[Federal Register Volume 75, Number 237 (Friday, December 10, 2010)]
[Notices]
[Pages 77029-77031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31100]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63442; File No. SR-BX-2010-081]
Self-Regulatory Organizations; The NASDAQ OMX BX Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
Fees for Direct Access to Exchange Data
December 6, 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 November 24, 2010, The NASDAQ BX OMX, Inc. (``BX'' or ``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 BX. 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 the
Substance of the Proposed Rule Change
BX proposes an amendment to the fee schedule to assess ``direct
access'' fees on customers receiving Exchange data within the Exchange
co-location facility. The rule filing also deletes outdated verbiage in
the fee schedule to eliminate confusion regarding application of the
fees, and corrects a minor typographical error in the rule. BX will
implement the proposed change on December 1, 2010. The text of the
proposed rule change is available from the principal office of the
Exchange, at the Commission's Public Reference Room and also on the
Exchange's Internet Web site at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, BX 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. BX 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
BX is amending its fee schedule to correct an anomaly that
effectively exempts certain customers residing within the Exchange's
co-location facility from paying a monthly fee for direct access to
Exchange data, while customers that receive data from an extranet and
reside outside the co-location facility are assessed the fee. The
inequity is a result of the definition of ``direct access'' in the fee
schedule, which does not by its terms clearly apply to data feeds
provided to customers through distributors located within the co-
located facility. This rule filing will expand the definition of
``direct access'' and thereby operate to assess the same fee on all
firms that have access to the Exchange's raw data feeds, whether co-
located or not. It will also delete terms that are obsolete or
generally limiting, given the evolution of technologies and systems
through which data may be accessed.
The Exchange, like other data providers, assesses fees for its real
time market data. In general, a customer that receives a data feed
directly from the Exchange is assessed a ``direct access'' fee. If the
customer then distributes the data, it is a ``distributor'' as defined
[[Page 77030]]
under the fee schedule and pays an ``internal'' or ``external''
distributor fee, depending upon whether it distributes the data
internally or externally. A ``distributor'' is broadly defined to
include any entity that distributes the Exchange's data, whether it
receives the data feed directly from the Exchange or indirectly through
another entity. Distributor fees apply to distributors located within
the Exchange's co-location facility as well as those outside of it.
The definition of what constitutes ``direct access,'' however, is
limited to several types of communications connections, none of which
accurately describe the systems by which data is delivered through
distributors located within the co-location facility to their customers
also located within the co-location facility. As a result, the
distributor's customers in the co-location facility are not charged a
direct access fee, even though they receive the Exchange's data in its
raw data format and have the same low latency data access as non-co-
located extranet customers that pay the Direct Access fee.
To correct this disparity, this rule filing will include within the
definition of ``direct access'' the receipt of Exchange data within the
co-location facility. It will also delete terms that, while describing
various means by which data is currently accessed, do not clearly or
adequately describe all viable technological means of accessing data.
More specifically, the terms ``Exchange-operated Web site, system or
application'' are deleted, as they are limiting terms that do not
clearly encompass potential technological means of accessing Exchange
data. Their elimination does not impact the fees of any customer
currently assessed a Direct Access fee, but should preclude the need
for future rule changes to the definition of direct access, as the
means by which those same customers access data evolve over time.
The filing also corrects minor typographical errors in the fee
schedule, in the interest of clarity and consistency.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\3\ in general, and with
Sections 6(b)(5) of the Act,\4\ in particular. 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. The filing permits
transparent, uniform fees for direct access to Exchange data for all
customers, whether co-located or not.
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\3\ 15 U.S.C. 78f.
\4\ 15 U.S.C. 78f(b)(5).
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In addition, the Exchange believes that the proposed rule change is
consistent with the provisions of Section 6 of the Act,\5\ in general,
and with Section 6(b)(4) of the Act,\6\ 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. In
particular, the Exchange notes that the amendment corrects an anomaly
that effectively exempts certain customers receiving the data from
paying a direct access fee.
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\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(4).
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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, as amended.
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)(ii) of the Act.\7\ 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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\7\ 15 U.S.C. 78s(b)(3)(a)(ii).
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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, 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-2010-081 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-2010-081. 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 such 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-2010-081, and should be submitted on
or before January 3, 2011.
[[Page 77031]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
Florence E. Harmon,
Deputy Secretary.
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\8\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2010-31100 Filed 12-9-10; 8:45 am]
BILLING CODE 8011-01-P