Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE MKT Equities Price List and NYSE Amex Options Fee Schedule To Provide for Fees for a 40 Gigabit Liquidity Center Network Connection in the Exchange Data Center, 54697-54700 [2013-21572]

Download as PDF Federal Register / Vol. 78, No. 172 / Thursday, September 5, 2013 / Notices As part of the Hurricane Sandy storm recovery, DTC has determined that it is not recovering its costs from usage of the Service by only a few Participants. Only fifteen Participants currently use the Service, with one of those Participants representing approximately 85% of the total volume. All fifteen of these Participants have been notified of DTC’s intention to discontinue the Service and none of the Participants have objected. Accordingly, upon approval by the SEC, DTC will terminate the Service. DTC will work with the Participants that currently use the Service to develop a timeline that is not unduly burdensome to return the existing sealed envelope inventory. Statutory Basis DTC believes the proposed rule change, as described above, is consistent with the requirements of the Act, specifically Section 17A(b)(3)(F),4 and the rules and regulations thereunder applicable to DTC, because the change, which terminates the Service, eliminates risk to the depository associated with the safeguarding of items in DTC’s physical custody and therefore enhances DTC’s ability to safeguard securities or funds in its custody or control or for which it is responsible. (B) Self-Regulatory Organization’s Statement on Burden on Competition DTC does not believe that the proposed rule change will have any impact, or impose any burden, on competition. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments relating to the proposed rule change have not yet been solicited or received. DTC will notify the Commission of any written comments received by DTC. ehiers on DSK2VPTVN1PROD with NOTICES 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 up to 90 days (i) as the Commission may designate 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: (A) by order approve or disapprove such proposed rule change, or 4 15 U.S.C. 78q–1(b)(3)(F). VerDate Mar<15>2010 14:10 Sep 04, 2013 Jkt 229001 (B) institute proceedings to determine whether the proposed rule change should be 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– DTC–2013–10 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–DTC–2013–10. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://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 filings also will be available for inspection and copying at the principal office of DTC and on DTC’s Web site at http://dtcc.com/legal/rule_filings/dtc/ 2013.php. 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–DTC– 2013–10 and should be submitted on or before September 26, 2013. PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 54697 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.5 Elizabeth M. Murphy, Secretary. [FR Doc. 2013–21561 Filed 9–4–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70285; File No. SR– NYSEMKT–2013–71] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE MKT Equities Price List and NYSE Amex Options Fee Schedule To Provide for Fees for a 40 Gigabit Liquidity Center Network Connection in the Exchange Data Center August 29, 2013. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on August 21, 2013, NYSE MKT LLC (the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II and III below, which Items have been prepared by the selfregulatory organization. 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 The Exchange proposes to amend the NYSE MKT Equities Price List and the NYSE Amex Options Fee Schedule in order to provide for fees for a 40 gigabit (‘‘Gb’’) Liquidity Center Network (‘‘LCN’’) connection in the Exchange’s data center. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, 5 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 E:\FR\FM\05SEN1.SGM 05SEN1 54698 Federal Register / Vol. 78, No. 172 / Thursday, September 5, 2013 / Notices and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the NYSE MKT Equities Price List and the NYSE Amex Options Fee Schedule in order to provide for fees for a 40 Gb LCN connection in the Exchange’s data center.4 The Exchange proposes to implement the fee change effective September 3, 2013. Users are currently able to purchase access to the Exchange’s LCN, a local area network that is available in the data center and that provides Users with access to the Exchange’s trading and execution systems via the Common Customer Gateway (‘‘CCG’’) and to the Exchanges’ proprietary market data products.5 LCN access is currently available in one and 10 Gb capacities, for which Users incur an initial and monthly fee per connection. The Exchange also recently submitted a proposal to expand its co-location services to include 40 Gb LCN connections.6 This higher-capacity LCN access is designed to have lower latency in the transmission of data between Users and the Exchange. The Exchange proposed to expand its co-location services to include 40 Gb LCN connections in order to make an additional service available to its colocation Users and thereby satisfy demand for more efficient, lowerlatency connections. The Exchange hereby proposes to establish the following fees for 40 Gb LCN connections: Description Amount of charge LCN Access ........................................................ 40 Gb Circuit .................................................... Bundled Network Access, Option 1 (2 LCN connections, 2 SFTI connections, and 2 optic connections to outside access center). Bundled Network Access, Option 2 (2 LCN connections, 2 SFTI connections, 1 optic connection to outside access center, and 1 optic connection in data center). Bundled Network Access, Option 3 (2 LCN connections, 2 SFTI connections, and 2 optic connections in data center). 40 Gb Bundle (LCN connections at 40 Gb; SFTI and optic connections at 10 Gb). $15,000 per connection initial charge plus $20,000 monthly per connection. $60,000 initial charge plus $64,500 monthly charge. 40 Gb Bundle (LCN connections at 40 Gb; SFTI and optic connections at 10 Gb). $60,000 initial charge plus $71,000 monthly charge. 40 Gb Bundle (LCN connections at 40 Gb; SFTI and optic connections at 10 Gb). $60,000 initial charge plus $77,500 monthly charge. As with the existing pricing for one and 10 Gb LCN connections, Users of the proposed 40 Gb LCN connections would be subject to an initial charge plus a monthly recurring charge per connection. However, in order to incentivize Users to upgrade to the proposed higher-bandwidth connections, the Exchange proposes that a User that submits a written order for a 40 Gb Circuit or 40 Gb Bundle ehiers on DSK2VPTVN1PROD with NOTICES Type of service between September 3, 2013 and September 30, 2013 would not be subject to the portion of the initial charge related to the LCN connections.7 As is the case with all Exchange colocation arrangements, (i) neither a User nor any of the User’s customers would be permitted to submit orders directly to the Exchange unless such User or customer is a member organization, a Sponsored Participant or an agent thereof (e.g., a service bureau providing order entry services); (ii) use of the colocation services proposed herein would be completely voluntary and available to all Users on a non-discriminatory basis; 8 and (iii) a User would only incur one charge for the particular co-location service described herein, regardless of whether the User connects only to the Exchange or to the Exchange and one or both of its Affiliates.9 4 The Securities and Exchange Commission (‘‘Commission’’) initially approved the Exchange’s co-location services in Securities Exchange Act Release No. 62961 (September 21, 2010), 75 FR 59299 (September 27, 2010) (SR–NYSEAmex–2010– 80) (the ‘‘Original Co-location Approval’’). The Exchange operates a data center in Mahwah, New Jersey (the ‘‘data center’’) from which it provides co-location services to Users. The Exchange’s colocation services allow Users to rent space in the data center so they may locate their electronic servers in close physical proximity to the Exchange’s trading and execution system. See id. at 59299. 5 For purposes of the Exchange’s co-location services, the term ‘‘User’’ includes (i) member organizations, as that term is defined in the definitions section of the General and Floor Rules of the NYSE MKT Equities Rules, and ATP Holders, as that term is defined in NYSE Amex Options Rule 900.2NY(5); (ii) Sponsored Participants, as that term is defined in Rule 123B.30(a)(ii)(B)—Equities and NYSE Amex Options Rule 900.2NY(77); and (iii) non-member organization and non-ATP Holder broker-dealers and vendors that request to receive co-location services directly from the Exchange. See, e.g., Securities Exchange Act Release Nos. 65974 (December 15, 2011), 76 FR 79249 (December 21, 2011) (SR–NYSEAmex–2011–81) and 65975 (December 15, 2011), 76 FR 79233 (December 21, 2011) (SR–NYSEAmex–2011–82). 6 See Securities Exchange Act Release No. 70176 (August 13, 2013) (SR–NYSEMKT–2013–67). The Exchange did not propose making LCN content service provider access (‘‘LCN CSP Access’’) available at a 40 Gb bandwidth because, at least initially, User demand was not anticipated to exist. Also, the Exchange noted that, for a 40 Gb ‘‘Bundle,’’ SFTI and optic connections would be at 10 Gb and only the LCN connections would be at 40 Gb, because 40 Gb bandwidths are not currently offered for SFTI and optic connections. The Exchange proposes to include language in the NYSE MKT Equities Price List and the NYSE Amex Options Fee Schedule to reflect this fact. The Exchange’s affiliates, New York Stock Exchange LLC (‘‘NYSE’’) and NYSE Arca, Inc. (‘‘NYSE Arca,’’ and together with NYSE, ‘‘Affiliates’’) have filed substantially the same proposed rule change to expand their co-location services to include 40 Gb LCN connections. See Securities Exchange Act Release No. 70206 (August 15, 2013) (SR–NYSE– 2013–59) and Securities Exchange Act Release No. 70173 (August 13, 2013) (SR–NYSEArca–2013–80). 7 For a Bundle, this would mean that a User would not be subject to the $30,000 LCN portion of the initial charge. The Exchange notes that each 40 Gb Bundle would include two 40 Gb LCN connections. The initial charge proposed for a nonBundled LCN Circuit is $15,000. Therefore, the LCN portion of the initial Bundle charge would be $30,000. A User would remain subject to the remaining $30,000 non-LCN portion of the initial Bundle charge, i.e. for SFTI and optic connections. 8 As is currently the case, Users that receive colocation 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 other Users. In this regard, all orders sent to the Exchange enter the Exchange’s trading and execution systems through the same order gateway, regardless of whether the sender is co-located in the data center or not. In addition, co-located Users do not receive any market data or data service product that is not available to all Users, although Users that receive co-location services normally would expect reduced latencies in sending orders to, and receiving market data from, the Exchange. 9 See SR–NYSEMKT–2013–67, supra note 6. The Exchange’s Affiliates have also submitted the same proposed rule change to provide for fees for a 40 VerDate Mar<15>2010 14:10 Sep 04, 2013 Jkt 229001 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 E:\FR\FM\05SEN1.SGM 05SEN1 Federal Register / Vol. 78, No. 172 / Thursday, September 5, 2013 / Notices ehiers on DSK2VPTVN1PROD with NOTICES The proposed change is not otherwise intended to address any other issues relating to co-location services and/or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,10 in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,11 in particular, because it provides for the equitable allocation of reasonable dues, fees, and other charges among its members, issuers and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers. The Exchange believes that the proposed change is reasonable because the Exchange proposes to offer the additional services described herein (i.e., the proposed 40 Gb LCN connection) 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 initial installation and ongoing monitoring, support and maintenance of such services. The Exchange further believes that the proposed change is reasonable because the proposed fees directly relate to the level of services provided by the Exchange and, in turn, received by the User. In this regard, the fees proposed for 40 Gb LCN connections are higher than, for example, the fees for 10 Gb LCN connections because costs for the initial purchase and ongoing maintenance of the 40 Gb connections are generally higher than those of the lower-bandwidth connections. However, these costs are not anticipated to be four times higher than the existing 10 Gb LCN connection. The Exchange therefore notes that while the proposed bandwidth of the 40 Gb LCN connection is four times greater than the existing 10 Gb LCN connection, the proposed fees for the 40 Gb LCN connection are significantly less than four times the fees for the 10 Gb LCN connection. Specifically, the proposed initial charge of $15,000 is only 50% greater than the initial charge of $10,000 for the existing 10 Gb LCN connection and the proposed monthly recurring charge of $20,000 is less than double the $12,000 monthly charge for the existing 10 Gb LCN Gb LCN connection. See SR–NYSE–2013–59 and SR–NYSEArca–2013–80. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(4) and (5). VerDate Mar<15>2010 14:10 Sep 04, 2013 Jkt 229001 connection. The Exchange believes that this supports a finding that the proposed pricing is reasonable because the Exchange anticipates realizing efficiencies as customers adopt higherbandwidth connections, and, in turn, reflecting such efficiencies in the pricing for such connections. The Exchange also believes that not charging the initial charge to a User that submits a written order for a 40 Gb Circuit or 40 Gb Bundle between September 3, 2013 and September 30, 2013 is reasonable because the Exchange believes it will incentivize Users to upgrade to higher-bandwidth connections during the first month that they are available, which will assist Users in meeting the growing needs of their business operations. As with fees for existing co-location services, the fees proposed herein would be charged only to those Users that voluntarily select the related services, which would be available to all Users. Accordingly, the Exchange believes that the proposed change is equitable and not unfairly discriminatory because it will result in fees being charged only to Users that voluntarily select to receive the corresponding services and because those services will be available to all Users. Furthermore, the Exchange believes that the services and fees proposed herein are not unfairly discriminatory and are equitably allocated because, in addition to the services being completely voluntary, they are available to all Users on an equal basis (i.e., the same products and services are available to all Users). The Exchange also believes that it is equitable and not unfairly discriminatory to not charge the initial charge to a User that submits a written order for a 40 Gb Circuit or 40 Gb Bundle between September 3, 2013 and September 30, 2013 because not charging such fee will incentivize Users to upgrade to higher-bandwidth connections, which, in turn, will assist Users in meeting the growing needs of their business operations. In this regard, all Users would have the option to submit a written order for a 40 Gb Circuit or 40 Gb Bundle and, if done so between September 3, 2013 and September 30, 2013, any such User would not be charged the initial charge related thereto. For the reasons above, the proposed change would not unfairly discriminate between or among market participants that are otherwise capable of satisfying any applicable co-location fees, requirements, terms and conditions established from time to time by the Exchange. PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 54699 Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchange’s statement regarding the burden on competition. For these reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,12 the Exchange believes that the proposed rule change will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Instead, the Exchange believes that the proposed change will enhance competition by making a service available to its colocation Users and thereby satisfying demand for more efficient, lowerlatency connections. The proposed 40 Gb LCN connection would make a service available to Users that require the increased bandwidth, but Users that do not require the increased bandwidth could continue to request an existing lower-bandwidth LCN connection and pay the correspondingly lower fees. Moreover, the Exchange believes that the proposed change will enhance competition between competing marketplaces by enabling the Exchange to provide a service to Users that is similar to services available on other markets. In this regard, the Exchange notes that The NASDAQ Stock Market LLC (‘‘NASDAQ’’) similarly makes a 40 Gb fiber connection available to users of its co-location facilities.13 Finally, the Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. In such an environment, the Exchange must continually review, and consider adjusting, its fees and credits to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. 12 15 U.S.C. 78f(b)(8). NASDAQ Rule 7034. 13 See E:\FR\FM\05SEN1.SGM 05SEN1 54700 Federal Register / Vol. 78, No. 172 / Thursday, September 5, 2013 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 14 of the Act and subparagraph (f)(2) of Rule 19b–4 15 thereunder, because it establishes a due, fee, or other charge imposed by NYSE MKT. At any time within 60 days of the filing of such 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 under Section 19(b)(2)(B) 16 of the Act 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: ehiers on DSK2VPTVN1PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEMKT–2013–71 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEMKT–2013–71. 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 (http://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 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–2013–71 and should be submitted on or before September 26, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–21572 Filed 9–4–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70282; File No. SR– NYSEArca–2013–70] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of Proposed Rule Change To List and Trade Shares of First Trust Inflation Managed Fund August 29, 2013. I. Introduction On July 8, 2013, NYSE Arca, Inc. (‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to list and trade shares (‘‘Shares’’) of the First Trust Inflation Managed Fund (‘‘Fund’’) under NYSE Arca Equities Rule 8.600. The proposed rule change was published for comment in the Federal Register on July 25, 2013.3 The Commission received no comments on the proposed rule change. This order 17 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 70008 (July 19, 2013), 78 FR 45003 (‘‘Notice’’). 1 15 14 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). 16 15 U.S.C. 78s(b)(2)(B). 15 17 VerDate Mar<15>2010 14:10 Sep 04, 2013 Jkt 229001 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 grants approval of the proposed rule change. II. Description of the Proposed Rule Change The Exchange proposes to list and trade Shares of the Fund pursuant to NYSE Arca Equities Rule 8.600, which governs the listing and trading of Managed Fund Shares on the Exchange. The Shares will be offered by First Trust Exchange-Traded Fund IV (‘‘Trust’’), which is organized as a Massachusetts business trust and is registered with the Commission as an open-end management investment company.4 The investment adviser to the Fund will be First Trust Advisors L.P. (‘‘Adviser’’ or ‘‘First Trust’’). First Trust Portfolios L.P. will be the principal underwriter and distributor of the Fund’s Shares. Bank of New York Mellon (‘‘BNY’’) will serve as the administrator, custodian, and transfer agent for the Fund. The Exchange states that the Adviser is not a broker-dealer but is affiliated with a broker-dealer and has implemented a fire wall with respect to its brokerdealer affiliate regarding access to information concerning the composition and/or changes to the Fund’s portfolio.5 The Fund’s primary investment objective will be to seek long-term capital appreciation, and its secondary investment objective will be to seek current income. The Fund will be an actively managed exchange-traded fund that will invest in: (1) Exchange-listed common stocks and other equity securities described below (including ‘‘Depositary Receipts,’’ as defined herein) of companies in the agriculture, energy, metals, and mining sectors; (2) exchange-traded products (‘‘Underlying ETPs’’) 6 that hold commodities, such as 4 The Trust is registered under the Investment Company Act of 1940 (‘‘1940 Act’’). On December 7, 2012, the Trust filed with the Commission an amendment to the Trust’s registration statement on Form N–1A under the Securities Act of 1933 (‘‘1933 Act’’) and under the 1940 Act relating to the Fund (File Nos. 333–174332 and 811–22559) (‘‘Registration Statement’’). In addition, the Commission has issued an order granting certain exemptive relief to the Trust under the 1940 Act. See Investment Company Act Release No. 28468 (October 27, 2008) (File No. 812–13477) (‘‘Exemptive Order’’). 5 See NYSE Arca Equities Rule 8.600, Commentary .06. In the event (a) the Adviser or any sub-adviser becomes newly affiliated with a brokerdealer, or (b) any new adviser or sub-adviser is a registered broker-dealer or becomes affiliated with a broker-dealer, it will implement a fire wall with respect to its relevant personnel or its broker-dealer affiliate regarding access to information concerning the composition and/or changes to the portfolio, and will be subject to procedures designed to prevent the use and dissemination of material nonpublic information regarding such portfolio. 6 The term ‘‘Underlying ETPs’’ includes Investment Company Units (as described in NYSE Arca Equities Rule 5.2(j)(3)); Portfolio Depositary E:\FR\FM\05SEN1.SGM 05SEN1

Agencies

[Federal Register Volume 78, Number 172 (Thursday, September 5, 2013)]
[Notices]
[Pages 54697-54700]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-21572]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70285; File No. SR-NYSEMKT-2013-71]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change To Amend the NYSE MKT 
Equities Price List and NYSE Amex Options Fee Schedule To Provide for 
Fees for a 40 Gigabit Liquidity Center Network Connection in the 
Exchange Data Center

August 29, 2013.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on August 21, 2013, NYSE MKT LLC (the ``Exchange'' or 
``NYSE MKT'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the NYSE MKT Equities Price List and 
the NYSE Amex Options Fee Schedule in order to provide for fees for a 
40 gigabit (``Gb'') Liquidity Center Network (``LCN'') connection in 
the Exchange's data center. The text of the proposed rule change is 
available on the Exchange's Web site at www.nyse.com, at the principal 
office of the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of,

[[Page 54698]]

and basis for, the proposed rule change and discussed any comments it 
received on the proposed rule change. The text of those 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 parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the NYSE MKT Equities Price List and 
the NYSE Amex Options Fee Schedule in order to provide for fees for a 
40 Gb LCN connection in the Exchange's data center.\4\ The Exchange 
proposes to implement the fee change effective September 3, 2013.
---------------------------------------------------------------------------

    \4\ The Securities and Exchange Commission (``Commission'') 
initially approved the Exchange's co-location services in Securities 
Exchange Act Release No. 62961 (September 21, 2010), 75 FR 59299 
(September 27, 2010) (SR-NYSEAmex-2010-80) (the ``Original Co-
location Approval''). The Exchange operates a data center in Mahwah, 
New Jersey (the ``data center'') from which it provides co-location 
services to Users. The Exchange's co-location services allow Users 
to rent space in the data center so they may locate their electronic 
servers in close physical proximity to the Exchange's trading and 
execution system. See id. at 59299.
---------------------------------------------------------------------------

    Users are currently able to purchase access to the Exchange's LCN, 
a local area network that is available in the data center and that 
provides Users with access to the Exchange's trading and execution 
systems via the Common Customer Gateway (``CCG'') and to the Exchanges' 
proprietary market data products.\5\ LCN access is currently available 
in one and 10 Gb capacities, for which Users incur an initial and 
monthly fee per connection. The Exchange also recently submitted a 
proposal to expand its co-location services to include 40 Gb LCN 
connections.\6\ This higher-capacity LCN access is designed to have 
lower latency in the transmission of data between Users and the 
Exchange. The Exchange proposed to expand its co-location services to 
include 40 Gb LCN connections in order to make an additional service 
available to its co-location Users and thereby satisfy demand for more 
efficient, lower-latency connections.
---------------------------------------------------------------------------

    \5\ For purposes of the Exchange's co-location services, the 
term ``User'' includes (i) member organizations, as that term is 
defined in the definitions section of the General and Floor Rules of 
the NYSE MKT Equities Rules, and ATP Holders, as that term is 
defined in NYSE Amex Options Rule 900.2NY(5); (ii) Sponsored 
Participants, as that term is defined in Rule 123B.30(a)(ii)(B)--
Equities and NYSE Amex Options Rule 900.2NY(77); and (iii) non-
member organization and non-ATP Holder broker-dealers and vendors 
that request to receive co-location services directly from the 
Exchange. See, e.g., Securities Exchange Act Release Nos. 65974 
(December 15, 2011), 76 FR 79249 (December 21, 2011) (SR-NYSEAmex-
2011-81) and 65975 (December 15, 2011), 76 FR 79233 (December 21, 
2011) (SR-NYSEAmex-2011-82).
    \6\ See Securities Exchange Act Release No. 70176 (August 13, 
2013) (SR-NYSEMKT-2013-67). The Exchange did not propose making LCN 
content service provider access (``LCN CSP Access'') available at a 
40 Gb bandwidth because, at least initially, User demand was not 
anticipated to exist. Also, the Exchange noted that, for a 40 Gb 
``Bundle,'' SFTI and optic connections would be at 10 Gb and only 
the LCN connections would be at 40 Gb, because 40 Gb bandwidths are 
not currently offered for SFTI and optic connections. The Exchange 
proposes to include language in the NYSE MKT Equities Price List and 
the NYSE Amex Options Fee Schedule to reflect this fact. The 
Exchange's affiliates, New York Stock Exchange LLC (``NYSE'') and 
NYSE Arca, Inc. (``NYSE Arca,'' and together with NYSE, 
``Affiliates'') have filed substantially the same proposed rule 
change to expand their co-location services to include 40 Gb LCN 
connections. See Securities Exchange Act Release No. 70206 (August 
15, 2013) (SR-NYSE-2013-59) and Securities Exchange Act Release No. 
70173 (August 13, 2013) (SR-NYSEArca-2013-80).
---------------------------------------------------------------------------

    The Exchange hereby proposes to establish the following fees for 40 
Gb LCN connections:

------------------------------------------------------------------------
       Type of service             Description        Amount of charge
------------------------------------------------------------------------
LCN Access..................  40 Gb Circuit.......  $15,000 per
                                                     connection initial
                                                     charge plus $20,000
                                                     monthly per
                                                     connection.
Bundled Network Access,       40 Gb Bundle (LCN     $60,000 initial
 Option 1 (2 LCN               connections at 40     charge plus $64,500
 connections, 2 SFTI           Gb; SFTI and optic    monthly charge.
 connections, and 2 optic      connections at 10
 connections to outside        Gb).
 access center).
Bundled Network Access,       40 Gb Bundle (LCN     $60,000 initial
 Option 2 (2 LCN               connections at 40     charge plus $71,000
 connections, 2 SFTI           Gb; SFTI and optic    monthly charge.
 connections, 1 optic          connections at 10
 connection to outside         Gb).
 access center, and 1 optic
 connection in data center).
Bundled Network Access,       40 Gb Bundle (LCN     $60,000 initial
 Option 3 (2 LCN               connections at 40     charge plus $77,500
 connections, 2 SFTI           Gb; SFTI and optic    monthly charge.
 connections, and 2 optic      connections at 10
 connections in data center).  Gb).
------------------------------------------------------------------------

    As with the existing pricing for one and 10 Gb LCN connections, 
Users of the proposed 40 Gb LCN connections would be subject to an 
initial charge plus a monthly recurring charge per connection. However, 
in order to incentivize Users to upgrade to the proposed higher-
bandwidth connections, the Exchange proposes that a User that submits a 
written order for a 40 Gb Circuit or 40 Gb Bundle between September 3, 
2013 and September 30, 2013 would not be subject to the portion of the 
initial charge related to the LCN connections.\7\
---------------------------------------------------------------------------

    \7\ For a Bundle, this would mean that a User would not be 
subject to the $30,000 LCN portion of the initial charge. The 
Exchange notes that each 40 Gb Bundle would include two 40 Gb LCN 
connections. The initial charge proposed for a non-Bundled LCN 
Circuit is $15,000. Therefore, the LCN portion of the initial Bundle 
charge would be $30,000. A User would remain subject to the 
remaining $30,000 non-LCN portion of the initial Bundle charge, i.e. 
for SFTI and optic connections.
---------------------------------------------------------------------------

    As is the case with all Exchange co-location arrangements, (i) 
neither a User nor any of the User's customers would be permitted to 
submit orders directly to the Exchange unless such User or customer is 
a member organization, a Sponsored Participant or an agent thereof 
(e.g., a service bureau providing order entry services); (ii) use of 
the co-location services proposed herein would be completely voluntary 
and available to all Users on a non-discriminatory basis; \8\ and (iii) 
a User would only incur one charge for the particular co-location 
service described herein, regardless of whether the User connects only 
to the Exchange or to the Exchange and one or both of its 
Affiliates.\9\
---------------------------------------------------------------------------

    \8\ As is currently the case, 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 other Users. In this regard, all orders sent 
to the Exchange enter the Exchange's trading and execution systems 
through the same order gateway, regardless of whether the sender is 
co-located in the data center or not. In addition, co-located Users 
do not receive any market data or data service product that is not 
available to all Users, although Users that receive co-location 
services normally would expect reduced latencies in sending orders 
to, and receiving market data from, the Exchange.
    \9\ See SR-NYSEMKT-2013-67, supra note 6. The Exchange's 
Affiliates have also submitted the same proposed rule change to 
provide for fees for a 40 Gb LCN connection. See SR-NYSE-2013-59 and 
SR-NYSEArca-2013-80.

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

[[Page 54699]]

    The proposed change is not otherwise intended to address any other 
issues relating to co-location services and/or related fees, and the 
Exchange is not aware of any problems that Users would have in 
complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\10\ in general, and furthers the 
objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\11\ in 
particular, because it provides for the equitable allocation of 
reasonable dues, fees, and other charges among its members, issuers and 
other persons using its facilities and does not unfairly discriminate 
between customers, issuers, brokers or dealers.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed change is reasonable 
because the Exchange proposes to offer the additional services 
described herein (i.e., the proposed 40 Gb LCN connection) 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 initial 
installation and ongoing monitoring, support and maintenance of such 
services.
    The Exchange further believes that the proposed change is 
reasonable because the proposed fees directly relate to the level of 
services provided by the Exchange and, in turn, received by the User. 
In this regard, the fees proposed for 40 Gb LCN connections are higher 
than, for example, the fees for 10 Gb LCN connections because costs for 
the initial purchase and ongoing maintenance of the 40 Gb connections 
are generally higher than those of the lower-bandwidth connections. 
However, these costs are not anticipated to be four times higher than 
the existing 10 Gb LCN connection. The Exchange therefore notes that 
while the proposed bandwidth of the 40 Gb LCN connection is four times 
greater than the existing 10 Gb LCN connection, the proposed fees for 
the 40 Gb LCN connection are significantly less than four times the 
fees for the 10 Gb LCN connection. Specifically, the proposed initial 
charge of $15,000 is only 50% greater than the initial charge of 
$10,000 for the existing 10 Gb LCN connection and the proposed monthly 
recurring charge of $20,000 is less than double the $12,000 monthly 
charge for the existing 10 Gb LCN connection. The Exchange believes 
that this supports a finding that the proposed pricing is reasonable 
because the Exchange anticipates realizing efficiencies as customers 
adopt higher-bandwidth connections, and, in turn, reflecting such 
efficiencies in the pricing for such connections.
    The Exchange also believes that not charging the initial charge to 
a User that submits a written order for a 40 Gb Circuit or 40 Gb Bundle 
between September 3, 2013 and September 30, 2013 is reasonable because 
the Exchange believes it will incentivize Users to upgrade to higher-
bandwidth connections during the first month that they are available, 
which will assist Users in meeting the growing needs of their business 
operations.
    As with fees for existing co-location services, the fees proposed 
herein would be charged only to those Users that voluntarily select the 
related services, which would be available to all Users. Accordingly, 
the Exchange believes that the proposed change is equitable and not 
unfairly discriminatory because it will result in fees being charged 
only to Users that voluntarily select to receive the corresponding 
services and because those services will be available to all Users. 
Furthermore, the Exchange believes that the services and fees proposed 
herein are not unfairly discriminatory and are equitably allocated 
because, in addition to the services being completely voluntary, they 
are available to all Users on an equal basis (i.e., the same products 
and services are available to all Users).
    The Exchange also believes that it is equitable and not unfairly 
discriminatory to not charge the initial charge to a User that submits 
a written order for a 40 Gb Circuit or 40 Gb Bundle between September 
3, 2013 and September 30, 2013 because not charging such fee will 
incentivize Users to upgrade to higher-bandwidth connections, which, in 
turn, will assist Users in meeting the growing needs of their business 
operations. In this regard, all Users would have the option to submit a 
written order for a 40 Gb Circuit or 40 Gb Bundle and, if done so 
between September 3, 2013 and September 30, 2013, any such User would 
not be charged the initial charge related thereto.
    For the reasons above, the proposed change would not unfairly 
discriminate between or among market participants that are otherwise 
capable of satisfying any applicable co-location fees, requirements, 
terms and conditions established from time to time by the Exchange.
    Finally, the Exchange believes that it is subject to significant 
competitive forces, as described below in the Exchange's statement 
regarding the burden on competition.
    For these reasons, the Exchange believes that the proposal is 
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\12\ the Exchange 
believes that the proposed rule change will not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. Instead, the Exchange believes that the proposed 
change will enhance competition by making a service available to its 
co-location Users and thereby satisfying demand for more efficient, 
lower-latency connections. The proposed 40 Gb LCN connection would make 
a service available to Users that require the increased bandwidth, but 
Users that do not require the increased bandwidth could continue to 
request an existing lower-bandwidth LCN connection and pay the 
correspondingly lower fees. Moreover, the Exchange believes that the 
proposed change will enhance competition between competing marketplaces 
by enabling the Exchange to provide a service to Users that is similar 
to services available on other markets. In this regard, the Exchange 
notes that The NASDAQ Stock Market LLC (``NASDAQ'') similarly makes a 
40 Gb fiber connection available to users of its co-location 
facilities.\13\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78f(b)(8).
    \13\ See NASDAQ Rule 7034.
---------------------------------------------------------------------------

    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive. In such an environment, the Exchange must continually 
review, and consider adjusting, its fees and credits to remain 
competitive with other exchanges. For the reasons described above, the 
Exchange believes that the proposed rule change reflects this 
competitive environment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

[[Page 54700]]

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \14\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \15\ thereunder, because it establishes a due, fee, or other 
charge imposed by NYSE MKT.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 under 
Section 19(b)(2)(B) \16\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please 
include File Number SR-NYSEMKT-2013-71 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEMKT-2013-71. 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 (http://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 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-2013-71 and should 
be submitted on or before September 26, 2013.
---------------------------------------------------------------------------

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

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-21572 Filed 9-4-13; 8:45 am]
BILLING CODE 8011-01-P