Document ID: SEC-2010-1215-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2010-08-10T04:00Z

[Federal Register: August 10, 2010 (Volume 75, Number 153)]
[Notices]               
[Page 48390-48391]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10au10-87]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62638; File No. SR-BX-2010-043]

 
 Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Order 
Approving a Proposed Rule Change Relating to Pricing for Direct Circuit 
Connections

August 4, 2010.
    On June 24, 2010, NASDAQ OMX BX, Inc. (``BX'' or the ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission''), 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to 
establish pricing for 10Gb direct circuit connections and codify 
pricing for 1Gb direct circuit connections for customers who are not 
co-located in BX's datacenter. The proposed rule change was published 
for comment in the Federal Register on July 2, 2010.\3\ The Commission 
received no comment letters on the proposal. This order approves the 
proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 62393 (July 2, 
2010), 75 FR 38571 (``Notice'').
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    In its proposal, BX proposed to establish fees for direct 10Gb 
circuit connections, and codify fees for direct circuit connections 
capable of supporting up to 1Gb, for customers who are not co-located 
at the Exchange's datacenter. BX represented that it 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 proposed to establish the same fees 
for non-co-located customers with a 10Gb circuit connection.\4\
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    \4\ According to the Exchange, BX provides an additional 1Gb 
copper connection option for co-located customers. BX represented 
that, given the technological constraints of copper connections over 
longer distances, it does not offer a copper connection option to 
users outside of its datacenter.
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    BX represented that it 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. According to 
the Exchange, 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, the 
Exchange represented that for non-co-located customers, it charges an 
optional installation fee of $925 if the customer chooses to use an on-
site router.
    After careful review, 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 exchange.\5\ 
In particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(4) of the Act,\6\ 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,\7\ 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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    \5\ 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).
    \6\ 15 U.S.C. 78f(b)(4).
    \7\ 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.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the

[[Page 48391]]

proposed rule change (SR-BX-2010-043) be, and hereby is, approved.
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    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-19649 Filed 8-9-10; 8:45 am]
BILLING CODE 8010-01-P