Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving a Proposed Rule Change Amending Its Price List To Reflect Fees Charged for Co-Location Services, 59310-59311 [2010-24061]

Download as PDF 59310 Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices applicable trigger pause percentage (31.5%) whereupon the CBSX MarketMaker must immediately move its quote back to at least the permissible default level of 30%. These requirements shall apply to Regulation NMS stocks during CBSX Regular Trading Hours after the primary listing market has disseminated an opening quote in the stock for the given trading day. Nothing in the above precludes a CBSX Market-Maker from voluntarily quoting at price levels that are closer to the national best bid and best offer than required under the proposal. 2. Statutory Basis The statutory basis for the proposed rule change is Section 6(b)(5) of the Act,6 which requires the rules of an exchange 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. The proposed rule change also is designed to support the principles of Section 11A(a)(1) 7 of the Act in that it seeks to assure fair competition among brokers and dealers and among exchange markets. The Exchange believes that the proposed rule meets these requirements in that it promotes transparency and uniformity across markets concerning minimum market maker quotation requirements. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. srobinson on DSKHWCL6B1PROD with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others The Exchange neither solicited nor received comments on the proposal. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: 6 15 7 15 U.S.C. 78f(b)(5). U.S.C. 78k–1(a)(1). VerDate Mar<15>2010 17:01 Sep 24, 2010 Jkt 220001 (A) By order approve or disapprove such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Florence E. Harmon, Deputy Secretary. 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: [FR Doc. 2010–24055 Filed 9–24–10; 8:45 am] Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2010–087 on the subject line. Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving a Proposed Rule Change Amending Its Price List To Reflect Fees Charged for Co-Location Services Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–CBOE–2010–087. This file number should be included on the subject line if e-mail 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 inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of 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 publicly available. All submissions should refer to File Number SR–CBOE–2010–087 and should be submitted on or before October 18, 2010. PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62960; File No. SR–NYSE– 2010–56] September 21, 2010. On August 3, 2010, New York Stock Exchange LLC (‘‘NYSE’’ or 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 amend its Price List to reflect fees charged for co-location services. The proposed rule change was published for comment in the Federal Register on August 20, 2010.3 The Commission received no comment letters on the proposal. This order approves the proposed rule change. In its proposal, NYSE proposed to amend its Price List to identify fees pertaining to co-location services, which allow Users 4 of the Exchange to rent space on premises controlled by the Exchange so that they may locate their electronic servers in close physical proximity to the Exchange’s trading and execution systems. NYSE represented that it planned to begin operating a data center in Mahwah, New Jersey, from which it will offer co-location services. The Exchange represented that it will offer space at the data center in cabinets with power usage capability of either four or eight kilowatts (kW).5 In 8 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR240.19b–4. 3 See Securities Exchange Act Release No. 62732 (Aug 16, 2010), 75 FR 51512 (‘‘Notice’’). 4 For the purposes of this filing, the term ‘‘Users’’ includes any ‘‘member organization,’’ as that term is defined in NYSE Rule 2(b) and any ‘‘Sponsored Participant,’’ as that term is defined in NYSE Rule 123B.30(a)(ii)(B). 5 The Exchange represented that it also allows Users, for a monthly fee (i.e., 40% of the applicable monthly per kW fee), to obtain an option for future use on available, unused cabinet space in proximity to their existing cabinet space. Specifically, Users may reserve cabinet space of up to 30% of the 1 15 E:\FR\FM\27SEN1.SGM 27SEN1 Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices srobinson on DSKHWCL6B1PROD with NOTICES addition, the Exchange stated that it will offer Users services related to colocation, including cross connections, equipment and cable installation, and remote ‘‘hot-hands’’ services, which allow Users to use on-site data center personnel to maintain User equipment. The Exchange proposed tiered colocation fees based on the level of service (1Gb circuit, 10Gb circuit and various bundled options), and additional fees for related services. NYSE represented that Users that receive co-location services from the Exchange will not receive any means of access to the Exchange’s trading and execution systems that is separate from or superior to that of Users that do not receive co-location services. The Exchange noted that all orders sent to NYSE enter the Exchange’s trading and execution systems through the same order gateway regardless of whether the sender is co-located in the Exchange’s data center or not. Furthermore, NYSE noted that co-located Users do not receive any market data or data service product that is not available to all Users. Users that receive co-location services normally would expect reduced latencies in sending orders to the Exchange and receiving market data from the Exchange. In addition, the Exchange represented that co-located Users have the option of obtaining access to the Exchange’s Liquidity Center Network (‘‘LCN’’), a local area network available in the data center.6 Co-located Users have the option of using either the LCN or the Exchange’s Secure Financial Transaction Infrastructure (‘‘SFTI’’) network, to which all Users have access. Because it operates as a local area network within the data center, the LCN provides reduced latencies in comparison with SFTI. Other than the reduced latencies, the Exchange believes that there are no material differences in terms of access to the Exchange between Users that choose to co-locate and those that do not. According to NYSE, SFTI and LCN both provide Users with access to the Exchange’s trading and execution systems and to the Exchange’s cabinet space under contract, which the Exchange will endeavor to provide as close as reasonably possible to the User’s existing cabinet space, taking into consideration power availability within segments of the data center and the overall efficiency of use of data center resources as determined by the Exchange. 6 NYSE represented that pricing for LCN access is provided on a stand-alone basis and on a bundled basis in combination with SFTI connections and optic connections to outside access centers and within the data center. The SFTI and optic connections are not related to the co-location services. VerDate Mar<15>2010 17:01 Sep 24, 2010 Jkt 220001 proprietary market data products. User access to non-proprietary market data products is available through SFTI and not through LCN. NYSE represented that it offers colocation space based on availability and the Exchange believes that it has sufficient space in the Mahwah data center to accommodate current demand on an equitable basis for the foreseeable future. In addition, the Exchange believes that any difference among the positions of the cabinets within the data center does not create any material difference to co-location Users in terms of access to the Exchange. 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 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 tiered fees for co-location and related services are reasonable and equitably allocated insofar as they are applied on the same terms to similarlysituated market participants. In addition, the Commission believes that the connectivity options described in the proposed rule change are not unfairly discriminatory because NYSE makes the co-location services uniformly available to all Users who voluntarily request them and pay the fees as detailed in the proposal. As represented by NYSE, these fees are uniform for all such customers and may vary from User to User due to each User’s choice of service package. Finally, the Commission believes that the proposal will further the protection of investors and the public interest because it will provide greater transparency regarding the connectivity options available to market participants. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,10 that the proposed rule change (SR–NYSE–2010– 56) 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. 2010–24061 Filed 9–24–10; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62950; File No. SR– NASDAQ–2010–115] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of a Proposed Rule Change To Enhance Quotation Requirements for Market Makers September 20, 2010. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 17, 2010, The NASDAQ Stock Market LLC (‘‘Nasdaq’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NASDAQ proposes to enhance quotation requirements for market makers. The text of the proposed rule change is below. Proposed new language is in * * * proposed deletions are in [brackets].3 * * * * * 4751. Definitions The following definitions apply to the Rule 4600 and 4750 Series for the trading of securities listed on Nasdaq or 10 15 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 00106 Fmt 4703 Sfmt 4703 59311 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 Changes are marked to the rule text that appears in the electronic manual of Nasdaq found at https:// nasdaqomx.cchwallstreet.com. 11 17 E:\FR\FM\27SEN1.SGM 27SEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 75, Number 186 (Monday, September 27, 2010)]
[Notices]
[Pages 59310-59311]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-24061]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62960; File No. SR-NYSE-2010-56]


Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving a Proposed Rule Change Amending Its Price List To Reflect 
Fees Charged for Co-Location Services

September 21, 2010.
    On August 3, 2010, New York Stock Exchange LLC (``NYSE'' or 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 amend its Price List to reflect fees charged 
for co-location services. The proposed rule change was published for 
comment in the Federal Register on August 20, 2010.\3\ The Commission 
received no comment letters on the proposal. This order approves the 
proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR240.19b-4.
    \3\ See Securities Exchange Act Release No. 62732 (Aug 16, 
2010), 75 FR 51512 (``Notice'').
---------------------------------------------------------------------------

    In its proposal, NYSE proposed to amend its Price List to identify 
fees pertaining to co-location services, which allow Users \4\ of the 
Exchange to rent space on premises controlled by the Exchange so that 
they may locate their electronic servers in close physical proximity to 
the Exchange's trading and execution systems. NYSE represented that it 
planned to begin operating a data center in Mahwah, New Jersey, from 
which it will offer co-location services. The Exchange represented that 
it will offer space at the data center in cabinets with power usage 
capability of either four or eight kilowatts (kW).\5\ In

[[Page 59311]]

addition, the Exchange stated that it will offer Users services related 
to co-location, including cross connections, equipment and cable 
installation, and remote ``hot-hands'' services, which allow Users to 
use on-site data center personnel to maintain User equipment. The 
Exchange proposed tiered co-location fees based on the level of service 
(1Gb circuit, 10Gb circuit and various bundled options), and additional 
fees for related services.
---------------------------------------------------------------------------

    \4\ For the purposes of this filing, the term ``Users'' includes 
any ``member organization,'' as that term is defined in NYSE Rule 
2(b) and any ``Sponsored Participant,'' as that term is defined in 
NYSE Rule 123B.30(a)(ii)(B).
    \5\ The Exchange represented that it also allows Users, for a 
monthly fee (i.e., 40% of the applicable monthly per kW fee), to 
obtain an option for future use on available, unused cabinet space 
in proximity to their existing cabinet space. Specifically, Users 
may reserve cabinet space of up to 30% of the cabinet space under 
contract, which the Exchange will endeavor to provide as close as 
reasonably possible to the User's existing cabinet space, taking 
into consideration power availability within segments of the data 
center and the overall efficiency of use of data center resources as 
determined by the Exchange.
---------------------------------------------------------------------------

    NYSE represented that Users that receive co-location services from 
the Exchange will not receive any means of access to the Exchange's 
trading and execution systems that is separate from or superior to that 
of Users that do not receive co-location services. The Exchange noted 
that all orders sent to NYSE enter the Exchange's trading and execution 
systems through the same order gateway regardless of whether the sender 
is co-located in the Exchange's data center or not. Furthermore, NYSE 
noted that co-located Users do not receive any market data or data 
service product that is not available to all Users. Users that receive 
co-location services normally would expect reduced latencies in sending 
orders to the Exchange and receiving market data from the Exchange.
    In addition, the Exchange represented that co-located Users have 
the option of obtaining access to the Exchange's Liquidity Center 
Network (``LCN''), a local area network available in the data 
center.\6\ Co-located Users have the option of using either the LCN or 
the Exchange's Secure Financial Transaction Infrastructure (``SFTI'') 
network, to which all Users have access. Because it operates as a local 
area network within the data center, the LCN provides reduced latencies 
in comparison with SFTI. Other than the reduced latencies, the Exchange 
believes that there are no material differences in terms of access to 
the Exchange between Users that choose to co-locate and those that do 
not. According to NYSE, SFTI and LCN both provide Users with access to 
the Exchange's trading and execution systems and to the Exchange's 
proprietary market data products. User access to non-proprietary market 
data products is available through SFTI and not through LCN.
---------------------------------------------------------------------------

    \6\ NYSE represented that pricing for LCN access is provided on 
a stand-alone basis and on a bundled basis in combination with SFTI 
connections and optic connections to outside access centers and 
within the data center. The SFTI and optic connections are not 
related to the co-location services.
---------------------------------------------------------------------------

    NYSE represented that it offers co-location space based on 
availability and the Exchange believes that it has sufficient space in 
the Mahwah data center to accommodate current demand on an equitable 
basis for the foreseeable future. In addition, the Exchange believes 
that any difference among the positions of the cabinets within the data 
center does not create any material difference to co-location Users in 
terms of access to the Exchange.
    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 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 tiered fees for co-
location and related services are reasonable and equitably allocated 
insofar as they are applied on the same terms to similarly-situated 
market participants. In addition, the Commission believes that the 
connectivity options described in the proposed rule change are not 
unfairly discriminatory because NYSE makes the co-location services 
uniformly available to all Users who voluntarily request them and pay 
the fees as detailed in the proposal. As represented by NYSE, these 
fees are uniform for all such customers and may vary from User to User 
due to each User's choice of service package. Finally, the Commission 
believes that the proposal will further the protection of investors and 
the public interest because it will provide greater transparency 
regarding the connectivity options available to market participants.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-NYSE-2010-56) 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. 2010-24061 Filed 9-24-10; 8:45 am]
BILLING CODE 8010-01-P

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