated. Recently, the Nasdaq affiliated exchanges filed rule 
changes to conform the usage of various terms across its 6 affiliated 
options markets within the various rulebooks.\3\ The Exchange believes 
that utilizing the same defined terms, where possible, across its 6 
affiliated options markets will avoid confusion for certain rules and 
pricing purposes. The term ``account number'' can be defined 
identically across Nasdaq's 6 affiliated options markets for purposes 
of pricing ports. The Exchange is not amending the manner in which 
pricing will be applied with respect to this particular change. The 
Exchange proposes to utilize the defined term ``account number'' in 
place of the term ``mnemonic,'' which was not defined in the pricing 
rules. The insertion of the new defined term is intended to add more 
specificity and clarity to the current pricing.
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    \3\ BX filed to define the terms ``account number,'' ``badge'' 
and ``mnemonic'' at Chapter I, Section 1(a)(70), (71) and (72) 
respectively. See Securities Exchange Act Release No. 84520 
(November 1, 2018), 83 FR 55765 (November 7, 2018) (SR-BX-2018-050). 
The Nasdaq Stock Market LLC filed to amend The Nasdaq Options Market 
LLC rules to define the terms ``account number,'' ``badge'' and 
``mnemonic'' at Chapter I, Section 1(a)(69), (70) and (71) 
respectively. See Securities Exchange Act Release No. 84571 
(November 9, 2018), 83 FR 57758 (November 16, 2018) (SR-NASDAQ-2018-
086). Nasdaq Phlx LLC has filed to define the terms ``account 
number,'' ``badge'' and ``mnemonic'' at Rule 1000(b)(51), (52) and 
(53) respectively. See Securities Exchange Act Release No. 84620 
(November 19, 2018), 83 FR 60512 (November 6, 2018) (SR-Phlx-2018-
71). See also ISE Rule 100(a)(1), (5) and (34) which defines the 
terms ``account number,'' ``badge'' and ``mnemonic,'' respectively. 
See also GEMX Rule 100(a)(1), (5) and (35) which defines the terms 
``account number,'' ``badge'' and ``mnemonic,'' respectively. See 
also MRX Rule 100(a)(1), (5) and (36) which defines the terms 
``account number,'' ``badge'' and ``mnemonic,'' respectively.
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    At this time, the Exchange proposes to define an ``account number'' 
within Options 7, Section 3 to mean a number assigned to a Participant. 
Participants may have more than one account number. The term 
``mnemonic'' has been used frequently throughout Options 7 without 
being defined. The Exchange proposes to remove the term ``mnemonic'' 
from Options 7, Section 3 and replace the term with the defined term 
``account number'' for the FIX protocol. The Exchange notes that the 
terms mnemonic and account number were being used interchangeably. The 
Exchange recently defined both terms in its rules.\4\ The term account 
number is appropriate to describe these fees. The Exchange is not 
amending the manner in which it assesses the FIX port, rather the 
Exchange simply proposes to utilize the new term to better describe its 
current pricing.
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    \4\ A ``mnemonic'' is defined as an acronym comprised of letters 
and/or numbers assigned to Participants. A Participant account may 
be associated with multiple mnemonics. See Securities Exchange Act 
Release No. 84520 (November 1, 2018), 83 FR 55765 (November 7, 2018) 
(SR-BX-2018-050). Mnemonics are issued to Participants to identify 
associated persons of Participants.
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    Also, the Exchange proposes to remove the term ``mnemonic'' from 
the CTI Port Fee, FIX DROP Port Fee, BX Depth Port Fee and BX Top Port 
Fee. Today, these ports are assessed only one fee per port, per month 
and therefore adding the term ``per account number'' would be redundant 
and unnecessary. These ports are associated with one account number. 
The Exchange is not proposing to amend the manner in which these ports 
are assessed, rather the Exchange proposes to eliminate the ``per 
mnemonic'' description. The Exchange believes that the billing is 
clearly defined as ``per port, per month.''
    The Exchange also proposes to amend current ``(c) Access and 
Redistribution Fee'' as ``v'' to conform to the remainder of the rule.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\5\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) 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, and is 
not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
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New Defined Term ``Account'' [sic]
    The Exchange's proposal to define the term ``account number'' 
within Options, Section 3 and apply that term within the rule in place 
of the term ``mnemonic'' as to the manner in which FIX Port Fees are 
priced is reasonable because the term is defined and will be utilized 
consistently throughout Options 7, where applicable. The usage of the 
defined term ``account number'' will

[[Page 63917]]

bring uniformity to the term and its usage across the 6 affiliated 
options markets. The proposed change to utilize the defined term will 
not amend the manner in which the ports are billed, rather it will also 
bring greater clarity to pricing in Options 7, Section 3.
    The Exchange's proposal to define the term ``account number'' 
within Options 7, Section 3 and apply that term within Options 7, 
Section 3, in place of the term ``mnemonic'' for the FIX Port Fee is 
equitable and not unfairly discriminatory because the Exchange proposes 
to apply that term uniformly in billing Participants utilizing those 
ports.
    The Exchange's proposal to remove the term ``mnemonic'' for the 
pricing of the CTI Port Fee, FIX DROP Port Fee, BX Depth Port Fee and 
BX Top Port Fee is reasonable because, today, these ports are assessed 
only one fee per port, per month and this change will bring greater 
clarity to the manner in which these services are billed. The term 
``mnemonic'' was undefined until the Exchange filed to define that term 
within the BX Rules.\7\ The manner in which the term ``mnemonic'' was 
defined for purposes of BX's Rules is not the manner that was intended 
for pricing these ports. To that end, the Exchange proposes to remove 
the term ``mnemonic'' and replace that term with ``account number,'' 
where applicable, to convey the intended manner in which the Exchange 
prices ports. This proposal will conform the defined term across BX 
Rules.\8\ Today, these ports are assessed only one fee per port, per 
month and therefore adding the term ``per account number'' would be 
redundant and unnecessary. These ports are associated with one account 
number. This proposal will conform the defined term across BX Rules. 
The Exchange is not proposing to amend the manner in which these ports 
are assessed, rather the Exchange proposes to eliminate the ``per 
mnemonic'' description and more clearly define the manner in which 
these services are billed as ``per port, per month.''
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    \7\ See Securities Exchange Act Release No. 84520 (November 1, 
2018), 83 FR 55765 (November 7, 2018) (SR-BX-2018-050).
    \8\ See Chapter I, Section 1(a)(70).
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    The Exchange's proposal to remove the term ``mnemonic'' for the 
pricing of the CTI Port Fee, FIX DROP Port Fee, BX Depth Port Fee and 
BX Top Port Fee is equitable and not unfairly discriminatory because 
the Exchange will continue to uniformly assess all market participants 
these services in a uniform manner. The proposed change does not amend 
the manner in which these services are billed.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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. In terms of inter-market 
competition, the Exchange notes that this proposal does not amend 
actual fees, rather the Exchange proposes to amend the name of a port 
fee and define a new term to be used more accurately to describe the 
manner in which certain services within Options 7, Section 3 are 
billed.
New Defined Term ``Account'' [sic]
    The Exchange's proposal to define the term ``account number'' 
within Options 7, Section 3 and apply that term within that rule in 
place of the term ``mnemonic'' with respect to the manner in which FIX 
protocols are priced does not impose an undue burden on intra-market 
competition because the Exchange proposes to apply that term uniformly 
in billing Participants utilizing those ports. No changes are being 
made to the manner in which the Exchange bills these ports.
    The Exchange's proposal to remove the term ``mnemonic'' for the 
pricing of the CTI Port Fee, FIX DROP Port Fee, BX Depth Port Fee and 
BX Top Port Fee does not impose an undue burden on intra-market 
competition because the Exchange will continue to uniformly assess all 
market participants these services in a uniform manner. The proposed 
change does not amend the manner in which these services are billed.

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.\9\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    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-BX-2018-060 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-BX-2018-060. 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 website (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 10:00 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-BX-2018-060 and should

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be submitted on or before January 2, 2019.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-26911 Filed 12-11-18; 8:45 am]
 BILLING CODE 8011-01-P