Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Approving a Proposed Rule Change to Modify Rule 7034 Regarding Low Latency Network Connections, 80992-80993 [2011-33145]
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Federal Register / Vol. 76, No. 248 / Tuesday, December 27, 2011 / Notices
Company Guide. Accordingly, the
Commission believes that the proposed
change should avoid potential
confusion associated with having
duplicative rules and is therefore,
consistent with Section 6 of the Act.
Finally, the Commission notes that
the change to reflect that NYSE Amex
rules prohibit not only the giving of a
proxy, but also the authorization of the
proxy, should help to clarify the intent
of NYSE Amex proxy rules and is
consistent with the requirements of
Section 6 of the Act.
Based on the above, the Commission
believes that the NYSE Amex’s proposal
will further the purposes of Sections
6(b)(5) and 6(b)(10) of the Act by
ensuring that brokers, holding shares on
behalf of beneficial owners, are not
voting uninstructed shares on matters
relating to executive compensation,
which should enhance corporate
accountability to shareholders. The rule
filing should also serve to fulfill the
Congressional intent in adopting
Section 6(b)(10) of the Act.
The Commission also finds good
cause, pursuant to Section 19(b)(2) of
the Act,15 for approving the proposed
rule change prior to the 30th day after
the date of publication of notice in the
Federal Register. Section 6(b)(10) of the
Act, enacted under Section 957 of the
Dodd-Frank Act, does not provide for a
transition phase, and requires rules of
national securities exchanges to
prohibit, among other things, broker
voting on executive compensation. The
Commission believes that good cause
exists to grant accelerated approval to
the Exchange’s proposal, because it will
conform NYSE Amex rules to the
requirements of Section 6(b)(10) of the
Act. Moreover, the Commission notes
that the proposed changes are based on
NYSE Rule 452.16
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,17 that the
proposed rule change (SR–NYSEAmex–
2011–97) be, and it hereby is, approved
on an accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to
delegated authority.18
sroberts on DSK5SPTVN1PROD with NOTICES
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–33045 Filed 12–23–11; 8:45 am]
BILLING CODE 8011–01–P
15 15
U.S.C. 78s(b)(2).
16 See NYSE Rule 452, Securities Exchange Act
Release No. 34–62874 (September 9, 2010), 75 FR
56152 (September 15, 2010) (SR–NYSE–2010–59).
17 15 U.S.C. 78s(b)(2).
18 17 CFR 200.30–3(a)(12).
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22:00 Dec 23, 2011
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66013; File No. SR–
NASDAQ–2011–146]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Order
Approving a Proposed Rule Change to
Modify Rule 7034 Regarding Low
Latency Network Connections
December 20, 2011.
I. Introduction
On October 31, 2011, the NASDAQ
Stock Market LLC (‘‘NASDAQ’’ 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
modify Exchange Rule 7034 entitled
‘‘Co-Location Services’’ to establish a
program for offering low latency
network connections and to establish
the initial fees for such connections.
The Exchange also proposed
administrative modifications to
Exchange Rule 7034. The proposed rule
change was published for comment in
the Federal Register on November 10,
2011.3 The Commission received no
comments on the proposal. This order
approves the proposed rule change.
II. Description of the Proposed Rule
Change
The Exchange proposed to modify
Exchange Rule 7034, which governs the
Exchange’s program for co-location
services, to offer new options for low
latency network telecommunication
connections and to establish the fees for
such connections. As its initial offering,
the Exchange proposed to offer point-topoint telecommunication connectivity
from the co-location facility to select
major financial trading and co-location
venues in the New York and New Jersey
metropolitan areas, Toronto, and
Chicago.4
According to the Exchange, the
enhanced point-to-point connectivity
would provide the Exchange’s co1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 65688
(November 4, 2011), 76 FR 70199 (‘‘Notice’’).
4 Id. at 70199. The Exchange represented that it
currently provides a cross connect from a client’s
cabinet to its requested telecommunication carrier’s
cabinet (known as a ‘‘telco cross connect’’).
According to the Exchange, clients would have the
option to use the enhanced point-to-point
connectivity service to receive low latency network
connectivity from the Exchange’s data center to the
client’s chosen venue(s), in addition to the telco
cross connect. These connections could be utilized
to send market data to and receive orders from the
chosen venues.
2 17
PO 00000
Frm 00125
Fmt 4703
Sfmt 4703
location customers with the opportunity
to obtain low latency network
connectivity with greater ease than is
currently the case, and at a competitive
price.5 The Exchange represented that
co-location customers currently obtain
similar services by negotiating fees,
obtaining service level agreements, and
executing service agreements directly
with approved telecommunication
carriers, and that such co-location
customers are currently charged a
monthly negotiated fee by the
telecommunications carrier in addition
to a cross connection fee by the
Exchange.6 The Exchange represented
that for its low latency network
connection services, it would obtain
wholesale rates from the carriers and
then charge a markup to compensate the
Exchange for its efforts to negotiate and
establish the arrangement, for
integrating the connectivity into the
Exchange co-location connectivity
offering, and for administrative costs
associated with establishing and
maintaining each new connection.7
According to the Exchange, colocation customers would have the
opportunity to request these new low
latency network telecommunication
connections through the same process
used to request a new co-located cabinet
and other co-location services.8 Colocation customers would retain the
option of contracting directly with
telecommunication providers, including
either the providers that participate in
the program, the current providers in
the data center who have not yet agreed
to participate, or any new carrier that is
approved to install equipment in the
Exchange’s data center.9
The Exchange proposed one-time fees
for the installation of
telecommunication connectivity to
select major financial trading and colocation venues in the New York and
New Jersey metropolitan areas, Toronto,
and Chicago, as well as per-month
connectivity fees, at connectivity levels
of 100MB, 1G, and 10G, respectively.10
The Exchange represented that the fees
were based on anticipated bandwidth
necessary for the connections and
distances to these select venues. The
Exchange indicated its belief that the
fees are reasonable, because they are
similar and competitive with fees
charged for similar services by other
entities.11
5 Id.
at 70200.
6 Id.
7 Id.
8 Id.
9 Id.
10 Id.
11 Id.
E:\FR\FM\27DEN1.SGM
27DEN1
Federal Register / Vol. 76, No. 248 / Tuesday, December 27, 2011 / Notices
The Exchange also proposed to
eliminate references to certain fee
waivers that expired July 31, 2011.12
sroberts on DSK5SPTVN1PROD with NOTICES
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.13 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(4) of the Act,14 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,15 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.
In the Notice, the Exchange
represented that the low latency
network connections would be offered
to market participants in a manner that
is not unfairly discriminatory.16 The
Commission believes that this program
to offer low latency network
connectivity, in the manner described in
the proposal, is consistent with Section
6(b)(5) the Exchange Act insofar as
NASDAQ makes these connectivity
options uniformly available to all
members who voluntarily request them
and pay the associated fees.
Additionally, the Commission notes that
members may choose not to obtain low
latency network connectivity through
the Exchange and instead negotiate
connectivity options separately through
other vendors on site.
Regarding the associated fees, the
Exchange represented that they will be
applied uniformly and will not unfairly
discriminate between similarly situated
12 See Notice, 76 FR at 70201; see also Securities
Exchange Act Release No. 64630 (June 8, 2011), 76
FR 34783 (June 14, 2011) (SR–NASDAQ–2011–074);
and Securities Exchange Act Release No. 64858
(July 12, 2011), 76 FR 42152 (July 18, 2011) (SR–
NASDAQ–2011–094).
13 In approving this proposed rule change, the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
14 15 U.S.C. 78f(b)(4).
15 15 U.S.C. 78f(b)(5).
16 See Notice, 76 FR at 70201.
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22:00 Dec 23, 2011
Jkt 226001
market participants that use such colocation services.17 The Exchange also
represented that the fees are reasonable
because, among other things, they
enable the Exchange to recoup its share
of the costs associated with the
proposed low latency network
telecommunication connections.18 The
Exchange further represented that the
fees and associated costs of the colocation services are comparable to the
costs and fees associated with
comparable services offered by other
trading venues.19 Finally, the Exchange
noted its expectation that this service
will result in a reduction in fees charged
to market participants due to enhanced
competition.20 In light of the Exchange’s
representations, the Commission
believes that the fees associated with the
low latency network connection
services are consistent with Section
6(b)(4) of the Exchange Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,21 that the
proposed rule change (SR–NASDAQ–
2011–146) be, and it hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–33145 Filed 12–23–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–66010; File No. SR–
NASDAQ–2011–160]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify Fees
for Co-Location Services
December 20, 2011.
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 December
9, 2011, The NASDAQ Stock Market
LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
17 Id.
18 Id.
19 Id.
20 Id.
21 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.
22 17
PO 00000
Frm 00126
Fmt 4703
Sfmt 4703
80993
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 the Substance
of the Proposed Rule Change
The Exchange proposes to modify
pricing for co-location services. The text
of the proposed rule change is available
at https://nasdaq.cchwallstreet.com/, at
the Exchange’s principal office, on the
Commission’s Web site at https://
www.sec.gov, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is modifying its colocation fee schedule, Exchange Rule
7034(a), to include a fee for an optional
cabinet choice. Currently co-location
customers have the option of obtaining
several cabinet sizes and power
densities. The co-located customer may
obtain a half cabinet, a low density
cabinet, a medium density cabinet, a
medium-high density cabinet and a high
density cabinet.3 Each cabinet may vary
in size and maximum power capacity.
The fees related to the 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. The co-location customer
may obtain more power by choosing a
combination of lower power density
cabinets. However, the Exchange is
providing a choice of a larger cabinet
(30″W × 48″ D × 96″ H) with higher
power instead of combining several
units for more power (>10kW<=17.3kW)
3 See
E:\FR\FM\27DEN1.SGM
Exchange Rule 7034(a).
27DEN1
]]>Agencies
[Federal Register Volume 76, Number 248 (Tuesday, December 27, 2011)]
[Notices]
[Pages 80992-80993]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-33145]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66013; File No. SR-NASDAQ-2011-146]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Approving a Proposed Rule Change to Modify Rule 7034 Regarding Low
Latency Network Connections
December 20, 2011.
I. Introduction
On October 31, 2011, the NASDAQ Stock Market LLC (``NASDAQ'' 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 modify Exchange Rule 7034 entitled ``Co-
Location Services'' to establish a program for offering low latency
network connections and to establish the initial fees for such
connections. The Exchange also proposed administrative modifications to
Exchange Rule 7034. The proposed rule change was published for comment
in the Federal Register on November 10, 2011.\3\ The Commission
received no comments on the proposal. This 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. 65688 (November 4,
2011), 76 FR 70199 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
The Exchange proposed to modify Exchange Rule 7034, which governs
the Exchange's program for co-location services, to offer new options
for low latency network telecommunication connections and to establish
the fees for such connections. As its initial offering, the Exchange
proposed to offer point-to-point telecommunication connectivity from
the co-location facility to select major financial trading and co-
location venues in the New York and New Jersey metropolitan areas,
Toronto, and Chicago.\4\
---------------------------------------------------------------------------
\4\ Id. at 70199. The Exchange represented that it currently
provides a cross connect from a client's cabinet to its requested
telecommunication carrier's cabinet (known as a ``telco cross
connect''). According to the Exchange, clients would have the option
to use the enhanced point-to-point connectivity service to receive
low latency network connectivity from the Exchange's data center to
the client's chosen venue(s), in addition to the telco cross
connect. These connections could be utilized to send market data to
and receive orders from the chosen venues.
---------------------------------------------------------------------------
According to the Exchange, the enhanced point-to-point connectivity
would provide the Exchange's co-location customers with the opportunity
to obtain low latency network connectivity with greater ease than is
currently the case, and at a competitive price.\5\ The Exchange
represented that co-location customers currently obtain similar
services by negotiating fees, obtaining service level agreements, and
executing service agreements directly with approved telecommunication
carriers, and that such co-location customers are currently charged a
monthly negotiated fee by the telecommunications carrier in addition to
a cross connection fee by the Exchange.\6\ The Exchange represented
that for its low latency network connection services, it would obtain
wholesale rates from the carriers and then charge a markup to
compensate the Exchange for its efforts to negotiate and establish the
arrangement, for integrating the connectivity into the Exchange co-
location connectivity offering, and for administrative costs associated
with establishing and maintaining each new connection.\7\
---------------------------------------------------------------------------
\5\ Id. at 70200.
\6\ Id.
\7\ Id.
---------------------------------------------------------------------------
According to the Exchange, co-location customers would have the
opportunity to request these new low latency network telecommunication
connections through the same process used to request a new co-located
cabinet and other co-location services.\8\ Co-location customers would
retain the option of contracting directly with telecommunication
providers, including either the providers that participate in the
program, the current providers in the data center who have not yet
agreed to participate, or any new carrier that is approved to install
equipment in the Exchange's data center.\9\
---------------------------------------------------------------------------
\8\ Id.
\9\ Id.
---------------------------------------------------------------------------
The Exchange proposed one-time fees for the installation of
telecommunication connectivity to select major financial trading and
co-location venues in the New York and New Jersey metropolitan areas,
Toronto, and Chicago, as well as per-month connectivity fees, at
connectivity levels of 100MB, 1G, and 10G, respectively.\10\ The
Exchange represented that the fees were based on anticipated bandwidth
necessary for the connections and distances to these select venues. The
Exchange indicated its belief that the fees are reasonable, because
they are similar and competitive with fees charged for similar services
by other entities.\11\
---------------------------------------------------------------------------
\10\ Id.
\11\ Id.
---------------------------------------------------------------------------
[[Page 80993]]
The Exchange also proposed to eliminate references to certain fee
waivers that expired July 31, 2011.\12\
---------------------------------------------------------------------------
\12\ See Notice, 76 FR at 70201; see also Securities Exchange
Act Release No. 64630 (June 8, 2011), 76 FR 34783 (June 14, 2011)
(SR-NASDAQ-2011-074); and Securities Exchange Act Release No. 64858
(July 12, 2011), 76 FR 42152 (July 18, 2011) (SR-NASDAQ-2011-094).
---------------------------------------------------------------------------
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.\13\ In particular, the Commission finds that the proposed
rule change is consistent with Section 6(b)(4) of the Act,\14\ 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,\15\ 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.
---------------------------------------------------------------------------
\13\ In approving this proposed rule change, the Commission
notes that it has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
\14\ 15 U.S.C. 78f(b)(4).
\15\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
In the Notice, the Exchange represented that the low latency
network connections would be offered to market participants in a manner
that is not unfairly discriminatory.\16\ The Commission believes that
this program to offer low latency network connectivity, in the manner
described in the proposal, is consistent with Section 6(b)(5) the
Exchange Act insofar as NASDAQ makes these connectivity options
uniformly available to all members who voluntarily request them and pay
the associated fees. Additionally, the Commission notes that members
may choose not to obtain low latency network connectivity through the
Exchange and instead negotiate connectivity options separately through
other vendors on site.
---------------------------------------------------------------------------
\16\ See Notice, 76 FR at 70201.
---------------------------------------------------------------------------
Regarding the associated fees, the Exchange represented that they
will be applied uniformly and will not unfairly discriminate between
similarly situated market participants that use such co-location
services.\17\ The Exchange also represented that the fees are
reasonable because, among other things, they enable the Exchange to
recoup its share of the costs associated with the proposed low latency
network telecommunication connections.\18\ The Exchange further
represented that the fees and associated costs of the co-location
services are comparable to the costs and fees associated with
comparable services offered by other trading venues.\19\ Finally, the
Exchange noted its expectation that this service will result in a
reduction in fees charged to market participants due to enhanced
competition.\20\ In light of the Exchange's representations, the
Commission believes that the fees associated with the low latency
network connection services are consistent with Section 6(b)(4) of the
Exchange Act.
---------------------------------------------------------------------------
\17\ Id.
\18\ Id.
\19\ Id.
\20\ Id.
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\21\ that the proposed rule change (SR-NASDAQ-2011-146) be, and it
hereby is, approved.
---------------------------------------------------------------------------
\21\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
Kevin M. O'Neill,
Deputy Secretary.
---------------------------------------------------------------------------
\22\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
[FR Doc. 2011-33145 Filed 12-23-11; 8:45 am]
BILLING CODE 8011-01-P
