[Federal Register Volume 85, Number 186 (Thursday, September 24, 2020)]
[Notices]
[Pages 60276-60279]
[FR Doc No: 2020-21047]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89925; File No. SR-NYSE-2020-75]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Add Commentary .02 to Rule 7.35

September 18, 2020.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on September 4, 2020, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the self-regulatory
organization. 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\ 15 U.S.C. 78a.
    \3\ 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 add Commentary .02 to Rule 7.35 to provide
that, for a temporary period that begins on September 4, 2020 and ends
on the earlier of a full reopening of the Trading Floor facilities to
DMMs or after the Exchange closes on September 30, 2020, for a Direct
Listing Auction, Rule 7.35(c)(3) will not be in effect, and the
Exchange will disseminate Auction Imbalance Information if a security
is a Direct Listing and has not had its Direct Listing Auction. The
proposed rule change is available on the Exchange's website at
www.nyse.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 self-regulatory organization
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 those 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 parts of
such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to add Commentary .02 to Rule 7.35 to provide
that, for a temporary period that begins on September 4, 2020 and ends
on the earlier of a full reopening of the Trading Floor facilities to
DMMs or after the Exchange closes on September 30, 2020, for a Direct
Listing Auction, Rule 7.35(c)(3) will not be in effect, and the
Exchange will disseminate Auction Imbalance Information if a security
is a Direct Listing and has not had its Direct Listing Auction.
Background
    To slow the spread of COVID-19 through social-distancing measures,
on March 18, 2020, the CEO of the Exchange made a determination under
Rule 7.1(c)(3) that, beginning March 23, 2020, the Trading Floor
facilities located at 11 Wall Street in New York City would close and
the Exchange would move, on a temporary basis, to fully electronic
trading.\4\ On May 14, 2020, the CEO of the Exchange made a
determination under Rule 7.1(c)(3) to reopen the Trading Floor on a
limited basis on May 26, 2020 to a subset of Floor brokers, subject to
safety measures designed to prevent the spread of COVID-19.\5\ On June
15, 2020, the CEO of the Exchange made a determination under Rule
7.1(c)(3) to begin the second phase of the Trading Floor reopening by
allowing DMMs to return on June 17, 2020, subject to safety measures
designed to prevent the spread of COVID-19.\6\ Consistent with these
safety measures, both DMMs and Floor broker firms continue to operate
with reduced staff on the Trading Floor.
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    \4\ Pursuant to Rule 7.1(e), the CEO notified the Board of
Directors of the Exchange of this determination. The Exchange's
current rules establish how the Exchange will function fully-
electronically. The CEO also closed the NYSE American Options
Trading Floor, which is located at the same 11 Wall Street
facilities, and the NYSE Arca Options Trading Floor, which is
located in San Francisco, CA. See Press Release, dated March 18,
2020, available here: https://ir.theice.com/press/press-releases/all-categories/2020/03-18-2020-204202110.
    \5\ See Securities Exchange Act Release No. 88933 (May 22,
2020), 85 FR 32059 (May 28, 2020) (SR-NYSE-2020-47) (Notice of
filing and immediate effectiveness of proposed rule change).
    \6\ See Securities Exchange Act Release No. 89086 (June 17,
2020) (SR-NYSE-2020-52) (Notice of filing and immediate
effectiveness of proposed rule change).
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    On April 21, 2020, the Exchange added Commentary .01 to Rule 7.35,
which has since been amended to provide: \7\
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    \7\ See Securities Exchange Act Release Nos. 88725 (April 22,
2020), 85 FR 23583 (April 28, 2020) (SR-NYSE-2020-37) (amending Rule
7.35 to add Commentary .01) and 89199 (June 30, 2020), 85 FR 40718
(July 7, 2020) (SR-NYSE-2020-56) (extending the temporary period
for, among other rules, Commentary .01 to Rule 7.35).
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    For a temporary period that begins on April 21, 2020 and ends on
the earlier of the reopening of the Trading Floor facilities or after
the Exchange closes on May 15, 2020, for an IPO Auction, paragraph
(c)(3) of this Rule will not be in effect, and the Exchange will
disseminate Auction Imbalance Information if a security is an IPO and
has not had its IPO Auction. Such Auction Imbalance Information will be
disseminated in the same manner that Auction Imbalance Information is
disseminated for a Core Open Auction, as set forth in Rule 7.35A(e)(1)-
(3), except that references to the term ``Consolidated Last Sale
Price'' in Rule 7.35A(e)(3) and subparagraphs (A)-(C) of that Rule will
be replaced with the term ``the security's offering price.''
Proposed Rule Change
    The Exchange proposes to amend Rule 7.35 to add Commentary .02 to
provide that, just as with IPO Auctions, for a temporary period that
begins on September 4, 2020 and ends on the earlier of a full reopening
of the Trading Floor facilities to DMMs or after the Exchange closes on
September 30, 2020, the Exchange would disseminate Auction Imbalance
Information for a Direct Listing Auction.
    Rule 7.35(c)(3) provides that the Exchange will not disseminate
Auction Imbalance Information if a security is an IPO or Direct Listing
and has not had its IPO Auction or Direct Listing Auction. This Rule is
based on a change that the Exchange made in 2015 to reflect that
Exchange systems would not publish Order Imbalance Information for an
IPO.\8\ In 2015, the rationale provided for excluding IPOs from Order
Imbalance Information was because Exchange systems at the time did not
have access to interest represented in the crowd by Floor brokers.
However, since the Exchange transitioned to Pillar in August 2019, all
Floor broker interest intended for a Core Open Auction, IPO Auction, or
Direct Listing Auction must be entered electronically and therefore
Exchange systems would be able to include orders from Floor brokers for
such Auctions in the Auction Imbalance Information.
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    \8\ See Securities Exchange Act Release No. 74837 (April 29,
2015), 80 FR 25741 (May 5, 2015) (SR-NYSE-2015-19) (Notice of filing
and immediate effectiveness of proposed rule change).
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    The Auction Imbalance Information that the Exchange proposes to
disseminate for a Direct Listing Auction would be the same information
that is disseminated in advance of a Core Open Auction, as set forth in
Rule 7.35A(e), except for how the Imbalance Reference Price would be
determined. Rule 7.35A(e)(1) provides that the Exchange begins
disseminating Auction Imbalance Information for a Core Open Auction at
8:00 a.m., and would do the same for a Direct Listing Auction. In
addition, Rule 7.35A(e)(2) specifies the content of the Auction
Imbalance Information that is disseminated in advance of a Core Open
Auction, which would be the same content for a Direct Listing
Auction.\9\ Finally, Rule 7.35A(e)(3) specifies the Imbalance Reference
Price, which for a Core Open Auction is the Consolidated Last Sale
Price. The Exchange proposes that the Imbalance Reference Price for a
Direct Listing would be the same as the security's Indication Reference
Price, as determined pursuant to Rule 7.35A(d)(2)(A)(iv), and that such
Imbalance Reference Price would be updated as provided for in Rule
7.35A(e)(3)(A)-(C).\10\
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    \9\ For Core Open Auctions, the Exchange disseminates Total
Imbalance, Side of Total Imbalance, Paired Quantity, and Continuous
Book Clearing Price, as these terms are defined in Rule 7.35(a)(4).
    \10\ As provided for in Rule 7.35A(e)(3), the Imbalance
Reference Price changes if a pre-opening indication has been
published for such Auction. For example, if the security's
Indication Reference Price as determined under Rule
7.35A(d)(2)(A)(iv) were lower than the bid price of a pre-opening
indication, the Imbalance Reference Price for that Direct Listing
Auction would be the pre-opening indication bid price, and not the
security's Indication Reference Price. See, e.g., Rule
7.35A(e)(3)(A).
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    Proposed Commentary .02 to Rule 7.35 would provide:
    For a temporary period that begins on September 4, 2020 and ends on
the earlier of a full reopening of the Trading Floor facilities to DMMs
or after the Exchange closes on September 30, 2020, for a Direct
Listing Auction, paragraph (c)(3) of this Rule will not be in effect,
and the Exchange will disseminate Auction Imbalance Information if a
security is a Direct Listing and has not had its Direct Listing
Auction. Such Auction Imbalance Information will be disseminated in the
same manner that

Auction Imbalance Information is disseminated for a Core Open Auction,
as set forth in Rule 7.35A(e)(1)-(3), except that with respect to a
Direct Listing Auction, references to the term ``Consolidated Last Sale
Price'' in Rule 7.35A(e)(3) and subparagraphs (A)-(C) of that Rule will
be replaced with the term ``the security's Indication Reference Price
as determined under Rule 7.35A(d)(2)(A)(iv).''
    The Exchange also proposes to make a non-substantive change to
Commentary .01 to Rule 7.35 to specify that the change to how the
Imbalance Reference Price would be determined under that Commentary
would be specific to an IPO Auction.
    The Exchange has tested the ability to disseminate such Auction
Imbalance Information on the day of Direct Listing Auction. In
addition, because such Auction Imbalance is already disseminated on a
daily basis in connection with Core Open Auctions, the Exchange
believes that member organizations that subscribe to such proprietary
data feeds would be able to receive, read, and respond to Auction
Imbalance Information for a Direct Listing Auction without needing to
make any changes. Accordingly, the Exchange would be able to implement
the proposed rule change immediately upon effectiveness of this filing.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the
Act,\11\ in general, and furthers the objectives of Section 6(b)(5) of
the Act,\12\ in particular, in that it 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 facilitating transactions in securities, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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    To reduce the spread of COVID-19, the CEO of the Exchange made a
determination under Rule 7.1(c)(3) that beginning March 23, 2020, the
Trading Floor facilities located at 11 Wall Street in New York City
would close and the Exchange would move, on a temporary basis, to fully
electronic trading. On May 14, 2020, the CEO made a determination under
Rule 7.1(c)(3) that, beginning May 26, 2020, the Trading Floor would be
partially reopened to allow a subset of Floor brokers to return to the
Trading Floor. On June 15, 2020, the CEO made a determination under
Rule 7.1(c)(3) that, beginning June 17, 2020, DMM units may choose to
return a subset of staff to the Trading Floor. Consistent with these
safety measures, both DMMs and Floor broker firms continue to operate
with reduced staff on the Trading Floor.
    The Exchange believes that the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market and
a national market system because, during a temporary period when both
Floor broker firms and DMMs are operating with reduced staff on the
Trading Floor, it would promote fair and orderly Direct Listing
Auctions for the Exchange to disseminate Auction Imbalance Information
on the same terms that such information is disseminated for a Core Open
Auction. Because of reduced Floor broker staff, there are fewer
individuals on the Trading Floor who would have access to imbalance
information for a Direct Listing Auction to provide to customers.
Moreover, such Auction Imbalance Information would include Floor broker
interest eligible to participate in such Direct Listing Auction. The
Exchange therefore believes that the Auction Imbalance Information
would provide more granular information in advance of a Direct Listing
Auction than would otherwise be available during this temporary period
when there is reduced staff on the Trading Floor. As described above,
the Auction Imbalance Information disseminated via the proprietary data
feeds would begin being published at 8:00 a.m. ET, would be published
every second, and would include Total Imbalance, Side of Total
Imbalance, Paired Quantity, and Continuous Book Clearing Price
information. The Exchange therefore believes that proposed rule change
would promote transparency in advance of a Direct Listing Auction,
which would benefit investors and the public.
    The Exchange believes that, by clearly stating that this relief
will be in effect through the earlier of a full reopening of the
Trading Floor facilities to DMMs or the close of the Exchange on
September 30, 2020, market participants will have advance notice that
the Exchange would disseminate Auction Imbalance Information for a
Direct Listing Auction that may occur during that period.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
not designed to address any competitive issues but rather is designed,
during a temporary period when both Floor broker firms and DMMs are
operating with reduced staff on the Trading Floor, to ensure fair and
orderly Direct Listing Auctions by providing that the Exchange would
disseminate Auction Imbalance Information for such auctions via its
proprietary data feeds during a temporary period.

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

    No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \13\ and Rule 19b-4(f)(6) thereunder.\14\
Because the 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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \13\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \14\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\16\ the Commission
may 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.\17\ The Commission
finds that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest. The Exchange believes
that a number of member organizations that currently subscribe to the
Exchange's proprietary data feeds are technologically prepared to
receive, read, and respond to Auction Imbalance Information for a
Direct Listing. The Exchange further states that two companies recently
filed registration

statements with the Commission and could potentially list their
securities on the Exchange via a Direct Listing within 30 days from the
date of this filing. The Commission believes that dissemination of
Auction Imbalance Information as proposed is reasonably designed to
promote transparency in advance of a Direct Listing Auction and to
benefit investors and the public. Accordingly, the Commission hereby
waives the operative delay and designates the proposal operative upon
filing.\18\
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    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule change's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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    At any time within 60 days of the filing of such 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 under
Section 19(b)(2)(B) \19\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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    \19\ 15 U.S.C. 78s(b)(2)(B).
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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 email to<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2020-75 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-NYSE-2020-75. 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-NYSE-2020-75 and should be submitted on
or before October 15, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-21047 Filed 9-23-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: September 3, 2010 (Volume 75, Number 171)]
[Notices]
[Page 54197]
[DOCID:fr03se10-109]

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SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington,
DC 20549-0213.
Extension:
    Rule 302; SEC File No. 270-453; OMB Control No. 3235-0510.

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget a request for approval of extension of the previously
approved collection of information provided for in Rule 302 (17 CFR
242.302) of Regulation ATS (17 CFR 242.300 et seq.) under the
Securities and Exchange Act of 1934 (``Act'') (15 U.S.C. 78a et seq.).
    Regulation ATS sets forth a regulatory regime for ``alternative
trading systems'' (``ATSs''), which are entities that carry out
exchange functions but which are not required to register as national
securities exchanges under the Act. In lieu of exchange registration,
an ATS can instead opt to register with the Commission as a broker-
dealer and, as a condition to not having to register as an exchange,
must instead comply with Regulation ATS. Rule 302 of Regulation ATS (17
CFR 242.302) describes the recordkeeping requirements for ATSs. Under
Rule 302, ATSs are required to make a record of subscribers to the ATS,
daily summaries of trading in the ATS, and time-sequenced records of
order information in the ATS.
    The information required to be collected under Rule 302 should
increase the abilities of the Commission, state securities regulatory
authorities, and the self-regulatory organizations (``SROs'') to ensure
that ATSs are in compliance with Regulation ATS as well as other
applicable rules and regulations. If the information is not collected
or collected less frequently, the regulators would be limited in their
ability to comply with their statutory obligations, provide for the
protection of investors, and promote the maintenance of fair and
orderly markets.
    Respondents consist of ATSs that choose to register as broker-
dealers and comply with the requirements of Regulation ATS. There are
currently 81 respondents. These respondents will spend approximately
10,530 hours per year (81 respondents at 130 burden hours/respondent)
to comply with the recordkeeping requirements of Rule 302. At an
average cost per burden hour of $59, the resultant total related cost
of compliance for these respondents is $621,270.00 per year (10,530
burden hours multiplied by $59/hour).
    Compliance with Rule 302 is mandatory. The information required by
Rule 302 is available only for the examination of the Commission staff,
state securities authorities, and the SROs. Subject to the provisions
of the Freedom of Information Act, 5 U.S.C. Sec.  522 (``FOIA''), and
the Commission's rule (17 CFR 200.80(b)(4)(iii)), the Commission does
not generally publish or make available information contained in any
reports, summaries, analyses, letters, or memoranda arising out of, in
anticipation of, or in connection with an examination or inspection of
the books and records of any person or any other investigation.
    ATSs are required to preserve any records, for at least three
years, made in the process of complying with the requirements set out
in Rule 302.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid control number.
    Comments should be directed to: (i) Desk Officer for the Securities
and Exchange Commission, Office of Information and Regulatory Affairs,
Office of Management and Budget, Room 10102, New Executive Office
Building, Washington, DC 20503, or by sending an e-mail to: Shagufta_
<EMAIL_ADDRESS>and (ii) Charles Boucher, Director/Chief Information
Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon,
6432 General Green Way, Alexandria, VA 22312 or send an e-mail to:
<EMAIL_ADDRESS>Comments must be submitted within 30 days of this
notice.

    Dated; August 30, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-22027 Filed 9-2-10; 8:45 am]
BILLING CODE 8010-01-P


[Federal Register Volume 78, Number 177 (Thursday, September 12, 2013)]
[Notices]
[Pages 56249-56251]
[FR Doc No: 2013-22165]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70339; File No. SR-BX-2013-051]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend
Fees Assessed for Connectivity to the Exchange Under Rule 7015 and
Amend the Fees Assessed and Credits Paid Under Exchange Rule 7018(a)

September 6, 2013.
    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 28, 2013, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``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 rule change to amend fees assessed for
connectivity to the Exchange under Rule 7015. The Exchange is also
amending the fees assessed and credits paid under Exchange Rule 7018(a)
for executing certain trades that either add liquidity to or remove
liquidity from the Exchange's order book in securities priced at $1 per
share or greater. The text of the proposed rule change is also
available on the Exchange's Web site at http://nasdaqomxbx.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 Exchange is proposing to modify two sets of fees: (1)
Connectivity fees assessed under Exchange Rule 7015, and (2) execution
fees and credits assessed or granted under Exchange Rule 7018(a) with
respect to securities priced at $1 per share or greater.
    Connectivity Fees. The Exchange is proposing to increase the fee
assessed for use of TCP ITCH data feed pairs to connect to the BX
System. TCP ITCH data feed pairs are a type of port pair \3\ that firms
may subscribe to receive market data through a private (i.e., not
shared) connection to BX. By contrast, a firm may subscribe to a
Multicast ITCH data feed pair,\4\ which provides access to a shared
distribution of market data that is distributed to all subscribers
simultaneously. BX assesses a fee of $400 per month for each port pair
used to connect to BX using protocols other than Multicast ITCH.
Currently, subscription to a TCP ITCH data feed pair is covered by this
fee. Unlike Multicast ITCH data, TCP ITCH data requires substantially
greater hardware infrastructure to support subscribers because BX must
support each individual TCP ITCH connection, including the transmission
of the large volume of market data through each port. By contrast, BX
transmits market data for Multicast ITCH through a single point, which
is accessed by all subscribers. In light of increased costs resulting
from a need to support the hardware and support demands of the service,
the Exchange is proposing to increase the fees for subscription to a
TCP ITCH data port from $400 per month, per port pair to $750 per
month, per port pair.
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    \3\ BX uses the term ``data feed pair'' herein and in the rule
as a more precise description of the intended use and functionality
of the port pair.
    \4\ For a fee of $1,000 per month for software-based TotalView-
ITCH or $2,500 per month for combined software- and hardware-based
TotalView-ITCH.
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    BX is also proposing to increase the $400 monthly fee assessed
under Rule 7015 for port pairs used to enter orders in Exchange trading
systems to $500 per month. The change does not affect ports used to
receive market data, to enter quotes, or to enter trade reports into
the FINRA/NASDAQ Trade Reporting Facility. The change applies both to
members that obtain ports for direct access, and non-member service
bureaus that act as a conduit for orders entered by BX members that are
their customers.
    BX notes that it has not increased the $400 fee since its adoption
in January 2009.\5\ When the Exchange initially adopted its fees, it
set its fee levels appropriate to the start-up nature of the Exchange's
new equities trading platform and in manner designed to attract order
flow to the Exchange. Since that time, the BX has matured as a market,
resulting in higher volumes. As a consequence, the Exchange has
experienced greater hardware demands and costs associated with offering
connectivity options. Accordingly, BX believes that an increase in
access services fees is now warranted to help ensure that its market
data technology continues to perform at a high level of responsiveness
and efficiency.
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    \5\ Securities Exchange Act Release No. 61595 (Feb. 2, 2009), 74
FR 6441 (Feb. 9, 2009) (SR-BX-2009-004).
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    Execution Fees and Credits. The Exchange proposes to amend four
fees and credits governed by Rule 7018(a), which applies to securities
priced at $1 per share or greater. The first three adjustments apply to
credits the Exchange offers members for entering order that accesses
liquidity in the NASDAQ OMX BX Equities System. The first applies to
order entered by a member through a BX Equities System Market
Participant Identifier (``MPID'') through which the member (i) accesses
an average daily volume of 3.5 million or more shares of liquidity, or
(ii) provides an average daily volume of 1 million or more shares of
liquidity during the month (excluding an order that executes against a
midpoint pegged order). Currently, the credit pays $0.0014 per share
executed. BX is lowering that credit to $0.0013 per share executed.
    The second adjustment applies to order entered by a member through
a BX Equities System MPID through which the member provides an average
daily volume of at least 25,000, but less than 1 million, shares of
liquidity during the month (excluding an order that executes against a
midpoint pegged order). Currently, the credit offered is $0.0010 per
share executed, and BX proposes to increase that credit to $0.0011 per
share executed.
    The third adjustment is an increase from $0.0004 to $0.0007 in
credit per share executed for all orders entered in securities priced
at $1 per share or greater that accesses liquidity in the NASDAQ OMX BX
Equities System. This increase is a ``catch-all'' that applies to all
other orders that access liquidity in securities priced $1 per share or
greater that are not specified elsewhere in Rule 7018(a) (i.e., not in

the liquidity program described in the preceding two paragraphs, not
midpoint peg orders, and not any of the multiple order types otherwise
specified).
    The fourth adjustment to the fee schedule for the BX Equities
Market is an decrease from $0.0015 to $0.0014 per share executed in the
charge for providing liquidity through the NASDAQ OMX BX Equities
System for Displayed order entered by a Qualified Liquidity Provider
through a Qualified MPID. The Exchange charges a reduced fee for
members providing liquidity if they meet the criteria of a ``Qualified
Liquidity Provider.'' These criteria (which BX is not modifying)
include requirements that the member access and provide volumes of
liquidity in excess of certain levels, expressed as a percentage of
Consolidated Volume.\6\ BX is now proposing to further reduce the fee
changed under that program from $0.0015 to $0.0014 per share executed.
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    \6\ ``Consolidated Volume'' is the consolidated volume of shares
reported to all consolidated transaction reporting plans by all
exchanges and trade reporting facilities during a month.
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2. Statutory Basis
    BX believes that the proposed rule change is consistent with the
provisions of Section 6 of the Act,\7\ in general, and Section 6(b)(4)
of the Act,\8\ in particular, because 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 that the
Exchange operates or controls, and it does not unfairly discriminate
between customers, issuers, brokers or dealers.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
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    The proposed connectivity fee increases are reasonable because they
reflect the increased costs associated with offering connectivity
options on BX. The proposed fees are equitable and not unfairly
discriminatory because the Exchange is assessing the fees equally among
subscribers to the service. Moreover, the proposed fees are not
unfairly discriminatory as it enables the Exchange to allocate the
increased costs of connectivity to the Exchange to those who subscribe
to the service. The Exchange believes that the increased fees will
enable it to cover its costs and earn an appropriate return on its
investment in market technology and services.
    With respect to execution fees under Exchange Rule 7018(a), the
Exchange believes that the minor fee modifications provide for the
equitable allocation of reasonable dues, fees and other charges among
members and issuers and other persons using any facility or system
which BX operates or controls, and are not designed to permit unfair
discrimination between customers, issuers, brokers, or dealers. In
particular, with respect to the credits offered for orders executed
that access liquidity on BX in securities priced at $1 or greater, the
Exchange notes that decreasing the credit paid to members qualifying
for the highest volume tier and increasing the credit for members
qualifying for the lower tier or for no tier (as is the case with the
``catch-all'' rate), will encourage more members to access liquidity
from BX. BX expects that small and medium-sized member firms will
benefit most from the proposed changes. Additionally, by increasing the
overall quantities of executed orders that access liquidity, as BX
believes will occur, BX expects to also increase total liquidity
available on its market, increase total order interaction on its order
book, and improve overall execution quality for all members.
    With respect to the decrease from $0.0015 to $0.0014 per share
executed in the charge for providing liquidity through the NASDAQ OMX
BX Equities System for Displayed order entered by a Qualified Liquidity
Provider through a Qualified MPID, the Exchange believes that the
proposed modification 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 BX operates or
controls, and are not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. In particular, the Exchange
first notes the proposed changes do not modify the requirements with
respect to the current $0.0015 per share executed rate for Displayed
orders that provide liquidity. The current Liquidity Provider program
has itself been accepted as consistent with the Exchange Act.
    Additionally, the decrease in the applicable rate for such
Displayed orders is reasonable because it will further encourage
members to qualify for the program, and increase the total volume of
orders displayed on the Exchange. Increased display of liquidity on the
Exchange will benefit all members, as described above. Moreover, the
Exchange continues to offer an even more favorable charge to members
using midpoint pegged orders, which may be used by all members,
regardless of volume.
    The proposed fee reduction is consistent with an equitable
allocation of fees because it is consistent with the established
practice at a number of national securities exchanges of providing more
favorable fee economics to members that contribute to market quality
and the Exchange's market share by achieving certain volume
requirements. A member that provides and displays a comparatively large
volume of liquidity is demonstrating its commitment to the viability of
BX's market model by posting orders at prices that attract members
seeking liquidity. Accordingly, BX believes that it is equitable for
the fees charged to such a member to be more favorable than the fees
charged to members providing lower volumes of liquidity. The Exchange
further believes that the change is not unfairly discriminatory because
the associated volume requirements are not very high and because the
Exchange provides an alternative means of paying a lower fee for orders
that provide liquidity.
    The Exchange notes that it operates in a highly competitive market,
in which market participants can readily favor competing venues if they
deem fee levels at a particular venue to be excessive. Accordingly, if
the Exchange's proposed fee is deemed excessive, a market participant
currently subscribed to the data service may elect to cancel its
subscription and either subscribe to another connectivity option or
route its order flow to another competitor exchange with lower fees.

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. BX
notes that it operates in a highly competitive market in which market
participants can readily favor competing venues if they deem fee levels
at a particular venue to be excessive, or rebate opportunities
available at other venues to be more favorable. In such an environment,
BX must continually adjust its fees to remain competitive with other
exchanges and with alternative trading systems that have been exempted
from compliance with the statutory standards applicable to exchanges.
Because competitors are free to modify their own fees in response, and
because market participants may readily adjust their order routing
practices, BX believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited.
    In this instance, the increased subscription fee is reflective of
the increased costs associated with offering the associated
connectivity options. As

such, the fees are targeted to apply to only those that subscribe to,
and derive benefit from, subscription to the connectivity options. In
terms of TCP ITCH data feed fee, the Exchange will continue to offer
other data connectivity options and firms may seek out third party
providers of such data as well, should the firms determine that the
cost of subscribing to the TCP ITCH data feed is excessive.
    With respect to the execution fees and credits, the minor
modifications described herein are a direct response to competition,
which should be viewed as a positive signal that a competitive market
exists. If the changes are unattractive to market participants, it is
likely that BX will lose market share as a result. Accordingly, BX does
not believe that the proposed changes will impair the ability of
members or competing order execution venues to maintain their
competitive standing in the financial markets.

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

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\9\ 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.
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    \9\ 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 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_ADDRESS>Please include
File Number SR-BX-2013-051 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-2013-051. 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 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 10:00 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; 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-2013-051 and
should be submitted on or before October 3, 2013.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
Kevin M O'Neill,
Deputy Secretary.
[FR Doc. 2013-22165 Filed 9-11-13; 8:45 am]
BILLING CODE 8011-01-P