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]

Download as PDF 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. sradovich on DSK3GMQ082PROD with NOTICES 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 VerDate Sep<11>2014 17:59 Oct 27, 2017 Jkt 244001 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). PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 50177 (‘‘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 E:\FR\FM\30OCN1.SGM Continued 30OCN1 50178 Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Notices 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. sradovich on DSK3GMQ082PROD with NOTICES 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. VerDate Sep<11>2014 17:59 Oct 27, 2017 Jkt 244001 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’’). PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 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). E:\FR\FM\30OCN1.SGM 30OCN1 sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Notices 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). VerDate Sep<11>2014 17:59 Oct 27, 2017 Jkt 244001 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 PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 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 E:\FR\FM\30OCN1.SGM U.S.C. 78f(b)(8). 30OCN1 sradovich on DSK3GMQ082PROD with NOTICES 50180 Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Notices 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 VerDate Sep<11>2014 17:59 Oct 27, 2017 Jkt 244001 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 PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 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 (http://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 (http:// 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 30OCN1 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 http://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

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[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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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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, 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.
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    \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).
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    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.
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    \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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    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\
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    \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).
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    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.
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    \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.
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    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\
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    \9\ See supra note 7, at 7899 (``The IP network also provides 
Users with access to away market data products'').
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    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
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Investors Exchange (IEX)................................          $1,000
OneChicago..............................................           1,000
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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\
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    \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.
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    The proposed change is not otherwise intended to address any other 
issues relating to co-location services and/or related fees, and the 
Exchange is not aware of any problems that Users would have in 
complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\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.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).

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[[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.
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    \14\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed fee changes are consistent 
with Section 6(b)(4) of the Act for multiple reasons. The Exchange 
operates in a highly competitive market in which exchanges offer co-
location services as a means to facilitate the trading and other market 
activities of those market participants who believe that co-location 
enhances the efficiency of their operations. Accordingly, fees charged 
for co-location services are constrained by the active competition for 
the order flow of, and other business from, such market participants. 
If a particular exchange charges excessive fees for co-location 
services, affected market participants will opt to terminate their co-
location arrangements with that exchange, and adopt a possible range of 
alternative strategies, including placing their servers in a physically 
proximate location outside the exchange's data center (which could be a 
competing exchange), or pursuing strategies less dependent upon the 
lower exchange-to-participant latency associated with co-location. 
Accordingly, the exchange charging excessive fees would stand to lose 
not only co-location revenues but also the liquidity of the formerly 
co-located trading firms, which could have additional follow-on effects 
on the market share and revenue of the affected exchange.
    The Exchange believes that the additional services and fees 
proposed herein would be equitably allocated and not unfairly 
discriminatory because, in addition to the services being completely 
voluntary, they would be available to all Users on an equal basis 
(i.e., the same products and services would be available to all Users). 
All Users that voluntarily selected to receive Access or Connectivity 
would be charged the same amount for the same services. Users that 
opted to use Access or Connectivity would not receive access or 
connectivity that is not available to all Users, as all market 
participants that contracted with the relevant market or content 
provider would receive access or connectivity.
    The Exchange believes that the proposed charges would be 
reasonable, equitably allocated and not unfairly discriminatory because 
the Exchange would offer the Access and Connectivity as conveniences to 
Users, but in order to do so must provide, maintain and operate the 
data center facility hardware and technology infrastructure. The 
Exchange must handle the installation, administration, monitoring, 
support and maintenance of such services, including by responding to 
any production issues. Since the inception of co-location, the Exchange 
has made numerous improvements to the network hardware and technology 
infrastructure and has established additional administrative controls. 
The Exchange has expanded the network infrastructure to keep pace with 
the increased number of services available to Users, including 
resilient and redundant feeds. In addition, in order to provide Access 
and Connectivity, the Exchange would maintain multiple connections to 
each ATPD and ATPS, allowing the Exchange to provide resilient and 
redundant connections; adapt to any changes made by the relevant third 
party; and cover any applicable fees charged by the relevant third 
party, such as port fees. In addition, Users would not be required to 
use any of their bandwidth for Access and Connectivity unless they wish 
to do so.
    The Exchange believes the proposed fees for 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.
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    \15\ 15 U.S.C. 78f(b)(8).
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    The Exchange believes that providing Users with additional options 
for connectivity and access to new services 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 (http://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 (http://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