Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Price List Related to Co-Location Services in Connection With a Proposed Transaction With the Chicago Stock Exchange, Inc. Exchange and Its Parent, CHX Holdings, Inc., 37548-37552 [2018-16422]
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37548
Federal Register / Vol. 83, No. 148 / Wednesday, August 1, 2018 / Notices
necessary or appropriate in furtherance
of the purposes of the Act because the
change would have no impact on
pricing or the services offered. Rather,
the change would alleviate possible
market participant confusion by making
it easier to find Included Data Products
in the table.
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 19b4(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 requested wavier
would ensure that immediately upon
the closing of the Transaction CHX
would be treated on the same terms and
in the same manner as the Exchange and
the Affiliate SROs with respect to their
trading and execution systems and data
products. The waiver would allow the
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).
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18 17
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Exchange to expand the definition of
Exchange Systems to incorporate CHX’s
trading and execution systems, add
CHX’s data products to the table of
Included Data Products, and remove
CHX from the lists of Third Party
Systems and Third Party Data Feeds
immediately upon the closing of the
Transaction. In addition, it would
implement the reduced fee for Users
that currently have access or
connectivity to CHX immediately upon
Closing. 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
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–
NYSEARCA–2018–53 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–2018–53. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
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).
PO 00000
22 For
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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 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–2018–53 and
should be submitted on or before
August 22, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018–16421 Filed 7–31–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83717; File No. SR–NYSE–
2018–35]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Its
Price List Related to Co-Location
Services in Connection With a
Proposed Transaction With the
Chicago Stock Exchange, Inc.
Exchange and Its Parent, CHX
Holdings, Inc.
July 26, 2018.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
24 17
1 15
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CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
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(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on July 16,
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 amend its
Price List related to co-location services
in connection with a proposed
transaction (‘‘Transaction’’) whereby the
Chicago Stock Exchange, Inc. (‘‘CHX’’)
Exchange and its parent, CHX Holdings,
Inc. (‘‘CHX Holdings’’), would become
indirect subsidiaries of Intercontinental
Exchange, Inc. (‘‘ICE’’), the Exchange’s
indirect parent, and affiliates of the
Exchange. The Exchange also proposes
to make a non-substantive change to the
Price List. 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.
1 15
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2 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
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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 its
Price List related to co-location 4
services in connection with the
proposed Transaction whereby CHX and
its parent, CHX Holdings, would
become indirect subsidiaries of ICE, the
Exchange’s indirect parent, and
affiliates of the Exchange.5 The
Exchange also proposes to make a nonsubstantive change to the Price List.
The Exchange proposes that the
proposed rule change become operative
upon the closing of the Transaction.
General Note 4
Pursuant to General Note 4 of the
Price List, when a User 6 purchases
access to the Liquidity Center Network
(‘‘LCN’’) or the internet protocol (‘‘IP’’)
network, the two local area networks
CFR 240.19b–4.
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 Exchange operates a data center in Mahwah,
New Jersey (the ‘‘data center’’) from which it
provides co-location services to Users.
5 In order to effect the Transaction, a whollyowned subsidiary of the Exchange’s direct parent
company, NYSE Group, Inc., would merge with and
into CHX Holdings, with CHX Holdings continuing
as the surviving corporation. See Securities
Exchange Act Release Nos. 83635 (July 13, 2018)
(SR–CHX–2018–004), and 83303 (May 22, 2018), 83
FR 24517 (May 29, 2018) (SR–CHX–2018–004).
CHX would also become an affiliate of the
Exchange’s affiliates NYSE American LLC (‘‘NYSE
American’’), NYSE Arca, Inc. (‘‘NYSE Arca’’), and
NYSE National, Inc. (‘‘NYSE National’’ and,
together, the ‘‘Affiliate SROs’’).
PO 00000
3 17
4 The
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37549
available in the data center,7 a User
receives (a) the ability to access the
trading and execution systems of the
Exchange and the Affiliate SROs
(‘‘Exchange Systems’’), and (b)
connectivity to any of the listed data
products (‘‘Included Data Products’’)
that it selects. The majority of the
Included Data Products are proprietary
feeds of the Exchange and the Affiliate
SROs.8
Upon the closing of the Transaction,
CHX will be an affiliate of both the
Exchange and the Affiliate SROs.
Consistent with the treatment of the
Exchange’s and the Affiliate SROs’
trading and execution systems and data
products, the Exchange proposes to
expand the definition of Exchange
Systems to incorporate CHX’s trading
and execution systems, and to add
CHX’s data products to the table of
Included Data Products. In order to
make the change, the Exchange
proposes to add CHX to the list of
trading and execution system providers
in the first sentence of the first
paragraph and add CHX to the lists of
affiliated entities in the first, third and
fourth sentences. The proposed changes
to the paragraph are as follows
(additions underlined, deletions in
brackets):
BILLING CODE 8011–01–P
6 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
Affiliate SROs. See Securities Exchange Act Release
No. 70206 (August 15, 2013), 78 FR 51765 (August
21, 2013) (SR–NYSE–2013–59).
7 See Securities Exchange Act Release No. 79730
(January 4, 2017), 82 FR 3045 (January 10, 2017)
(SR–NYSE–2016–92).
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In addition, the Exchange proposes to
add CHX to the table of Included Data
Products set forth in General Note 4.
In a non-substantive change, the
Exchange proposes to make the table of
Included Data Products alphabetical by
putting the list of NYSE American feeds
before NYSE American Options. Such
list currently follows NYSE Bonds.
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Connectivity to Third Party Systems and
Third Party Data Feeds
Users may obtain access to the trading
and execution services of third party
markets and other content service
providers (‘‘Third Party Systems’’) of
multiple third party markets and other
content service providers for a fee.9
Users connect to Third Party Systems
over the IP network. In addition, Users
may obtain connectivity to data feeds
from third party markets and other
8 Id.
Included Data Products are listed in the Price
List under General Note 4.
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content service providers (‘‘Third Party
Data Feeds’’) for a fee.10
Currently, CHX is listed in the tables
setting forth the Third Party Systems
and Third Party Data Feeds, and Users
seeking access to CHX’s trading and
execution services and data feeds are
subject to the applicable fees. Consistent
with the proposed changes to General
Note 4 described above, because CHX
will become an affiliate of the Exchange,
the Exchange proposes to delete CHX
from such tables.
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,
one or more of its Affiliate SROs.12
The proposed change is not otherwise
intended to address any other issues
relating to co-location services and/or
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
9 See Securities Exchange Act Release No. 80311
(March 24, 2017), 82 FR 15741 (March 30, 2017)
(SR–NYSE–2016–45).
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10 See
id.
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 As
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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
proposal is consistent with Section 6(b)
of the Act,13 in general, and furthers the
objectives of Section 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 change 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 upon the closing of the
Transaction, CHX will be an affiliate of
both the Exchange and the Affiliate
SROs. Expanding the definition of
Exchange Systems to incorporate CHX’s
trading and execution systems, adding
CHX’s data products to the table of
Included Data Products, and removing
CHX from the lists of Third Party
Systems and Third Party Data Feeds
would make the Price List treatment of
CHX trading and execution systems and
data products consistent with the
treatment of the trading and execution
systems and data products of the
Exchange and the Affiliate SROs.
Further, the Exchange believes that
revising General Note 4 would promote
just and equitable principles of trade
and remove impediments to, and perfect
the mechanisms of, a free and open
market and a national market system as
it would make clear that all Users that
voluntarily select to access the LCN or
IP network would receive the same
access to the CHX trading and execution
systems and connectivity to CHX data as
to those of the Exchange and the
Affiliate SROs and would not be subject
to a charge above and beyond the fee
12 See 78 FR 51765, supra note 6, at 51766. The
Affiliate SROs have also submitted substantially the
same proposed rule change to propose the changes
described herein. See SR–NYSEAMER–2018–38,
SR–NYSEArca–2018–53, and SR–NYSENAT–2018–
17.
13 15 U.S.C. 78f(b).
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paid for the relevant LCN or IP network
access. In addition, as with Exchange
and Affiliate SRO access and
connectivity, a User would not be
required to use any of its bandwidth to
access the CHX trading and execution
system or connect to CHX data unless it
wished to do so. A User only receives
access to Exchange Systems and
connectivity to Included Data Products
that it selects, and a User can change
such access or connectivity it receives at
any time, subject to authorization from
the relevant data provider, the
Exchange, or relevant Affiliate SRO.
The Exchange believes that the nonsubstantive change to put the table of
Included Data Products into
alphabetical order 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 amendment would
clarify Exchange rules and make it
easier for market participants to find
Included Data Products in the table.
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 change 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, because the
change would result in CHX, which will
be an affiliate of the Exchange and the
Affiliate SROs, being treated on the
same terms and in the same manner as
the Exchange and the Affiliate SROs
with respect to their trading and
execution systems and data products.
The proposed change would result in
reduced fees for Users that have access
or connectivity to CHX, as it would no
longer be a Third Party System or Third
Party Data Feed.
The Exchange believes that the
proposed non-substantive change to put
the table of Included Data Products into
alphabetical order would be reasonable
because the change would have no
impact on pricing or services offered.
Rather, the change would alleviate
possible market participant confusion
by making it easier to find Included
Data Products in the table.
PO 00000
14 15
U.S.C. 78f(b)(5).
Frm 00093
Fmt 4703
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, in
addition to the use of co-location
services being completely voluntary,
they are available to all Users on an
equal basis (i.e., the same range of
products and services are available to all
Users).
The Exchange believes that the
proposed change would not impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act because the
change would result in CHX, which will
be an affiliate of the Exchange and
Affiliate SROs, being treated on the
same terms and in the same manner as
the Exchange and the Affiliate SROs
with respect to their trading and
execution systems and data products.
As a result of the proposed changes, all
Users that voluntarily select to access
the LCN or IP network would receive
the same access to the CHX trading and
execution systems and connectivity to
CHX data as to those of the Exchange
and the Affiliate SROs and would not be
subject to a charge above and beyond
the fee paid for the relevant LCN or IP
network access. A User would not be
required to use any of its bandwidth to
access the CHX trading and execution
system or connect to CHX data unless it
wishes to do so. The proposed change
would result in reduced fees for Users
that have access or connectivity to CHX,
as it would no longer be a Third Party
System or Third Party Data Feed.
The Exchange believes that the
proposed non-substantive change to put
the table of Included Data Products into
alphabetical order would not impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act because the
change would have no impact on
pricing or the services offered. Rather,
the change would alleviate possible
market participant confusion by making
it easier to find Included Data Products
in the table.
16 15
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U.S.C. 78f(b)(8).
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Federal Register / Vol. 83, No. 148 / Wednesday, August 1, 2018 / Notices
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 19b4(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 requested wavier
would ensure that immediately upon
the closing of the Transaction CHX
would be treated on the same terms and
in the same manner as the Exchange and
the Affiliate SROs with respect to their
trading and execution systems and data
products. The waiver would allow the
Exchange to expand the definition of
Exchange Systems to incorporate CHX’s
trading and execution systems, add
CHX’s data products to the table of
Included Data Products, and remove
CHX from the lists of Third Party
Systems and Third Party Data Feeds
immediately upon the closing of the
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).
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18 17
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Transaction. In addition, it would
implement the reduced fee for Users
that currently have access or
connectivity to CHX immediately upon
Closing. 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
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.
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 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–2018–35 and should
be submitted on or before August 22,
2018.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
Robert W. Errett,
Deputy Secretary.
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–2018–35 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
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–2018–35. 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
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).
PO 00000
Frm 00094
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[FR Doc. 2018–16422 Filed 7–31–18; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–83715; File No. SR–
NYSENAT–2018–17]
Self-Regulatory Organizations; NYSE
National, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Its Schedule of
Fees and Rebates Related to CoLocation Services in Connection With
a Proposed Transaction With the
Chicago Stock Exchange, Inc.
Exchange and Its Parent, CHX
Holdings, Inc.
July 26, 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 July 16,
2018, NYSE National, Inc. (‘‘Exchange’’
or ‘‘NYSE National’’) 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
24 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
E:\FR\FM\01AUN1.SGM
01AUN1
]]>Agencies
[Federal Register Volume 83, Number 148 (Wednesday, August 1, 2018)]
[Notices]
[Pages 37548-37552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16422]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83717; File No. SR-NYSE-2018-35]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Price List Related to Co-Location Services in Connection With
a Proposed Transaction With the Chicago Stock Exchange, Inc. Exchange
and Its Parent, CHX Holdings, Inc.
July 26, 2018.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934
[[Page 37549]]
(``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that
on July 16, 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 amend its Price List related to co-
location services in connection with a proposed transaction
(``Transaction'') whereby the Chicago Stock Exchange, Inc. (``CHX'')
Exchange and its parent, CHX Holdings, Inc. (``CHX Holdings''), would
become indirect subsidiaries of Intercontinental Exchange, Inc.
(``ICE''), the Exchange's indirect parent, and affiliates of the
Exchange. The Exchange also proposes to make a non-substantive change
to the Price List. 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.
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 its Price List related to co-
location \4\ services in connection with the proposed Transaction
whereby CHX and its parent, CHX Holdings, would become indirect
subsidiaries of ICE, the Exchange's indirect parent, and affiliates of
the Exchange.\5\ The Exchange also proposes to make a non-substantive
change to the Price List.
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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. 62960 (September 21, 2010), 75 FR 59310
(September 27, 2010) (SR-NYSE-2010-56). The Exchange operates a data
center in Mahwah, New Jersey (the ``data center'') from which it
provides co-location services to Users.
\5\ In order to effect the Transaction, a wholly-owned
subsidiary of the Exchange's direct parent company, NYSE Group,
Inc., would merge with and into CHX Holdings, with CHX Holdings
continuing as the surviving corporation. See Securities Exchange Act
Release Nos. 83635 (July 13, 2018) (SR-CHX-2018-004), and 83303 (May
22, 2018), 83 FR 24517 (May 29, 2018) (SR-CHX-2018-004). CHX would
also become an affiliate of the Exchange's affiliates NYSE American
LLC (``NYSE American''), NYSE Arca, Inc. (``NYSE Arca''), and NYSE
National, Inc. (``NYSE National'' and, together, the ``Affiliate
SROs'').
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The Exchange proposes that the proposed rule change become
operative upon the closing of the Transaction.
General Note 4
Pursuant to General Note 4 of the Price List, when a User \6\
purchases access to the Liquidity Center Network (``LCN'') or the
internet protocol (``IP'') network, the two local area networks
available in the data center,\7\ a User receives (a) the ability to
access the trading and execution systems of the Exchange and the
Affiliate SROs (``Exchange Systems''), and (b) connectivity to any of
the listed data products (``Included Data Products'') that it selects.
The majority of the Included Data Products are proprietary feeds of the
Exchange and the Affiliate SROs.\8\
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\6\ 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 Affiliate SROs. See
Securities Exchange Act Release No. 70206 (August 15, 2013), 78 FR
51765 (August 21, 2013) (SR-NYSE-2013-59).
\7\ See Securities Exchange Act Release No. 79730 (January 4,
2017), 82 FR 3045 (January 10, 2017) (SR-NYSE-2016-92).
\8\ Id. Included Data Products are listed in the Price List
under General Note 4.
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Upon the closing of the Transaction, CHX will be an affiliate of
both the Exchange and the Affiliate SROs. Consistent with the treatment
of the Exchange's and the Affiliate SROs' trading and execution systems
and data products, the Exchange proposes to expand the definition of
Exchange Systems to incorporate CHX's trading and execution systems,
and to add CHX's data products to the table of Included Data Products.
In order to make the change, the Exchange proposes to add CHX to the
list of trading and execution system providers in the first sentence of
the first paragraph and add CHX to the lists of affiliated entities in
the first, third and fourth sentences. The proposed changes to the
paragraph are as follows (additions underlined, deletions in brackets):
BILLING CODE 8011-01-P
[[Page 37550]]
[GRAPHIC] [TIFF OMITTED] TN01AU18.008
BILLING CODE 8011-01-C
In addition, the Exchange proposes to add CHX to the table of
Included Data Products set forth in General Note 4.
In a non-substantive change, the Exchange proposes to make the
table of Included Data Products alphabetical by putting the list of
NYSE American feeds before NYSE American Options. Such list currently
follows NYSE Bonds.
Connectivity to Third Party Systems and Third Party Data Feeds
Users may obtain access to the trading and execution services of
third party markets and other content service providers (``Third Party
Systems'') of multiple third party markets and other content service
providers for a fee.\9\ Users connect to Third Party Systems over the
IP network. In addition, Users may obtain connectivity to data feeds
from third party markets and other content service providers (``Third
Party Data Feeds'') for a fee.\10\
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\9\ See Securities Exchange Act Release No. 80311 (March 24,
2017), 82 FR 15741 (March 30, 2017) (SR-NYSE-2016-45).
\10\ See id.
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Currently, CHX is listed in the tables setting forth the Third
Party Systems and Third Party Data Feeds, and Users seeking access to
CHX's trading and execution services and data feeds are subject to the
applicable fees. Consistent with the proposed changes to General Note 4
described above, because CHX will become an affiliate of the Exchange,
the Exchange proposes to delete CHX from such tables.
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, one or more of its Affiliate
SROs.\12\
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\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 78 FR 51765, supra note 6, at 51766. The Affiliate SROs
have also submitted substantially the same proposed rule change to
propose the changes described herein. See SR-NYSEAMER-2018-38, SR-
NYSEArca-2018-53, and SR-NYSENAT-2018-17.
---------------------------------------------------------------------------
The proposed change is not otherwise intended to address any other
issues relating to co-location services and/or
[[Page 37551]]
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 proposal is consistent with Section
6(b) of the Act,\13\ in general, and furthers the objectives of Section
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 change 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 upon the closing of the Transaction, CHX will
be an affiliate of both the Exchange and the Affiliate SROs. Expanding
the definition of Exchange Systems to incorporate CHX's trading and
execution systems, adding CHX's data products to the table of Included
Data Products, and removing CHX from the lists of Third Party Systems
and Third Party Data Feeds would make the Price List treatment of CHX
trading and execution systems and data products consistent with the
treatment of the trading and execution systems and data products of the
Exchange and the Affiliate SROs.
Further, the Exchange believes that revising General Note 4 would
promote just and equitable principles of trade and remove impediments
to, and perfect the mechanisms of, a free and open market and a
national market system as it would make clear that all Users that
voluntarily select to access the LCN or IP network would receive the
same access to the CHX trading and execution systems and connectivity
to CHX data as to those of the Exchange and the Affiliate SROs and
would not be subject to a charge above and beyond the fee paid for the
relevant LCN or IP network access. In addition, as with Exchange and
Affiliate SRO access and connectivity, a User would not be required to
use any of its bandwidth to access the CHX trading and execution system
or connect to CHX data unless it wished to do so. A User only receives
access to Exchange Systems and connectivity to Included Data Products
that it selects, and a User can change such access or connectivity it
receives at any time, subject to authorization from the relevant data
provider, the Exchange, or relevant Affiliate SRO.
The Exchange believes that the non-substantive change to put the
table of Included Data Products into alphabetical order 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 amendment would clarify Exchange rules and
make it easier for market participants to find Included Data Products
in the table.
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 change 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, because the change would result in CHX, which will be an
affiliate of the Exchange and the Affiliate SROs, being treated on the
same terms and in the same manner as the Exchange and the Affiliate
SROs with respect to their trading and execution systems and data
products. The proposed change would result in reduced fees for Users
that have access or connectivity to CHX, as it would no longer be a
Third Party System or Third Party Data Feed.
The Exchange believes that the proposed non-substantive change to
put the table of Included Data Products into alphabetical order would
be reasonable because the change would have no impact on pricing or
services offered. Rather, the change would alleviate possible market
participant confusion by making it easier to find Included Data
Products in the table.
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, in addition to the use of co-location
services being completely voluntary, they are available to all Users on
an equal basis (i.e., the same range of products and services are
available to all Users).
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
The Exchange believes that the proposed change would not impose any
burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act because the change would result
in CHX, which will be an affiliate of the Exchange and Affiliate SROs,
being treated on the same terms and in the same manner as the Exchange
and the Affiliate SROs with respect to their trading and execution
systems and data products. As a result of the proposed changes, all
Users that voluntarily select to access the LCN or IP network would
receive the same access to the CHX trading and execution systems and
connectivity to CHX data as to those of the Exchange and the Affiliate
SROs and would not be subject to a charge above and beyond the fee paid
for the relevant LCN or IP network access. A User would not be required
to use any of its bandwidth to access the CHX trading and execution
system or connect to CHX data unless it wishes to do so. The proposed
change would result in reduced fees for Users that have access or
connectivity to CHX, as it would no longer be a Third Party System or
Third Party Data Feed.
The Exchange believes that the proposed non-substantive change to
put the table of Included Data Products into alphabetical order would
not impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act because the
change would have no impact on pricing or the services offered. Rather,
the change would alleviate possible market participant confusion by
making it easier to find Included Data Products in the table.
[[Page 37552]]
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\
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\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 19b4(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 requested wavier would ensure that immediately upon
the closing of the Transaction CHX would be treated on the same terms
and in the same manner as the Exchange and the Affiliate SROs with
respect to their trading and execution systems and data products. The
waiver would allow the Exchange to expand the definition of Exchange
Systems to incorporate CHX's trading and execution systems, add CHX's
data products to the table of Included Data Products, and remove CHX
from the lists of Third Party Systems and Third Party Data Feeds
immediately upon the closing of the Transaction. In addition, it would
implement the reduced fee for Users that currently have access or
connectivity to CHX immediately upon Closing. 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\
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\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-2018-35 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-2018-35. 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 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-2018-35 and should be submitted on
or before August 22, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018-16422 Filed 7-31-18; 8:45 am]
BILLING CODE 8011-01-P
