Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the New York Stock Exchange Price List Related to Co-Location Services, 70987-70989 [2013-28418]
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Federal Register / Vol. 78, No. 229 / Wednesday, November 27, 2013 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70929; IA–3721; File No.
4–670]
Proxy Advisory Firm Roundtable
Securities and Exchange
Commission.
ACTION: Notice of roundtable discussion;
request for comment.
AGENCY:
The Securities and Exchange
Commission will host a roundtable
about proxy advisory firms. The panel
will be asked to discuss topics including
the current state of proxy advisory firm
use by investment advisers and
institutional investors and potential
changes that have been suggested by
market participants. Panelists will also
be invited to discuss any new ideas.
The roundtable discussion will be
held in the multi-purpose room of the
Securities and Exchange Commission
headquarters at 100 F Street NE.,
Washington, DC, on December 5, 2013
from 9:30 a.m. to approximately 1:30
p.m. The public is invited to observe the
roundtable discussion. Seating will be
available on a first-come, first-serve
basis. The roundtable discussion will
also be available via webcast on the
Commission’s Web site at www.sec.gov.
DATES: The roundtable discussion will
take place on December 5, 2013. The
Commission will accept comments
regarding issues addressed at the
roundtable until January 10, 2014.
ADDRESSES: Comments may be
submitted by any of the following
methods:
SUMMARY:
Electronic Comments
• Use the Commission’s internet
comment form (https://sec.gov/rules/
other.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number x–
xxx on the subject line.
emcdonald on DSK67QTVN1PROD with NOTICES
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 4–670. This file number should
be included on the subject line if email
is used. To help us process and review
your comments more efficiently, please
only use one method. The Commission
will post all comments on the
Commission’s Internet Web site (https://
www.sec.gov/rules/other.shtml).
Comments are also available for Web
site viewing and printing in the
VerDate Mar<15>2010
17:02 Nov 26, 2013
Jkt 232001
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. All comments received will be
posted without change; we do not edit
personal identifying information from
submissions. You should submit only
information that you wish to make
available publicly.
FOR FURTHER INFORMATION CONTACT: Sara
Cortes, Senior Special Counsel, Division
of Investment Management, at 202–551–
6700, or Raymond Be, Special Counsel,
Division of Corporation Finance, at 202–
551–3500, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549.
By the Commission.
Dated: November 22, 2013.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2013–28501 Filed 11–26–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70913; File No. SR–NYSE–
2013–74]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
New York Stock Exchange Price List
Related to Co-Location Services
November 21, 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
November 12, 2013, New York Stock
Exchange LLC (‘‘NYSE’’ or the
‘‘Exchange’’) 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Price List related to co-location services
in order to provide further specification
regarding the fees applicable to cabinets
for which power is not utilized (‘‘PNU
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
PO 00000
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70987
cabinets’’). 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,
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 its
Price List related to co-location services
in order to provide further specification
regarding the fees applicable to PNU
cabinets.4 The Exchange proposes to
implement the change immediately.
A User is currently able to obtain one
or more PNU cabinets in the data
center.5 A PNU cabinet is an unused
cabinet in proximity to a User’s existing
cabinet(s), which the User reserves for
future use, i.e., a cabinet that the User
4 The Securities and Exchange Commission
(‘‘Commission’’) initially approved the Exchange’s
co-location services in Securities Exchange Act
Release No. 62960 (September 21, 2010), 75 FR
59310 (September 27, 2010) (SR–NYSE–2010–56)
(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
59310.
5 For purposes of the Exchange’s co-location
services, the term ‘‘User’’ includes (i) member
organizations, as that term is defined in NYSE Rule
2(b); (ii) Sponsored Participants, as that term is
defined in NYSE Rule 123B.30(a)(ii)(B); and (iii)
non-member organization broker-dealers and
vendors that request to receive co-location services
directly from the Exchange. See, e.g., Securities
Exchange Act Release No. 65973 (December 15,
2011), 76 FR 79232 (December 21, 2011) (SR–
NYSE–2011–53). As specified in the Price List, a
User that incurs co-location fees for a particular colocation service pursuant thereto would not be
subject to co-location fees for the same co-location
service charged by the Exchange’s affiliates NYSE
MKT LLC and NYSE Arca, Inc. See Securities
Exchange Act Release No. 70206 (August 15, 2013),
78 FR 51765 (August 21, 2013) (SR–NYSE–2013–
59).
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Federal Register / Vol. 78, No. 229 / Wednesday, November 27, 2013 / Notices
emcdonald on DSK67QTVN1PROD with NOTICES
does not anticipate using until some
point in the future and therefore is
reserved but not currently utilized.
Although PNU cabinets do not use
power, when the Exchange establishes a
PNU cabinet, it includes wiring,
circuitry, and hardware and allocates
either four kilowatts (‘‘kW’’) or eight
kWs of unused power capacity,
depending on the User’s requirements,
as it does for all cabinets.6 This allows
the PNU cabinet to be powered and
used promptly upon the User’s request.
The applicable monthly fee for PNU
cabinets (the ‘‘PNU Fee’’) was described
within the Original Co-location
Approval as 40% of the applicable per
kW monthly fee.7 Accordingly, since the
Exchange began offering co-location
services in the data center, the amount
of the PNU Fee charged for a cabinet per
month depended on the number of kWs
of power allocated to that PNU cabinet.
The Exchange subsequently specified
that the PNU Fee would be $360 per
month, which is 40% of the lowest per
kW monthly cabinet fee specified in the
Price List for cabinets in use (i.e., 40%
of $900).8 The Exchange continued to
charge the PNU Fee on a per kW basis.
To provide greater specificity with
respect to the PNU Fee and better align
the Price List with the Exchange’s
billing practice, the Exchange proposes
to amend the Price List to explicitly
provide that the applicable monthly
PNU Fee is $360 per kW of power
allocated to the PNU cabinet.9
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 co6 A User is generally able to determine an
approximate amount of power that it will typically
consume in its cabinet. A User would request either
a four or eight kW cabinet based on its anticipated
peak power consumption.
7 See Original Co-location Approval at 59310–11,
n. 5. Users pay a monthly per kW fee for cabinets
in use, which is based on the number of kWs
allocated to the User’s cabinets. The fee ranges from
$1,200 per kW, for Users utilizing four to eight kWs,
to $900 per kW, for Users utilizing more than 41
kW.
8 See Securities Exchange Act Release No. 67666
(August 15, 2012), 77 FR 50742, 50743 (August 22,
2012) (SR–NYSE–2012–18).
9 For example, if a User has a PNU cabinet
allocated four kWs of power, the Exchange would
charge the User $1,440 per month (i.e., $360 × four).
If a User has a PNU cabinet allocated eight kWs of
power, the Exchange would charge the User $2,880
per month (i.e., $360 × eight). Users are not
otherwise charged for PNU cabinets until power is
activated, at which point the fees applicable to
other cabinets are charged (i.e., the $5,000 initial fee
per cabinet and the full, monthly fee per kW).
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17:02 Nov 26, 2013
Jkt 232001
location services proposed herein would
be completely voluntary and available
to all Users on a non-discriminatory
basis; 10 and (iii) a User would only
incur one charge for the particular colocation service described herein,
regardless of whether the User connects
only to the Exchange or to the Exchange
and one or both of its affiliates.11
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.
regarding such fees. The proposal is
further reasonable because pricing for
PNU cabinets is comparable to pricing
for the ‘‘Cabinet Proximity Option’’
available to users of co-location
facilities of The NASDAQ Stock Market
LLC (‘‘NASDAQ’’), which varies based
on the power capacity of the cabinet.14
As with fees for existing co-location
services, the PNU cabinet fees are
charged only to those Users that
voluntarily select the related services,
which are available to all Users. The
Exchange therefore believes that the
proposed change is equitable and not
unfairly discriminatory because it
would continue to result in fees being
2. Statutory Basis
charged only to Users that voluntarily
The Exchange believes that the
select to receive the corresponding
proposed rule change is consistent with services and because those services are
Section 6(b) of the Act,12 in general, and available to all Users. As such, the
furthers the objectives of Sections
proposed change would not unfairly
6(b)(4) and (5) of the Act,13 in particular, discriminate between or among market
because it provides for the equitable
participants that are otherwise capable
allocation of reasonable dues, fees, and
of satisfying any applicable co-location
other charges among its members,
fees, requirements, terms and conditions
issuers and other persons using its
established from time to time by the
facilities and does not unfairly
Exchange.
discriminate between customers,
Finally, the Exchange believes that it
issuers, brokers or dealers.
is subject to significant competitive
Overall, the Exchange believes that
forces, as described below in the
the proposed change is consistent with
Exchange’s statement regarding the
the Act because the Exchange offers the
burden on competition.
co-location services described herein
For these reasons, the Exchange
(i.e., PNU cabinets) as a convenience to
believes that the proposal is consistent
Users, but in doing so incurs certain
with the Act.
costs, including costs related to the data
center facility, including maintaining an B. Self-Regulatory Organization’s
Statement on Burden on Competition
adequate level of power so that PNU
In accordance with Section 6(b)(8) of
cabinets can be available and powered
on promptly at the request of a User. As the Act,15 the Exchange believes that the
proposed rule change would not impose
such, the proposed fees relate to the
any burden on competition that is not
level of services provided by the
necessary or appropriate in furtherance
Exchange and, in turn, received by the
of the purposes of the Act because any
User.
The Exchange believes that the
market participants that are otherwise
proposal is reasonable because it would capable of satisfying any applicable cobetter align the Price List with the
location fees, requirements, terms and
Exchange’s billing practices and provide conditions established from time to time
further specificity in the Price List
by the Exchange could have access to
the co-location services provided in the
10 As is currently the case, Users that receive codata center. This is also true because, in
location services from the Exchange will not receive addition to the services being
any means of access to the Exchange’s trading and
completely voluntary, they are available
execution systems that is separate from, or superior
to all Users on an equal basis (i.e., the
to, that of other Users. In this regard, all orders sent
to the Exchange enter the Exchange’s trading and
same range of products and services are
execution systems through the same order gateway,
available to all Users).
regardless of whether the sender is co-located in the
The Exchange further believes that the
data center or not. In addition, co-located Users do
proposal would not impose any burden
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.
11 See SR–NYSE–2013–59, supra note 5 at 51766.
The Exchange’s affiliates have also submitted the
same proposed rule change to provide further
specification regarding the fees applicable to PNU
cabinets. See SR–NYSEMKT–2013–93 and SR–
NYSEArca–2013–124.
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(4) and (5).
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Frm 00074
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14 See NASDAQ Rule 7034. Fees for NASDAQ’s
Cabinet Proximity Option are $1,000 per medium
or low density cabinet or $1,500 per medium/high
or high density cabinet. The Exchange understands
that NASDAQ’s Cabinet Proximity Option gives its
co-location customers the ability to reserve
contiguous or near contiguous cabinets and power
at a reduced rate, similar to manner in which Users
are able to request PNU cabinets in the Exchange’s
data center for future use.
15 15 U.S.C. 78f(b)(8).
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Federal Register / Vol. 78, No. 229 / Wednesday, November 27, 2013 / Notices
on competition that is not necessary or
appropriate in furtherance of the
purposes of the Act because it would
result in further specification in the
Price List regarding the fees applicable
to PNU cabinets. Although PNU
cabinets do not use power, when the
Exchange establishes a PNU cabinet, it
includes wiring, circuitry, and hardware
and allocates either four kWs or eight
kWs of unused power capacity,
depending on the User’s requirements,
as it does for all cabinets. This allows
the cabinet to be powered and used
promptly upon the User’s request. The
proposed amendment to the Price List
would therefore specify that the
applicable monthly PNU Fee is $360 per
kW of power allocated to the PNU
cabinet.
Finally, the Exchange notes that it
operates in a highly competitive market
in which market participants can
readily favor competing venues if, for
example, they deem fee levels at a
particular venue to be excessive or if
they determine that another venue’s
products and services are more
competitive than on the Exchange. In
such an environment, the Exchange
must continually review, and consider
adjusting, the services it offers as well
as any corresponding 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.
emcdonald on DSK67QTVN1PROD with NOTICES
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.
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) 16 of the Act and
subparagraph (f)(2) of Rule 19b–4 17
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
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
16 15
17 17
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
VerDate Mar<15>2010
17:02 Nov 26, 2013
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 18 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:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2013–74 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–NYSE–2013–74. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of 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–NYSE–
18 15
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PO 00000
U.S.C. 78s(b)(2)(B).
Frm 00075
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70989
2013–74 and should be submitted on or
before December 18, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–28418 Filed 11–26–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70916; File No. SR–
NYSEARCA–2013–124]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Amend the NYSE Arca
Options Fee Schedule and the NYSE
Arca Equities Schedule of Fees and
Charges for Exchange Services
Related to Co-Location Services
November 21, 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
November 8, 2013, NYSE Arca, Inc. (the
‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 Arca Options Fee Schedule and,
through its wholly owned subsidiary
NYSE Arca Equities, Inc. (‘‘NYSE Arca
Equities’’), the NYSE Arca Equities
Schedule of Fees and Charges for
Exchange Services (the ‘‘Equities Fee
Schedule’’ and, together with the
Options Fee Schedule, the ‘‘Fee
Schedules’’) related to co-location
services in order to provide further
specification regarding the fees
applicable to cabinets for which power
is not utilized (‘‘PNU cabinets’’). 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.
19 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
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Agencies
[Federal Register Volume 78, Number 229 (Wednesday, November 27, 2013)]
[Notices]
[Pages 70987-70989]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-28418]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70913; File No. SR-NYSE-2013-74]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the New York Stock Exchange Price List Related to Co-Location
Services
November 21, 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 November 12, 2013, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') 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 its Price List related to co-
location services in order to provide further specification regarding
the fees applicable to cabinets for which power is not utilized (``PNU
cabinets''). 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, 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 its Price List related to co-
location services in order to provide further specification regarding
the fees applicable to PNU cabinets.\4\ The Exchange proposes to
implement the change immediately.
---------------------------------------------------------------------------
\4\ The Securities and Exchange Commission (``Commission'')
initially approved the Exchange's co-location services in Securities
Exchange Act Release No. 62960 (September 21, 2010), 75 FR 59310
(September 27, 2010) (SR-NYSE-2010-56) (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 59310.
---------------------------------------------------------------------------
A User is currently able to obtain one or more PNU cabinets in the
data center.\5\ A PNU cabinet is an unused cabinet in proximity to a
User's existing cabinet(s), which the User reserves for future use,
i.e., a cabinet that the User
[[Page 70988]]
does not anticipate using until some point in the future and therefore
is reserved but not currently utilized. Although PNU cabinets do not
use power, when the Exchange establishes a PNU cabinet, it includes
wiring, circuitry, and hardware and allocates either four kilowatts
(``kW'') or eight kWs of unused power capacity, depending on the User's
requirements, as it does for all cabinets.\6\ This allows the PNU
cabinet to be powered and used promptly upon the User's request.
---------------------------------------------------------------------------
\5\ For purposes of the Exchange's co-location services, the
term ``User'' includes (i) member organizations, as that term is
defined in NYSE Rule 2(b); (ii) Sponsored Participants, as that term
is defined in NYSE Rule 123B.30(a)(ii)(B); and (iii) non-member
organization broker-dealers and vendors that request to receive co-
location services directly from the Exchange. See, e.g., Securities
Exchange Act Release No. 65973 (December 15, 2011), 76 FR 79232
(December 21, 2011) (SR-NYSE-2011-53). As specified in the Price
List, a User that incurs co-location fees for a particular co-
location service pursuant thereto would not be subject to co-
location fees for the same co-location service charged by the
Exchange's affiliates NYSE MKT LLC and NYSE Arca, Inc. See
Securities Exchange Act Release No. 70206 (August 15, 2013), 78 FR
51765 (August 21, 2013) (SR-NYSE-2013-59).
\6\ A User is generally able to determine an approximate amount
of power that it will typically consume in its cabinet. A User would
request either a four or eight kW cabinet based on its anticipated
peak power consumption.
---------------------------------------------------------------------------
The applicable monthly fee for PNU cabinets (the ``PNU Fee'') was
described within the Original Co-location Approval as 40% of the
applicable per kW monthly fee.\7\ Accordingly, since the Exchange began
offering co-location services in the data center, the amount of the PNU
Fee charged for a cabinet per month depended on the number of kWs of
power allocated to that PNU cabinet. The Exchange subsequently
specified that the PNU Fee would be $360 per month, which is 40% of the
lowest per kW monthly cabinet fee specified in the Price List for
cabinets in use (i.e., 40% of $900).\8\ The Exchange continued to
charge the PNU Fee on a per kW basis. To provide greater specificity
with respect to the PNU Fee and better align the Price List with the
Exchange's billing practice, the Exchange proposes to amend the Price
List to explicitly provide that the applicable monthly PNU Fee is $360
per kW of power allocated to the PNU cabinet.\9\
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\7\ See Original Co-location Approval at 59310-11, n. 5. Users
pay a monthly per kW fee for cabinets in use, which is based on the
number of kWs allocated to the User's cabinets. The fee ranges from
$1,200 per kW, for Users utilizing four to eight kWs, to $900 per
kW, for Users utilizing more than 41 kW.
\8\ See Securities Exchange Act Release No. 67666 (August 15,
2012), 77 FR 50742, 50743 (August 22, 2012) (SR-NYSE-2012-18).
\9\ For example, if a User has a PNU cabinet allocated four kWs
of power, the Exchange would charge the User $1,440 per month (i.e.,
$360 x four). If a User has a PNU cabinet allocated eight kWs of
power, the Exchange would charge the User $2,880 per month (i.e.,
$360 x eight). Users are not otherwise charged for PNU cabinets
until power is activated, at which point the fees applicable to
other cabinets are charged (i.e., the $5,000 initial fee per cabinet
and the full, monthly fee per kW).
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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; \10\ 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.\11\
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\10\ 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.
\11\ See SR-NYSE-2013-59, supra note 5 at 51766. The Exchange's
affiliates have also submitted the same proposed rule change to
provide further specification regarding the fees applicable to PNU
cabinets. See SR-NYSEMKT-2013-93 and SR-NYSEArca-2013-124.
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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,\12\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\13\ 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.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4) and (5).
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Overall, the Exchange believes that the proposed change is
consistent with the Act because the Exchange offers the co-location
services described herein (i.e., PNU cabinets) as a convenience to
Users, but in doing so incurs certain costs, including costs related to
the data center facility, including maintaining an adequate level of
power so that PNU cabinets can be available and powered on promptly at
the request of a User. As such, the proposed fees relate to the level
of services provided by the Exchange and, in turn, received by the
User.
The Exchange believes that the proposal is reasonable because it
would better align the Price List with the Exchange's billing practices
and provide further specificity in the Price List regarding such fees.
The proposal is further reasonable because pricing for PNU cabinets is
comparable to pricing for the ``Cabinet Proximity Option'' available to
users of co-location facilities of The NASDAQ Stock Market LLC
(``NASDAQ''), which varies based on the power capacity of the
cabinet.\14\
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\14\ See NASDAQ Rule 7034. Fees for NASDAQ's Cabinet Proximity
Option are $1,000 per medium or low density cabinet or $1,500 per
medium/high or high density cabinet. The Exchange understands that
NASDAQ's Cabinet Proximity Option gives its co-location customers
the ability to reserve contiguous or near contiguous cabinets and
power at a reduced rate, similar to manner in which Users are able
to request PNU cabinets in the Exchange's data center for future
use.
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As with fees for existing co-location services, the PNU cabinet
fees are charged only to those Users that voluntarily select the
related services, which are available to all Users. The Exchange
therefore believes that the proposed change is equitable and not
unfairly discriminatory because it would continue to result in fees
being charged only to Users that voluntarily select to receive the
corresponding services and because those services are available to all
Users. As such, 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,\15\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act because any 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
could have access to the co-location services provided in the data
center. This is also true because, in addition to the services being
completely voluntary, they are available to all Users on an equal basis
(i.e., the same range of products and services are available to all
Users).
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\15\ 15 U.S.C. 78f(b)(8).
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The Exchange further believes that the proposal would not impose
any burden
[[Page 70989]]
on competition that is not necessary or appropriate in furtherance of
the purposes of the Act because it would result in further
specification in the Price List regarding the fees applicable to PNU
cabinets. Although PNU cabinets do not use power, when the Exchange
establishes a PNU cabinet, it includes wiring, circuitry, and hardware
and allocates either four kWs or eight kWs of unused power capacity,
depending on the User's requirements, as it does for all cabinets. This
allows the cabinet to be powered and used promptly upon the User's
request. The proposed amendment to the Price List would therefore
specify that the applicable monthly PNU Fee is $360 per kW of power
allocated to the PNU cabinet.
Finally, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if, for example, they deem fee levels at a particular
venue to be excessive or if they determine that another venue's
products and services are more competitive than on the Exchange. In
such an environment, the Exchange must continually review, and consider
adjusting, the services it offers as well as any corresponding 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.
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) \16\ of the Act and subparagraph (f)(2) of Rule
19b-4 \17\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(2).
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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) \18\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\18\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please
include File Number SR-NYSE-2013-74 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-NYSE-2013-74. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of 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-NYSE-2013-74 and should be
submitted on or before December 18, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-28418 Filed 11-26-13; 8:45 am]
BILLING CODE 8011-01-P