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]
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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 (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–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
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[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).
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18:29 Jun 28, 2017
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‘‘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
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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).
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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.
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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.
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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’’).
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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
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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.
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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
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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).
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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.
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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).
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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.
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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).
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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
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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
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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 (https://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 (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
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
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]]>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\
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\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.
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The proposed change is not otherwise intended to address any other
issues relating to co-location services and/or related fees, and the
Exchange is not aware of any problems that Users would have in
complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\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.
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\14\ 15 U.S.C. 78f(b).
\15\ 15 U.S.C. 78f(b)(5).
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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.
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\16\ 15 U.S.C. 78f(b)(4).
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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 (https://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 (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-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
