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 the NYSE Amex Options Fee Schedule Related to Co-Location Services, 71000-71002 [2013-28419]
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71000
Federal Register / Vol. 78, No. 229 / Wednesday, November 27, 2013 / Notices
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:
• 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–
NYSEMKT–2013–91 on the subject line.
Paper Comments
emcdonald on DSK67QTVN1PROD with NOTICES
• 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–2013–91. 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 will also be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
publicly available. All submissions
should refer to File Number SR–
NYSEMKT–2013–91 and should be
submitted on or before December 18,
2013.
17:02 Nov 26, 2013
[FR Doc. 2013–28415 Filed 11–26–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
VerDate Mar<15>2010
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority. 43
Kevin M. O’Neill,
Deputy Secretary.
Jkt 232001
[Release No. 34–70914; File No. SR–
NYSEMKT–2013–93]
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 the NYSE Amex
Options Fee Schedule Related to CoLocation 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 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 (‘‘Price
List’’) and the NYSE Amex Options Fee
Schedule (‘‘Fee Schedule’’) 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
43 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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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
Price List and the Fee Schedule 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
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
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). As specified in
the Price List and the Fee Schedule, a User that
incurs co-location fees for a particular co-location
service pursuant thereto would not be subject to colocation fees for the same co-location service
charged by the Exchange’s affiliates New York
Stock Exchange LLC and NYSE Arca, Inc. See
Securities Exchange Act Release No. 70176 (August
13, 2013), 78 FR 50471 (August 19, 2013) (SR–
NYSEMKT–2013–67).
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Federal Register / Vol. 78, No. 229 / Wednesday, November 27, 2013 / Notices
emcdonald on DSK67QTVN1PROD with NOTICES
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 and Fee Schedule 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
and Fee Schedule with the Exchange’s
billing practice, the Exchange proposes
to amend the Price List and Fee
Schedule 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, an
ATP Holder, 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 non6 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 59299,
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 Nos. 67664
(August 15, 2012), 77 FR 50733, 50734 (August 22,
2012) (SR–NYSEMKT–2012–10) and 67665 (August
15, 2012), 77 FR 50734, 50735 (August 22, 2012)
(SR–NYSEMKT–2012–11).
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).
VerDate Mar<15>2010
17:02 Nov 26, 2013
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71001
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
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.
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
2. Statutory Basis
would continue to result in fees being
The Exchange believes that the
charged only to Users that voluntarily
proposed rule change is consistent with select to receive the corresponding
Section 6(b) of the Act,12 in general, and services and because those services are
furthers the objectives of Sections
available to all Users. As such, the
6(b)(4) and (5) of the Act,13 in particular, proposed change would not unfairly
because it provides for the equitable
discriminate between or among market
allocation of reasonable dues, fees, and
participants that are otherwise capable
other charges among its members,
of satisfying any applicable co-location
issuers and other persons using its
fees, requirements, terms and conditions
facilities and does not unfairly
established from time to time by the
discriminate between customers,
Exchange.
issuers, brokers or dealers.
Finally, the Exchange believes that it
Overall, the Exchange believes that
is subject to significant competitive
the proposed change is consistent with
forces, as described below in the
the Act because the Exchange offers the
Exchange’s statement regarding the
co-location services described herein
burden on competition.
(i.e., PNU cabinets) as a convenience to
For these reasons, the Exchange
Users, but in doing so incurs certain
believes that the proposal is consistent
costs, including costs related to the data with the Act.
center facility, including maintaining an
B. Self-Regulatory Organization’s
adequate level of power so that PNU
Statement on Burden on Competition
cabinets can be available and powered
In accordance with Section 6(b)(8) of
on promptly at the request of a User. As
the Act,15 the Exchange believes that the
such, the proposed fees relate to the
proposed rule change would not impose
level of services provided by the
any burden on competition that is not
Exchange and, in turn, received by the
necessary or appropriate in furtherance
User.
The Exchange believes that the
of the purposes of the Act because any
proposal is reasonable because it would market participants that are otherwise
better align the Price List and Fee
capable of satisfying any applicable coSchedule with the Exchange’s billing
location fees, requirements, terms and
practices and provide further specificity conditions established from time to time
in the Price List and Fee Schedule
by the Exchange could have access to
regarding such fees. The proposal is
the co-location services provided in the
data center. This is also true because, in
10 As is currently the case, Users that receive coaddition to the services being
location services from the Exchange will not receive completely voluntary, they are available
any means of access to the Exchange’s trading and
to all Users on an equal basis (i.e., the
execution systems that is separate from, or superior
same range of products and services are
to, that of other Users. In this regard, all orders sent
to the Exchange enter the Exchange’s trading and
available to all Users).
execution systems through the same order gateway,
The Exchange further believes that the
regardless of whether the sender is co-located in the
proposal would not impose any burden
data center or not. In addition, co-located Users do
on competition that is not necessary or
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–NYSEMKT–2013–67, supra note 5 at
50471. 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–NYSE–2013–74
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 00087
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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
appropriate in furtherance of the
purposes of the Act because it would
result in further specification in the
Price List and Fee Schedule 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 and Fee
Schedule 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–
NYSEMKT–2013–93 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–2013–93. 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–
18 15
Jkt 232001
PO 00000
U.S.C. 78s(b)(2)(B).
Frm 00088
Fmt 4703
Sfmt 4703
NYSEMKT–2013–93 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. 2013–28419 Filed 11–26–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70909; File No. SR–NYSE–
2013–72]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change To
Establish an Institutional Liquidity
Program on a One-Year Pilot Basis
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
7, 2013, New York Stock Exchange LLC
(‘‘NYSE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
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 a one-year
pilot program that would add new Rule
107D to establish an Institutional
Liquidity Program (‘‘Program’’ or
‘‘proposed rule change’’) to attract
buying and selling interest in greater
size to the Exchange for NYSE-listed
securities by facilitating interactions
between institutional customers (and
others with block trading interest) and
providers of liquidity exceeding
minimum size requirements. 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 71000-71002]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-28419]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70914; File No. SR-NYSEMKT-2013-93]
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 the NYSE Amex Options Fee Schedule 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 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
(``Price List'') and the NYSE Amex Options Fee Schedule (``Fee
Schedule'') 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 the Price List and the Fee Schedule
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. 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.
---------------------------------------------------------------------------
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 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
[[Page 71001]]
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 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). As specified in the Price List and the
Fee Schedule, 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 New York Stock Exchange LLC and NYSE Arca,
Inc. See Securities Exchange Act Release No. 70176 (August 13,
2013), 78 FR 50471 (August 19, 2013) (SR-NYSEMKT-2013-67).
\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 and Fee
Schedule 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
and Fee Schedule with the Exchange's billing practice, the Exchange
proposes to amend the Price List and Fee Schedule 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 59299, 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 Nos. 67664 (August 15,
2012), 77 FR 50733, 50734 (August 22, 2012) (SR-NYSEMKT-2012-10) and
67665 (August 15, 2012), 77 FR 50734, 50735 (August 22, 2012) (SR-
NYSEMKT-2012-11).
\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, an ATP Holder, 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-NYSEMKT-2013-67, supra note 5 at 50471. 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-NYSE-2013-74 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 and Fee Schedule with the Exchange's
billing practices and provide further specificity in the Price List and
Fee Schedule 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 on competition that is not necessary or
[[Page 71002]]
appropriate in furtherance of the purposes of the Act because it would
result in further specification in the Price List and Fee Schedule
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 and Fee Schedule 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-NYSEMKT-2013-93 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-2013-93. 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-NYSEMKT-2013-93 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.
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\19\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2013-28419 Filed 11-26-13; 8:45 am]
BILLING CODE 8011-01-P