[Federal Register Volume 85, Number 200 (Thursday, October 15, 2020)]
[Notices]
[Pages 65456-65458]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-22866]



[[Page 65456]]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90120; File No. SR-BX-2020-028]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Eliminate the 
Fee for BX's TradeInfo Interface in Options 7

October 9, 2020.
    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 30, 2020, Nasdaq 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to eliminate the fee for BX's TradeInfo 
interface in Options 7 in connection with decommissioning this 
functionality, and to credit any TradeInfo fees paid by Participants 
for the month of September 2020.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, 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 eliminate the fee for 
BX's TradeInfo interface in Options 7 in connection with 
decommissioning this functionality, and to credit any TradeInfo fees 
paid by Participants for the month of September 2020.
    While these amendments are effective upon filing, the Exchange has 
designated the proposed amendments to be operative on October 1, 2020.
    TradeInfo is a user interface which permits a Participant to: (i) 
Search all orders submitted in a particular security or all orders of a 
particular type, regardless of their status (open, canceled, executed, 
etc.); (ii) cancellation of open orders at the order, port or firm 
mnemonic level; (iii) a view of orders and executions; and (iv) 
download of orders and executions for recordkeeping purposes.\3\ The 
Exchange notes that this interface is not utilized by BX Participants 
at this time \4\ and has therefore separately filed to decommission 
TradeInfo effective September 14, 2020 to coincide with the BX 
technology migration to enhanced Nasdaq, Inc. functionality.\5\ As 
noted in that filing, information that is currently available within 
TradeInfo can be obtained from FIX,\6\ FIX Drop \7\ and the Clearing 
Trade Interface,\8\ which are available to all Participants.\9\
---------------------------------------------------------------------------

    \3\ See Options 3, Section 23(b)(2).
    \4\ There are five Participants currently billed for TradeInfo, 
but no Participant logged into TradeInfo in 2020, including these 
five Participants.
    \5\ See Securities Exchange Act Release No. 89819 (September 10, 
2020), 85 FR 57893 (September 16, 2020) (SR-BX-2020-027). The 
Exchange has also issued an Options Trader Alert to provide notice 
of TradeInfo's decommission. See Options Trader Alert #2020-23.
    \6\ ``Financial Information eXchange'' or ``FIX'' is an 
interface that allows Participants and their Sponsored Customers to 
connect, send, and receive messages related to orders and auction 
orders and responses to and from the Exchange. Features include the 
following: (1) Execution messages; (2) order messages; and (3) risk 
protection triggers and cancel notifications. See Options 3, Section 
7(d)(1)(A).
    \7\ FIX DROP is a real-time order and execution update message 
that is sent to a Participant after an order has been received/
modified or an execution has occurred and contains trade details 
specific to that Participant. The information includes, among other 
things, the following: (i) Executions; (ii) cancellations; (iii) 
modifications to an existing order and (iv) busts or post-trade 
corrections. See Options 3, Section 23(b)(3).
    \8\ The Clearing Trade Interface or ``CTI'' is a real-time 
clearing trade update message that is sent to a Participant after an 
execution has occurred and contains trade details specific to that 
Participant. The information includes, among other things, the 
following: (i) The Clearing Member Trade Agreement or ``CMTA'' or 
The Options Clearing Corporation or ``OCC'' number; (ii) Exchange 
badge or house number; (iii) the Exchange internal firm identifier; 
(iv) an indicator which will distinguish electronic and non-
electronically delivered orders; (v) liquidity indicators and 
transaction type for billing purposes; and (vi) capacity. See 
Options 3, Section 23(b)(1).
    \9\ See supra note 5. Today, all Participants have at least FIX, 
FIX DROP, or CTI.
---------------------------------------------------------------------------

    In connection with retiring TradeInfo on September 14, 2020, the 
Exchange proposes to eliminate the associated TradeInfo BX Interface 
Fee of $95 per user, per month set forth in Options 7, Section 3(ii), 
to be effective on October 1, 2020. The Exchange also proposes to make 
a similar change in Options 7, Section 7(c)(2), which governs fee 
disputes, by deleting the reference to the TradeInfo fee therein.
    The Exchange notes that TradeInfo fees are assessed in full month 
increments and are not prorated.\10\ Consequently, by decommissioning 
TradeInfo on September 14th, a Participant subscriber would still be 
charged the $95 per user fee for all of September on the October 
bill.\11\ As noted above, there are five Participants currently billed 
for TradeInfo, but no Participant is actually using this interface at 
this time.\12\ Accordingly, the Exchange proposes to issue a credit in 
the same amount the Participant paid in fees for TradeInfo for the 
month of September 2020. To effect this change, the Exchange proposes 
to add the following language in Options 7, Section 3(ii): ``Any BX 
Participant that paid the TradeInfo BX Interface Fee of $95 per user, 
per month in September 2020 will get an equivalent credit for that 
month.''
---------------------------------------------------------------------------

    \10\ See Options 7, Section 3.
    \11\ The Exchange sends a monthly invoice of fees to each 
Participant the following month. For example, a Participant will be 
billed in October for subscribing to TradeInfo in September.
    \12\ See supra note 4.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\13\ in general, and furthers the objectives of 
Sections 6(b)(4) and 6(b)(5) of the Act,\14\ 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, and is not designed to permit unfair

[[Page 65457]]

discrimination between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes the elimination of the TradeInfo BX Interface 
Fee and related rule text is reasonable because the Exchange no longer 
offers this functionality as of September 14, 2020, thus making the 
fees irrelevant going forward. As there are still a small number of 
Participants currently subscribed to TradeInfo, the Exchange believes 
that it is reasonable to issue an equivalent credit to those 
Participants that are billed for the TradeInfo fee for the month of 
September 2020.\15\ As explained above, because TradeInfo fees are 
currently assessed in full month increments and are not prorated, 
Participant subscribers would be charged the $95 per user fee for all 
of September on their October bill, even though they will not be able 
to access this service for the full month of September. The Exchange 
therefore believes that it is reasonable to refund the equivalent 
amount on the Participant's October bill in the manner proposed above.
---------------------------------------------------------------------------

    \15\ See supra note 4.
---------------------------------------------------------------------------

    The Exchange believes that its proposal to eliminate the TradeInfo 
fee and related rule text is equitable and not unfairly discriminatory 
because no BX Participant will be charged the TradeInfo fee going 
forward under this proposal. As noted above, five Participant 
subscribers are charged the TradeInfo fee today. To the extent any 
Participants pay the TradeInfo fee for the month of September 2020, the 
Exchange is proposing to issue an equivalent credit for that month. Not 
issuing the proposed credit to Participants that are not currently 
subscribed to TradeInfo is equitable and not unfairly discriminatory as 
these Participants would not be charged the TradeInfo fee in the first 
place. Thus, the Exchange believes that its proposal will not unfairly 
discriminate among Participants and will be allocated equitably.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed fee changes 
eliminate the fee and related rule text that applied to the TradeInfo 
interface, which the Exchange no longer offers as of September 14, 
2020. As noted above, while there are a very small number of 
Participants currently subscribed to TradeInfo, no Participants are 
actually utilizing this interface at this time.\16\ For those few 
Participants currently subscribed to (and billed for) TradeInfo for the 
month September 2020, the Exchange is proposing to issue an equivalent 
credit for that month. By providing a credit in this manner to 
Participant subscribers and not providing the credit to non-subscriber 
Participants (who would not be charged the TradeInfo fee in the first 
place), the Exchange seeks to ensure that all Participants are treated 
equitably under this proposal. Furthermore, the Exchange notes that the 
TradeInfo interface is entirely optional, and Participants are able to 
obtain the information available on TradeInfo from FIX, FIX Drop and 
CTI, which are available to all Participants. Accordingly, the Exchange 
does not believe that its proposal imposes any burden on intra-market 
competition, or places certain market participants at a relative 
disadvantage compared to other market participants.
---------------------------------------------------------------------------

    \16\ Id.
---------------------------------------------------------------------------

    In terms of inter-market competition, 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, or rebate opportunities available at 
other venues to be more favorable. In such an environment, the Exchange 
must continually adjust its fees to remain competitive with other 
exchanges. Because competitors are free to modify their own fees in 
response, and because market participants may readily adjust their 
order routing practices, the Exchange believes that the degree to which 
fee changes in this market may impose any burden on competition is 
extremely limited.

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.\17\
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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 rule-comments@sec.gov. Please include 
File Number SR-BX-2020-028 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-BX-2020-028. 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 
20549-1090, 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-BX-2020-028 and 
should be submitted on or before November 5, 2020.


[[Page 65458]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-22866 Filed 10-14-20; 8:45 am]
BILLING CODE 8011-01-P


