Notice2025-08850
Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Offer FPGA Technology as an Optional Delivery Mechanism for the Nasdaq GEMX Depth of Market Data Feed
Primary source
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Published
May 19, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 95 (Monday, May 19, 2025)</title>
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[Federal Register Volume 90, Number 95 (Monday, May 19, 2025)]
[Notices]
[Pages 21353-21355]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-08850]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103037; File No. SR-GEMX-2025-10]
Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Offer FPGA
Technology as an Optional Delivery Mechanism for the Nasdaq GEMX Depth
of Market Data Feed
May 13, 2025.
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 30, 2025, Nasdaq GEMX, LLC (``GEMX'' 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 to offer FPGA technology as an optional
delivery mechanism for the Nasdaq GEMX Depth of Market Data Feed.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/gemx/rulefilings">https://listingcenter.nasdaq.com/rulebook/gemx/rulefilings</a>,
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
GEMX proposes to offer field-programmable gate array (``FPGA'')
technology as an optional delivery mechanism for the Nasdaq GEMX Depth
of Market Data Feed (``Depth of Market Feed'').\3\ FPGA technology is
currently available on the Nasdaq Stock Market, LLC, Nasdaq Phlx (for
equities), and Nasdaq BX, as well as the Nasdaq Options Market.\4\
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\3\ See Equity 3, Section 23(a)(1). Proposals to make FPGA
technology available for the ISE and MRX exchanges are being
submitted together with this proposal.
\4\ See, e.g., Securities Exchange Act Release No. 98185 (August
21, 2023), 88 FR 58324 (August 25, 2023) (SR-Phlx-2023-37) (setting
fees for the purchase of FPGA technology as an optional delivery
mechanism for PSX TotalView); Securities Exchange Act Release No.
98158 (August 17, 2023), 88 FR 57505 (August 23, 2023) (SR-BX-2023-
020) (setting fees for the purchase of FPGA technology as an
optional delivery mechanism for BX TotalView).
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FPGA
FPGA is a hardware-based delivery mechanism that utilizes an
integrated circuit that is programmed to reduce ``jitter''--a technical
term of art referring to the deviation in amplitude, phase timing or
width of a signal pulse in a digital signal--that will allow data to be
processed in a more predictable, or ``deterministic,'' fashion.
Reducing jitter can be useful for certain customers due to the
variability in the timing of market data packets transmitted by an
exchange over the course of the trading day. Orders, and therefore
market data packets, typically accumulate in larger numbers at the
beginning and end of the trading day, as well as during the peaks of
activity that occur at random intervals during the day. These bursts of
activity may alter the time interval between the delivery of data
packets because software processes information at variable rates
depending on load to the system. Processing times may increase at
higher loads, and decrease during periods of lesser activity. FPGA
technology processes data packets at a constant time interval, without
regard to the number of packets processed. Higher levels of determinism
means less variable queuing, which improves the predictability of data
transfer, particularly during times of peak market activity.
The benefits of determinism depend on the use case of the customer,
as well as the customer's specific system architecture.
Higher determinism does not necessarily mean lower latency. The
concepts of determinism and latency are related, but distinct.
Determinism refers to predictability in the rate of data transmission;
latency refers to the time required to process data or transport it
from one location to another. Low latency is not necessarily
deterministic, and higher determinism does not necessarily mean low
latency. As such, use of FPGA technology will increase determinism, but
does not guarantee lower latency at all times.\5\
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\5\ Because software can be impacted by workload, FPGA
technology in general can provide lower latency during periods of
peak activity. The same FPGA technology that will support the GEMX
FPGA service is also broadly commercially available for purchase
from third-party sellers unrelated to the Exchange.
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Among customers that seek a higher degree of determinism, the
benefits of FPGA technology vary, as FPGA
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technology is one possible solution, among a catalog of possible
solutions, for increasing the consistency and predictability of message
throughput over the course of the trading day. Some customers are able
to adequately control jitter without using FPGA technology; other
customers address jitter using specialized software, coding or other
design solutions in conjunction with FPGA; still others use FPGA alone.
The specific choice depends on a complex analysis of the customer's
information technology systems in the context of their particular use
cases.
FPGA is a broadly available, commonly used type of programmable
circuit that can be modified to suit different use cases. It is used in
a wide spectrum of industries, including consumer electronics,
automotive, and aerospace, as well as in a variety of industrial
applications. It is not unique to the financial services industry,\6\
or to the Exchange.
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\6\ See, e.g., Contrive Datum Insights, ``Field-Programmable
Gate Array (FPGA) Market is expected to reach around USD 22.10
Billion by 2030, Grow at a CAGR of 15.12% during Forecast Period
2023 to 2030,'' (February 21, 2023), available at <a href="https://www.globenewswire.com/en/news-release/2023/02/21/2612772/0/en/Field-Programmable-Gate-Array-FPGA-Market-Is-Expected-To-Reach-around-USD-22-10-Billion-by-2030-Grow-at-a-CAGR-Of-15-12-during-Forecast-Period-2023-To-2030-Data-By-Contrive-Datum-I.html">https://www.globenewswire.com/en/news-release/2023/02/21/2612772/0/en/Field-Programmable-Gate-Array-FPGA-Market-Is-Expected-To-Reach-around-USD-22-10-Billion-by-2030-Grow-at-a-CAGR-Of-15-12-during-Forecast-Period-2023-To-2030-Data-By-Contrive-Datum-I.html</a> (describing the
general size and state of the FPGA market in 2023).
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FPGA technology has been offered by both the Nasdaq Stock Exchange
and the Nasdaq Options Market for over a decade,\7\ and has been cited
by the SEC as an example of a technology useful in the distribution of
market data products.\8\
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\7\ See Securities Exchange Act Release No. 67297 (June 28,
2012), 77 FR 39752 (July 5, 2012) (SR-Nasdaq-2012-063) (introducing
FPGA technology); see also Nasdaq Data News 2012-13, available at
<a href="http://www.nasdaqtrader.com/TraderNews.aspx?id=dn2012-13">http://www.nasdaqtrader.com/TraderNews.aspx?id=dn2012-13</a>
(introducing TotalView FPGA service as of August 1, 2012);
Securities Exchange Act Release No. 74745 (April 16, 2015), 80 FR
22588 (April 22, 2015) (SR-Nasdaq-2015-035) (establishing FPGA for
the Nasdaq Options Market); The Nasdaq Stock Market LLC Rules,
Equity 7, Section 126(c) (Hardware-Based Delivery of Nasdaq Depth
data).
\8\ See Securities Exchange Act Release No. 90610, 86 FR 18596,
18647 (April 9, 2021) (File No. S7-03-20) (listing field
programmable gate array services as an example of a technological
innovation that could be employed by competing consolidators as part
of the Market Data Infrastructure rule).
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The Exchange proposes to offer the GEMX FPGA service in conjunction
with the Exchange's Depth of Market Feed.\9\ The Depth of Market Feed
is a data feed that provides full order and quote depth information for
individual orders and quotes on the Exchange book and last sale
information for trades executed on the Exchange. The data provided for
each option series includes the symbols (series and underlying
security), put or call indicator, expiration date, the strike price of
the series, and whether the option series is available for trading on
the Exchange and identifies if the series is available for closing
transactions only. The feed also provides order imbalances on opening/
reopening (size of matched contracts and size of the imbalance).
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\9\ See Equity 3, Section 23(a)(1).
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Customers that choose to purchase the Depth of Market Feed without
the GEMX FPGA service will receive the same data as customers that
elect to purchase the Depth of Market Feed with the GEMX FPGA service.
The proposal to offer FPGA technology to customers of the GEMX
Depth of Market Feed is in response to customer demand.
The Exchange will submit a proposed fee schedule for this product
in a separate filing.
The Exchange intends to make this product available on June 1,
2025.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\11\ in particular, in that it is 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.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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The current proposal to offer the well-recognized FPGA technology
with the GEMX Depth of Market Feed is in response to changes in
customer demand, as noted above. FPGA technology has been used by The
Nasdaq Stock Market since 2012,\12\ and has been employed by the Nasdaq
Options Market for approximately a decade.\13\ Offering this well-
recognized technology to customers in response to demand will
facilitate their ingestion of exchange data. Customers that choose to
purchase the Depth of Market Feed without GEMX FPGA service will
receive the same data as customers that elect to purchase the Depth of
Market Feed with the GEMX FPGA service.
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\12\ See Securities Exchange Act Release No. 67297 (June 28,
2012), 77 FR 39752 (July 5, 2012) (SR-Nasdaq-2012-063) (introducing
FPGA technology); see also Nasdaq Data News 2012-13, available at
<a href="http://www.nasdaqtrader.com/TraderNews.aspx?id=dn2012-13">http://www.nasdaqtrader.com/TraderNews.aspx?id=dn2012-13</a>
(introducing TotalView FPGA service as of August 1, 2012).
\13\ Securities Exchange Act Release No. 74745 (April 16, 2015),
80 FR 22588 (April 22, 2015) (SR-Nasdaq-2015-035) (establishing FPGA
for the Nasdaq Options Market).
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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
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
This proposal will further promote competition by providing market
participants with additional choices in the transmission of depth of
book data. Nothing in the Proposal burdens inter-market competition
(the competition among self-regulatory organizations) because approval
of the proposal does not impose any burden on the ability of other
exchanges to compete.
Nothing in the Proposal burdens intra-market competition (the
competition among consumers of exchange data) because FPGA technology
will be available to any market participant on a non-discriminatory
basis.
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 \14\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A)(iii).
\15\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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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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
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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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#0270776e672f616d6f6f676c7671427167612c656d74"><span class="__cf_email__" data-cfemail="80f2f5ece5ade3efedede5eef4f3c0f3e5e3aee7eff6">[email protected]</span></a>. Please include
file number SR-GEMX-2025-10 on the subject line.
Paper Comments
<bullet> 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-2025-10. 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 (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). 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. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-GEMX-2025-10 and should be
submitted on or before June 9, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-08850 Filed 5-16-25; 8:45 am]
BILLING CODE 8011-01-P
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