Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Add Access for Users to Two Third Party Systems and Connectivity to Six Additional Third Party Data Feeds, 29615-29620 [2017-13588]

Download as PDF Federal Register / Vol. 82, No. 124 / Thursday, June 29, 2017 / Notices All submissions should refer to File No. SR–NYSEMKT–2017–32. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such 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–NYSEMKT– 2017–32, and should be submitted on or before July 20, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.24 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–13589 Filed 6–28–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION sradovich on DSK3GMQ082PROD with NOTICES [Release No. 34–81014; File No. SR–NYSE– 2017–25] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Add Access for Users to Two Third Party Systems and Connectivity to Six Additional Third Party Data Feeds June 23, 2017. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the 24 17 1 15 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). VerDate Sep<11>2014 18:29 Jun 28, 2017 Jkt 241001 ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on June 16, 2017, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to (a) provide Users with access to two additional third party systems, connectivity to six additional third party data feeds, and connectivity to two additional third party testing feeds, and (b) remove a duplicative third party data feed. In addition, the Exchange proposes to change its Price List related to these colocation services. 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 Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the co-location 4 services offered by the 2 15 U.S.C. 78a. CFR 240.19b–4. 4 The Exchange initially filed rule changes relating to its co-location services with the 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. 3 17 PO 00000 Frm 00142 Fmt 4703 Sfmt 4703 29615 Exchange to (a) provide Users 5 with access to two additional third party systems, connectivity to six additional third party data feeds, and connectivity to two additional third party testing feeds, and (b) remove a duplicative third party data feed. In addition the Exchange proposes to make the corresponding changes to the Exchange’s Price List related to these colocation services. As set forth in the Price List, the Exchange charges fees for connectivity 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 (‘‘Third Party Data Feeds’’), and third party testing feeds.6 The lists of Third Party Systems and Third Party Data Feeds are set forth in the Price List. The Exchange now proposes to make the following changes: • Add two content service providers to the list of Third Party Systems: Euronext Optiq Cash and Derivatives Unicast (EUA), and Euronext Optiq Cash and Derivatives Unicast (Production) (together, the ‘‘Additional Third Party Systems’’ or ‘‘ATPS’’); • add six feeds to the list of Third Party Data Feeds: Æ Euronext Optiq Compressed Cash, Euronext Optiq Compressed Derivatives, Euronext Optiq Shaped Cash and Euronext Optiq Shaped Derivatives (together, the ‘‘Additional Euronext Third Party Data Feeds’’); and Æ CME Group (‘‘CME’’) and International Securities Exchange (‘‘ISE’’) (together, with the Additional Euronext Third Party Data Feeds, the ‘‘Additional Third Party Data Feeds’’ or ‘‘ATPD’’); and • add two new testing feeds, Euronext Optiq Cash EUA and the Euronext Optiq Derivatives EUA; and • remove the Euronext Third Party Data Feed (the ‘‘Current Euronext Feed’’) from the list of Third Party Data Feeds, because the Current Euronext 5 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). 6 See Securities Exchange Act Release No. 80311 (March 24, 2017), 82 FR 15741 (March 30, 2017) (SR–NYSE–2016–45). E:\FR\FM\29JNN1.SGM 29JNN1 sradovich on DSK3GMQ082PROD with NOTICES 29616 Federal Register / Vol. 82, No. 124 / Thursday, June 29, 2017 / Notices Feed is similar to the Euronext Optiq Compressed Derivatives feed that the Exchange now proposes to add as a Third Party Data Feed.7 The proposed Additional Third Party Systems, Additional Euronext Third Party Data Feeds and new testing feeds are new services and products from the third party content service provider Euronext N.V. (collectively, the ‘‘Euronext Products’’). Euronext N.V. (‘‘Euronext’’) is expected to make the Euronext Products available no later than September 30, 2017. The Exchange would provide access to the Additional Third Party Systems (‘‘Access’’) and connectivity to the Additional Third Party Data Feeds and new testing feeds (‘‘Connectivity’’) as conveniences to Users. Use of Access or Connectivity would be completely voluntary. The Exchange is not aware of any impediment to third parties offering Access or Connectivity. Because the Euronext Products are not yet available, the Exchange does not know whether third parties will offer Users access and connectivity options to connect to the Euronext Products. Similarly, the Exchange does not have visibility into whether third parties currently offer, or intend to offer, Users connectivity to the CME and ISE Additional Third Party Data Feeds, as such third parties are not required to make that information public. However, if one or more third parties opt to offer (or, in the case of the CME and ISE Additional Third Party Data Feeds, presently offer) such access and connectivity to Users, a User may opt to access or connect to such services and products through a connection to an Exchange access center outside the data center, through another User, a third party access center or a third party vendor. In such a case, depending on the service offered by the third party, the User would be able to make such connection through the Exchange’s Secure Financial Transaction Infrastructure (‘‘SFTI’’) network, through a third party telecommunication provider, third party wireless network, or a combination thereof. The proposed rule change relating to the CME and ISE Additional Third Party Data Feeds would become operative upon the effectiveness of the present rule filing. The proposed rule change relating to each Euronext Product would become operative when such Euronext Product became available from 7 As discussed infra, the proposed Euronext Optiq Compressed Derivatives third party data feed will be offered in place of the Current Euronext Feed at the same price. VerDate Sep<11>2014 18:29 Jun 28, 2017 Jkt 241001 Euronext, which is expected to be no later than September 30, 2017, but may not be at the same time for each Euronext Product.8 The Exchange will announce the dates that each Euronext Product will be available through customer notices disseminated to all Users simultaneously. Connectivity to Additional Third Party Systems The Exchange proposes to revise the Price List to provide that Users may obtain connectivity to the two Additional Third Party Systems for a fee. As with the current Third Party Systems, Users would connect to the Additional Third Party Systems over the internet protocol (‘‘IP’’) network, a local area network available in the data center.9 As with the current Third Party Systems, in order to obtain access to an Additional Third Party System, the User would enter into an agreement with the relevant third party content service provider, pursuant to which the third party content service provider would charge the User for access to the Additional Third Party System. The Exchange would then establish a unicast connection between the User and the relevant third party content service provider over the IP network.10 The Exchange would charge the User for the connectivity to the Additional Third Party System. A User would only receive, and only be charged for, access to Additional Third Party Systems for which it enters into agreements with the third party content service provider. The Exchange has no ownership interest in the Additional Third Party Systems. Establishing a User’s access to an Additional Third Party System would not give the Exchange any right to use the Additional Third Party Systems. Connectivity to an Additional Third Party System would not provide access or order entry to the Exchange’s execution system, and a User’s connection to an Additional Third Party System would not be through the Exchange’s execution system. 8 As discussed infra, the Current Euronext Feed will not be removed until the proposed Euronext Optiq Compressed Derivatives third party data feed is available. 9 See 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). 10 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. PO 00000 Frm 00143 Fmt 4703 Sfmt 4703 The Exchange proposes to charge a monthly recurring fee for connectivity to an Additional Third Party System. Specifically, when a User requests access to an Additional Third Party System, it would identify the applicable content service provider and what bandwidth connection it required. The Exchange proposes to modify its Price List to add the Additional Third Party Systems to its existing list of Third Party Systems. The revised table would be as follows: THIRD PARTY SYSTEMS Americas Trading Group (ATG). BATS. Boston Options Exchange (BOX). Chicago Board Options Exchange (CBOE). Credit Suisse. Euronext Optiq Cash and Derivatives Unicast (EUA). Euronext Optiq Cash and Derivatives Unicast (Production). International Securities Exchange (ISE). Nasdaq. NYFIX Marketplace. The Exchange does not propose to change the monthly recurring fee the Exchange charges Users for unicast connectivity to each Third Party System, including the Additional Third Party Systems. Connectivity to Additional Third Party Data Feeds The Exchange proposes to revise the Price List to provide that Users may obtain connectivity to each of the six Additional Third Party Data Feeds for a fee. The Exchange would receive the Additional Third Party Data Feeds from the content service provider, at its data center. It would then provide connectivity to that data to Users for a fee. Users would connect to the Additional Third Party Data Feeds over the IP network.11 With respect to the Additional Euronext Third Party Data Feeds, the Exchange proposes to offer connectivity to both ‘‘compressed’’ and ‘‘shaped’’ data feeds. The Exchange expects that Euronext’s shaped feeds will include more data than the compressed feeds. In order to connect to an Additional Third Party Data Feed, a User would enter into a contract with the content service provider, pursuant to which the content service provider would charge the User for the Third Party Data Feed. The Exchange would receive the Third Party Data Feed over its fiber optic network and, after the content service 11 See supra note 9, at 7889 (‘‘The IP network also provides Users with access to away market data products’’). E:\FR\FM\29JNN1.SGM 29JNN1 Federal Register / Vol. 82, No. 124 / Thursday, June 29, 2017 / Notices provider and User entered into the contract and the Exchange received authorization from the content service provider, the Exchange would retransmit the data to the User over the User’s port. The Exchange would charge the User for the connectivity to the Additional Third Party Data Feed. A User would only receive, and would only be charged for, connectivity to the Additional Third Party Data Feeds for which it entered into contracts. The Exchange has no affiliation with the sellers of the Additional Third Party Data Feeds. It would have no right to use the Additional Third Party Data Feeds other than as a redistributor of the data. The Additional Third Party Data Feeds would not provide access or order entry to the Exchange’s execution system. The Additional Third Party Data Feeds would not provide access or order entry to the execution systems of the third parties generating the feed. The Exchange would receive the Additional Third Party Data Feeds via arms-length agreements and it would have no inherent advantage over any other distributor of such data. As it does with the existing Third Party Data Feeds, the Exchange proposes to charge a monthly recurring fee for connectivity to each Additional Third Party Data Feed. The monthly recurring fee would be per Additional Third Party Data Feed. Depending on its needs and bandwidth, a User may opt to receive all or some of the feeds or services included in an Additional Third Party Data Feed. The Exchange proposes to add the connectivity fees for the Additional Third Party Data to its existing list in the Price List. The additional items would be as follows: Third party data feed sradovich on DSK3GMQ082PROD with NOTICES CME Group ........................... Euronext Optiq Compressed Cash .................................. Euronext Optiq Compressed Derivatives ........................ Euronext Optiq Shaped Cash Euronext Optiq Shaped Derivatives ............................. International Securities Exchange (ISE) ..................... 18:29 Jun 28, 2017 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. 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 charges a connectivity fee of $100 per month per third party certification and testing feed. The Exchange proposes to offer Users connectivity to the Euronext Optiq Cash EUA and the Euronext Optiq Derivatives EUA testing data feeds for the same connectivity fee of $100 per month per feed. General As is the case with all Exchange colocation arrangements, (i) neither a User Monthly recurring nor any of the User’s customers would connectivity be permitted to submit orders directly to fee per the Exchange unless such User or third party customer is a member organization, a data feed Sponsored Participant or an agent $3,000 thereof (e.g., a service bureau providing order entry services); (ii) use of the co900 location services proposed herein would 600 be completely voluntary and available 1,200 to all Users on a non-discriminatory basis; 12 and (iii) a User would only 900 1,000 In addition, the Exchange proposes to remove the Current Euronext Feed from the list of Third Party Data Feeds when the proposed Euronext Optiq Compressed Derivatives third party data feed is available. The Exchange understands that the proposed Euronext VerDate Sep<11>2014 Optiq Compressed Derivatives third party data feed is a similar platform to the Current Euronext Feed. The proposed Euronext Optiq Compressed Derivatives data feed will be offered at the same price as the Current Euronext Feed. A User of the Current Euronext Feed that wishes to continue to receive such data would enter into a contract with the content service provider to purchase the proposed Euronext Optiq Compressed Derivatives data feed, when available. The Exchange will not cease to offer connectivity to the Current Euronext Feed until the Euronext Optiq Compressed Derivatives data feed is available. Jkt 241001 12 As is currently the case, Users that receive colocation services from the Exchange will not receive any means of access to the Exchange’s trading and execution systems that is separate from, or superior to, that of other Users. In this regard, all orders sent to the Exchange enter the Exchange’s trading and execution systems through the same order gateway, regardless of whether the sender is co-located in the data center or not. In addition, co-located Users do not receive any market data or data service product that is not available to all Users, although Users that receive co-location services normally would expect PO 00000 Frm 00144 Fmt 4703 Sfmt 4703 29617 incur one charge for the particular colocation service described herein, regardless of whether the User connects only to the Exchange or to the Exchange and one or both the Affiliate SROs.13 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,14 in general, and furthers the objectives of Sections 6(b)(5) of the Act,15 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. The Exchange believes that the proposed changes 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, by offering additional services, the Exchange would give each User additional options for addressing its access and connectivity needs, responding to User demand for access and connectivity options. Providing additional services would help 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 would provide Access and Connectivity as conveniences to Users. Use of Access or Connectivity would be completely voluntary. The Exchange is not aware of any impediment to third parties offering Access or Connectivity. Because the reduced latencies in sending orders to, and receiving market data from, the Exchange. 13 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–2017–32 and SR–NYSEArca–2017–62. 14 15 U.S.C. 78f(b). 15 15 U.S.C. 78f(b)(5). E:\FR\FM\29JNN1.SGM 29JNN1 sradovich on DSK3GMQ082PROD with NOTICES 29618 Federal Register / Vol. 82, No. 124 / Thursday, June 29, 2017 / Notices Euronext Products are not yet available, the Exchange does not know whether third parties will offer Users access and connectivity options to connect to the Euronext Products. Similarly, the Exchange does not have visibility into whether third parties currently offer, or intend to offer, Users connectivity to the CME and ISE Additional Third Party Data Feeds. However, if one or more third parties opt to offer (or, in the case of the CME and ISE Additional Third Party Data Feeds, presently offer) such access and connectivity to Users, a User may opt to access or connect to such services and products through a connection to an Exchange access center outside the data center, through another User, a third party access center or a third party vendor. In such a case, the User potentially would be able to make such connection through the Exchange’s SFTI network, through a third party telecommunication provider, third party wireless network, or a combination thereof. The Exchange believes that the proposed changes 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, by offering connectivity to each of the Euronext Products as they come into production by Euronext, and offering connectivity to the CME and ISE data feeds to Users upon the effective date of this filing, the Exchange would give Users additional options for connectivity and access to new services as soon as they are available, responding to User demand for access and connectivity options. The Exchange believes that the proposed changes 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 Exchange proposes not to remove the Current Euronext Feed from the list of Third Party Data Feeds until the proposed Euronext Optiq Compressed Derivatives third party data feed is available. The proposed Euronext Optiq Compressed Derivatives data feed will be offered to Users at the same price at the Current Euronext Feed, and the Exchange understands that the proposed Euronext Optiq Compressed Derivatives data feed is a similar platform to the Current Euronext Feed. All Users, whether or not they currently subscribe to the Current Euronext Feed, will have the opportunity to enter into a contract with Euronext to purchase the proposed Euronext Optiq Compressed Derivatives data feed, when available. VerDate Sep<11>2014 18:29 Jun 28, 2017 Jkt 241001 The Exchange also believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,16 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 fee 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 additional services and fees proposed herein would be equitably allocated and not unfairly discriminatory because, in addition to the services being completely voluntary, they would be available to all Users on an equal basis (i.e., the same products and services would be available to all Users). All Users that voluntarily selected to receive Access or Connectivity would be charged the same amount for the same services. Users that opted to use Access or Connectivity would not receive access or connectivity that is not available to all Users, as all market participants that contracted with the relevant market or content provider would receive access or connectivity. The Exchange believes that the proposed charges would be reasonable, equitably allocated and not unfairly 16 15 PO 00000 U.S.C. 78f(b)(4). Frm 00145 Fmt 4703 Sfmt 4703 discriminatory because the Exchange would offer the Access and Connectivity as conveniences to Users, but in order to do so must provide, maintain and operate the data center facility hardware and technology infrastructure. The Exchange must handle the installation, administration, monitoring, support and maintenance of such services, including by responding to any production issues. 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 resilient and redundant feeds. In addition, in order to provide Access and Connectivity, the Exchange would maintain multiple connections to each ATPD and ATPS, allowing the Exchange to provide resilient and redundant connections; adapt to any changes made by the relevant third party; and cover any applicable fees charged by the relevant third party, such as port fees. In addition, Users would not be required to use any of their bandwidth for Access and Connectivity unless they wish to do so. The Exchange believes the proposed fees for connectivity to the ATPD would be reasonable because they would allow the Exchange to defray or cover the costs associated with offering Users connectivity to ATPD while providing Users the convenience of receiving such ATPD within co-location, helping them tailor their data center operations to the requirements of their business operations. In regards to the Additional Euronext Third Party Data Feeds, the Exchange expects that the shaped feeds will include more data than the compressed feeds. The Exchange accordingly believes that the proposed fees for the compressed and shaped data feeds for both the new Euronext cash and new Euronext derivatives services are reasonable because they would allow the Exchange to defray or cover the costs associated with offering such connectivity, including the maintenance and operating costs associated with the transatlantic Euronext data feeds, while providing Users the benefit of receiving such Additional Euronext 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, including by selecting between shaped and compressed formats. E:\FR\FM\29JNN1.SGM 29JNN1 Federal Register / Vol. 82, No. 124 / Thursday, June 29, 2017 / Notices sradovich on DSK3GMQ082PROD with NOTICES The Exchange believes that the addition of the two new Euronext testing feeds for the same price as the monthly connectivity fees currently charged for other third party testing and certification feeds offered by the Exchange would be reasonable, equitably allocated and not unfairly discriminatory because it would provide Users with 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. For the reasons above, the proposed changes would not unfairly discriminate between or among market participants that are otherwise capable of satisfying any applicable co-location fees, requirements, terms and conditions established from time to time by the Exchange. 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,17 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 additional options for connectivity and access to new services when available would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because such proposed Access and Connectivity would satisfy User demand for access and connectivity options. The Exchange would provide Access and Connectivity as conveniences equally to all Users. Because the Euronext Products are not yet available, the Exchange does not know whether third parties will offer Users access and connectivity options to connect to the Euronext Products. Similarly, the Exchange does not have visibility into whether third parties currently offer, or intend to offer, Users connectivity to the CME and ISE Additional Third Party Data Feeds, as such third parties are not required to make that information public. However, if one or more third parties opt to offer (or, in the case of the CME and ISE Additional Third Party Data Feeds, 17 15 U.S.C. 78f(b)(8). VerDate Sep<11>2014 18:29 Jun 28, 2017 Jkt 241001 presently offer) such access and connectivity to Users, a User may opt to access or connect to such services and products through a connection to an Exchange access center outside the data center, through another User, a third party access center or a third party vendor. In such a case, depending on the service offered by the third party, the User would be able to make such connection through the SFTI network, through a third party telecommunication provider, third party wireless network, or a combination thereof. Users that opt to use the proposed Access or Connectivity would not receive access or connectivity that is not available to all Users, as all market participants that contract with the 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. In addition, the Exchange believes that providing Users with connectivity to each of the Euronext Products as they become available would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act because such proposed Access and Connectivity would satisfy User demand for additional options for connectivity and access to new services by providing them as soon as Euronext makes them available, responding to User demand for access and connectivity options. 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 colocation 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 PO 00000 Frm 00146 Fmt 4703 Sfmt 4703 29619 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 Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act 18 and subparagraph (f)(6) of Rule 19b–4 thereunder.19 A proposed rule change filed under Rule 19b–4(f)(6) normally does not become operative prior to 30 days after the date of filing.20 Rule 19b– 4(f)(6)(iii), however, permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest.21 The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange states that waiver of the operative delay will permit Users to obtain the benefits of the proposed new access and connectivity services and help Users tailor their data center operations to the requirements of their business operations without delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the operative delay and designates the 18 15 U.S.C. 78s(b)(3)(a)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 20 17 CFR 240.19b–4(f)(6)(iii). 21 Id. 19 17 E:\FR\FM\29JNN1.SGM 29JNN1 29620 Federal Register / Vol. 82, No. 124 / Thursday, June 29, 2017 / Notices proposed rule change operative upon filing.22 At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 23 of the Act to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File No. SR– NYSE–2017–25 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File No. SR–NYSE–2017–25. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the sradovich on DSK3GMQ082PROD with NOTICES Trades up to and including $200,000 par value 22 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 23 15 U.S.C. 78s(b)(2)(B). 24 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). VerDate Sep<11>2014 18:29 Jun 28, 2017 Jkt 241001 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– 2017–25, and should be submitted on or before July 20, 2017. prepared by FINRA. FINRA has designated the proposed rule change as ‘‘establishing or changing a due, fee or other charge’’ under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b– 4(f)(2) thereunder,4 which renders the proposal effective upon receipt of this filing by the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.24 Eduardo A. Aleman, Assistant Secretary. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change [FR Doc. 2017–13588 Filed 6–28–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–81009; File No. SR–FINRA– 2017–022] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Waive Certain TRACE Reporting Fees I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change FINRA is proposing to waive fees under Rule 7730 for trade reporting to the Trade Reporting and Compliance Engine (‘‘TRACE’’) due to a TRACE system issue on February 16, 2017 and February 17, 2017. The proposed rule change does not make any changes to the text of FINRA rules. In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA 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 June 23, 2017. 1. Purpose Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 21, 2017, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been FINRA Rule 6730 (Transaction Reporting) generally requires that members report trades in TRACEEligible Securities 5 to TRACE. FINRA assesses fees in connection with TRACE reporting pursuant to Rule 7730, including for reporting trades, cancelling or correcting previously reported trades, and late reporting, as summarized below: $0.475/trade. For Securitized Products where par value is not used to determine the size (volume) of a transaction, for purposes of trade reporting fees, size (volume) is the lesser of original face value or Remaining Principal Balance (or the equivalent) at the Time of Execution of the transaction. 2 17 CFR 240.19b–4. U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 5 Rule 6710 provides that ‘‘TRACE-Eligible Security’’ means a debt security that is United States (‘‘U.S.’’) dollar-denominated and is: (1) Issued by a U.S. or foreign private issuer, and, if a ‘‘restricted security’’ as defined in Securities Act 3 15 PO 00000 Frm 00147 Fmt 4703 Sfmt 4703 Rule 144(a)(3), sold pursuant to Securities Act Rule 144A; (2) issued or guaranteed by an Agency as defined in paragraph (k) or a GovernmentSponsored Enterprise as defined in paragraph (n); or (3) a U.S. Treasury Security as defined in paragraph (p), but does not include a debt security that is issued by a foreign sovereign or a Money Market Instrument as defined in paragraph (o). E:\FR\FM\29JNN1.SGM 29JNN1

Agencies

[Federal Register Volume 82, Number 124 (Thursday, June 29, 2017)]
[Notices]
[Pages 29615-29620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13588]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81014; File No. SR-NYSE-2017-25]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Add Access for Users to Two Third Party Systems and Connectivity to Six 
Additional Third Party Data Feeds

June 23, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on June 16, 2017, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to (a) provide Users with access to two 
additional third party systems, connectivity to six additional third 
party data feeds, and connectivity to two additional third party 
testing feeds, and (b) remove a duplicative third party data feed. In 
addition, the Exchange proposes to change its Price List related to 
these co-location services. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the co-location \4\ services offered 
by the Exchange to (a) provide Users \5\ with access to two additional 
third party systems, connectivity to six additional third party data 
feeds, and connectivity to two additional third party testing feeds, 
and (b) remove a duplicative third party data feed. In addition the 
Exchange proposes to make the corresponding changes to the Exchange's 
Price List related to these co-location services.
---------------------------------------------------------------------------

    \4\ The Exchange initially filed rule changes relating to its 
co-location services with the 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.
    \5\ 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).
---------------------------------------------------------------------------

    As set forth in the Price List, the Exchange charges fees for 
connectivity 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 (``Third Party 
Data Feeds''), and third party testing feeds.\6\ The lists of Third 
Party Systems and Third Party Data Feeds are set forth in the Price 
List.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 80311 (March 24, 
2017), 82 FR 15741 (March 30, 2017) (SR-NYSE-2016-45).
---------------------------------------------------------------------------

    The Exchange now proposes to make the following changes:
     Add two content service providers to the list of Third 
Party Systems: Euronext Optiq Cash and Derivatives Unicast (EUA), and 
Euronext Optiq Cash and Derivatives Unicast (Production) (together, the 
``Additional Third Party Systems'' or ``ATPS'');
     add six feeds to the list of Third Party Data Feeds:
    [cir] Euronext Optiq Compressed Cash, Euronext Optiq Compressed 
Derivatives, Euronext Optiq Shaped Cash and Euronext Optiq Shaped 
Derivatives (together, the ``Additional Euronext Third Party Data 
Feeds''); and
    [cir] CME Group (``CME'') and International Securities Exchange 
(``ISE'') (together, with the Additional Euronext Third Party Data 
Feeds, the ``Additional Third Party Data Feeds'' or ``ATPD''); and
     add two new testing feeds, Euronext Optiq Cash EUA and the 
Euronext Optiq Derivatives EUA; and
     remove the Euronext Third Party Data Feed (the ``Current 
Euronext Feed'') from the list of Third Party Data Feeds, because the 
Current Euronext

[[Page 29616]]

Feed is similar to the Euronext Optiq Compressed Derivatives feed that 
the Exchange now proposes to add as a Third Party Data Feed.\7\
---------------------------------------------------------------------------

    \7\ As discussed infra, the proposed Euronext Optiq Compressed 
Derivatives third party data feed will be offered in place of the 
Current Euronext Feed at the same price.
---------------------------------------------------------------------------

    The proposed Additional Third Party Systems, Additional Euronext 
Third Party Data Feeds and new testing feeds are new services and 
products from the third party content service provider Euronext N.V. 
(collectively, the ``Euronext Products''). Euronext N.V. (``Euronext'') 
is expected to make the Euronext Products available no later than 
September 30, 2017.
    The Exchange would provide access to the Additional Third Party 
Systems (``Access'') and connectivity to the Additional Third Party 
Data Feeds and new testing feeds (``Connectivity'') as conveniences to 
Users. Use of Access or Connectivity would be completely voluntary. The 
Exchange is not aware of any impediment to third parties offering 
Access or Connectivity.
    Because the Euronext Products are not yet available, the Exchange 
does not know whether third parties will offer Users access and 
connectivity options to connect to the Euronext Products. Similarly, 
the Exchange does not have visibility into whether third parties 
currently offer, or intend to offer, Users connectivity to the CME and 
ISE Additional Third Party Data Feeds, as such third parties are not 
required to make that information public. However, if one or more third 
parties opt to offer (or, in the case of the CME and ISE Additional 
Third Party Data Feeds, presently offer) such access and connectivity 
to Users, a User may opt to access or connect to such services and 
products through a connection to an Exchange access center outside the 
data center, through another User, a third party access center or a 
third party vendor. In such a case, depending on the service offered by 
the third party, the User would be able to make such connection through 
the Exchange's Secure Financial Transaction Infrastructure (``SFTI'') 
network, through a third party telecommunication provider, third party 
wireless network, or a combination thereof.
    The proposed rule change relating to the CME and ISE Additional 
Third Party Data Feeds would become operative upon the effectiveness of 
the present rule filing. The proposed rule change relating to each 
Euronext Product would become operative when such Euronext Product 
became available from Euronext, which is expected to be no later than 
September 30, 2017, but may not be at the same time for each Euronext 
Product.\8\ The Exchange will announce the dates that each Euronext 
Product will be available through customer notices disseminated to all 
Users simultaneously.
---------------------------------------------------------------------------

    \8\ As discussed infra, the Current Euronext Feed will not be 
removed until the proposed Euronext Optiq Compressed Derivatives 
third party data feed is available.
---------------------------------------------------------------------------

Connectivity to Additional Third Party Systems
    The Exchange proposes to revise the Price List to provide that 
Users may obtain connectivity to the two Additional Third Party Systems 
for a fee. As with the current Third Party Systems, Users would connect 
to the Additional Third Party Systems over the internet protocol 
(``IP'') network, a local area network available in the data center.\9\
---------------------------------------------------------------------------

    \9\ See 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).
---------------------------------------------------------------------------

    As with the current Third Party Systems, in order to obtain access 
to an Additional Third Party System, the User would enter into an 
agreement with the relevant third party content service provider, 
pursuant to which the third party content service provider would charge 
the User for access to the Additional Third Party System. The Exchange 
would then establish a unicast connection between the User and the 
relevant third party content service provider over the IP network.\10\ 
The Exchange would charge the User for the connectivity to the 
Additional Third Party System. A User would only receive, and only be 
charged for, access to Additional Third Party Systems for which it 
enters into agreements with the third party content service provider.
---------------------------------------------------------------------------

    \10\ 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 has no ownership interest in the Additional Third 
Party Systems. Establishing a User's access to an Additional Third 
Party System would not give the Exchange any right to use the 
Additional Third Party Systems. Connectivity to an Additional Third 
Party System would not provide access or order entry to the Exchange's 
execution system, and a User's connection to an Additional Third Party 
System would not be through the Exchange's execution system.
    The Exchange proposes to charge a monthly recurring fee for 
connectivity to an Additional Third Party System. Specifically, when a 
User requests access to an Additional Third Party System, it would 
identify the applicable content service provider and what bandwidth 
connection it required.
    The Exchange proposes to modify its Price List to add the 
Additional Third Party Systems to its existing list of Third Party 
Systems. The revised table would be as follows:

                           Third Party Systems
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
Americas Trading Group (ATG).
BATS.
Boston Options Exchange (BOX).
Chicago Board Options Exchange (CBOE).
Credit Suisse.
Euronext Optiq Cash and Derivatives Unicast (EUA).
Euronext Optiq Cash and Derivatives Unicast (Production).
International Securities Exchange (ISE).
Nasdaq.
NYFIX Marketplace.
------------------------------------------------------------------------

    The Exchange does not propose to change the monthly recurring fee 
the Exchange charges Users for unicast connectivity to each Third Party 
System, including the Additional Third Party Systems.
Connectivity to Additional Third Party Data Feeds
    The Exchange proposes to revise the Price List to provide that 
Users may obtain connectivity to each of the six Additional Third Party 
Data Feeds for a fee. The Exchange would receive the Additional Third 
Party Data Feeds from the content service provider, at its data center. 
It would then provide connectivity to that data to Users for a fee. 
Users would connect to the Additional Third Party Data Feeds over the 
IP network.\11\
---------------------------------------------------------------------------

    \11\ See supra note 9, at 7889 (``The IP network also provides 
Users with access to away market data products'').
---------------------------------------------------------------------------

    With respect to the Additional Euronext Third Party Data Feeds, the 
Exchange proposes to offer connectivity to both ``compressed'' and 
``shaped'' data feeds. The Exchange expects that Euronext's shaped 
feeds will include more data than the compressed feeds.
    In order to connect to an Additional Third Party Data Feed, a User 
would enter into a contract with the content service provider, pursuant 
to which the content service provider would charge the User for the 
Third Party Data Feed. The Exchange would receive the Third Party Data 
Feed over its fiber optic network and, after the content service

[[Page 29617]]

provider and User entered into the contract and the Exchange received 
authorization from the content service provider, the Exchange would re-
transmit the data to the User over the User's port. The Exchange would 
charge the User for the connectivity to the Additional Third Party Data 
Feed. A User would only receive, and would only be charged for, 
connectivity to the Additional Third Party Data Feeds for which it 
entered into contracts.
    The Exchange has no affiliation with the sellers of the Additional 
Third Party Data Feeds. It would have no right to use the Additional 
Third Party Data Feeds other than as a redistributor of the data. The 
Additional Third Party Data Feeds would not provide access or order 
entry to the Exchange's execution system. The Additional Third Party 
Data Feeds would not provide access or order entry to the execution 
systems of the third parties generating the feed. The Exchange would 
receive the Additional Third Party Data Feeds via arms-length 
agreements and it would have no inherent advantage over any other 
distributor of such data.
    As it does with the existing Third Party Data Feeds, the Exchange 
proposes to charge a monthly recurring fee for connectivity to each 
Additional Third Party Data Feed. The monthly recurring fee would be 
per Additional Third Party Data Feed. Depending on its needs and 
bandwidth, a User may opt to receive all or some of the feeds or 
services included in an Additional Third Party Data Feed.
    The Exchange proposes to add the connectivity fees for the 
Additional Third Party Data to its existing list in the Price List. The 
additional items would be as follows:

------------------------------------------------------------------------
                                                              Monthly
                                                             recurring
                                                           connectivity
                  Third party data feed                    fee per third
                                                            party data
                                                               feed
------------------------------------------------------------------------
CME Group...............................................          $3,000
Euronext Optiq Compressed Cash..........................             900
Euronext Optiq Compressed Derivatives...................             600
Euronext Optiq Shaped Cash..............................           1,200
Euronext Optiq Shaped Derivatives.......................             900
International Securities Exchange (ISE).................           1,000
------------------------------------------------------------------------

    In addition, the Exchange proposes to remove the Current Euronext 
Feed from the list of Third Party Data Feeds when the proposed Euronext 
Optiq Compressed Derivatives third party data feed is available. The 
Exchange understands that the proposed Euronext Optiq Compressed 
Derivatives third party data feed is a similar platform to the Current 
Euronext Feed. The proposed Euronext Optiq Compressed Derivatives data 
feed will be offered at the same price as the Current Euronext Feed. A 
User of the Current Euronext Feed that wishes to continue to receive 
such data would enter into a contract with the content service provider 
to purchase the proposed Euronext Optiq Compressed Derivatives data 
feed, when available. The Exchange will not cease to offer connectivity 
to the Current Euronext Feed until the Euronext Optiq Compressed 
Derivatives data feed is available.
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. 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 charges a connectivity fee of $100 per month per third 
party certification and testing feed. The Exchange proposes to offer 
Users connectivity to the Euronext Optiq Cash EUA and the Euronext 
Optiq Derivatives EUA testing data feeds for the same connectivity fee 
of $100 per month per feed.
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; \12\ 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 the Affiliate 
SROs.\13\
---------------------------------------------------------------------------

    \12\ 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.
    \13\ 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-2017-32 and 
SR-NYSEArca-2017-62.
---------------------------------------------------------------------------

    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,\14\ in general, and furthers the 
objectives of Sections 6(b)(5) of the Act,\15\ 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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed changes 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, by offering additional services, the Exchange 
would give each User additional options for addressing its access and 
connectivity needs, responding to User demand for access and 
connectivity options. Providing additional services would help 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 would provide Access and Connectivity as conveniences 
to Users. Use of Access or Connectivity would be completely voluntary. 
The Exchange is not aware of any impediment to third parties offering 
Access or Connectivity. Because the

[[Page 29618]]

Euronext Products are not yet available, the Exchange does not know 
whether third parties will offer Users access and connectivity options 
to connect to the Euronext Products. Similarly, the Exchange does not 
have visibility into whether third parties currently offer, or intend 
to offer, Users connectivity to the CME and ISE Additional Third Party 
Data Feeds. However, if one or more third parties opt to offer (or, in 
the case of the CME and ISE Additional Third Party Data Feeds, 
presently offer) such access and connectivity to Users, a User may opt 
to access or connect to such services and products through a connection 
to an Exchange access center outside the data center, through another 
User, a third party access center or a third party vendor. In such a 
case, the User potentially would be able to make such connection 
through the Exchange's SFTI network, through a third party 
telecommunication provider, third party wireless network, or a 
combination thereof.
    The Exchange believes that the proposed changes 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, by offering connectivity to each of the 
Euronext Products as they come into production by Euronext, and 
offering connectivity to the CME and ISE data feeds to Users upon the 
effective date of this filing, the Exchange would give Users additional 
options for connectivity and access to new services as soon as they are 
available, responding to User demand for access and connectivity 
options.
    The Exchange believes that the proposed changes 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 Exchange proposes not to remove the Current 
Euronext Feed from the list of Third Party Data Feeds until the 
proposed Euronext Optiq Compressed Derivatives third party data feed is 
available. The proposed Euronext Optiq Compressed Derivatives data feed 
will be offered to Users at the same price at the Current Euronext 
Feed, and the Exchange understands that the proposed Euronext Optiq 
Compressed Derivatives data feed is a similar platform to the Current 
Euronext Feed. All Users, whether or not they currently subscribe to 
the Current Euronext Feed, will have the opportunity to enter into a 
contract with Euronext to purchase the proposed Euronext Optiq 
Compressed Derivatives data feed, when available.
    The Exchange also believes that the proposed rule change is 
consistent with Section 6(b)(4) of the Act,\16\ 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.
---------------------------------------------------------------------------

    \16\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that the proposed fee 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 additional services and fees 
proposed herein would be equitably allocated and not unfairly 
discriminatory because, in addition to the services being completely 
voluntary, they would be available to all Users on an equal basis 
(i.e., the same products and services would be available to all Users). 
All Users that voluntarily selected to receive Access or Connectivity 
would be charged the same amount for the same services. Users that 
opted to use Access or Connectivity would not receive access or 
connectivity that is not available to all Users, as all market 
participants that contracted with the relevant market or content 
provider would receive access or connectivity.
    The Exchange believes that the proposed charges would be 
reasonable, equitably allocated and not unfairly discriminatory because 
the Exchange would offer the Access and Connectivity as conveniences to 
Users, but in order to do so must provide, maintain and operate the 
data center facility hardware and technology infrastructure. The 
Exchange must handle the installation, administration, monitoring, 
support and maintenance of such services, including by responding to 
any production issues. 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 
resilient and redundant feeds. In addition, in order to provide Access 
and Connectivity, the Exchange would maintain multiple connections to 
each ATPD and ATPS, allowing the Exchange to provide resilient and 
redundant connections; adapt to any changes made by the relevant third 
party; and cover any applicable fees charged by the relevant third 
party, such as port fees. In addition, Users would not be required to 
use any of their bandwidth for Access and Connectivity unless they wish 
to do so.
    The Exchange believes the proposed fees for connectivity to the 
ATPD would be reasonable because they would allow the Exchange to 
defray or cover the costs associated with offering Users connectivity 
to ATPD while providing Users the convenience of receiving such ATPD 
within co-location, helping them tailor their data center operations to 
the requirements of their business operations. In regards to the 
Additional Euronext Third Party Data Feeds, the Exchange expects that 
the shaped feeds will include more data than the compressed feeds. The 
Exchange accordingly believes that the proposed fees for the compressed 
and shaped data feeds for both the new Euronext cash and new Euronext 
derivatives services are reasonable because they would allow the 
Exchange to defray or cover the costs associated with offering such 
connectivity, including the maintenance and operating costs associated 
with the transatlantic Euronext data feeds, while providing Users the 
benefit of receiving such Additional Euronext 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, including by selecting between shaped and compressed formats.

[[Page 29619]]

    The Exchange believes that the addition of the two new Euronext 
testing feeds for the same price as the monthly connectivity fees 
currently charged for other third party testing and certification feeds 
offered by the Exchange would be reasonable, equitably allocated and 
not unfairly discriminatory because it would provide Users with 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.
    For the reasons above, the proposed changes would not unfairly 
discriminate between or among market participants that are otherwise 
capable of satisfying any applicable co-location fees, requirements, 
terms and conditions established from time to time by the Exchange.
    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,\17\ 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).
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    \17\ 15 U.S.C. 78f(b)(8).
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    The Exchange believes that providing Users with additional options 
for connectivity and access to new services when available would not 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act because such proposed Access 
and Connectivity would satisfy User demand for access and connectivity 
options. The Exchange would provide Access and Connectivity as 
conveniences equally to all Users. Because the Euronext Products are 
not yet available, the Exchange does not know whether third parties 
will offer Users access and connectivity options to connect to the 
Euronext Products. Similarly, the Exchange does not have visibility 
into whether third parties currently offer, or intend to offer, Users 
connectivity to the CME and ISE Additional Third Party Data Feeds, as 
such third parties are not required to make that information public. 
However, if one or more third parties opt to offer (or, in the case of 
the CME and ISE Additional Third Party Data Feeds, presently offer) 
such access and connectivity to Users, a User may opt to access or 
connect to such services and products through a connection to an 
Exchange access center outside the data center, through another User, a 
third party access center or a third party vendor. In such a case, 
depending on the service offered by the third party, the User would be 
able to make such connection through the SFTI network, through a third 
party telecommunication provider, third party wireless network, or a 
combination thereof. Users that opt to use the proposed Access or 
Connectivity would not receive access or connectivity that is not 
available to all Users, as all market participants that contract with 
the 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.
    In addition, the Exchange believes that providing Users with 
connectivity to each of the Euronext Products as they become available 
would not impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because such 
proposed Access and Connectivity would satisfy User demand for 
additional options for connectivity and access to new services by 
providing them as soon as Euronext makes them available, responding to 
User demand for access and connectivity options.
    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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \18\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\19\ A proposed rule 
change filed under Rule 19b-4(f)(6) normally does not become operative 
prior to 30 days after the date of filing.\20\ Rule 19b-4(f)(6)(iii), 
however, permits the Commission to designate a shorter time if such 
action is consistent with the protection of investors and the public 
interest.\21\
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    \18\ 15 U.S.C. 78s(b)(3)(a)(iii).
    \19\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
    \20\ 17 CFR 240.19b-4(f)(6)(iii).
    \21\ Id.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Exchange states that waiver of the operative delay will 
permit Users to obtain the benefits of the proposed new access and 
connectivity services and help Users tailor their data center 
operations to the requirements of their business operations without 
delay. The Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest. 
Therefore, the Commission hereby waives the operative delay and 
designates the

[[Page 29620]]

proposed rule change operative upon filing.\22\
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    \22\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \23\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \23\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File No. SR-NYSE-2017-25 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-NYSE-2017-25. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such 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-2017-25, and should be 
submitted on or before July 20, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-13588 Filed 6-28-17; 8:45 am]
BILLING CODE 8011-01-P