Document ID: SEC-2018-1032-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq BX, Inc.
Posted Date: 2018-07-03T04:00Z

[Federal Register Volume 83, Number 128 (Tuesday, July 3, 2018)]
[Notices]
[Pages 31241-31243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14277]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83535; File No. SR-BX-2018-024]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Relocate the 
Exchange's Rules Pertaining to Co-Location and Direct Connectivity

June 28, 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 June 13, 2018, Nasdaq BX, Inc. (``BX'' or ``Exchange'') 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.
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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 relocate the Exchange's rules pertaining 
to co-location and direct connectivity, which are presently at Rules 
7034 and 7051, to Sections 1 and 2, respectively, under a new General 8 
(``Connectivity'') heading within the Exchange's new rulebook shell, 
entitled ``General Equity and Options Rules.'' The Exchange also 
proposes to correct an error in Rule 7051(b).
    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 Exchange proposes to relocate its rules governing co-location 
and direct connectivity services, which presently comprise Rules 7034 
and 7051, respectively. The Exchange proposes to establish, within its 
new rulebook shell,\3\ a new General 8 heading, entitled 
``Connectivity,'' to renumber Rule 7034 as Section 1 thereunder, and to 
renumber Rule 7051 as Section 2 thereunder. The Exchange furthermore 
proposes to amend Rules 7011, 7025, 7030, and Options Rules Chapter XV 
to update cross references therein to Rules 7034 and 7051, as 
applicable. The Exchange also proposes to update internal cross-
references in the renumbered Rules.
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    \3\ Recently, the Exchange added a shell structure to its 
Rulebook with the purpose of improving efficiency and readability 
and to align its rules closer to those of its five sister exchanges: 
The Nasdaq Stock Market, LLC; Nasdaq PHLX LLC; Nasdaq ISE, LLC; 
Nasdaq GEMX, LLC; and Nasdaq MRX, LLC (together with BX, the 
``Affiliated Exchanges''). See Securities Exchange Act Release No. 
82174 (November 29, 2017), 82 FR 57492 (December 5, 2017) (SR-BX-
2017-054).
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    The Exchange considers it appropriate to relocate these Rules to 
better organize its Rulebook. The other Affiliated Exchanges intend to 
propose similar reorganizations of their co-location and direct 
connectivity rules so that these rules will be harmonized among all of 
the Affiliated Exchanges.
    The relocation of the co-location and direct connectivity rules is 
part of the Exchange's continued effort to promote efficiency and 
conformity of its processes with those of its Affiliated Exchanges. The 
Exchange believes that moving the co-location and direct connectivity 
rules to their new location will facilitate the use of the Rulebook by 
Members of the Exchange who are members of other Affiliated Exchanges.
    In addition to the above, the Exchange proposes to correct an error 
in Rule 7051(b), entitled ``Direct Circuit Connection to Third Party 
Services.'' The Exchange recently amended Rule 7051 in an attempt to 
harmonize it with the corresponding rules of the other Affiliated 
Exchanges.\4\ However, the Exchange recently discovered one remaining 
unintended discrepancy that it now proposes to remedy. The other 
Affiliated Exchanges waive installation and ongoing monthly fees for 
10Gb Ultra and 1 GB Ultra direct circuit

[[Page 31242]]

connections to third party services for the first two connections per 
client to UTP SIP feeds only (UQDF and UTDF).\5\ The Exchange's Rule 
does not presently provide for such waivers; it now proposes to amend 
the Rule so that it does so. With this amendment, Rule 7051(b) will be 
substantially the same as the corresponding rules of the other 
Affiliated Exchanges.
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    \4\ See Securities Exchange Act Release No. 34-82628 (Feb. 5, 
2018). 83 FR 5818 (Feb. 9, 2018) (SR-BX-2018-006).
    \5\ See Nasdaq Rule 7051(b), Phlx Pricing Schedule Section 
XI(b), Nasdaq ISE Schedule of Fees Section VI.G, Nasdaq GEMX 
Schedule of Fees Section IV.D [sic], Nasdaq MRX Schedule of Fees 
Section VI.C.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\7\ in particular, 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, 
by improving the way its Rulebook is organized, providing ease of 
reference in locating co-location and direct connectivity rules, and 
harmonizing the Exchange's Rules with those of the other Affiliated 
Exchanges. As previously stated, the proposed Rule relocation is non-
substantive.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange also believes that it is in the interests of investors 
and the public to remedy unintended errors in the Exchange's rules. 
Investors and the public have clear interests in the Exchange 
maintaining an accurate rulebook and schedule of fees.

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 intermarket or intra-market competition that is 
not necessary or appropriate in furtherance of the purposes of the Act. 
The proposed changes to relocate the Exchange's rules do not impose a 
burden on competition because, as previously stated, they (i) are of a 
non-substantive nature, (ii) are intended to harmonize the Exchange's 
rules with those of its Affiliated Exchanges, and (iii) are intended to 
organize the Rulebook in a way that it will ease the Members' 
navigation and reading of the rules across the Affiliated Exchanges. 
Likewise, the Exchange's proposal to amend Rule 7051(b) will not burden 
competition because it merely corrects an unintended error and renders 
the Exchange's fees identical to those that the other Affiliated 
Exchanges charge.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
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 \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
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 satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \10\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \11\ 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 requested that the Commission waive the 30-day operative delay so 
that the proposed rule change may become operative upon filing. The 
proposed rule change merely relocates the Exchange's co-location and 
direct connectivity rules, updates rule cross-references, and corrects 
unintended errors from a previous proposed rule change.\12\ 
Accordingly, the Commission believes that waiver of the 30-day 
operative delay is consistent with the protection of investors and the 
public interest and hereby waives the operative delay and designates 
the proposed rule change operative upon filing.\13\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ See supra notes 4-5 and accompanying text.
    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission also has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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 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 change 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 [email protected]. Please include 
File Number SR-BX-2018-024 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-2018-024. 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

[[Page 31243]]

to make available publicly. All submissions should refer to File Number 
SR-BX-2018-024, and should be submitted on or before July 24, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-14277 Filed 7-2-18; 8:45 am]
 BILLING CODE 8011-01-P