Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Provide Users With Access to Two Additional Third Party Systems and Connectivity to One Additional Third Party Data Feed, 5488-5493 [2018-02401]
Download as PDF
<![CDATA[
5488
Federal Register / Vol. 83, No. 26 / Wednesday, February 7, 2018 / Notices
proposed Rule G–40(a)(i) defines an
advertisement, in part, as any ‘‘material
. . . published or used in any electronic
or other public media . . . .’’ As such,
proposed Rule G–40 would apply to any
material posted on a municipal
advisor’s website or more generally, on
any website, if that material comes
within the definition of an
advertisement as set forth in proposed
Rule G–40(a)(i).
In addition, NAMA and PFM
requested guidance on the use of social
media.124 The MSRB appreciates
commenters’ requests, and currently is
studying whether to provide such
guidance. As part of that consideration,
the MSRB is reviewing the guidance
concerning the use of social media
provided by other financial
regulators.125
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period of
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the self-regulatory organization
consents, the Commission will:
(A) By order approve or disapprove
such proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
sradovich on DSK3GMQ082PROD with NOTICES
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.
124 NAMA letter at 3; PFM letter at 5; but see
Fidelity letter at 4 (‘‘MSRB Rule G–21 applies to
advertisements, regardless of whether electronic or
other public media, including social media, is used
with those advertisements’’) and SIFMA letter at 6
(‘‘[t]he amendments to Rule G–21 and draft Rule G–
40(c) apply to advertisements, regardless of whether
electronic or other public media is used with those
advertisements. As such, we feel no additional
guidance by the MSRB is needed regarding the use
of social media by a dealer or municipal advisor at
this time’’).
125 See Fidelity letter at 5 (‘‘[o]n the topic of social
media, FINRA has provided guidance on the
application of its rules governing communications
with the public to social media sites . . . . For
example, we understand that FINRA is currently
working on a new social media Q&A . . . .);
SIFMA letter at 6 (‘‘[w]e believe that FINRA is
currently working on guidance regarding social
media. In line with our earlier comments, we feel
the MSRB should ascribe to this guidance or clearly
articulate why it is not appropriate in this market’’).
The MSRB believes that SIFMA’s comments relate
to FINRA Regulatory Notice 17–18, Guidance on
Social Networking websites and Business
Communications (Apr. 2017).
VerDate Sep<11>2014
18:17 Feb 06, 2018
Jkt 244001
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–
MSRB–2018–01 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549.
All submissions should refer to File
Number SR–MSRB–2018–01. 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 website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website 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 MSRB. 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–MSRB–2018–01 and should
be submitted on or before February 28,
2018.
For the Commission, pursuant to delegated
authority.126
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–02398 Filed 2–6–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82620; File No. SR–NYSE–
2018–05]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Provide
Users With Access to Two Additional
Third Party Systems and Connectivity
to One Additional Third Party Data
Feed
February 1, 2018.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on January
19, 2018, New York Stock Exchange
LLC (‘‘NYSE’’ or ‘‘Exchange’’) 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.
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 two additional
third party systems and connectivity to
one additional third party data feed. In
addition, the Exchange proposes to
change its Price List related to these colocation services, and to update its Price
List to eliminate obsolete text. The
proposed rule change is available on the
Exchange’s website 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.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
126 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00089
Fmt 4703
Sfmt 4703
E:\FR\FM\07FEN1.SGM
07FEN1
Federal Register / Vol. 83, No. 26 / Wednesday, February 7, 2018 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
sradovich on DSK3GMQ082PROD with NOTICES
1. Purpose
The Exchange proposes to amend the
co-location 4 services offered by the
Exchange to provide Users 5 with access
to two additional third party systems
and connectivity to one additional third
party data feed. In addition the
Exchange proposes to make the
corresponding changes to the
Exchange’s Price List related to these colocation services, and to update its Price
List to eliminate obsolete text.
As set forth in the Price List, the
Exchange charges fees for connectivity
to the execution systems of third party
markets and other content service
providers (‘‘Third Party Systems’’), 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 Price List.
The Exchange now proposes to make
the following changes:
• Add two content service providers
to the list of Third Party Systems: Miami
International Securities Exchange and
MIAX PEARL (together, the ‘‘Additional
Third Party Systems’’); and
• add one feed to the list of Third
Party Data Feeds: Miami International
Securities Exchange/MIAX PEARL (the
‘‘Additional Third Party Data Feed’’).
The Exchange would provide access
to the Additional Third Party Systems
(‘‘Access’’) and connectivity to the
Additional Third Party Data Feed
(‘‘Connectivity’’) as conveniences to
Users. Use of Access or Connectivity
would be completely voluntary. The
4 The Exchange initially filed rule changes
relating to its co-location services with the
Commission in 2010. See Securities Exchange Act
Release No. 62960 (September 21, 2010), 75 FR
59310 (September 27, 2010) (SR–NYSE–2010–56)
(the ‘‘Original Co-location Filing’’). The Exchange
operates a data center in Mahwah, New Jersey (the
‘‘data center’’) from which it provides co-location
services to Users.
5 For purposes of the Exchange’s co-location
services, a ‘‘User’’ means any market participant
that requests to receive co-location services directly
from the Exchange. See Securities Exchange Act
Release No. 76008 (September 29, 2015), 80 FR
60190 (October 5, 2015) (SR–NYSE–2015–40). As
specified in the Price List, a User that incurs colocation fees for a particular co-location service
pursuant thereto would not be subject to co-location
fees for the same co-location service charged by the
Exchange’s affiliates NYSE American LLC (‘‘NYSE
American’’) and NYSE Arca, Inc. (‘‘NYSE Arca’’
and, together with NYSE American, the ‘‘Affiliate
SROs’’). See Securities Exchange Act Release No.
70206 (August 15, 2013), 78 FR 51765 (August 21,
2013) (SR–NYSE–2013–59).
6 See Securities Exchange Act Release No. 80311
(March 24, 2017), 82 FR 15741 (March 30, 2017)
(SR–NYSE–2016–45).
VerDate Sep<11>2014
18:17 Feb 06, 2018
Jkt 244001
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 Feed, 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 proposed rule change would
become operative when the Additional
Third Party Systems and the Additional
Third Party Data Feed becomes
available, which is expected to be no
later than March 31, 2018. 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
Price List to provide that Users may
obtain connectivity to the two
Additional Third Party Systems for a
fee. As with the current Third Party
Systems, Users would connect to the
Additional Third Party Systems over the
internet protocol (‘‘IP’’) network, a local
area network available in the data
center.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. 74222
(February 6, 2015), 80 FR 7888 (February 12, 2015)
(SR–NYSE–2015–05) (notice of filing and
immediate effectiveness of proposed rule change to
include IP network connections).
8 Information flows over existing network
connections in two formats: ‘‘unicast’’ format,
which is a format that allows one-to-one
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
5489
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
Price List 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
Miami International Securities Exchange.
MIAX PEARL.
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 Feed
The Exchange proposes to revise the
Price List to provide that Users may
obtain connectivity to the Additional
Third Party Data Feed for a fee. The
Exchange would receive the Additional
Third Party Data Feed 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 Feed over the IP network.9
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.
9 See supra note 7, at 7889 (‘‘The IP network also
provides Users with access to away market data
products’’).
E:\FR\FM\07FEN1.SGM
07FEN1
5490
Federal Register / Vol. 83, No. 26 / Wednesday, February 7, 2018 / Notices
In order to connect to the 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 Feed for
which it entered into contracts.
The Exchange has no affiliation with
the seller of the Additional Third Party
Data Feed. It would have no right to use
the Additional Third Party Data Feed
other than as a redistributor of the data.
The Additional Third Party Data Feed
would not provide access or order entry
to the Exchange’s execution system. The
Additional Third Party Data Feed 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 Feed 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 the 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 the Additional
Third Party Data Feed.
The Exchange proposes to add the
connectivity fees for the Additional
Third Party Data to its existing list in
the Price List. The additional item
would be as follows:
sradovich on DSK3GMQ082PROD with NOTICES
Third Party Data Feed
Miami International Securities Exchange/MIAX
PEARL ..............................
Monthly
recurring
connectivity
fee per Third
Party Data
Feed
$2,000
Elimination of Obsolete Rule Language
The Exchange proposes to delete
obsolete text from both the lists of Third
Party Data Feeds and Third Party
Systems in the Price List. More
VerDate Sep<11>2014
18:17 Feb 06, 2018
Jkt 244001
specifically, the Exchange proposes to
make the following changes: 10
• From both lists, remove the asterisk
and note stating that the asterisked
service is expected to be available no
later than September 30, 2017, as the
relevant services are currently available;
and
• from the list of Third Party Data
Feeds, remove the asterisks and note
stating that the Euronext Optiq
Compressed Derivatives is expected to
be offered in place of Euronext no later
than September 30, 2017, as such
change has occurred, and remove
Euronext as a Third Party Data Feed.
This proposed change would have no
impact on pricing.
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; 11 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.12
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 fee change is consistent with
Section 6(b) of the Act,13 in general, and
10 See Securities Exchange Act Release No. 81014
(June 23, 2017), 82 FR 29615 (June 29, 2017) (SR–
NYSE–2017–25).
11 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.
12 See SR–NYSE–2013–59, supra note 5 at 51766.
The Affiliate SROs have also submitted
substantially the same proposed rule change to
propose the changes described herein. See SR–
NYSEAMER–2018–02 and SR–NYSEArca–2018–06.
13 15 U.S.C. 78f(b).
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
furthers the objectives of Sections
6(b)(5) of the Act,14 in particular,
because it is designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating, clearing, settling,
processing information with respect to,
and facilitating transactions in
securities, to remove impediments to,
and perfect the mechanisms of, a free
and open market and a national market
system and, in general, to protect
investors and the public interest and
because it is not designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange believes that the
proposed changes would remove
impediments to, and perfect the
mechanisms of, a free and open market
and a national market system and, in
general, protect investors and the public
interest because, by offering additional
services, the Exchange would give each
User additional options for addressing
its access and connectivity needs,
responding to User demand for access
and connectivity options. Providing
additional services would help each
User tailor its data center operations to
the requirements of its business
operations by allowing it to select the
form and latency of access and
connectivity that best suits its needs.
The Exchange would provide Access
and Connectivity as conveniences to
Users. Use of Access or Connectivity
would be completely voluntary. The
Exchange is not aware of any
impediment to third parties offering
Access or Connectivity. 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 Feed.
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
14 15
E:\FR\FM\07FEN1.SGM
U.S.C. 78f(b)(5).
07FEN1
sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 83, No. 26 / Wednesday, February 7, 2018 / Notices
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 Feed to Users when
available, 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 fee change is consistent with
Section 6(b)(4) of the Act,15 in
particular, because it provides for the
equitable allocation of reasonable dues,
fees, and other charges among its
members, issuers and other persons
using its facilities and does not unfairly
discriminate between customers,
issuers, brokers or dealers.
The Exchange believes that the
proposed fee changes are consistent
with Section 6(b)(4) of the Act for
multiple reasons. The Exchange
operates in a highly competitive market
in which exchanges offer co-location
services as a means to facilitate the
trading and other market activities of
those market participants who believe
that co-location enhances the efficiency
of their operations. Accordingly, fees
charged for co-location services are
constrained by the active competition
for the order flow of, and other business
from, such market participants. If a
particular exchange charges excessive
fees for co-location services, affected
market participants will opt to terminate
their co-location arrangements with that
exchange, and adopt a possible range of
alternative strategies, including placing
their servers in a physically proximate
location outside the exchange’s data
center (which could be a competing
exchange), or pursuing strategies less
dependent upon the lower exchange-toparticipant latency associated with colocation. Accordingly, the exchange
charging excessive fees would stand to
lose not only co-location revenues but
also the liquidity of the formerly colocated trading firms, which could have
additional follow-on effects on the
market share and revenue of the affected
exchange.
The Exchange believes that the
additional services and fees proposed
herein would be equitably allocated and
not unfairly discriminatory because, in
addition to the services being
completely voluntary, they would be
available to all Users on an equal basis
(i.e., the same products and services
would be available to all Users). All
Users that voluntarily selected to
receive Access or Connectivity would be
15 15
U.S.C. 78f(b)(4).
VerDate Sep<11>2014
18:17 Feb 06, 2018
Jkt 244001
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
Additional Third Party Data Feed and
Additional Third Party System,
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 Feed 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.
The Exchange also believes that the
proposal to delete obsolete text from the
list of Third Party Data Feeds and the
list of Third Party Systems would
remove impediments to, and perfect the
mechanisms of, a free and open market
and a national market system and, in
general, protect investors and the public
interest because the proposed fee
changes would remove obsolete text
PO 00000
Frm 00092
Fmt 4703
Sfmt 4703
5491
from the Price List, reducing the
complexity and any potential ambiguity
and providing clarification concerning
the availability and the costs of products
and services available to Users. Further,
the Exchange believes that that the
proposed modifications and updates to
its Price List would be consistent with
the public interest and the protection of
investors because the public and
investors would not be harmed and, in
fact, would benefit from this updating
and clarification.
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,16 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
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 Feed, 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
16 15
E:\FR\FM\07FEN1.SGM
U.S.C. 78f(b)(8).
07FEN1
sradovich on DSK3GMQ082PROD with NOTICES
5492
Federal Register / Vol. 83, No. 26 / Wednesday, February 7, 2018 / Notices
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 proposed deletion of obsolete text
from the list of Third Party Data Feeds
and the list of Third Party Systems
would update the information and
increase the clarity of the Price List
concerning the availability and cost of
products and services available to Users.
Accordingly, the proposed change
would not impose any burden on
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act, as the public and
investors would benefit from this
updating and clarification.
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
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.
VerDate Sep<11>2014
18:17 Feb 06, 2018
Jkt 244001
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 17 and Rule
19b–4(f)(6) thereunder.18 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.19
A proposed rule change filed under
Rule 19b–4(f)(6) 20 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),21 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange requests 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
17 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
19 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
20 17 CFR 240.19b–4(f)(6).
21 17 CFR 240.19b–4(f)(6)(iii).
18 17
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
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.22
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 23 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2018–05 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–NYSE–2018–05. 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 website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
22 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
23 15 U.S.C. 78s(b)(2)(B).
E:\FR\FM\07FEN1.SGM
07FEN1
Federal Register / Vol. 83, No. 26 / Wednesday, February 7, 2018 / Notices
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website 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–NYSE–2018–05 and should
be submitted on or before February 28,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–02401 Filed 2–6–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82615; File No. SR–
CboeEDGX–2018–003]
sradovich on DSK3GMQ082PROD with NOTICES
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change to Rule 21.1,
Definitions, To Modify a Time in Force
Applicable to the Exchange’s Equity
Options Platform
February 1, 2018.
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 January
25, 2018, Cboe EDGX Exchange, Inc.
(the ‘‘Exchange’’ or ‘‘EDGX’’) 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 Exchange. The
Exchange has designated this proposal
as a ‘‘non-controversial’’ proposed rule
change pursuant to Section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(6)(iii)
thereunder,4 which renders it effective
upon filing with the Commission. The
Commission is publishing this notice to
24 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
amend Rule 21.1 to modify a Time in
Force applicable to the Exchange’s
equity options platform (‘‘EDGX
Options’’).
The text of the proposed rule change
is available at the Exchange’s website at
www.markets.cboe.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
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 parts of such
statements.
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Exchange Rule 21.1, Definitions, to
modify the Good Til Day (or ‘‘GTD’’)
Time in Force. Currently, GTD orders
are limited to the specific trading day on
which they are entered, as the Exchange
does not currently offer any orders that
continue to remain on the Exchange for
more than a single trading day (i.e., does
not carry any orders overnight). The
Exchange notes that it received approval
to offer the GTC Time in Force as part
of its proposal to adopt rules to allow
trading of complex orders on EDGX
Options.5 The GTC Time in Force is not
limited to the trading day on which an
order is entered.
The Exchange plans to make available
the GTC Time in Force effective January
26, 2018. In connection with such
release, the Exchange proposes to
modify the GTD Time in Force to also
allow orders with such Time in Force to
remain in effect past the day on which
they were entered, and therefore
proposes to remove language that refers
1 15
VerDate Sep<11>2014
21:00 Feb 06, 2018
5 See Securities Exchange Act Release No. 81891
(October 17, 2017), 82 FR 49058 (October 23, 2017)
(SR–Bats–EDGX–2017–29).
Jkt 244001
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
5493
to the time of expiration as needing to
be ‘‘during such trading day’’. In
addition, to avoid confusion, the
Exchange proposes to modify the name
of the GTD Time in Force to ‘‘Good Til
Date’’, which is more reflective of a
Time in Force that can last for more
than one trading day.
The Exchange does not believe that
offering GTD functionality that allows
orders to remain with the Exchange for
more than one trading day raises any
issues that are not already present with
GTC orders. In turn, GTC is a common
time in force and is typically
implemented to allow orders to remain
for more than one trading day.6 The
Exchange simply has not offered such
functionality previously and therefore
has had specific language reflecting that
an expiration time must be during the
trading day. The Exchange also notes
that a GTD modifier providing a Time
in Force that could last more than one
day has been previously offered by at
least one equities exchange not affiliated
with the Exchange.7
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 8 in general, and furthers the
objectives of Section 6(b)(5) of the Act 9
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest. The
Exchange believes the proposed
amendment will provide additional
flexibility to Users that wish to enter an
order that will last past the trading day
on which it is entered by allowing such
Users to set a specific expiration time.
The Exchange also believes the
proposed amendment will increase the
understanding of the Exchange’s
operations for all Users of the Exchange.
In particular, the Exchange intends to
release the GTC Time in Force in the
near future, which will persist over
multiple trading days unless cancelled,
and believes that the Time in Force of
GTD should similarly be able to persist
over multiple trading days. The
Exchange believes it could be confusing
and inconsistent to offer a GTC Time in
Force that can persist for longer than a
6 See,
e.g., C2 Rule 6.10(d)(2).
Securities Exchange Act Release No. 75497
(July 21, 2015), 80 FR 45022 (July 28, 2015) (SR–
NYSEArca–2015–56) (notice of filing by NYSE Arca
describing proposed changes in connection with
migration of technology to new platform, including
retirement of GTD modifier).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
7 See
E:\FR\FM\07FEN1.SGM
07FEN1
]]>Agencies
[Federal Register Volume 83, Number 26 (Wednesday, February 7, 2018)]
[Notices]
[Pages 5488-5493]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-02401]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82620; File No. SR-NYSE-2018-05]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Provide Users With Access to Two Additional Third Party Systems and
Connectivity to One Additional Third Party Data Feed
February 1, 2018.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on January 19, 2018, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') 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 two
additional third party systems and connectivity to one additional third
party data feed. In addition, the Exchange proposes to change its Price
List related to these co-location services, and to update its Price
List to eliminate obsolete text. The proposed rule change is available
on the Exchange's website 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.
[[Page 5489]]
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 two additional
third party systems and connectivity to one additional third party data
feed. In addition the Exchange proposes to make the corresponding
changes to the Exchange's Price List related to these co-location
services, and to update its Price List to eliminate obsolete text.
---------------------------------------------------------------------------
\4\ The Exchange initially filed rule changes relating to its
co-location services with the Commission in 2010. See Securities
Exchange Act Release No. 62960 (September 21, 2010), 75 FR 59310
(September 27, 2010) (SR-NYSE-2010-56) (the ``Original Co-location
Filing''). The Exchange operates a data center in Mahwah, New Jersey
(the ``data center'') from which it provides co-location services to
Users.
\5\ For purposes of the Exchange's co-location services, a
``User'' means any market participant that requests to receive co-
location services directly from the Exchange. See Securities
Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190
(October 5, 2015) (SR-NYSE-2015-40). As specified in the Price List,
a User that incurs co-location fees for a particular co-location
service pursuant thereto would not be subject to co-location fees
for the same co-location service charged by the Exchange's
affiliates NYSE American LLC (``NYSE American'') and NYSE Arca, Inc.
(``NYSE Arca'' and, together with NYSE American, the ``Affiliate
SROs''). See Securities Exchange Act Release No. 70206 (August 15,
2013), 78 FR 51765 (August 21, 2013) (SR-NYSE-2013-59).
---------------------------------------------------------------------------
As set forth in the Price List, the Exchange charges fees for
connectivity to the execution systems of third party markets and other
content service providers (``Third Party Systems''), 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 Price List.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 80311 (March 24,
2017), 82 FR 15741 (March 30, 2017) (SR-NYSE-2016-45).
---------------------------------------------------------------------------
The Exchange now proposes to make the following changes:
Add two content service providers to the list of Third
Party Systems: Miami International Securities Exchange and MIAX PEARL
(together, the ``Additional Third Party Systems''); and
add one feed to the list of Third Party Data Feeds: Miami
International Securities Exchange/MIAX PEARL (the ``Additional Third
Party Data Feed'').
The Exchange would provide access to the Additional Third Party
Systems (``Access'') and connectivity to the Additional Third Party
Data Feed (``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
Feed, 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 proposed rule change would become operative when the Additional
Third Party Systems and the Additional Third Party Data Feed becomes
available, which is expected to be no later than March 31, 2018. 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 Price List to provide that
Users may obtain connectivity to the two Additional Third Party Systems
for a fee. As with the current Third Party Systems, Users would connect
to the Additional Third Party Systems over the internet protocol
(``IP'') network, a local area network available in the data center.\7\
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 74222 (February 6,
2015), 80 FR 7888 (February 12, 2015) (SR-NYSE-2015-05) (notice of
filing and immediate effectiveness of proposed rule change to
include IP network connections).
---------------------------------------------------------------------------
As with the current Third Party Systems, in order to obtain access
to an Additional Third Party System, the User would enter into an
agreement with the relevant third party content service provider,
pursuant to which the third party content service provider would charge
the User for access to the Additional Third Party System. The Exchange
would then establish a unicast connection between the User and the
relevant third party content service provider over the IP network.\8\
The Exchange would charge the User for the connectivity to the
Additional Third Party System. A User would only receive, and only be
charged for, access to Additional Third Party Systems for which it
enters into agreements with the third party content service provider.
---------------------------------------------------------------------------
\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 Price List 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
------------------------------------------------------------------------
-------------------------------------------------------------------------
Miami International Securities Exchange.
MIAX PEARL.
------------------------------------------------------------------------
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 Feed
The Exchange proposes to revise the Price List to provide that
Users may obtain connectivity to the Additional Third Party Data Feed
for a fee. The Exchange would receive the Additional Third Party Data
Feed 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 Feed over the IP network.\9\
---------------------------------------------------------------------------
\9\ See supra note 7, at 7889 (``The IP network also provides
Users with access to away market data products'').
---------------------------------------------------------------------------
[[Page 5490]]
In order to connect to the 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 Feed for which it
entered into contracts.
The Exchange has no affiliation with the seller of the Additional
Third Party Data Feed. It would have no right to use the Additional
Third Party Data Feed other than as a redistributor of the data. The
Additional Third Party Data Feed would not provide access or order
entry to the Exchange's execution system. The Additional Third Party
Data Feed 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 Feed 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 the
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 the Additional Third Party Data Feed.
The Exchange proposes to add the connectivity fees for the
Additional Third Party Data to its existing list in the Price List. The
additional item would be as follows:
------------------------------------------------------------------------
Monthly
recurring
connectivity
Third Party Data Feed fee per Third
Party Data
Feed
------------------------------------------------------------------------
Miami International Securities Exchange/MIAX PEARL...... $2,000
------------------------------------------------------------------------
Elimination of Obsolete Rule Language
The Exchange proposes to delete obsolete text from both the lists
of Third Party Data Feeds and Third Party Systems in the Price List.
More specifically, the Exchange proposes to make the following changes:
\10\
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 81014 (June 23,
2017), 82 FR 29615 (June 29, 2017) (SR-NYSE-2017-25).
---------------------------------------------------------------------------
From both lists, remove the asterisk and note stating that
the asterisked service is expected to be available no later than
September 30, 2017, as the relevant services are currently available;
and
from the list of Third Party Data Feeds, remove the
asterisks and note stating that the Euronext Optiq Compressed
Derivatives is expected to be offered in place of Euronext no later
than September 30, 2017, as such change has occurred, and remove
Euronext as a Third Party Data Feed.
This proposed change would have no impact on pricing.
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; \11\ 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.\12\
---------------------------------------------------------------------------
\11\ 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.
\12\ See SR-NYSE-2013-59, supra note 5 at 51766. The Affiliate
SROs have also submitted substantially the same proposed rule change
to propose the changes described herein. See SR-NYSEAMER-2018-02 and
SR-NYSEArca-2018-06.
---------------------------------------------------------------------------
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 fee change is consistent
with Section 6(b) of the Act,\13\ in general, and furthers the
objectives of Sections 6(b)(5) of the Act,\14\ 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.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed changes would remove
impediments to, and perfect the mechanisms of, a free and open market
and a national market system and, in general, protect investors and the
public interest because, by offering additional services, the Exchange
would give each User additional options for addressing its access and
connectivity needs, responding to User demand for access and
connectivity options. Providing additional services would help each
User tailor its data center operations to the requirements of its
business operations by allowing it to select the form and latency of
access and connectivity that best suits its needs.
The Exchange would provide Access and Connectivity as conveniences
to Users. Use of Access or Connectivity would be completely voluntary.
The Exchange is not aware of any impediment to third parties offering
Access or Connectivity. 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 Feed. 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
[[Page 5491]]
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 Feed to Users when available, 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 fee change is
consistent with Section 6(b)(4) of the Act,\15\ 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.
---------------------------------------------------------------------------
\15\ 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 Additional Third Party Data Feed and Additional Third Party
System, 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
Feed 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.
The Exchange also believes that the proposal to delete obsolete
text from the list of Third Party Data Feeds and the list of Third
Party Systems would remove impediments to, and perfect the mechanisms
of, a free and open market and a national market system and, in
general, protect investors and the public interest because the proposed
fee changes would remove obsolete text from the Price List, reducing
the complexity and any potential ambiguity and providing clarification
concerning the availability and the costs of products and services
available to Users. Further, the Exchange believes that that the
proposed modifications and updates to its Price List would be
consistent with the public interest and the protection of investors
because the public and investors would not be harmed and, in fact,
would benefit from this updating and clarification.
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,\16\ 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.
---------------------------------------------------------------------------
\16\ 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
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 Feed, 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
[[Page 5492]]
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 proposed deletion of obsolete text from the list of Third Party
Data Feeds and the list of Third Party Systems would update the
information and increase the clarity of the Price List concerning the
availability and cost of products and services available to Users.
Accordingly, the proposed change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act, as the public and investors would benefit from
this updating and clarification.
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 \17\ and Rule 19b-4(f)(6) thereunder.\18\
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.\19\
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(3)(A)(iii).
\18\ 17 CFR 240.19b-4(f)(6).
\19\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \20\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\21\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange requests
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.\22\
---------------------------------------------------------------------------
\20\ 17 CFR 240.19b-4(f)(6).
\21\ 17 CFR 240.19b-4(f)(6)(iii).
\22\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \23\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
---------------------------------------------------------------------------
\23\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------
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-NYSE-2018-05 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-NYSE-2018-05. 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 website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the
[[Page 5493]]
public in accordance with the provisions of 5 U.S.C. 552, will be
available for website 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-
NYSE-2018-05 and should be submitted on or before February 28, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
---------------------------------------------------------------------------
\24\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-02401 Filed 2-6-18; 8:45 am]
BILLING CODE 8011-01-P
