Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE Arca Equities Fees and Charges, 49426-49428 [2017-23116]
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Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Notices
The correction is effective
October 25, 2017.
ADDRESSES: Submit comments directly
to the OMB reviewer at: Aaron Szabo
Desk Officer, Office of Information and
Regulatory Affairs (3150–0132), NEOB–
10202, Office of Management and
Budget, Washington, DC 20503;
telephone: 202–395–3621, email: oira_
submission@omb.eop.gov.
FOR FURTHER INFORMATION CONTACT:
David Cullison, NRC Clearance Officer,
U.S. Nuclear Regulatory Commission,
Washington, DC 20555–0001; telephone:
301–415–2084; email:
INFOCOLLECTS.Resource@nrc.gov.
SUPPLEMENTARY INFORMATION: In the FR
on October 13, 2017 in FR Doc. 2017–
22144, on page 47779, in the first
column, item #9, correct ‘‘79,040 hours
(33,909 hours reporting + 42,319 hours
recordkeeping + 2,812 hours third-party
disclosure)’’ to read ‘‘78,800 hours
(33,669 hours reporting + 42,319 hours
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third column, correct the ADAMS
Accession No. for the supporting
statement ‘‘ML17208A007’’ to read
‘‘ML17292A963.’’
DATES:
Dated at Rockville, Maryland, this 20th day
of October 2017.
For the Nuclear Regulatory Commission.
David Cullison,
NRC Clearance Officer, Office of the Chief
Information Officer.
[FR Doc. 2017–23174 Filed 10–24–17; 8:45 am]
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81901; File No. SR–
NYSEArca–2017–121]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the NYSE Arca
Equities Fees and Charges
sradovich on DSK3GMQ082PROD with NOTICES
October 19, 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 October
6, 2017, NYSE Arca, Inc. (the
‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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22:06 Oct 24, 2017
Jkt 244001
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
NYSE Arca Equities Fees and Charges
(the ‘‘Fee Schedule’’) to adopt a
Decommission Extension Fee that
would be applicable for the use of
certain ports connecting to NYSE Arca
during the months of March through
May 2018. The proposed rule change is
available on the Exchange’s Web site at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Fee Schedule to adopt a Decommission
Extension Fee that would be applicable
to ETP Holders for the use of certain
ports used to connect to NYSE Arca for
a three-month period from March 2018
through May 2018 (the ‘‘extension
period’’).
The Exchange currently makes ports
available that provide connectivity to
the Exchange’s trading systems (i.e.,
ports for the entry of orders and/or
quotes (‘‘order/quote entry ports’’)) and
charges $550 per port per month.4 The
Exchange also currently makes ports
available for drop copies and charges
$550 per port per month.5 Pursuant to
4 Port fees are not applicable to ports used for the
Exchange’s Risk Management Gateway service.
Further, no fee applies to ports in the backup
datacenter that are not utilized during the relevant
month. No fee applies to ports in the backup
datacenter that are utilized when the primary
datacenter is unavailable. However, if a port in the
backup datacenter is utilized when the primary
datacenter is available, then the fee shall apply.
5 No fee applies to ports in the backup datacenter
if configured such that it is duplicative of another
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Frm 00116
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Sfmt 4703
a recent proposed rule change, effective
October 1, 2017, the monthly fees for
ports activated after August 18, 2017,
the last trading day prior to the
introduction of ports that communicate
to the Exchange using Pillar phase II
protocols (‘‘phase II ports’’), are prorated
to the number of trading days in a
billing month, including any scheduled
early closing days, that a port is
connected to the Exchange.6
The Exchange makes available ports
that communicate with the Exchange
using Pillar phase I protocols (‘‘phase I
ports’’) and phase II ports. The proposed
Decommission Extension Fee would
apply only to ETP Holders that use
phase I ports during the extension
period.
The Exchange previously provided
notice to ETP Holders to migrate to
phase II ports over approximately a sixmonth period, which began on August
21, 2017.7 Because fees associated with
ports are billed on a monthly basis, the
period by which ETP Holders should
migrate to phase II ports will end at the
close of trading on February 28, 2018.
Notwithstanding prior notice to ETP
Holders to migrate fully to phase II ports
before the end of February 2018, the
Exchange has determined to continue to
make phase I ports available through the
end of May 2018. Because continued
support for phase 1 ports requires the
Exchange to dedicate resources, the
Exchange proposes a Decommission
Extension Fee that would be applicable
to use of such ports during the
extension period. Specifically, during
the extension period, the Exchange will
incur ongoing costs in maintaining
phase I ports, including costs to
maintain servers and their physical
location, monitoring order activity, and
drop copy port of the same user. Only one fee per
drop copy port applies, even if the port receives
drop copies from multiple order/quote entry ports
and/or drop copies for activity on both NYSE Arca
Equities and NYSE Arca Options.
6 See Securities Exchange Act Release No. 81573
(September 11, 2017), 82 FR 43430 (September 15,
2017) (SR–NYSEArca–2017–97) (the ‘‘Port Fee
Filing’’). Fees for ports activated before August 21,
2017, however, are not pro-rated and are charged
flat fees. Billing for ports activated before August
21, 2017 is based on the number of ports on the
third business day prior to the end of the month.
See Securities Exchange Act Release No. 66110
(January 5, 2012), 77 FR 1766 (January 11, 2012)
(SR–NYSEArca–2012–01).
7 See Trader Update at https://www.nyse.com/
publicdocs/nyse/markets/nyse/Pillar_Update_
NYSE_American_ARCA_NYSE_Tapes_B_and_
C.pdf. On June 22 [sic], 2017, the Exchange
provided ETP Holders with notice that the phase II
ports would be available on August 21, 2017. See
Trader Update at https://www.nyse.com/
publicdocs/nyse/notifications/trader-update/Pillar_
Phase_II_Update_Native_gateways_June_16_
2017.pdf.
E:\FR\FM\25OCN1.SGM
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Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Notices
other support, that are separate from the
costs in maintaining phase II ports.
The phase II ports are part of the
Exchange’s efforts to upgrade its
connectivity. The purpose of the
proposed Decommission Extension Fee
is to provide an incentive for ETP
Holders to fully transition to the phase
II ports within the initial six-month
transition period so the Exchange does
not have to maintain and support both
phase I ports and phase II ports at the
end of the six-month transition period.
In addition, to the extent that ETP
Holders do not fully transition to phase
II ports within the initial six-month
transition period, the Exchange believes
that the costs associated with continued
support of phase I ports should be paid
for by ETP Holders using phase I ports.
Therefore, during the extension period,
ETP Holders that continue to connect to
the Exchange through phase I ports
would be subject to the proposed
Decommission Extension Fee of $2,450
per port per month for March 2018,
April 2018 and May 2018.8 The
proposed Decommission Extension Fee
would be charged in addition to the
existing port fees currently set forth in
the Fee Schedule. The extension period
would expire at the end of trading on
May 31, 2018, on which date the phase
I ports will be fully decommissioned.
sradovich on DSK3GMQ082PROD with NOTICES
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,9 in general, and
furthers the objectives of Sections [sic]
6(b)(4) of the Act,10 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 Decommission Extension Fee
for ETP Holders that choose to continue
to connect to the Exchange through the
use of phase I ports after the transition
period, which is scheduled to end at the
close of trading on February 28, 2018, is
equitable and not unfairly
discriminatory because the proposed fee
would apply equally to all ETP Holders
that choose to connect to the Exchange
8 The concept of a Decommission Extension Fee
is not novel. The Exchange previously adopted a
Decommission Extension Fee for receipt of market
data products to encourage subscribers to migrate
to a new distribution channel. See Securities
Exchange Act Release Nos. 79287 (November 10,
2016), 81 FR 81216 (SR–NYSEMKT–2016–100); and
77389 (March 17, 2016), 81 FR 15363 (March 22,
2016) (SR–NYSEMKT–2016–37).
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(4).
VerDate Sep<11>2014
22:06 Oct 24, 2017
Jkt 244001
through the use of such ports during the
extension period. As noted above, the
Exchange will incur ongoing costs in
maintaining phase I ports during the
extension period, including costs to
maintain servers and their physical
location, monitoring order activity, and
other support, with no real benefit. The
Exchange believes that it is reasonable
to require ETP Holders to pay the
proposed Decommission Extension Fee
as an additional fee during the
extension period for connecting to the
Exchange through phase I ports because
ETP Holders were provided with two
months’ notice that the phase II ports
would be available beginning August
21, 2017, and will be provided with a
six-month period during which to
transition to phase II ports.11 The
Exchange believes that these notices
have provided ETP Holders with ample
time to transition to phase II protocols
by February 28, 2017 and the
Decommission Extension Fee is
designed to provide an additional
incentive to transition to the phase II
protocols by February 28, 2017. Due to
the fixed costs incurred by the Exchange
to support phase I ports during the
extension period, the Exchange believes
that it is fair and reasonable to charge
increased fees to cover the costs of such
support during the extension period
because it is expected that the number
of ETP Holders that do not transition to
phase II ports by February 28, 2018 will
be small.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
In accordance with Section 6(b)(8) of
the Act,12 the Exchange does not believe
that the proposed rule change will
impose any burden on intermarket or
intramarket competition that is not
necessary or appropriate in furtherance
of the purposes of the Act in that it is
simply designed to set forth the
Exchange’s adoption of a fee during the
extension period to provide an incentive
to ETP Holders to transition to phase II
ports. The Exchange believes that fees
for connectivity are constrained by the
robust competition for order flow among
exchanges and non-exchange markets.
Further, excessive fees for connectivity,
including port fees, would serve to
impair an exchange’s ability to compete
for order flow rather than burdening
competition. The Exchange also does
not believe the proposed rule change
would impact intramarket competition
as it would apply to all ETP Holders
equally that connect to the Exchange
through the use of such ports.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 13 of the Act and
subparagraph (f)(2) of Rule 19b–4 14
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 15 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEArca–2017–121 on the subject
line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEArca–2017–121. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
13 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(2).
15 15 U.S.C. 78s(b)(2)(B).
11 See
supra note 7.
12 15 U.S.C. 78f(b)(8).
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14 17
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49427
E:\FR\FM\25OCN1.SGM
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49428
Federal Register / Vol. 82, No. 205 / Wednesday, October 25, 2017 / Notices
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSEArca–2017–121 and
should be submitted on or before
November 15, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–23116 Filed 10–24–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81900; File No. SR–OPRA–
2017–02]
Options Price Reporting Authority;
Notice of Filing and Immediate
Effectiveness of Proposed Amendment
To Modify the OPRA Fee Schedule To
Eliminate the Enterprise Rate NonProfessional Subscriber Fee and
Amend the Non-Professional
Subscriber Fee
sradovich on DSK3GMQ082PROD with NOTICES
October 19, 2017.
Pursuant to Section 11A of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 608 thereunder,2
notice is hereby given that on
September 27, 2017, the Options Price
16 17
CFR 200.30–3(a)(12).
U.S.C. 78k–1.
2 17 CFR 242.608.
1 15
VerDate Sep<11>2014
22:06 Oct 24, 2017
Jkt 244001
Reporting Authority (‘‘OPRA’’)
submitted to the Securities and
Exchange Commission (‘‘Commission’’)
an amendment to the Plan for Reporting
of Consolidated Options Last Sale
Reports and Quotation Information
(‘‘OPRA Plan’’).3 The OPRA Plan
amendment would implement changes
to the Non-Professional Subscriber Fee
and Eliminate the Enterprise Rate NonProfessional Subscriber Fee effective
January 1, 2018. The Commission is
publishing this notice to provide
interested persons an opportunity to
submit written comments on the OPRA
Plan amendment.
I. Description and Purpose of the Plan
Amendment
(a) Fee Schedule Amendments
The purpose of the amendment is to
eliminate OPRA’s Enterprise Rate
Nonprofessional Subscriber Fee
(‘‘Enterprise Rate Nonpro Fee’’) and to
revise its Nonprofessional Subscriber
Fee so that, instead of being a flat fee of
$1.25 per month per Nonprofessional
Subscriber, the Nonprofessional
Subscriber Fee will have five tiers, with
the tier for a Vendor’s first 75,000
Nonprofessional Subscribers subject to
the current rate of $1.25 per month and
each of the successive higher tiers
subject to a lower rate.
OPRA’s Fee Schedule provides that a
Vendor 4 may determine the fee that it
pays with respect to its distribution of
current OPRA data to a Nonprofessional
Subscriber 5 in one of two ways: Either
the Vendor may pay OPRA’s monthly
Nonprofessional Subscriber Fee
(currently $1.25/month), or the Vendor
may count the Nonprofessional
3 The OPRA Plan is a national market system plan
approved by the Commission pursuant to Section
11A of the Act and Rule 608 thereunder. See
Securities Exchange Act Release No. 17638 (March
18, 1981), 22 S.E.C. Docket 484 (March 31, 1981).
The full text of the OPRA Plan and a list of its
fifteen participants are available at https://
www.opradata.com. The OPRA Plan provides for
the collection and dissemination of last sale and
quotation information on options that are traded on
the participant exchanges.
4 OPRA defines a ‘‘Vendor,’’ in general, as an
entity that receives OPRA data and redistributes it
externally, that is, to persons other than its own
employees and employees of its wholly-owned
subsidiaries.
5 OPRA defines a ‘‘Subscriber,’’ in general, as an
entity or person that receives OPRA data but does
not redistribute it to third parties, and defines a
‘‘Nonprofessional Subscriber’’ as a Subscriber who
is a ‘‘Nonprofessional.’’ OPRA’s definition of the
term ‘‘Nonprofessional’’ is stated in its forms of
‘‘Electronic Subscriber Agreement’’ and ‘‘Hardcopy
Subscriber Agreement.’’ These forms are available
on OPRA’s Web site, www.opradata.com. With a
limited exception for certain personal trusts that is
described in the Electronic Subscriber Agreement
and Hardcopy Subscriber Agreement, a
Nonprofessional Subscriber must be a natural
person.
PO 00000
Frm 00118
Fmt 4703
Sfmt 4703
Subscriber’s queries for OPRA data and
pay Usage-based Vendor Fees based on
the actual usage of OPRA data by the
Nonprofessional Subscriber, subject to a
cap that OPRA has always set at the
amount of the Nonprofessional
Subscriber Fee.6
OPRA introduced the Enterprise Rate
Nonpro Fee in 2012.7 The purpose of
the Fee was to limit the maximum
aggregate amount of Nonprofessional
Subscriber Fees and Usage-based
Vendor Fees with respect to
Nonprofessional Subscribers that any
Vendor would be required to pay with
respect to its Nonprofessional
Subscribers. OPRA’s Enterprise Rate
Nonpro Fee was established at $375,000
per month. When the Enterprise Rate
Nonpro Fee was introduced, the fee
provided a benefit to one OPRA Vendor,
but OPRA’s expectation was that the fee
would provide an incentive for other
Vendors to increase the number of
Nonprofessional Subscribers to whom
they distribute OPRA data.
OPRA’s expectation for the Enterprise
Rate Nonpro Fee has not been fulfilled.
The fee continues to provide a benefit
to only one OPRA Vendor, and it now
appears to OPRA that this is likely to
remain the case indefinitely.
Accordingly, OPRA is proposing to
eliminate the Enterprise Rate Nonpro
Fee and, at the same time, revise
OPRA’s Nonprofessional Subscriber Fee
so that the fee has five tiers: $1.25/
month for a Vendor’s first 75,000
Nonprofessional Subscribers, $1.15/
month for the Vendor’s next 75,000
Nonprofessional Subscribers, $1.00/
month for the Vendor’s next 100,000
Nonprofessional Subscribers, $0.75/
month for the Vendor’s next 250,000
Nonprofessional Subscribers, and $0.60/
month for the Vendor’s Nonprofessional
Subscribers in excess of 500,000
Nonprofessional Subscribers.8
If all Vendors were to continue to
distribute OPRA data to
Nonprofessional Subscribers at their
current rates, these changes would
result in an increase in OPRA’s annual
revenues of approximately $135,000.
However, OPRA anticipates that, in fact,
6 Many Vendors prefer to pay the flat
Nonprofessional Subscriber Fee, even though their
aggregate fees on the basis of Usage-based Vendor
Fees might be lower and could not be greater, due
to the administrative simplicity of doing so and the
fact that the cost on a per Subscriber basis of doing
so is very small.
7 See Securities Exchange Act Release No. 66564
(March 9, 2012) (File No. SR–OPRA–2012–02).
8 For example, a hypothetical Vendor that reports
310,000 Nonprofessional Subscribers in a month
would pay total Nonprofessional Subscriber Fees of
$337,500 for the month: The sum of (75,000 ×
$1.25) + (75,000 × $1.15) + (150,000 × $1.00) +
(10,000 × $0.75).
E:\FR\FM\25OCN1.SGM
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]]>Agencies
[Federal Register Volume 82, Number 205 (Wednesday, October 25, 2017)]
[Notices]
[Pages 49426-49428]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-23116]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81901; File No. SR-NYSEArca-2017-121]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend the NYSE
Arca Equities Fees and Charges
October 19, 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 October 6, 2017, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the NYSE Arca Equities Fees and
Charges (the ``Fee Schedule'') to adopt a Decommission Extension Fee
that would be applicable for the use of certain ports connecting to
NYSE Arca during the months of March through May 2018. The proposed
rule change is available on the Exchange's Web site at www.nyse.com, at
the principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Fee Schedule to adopt a
Decommission Extension Fee that would be applicable to ETP Holders for
the use of certain ports used to connect to NYSE Arca for a three-month
period from March 2018 through May 2018 (the ``extension period'').
The Exchange currently makes ports available that provide
connectivity to the Exchange's trading systems (i.e., ports for the
entry of orders and/or quotes (``order/quote entry ports'')) and
charges $550 per port per month.\4\ The Exchange also currently makes
ports available for drop copies and charges $550 per port per month.\5\
Pursuant to a recent proposed rule change, effective October 1, 2017,
the monthly fees for ports activated after August 18, 2017, the last
trading day prior to the introduction of ports that communicate to the
Exchange using Pillar phase II protocols (``phase II ports''), are
prorated to the number of trading days in a billing month, including
any scheduled early closing days, that a port is connected to the
Exchange.\6\
---------------------------------------------------------------------------
\4\ Port fees are not applicable to ports used for the
Exchange's Risk Management Gateway service. Further, no fee applies
to ports in the backup datacenter that are not utilized during the
relevant month. No fee applies to ports in the backup datacenter
that are utilized when the primary datacenter is unavailable.
However, if a port in the backup datacenter is utilized when the
primary datacenter is available, then the fee shall apply.
\5\ No fee applies to ports in the backup datacenter if
configured such that it is duplicative of another drop copy port of
the same user. Only one fee per drop copy port applies, even if the
port receives drop copies from multiple order/quote entry ports and/
or drop copies for activity on both NYSE Arca Equities and NYSE Arca
Options.
\6\ See Securities Exchange Act Release No. 81573 (September 11,
2017), 82 FR 43430 (September 15, 2017) (SR-NYSEArca-2017-97) (the
``Port Fee Filing''). Fees for ports activated before August 21,
2017, however, are not pro-rated and are charged flat fees. Billing
for ports activated before August 21, 2017 is based on the number of
ports on the third business day prior to the end of the month. See
Securities Exchange Act Release No. 66110 (January 5, 2012), 77 FR
1766 (January 11, 2012) (SR-NYSEArca-2012-01).
---------------------------------------------------------------------------
The Exchange makes available ports that communicate with the
Exchange using Pillar phase I protocols (``phase I ports'') and phase
II ports. The proposed Decommission Extension Fee would apply only to
ETP Holders that use phase I ports during the extension period.
The Exchange previously provided notice to ETP Holders to migrate
to phase II ports over approximately a six-month period, which began on
August 21, 2017.\7\ Because fees associated with ports are billed on a
monthly basis, the period by which ETP Holders should migrate to phase
II ports will end at the close of trading on February 28, 2018.
Notwithstanding prior notice to ETP Holders to migrate fully to phase
II ports before the end of February 2018, the Exchange has determined
to continue to make phase I ports available through the end of May
2018. Because continued support for phase 1 ports requires the Exchange
to dedicate resources, the Exchange proposes a Decommission Extension
Fee that would be applicable to use of such ports during the extension
period. Specifically, during the extension period, the Exchange will
incur ongoing costs in maintaining phase I ports, including costs to
maintain servers and their physical location, monitoring order
activity, and
[[Page 49427]]
other support, that are separate from the costs in maintaining phase II
ports.
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\7\ See Trader Update at https://www.nyse.com/publicdocs/nyse/markets/nyse/Pillar_Update_NYSE_American_ARCA_NYSE_Tapes_B_and_C.pdf. On June 22
[sic], 2017, the Exchange provided ETP Holders with notice that the
phase II ports would be available on August 21, 2017. See Trader
Update at https://www.nyse.com/publicdocs/nyse/notifications/trader-update/Pillar_Phase_II_Update_Native_gateways_June_16_2017.pdf.
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The phase II ports are part of the Exchange's efforts to upgrade
its connectivity. The purpose of the proposed Decommission Extension
Fee is to provide an incentive for ETP Holders to fully transition to
the phase II ports within the initial six-month transition period so
the Exchange does not have to maintain and support both phase I ports
and phase II ports at the end of the six-month transition period. In
addition, to the extent that ETP Holders do not fully transition to
phase II ports within the initial six-month transition period, the
Exchange believes that the costs associated with continued support of
phase I ports should be paid for by ETP Holders using phase I ports.
Therefore, during the extension period, ETP Holders that continue to
connect to the Exchange through phase I ports would be subject to the
proposed Decommission Extension Fee of $2,450 per port per month for
March 2018, April 2018 and May 2018.\8\ The proposed Decommission
Extension Fee would be charged in addition to the existing port fees
currently set forth in the Fee Schedule. The extension period would
expire at the end of trading on May 31, 2018, on which date the phase I
ports will be fully decommissioned.
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\8\ The concept of a Decommission Extension Fee is not novel.
The Exchange previously adopted a Decommission Extension Fee for
receipt of market data products to encourage subscribers to migrate
to a new distribution channel. See Securities Exchange Act Release
Nos. 79287 (November 10, 2016), 81 FR 81216 (SR-NYSEMKT-2016-100);
and 77389 (March 17, 2016), 81 FR 15363 (March 22, 2016) (SR-
NYSEMKT-2016-37).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Sections [sic] 6(b)(4) of the Act,\10\ 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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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed Decommission Extension Fee
for ETP Holders that choose to continue to connect to the Exchange
through the use of phase I ports after the transition period, which is
scheduled to end at the close of trading on February 28, 2018, is
equitable and not unfairly discriminatory because the proposed fee
would apply equally to all ETP Holders that choose to connect to the
Exchange through the use of such ports during the extension period. As
noted above, the Exchange will incur ongoing costs in maintaining phase
I ports during the extension period, including costs to maintain
servers and their physical location, monitoring order activity, and
other support, with no real benefit. The Exchange believes that it is
reasonable to require ETP Holders to pay the proposed Decommission
Extension Fee as an additional fee during the extension period for
connecting to the Exchange through phase I ports because ETP Holders
were provided with two months' notice that the phase II ports would be
available beginning August 21, 2017, and will be provided with a six-
month period during which to transition to phase II ports.\11\ The
Exchange believes that these notices have provided ETP Holders with
ample time to transition to phase II protocols by February 28, 2017 and
the Decommission Extension Fee is designed to provide an additional
incentive to transition to the phase II protocols by February 28, 2017.
Due to the fixed costs incurred by the Exchange to support phase I
ports during the extension period, the Exchange believes that it is
fair and reasonable to charge increased fees to cover the costs of such
support during the extension period because it is expected that the
number of ETP Holders that do not transition to phase II ports by
February 28, 2018 will be small.
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\11\ See supra note 7.
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B. Self-Regulatory Organization's Statement on Burden on Competition
In accordance with Section 6(b)(8) of the Act,\12\ the Exchange
does not believe that the proposed rule change will impose any burden
on intermarket or intramarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act in that it is
simply designed to set forth the Exchange's adoption of a fee during
the extension period to provide an incentive to ETP Holders to
transition to phase II ports. The Exchange believes that fees for
connectivity are constrained by the robust competition for order flow
among exchanges and non-exchange markets. Further, excessive fees for
connectivity, including port fees, would serve to impair an exchange's
ability to compete for order flow rather than burdening competition.
The Exchange also does not believe the proposed rule change would
impact intramarket competition as it would apply to all ETP Holders
equally that connect to the Exchange through the use of such ports.
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\12\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective upon filing pursuant to
Section 19(b)(3)(A) \13\ of the Act and subparagraph (f)(2) of Rule
19b-4 \14\ thereunder, because it establishes a due, fee, or other
charge imposed by the Exchange.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 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 [email protected]. Please include
File Number SR-NYSEArca-2017-121 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2017-121. This
file number should be included on the subject line if email is used. To
help the Commission process and review your
[[Page 49428]]
comments more efficiently, please use only one method. The Commission
will post all comments on the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent
amendments, all written statements with respect to the proposed rule
change that are filed with the Commission, and all written
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for Web site viewing and printing in the Commission's Public
Reference Room, 100 F Street NE., Washington, DC 20549 on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of the Exchange. All comments received will be posted
without change. Persons submitting comments are cautioned that we do
not redact or edit personal identifying information from comment
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NYSEArca-2017-121 and should be submitted on or before November 15,
2017.
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\16\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-23116 Filed 10-24-17; 8:45 am]
BILLING CODE 8011-01-P
