Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Order Approving a Proposed Rule Change To Codify Prices for Co-Location Services, 38585-38587 [2010-16146]
Download as PDF
<![CDATA[
emcdonald on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices
endeavor to provide as close as
reasonably possible to the customer’s
existing cabinet space, taking into
consideration power availability within
segments of the datacenter and the
overall efficiency of use of datacenter
resources as determined by the
Exchange. Should reserved datacenter
space be needed for use, the reserving
customer will have three business days
to formally contract with the Exchange
for full payment for the reserved cabinet
space in contention or it will be
reassigned. In making determinations to
require exercise or relinquishment of
reserved space as among numerous
customers, the Exchange will take into
consideration several factors, including:
Proximity between available reserved
cabinet space and the existing space of
a customer seeking additional space for
actual cabinet usage; a customer’s ratio
of cabinets in use to those reserved; the
length of time that a particular
reservation(s) has been in place; and any
other factor that the Exchange deems
relevant to ensure overall efficiency in
use of the datacenter space.
In the Notice, the Exchange made
certain representations regarding its colocation services. First, the Exchange
represents that co-location customers
are not provided any separate or
superior means of direct access to the
Exchange quoting and trading facilities,
nor does the Exchange offer any
separate or superior means of access to
the Exchange quoting and trading
facilities as among co-location
customers themselves within the
datacenter. Second, the Exchange
represents that it does not make
available to co-located customers any
market data or data feed product or
service for data going into, or out of, the
Exchange systems that is not likewise
available to all the Exchange members.6
Finally, the Exchange represents that all
orders sent to the Exchange market enter
the marketplace through the same
central system quote and order gateway
regardless of whether the sender is colocated in the Exchange data center or
not. In short, according to the Exchange,
it has created no special market
technology or programming that is
available only to co-located customers
and has organized its systems to
minimize, to the greatest extent
possible, any advantage for one
customer versus another.
6 The Exchange made a 10Gb fiber connection
available to co-located customers early in the first
quarter of 2010. On March 26, 2010, the Exchange
filed a proposed rule change that would, among
other things, establish pricing for 10Gb fiber
connections for customers who are not co-located
in Phlx’s datacenter. See SR–Phlx–2010–89.
VerDate Mar<15>2010
18:27 Jul 01, 2010
Jkt 220001
The Exchange also has represented
that co-location services are generally
available to all qualified market
participants who desire them. With the
exception of customers participating in
the Cabinet Proximity Option program,
the Exchange allocates cabinets and
power on a first-come/first-serve basis.
Should available cabinet inventory
shrink to 40 cabinets or less, the
Exchange will limit new cabinet orders
to a maximum of 4 cabinets each, and
all new cabinets will be limited to a
maximum power level of 5kW. Should
available cabinet inventory shrink to
zero, the Exchange will place firms
seeking services on a waiting list based
on that the Exchange receives signed
orders for the services from the firm. In
order to be placed on the waiting list,
a firm must have utilized all existing
cabinets they already have in the
datacenter. Once on the list, the firms,
on a rolling basis, will be allocated a
single 5kW cabinet each time one
becomes available. After receiving a
cabinet, the firm will move to the
bottom of the waiting list.
III. Discussion and Commission’s
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.7 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(4) of the Act,8 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,9 which requires, among other
things, that 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.
The Commission believes that the
proposed co-location fees are reasonable
and equitably allocated insofar as they
are applied on the same terms to
similarly-situated market participants.
7 In approving this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
8 15 U.S.C. 78f(b)(4).
9 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00130
Fmt 4703
Sfmt 4703
38585
The Commission notes that charges may
vary depending on the use of cabinet
space and/or power usage. In addition,
the Commission believes that the colocation services described in the
proposed rule change are not unfairly
discriminatory because: (1) Co-location
services are offered to all interested
market participants who request them
and pay the appropriate fees; (2) as
represented by Phlx, the Exchange has
architected its systems so as to reduce
or eliminate differences among users of
its systems, whether co-located or not;
and (3) the Exchange has stated that it
has sufficient space to accommodate
new co-locaters and has set forth in the
proposed rule change objective
procedures to allocate space should it
become limited in the future.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,10 that the
proposed rule change (SR–Phlx–2010–
18) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–16145 Filed 7–1–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62396; File No. SR–BX–
2010–012]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Order
Approving a Proposed Rule Change To
Codify Prices for Co-Location Services
June 28, 2010.
I. Introduction
On January 29, 2010, NASDAQ OMX
BX, Inc. (‘‘BX’’ or ‘‘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 relating to co-location services
and related fees. The proposed rule
change was published for comment in
the Federal Register on February 10,
2010.3 The Commission received no
comment letters on the proposal. This
10 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 61487
(February 3, 2010), 75 FR 6746 (‘‘Notice’’).
11 17
E:\FR\FM\02JYN1.SGM
02JYN1
38586
Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices
II. Description
As described in the Notice, the
Exchange is proposing to codify fees for
its existing co-location services. Colocation services are a suite of hardware,
power, telecommunication, and other
ancillary products and services that
allows market participants and vendors
to place their trading and
communications equipment in close
physical proximity to the quoting and
execution facilities of the Exchange. BX
provides co-location services and
imposes fees through Nasdaq
Technology Services LLC and pursuant
to agreements with the owner/operator
of its data center where both the
Exchange’s quoting and trading facilities
and co-located customer equipment are
housed.4 Users of co-location services
include private extranet providers, data
vendors, as well as the Exchange
members and non-members. The use of
co-location services is entirely
voluntary.
As detailed in its fee schedule, the
Exchange imposes a uniform set of fees
for various co-location services,
including: fees for cabinet space usage,
or options for future space usage;
installation and related power provision
for hosted equipment; connectivity
among multiple cabinets being used by
the same customer as well as customer
connectivity to the Exchange and
telecommunications providers; 5 and
related maintenance and consulting
services. Fees related to cabinet and
power usage are incremental, with
additional charges being imposed based
on higher levels of cabinet and/or power
usage, the use of non-standard cabinet
sizes or special cabinet cooling
equipment, or the re-selling of cabinet
space.
NASDAQ OMX BX is implementing a
Cabinet Proximity Option program
where, for a monthly a fee, customers
can obtain an option for future use on
available currently-unused cabinet floor
space in proximity to their existing
equipment. Under the program,
customers can reserve up to maximum
of 20 cabinets that the Exchange will
endeavor to provide as close as
reasonably possible to the customer’s
existing cabinet space, taking into
consideration power availability within
segments of the datacenter and the
overall efficiency of use of datacenter
resources as determined by the
Exchange. Should reserved datacenter
space be needed for use, the reserving
customer will have three business days
to formally contract with the Exchange
for full payment for the reserved cabinet
space in contention or it will be
reassigned. In making determinations to
require exercise or relinquishment of
reserved space as among numerous
customers, the Exchange will take into
consideration several factors, including:
Proximity between available reserved
cabinet space and the existing space of
a customer seeking additional space for
actual cabinet usage; a customer’s ratio
of cabinets in use to those reserved; the
length of time that a particular
reservation(s) has been in place; and any
other factor that the Exchange deems
relevant to ensure overall efficiency in
use of the datacenter space.
In the Notice, the Exchange made
certain representations regarding its colocation services. First, the Exchange
represents that co-location customers
are not provided any separate or
superior means of direct access to the
Exchange quoting and trading facilities,
nor does the Exchange offer any
separate or superior means of access to
the Exchange quoting and trading
facilities as among co-location
customers themselves within the
datacenter. Second, BX represents that it
does not make available to co-located
customers any market data or data feed
product or service for data going into, or
out of, the Exchange systems that is not
likewise available to all the Exchange
members.6 Finally, the Exchange
represents that all orders sent to the
Exchange market enter the marketplace
through the same central system quote
and order gateway regardless of whether
the sender is co-located in the Exchange
data center or not. In short, according to
the Exchange, it has created no special
market technology or programming that
is available only to co-located customers
and has organized its systems to
minimize, to the greatest extent
possible, any advantage for one
customer versus another.
The Exchange also has represented
that co-location services are generally
available to all qualified market
participants who desire them. With the
exception of customers participating in
the Cabinet Proximity Option program,
the Exchange allocates cabinets and
4 Currently, NASDAQ OMX BX provides its colocation services through data centers located in the
New York City and Mid-Atlantic areas.
5 The Exchange states that these fees are for
telecommunications connectivity only. Market data
fees are charged independently by NASDAQ OMX
BX and other exchanges.
6 The Exchange made a 10Gb fiber connection
available to co-located customers early in the first
quarter of 2010. On March 26, 2010, the Exchange
filed a proposed rule change that would, among
other things, establish pricing for 10Gb fiber
connections for customers who are not co-located
in BX’s datacenter. See SR–BX–2010–043.
emcdonald on DSK2BSOYB1PROD with NOTICES
order approves the proposed rule
change.
VerDate Mar<15>2010
18:27 Jul 01, 2010
Jkt 220001
PO 00000
Frm 00131
Fmt 4703
Sfmt 4703
power on a first-come/first-serve basis.
Should available cabinet inventory
shrink to 40 cabinets or less, the
Exchange will limit new cabinet orders
to a maximum of 4 cabinets each, and
all new cabinets will be limited to a
maximum power level of 5kW. Should
available cabinet inventory shrink to
zero, the Exchange will place firms
seeking services on a waiting list based
on that date the Exchange receives
signed orders for the services from the
firm. In order to be placed on the
waiting list, a firm must have utilized
all existing cabinets they already have
in the datacenter. Once on the list, the
firms, on a rolling basis, will be
allocated a single 5kW cabinet each time
one becomes available. After receiving a
cabinet, the firm will move to the
bottom of the waiting list.
III. Discussion and Commission’s
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.7 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(4) of the Act,8 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,9 which requires, among other
things, that 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.
The Commission believes that the
proposed co-location fees are reasonable
and equitably allocated insofar as they
are applied on the same terms to
similarly-situated market participants.
The Commission notes that charges may
vary depending on the use of cabinet
space and/or power usage. In addition,
the Commission believes that the colocation services described in the
proposed rule change are not unfairly
discriminatory because: (1) Co-location
7 In approving this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
8 15 U.S.C. 78f(b)(4).
9 15 U.S.C. 78f(b)(5).
E:\FR\FM\02JYN1.SGM
02JYN1
Federal Register / Vol. 75, No. 127 / Friday, July 2, 2010 / Notices
services are offered to all interested
market participants who request them
and pay the appropriate fees; (2) as
represented by BX, the Exchange has
architected its systems so as to, as much
as possible, reduce or eliminate
differences among users of its systems,
whether co-located or not; and (3) the
Exchange has stated that it has sufficient
space to accommodate new co-locaters
has set forth in the proposed rule
change objective procedures to allocate
space should it become limited in the
future.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,10 that the
proposed rule change (SR–BX–2010–
012) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–16146 Filed 7–1–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62399; File No. SR–ISE–
2010–34]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Order Approving Proposed Rule
Change Relating to Fees for the ISE
Order Feed
June 28, 2010.
emcdonald on DSK2BSOYB1PROD with NOTICES
I. Introduction
On May 11, 2010, the International
Securities Exchange, LLC (‘‘Exchange’’
or ‘‘ISE’’) 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 amend its
Schedule of Fees to adopt subscription
fees for the sale of a new market data
offering called the ISE Order Feed. The
proposed rule change was published for
comment in the Federal Register on
May 25, 2010.3 The Commission
received no comment letters on the
proposed rule change. This order
approves the proposed rule change.
10 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 62117
(May 18, 2010), 75 FR 29381 (‘‘Notice’’).
11 17
VerDate Mar<15>2010
18:27 Jul 01, 2010
Jkt 220001
II. Description of the Proposed Rule
Change
ISE proposes to establish subscription
fees for the sale of the ISE Order Feed,
which provides real-time updates every
time a new limit order that is not
immediately executable at the best bid/
offer (‘‘BBO’’) is placed on the ISE order
book.4 ISE Order Feed contains
information on individual limit orders
including the order type (buy/sell), the
order price, the order size, and customer
indicator (which reflects whether the
order is a customer order), as well as
details for each instrument series,
including the symbols (series and
underlying security), put or call
indicator, the expiration and the strike
price of the series.
The Exchange proposes to charge
distributors 5 of the ISE Order Feed
$2,000 per month and $10 per external
controlled device 6 per month. For
subscribers who redistribute the ISE
Order Feed externally, or redistribute
the ISE Order Feed internally and
externally, the Exchange proposes to
limit for any one month the combined
maximum amount of fees payable to
$2,500. The ISE Order Feed will be
made available to both members and
non-members on a subscription basis.
Upon Commission approval, the
Exchange intends to begin charging the
ISE Order Feed fees on July 1, 2010.
III. Discussion and Commission
Findings
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange.7 In particular, it is consistent
with Section 6(b)(4) of the Act,8 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 parties
using its facilities, and Section 6(b)(5) of
4 The ISE Order Feed does not include market
orders, immediate or cancel orders, quotes, or any
non-displayed interest.
5 A ‘‘distributor’’ is any firm that receives the ISE
Order Feed directly from ISE or indirectly through
a ‘‘redistributor’’ and then distributes it either
internally or externally. All distributors will be
required by the Exchange to execute an ISE
distributor agreement. ‘‘Redistributors’’ include
market data vendors and connectivity providers
such as extranets and private network providers.
6 A ‘‘controlled device’’ is as any device that a
distributor of the ISE Order Feed permits to access
the information in the ISE Order Feed.
7 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
8 15 U.S.C. 78f(b)(4).
PO 00000
Frm 00132
Fmt 4703
Sfmt 4703
38587
the Act,9 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. The
Commission also finds that the
proposed rule change is consistent with
the provisions of Section 6(b)(8) of the
Act,10 which requires that the rules of
an exchange not impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act.
The Commission has reviewed the
proposal using the approach set forth in
the approval order for SR–NYSEArca2006–21 for non-core market data fees.11
In the NYSE Arca Order, the
Commission stated that ‘‘when possible,
reliance on competitive forces is the
most appropriate and effective means to
assess whether the terms for the
distribution of non-core data are
equitable, fair and reasonable, and not
unreasonably discriminatory.’’ 12 It
noted that the ‘‘existence of significant
competition provides a substantial basis
for finding that the terms of an
exchange’s fee proposal are equitable,
fair, reasonable, and not unreasonably
or unfairly discriminatory.’’ 13 If an
exchange ‘‘was subject to significant
competitive forces in setting the terms
of a proposal,’’ the Commission will
approve a proposal unless it determines
that ‘‘there is a substantial
countervailing basis to find that the
terms nevertheless fail to meet an
applicable requirement of the Exchange
Act or the rules thereunder.’’ 14
As noted in the NYSE Arca Order, the
standards in Section 6 of the Act do not
differentiate between types of data and
therefore apply to exchange proposals to
distribute both core data and non-core
data.15 All U.S. options exchanges are
required pursuant to the Plan for
Reporting of Consolidated Options Last
Sale Reports and Quotation Information
(‘‘OPRA Plan’’) to provide ‘‘core data’’—
the best-priced quotations and
comprehensive last sale reports—to
9 15
U.S.C. 78f(b)(5).
U.S.C. 78f(b)(8).
11 See Securities Exchange Act Release No. 59039
(December 2, 2008), 73 FR 74770 (December 9,
2008) (SR–NYSEArca–2006–21) (‘‘NYSE Arca
Order’’).
12 Id. at 74771.
13 Id. at 74782.
14 Id. at 74781.
15 Id. at 74779.
10 15
E:\FR\FM\02JYN1.SGM
02JYN1
]]>Agencies
[Federal Register Volume 75, Number 127 (Friday, July 2, 2010)]
[Notices]
[Pages 38585-38587]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-16146]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62396; File No. SR-BX-2010-012]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Order
Approving a Proposed Rule Change To Codify Prices for Co-Location
Services
June 28, 2010.
I. Introduction
On January 29, 2010, NASDAQ OMX BX, Inc. (``BX'' or ``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
relating to co-location services and related fees. The proposed rule
change was published for comment in the Federal Register on February
10, 2010.\3\ The Commission received no comment letters on the
proposal. This
[[Page 38586]]
order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 61487 (February 3,
2010), 75 FR 6746 (``Notice'').
---------------------------------------------------------------------------
II. Description
As described in the Notice, the Exchange is proposing to codify
fees for its existing co-location services. Co-location services are a
suite of hardware, power, telecommunication, and other ancillary
products and services that allows market participants and vendors to
place their trading and communications equipment in close physical
proximity to the quoting and execution facilities of the Exchange. BX
provides co-location services and imposes fees through Nasdaq
Technology Services LLC and pursuant to agreements with the owner/
operator of its data center where both the Exchange's quoting and
trading facilities and co-located customer equipment are housed.\4\
Users of co-location services include private extranet providers, data
vendors, as well as the Exchange members and non-members. The use of
co-location services is entirely voluntary.
---------------------------------------------------------------------------
\4\ Currently, NASDAQ OMX BX provides its co-location services
through data centers located in the New York City and Mid-Atlantic
areas.
---------------------------------------------------------------------------
As detailed in its fee schedule, the Exchange imposes a uniform set
of fees for various co-location services, including: fees for cabinet
space usage, or options for future space usage; installation and
related power provision for hosted equipment; connectivity among
multiple cabinets being used by the same customer as well as customer
connectivity to the Exchange and telecommunications providers; \5\ and
related maintenance and consulting services. Fees related to cabinet
and power usage are incremental, with additional charges being imposed
based on higher levels of cabinet and/or power usage, the use of non-
standard cabinet sizes or special cabinet cooling equipment, or the re-
selling of cabinet space.
---------------------------------------------------------------------------
\5\ The Exchange states that these fees are for
telecommunications connectivity only. Market data fees are charged
independently by NASDAQ OMX BX and other exchanges.
---------------------------------------------------------------------------
NASDAQ OMX BX is implementing a Cabinet Proximity Option program
where, for a monthly a fee, customers can obtain an option for future
use on available currently-unused cabinet floor space in proximity to
their existing equipment. Under the program, customers can reserve up
to maximum of 20 cabinets that the Exchange will endeavor to provide as
close as reasonably possible to the customer's existing cabinet space,
taking into consideration power availability within segments of the
datacenter and the overall efficiency of use of datacenter resources as
determined by the Exchange. Should reserved datacenter space be needed
for use, the reserving customer will have three business days to
formally contract with the Exchange for full payment for the reserved
cabinet space in contention or it will be reassigned. In making
determinations to require exercise or relinquishment of reserved space
as among numerous customers, the Exchange will take into consideration
several factors, including: Proximity between available reserved
cabinet space and the existing space of a customer seeking additional
space for actual cabinet usage; a customer's ratio of cabinets in use
to those reserved; the length of time that a particular reservation(s)
has been in place; and any other factor that the Exchange deems
relevant to ensure overall efficiency in use of the datacenter space.
In the Notice, the Exchange made certain representations regarding
its co-location services. First, the Exchange represents that co-
location customers are not provided any separate or superior means of
direct access to the Exchange quoting and trading facilities, nor does
the Exchange offer any separate or superior means of access to the
Exchange quoting and trading facilities as among co-location customers
themselves within the datacenter. Second, BX represents that it does
not make available to co-located customers any market data or data feed
product or service for data going into, or out of, the Exchange systems
that is not likewise available to all the Exchange members.\6\ Finally,
the Exchange represents that all orders sent to the Exchange market
enter the marketplace through the same central system quote and order
gateway regardless of whether the sender is co-located in the Exchange
data center or not. In short, according to the Exchange, it has created
no special market technology or programming that is available only to
co-located customers and has organized its systems to minimize, to the
greatest extent possible, any advantage for one customer versus
another.
---------------------------------------------------------------------------
\6\ The Exchange made a 10Gb fiber connection available to co-
located customers early in the first quarter of 2010. On March 26,
2010, the Exchange filed a proposed rule change that would, among
other things, establish pricing for 10Gb fiber connections for
customers who are not co-located in BX's datacenter. See SR-BX-2010-
043.
---------------------------------------------------------------------------
The Exchange also has represented that co-location services are
generally available to all qualified market participants who desire
them. With the exception of customers participating in the Cabinet
Proximity Option program, the Exchange allocates cabinets and power on
a first-come/first-serve basis. Should available cabinet inventory
shrink to 40 cabinets or less, the Exchange will limit new cabinet
orders to a maximum of 4 cabinets each, and all new cabinets will be
limited to a maximum power level of 5kW. Should available cabinet
inventory shrink to zero, the Exchange will place firms seeking
services on a waiting list based on that date the Exchange receives
signed orders for the services from the firm. In order to be placed on
the waiting list, a firm must have utilized all existing cabinets they
already have in the datacenter. Once on the list, the firms, on a
rolling basis, will be allocated a single 5kW cabinet each time one
becomes available. After receiving a cabinet, the firm will move to the
bottom of the waiting list.
III. Discussion and Commission's Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange.\7\
In particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\8\ 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,\9\ which requires, among other things, that 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.
---------------------------------------------------------------------------
\7\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\8\ 15 U.S.C. 78f(b)(4).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission believes that the proposed co-location fees are
reasonable and equitably allocated insofar as they are applied on the
same terms to similarly-situated market participants. The Commission
notes that charges may vary depending on the use of cabinet space and/
or power usage. In addition, the Commission believes that the co-
location services described in the proposed rule change are not
unfairly discriminatory because: (1) Co-location
[[Page 38587]]
services are offered to all interested market participants who request
them and pay the appropriate fees; (2) as represented by BX, the
Exchange has architected its systems so as to, as much as possible,
reduce or eliminate differences among users of its systems, whether co-
located or not; and (3) the Exchange has stated that it has sufficient
space to accommodate new co-locaters has set forth in the proposed rule
change objective procedures to allocate space should it become limited
in the future.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\10\ that the proposed rule change (SR-BX-2010-012) be, and hereby
is, approved.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-16146 Filed 7-1-10; 8:45 am]
BILLING CODE 8010-01-P
