Document ID: SEC-2011-1353-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2011-09-09T04:00Z

[Federal Register Volume 76, Number 175 (Friday, September 9, 2011)]
[Notices]
[Pages 55986-55988]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-23112]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65251; File No. SR-BX-2011-060]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Regarding a 
Clarifying Amendment To Direct Connectivity Services

September 2, 2011.
    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 August 31, 2011, NASDAQ OMX BX, Inc. (the ``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 a clarifying amendment to Exchange Rule 7051 
regarding the Exchange's direct connectivity services. The text of the 
proposed rule change is available at http://nasdaqomxbx.cchwallstreet.com/, at the Exchange's principal office, 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

[[Page 55987]]

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 is amending Rule 7051 entitled ``Direct Connectivity 
to BX'' to clarify the Exchange's direct connectivity services. 
Currently, the Exchange assesses fees for direct 10Gb circuit 
connections, and fees for direct circuit connections capable of 
supporting up to 1Gb, for customers who are not co-located at the 
Exchange's datacenter.\3\ The Exchange noted in SR-BX-2010-064 that it 
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.\4\ Monthly fees are higher for non co-located 
customers because direct connection requires the Exchange to provide 
cabinet space and middleware for those customers' third-party vendors 
to connect to the datacenter and, ultimately, to the trading system.\5\ 
The Exchange also assesses an optional installation fee of $925 if the 
customer chooses to use an on-site router (collectively ``Direct 
Connectivity Fees'').\6\ The Exchange provides direct connect services 
and assesses fees through NASDAQ Technology Services, LLC, as it does 
with similar co-location services.\7\
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    \3\ See Securities Exchange Act Release No. 62969 (September 22, 
2010), 75 FR 59777 (September 28, 2010) (SR-BX-2010-064).
    \4\ Id. at page 4 and page 10.
    \5\ Id.
    \6\ Id.
    \7\ See Exchange Rule 7034(b), Connectivity to BX.
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    Subsequently, the Exchange amended these Direct Connectivity Fees 
to establish pricing for customers who are not co-located in the 
Exchange's data center, but require shared cabinet space and power for 
optional routers, switches, or modems to support their direct circuit 
connections. The Exchange assesses customers who are not co-located in 
the Exchange's data center monthly fees for space based on a height 
unit of approximately two inches high, commonly call a ``U'' space and 
a maximum power of 125 Watts per U space.\8\
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    \8\ See Securities Exchange Act Release No. 64439 (May 9, 2011), 
76 FR 28248 (May 16, 2011) (SR-BX-2011-023).
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    The Exchange now seeks to add clarifying text to Exchange Rule 7051 
to state that the direct connectivity services are provided by NASDAQ 
Technology Services, LLC. The Exchange's proposal is the result of its 
desire to prominently place language in the Exchange Rule 7051 to make 
transparent that the connectivity services are provided by NASDAQ 
Technology Services, LLC. Such change will assist with easy 
identification of items not serviced, and billed, by the Exchange. This 
change merely codifies the practice of the Exchange.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\9\ in general, and 
furthers the objectives of Section 6(b)(5) of the Act \10\ 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. The Exchange believes the 
proposed amendment to Exchange Rule 7051 makes transparent that the 
direct connectivity services are provided by NASDAQ Technology 
Services, LLC. The Exchange believes that this clarifying amendment 
will benefit all market participants by making transparent the source 
of the direct connectivity services.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor 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)(i) 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 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.
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    \11\ 15 U.S.C. 78s(b)(3)(a)(i).
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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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-BX-2011-060 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-BX-2011-060. 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 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 
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-2011-060 and should be 
submitted on or before September 30, 2011.

[[Page 55988]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary .
[FR Doc. 2011-23112 Filed 9-8-11; 8:45 am]
BILLING CODE 8011-01-P