[Federal Register Volume 75, Number 187 (Tuesday, September 28, 2010)]
[Notices]
[Pages 59777-59779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-24259]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62969; File No. SR-BX-2010-064]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Order Granting Accelerated Approval to a Proposed Rule
Change To Establish Pricing for 10Gb Direct Circuit Connections and To
Codify Pricing for Direct Circuit Connections Capable of Supporting Up
to 1Gb for Customers Who Are Not Co-Located in the Exchange's
Datacenter
September 22, 2010.
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 September 10, 2010, The NASDAQ OMX BX, Inc. (the ``Exchange'' or
``BX'') 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, and is approving the
proposal on an accelerated basis.
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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 the
Substance of the Proposed Rule Change
The Exchange is filing with the Commission a proposed rule change
to establish pricing for 10Gb direct circuit connections and to codify
pricing for direct circuit connections capable of supporting up to 1Gb
for customers who are not co-located in the Exchange's datacenter. The
text of the proposed rule change is below. Proposed new language is
underlined and proposed deletions are in brackets [sic].\3\
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\3\ Changes are marked to the rule text that appears in the
electronic manual of BX found at http://nasdaqomxbx.cchwallstreet.com.
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* * * * *
7051. Direct Connectivity to BX
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Description Installation Fee Ongoing Monthly Fee
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Direct Circuit Connection to BX (10Gb)........................ $1,000 $5000
Direct Circuit Connection to BX (supports up to 1Gb).......... $1000 $1000
Optional Cable Router......................................... $925
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[[Page 59778]]
(b) and (c) Not applicable [sic].
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 III 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
a. Purpose
The Exchange is re-proposing to establish fees for direct 10Gb
circuit connections, and to codify fees for direct circuit connections
capable of supporting up to 1Gb, for customers who are not co-located
at the Exchange's datacenter.\4\ Currently, the Exchange 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 is establishing the same fees for
non co-located customers with a 10Gb circuit.\5\
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\4\ The Exchange filed SR-BX-2010-043 seeking to establish and
codify the fees set forth in this filing. That proposal was
published for comment and approved by the Commission. The approval,
however, pre-dated the BX Board's approval of the proposal. As such,
BX is re-filing the proposal and seeking accelerated approval.
\5\ BX provides an additional 1Gb copper connection option to
the Exchange for co-located customers. Given the technological
constraints of copper connections over longer distances, the
Exchange does not offer a copper connection option to users outside
of its datacenter.
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The Exchange 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. 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, for non co-located customers the Exchange charges an optional
installation fee of $925 if the customer chooses to use an on-site
router.
b. Statutory Basis
BX believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\6\ in general, and with Sections
6(b)(5) of the Act,\7\ in particular, in that the proposal is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, 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. In particular, the proposal
will provide greater transparency into the connectivity options
available to market participants.
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\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(5).
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The Exchange also believes that the proposed rule change is
consistent with the provisions of Section 6 of the Act,\8\ in general,
and with Section 6(b)(4) of the Act,\9\ 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 or system which the Exchange operates or controls. The filing
codifies and makes transparent the fees imposed for direct connections
to non co-located customers. These fees are uniform for all such
customers and are either comparable to fees charged to co-located
customers or vary due to different costs associated with providing
service to the two customer types.
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
BX 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, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments on the proposed rule change were neither solicited
nor received.
III. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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 [email protected]. Please include
File Number SR-BX-2010-064 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BX-2010-064. 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 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
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-2010-064 and should be
submitted on or before October 19, 2010.
IV. Commission's Findings and Order Granting Accelerated Approval of
Proposed Rule Change
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
[[Page 59779]]
exchange.\10\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(4) of the Act,\11\ 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,\12\ 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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\10\ 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).
\11\ 15 U.S.C. 78f(b)(4).
\12\ 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.
The substance of the proposed rule has already been subject to full
notice and public comment, and no comments were received.\13\ Moreover,
similar pricing is already in effect for these same services being
offered by BX's sister markets, the NASDAQ Stock Market, LLC and NASDAQ
OMX PHLX, Inc.\14\ Accordingly, the Commission finds good cause,
pursuant to Section 19(b)(2) of the Act, for approving the proposed
rule change prior to the thirtieth day after the date of publication of
notice of filing thereof in the Federal Register.
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\13\ See supra note 4.
\14\ See Securities Exchange Act Release Nos. 62663 (August 9,
2010), 75 FR 49543 (August 13, 2010) (SR-NASDAQ-2010-77) (Order
approving a NASDAQ Stock Market, LLC proposed rule change relating
to pricing for direct circuit connections); 62639 (August 4, 2010),
75 FR 48391 (August 10, 2010) (SR-Phlx-2010-89) (Order approving a
NASDAQ OMX PHLX, Inc. proposed rule change relating to pricing for
direct circuit connections).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\15\ that the proposed rule change (SR-BX-2010-064) be, and hereby
is, approved on an accelerated basis.
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\15\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading & Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-24259 Filed 9-27-10; 8:45 am]
BILLING CODE 8010-01-P