Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Provide Users With Access to Five Additional Third Party Systems and Connectivity to Two Additional Third Party Data Feeds, 50177-50181 [2017-23476]
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Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Notices
SECURITIES AND EXCHANGE
COMMISSION
of the most significant parts of such
statements.
[Release No. 34–81929; File No. SR–
NYSEARCA–2017–122]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Provide Users With
Access to Five Additional Third Party
Systems and Connectivity to Two
Additional Third Party Data Feeds
October 24, 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
11, 2017, NYSE Arca, Inc. (the
‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to provide
Users with access to five additional
third party systems and connectivity to
two additional third party data feeds. In
addition, the Exchange proposes to
change its NYSE Arca Options Fees and
Charges (the ‘‘Options Fee Schedule’’)
and the NYSE Arca Equities Fees and
Charges (the ‘‘Equities Fee Schedule’’
and, together with the Options Fee
Schedule, the ‘‘Fee Schedules’’) 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,
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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1. Purpose
The Exchange proposes to amend the
co-location 4 services offered by the
Exchange to provide Users 5 with access
to five additional third party systems
and connectivity to two additional third
party data feeds. In addition the
Exchange proposes to make the
corresponding changes to the
Exchange’s Fee Schedules related to
these co-location services.
As set forth in the Fee Schedules, the
Exchange charges fees for connectivity
to the execution systems of third party
markets and other content service
providers (‘‘Third Party Systems’’), and
data feeds from third party markets and
other content service providers (‘‘Third
Party Data Feeds’’).6 The lists of Third
Party Systems and Third Party Data
Feeds are set forth in the Fee Schedules.
The Exchange now proposes to make
the following changes:
• Add five content service providers
to the list of Third Party Systems:
Chicago Mercantile Exchange (CME
Group), Chicago Stock Exchange (CHX),
Investors Exchange (IEX), OneChicago
and TMX Group (together, the
‘‘Additional Third Party Systems’’ or
‘‘ATPS’’); and
• add two feeds to the list of Third
Party Data Feeds: Investors Exchange
and OneChicago (together the
‘‘Additional Third Part Data Feeds’’ or
‘‘ATPD’’).
The Exchange would provide access
to the Additional Third Party Systems
4 The Exchange initially filed rule changes
relating to its co-location services with the
Commission in 2010. See Securities Exchange Act
Release No. 63275 (November 8, 2010), 75 FR 70048
(November 16, 2010) (SR–NYSEArca–2010–100)
(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. 76010 (September 29, 2015), 80 FR
60197 (October 5, 2015) (SR–NYSEArca–2015–82).
As specified in the Fee Schedules, a User that
incurs co-location fees for a particular co-location
service pursuant thereto would not be subject to colocation fees for the same co-location service
charged by the Exchange’s affiliates New York
Stock Exchange LLC (‘‘NYSE LLC’’) and NYSE MKT
LLC (‘‘NYSE MKT and, together with NYSE LLC,
the ‘‘Affiliate SROs’’). See Securities Exchange Act
Release No. 70173 (August 13, 2013), 78 FR 50459
(August 19, 2013) (SR–NYSEArca–2013–80).
6 See Securities Exchange Act Release No. 80310
(March 24, 2017), 82 FR 15763 (March 30, 2017)
(SR–NYSEArca–2016–89).
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(‘‘Access’’) and connectivity to the
Additional Third Party Data 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.
The Exchange does not have visibility
into whether third parties currently
offer, or intend to offer, Users access to
the Additional Third Party Systems and
connectivity to the Additional Third
Party Data Feeds, as such third parties
are not required to make that
information public. However, if one or
more third parties presently offer, or in
the future opt to offer, such Access and
Connectivity to Users, a User may
utilize the Secure Financial Transaction
Infrastructure (‘‘SFTI’’) network, a third
party telecommunication network, third
party wireless network, a cross connect,
or a combination thereof to access such
services and products through a
connection to an access center outside
the data center (which could be a SFTI
access center, a third-party access
center, or both), another User, or a third
party vendor.
The Exchange will announce the
dates that each Product is available
through customer notices disseminated
to all Users simultaneously.
Connectivity to Additional Third Party
Systems
The Exchange proposes to revise the
Fee Schedules to provide that Users
may obtain connectivity to the five
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.7
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.8 The
7 See Securities Exchange Act Release No. 74219
(February 6, 2015), 80 FR 7899 (February 12, 2015)
(SR–NYSEArca–2015–03) (notice of filing and
immediate effectiveness of proposed rule change to
include IP network connections).
8 Information flows over existing network
connections in two formats: ‘‘unicast’’ format,
which is a format that allows one-to-one
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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.
As with the existing connections to
Third Party Systems, 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
Fee Schedules to add the Additional
Third Party Systems to its existing list
of Third Party Systems. The additional
items would be as follows:
Third Party Systems
Chicago Mercantile Exchange (CME
Group)
Chicago Stock Exchange (CHX)
Investors Exchange (IEX)
OneChicago
TMX Group
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.
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Connectivity to Additional Third Party
Data Feeds
The Exchange proposes to revise the
Fee Schedules to provide that Users
may obtain connectivity to each of the
two 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
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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Additional Third Party Data Feeds over
the IP network.9
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
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 Fee Schedules. The additional items
would be as follows:
Third party data feed
Investors Exchange (IEX) ...............
OneChicago ....................................
Monthly
recurring
connectivity
fee per third
party data
feed
$1,000
1,000
9 See supra note 7, at 7899 (‘‘The IP network also
provides Users with access to away market data
products’’).
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General
As is the case with all Exchange colocation arrangements, (i) neither a User
nor any of the User’s customers would
be permitted to submit orders directly to
the Exchange unless such User or
customer is a member organization, a
Sponsored Participant or an agent
thereof (e.g., a service bureau providing
order entry services); (ii) use of the colocation services proposed herein would
be completely voluntary and available
to all Users on a non-discriminatory
basis; 10 and (iii) a User would only
incur one charge for the particular 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.11
The proposed change is not otherwise
intended to address any other issues
relating to co-location services and/or
related fees, and the Exchange is not
aware of any problems that Users would
have in complying with the proposed
change.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,12 in general, and
furthers the objectives of Sections
6(b)(5) of the Act,13 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.
10 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
reduced latencies in sending orders to, and
receiving market data from, the Exchange.
11 See SR–NYSEArca–2013–80, supra note 5 at
50459. The Affiliate SROs have also submitted
substantially the same proposed rule change to
propose the changes described herein. See SR–
NYSE–2017–52 and SR–NYSEAMER–2017–24.
12 15 U.S.C. 78f(b).
13 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. The Exchange
does not have visibility into whether
third parties currently offer, or intend to
offer, Users access to the Additional
Third Party Systems and connectivity to
the Additional Third Party Data Feeds.
However, if one or more third parties
presently offer, or in the future opt to
offer, such Access and Connectivity to
Users, a User may utilize the SFTI
network, a third party
telecommunication network, third party
wireless network, a cross connect, or a
combination thereof to access such
services and products through a
connection to an access center outside
the data center (which could be a SFTI
access center, a third-party access
center, or both), another User, or a third
party vendor.
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 access to
the Additional Third Party Systems and
connectivity to the Additional Third
Party 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 also believes that the
proposed rule change is consistent with
Section 6(b)(4) of the Act,14 in
particular, because it provides for the
equitable allocation of reasonable dues,
fees, and other charges among its
members, issuers and other persons
14 15
U.S.C. 78f(b)(4).
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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
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
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50179
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 Access and Connectivity would
be reasonable because they would allow
the Exchange to defray or cover the
costs associated with offering Users
access to Additional Third Party
Systems and connectivity to Additional
Third Party Data Feeds while providing
Users the convenience of receiving such
Access and Connectivity within colocation, helping them tailor their data
center operations to the requirements of
their business operations.
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,15 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 all of
the proposed services are completely
voluntary.
The Exchange believes that providing
Users with additional options for
connectivity and access to new services
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
15 15
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U.S.C. 78f(b)(8).
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would satisfy User demand for access
and connectivity options. The Exchange
would provide Access and Connectivity
as conveniences equally to all Users.
The Exchange does not have visibility
into whether third parties currently
offer, or intend to offer, Users access to
the Additional Third Party Systems and
connectivity to the Additional Third
Party Data Feeds, as such third parties
are not required to make that
information public. However, if one or
more third parties presently offer, or in
the future opt to offer, such Access and
Connectivity to Users, a User may
utilize the SFTI network, a third party
telecommunication network, third party
wireless network, a cross connect, or a
combination thereof to access such
services and products through a
connection to an access center outside
the data center (which could be a SFTI
access center, a third-party access
center, or both), another User, or a third
party vendor. 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.
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
also the liquidity of the formerly colocated trading firms, which could have
additional follow-on effects on the
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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
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 16 and Rule
19b–4(f)(6) thereunder.17 Because the
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
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.18
A proposed rule change filed under
Rule 19b–4(f)(6) 19 normally does not
become operative for 30 days after the
date of the filing. However, Rule 19b–
4(f)(6)(iii) 20 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay so that the proposal may become
operative immediately upon filing. The
Exchange represents that the proposed
rule changes present no new or novel
issues. According to the Exchange,
waiver of the operative delay would
allow Users to access the Additional
Third Party Systems and the Additional
Third Party Data Feeds without delay,
which would assist Users in tailoring
their data center operations to the
requirements of their business
operations. The Exchange also
16 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
18 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.
19 17 CFR 240.19b–4(f)(6).
20 17 CFR 240.19b–4(f)(6)(iii).
17 17
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represents that the proposed changes to
the Price List would provide Users with
more complete information regarding
their Access and Connectivity options.
The Commission believes that waiving
the 30-day operative delay is consistent
with the protection of investors and the
public interest. Accordingly, the
Commission waives the 30-day
operative delay and designates the
proposed rule change operative upon
filing.21
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) 22 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–2017–122 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
Number SR–NYSEARCA–2017–122.
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
21 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).
22 15 U.S.C. 78s(b)(2)(B).
E:\FR\FM\30OCN1.SGM
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Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Notices
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–2017–122 and
should be submitted on or before
November 20, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–23476 Filed 10–27–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81932; File No. SR–
PEARL–2017–35]
Self-Regulatory Organizations; MIAX
PEARL, LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend the MIAX
PEARL Fee Schedule
sradovich on DSK3GMQ082PROD with NOTICES
October 24, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b 4 thereunder,2
notice is hereby given that on October
11, 2017, MIAX PEARL, LLC (‘‘MIAX
PEARL’’ or ‘‘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 Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
23 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing a proposal to
amend the MIAX PEARL Fee Schedule
(the ‘‘Fee Schedule’’) to adopt a fee for
the sale of certain historical market data.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.miaxoptions.com/rulefilings/pearl at MIAX PEARL’s principal
office, and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend its
Fee Schedule to adopt a fee for the sale
of certain historical market data.
The historical market data that the
Exchange proposes to sell provides
information about the past activity of all
option products traded on the Exchange
for each trading session conducted
during a particular calendar month. The
data is intended to enhance the user’s
ability to analyze option trade and
volume data, evaluate historical trends
in the trading activity of a particular
option product, and enable the testing of
trading models and analytical strategies.
Specifically, the historical market data
that the Exchange proposes to sell
includes all data that is captured and
disseminated on the following
proprietary MIAX PEARL data feeds, on
a T+1 basis: MIAX PEARL Top of
Market (‘‘ToM’’); and MIAX PEARL
Liquidity Feed (‘‘PLF’’) (‘‘Historical
Market Data’’). All such proprietary
MIAX PEARL data feeds that, on a T+1
basis, comprise the Historical Market
Data are described on the Exchange’s
Fee Schedule.3
ToM provides real-time, ultra-low
latency updates of the MIAX PEARL
1 15
VerDate Sep<11>2014
17:59 Oct 27, 2017
3 See
Jkt 244001
PO 00000
MIAX PEARL Fee Schedule, Section 6.
Frm 00066
Fmt 4703
Sfmt 4703
50181
Best Bid or Offer, or PBBO,4 the last sale
with trade price, size and condition, last
sale cancellations, listed series updates,
system state, and underlying trading
state.5 PLF provides real-time, ultra-low
latency updates of new simple orders
added to the MIAX PEARL order book,
updates to simple orders resting on the
MIAX PEARL order book, listed series
updates, System 6 state, and underlying
trading state.7
MIAX PEARL will only assess the fee
for Historical Market Data on a user
(whether Member or Non-Member) that
specifically requests such Historical
Market Data. Historical Market Data will
be uploaded onto an Exchange-provided
device. The amount of the fee is $500,
and it will be assessed on a per device
basis. Each device shall have a
maximum storage capacity of 8
Terabytes and will be configured to
include data for both MIAX Options and
MIAX PEARL. Users may request up to
six months of Historical Market Data per
device, subject to the device’s storage
capacity. Historical Market Data is
available from August 1, 2017 to the
present (always on a T+1 basis),
however only the most recent six
months of Historical Market Data shall
be available for purchase from the
request date. Historical Market Data
usage is restricted to internal use only,
and thus may not be distributed to any
third-party.
The Exchange notes that this filing is
substantially similar to a companion
MIAX Options filing 8 establishing a fee
for historical market data on its
exchange.
2. Statutory Basis
The Exchange believes that its
proposal to amend its Fee Schedule is
consistent with Section 6(b) of the Act 9
in general, and furthers the objectives of
Section 6(b)(4) of the Act,10 in
particular, in that it is an equitable
allocation of reasonable dues, fees and
other charges among Exchange members
and issuers and other persons using its
facilities. The proposal provides for the
equitable allocation of reasonable fees
and other charges among Exchange
4 The term ‘‘PBBO’’ means the best bid or offer
on the PEARL Exchange. See Exchange Rule 100.
See also Exchange Rule 506(d).
5 See Securities Exchange Act Release No. 79913
(February 1, 2017), 82 FR 9617 (February 7, 2017)
(SR–PEARL–2017–01) (Establishing MIAX PEARL
ToM and PLF Data Products).
6 The term ‘‘System’’ means the automated
trading system used by the Exchange for the trading
of securities. See Exchange Rule 100.
7 See supra note 5.
8 See SR–MIAX–2017–42 (filed on October 11,
2017).
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(4).
E:\FR\FM\30OCN1.SGM
30OCN1
]]>Agencies
[Federal Register Volume 82, Number 208 (Monday, October 30, 2017)]
[Notices]
[Pages 50177-50181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-23476]
[[Page 50177]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81929; File No. SR-NYSEARCA-2017-122]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Provide Users
With Access to Five Additional Third Party Systems and Connectivity to
Two Additional Third Party Data Feeds
October 24, 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 11, 2017, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\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 provide Users with access to five
additional third party systems and connectivity to two additional third
party data feeds. In addition, the Exchange proposes to change its NYSE
Arca Options Fees and Charges (the ``Options Fee Schedule'') and the
NYSE Arca Equities Fees and Charges (the ``Equities Fee Schedule'' and,
together with the Options Fee Schedule, the ``Fee Schedules'') 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the co-location \4\ services offered
by the Exchange to provide Users \5\ with access to five additional
third party systems and connectivity to two additional third party data
feeds. In addition the Exchange proposes to make the corresponding
changes to the Exchange's Fee Schedules 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. 63275 (November 8, 2010), 75 FR 70048
(November 16, 2010) (SR-NYSEArca-2010-100) (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. 76010 (September 29, 2015), 80 FR 60197
(October 5, 2015) (SR-NYSEArca-2015-82). As specified in the Fee
Schedules, a User that incurs co-location fees for a particular co-
location service pursuant thereto would not be subject to co-
location fees for the same co-location service charged by the
Exchange's affiliates New York Stock Exchange LLC (``NYSE LLC'') and
NYSE MKT LLC (``NYSE MKT and, together with NYSE LLC, the
``Affiliate SROs''). See Securities Exchange Act Release No. 70173
(August 13, 2013), 78 FR 50459 (August 19, 2013) (SR-NYSEArca-2013-
80).
---------------------------------------------------------------------------
As set forth in the Fee Schedules, the Exchange charges fees for
connectivity to the execution systems of third party markets and other
content service providers (``Third Party Systems''), and data feeds
from third party markets and other content service providers (``Third
Party Data Feeds'').\6\ The lists of Third Party Systems and Third
Party Data Feeds are set forth in the Fee Schedules.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 80310 (March 24,
2017), 82 FR 15763 (March 30, 2017) (SR-NYSEArca-2016-89).
---------------------------------------------------------------------------
The Exchange now proposes to make the following changes:
Add five content service providers to the list of Third
Party Systems: Chicago Mercantile Exchange (CME Group), Chicago Stock
Exchange (CHX), Investors Exchange (IEX), OneChicago and TMX Group
(together, the ``Additional Third Party Systems'' or ``ATPS''); and
add two feeds to the list of Third Party Data Feeds:
Investors Exchange and OneChicago (together the ``Additional Third Part
Data Feeds'' or ``ATPD'').
The Exchange would provide access to the Additional Third Party
Systems (``Access'') and connectivity to the Additional Third Party
Data 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.
The Exchange does not have visibility into whether third parties
currently offer, or intend to offer, Users access to the Additional
Third Party Systems and connectivity to the Additional Third Party Data
Feeds, as such third parties are not required to make that information
public. However, if one or more third parties presently offer, or in
the future opt to offer, such Access and Connectivity to Users, a User
may utilize the Secure Financial Transaction Infrastructure (``SFTI'')
network, a third party telecommunication network, third party wireless
network, a cross connect, or a combination thereof to access such
services and products through a connection to an access center outside
the data center (which could be a SFTI access center, a third-party
access center, or both), another User, or a third party vendor.
The Exchange will announce the dates that each Product is available
through customer notices disseminated to all Users simultaneously.
Connectivity to Additional Third Party Systems
The Exchange proposes to revise the Fee Schedules to provide that
Users may obtain connectivity to the five 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.\7\
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 74219 (February 6,
2015), 80 FR 7899 (February 12, 2015) (SR-NYSEArca-2015-03) (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.\8\
The
[[Page 50178]]
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.
---------------------------------------------------------------------------
\8\ Information flows over existing network connections in two
formats: ``unicast'' format, which is a format that allows one-to-
one communication, similar to a phone line, in which information is
sent to and from the Exchange; and ``multicast'' format, which is a
format in which information is sent one-way from the Exchange to
multiple recipients at once, like a radio broadcast.
---------------------------------------------------------------------------
The Exchange 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.
As with the existing connections to Third Party Systems, 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 Fee Schedules to add the
Additional Third Party Systems to its existing list of Third Party
Systems. The additional items would be as follows:
Third Party Systems
Chicago Mercantile Exchange (CME Group)
Chicago Stock Exchange (CHX)
Investors Exchange (IEX)
OneChicago
TMX Group
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 Fee Schedules to provide that
Users may obtain connectivity to each of the two 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.\9\
---------------------------------------------------------------------------
\9\ See supra note 7, at 7899 (``The IP network also provides
Users with access to away market data products'').
---------------------------------------------------------------------------
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
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 Fee Schedules.
The additional items would be as follows:
------------------------------------------------------------------------
Monthly
recurring
connectivity
Third party data feed fee per third
party data
feed
------------------------------------------------------------------------
Investors Exchange (IEX)................................ $1,000
OneChicago.............................................. 1,000
------------------------------------------------------------------------
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; \10\ and
(iii) a User would only incur one charge for the particular co-location
service described herein, regardless of whether the User connects only
to the Exchange or to the Exchange and one or both the Affiliate
SROs.\11\
---------------------------------------------------------------------------
\10\ As is currently the case, Users that receive co-location
services from the Exchange will not receive any means of access to
the Exchange's trading and execution systems that is separate from,
or superior to, that of other Users. In this regard, all orders sent
to the Exchange enter the Exchange's trading and execution systems
through the same order gateway, regardless of whether the sender is
co-located in the data center or not. In addition, co-located Users
do not receive any market data or data service product that is not
available to all Users, although Users that receive co-location
services normally would expect reduced latencies in sending orders
to, and receiving market data from, the Exchange.
\11\ See SR-NYSEArca-2013-80, supra note 5 at 50459. The
Affiliate SROs have also submitted substantially the same proposed
rule change to propose the changes described herein. See SR-NYSE-
2017-52 and SR-NYSEAMER-2017-24.
---------------------------------------------------------------------------
The proposed change is not otherwise intended to address any other
issues relating to co-location services and/or related fees, and the
Exchange is not aware of any problems that Users would have in
complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\12\ in general, and furthers the
objectives of Sections 6(b)(5) of the Act,\13\ 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.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
[[Page 50179]]
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. The Exchange does not have visibility into
whether third parties currently offer, or intend to offer, Users access
to the Additional Third Party Systems and connectivity to the
Additional Third Party Data Feeds. However, if one or more third
parties presently offer, or in the future opt to offer, such Access and
Connectivity to Users, a User may utilize the SFTI network, a third
party telecommunication network, third party wireless network, a cross
connect, or a combination thereof to access such services and products
through a connection to an access center outside the data center (which
could be a SFTI access center, a third-party access center, or both),
another User, or a third party vendor.
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 access to the Additional Third
Party Systems and connectivity to the Additional Third Party 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 also believes that the proposed rule change is
consistent with Section 6(b)(4) of the Act,\14\ 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.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Exchange believes that the proposed fee changes are consistent
with Section 6(b)(4) of the Act for multiple reasons. The Exchange
operates in a highly competitive market in which exchanges offer co-
location services as a means to facilitate the trading and other market
activities of those market participants who believe that co-location
enhances the efficiency of their operations. Accordingly, fees charged
for co-location services are constrained by the active competition for
the order flow of, and other business from, such market participants.
If a particular exchange charges excessive fees for co-location
services, affected market participants will opt to terminate their co-
location arrangements with that exchange, and adopt a possible range of
alternative strategies, including placing their servers in a physically
proximate location outside the exchange's data center (which could be a
competing exchange), or pursuing strategies less dependent upon the
lower exchange-to-participant latency associated with co-location.
Accordingly, the exchange charging excessive fees would stand to lose
not only co-location revenues but also the liquidity of the formerly
co-located trading firms, which could have additional follow-on effects
on the market share and revenue of the affected exchange.
The Exchange believes that the additional services and fees
proposed herein would be equitably allocated and not unfairly
discriminatory because, in addition to the services being completely
voluntary, they would be available to all Users on an equal basis
(i.e., the same products and services would be available to all Users).
All Users that voluntarily selected to receive Access or Connectivity
would be charged the same amount for the same services. Users that
opted to use Access or Connectivity would not receive access or
connectivity that is not available to all Users, as all market
participants that contracted with the relevant market or content
provider would receive access or connectivity.
The Exchange believes that the proposed charges would be
reasonable, equitably allocated and not unfairly discriminatory because
the Exchange would offer the Access and Connectivity as conveniences to
Users, but in order to do so must provide, maintain and operate the
data center facility hardware and technology infrastructure. The
Exchange must handle the installation, administration, monitoring,
support and maintenance of such services, including by responding to
any production issues. Since the inception of co-location, the Exchange
has made numerous improvements to the network hardware and technology
infrastructure and has established additional administrative controls.
The Exchange has expanded the network infrastructure to keep pace with
the increased number of services available to Users, including
resilient and redundant feeds. In addition, in order to provide Access
and Connectivity, the Exchange would maintain multiple connections to
each ATPD and ATPS, allowing the Exchange to provide resilient and
redundant connections; adapt to any changes made by the relevant third
party; and cover any applicable fees charged by the relevant third
party, such as port fees. In addition, Users would not be required to
use any of their bandwidth for Access and Connectivity unless they wish
to do so.
The Exchange believes the proposed fees for Access and Connectivity
would be reasonable because they would allow the Exchange to defray or
cover the costs associated with offering Users access to Additional
Third Party Systems and connectivity to Additional Third Party Data
Feeds while providing Users the convenience of receiving such Access
and Connectivity within co-location, helping them tailor their data
center operations to the requirements of their business operations.
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,\15\ 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 all of the proposed services are completely
voluntary.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
The Exchange believes that providing Users with additional options
for connectivity and access to new services 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
[[Page 50180]]
would satisfy User demand for access and connectivity options. The
Exchange would provide Access and Connectivity as conveniences equally
to all Users. The Exchange does not have visibility into whether third
parties currently offer, or intend to offer, Users access to the
Additional Third Party Systems and connectivity to the Additional Third
Party Data Feeds, as such third parties are not required to make that
information public. However, if one or more third parties presently
offer, or in the future opt to offer, such Access and Connectivity to
Users, a User may utilize the SFTI network, a third party
telecommunication network, third party wireless network, a cross
connect, or a combination thereof to access such services and products
through a connection to an access center outside the data center (which
could be a SFTI access center, a third-party access center, or both),
another User, or a third party vendor. 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.
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \16\ and Rule 19b-4(f)(6) thereunder.\17\
Because the 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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\18\
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\16\ 15 U.S.C. 78s(b)(3)(A)(iii).
\17\ 17 CFR 240.19b-4(f)(6).
\18\ 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.
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A proposed rule change filed under Rule 19b-4(f)(6) \19\ normally
does not become operative for 30 days after the date of the filing.
However, Rule 19b-4(f)(6)(iii) \20\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay so that the proposal may
become operative immediately upon filing. The Exchange represents that
the proposed rule changes present no new or novel issues. According to
the Exchange, waiver of the operative delay would allow Users to access
the Additional Third Party Systems and the Additional Third Party Data
Feeds without delay, which would assist Users in tailoring their data
center operations to the requirements of their business operations. The
Exchange also represents that the proposed changes to the Price List
would provide Users with more complete information regarding their
Access and Connectivity options. The Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest. Accordingly, the Commission waives
the 30-day operative delay and designates the proposed rule change
operative upon filing.\21\
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\19\ 17 CFR 240.19b-4(f)(6).
\20\ 17 CFR 240.19b-4(f)(6)(iii).
\21\ 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) \22\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\22\ 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-2017-122 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 Number SR-NYSEARCA-2017-122. 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
[[Page 50181]]
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-2017-122 and should be submitted on or before November 20,
2017.
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\23\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-23476 Filed 10-27-17; 8:45 am]
BILLING CODE 8011-01-P
