Document ID: SEC-2018-0622-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq GEMX, LLC
Posted Date: 2018-04-19T04:00Z

[Federal Register Volume 83, Number 76 (Thursday, April 19, 2018)]
[Notices]
[Pages 17457-17459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-08157]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83050; File No. SR-GEMX-2018-12]

Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Codify Within 
Rule 718 the Data Feeds on GEMX

April 13, 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 April 4, 2018, Nasdaq GEMX, LLC (``GEMX'' 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 codify within Rule 718, which rule is 
currently reserved, the data feeds that are currently offered on GEMX.
    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaqgemx.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 codify within Rule 
718, which rule is currently reserved, the data feeds that are 
currently offered on GEMX and previously filed in prior rule changes as 
described in more detail below. The Exchange proposes to rename Rule 
718 ``Data Feeds'' and list the various data feed offerings within that 
rule.
    The Exchange has previously filed a rule change which describes the 
various data offerings.\3\ The data offerings contained in that rule 
change included: the Nasdaq GEMX Real-time Depth of Market Raw Data 
Feed (``Depth of Market Feed''), the Nasdaq GEMX Order Feed (``Order 
Feed''), the Nasdaq GEMX Top Quote Feed (``Top Quote Feed''), and the 
Nasdaq GEMX Trades Feed (``Trades Feed''). Each of the data offerings 
are described in more detail below.
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    \3\ See Securities Exchange Act Release No. 80649 (May 10, 
2017), 82 FR 22595 (May 16, 2017) (SR-GEMX-2017-07) (Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To 
Establish INET Ports) (``Prior Filing'').
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Universal Changes
    The Exchange notes it proposes various universal amendments to its 
data feeds for consistency and clarity. References to ``instrument'' 
will be replaced by the more specific language ``options series.'' 
Where the Exchange previously referred to ``trading status'' those 
words will be replaced with language which specifically explains the 
information for status, which is, ``whether the option series is 
available for trading on GEMX and identifies if the series is available 
for closing transactions only.'' The word ``customer'' will be replaced 
with the defined term ``Priority Customer.'' \4\ References to the word 
``cumulative,'' when referring to volume, will be replaced with more 
specific language namely, ``daily trading,'' to refer to the volume. 
These aforementioned amendments are made, where applicable, within the 
data feeds described below in more detail. Finally, the Exchange is 
adding language in Rule 718(a) to make clear that the data feeds 
pertain to GEMX trading information.
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    \4\ The term ``Priority Customer'' means a person or entity that 
(i) is not a broker or dealer in securities, and (ii) does not place 
more than 390 orders in listed options per day on average during a 
calendar month for its own beneficial account(s). See GEMX Rule 
100(a)(41A).
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Depth of Market Feed
    In a Prior Filing the Exchange described the Depth Feed as 
providing aggregate quotes and orders at the top five price levels on 
the Exchange, and provides subscribers with a consolidated view of 
tradable prices beyond the BBO, showing additional liquidity and 
enhancing transparency for GEMX traded options. The data provided for 
each instrument includes the symbols (series and underlying security), 
put or call indicator, expiration date, the strike price of the series, 
and trading status. In addition, subscribers are provided with total 
quantity, customer quantity, price, and side (i.e., bid/ask). This 
information is provided for each of the five indicated price levels on 
the Depth Feed. The feed also provides participants of imbalances on 
opening/reopening.
    In codifying the feed description, the Exchange proposes a few 
amendments to the description in the Prior Filing in addition to the 
universal changes mentioned above. For the Depth of Market Feed, the 
Exchange is removing the words ``Real-time'' and ``Raw'' because all 
the feeds are real-time and contain raw data. Removing these words 
conforms the language of all the feeds. The Exchange proposes to 
replace ``Exchange'' with ``GEMX'' for clarity. Also, the Exchange is 
expanding the description of total quantity to ``total aggregate 
quantity'' including Public Customer \5\ aggregate quantity and 
Priority Customer aggregate quantity. The Exchange is amending a 
description of the imbalances on opening/reopening to note the 
imbalances are order and not participant imbalances. Finally a 
typographical error is being amended in the last sentence of this data 
feed to remove an extraneous ``of'' in the sentence.
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    \5\ The term ``Public Customer'' means a person or entity that 
is not a broker or dealer in securities. See Rule 100(a)(42).
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Order Feed
    In a Prior Filing the Exchange described the Order Feed as 
providing information on new orders resting on the book. In addition, 
the feed also announces auctions. The data provided for each instrument 
includes the symbols (series and underlying

[[Page 17458]]

security), put or call indicator, expiration date, the strike price of 
the series, and trading status. The feed also provides participants of 
imbalances on opening/reopening.
    In codifying the feed description, the Exchange proposes a few 
amendments to the description in the Prior Filing in addition to the 
universal changes mentioned above. The Exchange is amending the order 
feed to include the word ``all'' before auctions to make clear all 
auction information is included. The Exchange is adding examples of the 
information provided on new orders resting on the book, e.g. price, 
quantity and market participant capacity. The words ``market 
participant'' are intended to make clear which capacity is referred to 
for the information. The Exchange is amending a description of the 
imbalances on opening/reopening to note the imbalances are order and 
not participant imbalances. Also, a typographical error is being 
amended in the last sentence of this data feed to remove an extraneous 
``of'' in the sentence.
Top Quote Feed
    In a Prior Filing the Exchange described the Top Quote Feed as one 
that calculates and disseminates its best bid and offer position, with 
aggregated size (Total & Customer), based on displayable order and 
quote interest in the options market system. The feed also provides 
last trade information along with opening price, cumulative volume, 
high and low prices for the day. The data provided for each instrument 
includes the symbols (series and underlying security), put or call 
indicator, expiration date, the strike price of the series, and trading 
status.
    In codifying the feed description, the Exchange proposes a few 
amendments to the description in the Prior Filing in addition to the 
universal changes mentioned above. The Exchange proposes to amend the 
Top Quote Feed to make clear that aggregated size included total size, 
Public Customer size in the aggregate and also Priority Customer size 
in the aggregate. The Exchange is replacing the term ``options market 
system'' with the defined term ``System.'' \6\ The Exchange also 
proposes to add a sentence, similar to the Depth of Market Feed and 
Order Feed which provides ``The feed also provides order imbalances on 
opening/reopening.'' This sentence should have been included with this 
feed as well. The universal changes described above apply as well.
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    \6\ See Rule 100(a)(53).
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Trades Feed
    In a Prior Filing the Exchange described the Trades Feed as 
displaying last trade information along with opening price, cumulative 
volume, high and low prices for the day. The data provided for each 
instrument includes the symbols (series and underlying security), put 
or call indicator, expiration date, the strike price of the series, and 
trading status.
    The Exchange is only amending the description of the Trades Feed as 
described in the universal changes.
    The Exchange notes that market participants are charged for 
subscriptions to these products.\7\ The Exchange believes that 
codifying these data feeds within the Exchange's Rulebook will bring 
greater transparency to its Rules as well as the data which is 
available on the Exchange. The amendments are also intended to provide 
greater clarity and transparency concerning the data offerings.
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    \7\ See Schedule of Fees, Section V, Market Data.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Securities Exchange Act of 1934 (the 
``Act''),\8\ in general, and furthers the objectives of Section 6(b)(5) 
of the Act,\9\ in particular, in that it is designed to promote just 
and equitable principles of trade, to remove impediments to and perfect 
the mechanism for a free and open market and a national market system, 
and, in general, to protect investors and the public interest. By 
codifying the various data feed offerings, which have already been 
filed for in another rule change,\10\ will bring greater transparency 
to the Exchange's Rules. Also, the content of each data feed is 
described within the Rule for ease of reference. The Exchange believes 
that the proposed rule change is consistent with the protection of 
investors and the public interest as it provides information relating 
to the data available on the Exchange for the benefit of its Members 
within its Rules and adds greater transparency to these offerings. 
Finally, the amendments seeks to add greater clarity to the data 
offerings and conform the text of the offerings.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ See note 3 above.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\11\ 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 data feed 
offerings are available to any market participant. The Exchange's 
proposal seeks to codify the data offerings in a rule for ease of 
reference and transparency within the Rulebook. The amendments seeks to 
add greater clarity to the data offerings and conform the text of the 
offerings.
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    \11\ 15 U.S.C. 78f(b)(8).
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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)(iii) of the Act \12\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's 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 under Rule 19b-4(f)(6) \14\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, Rule 19b-4(f)(6)(iii) \15\ 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 asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange states that 
waiving the operative delay will allow it to immediately reflect the 
Exchange's data feed offerings within its Rules and bring greater 
transparency to these data feed offerings. The Commission believes that 
waiver of the 30-day operative delay is consistent with the protection 
of investors and the public interest. Therefore, the Commission hereby 
waives the operative delay and

[[Page 17459]]

designates the proposed rule change as operative upon filing.\16\
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ For purposes only of waiving the 30-day operative delay, 
the Commission has also 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: (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 [email protected]. Please include 
File Number SR-GEMX-2018-12 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-GEMX-2018-12. 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-GEMX-2018-12 and should be submitted on 
or before May 10, 2018.
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    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-08157 Filed 4-18-18; 8:45 am]
 BILLING CODE 8011-01-P