Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1, To Provide That the Co-Location Services Offered by the Exchange Include Three Time Feeds and Four Partial Cabinet Bundle Options, 7394-7398 [2016-02736]

Download as PDF 7394 Federal Register / Vol. 81, No. 28 / Thursday, February 11, 2016 / Notices must be that of a senior official at the company with a rank of Corporate Secretary or above. Based on the foregoing, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. For this reason, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing.12 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 change 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 (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEMKT–2016–14 on the subject line. mstockstill on DSK4VPTVN1PROD with NOTICES 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–NYSEMKT–2016–14. 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 (https://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 12 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Sep<11>2014 16:52 Feb 10, 2016 Jkt 238001 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– NYSEMKT–2016–14, and should be submitted on or before March 3, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Brent J. Fields, Secretary. [FR Doc. 2016–02729 Filed 2–10–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–77072; File No. SR–NYSE– 2015–53] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1, To Provide That the Co-Location Services Offered by the Exchange Include Three Time Feeds and Four Partial Cabinet Bundle Options February 5, 2016. I. Introduction On November 27, 2015 the New York Stock Exchange LLC (‘‘the Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to provide that the co-location services offered by the Exchange include three time feeds and four bundles of co-location services (‘‘Partial Cabinet Solution bundles’’). The proposed rule change was published for comment in the Federal Register on 13 17 CFR 200.30–3(a)(12), (59). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 December 16, 2015.3 The Commission received one comment letter on the proposed rule change.4 On January 20, 2016, the Exchange filed a response letter.5 On January 28, 2016, the Exchange filed Amendment No. 1 to the proposed rule change.6 The Commission is publishing this notice to solicit comments on Amendment No. 1 from interested persons and is approving the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. II. Description of the Proposal, as Modified by Amendment No. 1 The Exchange proposes to change its rules to provide that the co-location services offered by the Exchange include three time feeds and four Partial Cabinet Solution bundles, and to establish fees for these services. Time Feeds The Exchange proposes to offer Users the option to purchase connectivity to one or more of three time feeds.7 Each proposed time feed provides a feed with the current time of day using one of three different time protocols: Global Positioning System (‘‘GPS’’) Time Source, the Network Time Protocol (‘‘NTP’’), and Precision Timing Protocol 3 See Securities Exchange Act Release No. 34– 76612 (December 10, 2015), 80 FR 78269 (‘‘Notice’’). On January 28, 2016, the Exchange consented to extending the time period for the Commission to either approve or disapprove the proposed rule change, or to institute proceedings to determine whether to approve or disapprove the proposed rule change, to February 5, 2016. 4 See letter from Kermit Kubitz to the Commission, dated January 6, 2016 (‘‘Kubitz Letter’’). 5 See letter from Martha Redding Senior Counsel & Assistant Secretary, NYSE to Brent J. Fields, Secretary of the Commission, dated January 20, 2016 (‘‘Exchange Response Letter’’). 6 Amendment No. 1 (i) updates the proposal to specify that that Partial Cabinet Solution Bundles, originally proposed to be offered on January 1, 2016, instead will be offered on the date that is the later of February 1, 2016 and the date of any Commission approval of the proposal; and (ii) as described further below, adds clarity to the proposal by specifying the differences in precision among the three time feeds. 7 For purposes of the Exchange’s co-location services, a ‘‘User’’ means any market participant that requests to receive co-location services directly from the Exchange, a ‘‘Hosting User’’ means a User that hosts a Hosted Customer in the User’s colocation space, and a ‘‘Hosted Customer’’ means a customer of a Hosting User that is hosted in a Hosting User’s co-location space. See Securities Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190 (October 5, 2015) (SR–NYSE– 2015–40). As specified in the Price List, a User that incurs co-location fees for a particular co-location service pursuant thereto would not be subject to colocation fees for the same co-location service charged by the Exchange’s affiliates NYSE MKT LLC and NYSE Arca, Inc. See Securities Exchange Act Release No. 70206 (August 15, 2013), 78 FR 51765 (August 21, 2013) (SR–NYSE–2013–59). E:\FR\FM\11FEN1.SGM 11FEN1 Federal Register / Vol. 81, No. 28 / Thursday, February 11, 2016 / Notices (‘‘PTP’’).8 GPS is a time and location system maintained by the United States government.9 The Exchange accesses the GPS Time Source feed through dedicated equipment and subscribing Users connect to the feed over dedicated cables.10 For the NTP and PTP time feeds, the Exchange routes the GPS data through dedicated equipment that reformats the GPS data into NTP and PTP.11 Subscribing Users connect to PTP over dedicated cables and NTP over the Liquidity Center Network (‘‘LCN’’), a local area network available in the data center.12 According to the Exchange, the GPS Time Source feed is a sub-microsecond time feed, providing the highest level of accuracy of the three time feeds.13 PTP has an accuracy of less than 10 microseconds, while the accuracy of NTP can be greater than 10 milliseconds.14 The Exchange states that a User does not require connectivity to a time feed to trade on the Exchange.15 The proposed connectivity to time feeds would provide Users a convenient way to access time protocols.16 According to the Exchange, Users make use of time feeds to receive time and to synchronize clocks between computer systems or throughout a computer network, and time feeds assist Users in other functions, including record keeping or measuring response times.17 Currently, Users have the option of either renting a dedicated cabinet or a partial cabinet to house their servers and other equipment in the data center.18 Under the proposal, only the NTP and PTP time feeds will be available to partial cabinet Users, whereas dedicated cabinet Users will have access to all three time feeds.19 According to the Exchange, connectivity to the GPS time feed is not available for partial cabinets because the proximity of the GPS and power connections into a partial cabinet would expose the GPS to interference from the cable power connections, interfering with the delivery of the GPS data.20 The Exchange states that if a partial cabinet User is in need of the GPS feed, it could either purchase a dedicated cabinet or become a Hosted Customer of a Hosting User that has the GPS feed.21 In addition, the Exchange states that the NTP time feed is offered only over the LCN due to a lack of demand for the NTP over the IP network, and notes that 7395 a User that requires connectivity to the NTP could connect to the LCN.22 The Exchange proposes to charge a non-recurring fee of $300, $1000, and $3000 for connectivity to the NTP, PTP, and GPS time feeds, respectively.23 The Exchange will also charge a monthly recurring fee of $100, $250, and $400 for the NTP, PTP, and GPS time feeds, respectively.24 Subscribing Users that order the proposed time feed services will be subject to a 12-month minimum commitment, after which they are subject to a 60-day rolling commitment.25 Partial Cabinet Solution Bundles The Exchange also proposes to offer four Partial Cabinet Solution bundles and establish fees therefor.26 As more fully described in the Notice, each Partial Cabinet Solution bundle option would include network access, two fiber cross connections, and connectivity to either the NTP or PTP time feed.27 Subscribing Users would be assessed a non-recurring fee and monthly charge for each bundle option as set forth below.28 Type of service Description Amount of charge Partial Cabinet Solution bundles ........................ Note: A User and its Affiliates are limited to one Partial Cabinet Solution bundle at a time. A User and its Affiliates must have an aggregate cabinet footprint of 2 kW or less to qualify for a Partial Cabinet Solution bundle. Option A: 1 kW partial cabinet, 1 LCN connection (1 Gb), 1 IP network connection (1 Gb), 2 fiber cross connections and either the Network Time Protocol Feed or Precision Timing Protocol. $7,500 initial charge per bundle plus monthly charge per bundle as follows: • For Users that order on or before December 31, 2016: $3,000 monthly for first 12 months of service, and $6,000 monthly thereafter. • For Users that order after December 31, 2016: $6,000 monthly. $7,500 initial charge per bundle plus monthly charge per bundle as follows: • For Users that order on or before December 31, 2016: $3,500 monthly for first 12 months of service, and $7,000 monthly thereafter. • For Users that order after December 31, 2016: $7,000 monthly. $10,000 initial charge per bundle plus monthly charge per bundle as follows: • For Users that order on or before December 31, 2016: $7,000 monthly for first 12 months of service, and $14,000 monthly thereafter. • For Users that order after December 31, 2016: $14,000 monthly. Option B: 2 kW partial cabinet, 1 LCN connection (1 Gb), 1 IP network connection (1 Gb), 2 fiber cross connections and either the Network Time Protocol Feed or Precision Timing Protocol. mstockstill on DSK4VPTVN1PROD with NOTICES Option C: 1 kW partial cabinet, 1 LCN connection (10 Gb), 1 IP network connection (10 Gb), 2 fiber cross connections and either the Network Time Protocol Feed or Precision Timing Protocol. 8 See Notice, 80 FR at 78269. id. at 78270. 10 See id. 11 See id. 12 See id. 13 See Amendment No. 1, at 4. 14 See id. 15 See Notice, 80 FR at 78269, n.6. 16 See VerDate Sep<11>2014 16:52 Feb 10, 2016 id. at 78270. id. at 78269–78270. For example, a User may connect to a time feed for record keeping purposes if it uses that specific time protocol for all its activities, both inside and out of the data center. See id. at 78270, n.7. 18 See id. at 78270. 19 See id. 20 See id. at n.10. Jkt 238001 21 See 17 See 9 See 22 See PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 id. at 78272. id. 23 See id. at 78270. 24 See id. 25 See id. 26 See id. 27 See id. 28 See id. at 78271. E:\FR\FM\11FEN1.SGM 11FEN1 7396 Federal Register / Vol. 81, No. 28 / Thursday, February 11, 2016 / Notices Type of service Description Amount of charge Option D: 2 kW partial cabinet, 1 LCN connection (10 Gb), 1 IP network connection (10 Gb), 2 fiber cross connections and either the Network Time Protocol Feed or Precision Timing Protocol. $10,000 initial charge per bundle plus monthly charge per bundle as follows: • For Users that order on or before December 31, 2016: $7,500 monthly for first 12 months of service, and $15,000 monthly thereafter. • For Users that order after December 31, 2016: $15,000 monthly. mstockstill on DSK4VPTVN1PROD with NOTICES Additionally, a User purchasing a Partial Cabinet Solution bundle would be subject to a 90-day minimum commitment, after which period it would be subject to the 60-day rolling time period.29 As more fully described in the Notice, the Exchange states that the purpose of offering four Partial Cabinet Solution bundles is to attract smaller Users, including those with minimal power or cabinet space demands or those for which the costs attendant with having a dedicated cabinet or greater network connection bandwidth are too burdensome.30 The Exchange proposes that the Partial Cabinet Solution bundles would be available to Users provided: (1) The subscribing User purchases only one Partial Cabinet Solution bundle; (2) the subscribing User and its Affiliates must not currently have a Partial Cabinet Solution bundle; and (3) after the purchase of the Partial Cabinet Solution bundle, the subscribing User, together with its Affiliates, has an Aggregate Cabinet Footprint of no more than 2 kW.31 The Exchange proposes that for purposes of the Partial Cabinet Solution bundles, an ‘‘Affiliate’’ of a User would be any other User or a Hosted Customer that is under 50% or greater common ownership or control of the first User.32 Further, the term ‘‘Aggregate Cabinet Footprint’’ of a User or Hosted Customer is proposed to be defined as: (a) For a User, the total kW of the User’s cabinets, including both partial and dedicated cabinets, and (b), for a Hosted Customer, the total kW of the portion of the Hosting User’s cabinet, whether partial or dedicated, allocated to such Hosted Customer.33 A User would be required to inform the Exchange immediately of any event that causes the User or a Hosted Customer to become ineligible for a Partial Cabinet Solution bundle, including an event that causes another User or Hosted Customer to become an Affiliate as this can make the subscribing User ineligible for the bundle.34 If a subscribing User ceases to meet the conditions for access to the Partial Cabinet Solution bundle, it would be charged for each of the services individually, at the price for each such service set out in the Price List and Fee Schedule.35 Such price change would be effective as of the date that the subscribing User ceased to meet the conditions.36 Further, if a subscribing User purchased each of the components of a Partial Cabinet Solution bundle, whether over several purchases or in one order, and met the conditions described above for access to the Partial Cabinet Solution bundle, the Exchange would automatically treat that User’s services as a Partial Cabinet Solution bundle and, effective the date of installation of the final component, reduce the User’s recurring fee to the recurring fee for the relevant bundle.37 In addition, a User that changes its Partial Cabinet Solution bundle from one option to another will not be subject to a second initial charge, but will be required to pay the difference, if any, between the bundles’ initial charges.38 Finally, the Exchange proposes to make non-substantive changes to the Price List and Fee Schedule to add subheadings under ‘‘Co-Location Fees’’ 29 See id. at 78272. The Exchange proposes to have a reduced minimum commitment period for the Partial Cabinet Solution bundle to further reduce the cost commitment for such Users. The Exchange acknowledges that the proposal may also attract some entities that are currently Hosted Customers or would have become Hosted Customers. 30 See id. at 78270. 31 See id. 32 See id. at n.15. 33 See id. at 78270–78271. For example, a User with a 4 kW dedicated cabinet would not be eligible for a Partial Cabinet Solution bundle, as its aggregate cabinet footprint would be either 5 kW or 6 kW once a Partial Cabinet Solution bundle was added. 34 See id. at 78271. The Exchange would review available information regarding the entities and may request additional information to verify the Affiliate status of a User or Hosted Customer. The Exchange would approve a request for a Partial Cabinet Solution bundle unless it determines that the certification is not accurate. 35 See id. 36 See id. 37 See id. at 78271–78272. 38 See id. at 78271, n.19. VerDate Sep<11>2014 16:52 Feb 10, 2016 Jkt 238001 PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 for ‘‘Definitions’’ and ‘‘General Notes.’’ 39 III. Summary of Comment Letter and Exchange Response As noted above, the Commission received one comment letter on the proposed rule change,40 and a response from the Exchange.41 The commenter expressed concern about the potential for ‘‘GPS spoofing’’ (intentional interference with GPS feeds from a distance) if GPS data are from an unsecured source.42 According to the commenter, a successful GPS spoofing attack could cause time feed data to become corrupted, which could cause Users, such as High Frequency Trading (‘‘HFT’’) firms that represent substantial market volume, to withdraw from the market and lead to market disruption.43 The commenter asked particularly whether purchasers of Partial Cabinet Solution bundles that have access to the PTP and NTP feeds, but not the dedicated GPS time feed, would have any ‘‘special vulnerability to some sort of feed failure’’ as a result of ‘‘GPS spoofing’’ or otherwise.44 The Exchange responded that ‘‘[t]o the best of the Exchange’s knowledge, Users that connect to the NTP or the PTP, rather than the GPS Time Source, do not have a special vulnerability to feed failure, irrespective of whether they utilize a partial or dedicated cabinet.’’ 45 The Exchange stated that it uses the same GPS time feed equipment for its production environment and to provide time feeds to Users; 46 and that Users purchasing time feeds from the Exchange (whether GPS, PTP, or NTP) benefit from the same protections that the Exchange has implemented for its 39 See id. at 78272. Kubitz Letter, supra note 4. 41 See Exchange Response Letter, supra note 5. 42 See Kubitz Letter, supra note 4. 43 See id. 44 See id. The commenter further requested that the Commission more broadly investigate and report on any risks associated with time feeds, and measures to protect these and other data feeds. See id. The Commission notes that this suggestion is beyond the scope of the proposed rule change. 45 See Exchange Response Letter, supra note 5, at 3. 46 See id. at 4. 40 See E:\FR\FM\11FEN1.SGM 11FEN1 Federal Register / Vol. 81, No. 28 / Thursday, February 11, 2016 / Notices own GPS antennas and receivers.47 The Exchange also stated that GPS is the source information for all three time feeds and that the Exchange routes the GPS data through dedicated equipment that reformats the GPS data to propagate the NTP and PTP.48 The Exchange further stated that any disruption to the GPS time feed would impact the NTP and PTP time feeds in the same way as the GPS feed; and that the Exchange has no knowledge of any other method to ‘‘spoof’’ the NTP or PTP feeds if the GPS feed were not compromised.49 IV. Discussion and Commission Findings mstockstill on DSK4VPTVN1PROD with NOTICES After careful review and consideration of the Exchange’s proposal, the comment letter and the Exchange’s response, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.50 In particular, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with Section 6(b)(4) of the Act,51 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,52 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 47 See id. The Exchange added that that discussion of these protections in a proposed rule change would impair their effectiveness. See id. at 5. 48 See id. at 3. 49 See id. Regarding the commenter’s concern about the potential for GPS spoofing to lead to market disruption, the Exchange stated that it could not comment on the behavior of HFT Users during a ‘‘spoofing event’’ regardless of whether the HFT User received its time feed from the Exchange or a third party vendor. The Exchange noted, however, that the proposal was limited to time feeds provided by the Exchange and that Users purchasing time feeds from the Exchange benefit from the same protections that the Exchange has implemented for its own GPS antennas and receivers. See id. at 5. 50 In approving this proposed rule change, as modified by Amendment No. 1, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 51 15 U.S.C. 78f(b)(4). 52 15 U.S.C. 78f(b)(5). VerDate Sep<11>2014 16:52 Feb 10, 2016 Jkt 238001 permit unfair discrimination between customers, issuers, brokers, or dealers. The Commission believes that the proposed rule change is consistent with Section 6(b)(4) of the Act. The Commission notes the Exchange’s representation that the proposed fees for the time feed connectivity and Partial Cabinet Solution bundles are reasonable because the Exchange proposes to offer the services as a convenience to Users, but in doing so will incur certain costs, including costs related to the data center facility, hardware and equipment and costs related to personnel required for the initial installation, monitoring, support and maintenance of such services.53 The Exchange states that the higher fee in connection with the GPS time feed reflects the greater costs for its equipment, installation and maintenance in comparison with the other time feeds.54 In addition, all Users that voluntarily select connectivity to one or more of the proposed time feeds would be charged the same amount for the same services. With respect to the proposed Partial Cabinet Solution bundles in particular, the Commission also notes that all Users are subject to the same conditions and fees for the service selected; all Users are subject to the same limits on the number of Partial Cabinet Solution bundles and aggregate cabinet footprint; all Users that order a bundle on or before December 31, 2016 would have their monthly charges reduced by 50 percent for the first 12 months; and all Users that change their Partial Cabinet Solution bundles would not be charged a second initial charge but instead charged the difference, if any, between the initial charges. The Commission further believes that the Exchange’s proposal to offer Users optional connectivity to the GPS, PTP, and NTP time feeds is consistent with the requirements of Section 6(b)(5) of the Act. The proposal to offer connectivity to different time feed options allows a User to select the time protocol that best suits it needs, helping to tailor its data center operations to the requirements of its business operations, and to operate more efficiently. As set forth in the Exchange Response Letter, the Exchange states that whether a User purchases access to the GPS, NTP, or PTP time feed, it benefits from the same precautions as the Exchange’s production environment, as the Exchange uses the same GPS time feed equipment, including antennas and receivers, to provide time feeds to 7397 Users.55 The Commission therefore believes that the proposed time feeds, would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest. The Exchange represents that connectivity to the GPS time feed is not available for partial cabinets because the proximity of the GPS and power connections into a partial cabinet would expose the GPS to interference from the cable power connections, interfering with the delivery of the GPS data.56 The Exchange also represents that connectivity to the NTP time feed is not proposed to be offered over the IP network due to lack of demand.57 For these reasons, the Commission believes that providing connectivity to the GPS Time Source for dedicated cabinets but not partial cabinets, and to the NTP time feed through the LCN but not the IP network, is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Commission also finds the Exchange’s proposal to offer Partial Cabinet Solution bundles consistent with Section 6(b)(5) of the Act. As noted, all Users seeking to purchase a Partial Cabinet Solution bundle would be subject to the same conditions. The Commission believes that the proposed Partial Cabinet Solution bundles are reasonably designed to make it more cost effective for Users with minimal power or cabinet space demands to take advantage of the option for co-location services, and therefore that they are 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 are not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. For the foregoing reasons, the Commission also finds that, the proposed rule change, as modified by Amendment No. 1, is consistent with the Act. V. Solicitation of Comments on Amendment No. 1 Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether this filing, as modified by Amendment No. 1, is Notice, 80 FR at 78273. 54 See id. PO 00000 Frm 00114 Fmt 4703 Sfmt 4703 Exchange Response Letter, supra note 5, at 56 See 53 See 55 See supra, notes 20 and 21 and accompanying 4. text. 57 See E:\FR\FM\11FEN1.SGM supra, note 22 and accompanying text. 11FEN1 7398 Federal Register / Vol. 81, No. 28 / Thursday, February 11, 2016 / Notices consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File No. SR– NYSE–2015–53 on the subject line. mstockstill on DSK4VPTVN1PROD with NOTICES 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 No. SR–NYSE–2015–53. 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 (https://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 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 No. SR–NYSE– 2015–53, and should be submitted on or before March 3, 2016. VI. Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1 The Commission finds good cause, pursuant to Section 19(b)(2) of the Act, to approve the proposed rule change, as modified by Amendment No. 1, prior to the 30th day after the date of publication of Amendment No. 1 in the Federal Register. As discussed above, Amendment No. 1 updates dates in the original proposed rule change and adds VerDate Sep<11>2014 16:52 Feb 10, 2016 Jkt 238001 clarity on the differences between the three time feeds in terms of their precision.58 The Commission believes that these revisions provide clarity on when partial cabinet bundle discounts will apply along with additional information on the differences between the various time feeds. Furthermore, the Commission believes it is appropriate to have these changes incorporated into the rules of the Exchange concurrently with those changes discussed in the original filing. Accordingly, the Commission finds good cause for approving the proposed rule change, as modified by Amendment No. 1, on an accelerated basis, pursuant to Section 19(b)(2) of the Act.59 VII. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,60 that the proposed rule change, as modified by Amendment No. 1, (File No. SR–NYSE– 2015–53) be, and hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.61 Brent J. Fields, Secretary. [FR Doc. 2016–02736 Filed 2–10–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–77066; File No. SR– NASDAQ–2016–008] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Proposed Rule Change To Amend Rule 4120 February 5, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on January 29, 2016, The NASDAQ Stock Market LLC (‘‘Nasdaq’’ 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 Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 58 See supra, note 6. U.S.C. 78s(b)(2). 60 See id. 61 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 59 15 PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change Nasdaq is proposing to amend Rule 4120 and the Nasdaq process for commencing trading of a security that is the subject of Nasdaq and non-Nasdaqlisted initial public offerings (‘‘IPOs’’) and trading halts. The text of the proposed rule change is available at https:// nasdaq.cchwallstreet.com/, at the Exchange’s principal office, 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 Nasdaq is proposing to make a minor modification to the Nasdaq process for commencing trading of a security that is the subject of Nasdaq and non-Nasdaqlisted IPOs or trading halts. Specifically, the Exchange is proposing to modify the way in which orders are accepted prior to the commencement of trading for securities subject to trading halt or IPO. This small change will simplify the order submission operations for market participants during trading halts and IPOs. Currently, Nasdaq Rule 4120(c)(4)(B) provides that during any trading halt or pause for which a halt cross under Rule 4753 will not occur, market participants may enter orders during the trading halt or pause and designate such orders to be held until the termination of the trading halt or pause. Under this rule, such orders will be held in a suspended state until the termination of the halt or pause, at which time they will be entered into the system. Nasdaq Rules 4120(a)(1), (4), (5), (6), (9), (10), (11), and (12)(F) provide specific instances when the Exchange may halt trading of a security listed on Nasdaq. Nasdaq Rule 4120(c)(7)(A) establishes the process for lifting the E:\FR\FM\11FEN1.SGM 11FEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 81, Number 28 (Thursday, February 11, 2016)]
[Notices]
[Pages 7394-7398]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-02736]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77072; File No. SR-NYSE-2015-53]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Amendment No. 1 and Order Granting Accelerated
Approval of Proposed Rule Change, as Modified by Amendment No. 1, To
Provide That the Co-Location Services Offered by the Exchange Include
Three Time Feeds and Four Partial Cabinet Bundle Options

February 5, 2016.

I. Introduction

On November 27, 2015 the New York Stock Exchange LLC (``the
Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to provide that the co-location services offered
by the Exchange include three time feeds and four bundles of co-
location services (``Partial Cabinet Solution bundles''). The proposed
rule change was published for comment in the Federal Register on
December 16, 2015.\3\ The Commission received one comment letter on the
proposed rule change.\4\ On January 20, 2016, the Exchange filed a
response letter.\5\ On January 28, 2016, the Exchange filed Amendment
No. 1 to the proposed rule change.\6\ The Commission is publishing this
notice to solicit comments on Amendment No. 1 from interested persons
and is approving the proposed rule change, as modified by Amendment No.
1, on an accelerated basis.
---------------------------------------------------------------------------

\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 34-76612 (December
10, 2015), 80 FR 78269 (``Notice''). On January 28, 2016, the
Exchange consented to extending the time period for the Commission
to either approve or disapprove the proposed rule change, or to
institute proceedings to determine whether to approve or disapprove
the proposed rule change, to February 5, 2016.
\4\ See letter from Kermit Kubitz to the Commission, dated
January 6, 2016 (``Kubitz Letter'').
\5\ See letter from Martha Redding Senior Counsel & Assistant
Secretary, NYSE to Brent J. Fields, Secretary of the Commission,
dated January 20, 2016 (``Exchange Response Letter'').
\6\ Amendment No. 1 (i) updates the proposal to specify that
that Partial Cabinet Solution Bundles, originally proposed to be
offered on January 1, 2016, instead will be offered on the date that
is the later of February 1, 2016 and the date of any Commission
approval of the proposal; and (ii) as described further below, adds
clarity to the proposal by specifying the differences in precision
among the three time feeds.
---------------------------------------------------------------------------

II. Description of the Proposal, as Modified by Amendment No. 1

The Exchange proposes to change its rules to provide that the co-
location services offered by the Exchange include three time feeds and
four Partial Cabinet Solution bundles, and to establish fees for these
services.
Time Feeds
The Exchange proposes to offer Users the option to purchase
connectivity to one or more of three time feeds.\7\ Each proposed time
feed provides a feed with the current time of day using one of three
different time protocols: Global Positioning System (``GPS'') Time
Source, the Network Time Protocol (``NTP''), and Precision Timing
Protocol

[[Page 7395]]

(``PTP'').\8\ GPS is a time and location system maintained by the
United States government.\9\ The Exchange accesses the GPS Time Source
feed through dedicated equipment and subscribing Users connect to the
feed over dedicated cables.\10\ For the NTP and PTP time feeds, the
Exchange routes the GPS data through dedicated equipment that reformats
the GPS data into NTP and PTP.\11\ Subscribing Users connect to PTP
over dedicated cables and NTP over the Liquidity Center Network
(``LCN''), a local area network available in the data center.\12\
According to the Exchange, the GPS Time Source feed is a sub-
microsecond time feed, providing the highest level of accuracy of the
three time feeds.\13\ PTP has an accuracy of less than 10 microseconds,
while the accuracy of NTP can be greater than 10 milliseconds.\14\ The
Exchange states that a User does not require connectivity to a time
feed to trade on the Exchange.\15\ The proposed connectivity to time
feeds would provide Users a convenient way to access time
protocols.\16\ According to the Exchange, Users make use of time feeds
to receive time and to synchronize clocks between computer systems or
throughout a computer network, and time feeds assist Users in other
functions, including record keeping or measuring response times.\17\
---------------------------------------------------------------------------

\7\ For purposes of the Exchange's co-location services, a
``User'' means any market participant that requests to receive co-
location services directly from the Exchange, a ``Hosting User''
means a User that hosts a Hosted Customer in the User's co-location
space, and a ``Hosted Customer'' means a customer of a Hosting User
that is hosted in a Hosting User's co-location space. See Securities
Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190
(October 5, 2015) (SR-NYSE-2015-40). As specified in the Price List,
a User that incurs co-location fees for a particular co-location
service pursuant thereto would not be subject to co-location fees
for the same co-location service charged by the Exchange's
affiliates NYSE MKT LLC and NYSE Arca, Inc. See Securities Exchange
Act Release No. 70206 (August 15, 2013), 78 FR 51765 (August 21,
2013) (SR-NYSE-2013-59).
\8\ See Notice, 80 FR at 78269.
\9\ See id. at 78270.
\10\ See id.
\11\ See id.
\12\ See id.
\13\ See Amendment No. 1, at 4.
\14\ See id.
\15\ See Notice, 80 FR at 78269, n.6.
\16\ See id. at 78270.
\17\ See id. at 78269-78270. For example, a User may connect to
a time feed for record keeping purposes if it uses that specific
time protocol for all its activities, both inside and out of the
data center. See id. at 78270, n.7.
---------------------------------------------------------------------------

Currently, Users have the option of either renting a dedicated
cabinet or a partial cabinet to house their servers and other equipment
in the data center.\18\ Under the proposal, only the NTP and PTP time
feeds will be available to partial cabinet Users, whereas dedicated
cabinet Users will have access to all three time feeds.\19\ According
to the Exchange, connectivity to the GPS time feed is not available for
partial cabinets because the proximity of the GPS and power connections
into a partial cabinet would expose the GPS to interference from the
cable power connections, interfering with the delivery of the GPS
data.\20\ The Exchange states that if a partial cabinet User is in need
of the GPS feed, it could either purchase a dedicated cabinet or become
a Hosted Customer of a Hosting User that has the GPS feed.\21\ In
addition, the Exchange states that the NTP time feed is offered only
over the LCN due to a lack of demand for the NTP over the IP network,
and notes that a User that requires connectivity to the NTP could
connect to the LCN.\22\
---------------------------------------------------------------------------

\18\ See id. at 78270.
\19\ See id.
\20\ See id. at n.10.
\21\ See id. at 78272.
\22\ See id.
---------------------------------------------------------------------------

The Exchange proposes to charge a non-recurring fee of $300, $1000,
and $3000 for connectivity to the NTP, PTP, and GPS time feeds,
respectively.\23\ The Exchange will also charge a monthly recurring fee
of $100, $250, and $400 for the NTP, PTP, and GPS time feeds,
respectively.\24\ Subscribing Users that order the proposed time feed
services will be subject to a 12-month minimum commitment, after which
they are subject to a 60-day rolling commitment.\25\
---------------------------------------------------------------------------

\23\ See id. at 78270.
\24\ See id.
\25\ See id.
---------------------------------------------------------------------------

Partial Cabinet Solution Bundles
The Exchange also proposes to offer four Partial Cabinet Solution
bundles and establish fees therefor.\26\ As more fully described in the
Notice, each Partial Cabinet Solution bundle option would include
network access, two fiber cross connections, and connectivity to either
the NTP or PTP time feed.\27\ Subscribing Users would be assessed a
non-recurring fee and monthly charge for each bundle option as set
forth below.\28\
---------------------------------------------------------------------------

\26\ See id.
\27\ See id.
\28\ See id. at 78271.

------------------------------------------------------------------------
Type of service Description Amount of charge
------------------------------------------------------------------------
Partial Cabinet Solution Option A: 1 kW $7,500 initial
bundles. partial cabinet, 1 charge per bundle
Note: A User and its LCN connection (1 plus monthly charge
Affiliates are limited to Gb), 1 IP network per bundle as
one Partial Cabinet connection (1 Gb), follows:
Solution bundle at a time. 2 fiber cross For Users
A User and its Affiliates connections and that order on or
must have an aggregate either the Network before December 31,
cabinet footprint of 2 kW Time Protocol Feed 2016: $3,000
or less to qualify for a or Precision Timing monthly for first
Partial Cabinet Solution Protocol. 12 months of
bundle. service, and $6,000
monthly thereafter.
For Users
that order after
December 31, 2016:
$6,000 monthly.
Option B: 2 kW $7,500 initial
partial cabinet, 1 charge per bundle
LCN connection (1 plus monthly charge
Gb), 1 IP network per bundle as
connection (1 Gb), follows:
2 fiber cross For Users
connections and that order on or
either the Network before December 31,
Time Protocol Feed 2016: $3,500
or Precision Timing monthly for first
Protocol. 12 months of
service, and $7,000
monthly thereafter.
For Users
that order after
December 31, 2016:
$7,000 monthly.
Option C: 1 kW $10,000 initial
partial cabinet, 1 charge per bundle
LCN connection (10 plus monthly charge
Gb), 1 IP network per bundle as
connection (10 Gb), follows:
2 fiber cross For Users
connections and that order on or
either the Network before December 31,
Time Protocol Feed 2016: $7,000
or Precision Timing monthly for first
Protocol. 12 months of
service, and
$14,000 monthly
thereafter.
For Users
that order after
December 31, 2016:
$14,000 monthly.

[[Page 7396]]

Option D: 2 kW $10,000 initial
partial cabinet, 1 charge per bundle
LCN connection (10 plus monthly charge
Gb), 1 IP network per bundle as
connection (10 Gb), follows:
2 fiber cross For Users
connections and that order on or
either the Network before December 31,
Time Protocol Feed 2016: $7,500
or Precision Timing monthly for first
Protocol. 12 months of
service, and
$15,000 monthly
thereafter.
For Users
that order after
December 31, 2016:
$15,000 monthly.
------------------------------------------------------------------------

Additionally, a User purchasing a Partial Cabinet Solution bundle would
be subject to a 90-day minimum commitment, after which period it would
be subject to the 60-day rolling time period.\29\
---------------------------------------------------------------------------

\29\ See id. at 78272. The Exchange proposes to have a reduced
minimum commitment period for the Partial Cabinet Solution bundle to
further reduce the cost commitment for such Users. The Exchange
acknowledges that the proposal may also attract some entities that
are currently Hosted Customers or would have become Hosted
Customers.
---------------------------------------------------------------------------

As more fully described in the Notice, the Exchange states that the
purpose of offering four Partial Cabinet Solution bundles is to attract
smaller Users, including those with minimal power or cabinet space
demands or those for which the costs attendant with having a dedicated
cabinet or greater network connection bandwidth are too burdensome.\30\
The Exchange proposes that the Partial Cabinet Solution bundles would
be available to Users provided: (1) The subscribing User purchases only
one Partial Cabinet Solution bundle; (2) the subscribing User and its
Affiliates must not currently have a Partial Cabinet Solution bundle;
and (3) after the purchase of the Partial Cabinet Solution bundle, the
subscribing User, together with its Affiliates, has an Aggregate
Cabinet Footprint of no more than 2 kW.\31\ The Exchange proposes that
for purposes of the Partial Cabinet Solution bundles, an ``Affiliate''
of a User would be any other User or a Hosted Customer that is under
50% or greater common ownership or control of the first User.\32\
Further, the term ``Aggregate Cabinet Footprint'' of a User or Hosted
Customer is proposed to be defined as: (a) For a User, the total kW of
the User's cabinets, including both partial and dedicated cabinets, and
(b), for a Hosted Customer, the total kW of the portion of the Hosting
User's cabinet, whether partial or dedicated, allocated to such Hosted
Customer.\33\
---------------------------------------------------------------------------

\30\ See id. at 78270.
\31\ See id.
\32\ See id. at n.15.
\33\ See id. at 78270-78271. For example, a User with a 4 kW
dedicated cabinet would not be eligible for a Partial Cabinet
Solution bundle, as its aggregate cabinet footprint would be either
5 kW or 6 kW once a Partial Cabinet Solution bundle was added.
---------------------------------------------------------------------------

A User would be required to inform the Exchange immediately of any
event that causes the User or a Hosted Customer to become ineligible
for a Partial Cabinet Solution bundle, including an event that causes
another User or Hosted Customer to become an Affiliate as this can make
the subscribing User ineligible for the bundle.\34\ If a subscribing
User ceases to meet the conditions for access to the Partial Cabinet
Solution bundle, it would be charged for each of the services
individually, at the price for each such service set out in the Price
List and Fee Schedule.\35\ Such price change would be effective as of
the date that the subscribing User ceased to meet the conditions.\36\
---------------------------------------------------------------------------

\34\ See id. at 78271. The Exchange would review available
information regarding the entities and may request additional
information to verify the Affiliate status of a User or Hosted
Customer. The Exchange would approve a request for a Partial Cabinet
Solution bundle unless it determines that the certification is not
accurate.
\35\ See id.
\36\ See id.
---------------------------------------------------------------------------

Further, if a subscribing User purchased each of the components of
a Partial Cabinet Solution bundle, whether over several purchases or in
one order, and met the conditions described above for access to the
Partial Cabinet Solution bundle, the Exchange would automatically treat
that User's services as a Partial Cabinet Solution bundle and,
effective the date of installation of the final component, reduce the
User's recurring fee to the recurring fee for the relevant bundle.\37\
In addition, a User that changes its Partial Cabinet Solution bundle
from one option to another will not be subject to a second initial
charge, but will be required to pay the difference, if any, between the
bundles' initial charges.\38\
---------------------------------------------------------------------------

\37\ See id. at 78271-78272.
\38\ See id. at 78271, n.19.
---------------------------------------------------------------------------

Finally, the Exchange proposes to make non-substantive changes to
the Price List and Fee Schedule to add subheadings under ``Co-Location
Fees'' for ``Definitions'' and ``General Notes.'' \39\
---------------------------------------------------------------------------

\39\ See id. at 78272.
---------------------------------------------------------------------------

III. Summary of Comment Letter and Exchange Response

As noted above, the Commission received one comment letter on the
proposed rule change,\40\ and a response from the Exchange.\41\ The
commenter expressed concern about the potential for ``GPS spoofing''
(intentional interference with GPS feeds from a distance) if GPS data
are from an unsecured source.\42\ According to the commenter, a
successful GPS spoofing attack could cause time feed data to become
corrupted, which could cause Users, such as High Frequency Trading
(``HFT'') firms that represent substantial market volume, to withdraw
from the market and lead to market disruption.\43\ The commenter asked
particularly whether purchasers of Partial Cabinet Solution bundles
that have access to the PTP and NTP feeds, but not the dedicated GPS
time feed, would have any ``special vulnerability to some sort of feed
failure'' as a result of ``GPS spoofing'' or otherwise.\44\
---------------------------------------------------------------------------

\40\ See Kubitz Letter, supra note 4.
\41\ See Exchange Response Letter, supra note 5.
\42\ See Kubitz Letter, supra note 4.
\43\ See id.
\44\ See id. The commenter further requested that the Commission
more broadly investigate and report on any risks associated with
time feeds, and measures to protect these and other data feeds. See
id. The Commission notes that this suggestion is beyond the scope of
the proposed rule change.
---------------------------------------------------------------------------

The Exchange responded that ``[t]o the best of the Exchange's
knowledge, Users that connect to the NTP or the PTP, rather than the
GPS Time Source, do not have a special vulnerability to feed failure,
irrespective of whether they utilize a partial or dedicated cabinet.''
\45\ The Exchange stated that it uses the same GPS time feed equipment
for its production environment and to provide time feeds to Users; \46\
and that Users purchasing time feeds from the Exchange (whether GPS,
PTP, or NTP) benefit from the same protections that the Exchange has
implemented for its

[[Page 7397]]

own GPS antennas and receivers.\47\ The Exchange also stated that GPS
is the source information for all three time feeds and that the
Exchange routes the GPS data through dedicated equipment that reformats
the GPS data to propagate the NTP and PTP.\48\ The Exchange further
stated that any disruption to the GPS time feed would impact the NTP
and PTP time feeds in the same way as the GPS feed; and that the
Exchange has no knowledge of any other method to ``spoof'' the NTP or
PTP feeds if the GPS feed were not compromised.\49\
---------------------------------------------------------------------------

\45\ See Exchange Response Letter, supra note 5, at 3.
\46\ See id. at 4.
\47\ See id. The Exchange added that that discussion of these
protections in a proposed rule change would impair their
effectiveness. See id. at 5.
\48\ See id. at 3.
\49\ See id. Regarding the commenter's concern about the
potential for GPS spoofing to lead to market disruption, the
Exchange stated that it could not comment on the behavior of HFT
Users during a ``spoofing event'' regardless of whether the HFT User
received its time feed from the Exchange or a third party vendor.
The Exchange noted, however, that the proposal was limited to time
feeds provided by the Exchange and that Users purchasing time feeds
from the Exchange benefit from the same protections that the
Exchange has implemented for its own GPS antennas and receivers. See
id. at 5.
---------------------------------------------------------------------------

IV. Discussion and Commission Findings

After careful review and consideration of the Exchange's proposal,
the comment letter and the Exchange's response, the Commission finds
that the proposed rule change, as modified by Amendment No. 1, is
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\50\ In particular, the Commission finds that the proposed
rule change, as modified by Amendment No. 1, is consistent with Section
6(b)(4) of the Act,\51\ 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,\52\
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.
---------------------------------------------------------------------------

\50\ In approving this proposed rule change, as modified by
Amendment No. 1, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. See 15
U.S.C. 78c(f).
\51\ 15 U.S.C. 78f(b)(4).
\52\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

The Commission believes that the proposed rule change is consistent
with Section 6(b)(4) of the Act. The Commission notes the Exchange's
representation that the proposed fees for the time feed connectivity
and Partial Cabinet Solution bundles are reasonable because the
Exchange proposes to offer the services as a convenience to Users, but
in doing so will incur certain costs, including costs related to the
data center facility, hardware and equipment and costs related to
personnel required for the initial installation, monitoring, support
and maintenance of such services.\53\ The Exchange states that the
higher fee in connection with the GPS time feed reflects the greater
costs for its equipment, installation and maintenance in comparison
with the other time feeds.\54\ In addition, all Users that voluntarily
select connectivity to one or more of the proposed time feeds would be
charged the same amount for the same services. With respect to the
proposed Partial Cabinet Solution bundles in particular, the Commission
also notes that all Users are subject to the same conditions and fees
for the service selected; all Users are subject to the same limits on
the number of Partial Cabinet Solution bundles and aggregate cabinet
footprint; all Users that order a bundle on or before December 31, 2016
would have their monthly charges reduced by 50 percent for the first 12
months; and all Users that change their Partial Cabinet Solution
bundles would not be charged a second initial charge but instead
charged the difference, if any, between the initial charges.
---------------------------------------------------------------------------

\53\ See Notice, 80 FR at 78273.
\54\ See id.
---------------------------------------------------------------------------

The Commission further believes that the Exchange's proposal to
offer Users optional connectivity to the GPS, PTP, and NTP time feeds
is consistent with the requirements of Section 6(b)(5) of the Act. The
proposal to offer connectivity to different time feed options allows a
User to select the time protocol that best suits it needs, helping to
tailor its data center operations to the requirements of its business
operations, and to operate more efficiently. As set forth in the
Exchange Response Letter, the Exchange states that whether a User
purchases access to the GPS, NTP, or PTP time feed, it benefits from
the same precautions as the Exchange's production environment, as the
Exchange uses the same GPS time feed equipment, including antennas and
receivers, to provide time feeds to Users.\55\ The Commission therefore
believes that the proposed time feeds, would remove impediments to, and
perfect the mechanisms of, a free and open market and a national market
system and, in general, protect investors and the public interest. The
Exchange represents that connectivity to the GPS time feed is not
available for partial cabinets because the proximity of the GPS and
power connections into a partial cabinet would expose the GPS to
interference from the cable power connections, interfering with the
delivery of the GPS data.\56\ The Exchange also represents that
connectivity to the NTP time feed is not proposed to be offered over
the IP network due to lack of demand.\57\ For these reasons, the
Commission believes that providing connectivity to the GPS Time Source
for dedicated cabinets but not partial cabinets, and to the NTP time
feed through the LCN but not the IP network, is not designed to permit
unfair discrimination between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

\55\ See Exchange Response Letter, supra note 5, at 4.
\56\ See supra, notes 20 and 21 and accompanying text.
\57\ See supra, note 22 and accompanying text.
---------------------------------------------------------------------------

The Commission also finds the Exchange's proposal to offer Partial
Cabinet Solution bundles consistent with Section 6(b)(5) of the Act. As
noted, all Users seeking to purchase a Partial Cabinet Solution bundle
would be subject to the same conditions. The Commission believes that
the proposed Partial Cabinet Solution bundles are reasonably designed
to make it more cost effective for Users with minimal power or cabinet
space demands to take advantage of the option for co-location services,
and therefore that they are 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 are not designed to
permit unfair discrimination between customers, issuers, brokers, or
dealers.
For the foregoing reasons, the Commission also finds that, the
proposed rule change, as modified by Amendment No. 1, is consistent
with the Act.

V. Solicitation of Comments on Amendment No. 1

Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether this filing, as
modified by Amendment No. 1, is

[[Page 7398]]

consistent with the Act. Comments may be submitted by any of the
following methods:

Electronic Comments

Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File No. SR-NYSE-2015-53 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 No. SR-NYSE-2015-53. 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 (https://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 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 No. SR-NYSE-2015-53, and should be
submitted on or before March 3, 2016.

VI. Accelerated Approval of Proposed Rule Change, as Modified by
Amendment No. 1

The Commission finds good cause, pursuant to Section 19(b)(2) of
the Act, to approve the proposed rule change, as modified by Amendment
No. 1, prior to the 30th day after the date of publication of Amendment
No. 1 in the Federal Register. As discussed above, Amendment No. 1
updates dates in the original proposed rule change and adds clarity on
the differences between the three time feeds in terms of their
precision.\58\ The Commission believes that these revisions provide
clarity on when partial cabinet bundle discounts will apply along with
additional information on the differences between the various time
feeds. Furthermore, the Commission believes it is appropriate to have
these changes incorporated into the rules of the Exchange concurrently
with those changes discussed in the original filing.
---------------------------------------------------------------------------

\58\ See supra, note 6.
---------------------------------------------------------------------------

Accordingly, the Commission finds good cause for approving the
proposed rule change, as modified by Amendment No. 1, on an accelerated
basis, pursuant to Section 19(b)(2) of the Act.\59\
---------------------------------------------------------------------------

\59\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

VII. Conclusion

It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\60\ that the proposed rule change, as modified by Amendment No. 1,
(File No. SR-NYSE-2015-53) be, and hereby is, approved on an
accelerated basis.
---------------------------------------------------------------------------

\60\ See id.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\61\
---------------------------------------------------------------------------

\61\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2016-02736 Filed 2-10-16; 8:45 am]
BILLING CODE 8011-01-P

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