Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Amendment No. 1 to Proposed Rule Change Amending the Co-Location Services Offered by the Exchange To Add Certain Access and Connectivity Fees, 66095-66105 [2016-23046]

Download as PDF 66095 Federal Register / Vol. 81, No. 186 / Monday, September 26, 2016 / Notices qualified railroad employees whose physical or mental condition renders them incapable of working in their regular occupation (occupational disability) or any occupation (total disability). The medical reports obtain information needed for determining the nature and severity of the impairment. Changes Proposed: In support of the RRB’s Disability Program Improvement Project to enhance/improve disability case processing and overall program integrity, the RRB proposes the addition of proposed Form RL–11D1, Request for Medical Evidence from Employers, to the information collection. Form RL– 11D1 will be mailed by an RRB field office to railroad employers to obtain any medical evidence regarding the employee’s disability that they may have acquired within the last 18 months. A copy of the employee signed Form G–197 will be enclosed with the RL–11D1. The employer will return the RL–11D1 to RRB Headquarters certifying that they either have submitted the requested medical evidence or that they have no medical evidence to submit. One response is requested of each respondent. Completion is voluntary. The burden estimate for the ICR is as follows: Annual responses Form No. Time (minutes) Burden (hours) G–3EMP ...................................................................................................................................... G–197 .......................................................................................................................................... G–250 .......................................................................................................................................... G–250A ........................................................................................................................................ G–260 .......................................................................................................................................... RL–11B ........................................................................................................................................ RL–11D ........................................................................................................................................ RL–11D1 ...................................................................................................................................... RL–250 ........................................................................................................................................ 600 6,000 11,950 50 100 5,000 250 600 11,950 10 10 30 20 25 10 10 20 10 100 1,000 5,975 17 42 833 42 200 1,992 Total ...................................................................................................................................... 36,500 ........................ 10,201 Additional Information or Comments: Copies of the forms and supporting documents can be obtained from Dana Hickman at (312) 751–4981 or Dana.Hickman@RRB.GOV. Comments regarding the information collection should be addressed to Charles Mierzwa, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois, 60611–2092 or Charles.Mierzwa@RRB.GOV and to the OMB Desk Officer for the RRB, Fax: 202–395–6974, Email address: OIRA_ Submission@omb.eop.gov. Charles Mierzwa, Associate Chief Information Officer for Policy and Compliance. [FR Doc. 2016–23011 Filed 9–23–16; 8:45 am] BILLING CODE 7905–01–P SECURITIES AND EXCHANGE COMMISSION mstockstill on DSK3G9T082PROD with NOTICES Sunshine Act Meeting Notice is hereby given, pursuant to the provisions of the Government in the Sunshine Act, Public Law 94–409, that the Securities and Exchange Commission will hold a closed meeting on Thursday, September 29, 2016 at 2 p.m. Commissioners, Counsel to the Commissioners, the Secretary to the Commission, and recording secretaries will attend the closed meeting. Certain staff members who have an interest in the matters also may be present. The General Counsel of the Commission, or her designee, has certified that, in her opinion, one or VerDate Sep<11>2014 19:40 Sep 23, 2016 Jkt 238001 more of the exemptions set forth in 5 U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) and 17 CFR 200.402(a)(3), (a)(5), (a)(7), (a)(9)(ii) and (a)(10), permit consideration of the scheduled matter at the closed meeting. Chair White, as duty officer, voted to consider the items listed for the closed meeting in closed session. The subject matter of the closed meeting will be: Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings; Adjudicatory matters; and Other matters relating to enforcement proceedings. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact Brent J. Fields from the Office of the Secretary at (202) 551–5400. Dated: September 22, 2016. Brent J. Fields, Secretary. [FR Doc. 2016–23326 Filed 9–22–16; 4:15 pm] BILLING CODE 8011–01–P PO 00000 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78887; File No. SR–NYSE– 2016–45] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Amendment No. 1 to Proposed Rule Change Amending the Co-Location Services Offered by the Exchange To Add Certain Access and Connectivity Fees September 20, 2016. On July 29, 2016, the New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change (1) to provide additional information regarding access to various trading and execution services; connectivity to market data feeds and testing and certification feeds; connectivity to third party systems; and connectivity to DTCC provided to Users using data center local area networks; and (2) to establish fees relating to a User’s access to various trading and execution services; connectivity to market data feeds and testing and certification feeds; connectivity to DTCC; and other services. The Exchange filed Amendment No. 1 to the proposed rule change on August 16, 2016. The proposed rule change was published for 1 15 2 17 Frm 00101 Fmt 4703 Sfmt 4703 E:\FR\FM\26SEN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 26SEN1 66096 Federal Register / Vol. 81, No. 186 / Monday, September 26, 2016 / Notices comment in the Federal Register on August 17, 2016 without Amendment No. 1.3 The Commission received one comment letter in response to the proposed rule change.4 Amendment No. 1 is described in Items I, II, and III below, which Items have been prepared by the Exchange.5 The Commission is publishing this notice to solicit comments on Amendment No. 1 to 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 co-location services offered by the Exchange as follows: (1) To provide additional information regarding the access to trading and execution services and connectivity to data provided to Users with local area networks available in the data center; and (2) to establish fees relating to User’s access to trading and execution services; connectivity to data feeds and to testing and certification feeds; access to clearing; and other services. In addition, this proposed rule change reflects changes to the Exchange’s Price List related to these co-location services. This Amendment No. 1 supersedes the original filing in its entirety. 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. mstockstill on DSK3G9T082PROD with NOTICES 3 See Securities Exchange Act Release No. 34– 78556 (August 11, 2016), 81 FR 54877 (‘‘Notice’’). 4 See letter to Brent J. Fields, Secretary, Commission, from John Ramsay, Chief Market Policy Officer, Investors Exchange LLC (IEX), dated September 9, 2016, available at https:// www.sec.gov/comments/sr-nyse-2016-45/ nyse201645-2.pdf. 5 Amendment No. 1 more closely aligns the proposed rule change with companion proposals filed by the Exchange’s affiliates NYSE Arca and NYSE MKT. See Securities Exchange Act Release No. 34–78628 (August 22, 2016), 81 FR 59004 (August 26, 2016) (SR–NYSEArca–2016–89); Securities Exchange Act Release No. 34–78629 (August 22, 2016), 81 FR 58992 (August 26, 2016) (SR–NYSEMKT–2016–63). Amendment No. 1 is also available at https://www.sec.gov/comments/srnyse-2016-45/nyse201645-1.pdf. VerDate Sep<11>2014 19:40 Sep 23, 2016 Jkt 238001 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 co-location 6 services offered by the Exchange as follows: (1) To provide additional information regarding the access to trading and execution services and connectivity to data provided to Users 7 with local area networks available in the data center; and (2) to establish fees relating to Users’ access to trading and execution services; connectivity to data feeds and to testing and certification feeds; access to clearing; and other services. More specifically, the Exchange proposes to revise the Price List to include: a. A more detailed description of the access to the trading and execution systems of the Exchange and its Affiliate SROs (the ‘‘Exchange Systems’’) and connectivity to certain market data products (the ‘‘Included Data Products’’) that Users receive with connections to the Liquidity Center Network (‘‘LCN’’) and internet protocol (‘‘IP’’) network, local area networks available in the data center; b. fees for connectivity to: • Certain other market data products of the Exchange and its Affiliate SROs (the ‘‘Premium NYSE Data Products’’ and, together with the Included Data Products, the ‘‘NYSE Data Products’’); • access to the execution systems of third party markets and other content service providers (‘‘Third Party Systems’’); 6 The Exchange initially filed rule changes relating to its co-location services with the Securities and Exchange Commission (‘‘Commission’’) in 2010. See Securities Exchange Act Release No. 62960 (September 21, 2010), 75 FR 59310 (September 27, 2010) (SR–NYSE–2010–56) (the ‘‘Original Co-location Filing’’). The Exchange operates a data center in Mahwah, New Jersey (the ‘‘data center’’) from which it provides co-location services to Users. 7 For purposes of the Exchange’s co-location services, a ‘‘User’’ means any market participant that requests to receive co-location services directly from the Exchange. See Securities Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190 (October 5, 2015) (SR–NYSE–2015–40). As specified in the Price List, a User that incurs colocation 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 (‘‘NYSE MKT’’) and NYSE Arca, Inc. (‘‘NYSE Arca’’ and, together with NYSE MKT, the ‘‘Affiliate SROs’’). See Securities Exchange Act Release No. 70206 (August 15, 2013), 78 FR 51765 (August 21, 2013) (SR–NYSE–2013–59). PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 • data feeds from third party markets and other content service providers (the ‘‘Third Party Data Feeds’’); • third party testing and certification feeds; • Depository Trust & Clearing Corporation (‘‘DTCC’’) services; and c. fees for virtual control circuits (‘‘VCCs’’) between two Users. VCCs are unicast connections between two participants over dedicated bandwidth.8 The Exchange provides access to the Exchange Systems and Third Party Systems (together, ‘‘Access’’) and connectivity to NYSE Data Products, Third Party Data Feeds, third party testing and certification feeds, and DTCC (collectively, ‘‘Connectivity’’) as conveniences to Users. Use of Access or Connectivity is completely voluntary, and several other access and connectivity options are available to a User. As alternatives to using the Access and Connectivity provided by the Exchange, a User may access or connect to such services and products through another User or through a connection to an Exchange access center outside the data center, third party access center, or third party vendor. The User may make such connection through a third party telecommunication provider, third party wireless network, the Exchange’s Secure Financial Transaction Infrastructure (‘‘SFTI’’) network, or a combination thereof. Similarly, the Exchange provides VCCs as a convenience to Users. Use of a VCC is completely voluntary. As an alternative to an Exchange-provided VCC, a User may connect to another User through a fiber connection (‘‘cross connect’’).9 Access to Exchange Systems and Connectivity to Included Data Products As the Exchange has previously stated, a User’s connection to the LCN or IP network provides it access to the Exchange Systems and Exchange market data products.10 More specifically, 8 Information flows over existing network connections in two formats: ‘‘unicast’’ format, which is a format that allows one-to-one communication, similar to a phone line, in which information is sent to and from the Exchange; and ‘‘multicast’’ format, which is a format in which information is sent one-way from the Exchange to multiple recipients at once, like a radio broadcast. 9 See Original Co-location Filing, supra note 4, at 59311 and Securities Exchange Act Release No. 74222 (February 6, 2015), 80 FR 7888 (February 12, 2015) (SR–NYSE–2015–05) (notice of filing and immediate effectiveness of proposed rule change to include IP network connections and fiber cross connects between a User’s cabinet and non-User’s equipment as co-location services) (the ‘‘IP Network Release’’). 10 See Original Co-location Filing, supra note 4, at 59311 (‘‘According to NYSE, SFTI and LCN both provide Users with access to the Exchange’s trading E:\FR\FM\26SEN1.SGM 26SEN1 Federal Register / Vol. 81, No. 186 / Monday, September 26, 2016 / Notices mstockstill on DSK3G9T082PROD with NOTICES when a User purchases access to the LCN or IP network through purchase of a 1, 10, or 40 Gb LCN circuit, a 10 Gb LX Circuit, bundled network access, Partial Cabinet Solution bundle, or 1, 10 or 40 Gb IP network access,11 as part of the purchase it receives access to the Exchange Systems and connectivity to any Included Data Products that it selects.12 The Exchange proposes to revise the Price List to provide a more detailed description of the access to the Exchange Systems and connectivity to Included Data Products that comes with connections to the LCN or IP network.13 Access to certification and testing feeds comes with the purchase of access to the Exchange Systems and connectivity to many of the NYSE Data Products. Such feeds, which are solely used for certification and testing and do not carry live production data, are only available over the IP network.14 Certification feeds are used to certify that a User conforms to any relevant technical requirements for receipt of data or access to Exchange Systems. Test feeds provide Users an environment in which to conduct tests with non-live data, including testing for upcoming Exchange releases and product enhancements or the User’s own software development. The Exchange offers connectivity to NYSE Data Products in three forms: As a resilient feed, as ‘‘Feed A’’ or as ‘‘Feed and execution systems and to the Exchange’s proprietary market data products.’’) and IP Network Release, supra note 7, at 7889 (‘‘Like the LCN, the IP network provides Users with access to the Exchange’s trading and execution systems and to the Exchanges’ proprietary market data products.’’). The IP network was previously sometimes referred to as SFTI. See id. 11 See Securities Exchange Act Release Nos. 70888 (November 15, 2013), 78 FR 69907 (November 21, 2013) (SR–NYSE–2013–73); 72721 (July 30, 2014), 79 FR 45562 (August 5, 2014) (SR– NYSE–2014–37); 76369 (November 5, 2015), 80 FR 70027 (November 12, 2015) (SR–NYSE–2015–54); and 77072 (February 5, 2016), 81 FR 7394 (February 11, 2016) (SR–NYSE–2015–53). 12 As discussed below, in order to connect to an Included Data Product, a User must have entered into a contract with the provider of the data feed. Similarly, in order to access an Exchange System, the User must have authorization from the Exchange or the relevant Affiliate SRO. 13 Because each Included Data Product uses part of a User’s bandwidth, a User may wish to limit the number of Included Data Products that it receives to those that it requires. The Exchange notes that connectivity to the LCN and IP network also includes connectivity to Exchange Systems, as discussed under ‘‘Connectivity to Exchange Systems,’’ below. See also note 8, supra. 14 A User that does not have an IP network connection may obtain an IP network circuit for purposes of testing and certification for free for three months. See IP Network Release, supra note 7, at 7889. A User that opted to obtain connectivity to NYSE Data Products through another User, a telecommunication provider, third party wireless network, or the SFTI network would receive the corresponding testing and certification feeds. VerDate Sep<11>2014 19:40 Sep 23, 2016 Jkt 238001 B.’’ Resilient feeds include two copies of the same feed, for redundancy purposes. Feed A and Feed B are identical feeds.15 Connectivity to Exchange Systems As the Exchange has previously stated, Users’ connections to the LCN or IP networks include access to Exchange Systems.16 Accordingly, the Exchange proposes to add language to its Price List stating the following: When a User purchases access to the LCN or IP network, it receives the ability to connect to the trading and execution systems of the NYSE, NYSE MKT and NYSE Arca (Exchange Systems), subject, in each case, to authorization by the NYSE, NYSE MKT or NYSE Arca, as applicable. Such connectivity includes access to the customer gateways that provide for order entry, order receipt (i.e. confirmation that an order has been received), receipt of drop copies and trade reporting (i.e. whether a trade is executed or cancelled), as well as for sending information to shared data services for clearing and settlement. A User can change the connections it receives at any time, subject to authorization. A User does not have to purchase access to the LCN or IP network in order to obtain connectivity to Exchange Systems. Connectivity to Included Data Products Currently, there are three categories of data feeds for which the Exchange offers Users connectivity: Included Data Products; Premium NYSE Data Products; and Third Party Data.17 The Included Data Products include the data feeds disseminated by the Consolidated Tape Association (‘‘CTA’’) (such data feeds, the ‘‘NMS feeds’’). CTA is responsible for disseminating consolidated, real-time trade and quote information in NYSE listed securities (Network A) and NYSE MKT, NYSE Arca and other regional exchanges’ listed securities (Network B) pursuant to a national market system plan.18 The 15 A User that wants redundancy would connect to both Feed A and Feed B or two resilient feeds, using two different ports. A User may opt to connect both Feed A and Feed B to the same port, the effect of which would be the same as if the User had connected to a resilient feed. The form of feed that a User selects may affect the connection it requires. For example, a User connecting to the NYSE Arca Integrated Feed, NYSE Integrated Feed or NYSE MKT Integrated Feed would need at least a 1 Gb IP network connection in order to connect to either Feed A or Feed B. To connect to a resilient feed, the User would require an LCN or IP network connection of at least 10 Gb. 16 See note 8, supra. 17 The NYSE Data Products and Third Party Data Feeds do not provide access or order entry to the Exchange’s execution system. 18 The Included Data Products do not include connectivity to the data feeds disseminated pursuant to the ‘‘Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privilege Basis’’ PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 66097 NMS feeds include the Consolidated Tape System and Consolidated Quote System data streams, as well as Options Price Reporting Authority feeds. In order to connect to an Included Data Product, a User enters into a contract with the provider of such data, pursuant to which the User is charged for the Included Data Product. After the User and data provider enter into the contract and the Exchange receives authorization from the provider of the data feed, the Exchange provides the User with connectivity to the Included Data Product over the User’s LCN or IP network port. The Exchange does not charge the User separately for such connectivity to the Included Data Product, as it is included in the purchase of the access to the LCN or IP network. The Included Data Products are available over both the LCN and IP network.19 For a User that purchases access to the LCN and IP network, the Exchange works with such User to allocate its connectivity to Included Data Products between its LCN and IP network connections. Some Included Data Products require a network connection with a minimum gigabyte (‘‘Gb’’) size in order to accommodate the feed. Users may connect to an Included Data Product as a resilient feed or as individual Feeds A and B. The Included Data Products are as follows: NMS feeds NYSE: NYSE Alerts NYSE BBO NYSE OpenBook NYSE Order Imbalances NYSE Trades NYSE Amex Options NYSE Arca: NYSE ArcaBook NYSE Arca BBO NYSE Arca Order Imbalances NYSE Arca Trades NYSE Arca Options NYSE Bonds NYSE MKT: NYSE MKT Alerts NYSE MKT BBO NYSE MKT OpenBook NYSE MKT Order Imbalances NYSE MKT Trades In addition to the above list of Included Data Products, the Exchange (the ‘‘UTP Plan’’). The UTP Plan is responsible for disseminating consolidated, real-time trade and quote information in Nasdaq Stock Exchange LLC listed securities (Network C). Connectivity to data disseminated pursuant to the UTP Plan is available as a Third Party Data Feed. 19 As noted above, certification and testing feeds included with an Included Data Product are only available over the IP network. E:\FR\FM\26SEN1.SGM 26SEN1 66098 Federal Register / Vol. 81, No. 186 / Monday, September 26, 2016 / Notices of the equity Included Data Products: NYSE OpenBook, NYSE Trades, and NYSE Order Imbalances.21 The NYSE BQT data feed includes, among other things, certain data elements from six of the equity Included Data Products: NYSE Trades, NYSE BBO, NYSE Arca Trades, NYSE Arca BBO, NYSE MKT Trades, and NYSE MKT BBO.22 By contrast, while some of the Included Data Products include data elements from other Included Data Products, no single Included Data Product includes as much data as a Premium NYSE Data Product. With the exception of NYSE Arca Order Imbalances, the equity Included Data Products were introduced before the Premium Data Products.23 There are no Premium NYSE Data Products for the NYSE Amex Options or NYSE Arca Options markets, as there are no options data products that integrate, or include data elements from, other option data products in the same manner that the NYSE, NYSE MKT and NYSE Arca Integrated Feeds integrate, or include data elements from, equity Included Data Products. In order to connect to a Premium NYSE Data Product, a User enters into a contract with the provider of such data, pursuant to which it is charged for the Premium NYSE Data Product for the same market. After the data provider and User enter into the contract and the Exchange receives authorization from the data provider, the Exchange provides the User with connectivity to the Premium NYSE Data Product over the User’s LCN or IP network port. The Exchange charges the User for the connectivity to the Premium NYSE Data Product. A User only receives, and is only charged for, connectivity to the Premium NYSE Data Product feeds that it selects. The Premium NYSE Data Products are available over both the LCN and IP network.24 For a User that purchases access to the LCN and IP network, the Exchange works with such User to allocate its connectivity to Premium NYSE Data Products between its LCN and IP network connections. Some Premium NYSE Data Products require a network connection with a minimum Gb size in order to accommodate the feed.25 A User can opt to connect to a Premium NYSE Data Product as a resilient feed or as Feed A or Feed B. Connectivity to the two identical Feeds A and B is only available on the IP network. The Exchange charges a monthly recurring fee for connectivity to Premium NYSE Data Products. The following table shows the Premium NYSE Data Products and corresponding monthly recurring connectivity fees. Premium NYSE data product Feed Monthly recurring connectivity fee per feed NYSE Arca Integrated Feed .................................................... Feed A, IP network only .......................................................... Feed B, IP network only .......................................................... Resilient, IP network only ........................................................ Resilient, LCN only .................................................................. Feed A, IP network only .......................................................... Feed B, IP network only .......................................................... Resilient, IP network only ........................................................ Resilient, LCN only .................................................................. Feed A, IP network only .......................................................... Feed B, IP network only .......................................................... Resilient, IP network only ........................................................ Resilient, LCN only .................................................................. Feed A, IP network only .......................................................... Feed B, IP network only .......................................................... Resilient, IP network only ........................................................ Resilient, LCN only .................................................................. proposes to add the following language to the Price List: When a User purchases access to the LCN or IP network it receives connectivity to any of the Included Data Products that it selects, subject to any technical provisioning requirements and authorization from the provider of the data feed. Market data fees for the Included Data Products are charged by the provider of the data feed. A User can change the Included Data Products to which it receives connectivity at any time, subject to authorization from the provider of the data feed. The Exchange is not the exclusive method to connect to the Included Data Products. Connectivity Connectivity to Premium NYSE Data Products The Exchange offers Users connectivity to Premium NYSE Data Products from the Exchange and its Affiliate SROs over Users’ LCN and IP network connections. The Exchange proposes to revise the Price List to specify the connectivity fees for Premium NYSE Data Products. The Premium NYSE Data Products are equity market data products that are variants of the equity Included Data Products. Each Premium NYSE Data Product integrates, or includes data elements from, several Included Data Products.20 For example, the NYSE Integrated Feed includes, among other things, information available from three NYSE Best Quote and Trades (BQT) ..................................... NYSE Integrated Feed ............................................................ mstockstill on DSK3G9T082PROD with NOTICES NYSE MKT Integrated Feed .................................................... 20 The rule changes establishing the NYSE Integrated Feed and NYSE MKT Integrated Feed were immediately effective in 2015, and the rule change establishing the NYSE Arca Integrated Data Feed was immediately effective in 2011. The NYSE Best Quote & Trades (‘‘NYSE BQT’’) data feed was approved in 2014. See Securities Exchange Act Release Nos. 74128 (Jan. 23, 2015), 80 FR 4951 (Jan. 29, 2015) (SR–NYSE–2015–03) (establishing the NYSE Integrated Feed); 74127 (Jan. 23, 2015), 80 FR 4956 (Jan. 29, 2015) (SR–NYSEMKT–2015–06) (establishing the NYSE MKT Integrated Feed); 65669 (Nov. 2, 2011), 76 FR 69311 (Nov. 8, 2011) (SR–NYSEArca–2011–78) (establishing the NYSE Arca Integrated Feed); and 73553 (Nov. 6, 2014), 79 VerDate Sep<11>2014 19:40 Sep 23, 2016 Jkt 238001 FR 67491 (Nov. 13, 2014) (SR–NYSE–2014–40) (establishing the NYSE Best Quote & Trades Data Feed). 21 See SR–NYSE–2015–03, supra note 18, at 4952. 22 See SR–NYSE–2014–40, supra note 18, at 67491. 23 See Securities Exchange Act Release Nos. 44138 (December 7, 2001), 66 FR 64895 (December 14, 2001) (SR–NYSE–2001–42) (establishing fees for NYSE OpenBook); 50844 (December 13, 2004), 69 FR 76806 (December 22, 2004) (SR–NYSE–2004–53) (establishing fee for NYSE Alerts); 59543 (March 9, 2009), 74 FR 11159 (March 16, 2009) (establishing fee for NYSE Order Imbalances); 59290 (January 23, PO 00000 Frm 00104 Fmt 4703 Sfmt 4703 $1,500 1,500 3,000 1,500 500 500 1,000 500 1,500 1,500 3,000 1,500 300 300 600 300 2009) 74 FR 5707 (January 30, 2009) (SR–NYSE– 2009–05) (establishing pilot program for NYSE Trades); and 62181 (May 26, 2010), 75 FR 31488 (June 3, 2010) (SR–NYSE–2010–30) (establishing NYSE BBO). See also Securities Exchange Act Release No. 76968 (January 22, 2016), 81 FR 4689 (January 27, 2016) (establishing NYSE Arca Order Imbalances). NYSE Arca Order Imbalances, NYSE Order Imbalances and NYSE MKT Order Imbalances are all Included Data Products. 24 As noted above, certification and testing feeds included with a Premium NYSE Data Product are only available over the IP network. 25 See note 13, supra. E:\FR\FM\26SEN1.SGM 26SEN1 Federal Register / Vol. 81, No. 186 / Monday, September 26, 2016 / Notices In addition to the connectivity fees, the Exchange proposes to add the following language to its Price List: Pricing for Premium NYSE Data Products is for connectivity only. Connectivity to Premium NYSE Data Products is subject to any technical provisioning requirements and authorization from the provider of the data feed. Market data fees for the Premium NYSE Data Products are charged by the provider of the data feed. The Exchange is not the exclusive method to connect to Premium NYSE Data Products. Connectivity to Third Party Systems The Exchange proposes to revise the Price List to provide that Users may obtain connectivity to Third Party Systems of multiple third party markets and other content service providers for a fee. Users connect to Third Party Systems over the IP network.26 The Exchange selects what connectivity to Third Party Systems to offer in the data center based on User demand. In order to obtain access to a Third Party System, a User enters into an agreement with the relevant third party content service provider, pursuant to which the third party content service provider charges the User for access to the Third Party System. The Exchange then establishes a unicast connection between the User and the relevant third party content service provider over the IP network. The Exchange charges the User for the connectivity to the Third Party System. A User only receives, and is only charged for, access to Third Party Systems for which it enters into agreements with the third party content service provider. With the exception of the ICE feed,27 the Exchange has no ownership interest in the Third Party Systems. Establishing a User’s access to a Third Party System does not give the Exchange any right to use the Third Party Systems. Connectivity to a Third Party System does not provide access or order entry to the Exchange’s execution system, and a User’s connection to a Third Party System is not through the Exchange’s execution system.28 The Exchange charges a monthly recurring fee for connectivity to a Third Party System. Specifically, when a User requests access to a Third Party System, 26 See IP Network Release, supra note 7, at 7889. is owned by the Exchange’s ultimate parent, Intercontinental Exchange, Inc., and so the Exchange has an indirect interest in the ICE feeds. The ICE feeds include both market data and trading and clearing services, but the Exchange includes it as a Third Party Data Feed. In order for a User to receive an ICE feed, ICE must provide authorization for the User to receive both data and trading and clearing services. 28 The Exchange has a dedicated network connection to each of the Third Party Systems. mstockstill on DSK3G9T082PROD with NOTICES 27 ICE VerDate Sep<11>2014 19:40 Sep 23, 2016 Jkt 238001 it identifies the applicable third party market or other content service provider and what bandwidth connection it requires. The monthly recurring fee the Exchange charges Users for unicast connectivity to each Third Party System varies by the bandwidth of the connection, as follows: Bandwidth of connection to third party system Monthly recurring fee per connection to third party system 1Mb ....................... 3Mb ....................... 5Mb ....................... 10Mb ..................... 25Mb ..................... 50Mb ..................... 100Mb ................... 200 Mb .................. 1 Gb ...................... $200 400 500 800 1,200 1,800 2,500 3,000 3,500 The Exchange provides connectivity to the following Third Party Systems: Americas Trading Group (ATG) BATS Boston Options Exchange (BOX) Chicago Board Options Exchange (CBOE) Credit Suisse International Securities Exchange (ISE) Nasdaq National Stock Exchange NYFIX Marketplace In addition to the connectivity fees, the Exchange proposes to add language to its Price List stating the following: Pricing for access to the execution systems of third party markets and other service providers (Third Party Systems) is for connectivity only. Connectivity to Third Party Systems is subject to any technical provisioning requirements and authorization from the provider of the data feed. Connectivity to Third Party Systems is over the IP network. Any applicable fees are charged independently by the relevant third party content service provider. The Exchange is not the exclusive method to connect to Third Party Systems. Connectivity to Third Party Data Feeds The Exchange proposes to revise the Price List to provide that Users may obtain connectivity to Third Party Data Feeds for a fee. The Exchange receives Third Party Data Feeds from multiple national securities exchanges and other content service providers at its data center. It then provides connectivity to that data to Users for a fee. With the exceptions of Global OTC and NYSE Global Index, Users connect to Third Party Data Feeds over the IP network.29 29 See IP Network Release, supra note 7, at 7889 (‘‘The IP network also provides Users with access to away market data products.’’). Users can connect to Global OTC and NYSE Global Index over the IP network or LCN. PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 66099 The Exchange notes that charging Users a monthly fee for connectivity to Third Party Data Feeds is consistent with the monthly fee Nasdaq charges its co-location customers for connectivity to third party data. For instance, Nasdaq charges its co-location customers monthly fees of $1,500 and $4,000 for connectivity to BATS Y and BATS, respectively, and of $2,500 for connectivity to EDGA or EDGX.30 In order to connect to a Third Party Data Feed, a User enters into a contract with the relevant third party market or other content service provider, pursuant to which the content service provider charges the User for the Third Party Data Feed. The Exchange receives the Third Party Data Feed over its fiber optic network and, after the data provider and User enter into the contract and the Exchange receives authorization from the data provider, the Exchange re-transmits the data to the User over the User’s port. The Exchange charges the User for the connectivity to the Third Party Data Feed. A User only receives, and is only charged for, connectivity to the Third Party Data Feeds for which it enters into contracts. With the exception of the Intercontinental Exchange (‘‘ICE’’), Global OTC and NYSE Global Index feeds,31 the Exchange has no affiliation with the sellers of the Third Party Data Feeds. It has no right to use the Third Party Data Feeds other than as a redistributor of the data. The Third Party Data Feeds do not provide access or order entry to the Exchange’s execution system. With the exception of the ICE feeds, the Third Party Data Feeds do not provide access or order entry to the execution systems of the third party generating the feed.32 The Exchange receives Third Party Data Feeds via arms-length agreements and it has no inherent advantage over any other distributor of such data. The Exchange charges a monthly recurring fee for connectivity to each 30 See Nasdaq Stock Market Rule 7034. and the Global OTC alternative trading system are both owned by the Exchange’s ultimate parent, Intercontinental Exchange, Inc., and so the Exchange has an indirect interest in the ICE and Global OTC feeds. The NYSE Global Index feed includes index and exchange traded product valuations data, with data drawn from the Exchange, the Affiliate SROs, and third party exchanges. Because it includes third party data, the NYSE Global Index feed is considered a Third Party Data Feed. As with all Third Party Data Feeds, the Exchange is not the exclusive method to connect to the ICE, Global OTC or NYSE Global Index feeds. 32 Unlike other Third Party Data Feeds, the ICE feeds include both market data and trading and clearing services. In order to receive the ICE feeds, a User must receive authorization from ICE to receive both market data and trading and clearing services. 31 ICE E:\FR\FM\26SEN1.SGM 26SEN1 66100 Federal Register / Vol. 81, No. 186 / Monday, September 26, 2016 / Notices Third Party Data Feed. The monthly recurring fee is per Third Party Data Feed, with the exception that the monthly recurring feed for SuperFeed and MSCI varies by the bandwidth of the connection. Depending on its needs and bandwidth, a User may opt to receive all or some of the feeds or services included in a Third Party Data Feed. The following table shows the feeds that connectivity to each Third Party Data Feed provides, together with the applicable monthly recurring fee. Third party data feed Bats BZX Exchange (BZX) and Bats BYX Exchange (BYX) ... Bats EDGX Exchange (EDGX) and Bats EDGA Exchange (EDGA) .................................. Chicago Board Options Exchange (CBOE) ..................... Chicago Stock Exchange (CHX) .................................... Euronext ................................... Financial Industry Regulatory Authority (FINRA) .................. Global OTC ............................... Intercontinental Exchange (ICE) ´ Montreal Exchange (MX) .......... MSCI 5 Mb ............................... MSCI 25 Mb ............................. NASDAQ Stock Market ............ NASDAQ OMX Global Index Data Service ......................... NASDAQ OMDF ....................... NASDAQ UQDF & UTDF ......... NYSE Global Index .................. OTC Markets Group ................. SR Labs—SuperFeed ≤500 Mb SR Labs—SuperFeed >500 Mb to ≤1.25 Gb ........................... SR Labs—SuperFeed >1.25 Gb ......................................... TMX Group ............................... Monthly recurring connectivity fee per third party data feed $2,000 2,000 2,000 400 600 500 100 1,500 1,000 500 1,200 2,000 100 100 500 100 1,000 250 800 1,000 2,500 mstockstill on DSK3G9T082PROD with NOTICES In addition to the above connectivity fees, the Exchange proposes to add the following language to its Price List: Pricing for data feeds from third party markets and other content service providers (Third Party Data Feeds) is for connectivity only. Connectivity to Third Party Data Feeds is subject to any technical provisioning requirements and authorization from the provider of the data feed. Connectivity to Third Party Data Feeds is over the IP network, with the exception that Users can connect to Global OTC and NYSE Global Index over the IP network or LCN. Market data fees are charged independently by the relevant third party market or content service provider. The Exchange is not the exclusive method to connect to Third Party Data Feeds. Third Party Data Feed providers may charge redistribution fees, such as Nasdaq’s Extranet Access Fees and OTC VerDate Sep<11>2014 19:40 Sep 23, 2016 Jkt 238001 Markets Group’s Access Fees.33 When the Exchange receives a redistribution fee, it passes through the charge to the User, without change to the fee. The fee is labeled as a pass-through of a redistribution fee on the User’s invoice. The Exchange proposes to add language to the Price List accordingly. The Exchange provides third party markets or content providers that are also Users connectivity to their own Third Party Data Feeds. The Exchange does not charge Users that are third party markets or content providers for connectivity to their own feeds, as in the Exchange’s experience such parties generally receive their own feeds for purposes of diagnostics and testing. The Exchange proposes to add language to the Price List accordingly. Connectivity to Third Party Testing and Certification Feeds The Exchange offers Users connectivity to third party certification and testing feeds. Certification feeds are used to certify that a User conforms to any of the relevant content service provider’s requirements for accessing Third Party Systems or receiving Third Party Data, while testing feeds provide Users an environment in which to conduct tests with non-live data.34 Such feeds, which are solely used for certification and testing and do not carry live production data, are available over the IP network. The Exchange proposes to revise the Price List to include connectivity to third party certification and testing feeds. The Exchange charges a connectivity fee of $100 per month per feed. The Exchange proposes to add the following connectivity fees and language to its Price List: Connectivity to third party certification and testing feeds. $100 monthly recurring fee per feed. The Exchange provides connectivity to third party testing and certification feeds provided by third party markets and other content service providers. Pricing for third party testing and certification feeds is for connectivity only. Connectivity to third party testing and certification feeds is subject to any technical provisioning requirements and 33 See NASDAQ Stock Market LLC Rule 7025, ‘‘Extranet Access Fee’’, and OTC Markets Market Data Distribution Agreement Appendix B, ‘‘Fees’’ at https://www.otcmarkets.com/content/doc/marketdata-fees-2016.pdf. See also Securities Exchange Act Release No. 74040 (January 13, 2015), 80 FR 2460 (January 16, 2015) (SR–NASDAQ–2015–003). 34 For example, a User that trades on a third party exchange may wish to test the exchange’s upcoming releases and product releases or may wish to test a new algorithm in a testing environment prior to making it live. PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 authorization from the provider of the data feed. Connectivity to third party testing and certification feeds is over the IP network. Any applicable fees are charged independently by the relevant third party market or content service provider. The Exchange is not the exclusive method to connect to third party testing and certification feeds. Connectivity to DTCC The Exchange provides Users connectivity to DTCC for clearing, fund transfer, insurance, and settlement services.35 The Exchange proposes to revise the Price List to include connectivity to DTCC. The Exchange charges a connectivity fee of $500 per month for connections to DTCC of 5 Mb and $2,500 for connections of 50 Mb. Connectivity to DTCC is available over the IP network. In order to connect to DTCC, a User enters into a contract with DTCC, pursuant to which DTCC charges the User for the services provided. The Exchange receives the DTCC feed over its fiber optic network and, after DTCC and the User enter into the services contract and the Exchange receives authorization from DTCC, the Exchange provides connectivity to DTCC to the User over the User’s IP network port. The Exchange charges the User for the connectivity to DTCC. Connectivity to DTCC does not provide access or order entry to the Exchange’s execution system, and a User’s connection to DTCC is not through the Exchange’s execution system. The Exchange proposes to add the following connectivity fees and language to its Price List: 5 Mb connection to DTCC. 50 Mb connection to DTCC. $500 monthly recurring fee. $2,500 monthly recurring fee. Pricing for connectivity to DTCC feeds is for connectivity only. Connectivity to DTCC feeds is subject to any technical provisioning requirements and authorization from DTCC. Connectivity to DTCC feeds is over the IP network. Any applicable fees are charged independently by DTCC. The Exchange is not the exclusive method to connect to DTCC feeds. Virtual Control Circuits Finally, the Exchange proposes to revise the Price List to offer VCCs between two Users. VCCs are 35 Such connectivity to DTCC is distinct from the access to shared data services for clearing and settlement services that a User receives when it purchases access to the LCN or IP network. The shared data services allow Users and other entities with access to the Trading Systems to post files for settlement and clearing services to access. E:\FR\FM\26SEN1.SGM 26SEN1 Federal Register / Vol. 81, No. 186 / Monday, September 26, 2016 / Notices 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,38 in general, and furthers the objectives of Sections 6(b)(5) of the Act,39 in particular, because it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to, Description Amount of and perfect the mechanisms of, a free Type of service charge (Mb) and open market and a national market (monthly) system and, in general, to protect Virtual Control Cir1 $200 investors and the public interest and cuit between two 3 400 because it is not designed to permit Users. 5 500 unfair discrimination between 10 800 customers, issuers, brokers, or dealers. 25 1,200 The Exchange believes that the 50 1,800 proposed changes remove impediments 100 2,500 to, and perfect the mechanisms of, a free and open market and a national market General system and, in general, protect investors As is the case with all Exchange coand the public interest because, by location arrangements, (i) neither a User offering Access and Connectivity, the nor any of the User’s customers would Exchange gives each User additional be permitted to submit orders directly to options for addressing its access and the Exchange unless such User or connectivity needs, responding to User customer is a member organization, a demand for access and connectivity Sponsored Participant or an agent options. Providing Access and thereof (e.g., a service bureau providing Connectivity helps each User tailor its order entry services); (ii) use of the codata center operations to the location services proposed herein would requirements of its business operations be completely voluntary and available by allowing it to select the form and to all Users on a non-discriminatory latency of access and connectivity that basis; 36 and (iii) a User would only best suits its needs. The Exchange incur one charge for the particular coprovides Access and Connectivity as location service described herein, conveniences to Users. Use of Access or regardless of whether the User connects Connectivity is completely voluntary, only to the Exchange or to the Exchange and each User has several other access and one or both of its Affiliate SROs.37 and connectivity options available to it. The proposed change is not otherwise As alternatives to using the Access and intended to address any other issues Connectivity provided by the Exchange, relating to co-location services and/or a User may access or connect to such related fees, and the Exchange is not services and products through another aware of any problems that Users would User or through a connection to an have in complying with the proposed Exchange access center outside the data change. center, third party access center, or third party vendor. The User may make such 36 As is currently the case, Users that receive coconnection through a third party location services from the Exchange will not receive telecommunication provider, third party any means of access to the Exchange’s trading and wireless network, the SFTI network, or execution systems that is separate from, or superior a combination thereof. to, that of other Users. In this regard, all orders sent Co-location was created to permit to the Exchange enter the Exchange’s trading and execution systems through the same order gateway, Users ‘‘to rent space on premises regardless of whether the sender is co-located in the controlled by the Exchange in order that data center or not. In addition, co-located Users do they may locate their electronic servers not receive any market data or data service product that is not available to all Users, although Users that in close physical proximity to the receive co-location services normally would expect Exchange’s trading and execution reduced latencies in sending orders to, and systems.’’ 40 The Exchange believes that receiving market data from, the Exchange. mstockstill on DSK3G9T082PROD with NOTICES connections between two points over dedicated bandwidth using the IP network. A VCC (previously called a ‘‘peer to peer’’ connection) is a two-way connection which the two participants can use for any purpose. The Exchange bills the User requesting the VCC, but will not set up a VCC until the other User confirms that it wishes to have the VCC set up. The Exchange proposes to revise the Price List to include VCCs between two Users. The fee for VCCs is based on the bandwidth utilized, as follows: 37 See SR–NYSE–2013–59, supra note 5 at 51766. The Affiliate SROs have also submitted substantially the same proposed rule change to propose the changes described herein. See SR– NYSEMKT–2016–63 and SR–NYSEArca–2016–89. VerDate Sep<11>2014 19:40 Sep 23, 2016 Jkt 238001 38 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 40 Original Co-Location Filing, supra note 4, at 59310. 39 15 PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 66101 providing Users access to the Exchange Systems and connectivity to Included Data Products to Users with their purchase of access to the LCN or IP network, as well as revising the Price List to provide a more detailed description of such access and connectivity, would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because such access and connectivity is directly related to the purpose of co-location. In addition, the proposed changes would make the descriptions of access to the LCN and IP network more accessible and transparent, thereby providing market participants with clarity as to what connectivity is included in the purchase of access to the LCN and IP network. The Exchange believes that providing access to Third Party Systems and connectivity to Premium NYSE Data Products, Third Party Data Feeds, third party testing and certification feeds and DTCC, as well as revising the Price List to describe such services, would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest because the proposed changes would make the descriptions of market participants’ access and connectivity options and the related fees more accessible and transparent, thereby providing market participants with clarity as to what options for connectivity are available to them and what the related costs are. In addition, the Exchange believes that providing connectivity to third party testing and certification feeds removes impediments to, and perfects the mechanisms of, a free and open market and a national market system and, in general, protects investors and the public interest because such feeds provide Users an environment in which to conduct tests with non-live data, including testing for upcoming releases and product enhancements or the User’s own software development, and allow Users to certify conformance to any applicable technical requirements. Similarly, the Exchange believes that providing connectivity to DTCC removes impediments to, and perfects the mechanisms of, a free and open market and a national market system and, in general, protects investors and the public interest because it provides efficient connection to clearing, fund transfer, insurance, and settlement services. The Exchange believes that providing Users with VCCs removes impediments E:\FR\FM\26SEN1.SGM 26SEN1 mstockstill on DSK3G9T082PROD with NOTICES 66102 Federal Register / Vol. 81, No. 186 / Monday, September 26, 2016 / Notices to, and perfects the mechanisms of, a free and open market and a national market system because VCCs provide each User with an additional option for connectivity to another User, helping it tailor its data center operations to the requirements of its business operations by allowing it to select the form of connectivity that best suits its needs. The Exchange provides VCCs as a convenience to Users. Use of a VCC is completely voluntary. As an alternative to an Exchange-provided VCC, a User may connect to another User through a cross connect. The Exchange also believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,41 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 fees changes are consistent with Section 6(b)(4) of the Act for multiple reasons. The Exchange operates in a highly competitive market in which exchanges offer co-location services as a means to facilitate the trading and other market activities of those market participants who believe that co-location enhances the efficiency of their operations. Accordingly, fees charged for co-location services are constrained by the active competition for the order flow of, and other business from, such market participants. If a particular exchange charges excessive fees for co-location services, affected market participants will opt to terminate their co-location arrangements with that exchange, and adopt a possible range of alternative strategies, including placing their servers in a physically proximate location outside the exchange’s data center (which could be a competing exchange), or pursuing strategies less dependent upon the lower exchange-toparticipant latency associated with colocation. Accordingly, the exchange charging excessive fees would stand to lose not only co-location revenues but also the liquidity of the formerly colocated trading firms, which could have additional follow-on effects on the market share and revenue of the affected exchange. The Exchange believes that the services and fees proposed herein are equitably allocated and not unfairly discriminatory 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 41 15 U.S.C. 78f(b)(4). VerDate Sep<11>2014 19:40 Sep 23, 2016 Jkt 238001 services are available to all Users). All Users that voluntarily select to access the Exchange Systems or connect to Included Data Products would not be subject to a charge above and beyond the fee paid for the relevant LCN or IP network access. All Users that voluntarily select to receive access to Third Party Systems, connectivity to Premium NYSE Data Products, Third Party Data Feeds, third party testing and certification feeds and DTCC, or a VCC between Users would be charged the same amount for the same services. The Exchange believes that the services and fees proposed herein are reasonable, equitably allocated and not unfairly discriminatory because the Exchange provides Access and Connectivity as conveniences to Users. Use of Access or Connectivity is completely voluntary, and each User has several other access and connectivity options available to it. As alternatives to using the Access and Connectivity provided by the Exchange, a User may access or connect to such services and products through another User or through a connection to an Exchange access center outside the data center, third party access center, or third party vendor. The User may make such connection through a third party telecommunication provider, third party wireless network, the SFTI network, or a combination thereof. Users that opt to use Access or Connectivity would not receive access or connectivity that is not available to all Users, as all market participants that contract with the relevant market or content provider may receive access or connectivity. Similarly, the Exchange provides VCCs between Users as a convenience to Users. Use of a VCC is completely voluntary. As an alternative to an Exchange-provided VCC, a User may connect to another User through a cross connect. Overall, the Exchange believes that the proposed charges are reasonable, equitably allocated and not unfairly discriminatory because the Exchange offers Access, Connectivity, and VCCs as conveniences to Users, and in doing so incurs certain costs. The expenses incurred and resources expended by the Exchange to provide these services generally include costs related to the data center facility hardware and technology infrastructure; maintenance and operational costs, such as the costs of responding to any production issues; and the costs related to the personnel required for initial installation and administration, monitoring, support and maintenance of such services. Since the inception of co-location, the Exchange has made numerous improvements to PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 the network hardware and technology infrastructure and has established additional administrative controls. The Exchange has expanded the network infrastructure to keep pace with the increased number of services available to Users, including the increasing bandwidth required for Access and Connectivity, including resilient and redundant feeds. For example, the Exchange must ensure that the network infrastructure has the necessary bandwidth for connectivity to the Premium NYSE Data Products as well as the Included Data Products, as on a typical trading day no single Included Data Product will require as much bandwidth as a Premium NYSE Data Product for the same market. In addition, the Exchange incurs certain costs specific to providing connectivity to Third Party Data Feeds, Third Party Systems, third party testing and certification feeds and DTCC, including the costs of maintaining multiple connections to each Third Party Data Feed, Third Party System, and DTCC, allowing the Exchange to provide resilient and redundant connections; adapting to any changes made by the relevant third party; and covering any applicable fees (other than redistribution fees) charged by the relevant third party, such as port fees. As noted above, co-location was created to permit Users ‘‘to rent space on premises controlled by the Exchange in order that they may locate their electronic servers in close physical proximity to the Exchange’s trading and execution systems.’’ 42 The expectation was that normally Users ‘‘would expect reduced latencies in sending orders to the Exchange and in receiving market data from the Exchange.’’ 43 Accordingly, the Exchange believes that including access to the Exchange Systems and connectivity to Included Data Products with the purchase of access to the LCN or IP network is reasonable because such access and connectivity is directly related to the purpose of co-location. In addition, the Exchange believes that including access to the Exchange Systems and connectivity to the Included Data Products with the purchase of access to the LCN or IP network is reasonable and not unfairly discriminatory because Users are not required to use any of their bandwidth to access Exchange Systems or connect to an Included Data Product unless they wish to do so. Rather, a User only receives access to the Exchange Systems 42 Original Co-Location Filing, supra note 4, at 59299. 43 Id. E:\FR\FM\26SEN1.SGM 26SEN1 mstockstill on DSK3G9T082PROD with NOTICES Federal Register / Vol. 81, No. 186 / Monday, September 26, 2016 / Notices and connectivity to the Included Data Products that it selects, and a User can change which of such access or connections it receives at any time, subject to authorization from the data provider or relevant Exchange or Affiliate SRO. Including access to the Exchange Systems and connectivity to the Included Data Products with the purchase of access to the LCN or IP network is a decision based on an assessment of the competitive landscape. As noted above, the Exchange operates in a highly competitive market. If a particular exchange charges excessive fees for colocation services—such as excessive fees for access to the local area network within the exchange’s colocation space—affected market participants will opt to terminate their co-location arrangements with that exchange, and adopt a possible range of alternative strategies. The Exchange believes that including connectivity to Included Data Products with the purchase of access to the LCN or IP network is consistent with Nasdaq’s colocation service, which, apart from an installation fee, does not charge its co-located customers for connectivity to Nasdaq data.44 The Premium NYSE Data Products are equity market data products that are variants of the equity Included Data Products. Each Premium NYSE Data Product integrates, or includes data elements from, several Included Data Products. Charging separate fees for connectivity to Premium NYSE Data Products, as opposed to Included Data Products, is a decision based on an assessment of the competitive landscape. The Exchange believes that it is reasonable and not unfairly discriminatory to charge Users for connectivity to Premium NYSE Data Products because Users are not required to use any of their bandwidth to connect to a Premium NYSE Data product unless they wish to do, and each User has several other connectivity options available to it. The expenses incurred and resources expended by the Exchange to offer connectivity to the Premium NYSE Data Products include costs related to the data center facility hardware and technology infrastructure, such as the cost of ensuring that the network infrastructure has the necessary bandwidth for the Premium NYSE Data Products; maintenance and operational costs, such as the costs of responding to any production issues; and the costs related to the personnel required for initial installation and administration, monitoring, support and maintenance of the connectivity. By charging only those 44 See Nasdaq Stock Market Rule 7034. VerDate Sep<11>2014 19:40 Sep 23, 2016 Jkt 238001 Users that receive connectivity to a Premium NYSE Data Product, only the Users that directly benefit from such connectivity support its cost. The Exchange believes that its fees for connectivity to Premium NYSE Data Products are reasonable because they allow the Exchange to defray or cover the costs associated with offering Users connectivity to Premium NYSE Data Products while providing Users the benefit of reduced latency when connecting to data feeds that integrate, or include data elements from, several Included Data Products. Charging separate connectivity fees for Premium NYSE Data Products is a decision based on an assessment of the competitive landscape. As noted above, the Exchange operates in a highly competitive market. If a particular exchange charges excessive fees for colocation services—such as excessive fees for connectivity to the exchange’s market data—affected market participants will opt to terminate their co-location arrangements with that exchange, and adopt a possible range of alternative strategies. Although Nasdaq does not include connectivity to any of the Premium NYSE Data Products in its co-location services, the Exchange believes that the proposed fees are generally consistent with the fees that a Nasdaq co-location customer would pay for connectivity to the individual feeds included in a Premium NYSE Data Product. For example, the NYSE Integrated Feed includes, among other things, information available from three of the Included Data Products: NYSE OpenBook, NYSE Trades, and NYSE Order Imbalances. Nasdaq offers connectivity to two of those feeds, OpenBook Ultra and NYSE Trades, for which it would charge a co-located customer a combined monthly fee of $2,600.45 The Exchange believes that it is reasonable to charge less for connectivity to the resilient Premium NYSE Data Products on the LCN than over the IP network, because Users do not have the option to connect to Feed A or Feed B over the LCN. The Exchange believes that charging separate connectivity fees for Third Party Data Feeds and access to Third Party Systems, third party testing and certification feeds and connectivity to DTCC is reasonable and not unfairly discriminatory because, in the Exchange’s experience, not all Users connect to Third Party Data Feeds, Third Party Systems, third party testing and certification feeds or DTCC. By charging only those Users that receive such connectivity, only the Users that 45 Id. PO 00000 Frm 00109 directly benefit from it support its cost. In addition, Users are not required to use any of their bandwidth to connect to Third Party Data Feeds, third party testing and certification feeds or DTCC, or to access Third Party Systems, unless they wish to do so. The Exchange believes the fees for connectivity to Third Party Data Feeds are reasonable because they allow the Exchange to defray or cover the costs associated with offering Users connectivity to Third Party Data Feeds while providing Users the convenience of receiving such Third Party Data Feeds within co-location, helping them tailor their data center operations to the requirements of their business operations by allowing them to select the form and latency of connectivity that best suits their needs. The Exchange believes that its proposed charges for connectivity to Third Party Data Feeds are similar to the connectivity fees Nasdaq imposes on its co-location customers. For instance, Nasdaq charges its co-location customers monthly fees of $1,500 and $4,000 for connectivity to BATS Y and BATS, respectively, and of $2,500 for connectivity to EDGA or EDGX.46 The Exchange believes that its connectivity fees for access to Third Party Systems are reasonable because they allow the Exchange to defray or cover the costs associated with offering such access while providing Users the convenience of being able to access such Third Party Systems, helping them tailor their data center operations to the requirements of their business operations by allowing them to select the form and latency of connectivity that best suits their needs. Similarly, the Exchange believes that its fees for connectivity to DTCC are reasonable because they allow the Exchange to defray or cover the costs associated with offering such access while providing Users the benefit of an efficient connection to clearing, fund transfer, insurance, and settlement services. The monthly recurring fees the Exchange charges Users for connectivity to Third Party Systems, the MSCI and SuperFeed Third Party Data Feeds, and DTCC, as well as for VCCs between Users, vary by the bandwidth of the connection. The Exchange also believes such fees are reasonable because the monthly recurring fee varies by the bandwidth of the connection, and so is generally proportional to the bandwidth required. The Exchange notes that some of the monthly recurring fees for connectivity to SuperFeed and DTCC differ from the fees for the other 46 See Fmt 4703 Sfmt 4703 66103 E:\FR\FM\26SEN1.SGM Nasdaq Stock Market Rule 7034. 26SEN1 mstockstill on DSK3G9T082PROD with NOTICES 66104 Federal Register / Vol. 81, No. 186 / Monday, September 26, 2016 / Notices connections of the same bandwidth. The Exchange believes that such difference in pricing is reasonable, equitably allocated and not unfairly discriminatory because, although the bandwidth may be the same, the competitive considerations and the costs the Exchange incurs in providing such connections and VCCs may differ. The Exchange also believes that its connectivity fees for access to third party testing and certification feeds are reasonable because they allow the Exchange to defray or cover the costs associated with offering such access while providing Users the benefit of having an environment in which to conduct tests with non-live data, including testing for upcoming releases and product enhancements or the User’s own software development, and to certify conformance to any applicable technical requirements. The Exchange believes it is reasonable that redistribution fees charged by providers of Third Party Data Feeds are passed through to the User, without change to the fee. If not passed through, the cost of the re-distribution fees would be factored into the proposed fees for connectivity to Third Party Data Feeds. The Exchange believes that passing through the fees makes them more transparent to the User, allowing the User to better assess the cost of the connectivity to a Third Party Data Feed by seeing the individual components of the cost, i.e. the Exchange’s fee and the redistribution fee. The Exchange believes that it is reasonable that it does not charge third party markets or content providers for connectivity to their own Third Party Data Feeds, as in the Exchange’s experience such parties generally receive their own feeds for purposes of diagnostics and testing. The Exchange believes that it removes impediments to, and perfects the mechanisms of, a free and open market and a national market system and, in general, protects investors and the public interest to facilitate such diagnostics and testing. Finally, the Exchange also believes that its fees for VCCs between two Users are reasonable because they allow the Exchange to defray or cover the costs associated with offering such VCCs while providing Users the benefit of an additional option for connectivity to another User, helping them tailor their data center operations to the requirements of their business operations by allowing them to select the form of connectivity that best suits their needs. As an alternative to an Exchange-provided VCC, a User may connect to another User through a cross connect. VerDate Sep<11>2014 19:40 Sep 23, 2016 Jkt 238001 For the reasons above, the proposed changes do 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. 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,47 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 because, in addition to the proposed 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 believes that providing Users with access to the Exchange Systems and Third Party Systems and connectivity to NYSE Data Products, Third Party Data Feeds, third party testing and certification feeds, and DTCC does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because such Access and Connectivity satisfies User demand for access and connectivity options, and each User has several other access and connectivity options available to it. As alternatives to using the Access and Connectivity provided by the Exchange, a User may access or connect to such services and products through another User or through a connection to an Exchange access center outside the data center, third party access center, or third party vendor. The User may make such connection through a third party telecommunication provider, third party wireless network, the SFTI network, or a combination thereof. Users that opt to use Access or Connectivity would not receive access or connectivity that is not available to all Users, as all market participants that contract with the relevant market or content provider may receive access or connectivity. In this way, the proposed changes would enhance competition by helping Users tailor their Access and Connectivity to the needs of their business operations by allowing them to select the form and latency of access and connectivity that best suits their needs. Similarly, the Exchange believes that providing VCCs between Users does not 47 15 PO 00000 U.S.C. 78f(b)(8). Frm 00110 Fmt 4703 Sfmt 4703 impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because providing VCCs satisfies User demand for an alternative to cross connects. The Exchange believes that revising the Price List to provide a more detailed description of the Access and Connectivity available to Users would make such descriptions more accessible and transparent, thereby providing market participants with clarity as to what Access and Connectivity is available to them and what the related costs are, thereby enhancing competition by ensuring that all Users have access to the same information regarding Access and Connectivity. Finally, the Exchange operates in a highly competitive market in which exchanges offer co-location services as a means to facilitate the trading and other market activities of those market participants who believe that colocation enhances the efficiency of their operations. Accordingly, fees charged for co-location services are constrained by the active competition for the order flow of, and other business from, such market participants. If a particular exchange charges excessive fees for colocation services, affected market participants will opt to terminate their co-location arrangements with that exchange, and adopt a possible range of alternative strategies, including placing their servers in a physically proximate location outside the exchange’s data center (which could be a competing exchange), or pursuing strategies less dependent upon the lower exchange-toparticipant latency associated with colocation. Accordingly, the exchange charging excessive fees would stand to lose not only co-location revenues but also the liquidity of the formerly colocated trading firms, which could have additional follow-on effects on the market share and revenue of the affected exchange. 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 Within 45 days of the date of publication of this notice in the Federal Register or up to 90 days (i) as the E:\FR\FM\26SEN1.SGM 26SEN1 Federal Register / Vol. 81, No. 186 / Monday, September 26, 2016 / Notices 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 the proposed rule change, or (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 Amendment No. 1, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: mstockstill on DSK3G9T082PROD with NOTICES 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 No. SR– NYSE–2016–45 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File No. SR–NYSE–2016–45. 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 such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make VerDate Sep<11>2014 19:40 Sep 23, 2016 Jkt 238001 available publicly. All submissions should refer to File No. SR–NYSE– 2016–45, and should be submitted on or before October 17, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.48 Robert W. Errett, Deputy Secretary. [FR Doc. 2016–23046 Filed 9–23–16; 8:45 am] places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–78885; File No. SR–CBOE– 2016–064] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Relating to SPX Combo Orders September 20, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 8, 2016, Chicago Board Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘CBOE’’) 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 Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange seeks to amend its rules related to SPX Combo Orders. The text of the proposed rule change is available on the Exchange’s Web site (https:// www.cboe.com/AboutCBOE/ CBOELegalRegulatoryHome.aspx), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. The Exchange proposes to amend Rules 24.20, SPX Combo Orders, and 6.42, Minimum Increment for Bids and Offers, to specify the manner in which the minimum increment provision of Rule 6.42 applies to SPX Combo Orders. Background An SPX Combo Order consists of an order to purchase or sell one or more SPX option series (hereinafter the ‘‘nonSPX combination’’) and the offsetting number of ‘‘SPX combinations’’ defined by the delta.3 For purposes of an SPX Combo Order, an SPX combination is a purchase (sale) of an SPX call and sale (purchase) of an SPX put having the same expiration date and strike price. Additionally, the delta is the positive (negative) number of SPX combinations that must be sold (bought) to establish a market neutral hedge with one or more SPX option series (i.e., the non-SPX combination).4 SPX traders commonly hedge their options positions with SPX combinations, also called ‘‘synthetic futures,’’ which, as the above definition provides, are created by combining long(short) SPX calls with short(long) SPX puts of the same series, in lieu of hedging with the actual S&P 500 futures contract trading at CME. The individual legs of the SPX combination are priced such that a value for the SPX combination is established which is equivalent to the value of a future at a level at which the trader wishes to make the underlying futures market ‘‘static.’’ Then, based on the static value established by the SPX combination that has been quoted, the trader will request a market for the non-SPX combination that he wishes to trade, and will indicate the delta of the non-SPX combination. An SPX trader will execute the SPX combination in conjunction with the non-SPX combination, taking into account the delta of the particular options making up the non-SPX combination, such that the combined positions will create a 48 17 1 15 PO 00000 Frm 00111 Fmt 4703 66105 Sfmt 4703 3 See 4 See E:\FR\FM\26SEN1.SGM Rule 24.20(a)(3). Rule 24.20(a)(1) and (2). 26SEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 81, Number 186 (Monday, September 26, 2016)]
[Notices]
[Pages 66095-66105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-23046]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78887; File No. SR-NYSE-2016-45]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Amendment No. 1 to Proposed Rule Change Amending
the Co-Location Services Offered by the Exchange To Add Certain Access
and Connectivity Fees

September 20, 2016.
On July 29, 2016, the New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change (1) to provide additional information regarding
access to various trading and execution services; connectivity to
market data feeds and testing and certification feeds; connectivity to
third party systems; and connectivity to DTCC provided to Users using
data center local area networks; and (2) to establish fees relating to
a User's access to various trading and execution services; connectivity
to market data feeds and testing and certification feeds; connectivity
to DTCC; and other services. The Exchange filed Amendment No. 1 to the
proposed rule change on August 16, 2016. The proposed rule change was
published for

[[Page 66096]]

comment in the Federal Register on August 17, 2016 without Amendment
No. 1.\3\ The Commission received one comment letter in response to the
proposed rule change.\4\ Amendment No. 1 is described in Items I, II,
and III below, which Items have been prepared by the Exchange.\5\ The
Commission is publishing this notice to solicit comments on Amendment
No. 1 to the proposed rule change from interested persons.
---------------------------------------------------------------------------

\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 34-78556 (August 11,
2016), 81 FR 54877 (``Notice'').
\4\ See letter to Brent J. Fields, Secretary, Commission, from
John Ramsay, Chief Market Policy Officer, Investors Exchange LLC
(IEX), dated September 9, 2016, available at https://www.sec.gov/comments/sr-nyse-2016-45/nyse201645-2.pdf.
\5\ Amendment No. 1 more closely aligns the proposed rule change
with companion proposals filed by the Exchange's affiliates NYSE
Arca and NYSE MKT. See Securities Exchange Act Release No. 34-78628
(August 22, 2016), 81 FR 59004 (August 26, 2016) (SR-NYSEArca-2016-
89); Securities Exchange Act Release No. 34-78629 (August 22, 2016),
81 FR 58992 (August 26, 2016) (SR-NYSEMKT-2016-63). Amendment No. 1
is also available at https://www.sec.gov/comments/sr-nyse-2016-45/nyse201645-1.pdf.
---------------------------------------------------------------------------

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

The Exchange proposes to amend the co-location services offered by
the Exchange as follows: (1) To provide additional information
regarding the access to trading and execution services and connectivity
to data provided to Users with local area networks available in the
data center; and (2) to establish fees relating to User's access to
trading and execution services; connectivity to data feeds and to
testing and certification feeds; access to clearing; and other
services. In addition, this proposed rule change reflects changes to
the Exchange's Price List related to these co-location services. This
Amendment No. 1 supersedes the original filing in its entirety. 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 co-location \6\ services offered
by the Exchange as follows: (1) To provide additional information
regarding the access to trading and execution services and connectivity
to data provided to Users \7\ with local area networks available in the
data center; and (2) to establish fees relating to Users' access to
trading and execution services; connectivity to data feeds and to
testing and certification feeds; access to clearing; and other
services.
---------------------------------------------------------------------------

\6\ The Exchange initially filed rule changes relating to its
co-location services with the Securities and Exchange Commission
(``Commission'') in 2010. See Securities Exchange Act Release No.
62960 (September 21, 2010), 75 FR 59310 (September 27, 2010) (SR-
NYSE-2010-56) (the ``Original Co-location Filing''). The Exchange
operates a data center in Mahwah, New Jersey (the ``data center'')
from which it provides co-location services to Users.
\7\ For purposes of the Exchange's co-location services, a
``User'' means any market participant that requests to receive co-
location services directly from the Exchange. See Securities
Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190
(October 5, 2015) (SR-NYSE-2015-40). 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 (``NYSE MKT'') and NYSE Arca, Inc. (``NYSE
Arca'' and, together with NYSE MKT, the ``Affiliate SROs''). See
Securities Exchange Act Release No. 70206 (August 15, 2013), 78 FR
51765 (August 21, 2013) (SR-NYSE-2013-59).
---------------------------------------------------------------------------

More specifically, the Exchange proposes to revise the Price List
to include:
a. A more detailed description of the access to the trading and
execution systems of the Exchange and its Affiliate SROs (the
``Exchange Systems'') and connectivity to certain market data products
(the ``Included Data Products'') that Users receive with connections to
the Liquidity Center Network (``LCN'') and internet protocol (``IP'')
network, local area networks available in the data center;
b. fees for connectivity to:
Certain other market data products of the Exchange and its
Affiliate SROs (the ``Premium NYSE Data Products'' and, together with
the Included Data Products, the ``NYSE Data Products'');
access to the execution systems of third party markets and
other content service providers (``Third Party Systems'');
data feeds from third party markets and other content
service providers (the ``Third Party Data Feeds'');
third party testing and certification feeds;
Depository Trust & Clearing Corporation (``DTCC'')
services; and
c. fees for virtual control circuits (``VCCs'') between two Users.
VCCs are unicast connections between two participants over dedicated
bandwidth.\8\
---------------------------------------------------------------------------

\8\ Information flows over existing network connections in two
formats: ``unicast'' format, which is a format that allows one-to-
one communication, similar to a phone line, in which information is
sent to and from the Exchange; and ``multicast'' format, which is a
format in which information is sent one-way from the Exchange to
multiple recipients at once, like a radio broadcast.
---------------------------------------------------------------------------

The Exchange provides access to the Exchange Systems and Third
Party Systems (together, ``Access'') and connectivity to NYSE Data
Products, Third Party Data Feeds, third party testing and certification
feeds, and DTCC (collectively, ``Connectivity'') as conveniences to
Users. Use of Access or Connectivity is completely voluntary, and
several other access and connectivity options are available to a User.
As alternatives to using the Access and Connectivity provided by the
Exchange, a User may access or connect to such services and products
through another User or through a connection to an Exchange access
center outside the data center, third party access center, or third
party vendor. The User may make such connection through a third party
telecommunication provider, third party wireless network, the
Exchange's Secure Financial Transaction Infrastructure (``SFTI'')
network, or a combination thereof.
Similarly, the Exchange provides VCCs as a convenience to Users.
Use of a VCC is completely voluntary. As an alternative to an Exchange-
provided VCC, a User may connect to another User through a fiber
connection (``cross connect'').\9\
---------------------------------------------------------------------------

\9\ See Original Co-location Filing, supra note 4, at 59311 and
Securities Exchange Act Release No. 74222 (February 6, 2015), 80 FR
7888 (February 12, 2015) (SR-NYSE-2015-05) (notice of filing and
immediate effectiveness of proposed rule change to include IP
network connections and fiber cross connects between a User's
cabinet and non-User's equipment as co-location services) (the ``IP
Network Release'').
---------------------------------------------------------------------------

Access to Exchange Systems and Connectivity to Included Data Products

As the Exchange has previously stated, a User's connection to the
LCN or IP network provides it access to the Exchange Systems and
Exchange market data products.\10\ More specifically,

[[Page 66097]]

when a User purchases access to the LCN or IP network through purchase
of a 1, 10, or 40 Gb LCN circuit, a 10 Gb LX Circuit, bundled network
access, Partial Cabinet Solution bundle, or 1, 10 or 40 Gb IP network
access,\11\ as part of the purchase it receives access to the Exchange
Systems and connectivity to any Included Data Products that it
selects.\12\ The Exchange proposes to revise the Price List to provide
a more detailed description of the access to the Exchange Systems and
connectivity to Included Data Products that comes with connections to
the LCN or IP network.\13\
---------------------------------------------------------------------------

\10\ See Original Co-location Filing, supra note 4, at 59311
(``According to NYSE, SFTI and LCN both provide Users with access to
the Exchange's trading and execution systems and to the Exchange's
proprietary market data products.'') and IP Network Release, supra
note 7, at 7889 (``Like the LCN, the IP network provides Users with
access to the Exchange's trading and execution systems and to the
Exchanges' proprietary market data products.''). The IP network was
previously sometimes referred to as SFTI. See id.
\11\ See Securities Exchange Act Release Nos. 70888 (November
15, 2013), 78 FR 69907 (November 21, 2013) (SR-NYSE-2013-73); 72721
(July 30, 2014), 79 FR 45562 (August 5, 2014) (SR-NYSE-2014-37);
76369 (November 5, 2015), 80 FR 70027 (November 12, 2015) (SR-NYSE-
2015-54); and 77072 (February 5, 2016), 81 FR 7394 (February 11,
2016) (SR-NYSE-2015-53).
\12\ As discussed below, in order to connect to an Included Data
Product, a User must have entered into a contract with the provider
of the data feed. Similarly, in order to access an Exchange System,
the User must have authorization from the Exchange or the relevant
Affiliate SRO.
\13\ Because each Included Data Product uses part of a User's
bandwidth, a User may wish to limit the number of Included Data
Products that it receives to those that it requires. The Exchange
notes that connectivity to the LCN and IP network also includes
connectivity to Exchange Systems, as discussed under ``Connectivity
to Exchange Systems,'' below. See also note 8, supra.
---------------------------------------------------------------------------

Access to certification and testing feeds comes with the purchase
of access to the Exchange Systems and connectivity to many of the NYSE
Data Products. Such feeds, which are solely used for certification and
testing and do not carry live production data, are only available over
the IP network.\14\ Certification feeds are used to certify that a User
conforms to any relevant technical requirements for receipt of data or
access to Exchange Systems. Test feeds provide Users an environment in
which to conduct tests with non-live data, including testing for
upcoming Exchange releases and product enhancements or the User's own
software development.
---------------------------------------------------------------------------

\14\ A User that does not have an IP network connection may
obtain an IP network circuit for purposes of testing and
certification for free for three months. See IP Network Release,
supra note 7, at 7889. A User that opted to obtain connectivity to
NYSE Data Products through another User, a telecommunication
provider, third party wireless network, or the SFTI network would
receive the corresponding testing and certification feeds.
---------------------------------------------------------------------------

The Exchange offers connectivity to NYSE Data Products in three
forms: As a resilient feed, as ``Feed A'' or as ``Feed B.'' Resilient
feeds include two copies of the same feed, for redundancy purposes.
Feed A and Feed B are identical feeds.\15\
---------------------------------------------------------------------------

\15\ A User that wants redundancy would connect to both Feed A
and Feed B or two resilient feeds, using two different ports. A User
may opt to connect both Feed A and Feed B to the same port, the
effect of which would be the same as if the User had connected to a
resilient feed. The form of feed that a User selects may affect the
connection it requires. For example, a User connecting to the NYSE
Arca Integrated Feed, NYSE Integrated Feed or NYSE MKT Integrated
Feed would need at least a 1 Gb IP network connection in order to
connect to either Feed A or Feed B. To connect to a resilient feed,
the User would require an LCN or IP network connection of at least
10 Gb.
---------------------------------------------------------------------------

Connectivity to Exchange Systems

As the Exchange has previously stated, Users' connections to the
LCN or IP networks include access to Exchange Systems.\16\ Accordingly,
the Exchange proposes to add language to its Price List stating the
following:
---------------------------------------------------------------------------

\16\ See note 8, supra.

When a User purchases access to the LCN or IP network, it
receives the ability to connect to the trading and execution systems
of the NYSE, NYSE MKT and NYSE Arca (Exchange Systems), subject, in
each case, to authorization by the NYSE, NYSE MKT or NYSE Arca, as
applicable. Such connectivity includes access to the customer
gateways that provide for order entry, order receipt (i.e.
confirmation that an order has been received), receipt of drop
copies and trade reporting (i.e. whether a trade is executed or
cancelled), as well as for sending information to shared data
services for clearing and settlement. A User can change the
connections it receives at any time, subject to authorization. A
User does not have to purchase access to the LCN or IP network in
order to obtain connectivity to Exchange Systems.

Connectivity to Included Data Products

Currently, there are three categories of data feeds for which the
Exchange offers Users connectivity: Included Data Products; Premium
NYSE Data Products; and Third Party Data.\17\
---------------------------------------------------------------------------

\17\ The NYSE Data Products and Third Party Data Feeds do not
provide access or order entry to the Exchange's execution system.
---------------------------------------------------------------------------

The Included Data Products include the data feeds disseminated by
the Consolidated Tape Association (``CTA'') (such data feeds, the ``NMS
feeds''). CTA is responsible for disseminating consolidated, real-time
trade and quote information in NYSE listed securities (Network A) and
NYSE MKT, NYSE Arca and other regional exchanges' listed securities
(Network B) pursuant to a national market system plan.\18\ The NMS
feeds include the Consolidated Tape System and Consolidated Quote
System data streams, as well as Options Price Reporting Authority
feeds.
---------------------------------------------------------------------------

\18\ The Included Data Products do not include connectivity to
the data feeds disseminated pursuant to the ``Joint Self-Regulatory
Organization Plan Governing the Collection, Consolidation and
Dissemination of Quotation and Transaction Information for Nasdaq-
Listed Securities Traded on Exchanges on an Unlisted Trading
Privilege Basis'' (the ``UTP Plan''). The UTP Plan is responsible
for disseminating consolidated, real-time trade and quote
information in Nasdaq Stock Exchange LLC listed securities (Network
C). Connectivity to data disseminated pursuant to the UTP Plan is
available as a Third Party Data Feed.
---------------------------------------------------------------------------

In order to connect to an Included Data Product, a User enters into
a contract with the provider of such data, pursuant to which the User
is charged for the Included Data Product. After the User and data
provider enter into the contract and the Exchange receives
authorization from the provider of the data feed, the Exchange provides
the User with connectivity to the Included Data Product over the User's
LCN or IP network port. The Exchange does not charge the User
separately for such connectivity to the Included Data Product, as it is
included in the purchase of the access to the LCN or IP network.
The Included Data Products are available over both the LCN and IP
network.\19\ For a User that purchases access to the LCN and IP
network, the Exchange works with such User to allocate its connectivity
to Included Data Products between its LCN and IP network connections.
Some Included Data Products require a network connection with a minimum
gigabyte (``Gb'') size in order to accommodate the feed.
---------------------------------------------------------------------------

\19\ As noted above, certification and testing feeds included
with an Included Data Product are only available over the IP
network.
---------------------------------------------------------------------------

Users may connect to an Included Data Product as a resilient feed
or as individual Feeds A and B.
The Included Data Products are as follows:

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

-------------------------------------------------------------------------
NMS feeds
NYSE:
NYSE Alerts
NYSE BBO
NYSE OpenBook
NYSE Order Imbalances
NYSE Trades
NYSE Amex Options
NYSE Arca:
NYSE ArcaBook
NYSE Arca BBO
NYSE Arca Order Imbalances
NYSE Arca Trades
NYSE Arca Options
NYSE Bonds
NYSE MKT:
NYSE MKT Alerts
NYSE MKT BBO
NYSE MKT OpenBook
NYSE MKT Order Imbalances
NYSE MKT Trades
------------------------------------------------------------------------

In addition to the above list of Included Data Products, the
Exchange

[[Page 66098]]

proposes to add the following language to the Price List:

When a User purchases access to the LCN or IP network it
receives connectivity to any of the Included Data Products that it
selects, subject to any technical provisioning requirements and
authorization from the provider of the data feed. Market data fees
for the Included Data Products are charged by the provider of the
data feed. A User can change the Included Data Products to which it
receives connectivity at any time, subject to authorization from the
provider of the data feed. The Exchange is not the exclusive method
to connect to the Included Data Products.

Connectivity

Connectivity to Premium NYSE Data Products

The Exchange offers Users connectivity to Premium NYSE Data
Products from the Exchange and its Affiliate SROs over Users' LCN and
IP network connections. The Exchange proposes to revise the Price List
to specify the connectivity fees for Premium NYSE Data Products.
The Premium NYSE Data Products are equity market data products that
are variants of the equity Included Data Products. Each Premium NYSE
Data Product integrates, or includes data elements from, several
Included Data Products.\20\ For example, the NYSE Integrated Feed
includes, among other things, information available from three of the
equity Included Data Products: NYSE OpenBook, NYSE Trades, and NYSE
Order Imbalances.\21\ The NYSE BQT data feed includes, among other
things, certain data elements from six of the equity Included Data
Products: NYSE Trades, NYSE BBO, NYSE Arca Trades, NYSE Arca BBO, NYSE
MKT Trades, and NYSE MKT BBO.\22\
---------------------------------------------------------------------------

\20\ The rule changes establishing the NYSE Integrated Feed and
NYSE MKT Integrated Feed were immediately effective in 2015, and the
rule change establishing the NYSE Arca Integrated Data Feed was
immediately effective in 2011. The NYSE Best Quote & Trades (``NYSE
BQT'') data feed was approved in 2014. See Securities Exchange Act
Release Nos. 74128 (Jan. 23, 2015), 80 FR 4951 (Jan. 29, 2015) (SR-
NYSE-2015-03) (establishing the NYSE Integrated Feed); 74127 (Jan.
23, 2015), 80 FR 4956 (Jan. 29, 2015) (SR-NYSEMKT-2015-06)
(establishing the NYSE MKT Integrated Feed); 65669 (Nov. 2, 2011),
76 FR 69311 (Nov. 8, 2011) (SR-NYSEArca-2011-78) (establishing the
NYSE Arca Integrated Feed); and 73553 (Nov. 6, 2014), 79 FR 67491
(Nov. 13, 2014) (SR-NYSE-2014-40) (establishing the NYSE Best Quote
& Trades Data Feed).
\21\ See SR-NYSE-2015-03, supra note 18, at 4952.
\22\ See SR-NYSE-2014-40, supra note 18, at 67491.
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By contrast, while some of the Included Data Products include data
elements from other Included Data Products, no single Included Data
Product includes as much data as a Premium NYSE Data Product. With the
exception of NYSE Arca Order Imbalances, the equity Included Data
Products were introduced before the Premium Data Products.\23\
---------------------------------------------------------------------------

\23\ See Securities Exchange Act Release Nos. 44138 (December 7,
2001), 66 FR 64895 (December 14, 2001) (SR-NYSE-2001-42)
(establishing fees for NYSE OpenBook); 50844 (December 13, 2004), 69
FR 76806 (December 22, 2004) (SR-NYSE-2004-53) (establishing fee for
NYSE Alerts); 59543 (March 9, 2009), 74 FR 11159 (March 16, 2009)
(establishing fee for NYSE Order Imbalances); 59290 (January 23,
2009) 74 FR 5707 (January 30, 2009) (SR-NYSE- 2009-05) (establishing
pilot program for NYSE Trades); and 62181 (May 26, 2010), 75 FR
31488 (June 3, 2010) (SR-NYSE-2010-30) (establishing NYSE BBO). See
also Securities Exchange Act Release No. 76968 (January 22, 2016),
81 FR 4689 (January 27, 2016) (establishing NYSE Arca Order
Imbalances). NYSE Arca Order Imbalances, NYSE Order Imbalances and
NYSE MKT Order Imbalances are all Included Data Products.
---------------------------------------------------------------------------

There are no Premium NYSE Data Products for the NYSE Amex Options
or NYSE Arca Options markets, as there are no options data products
that integrate, or include data elements from, other option data
products in the same manner that the NYSE, NYSE MKT and NYSE Arca
Integrated Feeds integrate, or include data elements from, equity
Included Data Products.
In order to connect to a Premium NYSE Data Product, a User enters
into a contract with the provider of such data, pursuant to which it is
charged for the Premium NYSE Data Product for the same market. After
the data provider and User enter into the contract and the Exchange
receives authorization from the data provider, the Exchange provides
the User with connectivity to the Premium NYSE Data Product over the
User's LCN or IP network port. The Exchange charges the User for the
connectivity to the Premium NYSE Data Product. A User only receives,
and is only charged for, connectivity to the Premium NYSE Data Product
feeds that it selects.
The Premium NYSE Data Products are available over both the LCN and
IP network.\24\ For a User that purchases access to the LCN and IP
network, the Exchange works with such User to allocate its connectivity
to Premium NYSE Data Products between its LCN and IP network
connections. Some Premium NYSE Data Products require a network
connection with a minimum Gb size in order to accommodate the feed.\25\
---------------------------------------------------------------------------

\24\ As noted above, certification and testing feeds included
with a Premium NYSE Data Product are only available over the IP
network.
\25\ See note 13, supra.
---------------------------------------------------------------------------

A User can opt to connect to a Premium NYSE Data Product as a
resilient feed or as Feed A or Feed B. Connectivity to the two
identical Feeds A and B is only available on the IP network.
The Exchange charges a monthly recurring fee for connectivity to
Premium NYSE Data Products. The following table shows the Premium NYSE
Data Products and corresponding monthly recurring connectivity fees.

------------------------------------------------------------------------
Monthly recurring
Premium NYSE data product Feed connectivity fee
per feed
------------------------------------------------------------------------
NYSE Arca Integrated Feed..... Feed A, IP network $1,500
only.
Feed B, IP network 1,500
only.
Resilient, IP network 3,000
only.
Resilient, LCN only.. 1,500
NYSE Best Quote and Trades Feed A, IP network 500
(BQT). only.
Feed B, IP network 500
only.
Resilient, IP network 1,000
only.
Resilient, LCN only.. 500
NYSE Integrated Feed.......... Feed A, IP network 1,500
only.
Feed B, IP network 1,500
only.
Resilient, IP network 3,000
only.
Resilient, LCN only.. 1,500
NYSE MKT Integrated Feed...... Feed A, IP network 300
only.
Feed B, IP network 300
only.
Resilient, IP network 600
only.
Resilient, LCN only.. 300
------------------------------------------------------------------------

[[Page 66099]]

In addition to the connectivity fees, the Exchange proposes to add
the following language to its Price List:

Pricing for Premium NYSE Data Products is for connectivity only.
Connectivity to Premium NYSE Data Products is subject to any
technical provisioning requirements and authorization from the
provider of the data feed. Market data fees for the Premium NYSE
Data Products are charged by the provider of the data feed. The
Exchange is not the exclusive method to connect to Premium NYSE Data
Products.

Connectivity to Third Party Systems

The Exchange proposes to revise the Price List to provide that
Users may obtain connectivity to Third Party Systems of multiple third
party markets and other content service providers for a fee. Users
connect to Third Party Systems over the IP network.\26\ The Exchange
selects what connectivity to Third Party Systems to offer in the data
center based on User demand.
---------------------------------------------------------------------------

\26\ See IP Network Release, supra note 7, at 7889.
---------------------------------------------------------------------------

In order to obtain access to a Third Party System, a User enters
into an agreement with the relevant third party content service
provider, pursuant to which the third party content service provider
charges the User for access to the Third Party System. The Exchange
then establishes a unicast connection between the User and the relevant
third party content service provider over the IP network. The Exchange
charges the User for the connectivity to the Third Party System. A User
only receives, and is only charged for, access to Third Party Systems
for which it enters into agreements with the third party content
service provider.
With the exception of the ICE feed,\27\ the Exchange has no
ownership interest in the Third Party Systems. Establishing a User's
access to a Third Party System does not give the Exchange any right to
use the Third Party Systems. Connectivity to a Third Party System does
not provide access or order entry to the Exchange's execution system,
and a User's connection to a Third Party System is not through the
Exchange's execution system.\28\
---------------------------------------------------------------------------

\27\ ICE is owned by the Exchange's ultimate parent,
Intercontinental Exchange, Inc., and so the Exchange has an indirect
interest in the ICE feeds. The ICE feeds include both market data
and trading and clearing services, but the Exchange includes it as a
Third Party Data Feed. In order for a User to receive an ICE feed,
ICE must provide authorization for the User to receive both data and
trading and clearing services.
\28\ The Exchange has a dedicated network connection to each of
the Third Party Systems.
---------------------------------------------------------------------------

The Exchange charges a monthly recurring fee for connectivity to a
Third Party System. Specifically, when a User requests access to a
Third Party System, it identifies the applicable third party market or
other content service provider and what bandwidth connection it
requires.
The monthly recurring fee the Exchange charges Users for unicast
connectivity to each Third Party System varies by the bandwidth of the
connection, as follows:

------------------------------------------------------------------------
Monthly recurring fee
Bandwidth of connection to third party system per connection to third
party system
------------------------------------------------------------------------
1Mb............................................ $200
3Mb............................................ 400
5Mb............................................ 500
10Mb........................................... 800
25Mb........................................... 1,200
50Mb........................................... 1,800
100Mb.......................................... 2,500
200 Mb......................................... 3,000
1 Gb........................................... 3,500
------------------------------------------------------------------------

The Exchange provides connectivity to the following Third Party
Systems:

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

-------------------------------------------------------------------------
Americas Trading Group (ATG)
BATS
Boston Options Exchange (BOX)
Chicago Board Options Exchange (CBOE)
Credit Suisse
International Securities Exchange (ISE)
Nasdaq
National Stock Exchange
NYFIX Marketplace
------------------------------------------------------------------------

In addition to the connectivity fees, the Exchange proposes to add
language to its Price List stating the following:

Pricing for access to the execution systems of third party
markets and other service providers (Third Party Systems) is for
connectivity only. Connectivity to Third Party Systems is subject to
any technical provisioning requirements and authorization from the
provider of the data feed. Connectivity to Third Party Systems is
over the IP network. Any applicable fees are charged independently
by the relevant third party content service provider. The Exchange
is not the exclusive method to connect to Third Party Systems.

Connectivity to Third Party Data Feeds

The Exchange proposes to revise the Price List to provide that
Users may obtain connectivity to Third Party Data Feeds for a fee. The
Exchange receives Third Party Data Feeds from multiple national
securities exchanges and other content service providers at its data
center. It then provides connectivity to that data to Users for a fee.
With the exceptions of Global OTC and NYSE Global Index, Users connect
to Third Party Data Feeds over the IP network.\29\
---------------------------------------------------------------------------

\29\ See IP Network Release, supra note 7, at 7889 (``The IP
network also provides Users with access to away market data
products.''). Users can connect to Global OTC and NYSE Global Index
over the IP network or LCN.
---------------------------------------------------------------------------

The Exchange notes that charging Users a monthly fee for
connectivity to Third Party Data Feeds is consistent with the monthly
fee Nasdaq charges its co-location customers for connectivity to third
party data. For instance, Nasdaq charges its co-location customers
monthly fees of $1,500 and $4,000 for connectivity to BATS Y and BATS,
respectively, and of $2,500 for connectivity to EDGA or EDGX.\30\
---------------------------------------------------------------------------

\30\ See Nasdaq Stock Market Rule 7034.
---------------------------------------------------------------------------

In order to connect to a Third Party Data Feed, a User enters into
a contract with the relevant third party market or other content
service provider, pursuant to which the content service provider
charges the User for the Third Party Data Feed. The Exchange receives
the Third Party Data Feed over its fiber optic network and, after the
data provider and User enter into the contract and the Exchange
receives authorization from the data provider, the Exchange re-
transmits the data to the User over the User's port. The Exchange
charges the User for the connectivity to the Third Party Data Feed. A
User only receives, and is only charged for, connectivity to the Third
Party Data Feeds for which it enters into contracts.
With the exception of the Intercontinental Exchange (``ICE''),
Global OTC and NYSE Global Index feeds,\31\ the Exchange has no
affiliation with the sellers of the Third Party Data Feeds. It has no
right to use the Third Party Data Feeds other than as a redistributor
of the data. The Third Party Data Feeds do not provide access or order
entry to the Exchange's execution system. With the exception of the ICE
feeds, the Third Party Data Feeds do not provide access or order entry
to the execution systems of the third party generating the feed.\32\
The Exchange receives Third Party Data Feeds via arms-length agreements
and it has no inherent advantage over any other distributor of such
data.
---------------------------------------------------------------------------

\31\ ICE and the Global OTC alternative trading system are both
owned by the Exchange's ultimate parent, Intercontinental Exchange,
Inc., and so the Exchange has an indirect interest in the ICE and
Global OTC feeds. The NYSE Global Index feed includes index and
exchange traded product valuations data, with data drawn from the
Exchange, the Affiliate SROs, and third party exchanges. Because it
includes third party data, the NYSE Global Index feed is considered
a Third Party Data Feed. As with all Third Party Data Feeds, the
Exchange is not the exclusive method to connect to the ICE, Global
OTC or NYSE Global Index feeds.
\32\ Unlike other Third Party Data Feeds, the ICE feeds include
both market data and trading and clearing services. In order to
receive the ICE feeds, a User must receive authorization from ICE to
receive both market data and trading and clearing services.
---------------------------------------------------------------------------

The Exchange charges a monthly recurring fee for connectivity to
each

[[Page 66100]]

Third Party Data Feed. The monthly recurring fee is per Third Party
Data Feed, with the exception that the monthly recurring feed for
SuperFeed and MSCI varies by the bandwidth of the connection. Depending
on its needs and bandwidth, a User may opt to receive all or some of
the feeds or services included in a Third Party Data Feed.
The following table shows the feeds that connectivity to each Third
Party Data Feed provides, together with the applicable monthly
recurring fee.

------------------------------------------------------------------------
Monthly
recurring
connectivity
Third party data feed fee per
third party
data feed
------------------------------------------------------------------------
Bats BZX Exchange (BZX) and Bats BYX Exchange (BYX)....... $2,000
Bats EDGX Exchange (EDGX) and Bats EDGA Exchange (EDGA)... 2,000
Chicago Board Options Exchange (CBOE)..................... 2,000
Chicago Stock Exchange (CHX).............................. 400
Euronext.................................................. 600
Financial Industry Regulatory Authority (FINRA)........... 500
Global OTC................................................ 100
Intercontinental Exchange (ICE)........................... 1,500
Montr[eacute]al Exchange (MX)............................. 1,000
MSCI 5 Mb................................................. 500
MSCI 25 Mb................................................ 1,200
NASDAQ Stock Market....................................... 2,000
NASDAQ OMX Global Index Data Service...................... 100
NASDAQ OMDF............................................... 100
NASDAQ UQDF & UTDF........................................ 500
NYSE Global Index......................................... 100
OTC Markets Group......................................... 1,000
SR Labs--SuperFeed <=500 Mb............................... 250
SR Labs--SuperFeed >500 Mb to <=1.25 Gb................... 800
SR Labs--SuperFeed >1.25 Gb............................... 1,000
TMX Group................................................. 2,500
------------------------------------------------------------------------

In addition to the above connectivity fees, the Exchange proposes
to add the following language to its Price List:

Pricing for data feeds from third party markets and other
content service providers (Third Party Data Feeds) is for
connectivity only. Connectivity to Third Party Data Feeds is subject
to any technical provisioning requirements and authorization from
the provider of the data feed. Connectivity to Third Party Data
Feeds is over the IP network, with the exception that Users can
connect to Global OTC and NYSE Global Index over the IP network or
LCN. Market data fees are charged independently by the relevant
third party market or content service provider. The Exchange is not
the exclusive method to connect to Third Party Data Feeds.

Third Party Data Feed providers may charge redistribution fees,
such as Nasdaq's Extranet Access Fees and OTC Markets Group's Access
Fees.\33\ When the Exchange receives a redistribution fee, it passes
through the charge to the User, without change to the fee. The fee is
labeled as a pass-through of a redistribution fee on the User's
invoice. The Exchange proposes to add language to the Price List
accordingly.
---------------------------------------------------------------------------

\33\ See NASDAQ Stock Market LLC Rule 7025, ``Extranet Access
Fee'', and OTC Markets Market Data Distribution Agreement Appendix
B, ``Fees'' at https://www.otcmarkets.com/content/doc/market-data-fees-2016.pdf. See also Securities Exchange Act Release No. 74040
(January 13, 2015), 80 FR 2460 (January 16, 2015) (SR-NASDAQ-2015-
003).
---------------------------------------------------------------------------

The Exchange provides third party markets or content providers that
are also Users connectivity to their own Third Party Data Feeds. The
Exchange does not charge Users that are third party markets or content
providers for connectivity to their own feeds, as in the Exchange's
experience such parties generally receive their own feeds for purposes
of diagnostics and testing. The Exchange proposes to add language to
the Price List accordingly.

Connectivity to Third Party Testing and Certification Feeds

The Exchange offers Users connectivity to third party certification
and testing feeds. Certification feeds are used to certify that a User
conforms to any of the relevant content service provider's requirements
for accessing Third Party Systems or receiving Third Party Data, while
testing feeds provide Users an environment in which to conduct tests
with non-live data.\34\ Such feeds, which are solely used for
certification and testing and do not carry live production data, are
available over the IP network.
---------------------------------------------------------------------------

\34\ For example, a User that trades on a third party exchange
may wish to test the exchange's upcoming releases and product
releases or may wish to test a new algorithm in a testing
environment prior to making it live.
---------------------------------------------------------------------------

The Exchange proposes to revise the Price List to include
connectivity to third party certification and testing feeds. The
Exchange charges a connectivity fee of $100 per month per feed.
The Exchange proposes to add the following connectivity fees and
language to its Price List:

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

------------------------------------------------------------------------
Connectivity to third party certification $100 monthly recurring fee
and testing feeds. per feed.
------------------------------------------------------------------------

The Exchange provides connectivity to third party testing and
certification feeds provided by third party markets and other
content service providers. Pricing for third party testing and
certification feeds is for connectivity only. Connectivity to third
party testing and certification feeds is subject to any technical
provisioning requirements and authorization from the provider of the
data feed. Connectivity to third party testing and certification
feeds is over the IP network. Any applicable fees are charged
independently by the relevant third party market or content service
provider. The Exchange is not the exclusive method to connect to
third party testing and certification feeds.
Connectivity to DTCC
The Exchange provides Users connectivity to DTCC for clearing, fund
transfer, insurance, and settlement services.\35\ The Exchange proposes
to revise the Price List to include connectivity to DTCC. The Exchange
charges a connectivity fee of $500 per month for connections to DTCC of
5 Mb and $2,500 for connections of 50 Mb. Connectivity to DTCC is
available over the IP network.
---------------------------------------------------------------------------

\35\ Such connectivity to DTCC is distinct from the access to
shared data services for clearing and settlement services that a
User receives when it purchases access to the LCN or IP network. The
shared data services allow Users and other entities with access to
the Trading Systems to post files for settlement and clearing
services to access.
---------------------------------------------------------------------------

In order to connect to DTCC, a User enters into a contract with
DTCC, pursuant to which DTCC charges the User for the services
provided. The Exchange receives the DTCC feed over its fiber optic
network and, after DTCC and the User enter into the services contract
and the Exchange receives authorization from DTCC, the Exchange
provides connectivity to DTCC to the User over the User's IP network
port. The Exchange charges the User for the connectivity to DTCC.
Connectivity to DTCC does not provide access or order entry to the
Exchange's execution system, and a User's connection to DTCC is not
through the Exchange's execution system.
The Exchange proposes to add the following connectivity fees and
language to its Price List:

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

------------------------------------------------------------------------
5 Mb connection to DTCC................... $500 monthly recurring fee.
50 Mb connection to DTCC.................. $2,500 monthly recurring
fee.
------------------------------------------------------------------------

Pricing for connectivity to DTCC feeds is for connectivity only.
Connectivity to DTCC feeds is subject to any technical provisioning
requirements and authorization from DTCC. Connectivity to DTCC feeds
is over the IP network. Any applicable fees are charged
independently by DTCC. The Exchange is not the exclusive method to
connect to DTCC feeds.
Virtual Control Circuits
Finally, the Exchange proposes to revise the Price List to offer
VCCs between two Users. VCCs are

[[Page 66101]]

connections between two points over dedicated bandwidth using the IP
network. A VCC (previously called a ``peer to peer'' connection) is a
two-way connection which the two participants can use for any purpose.
The Exchange bills the User requesting the VCC, but will not set up
a VCC until the other User confirms that it wishes to have the VCC set
up.
The Exchange proposes to revise the Price List to include VCCs
between two Users. The fee for VCCs is based on the bandwidth utilized,
as follows:

------------------------------------------------------------------------
Amount of
Type of service Description charge
(Mb) (monthly)
------------------------------------------------------------------------
Virtual Control Circuit between two Users...... 1 $200
3 400
5 500
10 800
25 1,200
50 1,800
100 2,500
------------------------------------------------------------------------

General
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; \36\ 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 Affiliate
SROs.\37\
---------------------------------------------------------------------------

\36\ 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.
\37\ See SR-NYSE-2013-59, supra note 5 at 51766. The Affiliate
SROs have also submitted substantially the same proposed rule change
to propose the changes described herein. See SR-NYSEMKT-2016-63 and
SR-NYSEArca-2016-89.
---------------------------------------------------------------------------

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,\38\ in general, and furthers the
objectives of Sections 6(b)(5) of the Act,\39\ in particular, because
it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to, and
perfect the mechanisms of, a free and open market and a national market
system and, in general, to protect investors and the public interest
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

\38\ 15 U.S.C. 78f(b).
\39\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

The Exchange believes that the proposed changes remove impediments
to, and perfect the mechanisms of, a free and open market and a
national market system and, in general, protect investors and the
public interest because, by offering Access and Connectivity, the
Exchange gives each User additional options for addressing its access
and connectivity needs, responding to User demand for access and
connectivity options. Providing Access and Connectivity helps each User
tailor its data center operations to the requirements of its business
operations by allowing it to select the form and latency of access and
connectivity that best suits its needs. The Exchange provides Access
and Connectivity as conveniences to Users. Use of Access or
Connectivity is completely voluntary, and each User has several other
access and connectivity options available to it. As alternatives to
using the Access and Connectivity provided by the Exchange, a User may
access or connect to such services and products through another User or
through a connection to an Exchange access center outside the data
center, third party access center, or third party vendor. The User may
make such connection through a third party telecommunication provider,
third party wireless network, the SFTI network, or a combination
thereof.
Co-location was created to permit Users ``to rent space on premises
controlled by the Exchange in order that they may locate their
electronic servers in close physical proximity to the Exchange's
trading and execution systems.'' \40\ The Exchange believes that
providing Users access to the Exchange Systems and connectivity to
Included Data Products to Users with their purchase of access to the
LCN or IP network, as well as revising the Price List to provide a more
detailed description of such access and connectivity, would remove
impediments to, and perfect the mechanisms of, a free and open market
and a national market system and, in general, protect investors and the
public interest because such access and connectivity is directly
related to the purpose of co-location. In addition, the proposed
changes would make the descriptions of access to the LCN and IP network
more accessible and transparent, thereby providing market participants
with clarity as to what connectivity is included in the purchase of
access to the LCN and IP network.
---------------------------------------------------------------------------

\40\ Original Co-Location Filing, supra note 4, at 59310.
---------------------------------------------------------------------------

The Exchange believes that providing access to Third Party Systems
and connectivity to Premium NYSE Data Products, Third Party Data Feeds,
third party testing and certification feeds and DTCC, as well as
revising the Price List to describe such services, would remove
impediments to, and perfect the mechanisms of, a free and open market
and a national market system and, in general, protect investors and the
public interest because the proposed changes would make the
descriptions of market participants' access and connectivity options
and the related fees more accessible and transparent, thereby providing
market participants with clarity as to what options for connectivity
are available to them and what the related costs are.
In addition, the Exchange believes that providing connectivity to
third party testing and certification feeds removes impediments to, and
perfects the mechanisms of, a free and open market and a national
market system and, in general, protects investors and the public
interest because such feeds provide Users an environment in which to
conduct tests with non-live data, including testing for upcoming
releases and product enhancements or the User's own software
development, and allow Users to certify conformance to any applicable
technical requirements.
Similarly, the Exchange believes that providing connectivity to
DTCC removes impediments to, and perfects the mechanisms of, a free and
open market and a national market system and, in general, protects
investors and the public interest because it provides efficient
connection to clearing, fund transfer, insurance, and settlement
services.
The Exchange believes that providing Users with VCCs removes
impediments

[[Page 66102]]

to, and perfects the mechanisms of, a free and open market and a
national market system because VCCs provide each User with an
additional option for connectivity to another User, helping it tailor
its data center operations to the requirements of its business
operations by allowing it to select the form of connectivity that best
suits its needs. The Exchange provides VCCs as a convenience to Users.
Use of a VCC is completely voluntary. As an alternative to an Exchange-
provided VCC, a User may connect to another User through a cross
connect.
The Exchange also believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\41\ 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.
---------------------------------------------------------------------------

\41\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

The Exchange believes that the proposed fees changes are consistent
with Section 6(b)(4) of the Act for multiple reasons. The Exchange
operates in a highly competitive market in which exchanges offer co-
location services as a means to facilitate the trading and other market
activities of those market participants who believe that co-location
enhances the efficiency of their operations. Accordingly, fees charged
for co-location services are constrained by the active competition for
the order flow of, and other business from, such market participants.
If a particular exchange charges excessive fees for co-location
services, affected market participants will opt to terminate their co-
location arrangements with that exchange, and adopt a possible range of
alternative strategies, including placing their servers in a physically
proximate location outside the exchange's data center (which could be a
competing exchange), or pursuing strategies less dependent upon the
lower exchange-to-participant latency associated with co-location.
Accordingly, the exchange charging excessive fees would stand to lose
not only co-location revenues but also the liquidity of the formerly
co-located trading firms, which could have additional follow-on effects
on the market share and revenue of the affected exchange.
The Exchange believes that the services and fees proposed herein
are equitably allocated and not unfairly discriminatory 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). All Users that voluntarily select to
access the Exchange Systems or connect to Included Data Products would
not be subject to a charge above and beyond the fee paid for the
relevant LCN or IP network access. All Users that voluntarily select to
receive access to Third Party Systems, connectivity to Premium NYSE
Data Products, Third Party Data Feeds, third party testing and
certification feeds and DTCC, or a VCC between Users would be charged
the same amount for the same services.
The Exchange believes that the services and fees proposed herein
are reasonable, equitably allocated and not unfairly discriminatory
because the Exchange provides Access and Connectivity as conveniences
to Users. Use of Access or Connectivity is completely voluntary, and
each User has several other access and connectivity options available
to it. As alternatives to using the Access and Connectivity provided by
the Exchange, a User may access or connect to such services and
products through another User or through a connection to an Exchange
access center outside the data center, third party access center, or
third party vendor. The User may make such connection through a third
party telecommunication provider, third party wireless network, the
SFTI network, or a combination thereof. Users that opt to use Access or
Connectivity would not receive access or connectivity that is not
available to all Users, as all market participants that contract with
the relevant market or content provider may receive access or
connectivity. Similarly, the Exchange provides VCCs between Users as a
convenience to Users. Use of a VCC is completely voluntary. As an
alternative to an Exchange-provided VCC, a User may connect to another
User through a cross connect.
Overall, the Exchange believes that the proposed charges are
reasonable, equitably allocated and not unfairly discriminatory because
the Exchange offers Access, Connectivity, and VCCs as conveniences to
Users, and in doing so incurs certain costs. The expenses incurred and
resources expended by the Exchange to provide these services generally
include costs related to the data center facility hardware and
technology infrastructure; maintenance and operational costs, such as
the costs of responding to any production issues; and the costs related
to the personnel required for initial installation and administration,
monitoring, support and maintenance of such services. Since the
inception of co-location, the Exchange has made numerous improvements
to the network hardware and technology infrastructure and has
established additional administrative controls. The Exchange has
expanded the network infrastructure to keep pace with the increased
number of services available to Users, including the increasing
bandwidth required for Access and Connectivity, including resilient and
redundant feeds. For example, the Exchange must ensure that the network
infrastructure has the necessary bandwidth for connectivity to the
Premium NYSE Data Products as well as the Included Data Products, as on
a typical trading day no single Included Data Product will require as
much bandwidth as a Premium NYSE Data Product for the same market. In
addition, the Exchange incurs certain costs specific to providing
connectivity to Third Party Data Feeds, Third Party Systems, third
party testing and certification feeds and DTCC, including the costs of
maintaining multiple connections to each Third Party Data Feed, Third
Party System, and DTCC, allowing the Exchange to provide resilient and
redundant connections; adapting to any changes made by the relevant
third party; and covering any applicable fees (other than
redistribution fees) charged by the relevant third party, such as port
fees.
As noted above, co-location was created to permit Users ``to rent
space on premises controlled by the Exchange in order that they may
locate their electronic servers in close physical proximity to the
Exchange's trading and execution systems.'' \42\ The expectation was
that normally Users ``would expect reduced latencies in sending orders
to the Exchange and in receiving market data from the Exchange.'' \43\
Accordingly, the Exchange believes that including access to the
Exchange Systems and connectivity to Included Data Products with the
purchase of access to the LCN or IP network is reasonable because such
access and connectivity is directly related to the purpose of co-
location.
---------------------------------------------------------------------------

\42\ Original Co-Location Filing, supra note 4, at 59299.
\43\ Id.
---------------------------------------------------------------------------

In addition, the Exchange believes that including access to the
Exchange Systems and connectivity to the Included Data Products with
the purchase of access to the LCN or IP network is reasonable and not
unfairly discriminatory because Users are not required to use any of
their bandwidth to access Exchange Systems or connect to an Included
Data Product unless they wish to do so. Rather, a User only receives
access to the Exchange Systems

[[Page 66103]]

and connectivity to the Included Data Products that it selects, and a
User can change which of such access or connections it receives at any
time, subject to authorization from the data provider or relevant
Exchange or Affiliate SRO. Including access to the Exchange Systems and
connectivity to the Included Data Products with the purchase of access
to the LCN or IP network is a decision based on an assessment of the
competitive landscape. As noted above, the Exchange operates in a
highly competitive market. If a particular exchange charges excessive
fees for co-location services--such as excessive fees for access to the
local area network within the exchange's colocation space--affected
market participants will opt to terminate their co-location
arrangements with that exchange, and adopt a possible range of
alternative strategies. The Exchange believes that including
connectivity to Included Data Products with the purchase of access to
the LCN or IP network is consistent with Nasdaq's colocation service,
which, apart from an installation fee, does not charge its co-located
customers for connectivity to Nasdaq data.\44\
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\44\ See Nasdaq Stock Market Rule 7034.
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The Premium NYSE Data Products are equity market data products that
are variants of the equity Included Data Products. Each Premium NYSE
Data Product integrates, or includes data elements from, several
Included Data Products. Charging separate fees for connectivity to
Premium NYSE Data Products, as opposed to Included Data Products, is a
decision based on an assessment of the competitive landscape. The
Exchange believes that it is reasonable and not unfairly discriminatory
to charge Users for connectivity to Premium NYSE Data Products because
Users are not required to use any of their bandwidth to connect to a
Premium NYSE Data product unless they wish to do, and each User has
several other connectivity options available to it. The expenses
incurred and resources expended by the Exchange to offer connectivity
to the Premium NYSE Data Products include costs related to the data
center facility hardware and technology infrastructure, such as the
cost of ensuring that the network infrastructure has the necessary
bandwidth for the Premium NYSE Data Products; maintenance and
operational costs, such as the costs of responding to any production
issues; and the costs related to the personnel required for initial
installation and administration, monitoring, support and maintenance of
the connectivity. By charging only those Users that receive
connectivity to a Premium NYSE Data Product, only the Users that
directly benefit from such connectivity support its cost.
The Exchange believes that its fees for connectivity to Premium
NYSE Data Products are reasonable because they allow the Exchange to
defray or cover the costs associated with offering Users connectivity
to Premium NYSE Data Products while providing Users the benefit of
reduced latency when connecting to data feeds that integrate, or
include data elements from, several Included Data Products. Charging
separate connectivity fees for Premium NYSE Data Products is a decision
based on an assessment of the competitive landscape. As noted above,
the Exchange operates in a highly competitive market. If a particular
exchange charges excessive fees for co-location services--such as
excessive fees for connectivity to the exchange's market data--affected
market participants will opt to terminate their co-location
arrangements with that exchange, and adopt a possible range of
alternative strategies. Although Nasdaq does not include connectivity
to any of the Premium NYSE Data Products in its co-location services,
the Exchange believes that the proposed fees are generally consistent
with the fees that a Nasdaq co-location customer would pay for
connectivity to the individual feeds included in a Premium NYSE Data
Product. For example, the NYSE Integrated Feed includes, among other
things, information available from three of the Included Data Products:
NYSE OpenBook, NYSE Trades, and NYSE Order Imbalances. Nasdaq offers
connectivity to two of those feeds, OpenBook Ultra and NYSE Trades, for
which it would charge a co-located customer a combined monthly fee of
$2,600.\45\ The Exchange believes that it is reasonable to charge less
for connectivity to the resilient Premium NYSE Data Products on the LCN
than over the IP network, because Users do not have the option to
connect to Feed A or Feed B over the LCN.
---------------------------------------------------------------------------

\45\ Id.
---------------------------------------------------------------------------

The Exchange believes that charging separate connectivity fees for
Third Party Data Feeds and access to Third Party Systems, third party
testing and certification feeds and connectivity to DTCC is reasonable
and not unfairly discriminatory because, in the Exchange's experience,
not all Users connect to Third Party Data Feeds, Third Party Systems,
third party testing and certification feeds or DTCC. By charging only
those Users that receive such connectivity, only the Users that
directly benefit from it support its cost. In addition, Users are not
required to use any of their bandwidth to connect to Third Party Data
Feeds, third party testing and certification feeds or DTCC, or to
access Third Party Systems, unless they wish to do so.
The Exchange believes the fees for connectivity to Third Party Data
Feeds are reasonable because they allow the Exchange to defray or cover
the costs associated with offering Users connectivity to Third Party
Data Feeds while providing Users the convenience of receiving such
Third Party Data Feeds within co-location, helping them tailor their
data center operations to the requirements of their business operations
by allowing them to select the form and latency of connectivity that
best suits their needs. The Exchange believes that its proposed charges
for connectivity to Third Party Data Feeds are similar to the
connectivity fees Nasdaq imposes on its co-location customers. For
instance, Nasdaq charges its co-location customers monthly fees of
$1,500 and $4,000 for connectivity to BATS Y and BATS, respectively,
and of $2,500 for connectivity to EDGA or EDGX.\46\
---------------------------------------------------------------------------

\46\ See Nasdaq Stock Market Rule 7034.
---------------------------------------------------------------------------

The Exchange believes that its connectivity fees for access to
Third Party Systems are reasonable because they allow the Exchange to
defray or cover the costs associated with offering such access while
providing Users the convenience of being able to access such Third
Party Systems, helping them tailor their data center operations to the
requirements of their business operations by allowing them to select
the form and latency of connectivity that best suits their needs.
Similarly, the Exchange believes that its fees for connectivity to DTCC
are reasonable because they allow the Exchange to defray or cover the
costs associated with offering such access while providing Users the
benefit of an efficient connection to clearing, fund transfer,
insurance, and settlement services.
The monthly recurring fees the Exchange charges Users for
connectivity to Third Party Systems, the MSCI and SuperFeed Third Party
Data Feeds, and DTCC, as well as for VCCs between Users, vary by the
bandwidth of the connection. The Exchange also believes such fees are
reasonable because the monthly recurring fee varies by the bandwidth of
the connection, and so is generally proportional to the bandwidth
required. The Exchange notes that some of the monthly recurring fees
for connectivity to SuperFeed and DTCC differ from the fees for the
other

[[Page 66104]]

connections of the same bandwidth. The Exchange believes that such
difference in pricing is reasonable, equitably allocated and not
unfairly discriminatory because, although the bandwidth may be the
same, the competitive considerations and the costs the Exchange incurs
in providing such connections and VCCs may differ.
The Exchange also believes that its connectivity fees for access to
third party testing and certification feeds are reasonable because they
allow the Exchange to defray or cover the costs associated with
offering such access while providing Users the benefit of having an
environment in which to conduct tests with non-live data, including
testing for upcoming releases and product enhancements or the User's
own software development, and to certify conformance to any applicable
technical requirements.
The Exchange believes it is reasonable that redistribution fees
charged by providers of Third Party Data Feeds are passed through to
the User, without change to the fee. If not passed through, the cost of
the re-distribution fees would be factored into the proposed fees for
connectivity to Third Party Data Feeds. The Exchange believes that
passing through the fees makes them more transparent to the User,
allowing the User to better assess the cost of the connectivity to a
Third Party Data Feed by seeing the individual components of the cost,
i.e. the Exchange's fee and the redistribution fee.
The Exchange believes that it is reasonable that it does not charge
third party markets or content providers for connectivity to their own
Third Party Data Feeds, as in the Exchange's experience such parties
generally receive their own feeds for purposes of diagnostics and
testing. The Exchange believes that it removes impediments to, and
perfects the mechanisms of, a free and open market and a national
market system and, in general, protects investors and the public
interest to facilitate such diagnostics and testing.
Finally, the Exchange also believes that its fees for VCCs between
two Users are reasonable because they allow the Exchange to defray or
cover the costs associated with offering such VCCs while providing
Users the benefit of an additional option for connectivity to another
User, helping them tailor their data center operations to the
requirements of their business operations by allowing them to select
the form of connectivity that best suits their needs. As an alternative
to an Exchange-provided VCC, a User may connect to another User through
a cross connect.
For the reasons above, the proposed changes do 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.
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,\47\ 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 because, in addition to the proposed 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).
---------------------------------------------------------------------------

\47\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

The Exchange believes that providing Users with access to the
Exchange Systems and Third Party Systems and connectivity to NYSE Data
Products, Third Party Data Feeds, third party testing and certification
feeds, and DTCC does not impose any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act
because such Access and Connectivity satisfies User demand for access
and connectivity options, and each User has several other access and
connectivity options available to it. As alternatives to using the
Access and Connectivity provided by the Exchange, a User may access or
connect to such services and products through another User or through a
connection to an Exchange access center outside the data center, third
party access center, or third party vendor. The User may make such
connection through a third party telecommunication provider, third
party wireless network, the SFTI network, or a combination thereof.
Users that opt to use Access or Connectivity would not receive access
or connectivity that is not available to all Users, as all market
participants that contract with the relevant market or content provider
may receive access or connectivity. In this way, the proposed changes
would enhance competition by helping Users tailor their Access and
Connectivity to the needs of their business operations by allowing them
to select the form and latency of access and connectivity that best
suits their needs.
Similarly, the Exchange believes that providing VCCs between Users
does not impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act because providing
VCCs satisfies User demand for an alternative to cross connects.
The Exchange believes that revising the Price List to provide a
more detailed description of the Access and Connectivity available to
Users would make such descriptions more accessible and transparent,
thereby providing market participants with clarity as to what Access
and Connectivity is available to them and what the related costs are,
thereby enhancing competition by ensuring that all Users have access to
the same information regarding Access and Connectivity.
Finally, the Exchange operates in a highly competitive market in
which exchanges offer co-location services as a means to facilitate the
trading and other market activities of those market participants who
believe that co-location enhances the efficiency of their operations.
Accordingly, fees charged for co-location services are constrained by
the active competition for the order flow of, and other business from,
such market participants. If a particular exchange charges excessive
fees for co-location services, affected market participants will opt to
terminate their co-location arrangements with that exchange, and adopt
a possible range of alternative strategies, including placing their
servers in a physically proximate location outside the exchange's data
center (which could be a competing exchange), or pursuing strategies
less dependent upon the lower exchange-to-participant latency
associated with co-location. Accordingly, the exchange charging
excessive fees would stand to lose not only co-location revenues but
also the liquidity of the formerly co-located trading firms, which
could have additional follow-on effects on the market share and revenue
of the affected exchange. 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

Within 45 days of the date of publication of this notice in the
Federal Register or up to 90 days (i) as the

[[Page 66105]]

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 the proposed rule change, or
(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 Amendment No. 1, 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 No. SR-NYSE-2016-45 on the subject line.

Paper Comments

Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File No. SR-NYSE-2016-45. 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 such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File No. SR-NYSE-2016-45, and should be
submitted on or before October 17, 2016.
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\48\ 17 CFR 200.30-3(a)(12).

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\48\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-23046 Filed 9-23-16; 8:45 am]
BILLING CODE 8011-01-P

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