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 Co-location Services, 25887-25891 [2019-11563]
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Federal Register / Vol. 84, No. 107 / Tuesday, June 4, 2019 / Notices
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–NASDAQ–2019–042 and
should be submitted on or before June
25, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019–11565 Filed 6–3–19; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–85959; File No. SR–
NYSENAT–2019–13]
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
May 29, 2019.
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Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on May 21,
2019, NYSE National, Inc. (‘‘NYSE
National’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the 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
Schedule of Fees and Rebates (the
‘‘Price List’’) related to co-location
services to update the description of the
access to trading and execution systems
provided with the purchase of access to
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
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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
BILLING CODE 8011–01–P
18 17
the co-location local area networks. 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.
1. Purpose
The Exchange proposes to amend the
Price List related to co-location 4
services offered by the Exchange to
update the description of the access to
trading and execution services and
connectivity to data provided to Users 5
with connections to the Liquidity Center
Network (‘‘LCN’’) and internet protocol
(‘‘IP’’) network, local area networks
available in the data center.
To implement the changes, the
Exchange proposes to amend paragraph
one of General Note 4, which describes
the access to trading and execution
systems which a User receives when it
purchases access to the LCN or IP
network.6
The Exchange will announce the
implementation date through a
customer notice.
4 The Exchange initially filed rule changes
relating to its co-location services with the
Securities and Exchange Commission
(‘‘Commission’’) on May 18, 2018. See Securities
Exchange Act Release No. 83351 (May 31, 2018), 83
FR 26314 (June 6, 2018) (SR–NYSENAT–2018–07).
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 id. at note 9. 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 the New York Stock Exchange (‘‘NYSE’’),
NYSE American LLC (‘‘NYSE American’’), and
NYSE Arca, Inc. (‘‘NYSE Arca’’ and together with
NYSE, NYSE American, and NYSE Chicago, Inc.,
the ‘‘Affiliate SROs’’). See id. at note 11.
6 See id. at 26315–26316.
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As set forth in the first paragraph of
General Note 4, when a User purchases
access to the LCN or IP network, it
receives the ability to access the trading
and execution systems of the Exchange
and the SRO Affiliates (together, the
‘‘Exchange Systems’’), provided the
User has authorization from the
Exchange or relevant Affiliate SRO.7
The Exchange proposes to revise such
paragraph to reflect that a User that
purchases access to the LCN or IP
network also receives the ability to
access the trading and execution
systems of Global OTC (‘‘Global OTC
System’’), subject to authorization by
Global OTC.
In order to obtain access to the Global
OTC System, the User would enter into
an agreement with Global OTC,
pursuant to which Global OTC would
charge the User any applicable fees
charged to its subscribers by Global
OTC. Once the Exchange receives
authorization from Global OTC, the
Exchange would establish a connection
between the User and the Global OTC
System.
The Exchange provides Users access
to the Global OTC System and the
Exchange Systems (‘‘Access’’) as a
convenience to Users. Use of Access is
completely voluntary. The Exchange is
not aware of any impediment to third
parties offering Access. As alternatives
to using the Access to the Global OTC
System provided by the Exchange, a
User may access such services through
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.
Global OTC
Global OTC is an affiliate of the
Exchange, which has an indirect interest
in Global OTC because it is owned by
the Exchange’s ultimate parent,
Intercontinental Exchange, Inc.8
Unlike the NYSE Exchanges, Global
OTC is not a national securities
exchange registered with the Securities
and Exchange Commission
(‘‘Commission’’) under Section 6 of the
7 See
id.
id. at 26322. Global OTC is operated by
Archipelago Trading Services, Inc., which is a
broker-dealer subsidiary of NYSE Group, Inc.
(‘‘NYSE Group’’). NYSE Group is also the parent
company of the Exchange.
8 See
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Act.9 Rather, Global OTC is an
alternative trading system (‘‘ATS’’) 10
operated by a broker-dealer, a member
of the Financial Industry Regulatory
Authority. It facilitates transactions in
over-the-counter (‘‘OTC’’) equity
securities, providing publicly displayed,
firm, auto-executable prices in the OTC
securities marketplace. There is no
overlap in the securities traded on the
NYSE Exchanges and Global OTC:
members trade National Market System
(‘‘NMS’’) securities on the NYSE
Exchanges,11 but Global OTC
subscribers cannot trade NMS securities
on Global OTC.
The Exchange charges fees for
connectivity to the execution systems of
third party markets and other content
service providers, including two
ATSs.12 Of those, the Exchange believes
the OTC Markets ATS is the most
comparable to Global OTC.13 Both are
inter-dealer quotation systems for OTC
securities.14 Global OTC and the OTC
Markets’ ATS are not fungible, however.
The OTC Markets’ ATS is a trade
messaging system that displays market
makers quotes and does not offer
automatic executions. While Global
OTC provides a limit order book,
displays participants’ orders, and
executes orders pursuant to price/time
priority, OTC Markets’ ATS displays
market makers’ quotes by price priority,
not time priority. In sum, OTC Markets’
ATS is a market maker intermediary,
whereas Global OTC is a trading
platform.
The Proposed Amendments
To implement the change, the
Exchange proposes to revise the first
paragraph of General Note 4 as follows:
• Amend the first sentence to state
that when a User purchases access to
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9 15
U.S.C. 78f. Global OTC is not required to
register as a national securities exchange because it
operates under an exemption from the requirement
to register as an exchange. See 17 CFR 240.3a1–1(a)
and 17 CFR 240.300 through 304.
10 See 17 CFR 242.300(a). An ATS is a trading
system that meets the definition of ‘‘exchange’’
under federal securities laws but is not required to
register as a national securities exchange if the ATS
operates under an exemption provided under the
Act.
11 See 17 CFR 242.600.
12 See 83 FR 26314, supra note 5, at 26322. Credit
Suisse and OTC Markets have ATSs. See
Commission list of ATSs at https://www.sec.gov/
foia/docs/atslist.htm.
13 The OTC Markets’ ATS is OTC Link. Global
OTC is substantially smaller than OTC Markets’
ATS: Global OTC’s market share is approximately
10% of average daily volume of trades of over-thecounter equities, compared to OTC Markets’ ATS
market share of approximately 90% of average daily
volume of trades. See https://www.globalotc.com/
brokers/market-share.
14 The third inter-dealer quotation system is the
OTC Bulletin Board, a facility of the Financial
Industry Regulatory Authority.
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the LCN or IP network, it receives the
ability to access the Global OTC System
as well as the Exchange Systems, subject
to authorization by Global OTC, the
Exchange or Affiliate Exchange, as
applicable;
• Amend the third sentence to note
that a User can change the access to the
Global OTC System that it receives at
any time, subject to authorization by
Global OTC; and
• Add a new fifth sentence stating
that ‘‘Global OTC offers access to the
Global OTC System to its subscribers,
such that a User does not have to
purchase access to the LCN or IP
network to obtain access to the Global
OTC System.’’
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; 15 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 more of the Affiliate SROs.16
The proposed change is not otherwise
intended to address any other issues
relating to co-location services and/or
related fees, and the Exchange is not
aware of any problems that Users would
have in complying with the proposed
change.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,17 in general, and
15 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, as compared to Users that are not
co-located, in sending orders to, and receiving
market data from, the Exchange.
16 See 83 FR 26314, supra note 5, at 26315. NYSE,
NYSE American, and NYSE Arca have submitted
substantially the same proposed rule change to
propose the changes described herein. See SR–
NYSE–2019–31, SR–NYSEAmer–2019–21, and SR–
NYSEArca–2019–40.
17 15 U.S.C. 78f(b).
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furthers the objectives of Section 6(b)(5)
of the Act,18 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 rule 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 it would allow Users to
connect to the Global OTC System,
thereby increasing Users’ ability to tailor
their data center operations to the
requirements of their business
operations by allowing them to select
the form and latency of access that best
suits their needs. Global OTC provides
publicly displayed, firm, autoexecutable prices in the OTC securities
marketplace, and the Exchange believes
that allowing Users to connect to the
Global OTC System would promote
price discovery and transparency in the
OTC market, benefiting participants in
such market. At the same time, Users
are not required to use any of their
bandwidth to access the Global OTC
System unless they wish to do so.
Rather, a User only receives the Access
that it selects, and a User can change
what Access it receives at any time,
subject to authorization from the
Exchange, Affiliate SRO or Global OTC,
as applicable.
The Exchange provides Access as a
convenience to Users. Use of Access is
completely voluntary, and each User
has several other access options
available to it. As alternatives to using
the Access to the Global OTC System
provided by the Exchange, a User may
access the Global OTC System through
the SFTI network, a third party
telecommunication network, third party
wireless network, a cross connect, or a
combination thereof to access the Global
OTC System 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.
18 15
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U.S.C. 78f(b)(5).
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The Exchange believes that the
proposed revisions to General Note 4
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 they
would make the description of Access
more accessible and transparent by
including Global OTC, thereby
providing market participants with
clarity as to what connectivity is
included in the purchase of access to
the LCN and IP network, avoiding any
potential investor confusion. The
proposed revisions to General Note 4
would provide a more detailed and
accurate description of the Access Users
receive with their purchase of access to
the LCN or IP network. The proposed
rule change would also make clear that
Access to each of the Exchange Systems
and the Global OTC System is provided
on the same terms. All Users that
voluntarily select to access the LCN or
IP network receive Access to the
Exchange Systems and the Global OTC
System, and are not subject to a charge
for such Access above and beyond the
fee paid for the relevant LCN or IP
network access.
The Exchange also believes that the
proposed rule changes are consistent
with Section 6(b)(4) of the Act,19 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
changes are consistent with Section
6(b)(4) of the Act for multiple reasons.
The proposed rule change is
reasonable and equitable because, as
stated above, it would also make clear
that Access to each of the Exchange
Systems and Global OTC System is
provided on the same terms. The
Exchange further believes that the
Access to the Global OTC System
described herein is equitably allocated
and not unfairly discriminatory because
all Users that voluntarily select to access
the LCN or IP network receive the same
Access, and are not subject to a charge
for Access to Global OTC above and
beyond the fee paid for the relevant LCN
or IP network access. Users are not
required to use any of their bandwidth
to access the Global OTC System unless
they wish to do so. Rather, a User only
receives the Access that it selects, and
a User can change what Access it
receives at any time, subject to
authorization from the Exchange,
19 15
U.S.C. 78f(b)(4).
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Affiliate SRO or Global OTC, as
applicable. In addition to the service
being completely voluntary, it is
available to all Users on an equal basis.
Users that opted to Access the Global
OTC System would not receive access
that is not available to all Users.
The Exchange believes that the
proposed rule change does not unfairly
discriminate between customers,
issuers, brokers or dealers in not
charging Users an additional fee to
access Global OTC while charging a
connectivity fee to access OTC Markets,
because Global OTC and the OTC
Markets ATS are not fungible. A User
that opted to access Global OTC or OTC
Markets would choose between them
based on a variety of factors, including
not just the reasonableness of fees
charged, but also the extent to which it
wished to have publicly displayed, firm,
auto-executable prices. In addition, the
Exchange is not the sole method a User
can use to access the OTC Markets ATS.
A User may use the SFTI network, a
third party telecommunication network,
a cross connect, or a combination
thereof to access the OTC Markets ATS
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 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 above, the proposed
changes do not unfairly discriminate
between or among market participants
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25889
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,20 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 proposed services being
completely voluntary, they are available
to all Users on an equal basis (i.e. the
same products and services are available
to all Users). The Exchange believes that
the proposed changes are reasonable
and designed to be fair and equitable,
and therefore, will not unduly burden
any particular group of Users.
The Exchange believes that providing
Users that purchase access to the LCN
or IP network with Access to the Global
OTC System does not impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act because, by
offering Access to the Global OTC
System, the Exchange gives each User
additional options for addressing its
access needs, responding to User
demand for access options. The
Exchange provides Access as a
convenience to Users. Use of Access is
completely voluntary, and each User
has several other access options
available to it. As alternatives to using
the Access to the Global OTC System
provided by the Exchange, a User may
access the Global OTC System through
the SFTI network, a third party
telecommunication network, third party
wireless network, a cross connect, or a
combination thereof to access the Global
OTC System through a connection to an
access center outside the data center
(which could be a SFTI access center, a
third-party access center, or both),
another User, or a third party vendor.
Users that opt to Access the Global OTC
System would not receive access that is
not available to all Users, as all market
participants that contract with Global
OTC may receive access. In this way,
the proposed changes would enhance
competition by helping Users tailor
their Access 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.
20 15
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U.S.C. 78f(b)(8).
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The Exchange believes that the
proposed rule change does not unfairly
discriminate between customers,
issuers, brokers or dealers in not
charging Users an additional fee to
access Global OTC while charging a
connectivity fee to access OTC Markets,
because Global OTC and the OTC
Markets ATS are not fungible. A User
that opted to access Global OTC or OTC
Markets would choose between them
based on a variety of factors, including
not just the reasonableness of fees
charged, but also the extent to which it
wished to have publicly displayed, firm,
auto-executable prices. In addition, the
Exchange is not the sole method a User
can use to access the OTC Markets ATS.
A User may use the SFTI network, a
third party telecommunication network,
a cross connect, or a combination
thereof to access the OTC Markets ATS
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 revisions to General Note 4
would provide a more detailed and
accurate description of the Access Users
receive with their purchase of access to
the LCN or IP network, thereby
enhancing competition by ensuring that
all Users have access to the same
information regarding Access.
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.
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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 21 and Rule
19b–4(f)(6) thereunder.22 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.23
A proposed rule change filed under
Rule 19b–4(f)(6) 24 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),25 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 believes that waiver of the
operative delay would allow Users to
have access to the Global OTC System
during the operative delay period and
would provide Users with options for
connectivity to trading and execution
services and the availability of products
and services. 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
21 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
23 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.
24 17 CFR 240.19b–4(f)(6).
25 17 CFR 240.19b–4(f)(6)(iii).
22 17
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the 30-day operative delay and
designates the proposed rule change
operative upon filing.26
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) 27 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–
NYSENAT–2019–13 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–NYSENAT–2019–13. 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
26 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).
27 15 U.S.C. 78s(b)(2)(B).
E:\FR\FM\04JNN1.SGM
04JNN1
25891
Federal Register / Vol. 84, No. 107 / Tuesday, June 4, 2019 / Notices
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–NYSENAT–2019–13 and
should be submitted on or before June
25, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.28
Eduardo A. Aleman,
Deputy Secretary.
collection packages requiring clearance
by the Office of Management and
Budget (OMB) in compliance with
Public Law 104–13, the Paperwork
Reduction Act of 1995, effective October
1, 1995. This notice includes revisions
of OMB-approved information
collections.
SSA is soliciting comments on the
accuracy of the agency’s burden
estimate; the need for the information;
its practical utility; ways to enhance its
quality, utility, and clarity; and ways to
minimize burden on respondents,
including the use of automated
collection techniques or other forms of
information technology. Mail, email, or
fax your comments and
recommendations on the information
collection(s) to the OMB Desk Officer
and SSA Reports Clearance Officer at
the following addresses or fax numbers.
Agency Information Collection
Activities: Proposed Request
(OMB) Office of Management and
Budget, Attn: Desk Officer for SSA,
Fax: 202–395–6974, Email address:
OIRA_Submission@omb.eop.gov
(SSA) Social Security Administration,
OLCA, Attn: Reports Clearance
Director, 3100 West High Rise, 6401
Security Blvd., Baltimore, MD 21235,
Fax: 410–966–2830, Email address:
OR.Reports.Clearance@ssa.gov
The Social Security Administration
(SSA) publishes a list of information
Or you may submit your comments
online through www.regulations.gov,
[FR Doc. 2019–11563 Filed 6–3–19; 8:45 am]
BILLING CODE 8011–01–P
SOCIAL SECURITY ADMINISTRATION
[Docket No: SSA–2019–0023]
Number of
respondents
Modality of completion
Frequency of
response
Average
burden per
response
(minutes)
Estimated
total annual
burden
(hours)
SSA–8—MCS Screens ....................................................................................
SSA–8—Paper Form .......................................................................................
656,623
5,484
1
1
9
10
98,493
914
Totals ........................................................................................................
662,107
........................
........................
99,407
2. Report to United States Social
Security Administration by Person
Receiving Benefits for a Child or for an
Adult Unable to Handle Funds/Report
to the United States Social Security
Administration—0960–0049. Section
203(c) of the Act requires the
Commissioner of SSA to make benefit
deductions, and provides for the
Commissioner to impose penalty
deductions on benefits of individuals
who fail to make timely reports of
khammond on DSKBBV9HB2PROD with NOTICES
referencing Docket ID Number [SSA–
2019–0023].
The information collections below are
pending at SSA. SSA will submit them
to OMB within 60 days from the date of
this notice. To be sure we consider your
comments, we must receive them no
later than August 5, 2019. Individuals
can obtain copies of the collection
instruments by writing to the above
email address.
1. Application for Lump Sum Death
Payment—20 CFR 404.390–404.392—
0960–0013. SSA uses Form SSA–8 to
collect information needed to authorize
payment of the lump sum death
payment (LSDP) to a widow, widower,
or children as defined in section 202(i)
of the Social Security Act (Act).
Respondents complete the application
for this one-time payment through use
of the paper form, or person interview
with an SSA employee either via
telephone, or in person in a field office.
For all personal interviews (either
telephone or in-person), we collect the
information in our electronic
Modernized Claim System (MCS).
Respondents are applicants for the
LSDP.
Type of Request: Revision of an OMBapproved information collection.
events, which are cause for deductions.
SSA uses Forms SSA–7161–OCR–SM
and SSA–7162–OCR–SM to: (1)
Determine continuing entitlement to
Social Security benefits; (2) correct
benefit amounts for beneficiaries
outside the United States; and (3)
monitor the performance of
representative payees outside the
United States. This collection is
mandatory as an annual (or every other
year, depending on the country of
Number of
respondents
Modality of completion
SSA–7161–OCR–SM ......................................................................................
SSA–7162–OCR–SM ......................................................................................
28 17
residence) review for fraud prevention.
In addition, the results can affect
benefits by increasing or decreasing
payment amount or by causing SSA to
suspend or terminate benefits. The
respondents are individuals living
outside the United States who are
receiving benefits on their own (or on
behalf of someone else) under Title II of
the Act.
Type of Request: Revision of an OMBapproved information collection.
Frequency of
response
42,314
426,448
1
1
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:16 Jun 03, 2019
Jkt 247001
PO 00000
Frm 00162
Fmt 4703
Sfmt 4703
E:\FR\FM\04JNN1.SGM
04JNN1
Average
burden per
response
(minutes)
15
5
Estimated
total annual
burden
(hours)
10,579
35,537
]]>Agencies
[Federal Register Volume 84, Number 107 (Tuesday, June 4, 2019)]
[Notices]
[Pages 25887-25891]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11563]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-85959; File No. SR-NYSENAT-2019-13]
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 Co-location Services
May 29, 2019.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on May 21, 2019, NYSE National, Inc. (``NYSE National'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the 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 Schedule of Fees and Rebates
(the ``Price List'') related to co-location services to update the
description of the access to trading and execution systems provided
with the purchase of access to the co-location local area networks. 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 the Price List related to co-
location \4\ services offered by the Exchange to update the description
of the access to trading and execution services and connectivity to
data provided to Users \5\ with connections to the Liquidity Center
Network (``LCN'') and internet protocol (``IP'') network, local area
networks available in the data center.
---------------------------------------------------------------------------
\4\ The Exchange initially filed rule changes relating to its
co-location services with the Securities and Exchange Commission
(``Commission'') on May 18, 2018. See Securities Exchange Act
Release No. 83351 (May 31, 2018), 83 FR 26314 (June 6, 2018) (SR-
NYSENAT-2018-07). 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 id. at note 9. 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 the New York Stock Exchange (``NYSE''),
NYSE American LLC (``NYSE American''), and NYSE Arca, Inc. (``NYSE
Arca'' and together with NYSE, NYSE American, and NYSE Chicago,
Inc., the ``Affiliate SROs''). See id. at note 11.
---------------------------------------------------------------------------
To implement the changes, the Exchange proposes to amend paragraph
one of General Note 4, which describes the access to trading and
execution systems which a User receives when it purchases access to the
LCN or IP network.\6\
---------------------------------------------------------------------------
\6\ See id. at 26315-26316.
---------------------------------------------------------------------------
The Exchange will announce the implementation date through a
customer notice.
As set forth in the first paragraph of General Note 4, when a User
purchases access to the LCN or IP network, it receives the ability to
access the trading and execution systems of the Exchange and the SRO
Affiliates (together, the ``Exchange Systems''), provided the User has
authorization from the Exchange or relevant Affiliate SRO.\7\ The
Exchange proposes to revise such paragraph to reflect that a User that
purchases access to the LCN or IP network also receives the ability to
access the trading and execution systems of Global OTC (``Global OTC
System''), subject to authorization by Global OTC.
---------------------------------------------------------------------------
\7\ See id.
---------------------------------------------------------------------------
In order to obtain access to the Global OTC System, the User would
enter into an agreement with Global OTC, pursuant to which Global OTC
would charge the User any applicable fees charged to its subscribers by
Global OTC. Once the Exchange receives authorization from Global OTC,
the Exchange would establish a connection between the User and the
Global OTC System.
The Exchange provides Users access to the Global OTC System and the
Exchange Systems (``Access'') as a convenience to Users. Use of Access
is completely voluntary. The Exchange is not aware of any impediment to
third parties offering Access. As alternatives to using the Access to
the Global OTC System provided by the Exchange, a User may access such
services through 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.
Global OTC
Global OTC is an affiliate of the Exchange, which has an indirect
interest in Global OTC because it is owned by the Exchange's ultimate
parent, Intercontinental Exchange, Inc.\8\
---------------------------------------------------------------------------
\8\ See id. at 26322. Global OTC is operated by Archipelago
Trading Services, Inc., which is a broker-dealer subsidiary of NYSE
Group, Inc. (``NYSE Group''). NYSE Group is also the parent company
of the Exchange.
---------------------------------------------------------------------------
Unlike the NYSE Exchanges, Global OTC is not a national securities
exchange registered with the Securities and Exchange Commission
(``Commission'') under Section 6 of the
[[Page 25888]]
Act.\9\ Rather, Global OTC is an alternative trading system (``ATS'')
\10\ operated by a broker-dealer, a member of the Financial Industry
Regulatory Authority. It facilitates transactions in over-the-counter
(``OTC'') equity securities, providing publicly displayed, firm, auto-
executable prices in the OTC securities marketplace. There is no
overlap in the securities traded on the NYSE Exchanges and Global OTC:
members trade National Market System (``NMS'') securities on the NYSE
Exchanges,\11\ but Global OTC subscribers cannot trade NMS securities
on Global OTC.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f. Global OTC is not required to register as a
national securities exchange because it operates under an exemption
from the requirement to register as an exchange. See 17 CFR 240.3a1-
1(a) and 17 CFR 240.300 through 304.
\10\ See 17 CFR 242.300(a). An ATS is a trading system that
meets the definition of ``exchange'' under federal securities laws
but is not required to register as a national securities exchange if
the ATS operates under an exemption provided under the Act.
\11\ See 17 CFR 242.600.
---------------------------------------------------------------------------
The Exchange charges fees for connectivity to the execution systems
of third party markets and other content service providers, including
two ATSs.\12\ Of those, the Exchange believes the OTC Markets ATS is
the most comparable to Global OTC.\13\ Both are inter-dealer quotation
systems for OTC securities.\14\ Global OTC and the OTC Markets' ATS are
not fungible, however. The OTC Markets' ATS is a trade messaging system
that displays market makers quotes and does not offer automatic
executions. While Global OTC provides a limit order book, displays
participants' orders, and executes orders pursuant to price/time
priority, OTC Markets' ATS displays market makers' quotes by price
priority, not time priority. In sum, OTC Markets' ATS is a market maker
intermediary, whereas Global OTC is a trading platform.
---------------------------------------------------------------------------
\12\ See 83 FR 26314, supra note 5, at 26322. Credit Suisse and
OTC Markets have ATSs. See Commission list of ATSs at https://www.sec.gov/foia/docs/atslist.htm.
\13\ The OTC Markets' ATS is OTC Link. Global OTC is
substantially smaller than OTC Markets' ATS: Global OTC's market
share is approximately 10% of average daily volume of trades of
over-the-counter equities, compared to OTC Markets' ATS market share
of approximately 90% of average daily volume of trades. See https://www.globalotc.com/brokers/market-share.
\14\ The third inter-dealer quotation system is the OTC Bulletin
Board, a facility of the Financial Industry Regulatory Authority.
---------------------------------------------------------------------------
The Proposed Amendments
To implement the change, the Exchange proposes to revise the first
paragraph of General Note 4 as follows:
Amend the first sentence to state that when a User
purchases access to the LCN or IP network, it receives the ability to
access the Global OTC System as well as the Exchange Systems, subject
to authorization by Global OTC, the Exchange or Affiliate Exchange, as
applicable;
Amend the third sentence to note that a User can change
the access to the Global OTC System that it receives at any time,
subject to authorization by Global OTC; and
Add a new fifth sentence stating that ``Global OTC offers
access to the Global OTC System to its subscribers, such that a User
does not have to purchase access to the LCN or IP network to obtain
access to the Global OTC System.''
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; \15\ 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 more of the Affiliate
SROs.\16\
---------------------------------------------------------------------------
\15\ 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, as compared to
Users that are not co-located, in sending orders to, and receiving
market data from, the Exchange.
\16\ See 83 FR 26314, supra note 5, at 26315. NYSE, NYSE
American, and NYSE Arca have submitted substantially the same
proposed rule change to propose the changes described herein. See
SR-NYSE-2019-31, SR-NYSEAmer-2019-21, and SR-NYSEArca-2019-40.
---------------------------------------------------------------------------
The proposed change is not otherwise intended to address any other
issues relating to co-location services and/or related fees, and the
Exchange is not aware of any problems that Users would have in
complying with the proposed change.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\17\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\18\ 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.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78f(b).
\18\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule 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 it would allow Users to connect to the Global
OTC System, thereby increasing Users' ability to tailor their data
center operations to the requirements of their business operations by
allowing them to select the form and latency of access that best suits
their needs. Global OTC provides publicly displayed, firm, auto-
executable prices in the OTC securities marketplace, and the Exchange
believes that allowing Users to connect to the Global OTC System would
promote price discovery and transparency in the OTC market, benefiting
participants in such market. At the same time, Users are not required
to use any of their bandwidth to access the Global OTC System unless
they wish to do so. Rather, a User only receives the Access that it
selects, and a User can change what Access it receives at any time,
subject to authorization from the Exchange, Affiliate SRO or Global
OTC, as applicable.
The Exchange provides Access as a convenience to Users. Use of
Access is completely voluntary, and each User has several other access
options available to it. As alternatives to using the Access to the
Global OTC System provided by the Exchange, a User may access the
Global OTC System through the SFTI network, a third party
telecommunication network, third party wireless network, a cross
connect, or a combination thereof to access the Global OTC System
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.
[[Page 25889]]
The Exchange believes that the proposed revisions to General Note 4
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 they would make the
description of Access more accessible and transparent by including
Global OTC, thereby providing market participants with clarity as to
what connectivity is included in the purchase of access to the LCN and
IP network, avoiding any potential investor confusion. The proposed
revisions to General Note 4 would provide a more detailed and accurate
description of the Access Users receive with their purchase of access
to the LCN or IP network. The proposed rule change would also make
clear that Access to each of the Exchange Systems and the Global OTC
System is provided on the same terms. All Users that voluntarily select
to access the LCN or IP network receive Access to the Exchange Systems
and the Global OTC System, and are not subject to a charge for such
Access above and beyond the fee paid for the relevant LCN or IP network
access.
The Exchange also believes that the proposed rule changes are
consistent with Section 6(b)(4) of the Act,\19\ 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
changes are consistent with Section 6(b)(4) of the Act for multiple
reasons.
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The proposed rule change is reasonable and equitable because, as
stated above, it would also make clear that Access to each of the
Exchange Systems and Global OTC System is provided on the same terms.
The Exchange further believes that the Access to the Global OTC System
described herein is equitably allocated and not unfairly discriminatory
because all Users that voluntarily select to access the LCN or IP
network receive the same Access, and are not subject to a charge for
Access to Global OTC above and beyond the fee paid for the relevant LCN
or IP network access. Users are not required to use any of their
bandwidth to access the Global OTC System unless they wish to do so.
Rather, a User only receives the Access that it selects, and a User can
change what Access it receives at any time, subject to authorization
from the Exchange, Affiliate SRO or Global OTC, as applicable. In
addition to the service being completely voluntary, it is available to
all Users on an equal basis. Users that opted to Access the Global OTC
System would not receive access that is not available to all Users.
The Exchange believes that the proposed rule change does not
unfairly discriminate between customers, issuers, brokers or dealers in
not charging Users an additional fee to access Global OTC while
charging a connectivity fee to access OTC Markets, because Global OTC
and the OTC Markets ATS are not fungible. A User that opted to access
Global OTC or OTC Markets would choose between them based on a variety
of factors, including not just the reasonableness of fees charged, but
also the extent to which it wished to have publicly displayed, firm,
auto-executable prices. In addition, the Exchange is not the sole
method a User can use to access the OTC Markets ATS. A User may use the
SFTI network, a third party telecommunication network, a cross connect,
or a combination thereof to access the OTC Markets ATS 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 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 above, the proposed changes do 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,\20\ 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 proposed services being
completely voluntary, they are available to all Users on an equal basis
(i.e. the same products and services are available to all Users). The
Exchange believes that the proposed changes are reasonable and designed
to be fair and equitable, and therefore, will not unduly burden any
particular group of Users.
---------------------------------------------------------------------------
\20\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
The Exchange believes that providing Users that purchase access to
the LCN or IP network with Access to the Global OTC System does not
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act because, by offering Access
to the Global OTC System, the Exchange gives each User additional
options for addressing its access needs, responding to User demand for
access options. The Exchange provides Access as a convenience to Users.
Use of Access is completely voluntary, and each User has several other
access options available to it. As alternatives to using the Access to
the Global OTC System provided by the Exchange, a User may access the
Global OTC System through the SFTI network, a third party
telecommunication network, third party wireless network, a cross
connect, or a combination thereof to access the Global OTC System
through a connection to an access center outside the data center (which
could be a SFTI access center, a third-party access center, or both),
another User, or a third party vendor. Users that opt to Access the
Global OTC System would not receive access that is not available to all
Users, as all market participants that contract with Global OTC may
receive access. In this way, the proposed changes would enhance
competition by helping Users tailor their Access 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.
[[Page 25890]]
The Exchange believes that the proposed rule change does not
unfairly discriminate between customers, issuers, brokers or dealers in
not charging Users an additional fee to access Global OTC while
charging a connectivity fee to access OTC Markets, because Global OTC
and the OTC Markets ATS are not fungible. A User that opted to access
Global OTC or OTC Markets would choose between them based on a variety
of factors, including not just the reasonableness of fees charged, but
also the extent to which it wished to have publicly displayed, firm,
auto-executable prices. In addition, the Exchange is not the sole
method a User can use to access the OTC Markets ATS. A User may use the
SFTI network, a third party telecommunication network, a cross connect,
or a combination thereof to access the OTC Markets ATS 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 revisions to General Note 4
would provide a more detailed and accurate description of the Access
Users receive with their purchase of access to the LCN or IP network,
thereby enhancing competition by ensuring that all Users have access to
the same information regarding Access.
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 \21\ and Rule 19b-4(f)(6) thereunder.\22\
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.\23\
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\21\ 15 U.S.C. 78s(b)(3)(A)(iii).
\22\ 17 CFR 240.19b-4(f)(6).
\23\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \24\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\25\ 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
believes that waiver of the operative delay would allow Users to have
access to the Global OTC System during the operative delay period and
would provide Users with options for connectivity to trading and
execution services and the availability of products and services. 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.\26\
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\24\ 17 CFR 240.19b-4(f)(6).
\25\ 17 CFR 240.19b-4(f)(6)(iii).
\26\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \27\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\27\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSENAT-2019-13 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-NYSENAT-2019-13. 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
[[Page 25891]]
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-
NYSENAT-2019-13 and should be submitted on or before June 25, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\28\
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\28\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-11563 Filed 6-3-19; 8:45 am]
BILLING CODE 8011-01-P
