Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Fee Schedule of NYSE Chicago, Inc., 58778-58794 [2019-23862]
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Federal Register / Vol. 84, No. 212 / Friday, November 1, 2019 / Notices
• Send an email to rule-comments@
sec.gov. Please include File No. SR–
NYSEAMER–2019–43 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 No.
SR–NYSEAMER–2019–43. 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
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personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File No.
SR–NYSEAMER–2019–43, and should
be submitted on or before November 22,
2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.32
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–23857 Filed 10–31–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87408; File No. SR–
NYSECHX–2019–12]
Self-Regulatory Organizations; NYSE
Chicago, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend the Fee
Schedule of NYSE Chicago, Inc.
October 28, 2019.
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 October
15, 2019 the NYSE Chicago, Inc.
(‘‘NYSE Chicago’’ 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 the
Fee Schedule of NYSE Chicago, Inc. to
provide for co-location services and fees
in connection with its expected
migration to the NYSE Pillar platform in
the fourth quarter of 2019. The proposed
rule change is available on the
Exchange’s website at www.nyse.com, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
32 17
CFR 200.30–3(a)(12).
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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
Fee Schedule to provide for co-location
services and fees in connection with its
expected migration to the NYSE Pillar
platform (‘‘Pillar’’) in the fourth quarter
of 2019.4 Pillar is an integrated trading
technology platform designed to use a
single specification for connecting to the
equities and options markets operated
by the Exchange’s affiliates New York
Stock Exchange LLC (‘‘NYSE’’), NYSE
American LLC (‘‘NYSE American’’),
NYSE Arca, Inc. (‘‘NYSE Arca’’), and
NYSE National, Inc. (‘‘NYSE National’’
and, together, the ‘‘Affiliate SROs’’).5 As
detailed below, current Users 6 would
not incur any new fees and no
incremental co-location revenue is
expected under this proposal.
The Affiliate SROs offer co-location
services.7 When a User purchases a co4 Subject to rule approvals, the migration to Pillar
is currently anticipated to be on November 4, 2019.
See Exchange Act Release Nos. 85297 (March 12,
2019), 84 FR 9854 (March 18, 2019) (SR–CHX–
2018–03), and 86709 (August 20, 2019), 84 FR
44654 (August 26, 2019) (SR–CHX–2019–08).
5 In July 2018, the Exchange and its direct parent
company were acquired by NYSE Group, Inc. As a
result, the Exchange and the Affiliate SROs are
direct or indirect subsidiaries of NYSE Group, Inc.
and, indirectly, Intercontinental Exchange, Inc. See
Exchange Act Release No. 83635 (July 13, 2018), 83
FR 34182 (July 19, 2018) (SR–CHX–2018–004); see
also Exchange Act Release No. 83303 (May 22,
2018), 83 FR 24517 (May 29, 2018) (SR–CHX–2018–
004).
6 Consistent with the Affiliate SRO Price Lists, for
purposes of the Exchange’s co-location services, a
‘‘User’’ shall mean any market participant that
requests to receive co-location services directly
from the Exchange. See Securities Exchange Act
Release Nos. 76008 (September 29, 2015), 80 FR
60190 (October 5, 2015) (SR–NYSE–2015–40);
76009 (September 29, 2015), 80 FR 60213 (October
5, 2015) (SR–NYSEMKT–2015–67); and 76010
(September 29, 2015), 80 FR 60197 (October 5,
2015) (SR–NYSEArca–2015–82); and 83351 (May
31, 2018), 83 FR 26314 (June 6, 2018) (SR–
NYSENAT–2018–07) (‘‘NYSE National Co-location
Notice’’).
7 With the exception of NYSE National, the
Affiliate SROs initially filed rule changes relating
to their co-location services and related fees with
the Commission in 2010. See Securities Exchange
Act Release Nos. 62960 (September 21, 2010), 75 FR
59310 (September 27, 2010) (SR–NYSE–2010–56);
62961 (September 21, 2010), 75 FR 59299
(September 27, 2010) (SR–NYSEAmex–2010–80);
and 63275 (November 8, 2010), 75 FR 70048
(November 16, 2010) (SR–NYSEArca–2010–100).
NYSE National initially filed rule changes relating
to its co-location services and related fees with the
Commission on May 18, 2018. See NYSE National
Co-location Notice, supra note 6. If any change to
the Affiliate SROs’ colocation services become
operative after the present filing is made but before
it becomes operative, the Exchange would make an
additional rule filing implementing the change,
with the intention that the Exchange would offer
the same co-location services offered by the
Affiliate SROs.
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Federal Register / Vol. 84, No. 212 / Friday, November 1, 2019 / Notices
location service, it is charged once for
the service, despite the service being
offered by all the Affiliate SROs. Under
this proposal, Users purchasing colocation services would continue to pay
once, even though all four Affiliate
SROs and the Exchange would offer colocation services, and would receive
access to the Affiliate SROs and the
Exchange in the Mahwah, New Jersey
data center (the ‘‘data center’’).
The Exchange proposes that the
additions to the Fee Schedule to provide
for co-location services would become
operative upon the Exchange’s
migration to Pillar.
Currently, the Exchange’s trading and
execution systems are not in the data
center. Once the migration to Pillar is
completed, the trading of all securities
on the Exchange will have moved to the
data center. As a result of the migration,
Users will be able to have low latency
connections to the Exchange over the
Liquidity Center Network (‘‘LCN’’), a
local area network available in the data
center, and so would be able to co-locate
in the data center by ‘‘rent[ing] space on
premises controlled by the Exchange in
order that they may locate their
electronic servers in close physical
proximity to the Exchange’s trading and
execution systems.’’ 8 Absent this
proposal to offer co-location services,
market participants’ access to the
Exchange would solely be available
outside of co-location, even after the
migration of the Exchange’s trading and
execution systems to Pillar, and so they
would not be able to ‘‘reduce latency in
transmitting market data and order
messages’’ to the Exchange.9
The Exchange operates in a highly
competitive environment. The
Commission has repeatedly expressed
its preference for competition over
regulatory intervention in determining
prices, products, and services in the
securities markets. Specifically, in
Regulation National Market System
(‘‘NMS’’), the Commission highlighted
the importance of market forces in
determining prices and SRO revenues
and, also, recognized that current
regulation of the market system ‘‘has
been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 10
8 See
75 FR 59310, supra note 7.
Securities Exchange Act Release No. 61358
(January 14, 2010), 75 CFR 3594 (January 21, 2010),
at 3598 (concept release on equity market
structure).
10 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
9 See
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Proposed Services and Fees
The Exchange proposes the same
services and fees set forth in the price
lists and fee schedules of its Affiliate
SROs (collectively, the ‘‘Affiliate SRO
Price Lists’’),11 with the non-substantive
differences described below. No new or
novel services or fees are proposed and,
as described below, current Users of the
Affiliate SROs’ co-location services
would not incur any new fees.
Definitions
The Exchange proposes to adopt the
definitions of ‘‘Affiliate,’’ ‘‘Aggregate
Cabinet Footprint,’’ ‘‘Hosted Customer,’’
‘‘Hosting User,’’ and ‘‘User’’ as set forth
in the Affiliate SRO Price Lists.
Specifically, the Exchange proposes the
following definitions:
• An ‘‘Affiliate’’ of a User is any other
User or Hosted Customer that is under
50% or greater common ownership or
control of the first User.
• ‘‘Aggregate Cabinet Footprint’’ of a
User or Hosted Customer is (a) for a
User, the total kW of the User’s cabinets,
including both partial and dedicated
cabinets, and (b), for a Hosted Customer,
the total kW of the portion of the
Hosting User’s cabinet, whether partial
or dedicated, allocated to such Hosted
Customer.
• A ‘‘Hosted Customer’’ means a
customer of a Hosting User that is
hosted in a Hosting User’s co-location
space.
• A ‘‘Hosting User’’ means a User of
co-location services that hosts a Hosted
Customer in the User’s co-location
space.
• A ‘‘User’’ means any market
participant that requests to receive colocation services directly from the
Exchange.
As in the Affiliate SRO Price Lists, the
Exchange would specify that the
definitions were for purposes of the colocation fees only.
11 See ‘‘Co-Location Fees’’ in ‘‘New York Stock
Exchange Price List 2019’’ (‘‘NYSE Price List’’) at
https://www.nyse.com/publicdocs/nyse/markets/
nyse/NYSE_Price_List.pdf; ‘‘NYSE American
Equities Price List’’ (‘‘NYSE American Equities
Price List’’) at https://www.nyse.com/publicdocs/
nyse/markets/nyse-american/NYSE_America_
Equities_Price_List.pdf; ‘‘NYSE American Options
Fee Schedule’’ (‘‘NYSE American Options Fee
Schedule’’) at https://www.nyse.com/publicdocs/
nyse/markets/american-options/NYSE_American_
Options_Fee_Schedule.pdf; ‘‘NYSE Arca Equities
Fees and Charges’’ (‘‘NYSE Arca Equities Fee
Schedule’’) at https://www.nyse.com/publicdocs/
nyse/markets/nyse-arca/NYSE_Arca_Marketplace_
Fees.pdf; ‘‘NYSE Arca Options Fees and Charges’’
(‘‘NYSE Arca Options Fee Schedule’’) at https://
www.nyse.com/publicdocs/nyse/markets/arcaoptions/NYSE_Arca_Options_Fee_Schedule.pdf;
and ‘‘NYSE National, Inc. Schedule of Fees and
Rebates’’ (‘‘NYSE National Fee Schedule’’) at
https://www.nyse.com/publicdocs/nyse/regulation/
nyse/NYSE_National_Schedule_of_Fees.pdf.
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General Notes
The Exchange proposes to adopt
General Notes 1 through 4 as set forth
in the Affiliate SRO Price Lists, subject
to the differences discussed below.
General Note 1: General Note 1 of the
Affiliate SRO Price Lists provides that a
User that incurs co-location fees for a
particular co-location service would not
be subject to co-location fees for the
same co-location service charged by the
other Affiliate SROs. The wording of
General Note 1 differs among the
Affiliate SRO Price Lists both where it
references the relevant price list or fee
schedule and where it lists the relevant
exchange’s affiliates.12
The Exchange proposes to adopt the
following General Note 1: 13
A User that incurs co-location fees for
a particular co-location service pursuant
to this Fee Schedule shall not be subject
to co-location fees for the same colocation service charged by the
Exchange’s affiliates the New York
Stock Exchange LLC (NYSE), NYSE
American LLC (NYSE American), NYSE
Arca, Inc. (NYSE Arca) and NYSE
National (NYSE National).
General Note 2: The Exchange
proposes the same General Note 2 as in
the Affiliate SRO Price Lists, setting
forth the requirements for qualifying for
a ‘‘Partial Cabinet Solution’’ bundle.14
The proposed text is as follows:
To qualify for a Partial Cabinet
Solution bundle, a User must meet the
following conditions: (1) It must
purchase only one Partial Cabinet
12 For example, the NYSE Arca Options Fee
Schedule provides that ‘‘[a] User that incurs colocation fees for a particular co-location service
pursuant to this Fee Schedule shall not be subject
to co-location fees for the same co-location service
charged pursuant to the NYSE Arca Equities Fee
Schedule or by the Exchange’s affiliates NYSE
American LLC (NYSE American), New York Stock
Exchange LLC (NYSE) and NYSE National, Inc.
(NYSE National)’’ (emphasis added) while the
NYSE Price List provides that ‘‘[a] User that incurs
co-location fees for a particular co-location service
pursuant to this Price List shall not be subject to
co-location fees for the same co-location service
charged by the Exchange’s affiliates NYSE
American LLC (NYSE American) and NYSE Arca,
Inc. (NYSE Arca), and NYSE National, Inc. (NYSE
National).’’ (emphasis added) The Exchange’s
proposed text for General Note 1 is consistent with
the wording of General Note 1 in the NYSE Price
List, with the exception that it will use ‘‘this Fee
Schedule’’ instead of ‘‘this Price List.’’
13 The Exchange expects that each Affiliate SRO
will submit a proposed rule change to update
General Note 1 to include NYSE Chicago as a
provider of co-location services and to remove the
definition of NYSE Chicago from General Note 4.
14 See Securities Exchange Act Release Nos.
77072 (February 5, 2016), 81 FR 7394 (February 11,
2016) (SR–NYSE–2015–53); 77071 (February 5,
2016), 81 FR 7382 (February 11, 2016) (SR–
NYSEMKT–2015–89); and 77070 (February 5,
2016), 81 FR 7401 (February 11, 2016) (SR–
NYSEArca–2015–102); and NYSE National Colocation Notice, supra note 6, at 26315.
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Solution bundle; (2) the User and its
Affiliates must not currently have a
Partial Cabinet Solution bundle; and (3)
after the purchase of the Partial Cabinet
Solution bundle, the User, together with
its Affiliates, will have an Aggregate
Cabinet Footprint of no more than 2 kW.
• A User requesting a Partial Cabinet
Solution bundle will be required to
certify to the Exchange (a) whether any
other Users or Hosted Customers are
Affiliates of the certificating User, and
(b) that after the purchase of the Partial
Cabinet Solution bundle, the User,
together with its Affiliates, would have
an Aggregate Cabinet Footprint of no
more than 2 kW. The certificating User
will be required to inform the Exchange
immediately of any event that causes
another User or Hosted Customer to
become an Affiliate. The Exchange shall
review available information regarding
the entities and may request additional
information to verify the Affiliate status
of a User or Hosted Customer. The
Exchange shall approve a request for a
Partial Cabinet Solution bundle unless it
determines that the certification is not
accurate.
• If a User that has purchased a
Partial Cabinet Solution bundle
becomes affiliated with one or more
other Users or Hosted Customers and
thereby no longer meets the conditions
for access to the Partial Cabinet Solution
bundle, or if the User otherwise ceases
to meet the conditions for access to the
Partial Cabinet Solution bundle, the
Exchange will no longer offer it to such
User and the User will be charged for
each of the services individually, at the
price for each such service set out in the
Fee Schedule. Such price change would
be effective as of the date that the User
ceased to meet the conditions.
In addition, a User that changes its
Partial Cabinet Solution bundle from
one option to another will not be subject
to a second initial charge, but will be
required to pay the difference, if any,
between the bundles’ initial charges.
General Note 3: The Exchange
proposes the same General Note 3 as in
the Affiliate SRO Price Lists, setting
forth the provisions relating to the use
of a waitlist.15 The proposed text is as
follows:
The initial and monthly charge for 2
bundles of 24 cross connects will be
waived for a User that is waitlisted for
a cage for the duration of the waitlist
period, provided that the cross connects
15 See Securities Exchange Act Release Nos.
77681 (April 21, 2016), 81 FR 24915 (April 27, 2016
(SR–NYSE–2016–13); 77680 (April 21, 2016), 81 FR
24905 (April 27, 2016) (NYSEMKT–2016–17); and
77682 (April 21, 2016), 81 FR 24913 (April 27, 2016
(NYSEArca–2016–21); and NYSE National Colocation Notice, supra note 6, at 26315.
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may only be used to connect the User’s
non-contiguous cabinets. The charge
will no longer be waived once a User is
removed from the waitlist.
• If a waitlist is created, a User
seeking a new cage will be placed on the
waitlist based on the date a signed order
for the cage is received.
• A User that turns down a cage
because it is not the correct size will
remain on the waitlist. A User that
requests to be removed or that turns
down a cage that is the size that it
requested will be removed from the
waitlist.
• A User that is removed from the
waitlist but subsequently requests a cage
will be added back to the bottom of the
waitlist, provided that, if the User was
removed from the waitlist because it
turned down a cage that is the size that
it requested, it will not receive a second
waiver of the charge.
General Note 4: Proposed General
Note 4 would establish that, when a
User purchases access to the Liquidity
Center Network (‘‘LCN’’) or the internet
protocol (‘‘IP’’) network, the two local
area networks available in the data
center,16 a User would receive (a) the
ability to access the trading and
execution systems of the Exchange and
Affiliate SROs (‘‘Exchange Systems’’) as
well as of Global OTC (the ‘‘Global OTC
System’’) and (b) connectivity to any of
the listed data products (‘‘Included Data
Products’’) that it selects. The proposed
General Note 4 would be the same as the
General Note 4 in the Affiliate SRO
Price Lists.17
The Exchange proposes to adopt the
following General Note 4:
When a User purchases access to the
LCN or IP network, it receives the
ability to access the trading and
16 See Securities Exchange Act Release Nos.
79730 (January 4, 2017), 82 FR 3045 (January 10,
2017) (SR–NYSE–2016–92); 79728 (January 4,
2017), 82 FR 3035 (January 10, 2017) (SR–
NYSEMKT–2016–126); and 79729 (January 4,
2017), 82 FR 3061 (January 10, 2017) (SR–
NYSEArca–2016–172); and NYSE National Colocation Notice, supra note 6, at 26316.
17 See Securities Exchange Act Release Nos.
85952 (May 29, 2019), 84 FR 25880 (June 4, 2019)
(SR–NYSE–2019–31); 85960 (May 29, 2019), 84 FR
25848 (June 4, 2019) (SR–NYSEAmer–2019–21);
85958 (May 29, 2019), 84 FR 25858 (June 4, 2019)
(SR–NYSEArca–2019–40); and 85959 (May 29,
2019), 84 FR 25887 (June 4, 2019) (SR–NYSENat–
2019–13); see also Securities Exchange Act Release
Nos. 85300 (March 13, 2019), 84 FR 10152 (March
19, 2019) (SR–NYSE–2019–11); 85302 (March 13,
2019), 84 FR 10164 (March 19, 2019) (SR–
NYSEAmer–2019–02); 85306 (March 13, 2019), 84
FR 10159 (March 19, 2019) (SR–NYSEArca–2019–
11); 85305 (March 13, 2019), 84 FR 10154 (March
19, 2019) (SR–NYSENat–2019–05; 83404 (June 11,
2018), 83 FR 28048 (June 15, 2018) (SR–NYSE–
2018–23); 83402 (June 11, 2018), 83 FR 28041 (June
15, 2018) (SR–NYSEAmer–2018–23); and 83403
(June 11, 2018), 83 FR 28053 (June 15, 2018) (SR–
NYSEArca–2018–36).
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execution systems of the NYSE, NYSE
American, NYSE Arca, NYSE Chicago,
Inc. (NYSE Chicago), and NYSE
National (together, the Exchange
Systems) as well as of Global OTC (the
‘‘Global OTC System’’), subject, in each
case, to authorization by the NYSE,
NYSE American, NYSE Arca, NYSE
Chicago, NYSE National or Global OTC,
as applicable. Such access includes
access to the customer gateways that
provide for order entry, order receipt
(i.e. confirmation that an order has been
received), receipt of drop copies and
trade reporting (i.e. whether a trade is
executed or cancelled), as well as for
sending information to shared data
services for clearing and settlement. A
User can change the access it receives at
any time, subject to authorization by
NYSE, NYSE American, NYSE Arca,
NYSE Chicago, NYSE National or Global
OTC. NYSE, NYSE American, NYSE
Arca, NYSE Chicago and NYSE National
also offer access to Exchange Systems to
their members, such that a User does
not have to purchase access to the LCN
or IP network to obtain access to
Exchange Systems. 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.
When a User purchases access to the
LCN or IP network it receives
connectivity to any of the Included Data
Products that it selects, subject to any
technical provisioning requirements and
authorization from the provider of the
data feed. Market data fees for the
Included Data Products are charged by
the provider of the data feed. A User can
change the Included Data Products to
which it receives connectivity at any
time, subject to authorization from the
provider of the data feed. The Exchange
is not the exclusive method to connect
to the Included Data Products.
The Included Data Products are as
follows:
NMS feeds
NYSE:
NYSE Alerts
NYSE BBO
NYSE Integrated Feed
NYSE OpenBook
NYSE Order Imbalances
NYSE Trades
NYSE American:
NYSE American Alerts
NYSE American BBO
NYSE American Integrated Feed
NYSE American OpenBook
NYSE American Order Imbalances
NYSE American Trades
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NYSE American Options
NYSE Arca:
NYSE ArcaBook
NYSE Arca BBO
NYSE Arca Integrated Feed
NYSE Arca Order Imbalances
NYSE Arca Trades
NYSE Arca Options
NYSE Best Quote and Trades (BQT)
NYSE Bonds
NYSE Chicago
NYSE National
Cabinet-Related Fees
The Exchange proposes the same
services and fees set forth in the
Affiliate SRO Price Lists under ‘‘Initial
Fee per Cabinet’’; ‘‘Monthly Fee per
Cabinet’’; ‘‘Cabinet Upgrade Fee’’; ‘‘PNU
Cabinet’’; and ‘‘Cage Fees’’ (collectively,
the ‘‘Cabinet-Related Fees’’).
Initial Fee per Cabinet and Monthly
Fee per Cabinet: As in the Affiliate SRO
Price Lists, the Exchange proposes that,
to house its servers and other equipment
in the data center, a User have the
option of an entire cabinet dedicated
solely to that User (‘‘dedicated cabinet’’)
or a partial cabinet alternative (‘‘partial
cabinet’’).18 Partial cabinets would be
made available in increments of eightrack units of space. Users would pay an
initial fee and a monthly fee based on
the number of kilowatts (‘‘kW’’).
Cabinet Upgrade Fee: Users that
require additional power allocation may
prefer to maintain their hardware within
one of their existing cabinets rather than
add an additional cabinet. Specifically,
Users may develop their hardware
infrastructure within a particular
cabinet in such a way that, if expansion
of such hardware is needed, it can be
accomplished within the space
constraints of that particular cabinet. If
this type of User requires additional
power allocation, it would likely want
to modify its existing cabinet in this
manner, rather than taking an additional
dedicated cabinet due to the expense of
re-developing its infrastructure within
such additional dedicated cabinet.
Accordingly, as in the Affiliate SRO
Price Lists, the Exchange would offer
Users the option of a ‘‘Cabinet Upgrade’’
and related fee, pursuant to which the
Exchange would accommodate requests
for additional power allocation beyond
the typical amount that the Exchange
allocates per dedicated cabinet, at
which point the Exchange must upgrade
the cabinet’s power capacity.19
The Exchange notes that the Cabinet
Upgrade Fees in the Affiliate SRO Price
Lists have a parenthetical setting forth
lower fees for a User that submitted a
written order for a Cabinet Upgrade by
January 31, 2014, provided that the
Cabinet Upgrade became fully
operational by March 31, 2014. Because
a User that incurs co-location fees for a
particular co-location service would not
be subject to co-location fees for the
same co-location service charged by the
58781
Affiliate SROs and such Users may
already be subject to this different
charge based on the Price List of an
Affiliate SRO, the Exchange proposes to
maintain the information regarding the
lower price on its Fee Schedule.
PNU Fee: As in the Affiliate SRO
Price Lists, the Exchange proposes to
offer Users the option of an unused
cabinet for which power is not utilized
(‘‘PNU cabinet’’) and charge a monthly
fee.20 A User may wish to have a PNU
cabinet it reserves for future use.
Although PNU cabinets do not use
power, when the Exchange establishes a
PNU cabinet, it would include wiring,
circuitry, and hardware and allocate
kWs of unused power capacity. This
would allow the PNU cabinet to be
powered and used promptly upon the
User’s request.
Cage Fee: As in the Affiliate SRO
Price Lists, the Exchange proposes to
offer Users the use of cages to house
their cabinets within the data center,
with initial and monthly charges based
on the size of the cage.21 A cage would
typically be purchased by a User that
has several cabinets within the data
center and that wishes to enhance
privacy around its cabinets, e.g., so that
other Users cannot see what type of
hardware is being utilized.
The Exchange proposes to add the
following fees and language to its Fee
Schedule:
Initial Fee per Cabinet
Dedicated Cabinet ....................................................................................
8-Rack Unit of a Partial Cabinet ..............................................................
$5,000
$2,500
Monthly Fee per Cabinet
Dedicated Cabinet:
Number of kWs
4–8
9–20
21–40
41+
8-Rack Unit of a Partial Cabinet:
Number of kWs
1
2
Per kW Fee Monthly
$1,200
$1,050
$950
$900
Total Fee Monthly
$1,500
$2,700
Cabinet Upgrade Fee
Dedicated Cabinet ....................................................................................
18 See Securities Exchange Act Release Nos.
71122 (December 18, 2013), 78 FR 77739 (December
24, 2013) (SR–NYSE–2013–81); 71131 (December
18, 2013), 78 FR 77750 (December 24, 2013) (SR–
NYSEMKT–2013–103); and 71130 (December 18,
2013), 78 FR 77765 (December 24, 2013) (SR–
NYSEArca–2013–143) and NYSE National Colocation Notice, supra note 6, at 26316.
19 See id.
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$9,200 ($4,600 for a User that submitted a written order for a Cabinet
Upgrade by January 31, 2014, provided that the Cabinet Upgrade
became fully operational by March 31, 2014).
20 See Securities Exchange Act Release Nos.
70913 (November 21, 2013), 78 FR 70987
(November 27, 2013 (SR–NYSE–2013–74); 70914
(November 21, 2013), 78 FR 71000 (November 27,
2013) (SR–NYSEMKT–2013–93); and 70916
(November 21, 2013), 78 FR 70989 (November 21,
2013) (SR–NYSEArca–2013–124) and NYSE
National Co-location Notice, supra note 6, at 26316.
21 See Securities Exchange Act Release Nos.
67666 (August 15, 2012), 77 FR 50742 (August 22,
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
2012) (SR–NYSE–2012–18); 67665 (August 15,
2012), 77 FR 50734 (August 22, 2012) (SR–
NYSEMKT–2012–11); 67669 (August 15, 2012), 77
FR 50746 (August 22, 2012) (SR–NYSEArca–2012–
62); and 67667 (August 15, 2012), 77 FR 50743
(August 22, 2012) (SR–NYSEArca–2012–63); and
NYSE National Co-location Notice, supra note 6, at
26316.
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PNU Cabinet ............................................................................................
monthly charge of $360 per kW allocated to PNU Cabinet.
Cage Fees
2–14 Cabinets ..........................................................................................
15–28 Cabinets ........................................................................................
29+ Cabinets ............................................................................................
Access and Service Fees
The Exchange proposes to adopt the
same services and fees set forth in the
Affiliate SRO Price Lists under ‘‘LCN
Access’’; ‘‘Bundled Network Access’’;
‘‘Partial Cabinet Solution bundles’’; ‘‘IP
Network Access’’; ‘‘Testing and
Certification IP Network Access’’;
‘‘Wireless Connections for Third Party
Data’’; ‘‘Virtual Control Circuit between
two Users’’; ‘‘Hosting Fee’’; ‘‘Data Center
Fiber Cross Connect’’; ‘‘Connection to
Time Protocol Feed’’ and ‘‘Expedite
Fee’’ (collectively, the ‘‘Access and
Service Fees’’).
LCN Access: As in the Affiliate SRO
Price Lists, the Exchange proposes to
offer Users the option to purchase 1 Gb,
10 Gb, 40 Gb, and 10 Gb LX LCN
circuits, with initial and monthly
charges.22 As in the Affiliate SRO Price
Lists, the Exchange proposes that a User
that purchases five 10 Gb LCN
connections would only be charged the
initial fee for a sixth 10 Gb LCN
connection and would not be charged
the monthly fee that would otherwise be
applicable. This would apply to a User
that purchases six 10 Gb LCN
connections at one time as well as to a
User that purchases six 10 Gb LCN
connections at separate times.23
Bundled Network Access: As in the
Affiliate SRO Price Lists, the Exchange
proposes to offer Users two ‘‘Bundled
Network Access’’ options, with initial
and monthly charges.24 Both bundles
would include two LCN connections,
two IP network connections, and two
optic connections to outside access
centers. One bundle would have 1 Gb
connections, and the other 10 Gb
connections.
Partial Cabinet Solution Bundles: As
in the Affiliate SRO Price Lists, the
Exchange proposes to offer Users four
‘‘Partial Cabinet Solution’’ bundles.25
Each Partial Cabinet Solution bundle
option would include a one or two kW
22 See
note 16, supra.
note 21, supra.
24 See note 16, supra.
25 See note 14, supra; Securities Exchange Act
Release Nos. 84893 (December 20, 2018), 83 FR
67455 (December 28, 2018) (SR–NYSE–2018–63);
84925 (December 21, 2018), 83 FR 67754 (December
31, 2018) (SR–NYSEAmer–2018–55); 84893
(December 20, 2018), 83 FR 67455 (December 28,
2018) (SR–NYSEArca–2018–93); and 84895
(December 20, 2018), 83 FR 67405 (December 28,
2018) (SR–NYSENat–2018–26).
23 See
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$5,000 initial charge plus $2,700 monthly charge.
$10,000 initial charge plus $4,100 monthly charge.
$15,000 initial charge plus $5,500 monthly charge.
partial cabinet, one LCN connection,
one IP network connection, two fiber
cross connections, and connectivity to
either the Network Time Protocol
(‘‘NTP’’) or Precision Timing Protocol
(‘‘PTP’’) time feed. The power of the
partial cabinet and Gb of the network
connections would vary by bundle.26 A
User and its Affiliates would be limited
to one Partial Cabinet Solution bundle
at a time, and must have an Aggregate
Cabinet Footprint of 2 kW or less to
qualify. As noted above, such
requirements would be set forth in
General Note 2.27 Finally, a User
purchasing a Partial Cabinet Solution
bundle would be subject to a 90-day
minimum commitment, after which
period it would be subject to the 60-day
rolling time period.
IP Network Access: As in the Affiliate
SRO Price Lists, the Exchange proposes
to offer Users the option to purchase 1
Gb, 10 Gb, and 40 Gb IP network
circuits, with initial and monthly
charges.28
Testing and Certification IP Network
Access: As in the Affiliate SRO Price
Lists, the Exchange proposes to offer
Users access to an IP network circuit for
testing and certification at no charge.29
The circuit could only be used for
testing and certification, and the testing
26 The Affiliate SROs have filed to amend two of
the Partial Cabinet Solution bundles by replacing
the 10 Gb LCN connection with a LCN 10 Gb LX
connection. According to the Affiliate SROs, the
change is expected to become operative during the
fourth quarter of 2019, and the implementation date
will be announced through a customer notice. See
Securities Exchange Act Release Nos. 86550
(August 1, 2019), 84 FR 38696 (August 7, 2019)
(SR–NYSE–2019–41); 86548 (August 1, 2019), 84
FR 38704 (August 7, 2019) (SR–NYSEAmer–2019–
28); 86547 (August 1, 2019), 84 FR 38708 (August
7, 2019) (SR–NYSEArca–2019–54); and 86549
(August 1, 2019), 84 FR 38700 (August 7, 2019)
(SR–NYSENat–2019–17). The Exchange proposes to
include notes to the Partial Cabinet Solution
bundles in the Fee Schedule indicating the
expected change.
27 See text accompanying note 14, supra.
28 See note 16, supra. See also Securities
Exchange Act Release Nos. 74222 (February 6,
2015), 80 FR 7888 (February 12, 2015 (SR–NYSE–
2015–05); 74220 (February 6, 2015), 80 FR 7894
(February 12, 2015) (SR–NYSEMKT–2015–08); and
74219 (February 6, 2015), 80 FR 7899 (February 12,
2015) (SR–NYSEArca–2015–03) and NYSE National
Co-location Notice, supra note 6, at 26317.
29 See id. 80 FR at 7888, 80 FR at 7894, 80 FR
at 7899, and NYSE National Co-location Notice,
supra note 6, at 26318.
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and certification period would be
limited to three months.
Wireless Connections for Third Party
Data: As in the Affiliate SRO Price Lists,
the Exchange proposes to offer Users a
means to receive market data feeds from
third party markets (‘‘Wireless Third
Party Data’’) through a wireless
connection, for an initial and monthly
fee.30 Fees would be subject to a 30-day
testing period, during which the
monthly charge per connection would
be waived. The wireless connections
would include the use of one port for
connectivity to the Wireless Third Party
Data. If a User that has more than one
wireless connection wishes to use more
than one port to connect to the Wireless
Third Party Data, the Exchange proposes
to make such additional ports available
for a monthly fee per port.31
Virtual Control Circuit between two
Users: As in the Affiliate SRO Price
Lists, the Exchange proposes to offer
Users ‘‘Virtual Control Circuits’’
(‘‘VCCs’’) between two Users for a
monthly charge based on the size of the
VCC. 32 VCCs are connections between
two points over dedicated bandwidth
using the IP network. A VCC is a twoway connection which the two
participants can use for any purpose.
The Exchange would bill the User
requesting the VCC, but would not set
up a VCC until the other User confirmed
that it wishes to have the VCC set up.
Hosting Fee: As in the Affiliate SRO
Price Lists, the Exchange proposes to
offer Users a hosting service for a
monthly fee per cabinet per Hosted
Customer for each cabinet in which
such Hosted Customer is hosted.33
‘‘Hosting’’ would be a service offered by
a User to another entity in the User’s
30 See Securities Exchange Act Release Nos.
76748 (December 23, 2015), 80 FR 81609 (December
30, 2015) (SR–NYSE–2015–52); 76750 (December
23, 2015), 80 FR 81648 (December 30, 2015) (SR–
NYSEMKT–2015–85); and 76749 (December 23,
2015), 80 FR 81640 (December 30, 2015) (SR–
NYSEArca–2015–99); and NYSE National Colocation Notice, supra note 6, at 26318.
31 Id.
32 See Securities Exchange Act Release Nos.
80311 (March 24, 2017), 82 FR 15749 (March 30,
2017) (SR–NYSE–2016–45); 80309 (March 24,
2017), 82 FR 15725 (March 30, 2017) (SR–
NYSEMKT–2016–63); and 80310 (March 24, 2017),
82 FR 15763 (March 30, 2017) (SR–NYSEArca–
2016–89); and NYSE National Co-location Notice,
supra note 6, at 26318.
33 See note 6, supra.
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space within the data center and could
include, for example, a User supporting
such other entity’s technology, whether
hardware or software, through the
User’s co-location space. A Hosting User
would be required to be a User pursuant
to the definition of User proposed
above. Since only Users could be
Hosting Users, a Hosted Customer
would not be able to provide hosting
services to any other entities in the
space in which it is hosted.
Data Center Fiber Cross Connect: As
in the Affiliate SRO Price Lists, the
Exchange proposes to offer Users fiber
cross connects for an initial and
monthly charge.34 A User would be able
to use cross connects between its
cabinets or between its cabinet(s) and
the cabinets of separate Users within the
data center. A cross connect would be
used to connect cabinets of separate
Users when, for example, a User
receives technical support, order
routing, and/or market data delivery
services from another User in the data
center. Cross connects may be bundled
(i.e., multiple cross connects within a
single sheath) such that a single sheath
can hold either one cross connect or
several cross connects in multiples of
six (e.g., six or 12 cross connects). The
Exchange is proposing fees for bundled
cross connects that correspond to the
number of cross connects in the bundle.
Connection to Time Protocol Feed: As
in the Affiliate SRO Price Lists, the
Exchange proposes to offer Users the
option to purchase connectivity to one
or more of three time feeds, with
monthly and initial charges.35 Each
proposed time feed would provide a
feed with the current time of day using
one of three different time protocols:
GPS Time Source, the Network Time
Protocol Feed (‘‘NTP’’), and the
58783
Precision Time Protocol (‘‘PTP’’). Users
may make use of time feeds to receive
time and to synchronize clocks between
computer systems or throughout a
computer network, and time feeds may
assist Users in other functions,
including record keeping or measuring
response times. Only the NTP and PTP
time feeds would be available to partial
cabinet Users, whereas dedicated
cabinet Users would have access to all
three time feeds. The NTP feed would
only be available on the LCN.
Expedite Fee: As in the Affiliate SRO
Price Lists, the Exchange proposes to
offer Users the option to expedite the
completion of co-location services
purchased or ordered by the User, for
which the Exchange would charge an
‘‘Expedite Fee.’’ 36
The Exchange proposes to add the
following fees and language to its Fee
Schedule:
Type of service
Description
Amount of charge
LCN Access ........................................................
1 Gb Circuit ......................................................
LCN Access ........................................................
10 Gb Circuit ....................................................
LCN Access ........................................................
10 Gb LX Circuit ..............................................
LCN Access ........................................................
40 Gb Circuit ....................................................
Bundled Network Access (2 LCN connections,
2 IP network connections, and 2 optic connections to outside access center).
1 Gb Bundle .....................................................
Partial Cabinet Solution bundles ........................
Note: A User and its Affiliates are limited to one
Partial Cabinet Solution bundle at a time. A
User and its Affiliates must have an Aggregate Cabinet Footprint of 2 kW or less to
qualify for a Partial Cabinet Solution bundle.
See Note 2 under ‘‘General Notes.’’.
Option A: 1 kW partial cabinet, 1 LCN connection (1 Gb), 1 IP network connection (1
Gb), 2 fiber cross connections and either
the Network Time Protocol Feed or Precision Timing Protocol.
$6,000 per connection initial charge plus
$5,000 monthly per connection.
$10,000 per connection initial charge plus
$14,000 monthly per connection. A User
that purchases 5 10 GB LCN Circuits will
receive the 6th 10 GB LCN Circuit without
an additional monthly charge.
$15,000 per connection initial charge plus
$22,000 monthly per connection.
$15,000 per connection initial charge plus
$22,000 monthly per connection.
$25,000 initial charge plus $13,000 monthly
charge.
$50,000 initial charge plus $53,000 monthly
charge.
$7,500 initial charge per bundle plus monthly
charge per bundle as follows:
• For Users that order on or before December 31, 2019: $3,000 monthly for first 24
months of service, and $6,000 monthly
thereafter.
• For Users that order after December 31,
2019: $6,000 monthly.
$7,500 initial charge per bundle plus monthly
charge per bundle as follows:
• For Users that order on or before December 31, 2019: $3,500 monthly for first 24
months of service, and $7,000 monthly
thereafter.
• For Users that order after December 31,
2019: $7,000 monthly.
10 Gb Bundle ...................................................
Option B: 2 kW partial cabinet, 1 LCN connection (1 Gb), 1 IP network connection (1
Gb), 2 fiber cross connections and either
the Network Time Protocol Feed or Precision Timing Protocol.
34 See
note 21, supra.
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35 See
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Type of service
Description
Amount of charge
Option C: 1 kW partial cabinet, 1 LCN connection (10 Gb),* 1 IP network connection
(10 Gb), 2 fiber cross connections and either the Network Time Protocol Feed or
Precision Timing Protocol.
* The LCN connection (10 Gb) will be replaced with an LCN connection (10 Gb LX)
on a date to be announced by customer notice, expected to be during the fourth quarter of 2019.
$10,000 initial charge per bundle plus monthly
charge per bundle as follows:
• For Users that order on or before December 31, 2019: $7,000 monthly for first 24
months of service, and $14,000 monthly
thereafter.
• For Users that order after December 31,
2019: $14,000 monthly.
$10,000 initial charge per bundle plus monthly
charge per bundle as follows:
• For Users that order on or before December 31, 2019: $7,000 monthly for first 24
months of service, and $14,000 monthly
thereafter.
• For Users that order after December 31,
2019: $14,000 monthly.
$10,000 initial charge per bundle plus monthly
charge per bundle as follows:
• For Users that order on or before December 31, 2019: $7,500 monthly for first 24
months of service, and $15,000 monthly
thereafter.
• For Users that order after December 31,
2019: $15,000 monthly.
IP Network Access .............................................
Option D: 2 kW partial cabinet, 1 LCN connection (10 Gb),* 1 IP network connection
(10 Gb), 2 fiber cross connections and either the Network Time Protocol Feed or
Precision Timing Protocol.
* The LCN connection (10 Gb) will be replaced with an LCN connection (10 Gb LX)
on a date to be announced by customer notice, expected to be during the fourth quarter of 2019.
1 Gb Circuit ......................................................
IP Network Access .............................................
10 Gb Circuit ....................................................
IP Network Access .............................................
40 Gb Circuit ....................................................
Testing and certification IP Network Access ......
IP network circuit for testing and certification.
Circuit can only be used for testing and certification and testing and certification period
is limited to three months.
Wireless connection of Cboe Pitch BZX Gig
shaped data and Cboe Pitch BYX Gig
shaped data.
Wireless Connection for Third Party Data .........
Wireless Connection for Third Party Data .........
Wireless connection of Cboe EDGX Gig
shaped data and Cboe EDGA Gig shaped
data.
Wireless Connection for Third Party Data .........
Wireless connection of NASDAQ TotalviewITCH data.
Wireless Connection for Third Party Data .........
Wireless connection
Totalview-ITCH data.
Wireless Connection for Third Party Data .........
Wireless connection of NASDAQ Totalview
Ultra (FPGA).
Wireless Connection for Third Party Data .........
Wireless connection of NASDAQ TotalviewITCH and BX Totalview-ITCH data.
Wireless Connection for Third Party Data .........
Wireless connection of NASDAQ Totalview
Ultra (FPGA) and BX Totalview-ITCH data.
Wireless Connection for Third Party Data .........
Wireless connection of Toronto Stock Exchange (TSX).
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of
NASDAQ
Sfmt 4703
BX
$2,500 per connection initial charge plus
$2,500 monthly per connection.
$10,000 per connection initial charge plus
$11,000 monthly per connection.
$10,000 per connection initial charge plus
$18,000 monthly per connection.
No charge.
$5,000 per connection initial charge plus
monthly charge per connection of $6,000.
Fees are subject to a 30-day testing period,
during which the monthly charge per connection is waived.
$5,000 per connection initial charge plus
monthly charge per connection of $6,000.
Fees are subject to a 30-day testing period,
during which the monthly charge per connection is waived.
$5,000 per connection initial charge plus
monthly charge per connection of $8,500.
Fees are subject to a 30-day testing period,
during which the monthly charge per connection is waived.
$5,000 per connection initial charge plus
monthly charge per connection of $6,000.
Fees are subject to a 30-day testing period,
during which the monthly charge per connection is waived.
$5,000 per connection initial charge plus
monthly charge per connection of $11,000.
Fees are subject to a 30-day testing period,
during which the monthly charge per connection is waived.
$5,000 per connection initial charge plus
monthly charge per connection of $12,000.
Fees are subject to a 30-day testing period,
during which the monthly charge per connection is waived.
$5,000 per connection initial charge plus
monthly charge per connection of $14,500.
Fees are subject to a 30-day testing period,
during which the monthly charge per connection is waived.
$5,000 per connection initial charge plus
monthly charge per connection of $8,500.
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Type of service
Description
Amount of charge
Wireless Connection for Third Party Data .........
Port for wireless connection ............................
Virtual Control Circuit between two Users .........
1Mb ..................................................................
3Mb ..................................................................
5Mb ..................................................................
10Mb ................................................................
25Mb ................................................................
50Mb ................................................................
100Mb ..............................................................
..........................................................................
Hosting Fee ........................................................
Data Center Fiber Cross Connect ......................
Furnish and install 1 cross connect .................
Furnish and install bundle of 6 cross connects
Furnish and install bundle of 12 cross connects.
Furnish and install bundle of 18 cross connects.
Furnish and install bundle of 24 cross connects.
Connection to Time Protocol Feed ....................
Expedite Fee ......................................................
Service-Related Fees
The Exchange proposes to adopt the
same services and fees set forth in the
Affiliate SRO Price Lists under ‘‘Change
Fee’’; ‘‘Initial Install Services’’; ‘‘Hot
Hands Service’’; ‘‘Shipping and
Receiving’’; ‘‘Badge Request’’; ‘‘External
Cabinet Cable Tray’’; ‘‘Custom External
Cabinet Cable Tray’’ and ‘‘Visitor
Security Escort’’ (collectively, the
‘‘Service-related Fees’’) and related note,
as follows.
Change Fee: As in the Affiliate SRO
Price Lists, the Exchange proposes to
charge a User a ‘‘Change Fee’’ if the User
requests a change to one or more
existing co-location services that the
Exchange has already established or
completed for the User.37 The Change
Fee would be charged per order. If a
User ordered two or more services at
one time (for example, through
submitting an order form requesting
multiple services) the User would be
charged a one-time Change Fee, which
would cover the multiple services.
Initial Install Services: As in the
Affiliate SRO Price Lists, the Exchange
proposes to charge a User an ‘‘Initial
Install Services’’ fee for the installation
of a dedicated or partial cabinet.38 The
proposed fee would be lower for a
37 See
id.
38 See note 18, supra.
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Network Time Protocol Feed (Note: LCN only)
Precision Time Protocol ...................................
GPS Time Source (Note: dedicated cabinets
only).
Expedited installation/completion of a User’s
co-location service.
partial cabinet. The Initial Install
Services fee would include initial
racking of equipment in the cabinet,
provision of cables and labor. The
number of hours would depend on
whether the cabinet was partial or
dedicated.
Hot Hands Service: As in the Affiliate
SRO Price Lists, the Exchange proposes
to offer Users a ‘‘Hot Hands’’ service,
which would allow Users to use on-site
data center personnel to maintain User
equipment, support network
troubleshooting, rack and stack a server
in a User’s cabinet; power recycling; and
install and document the fitting of cable
in a User’s cabinet(s).39 The Hot Hands
fee would be charged per half hour.
Shipping and Receiving: As in the
Affiliate SRO Price Lists, the Exchange
proposes to offer Users shipping and
receiving services, with a per shipment
fee for the receipt of one shipment of
goods at the data center from the User
or supplier.40
Badge Request: As in the Affiliate
SRO Price Lists, the Exchange proposes
to offer Users the option to obtain a
39 See Securities Exchange Act Release Nos.
72721 (July 30, 2014), 79 FR 45562 (August 5, 2014)
(SR–NYSE–2014–37); 72719 (July 30, 2014), 79 FR
45502 (August 5, 2014) (SR–NYSEMKT–2014–61);
and 72720 (July 30, 2014), 79 FR 45577 (August 5,
2014) (SR–NYSEArca–2014–81); and NYSE
National Co-location Notice, supra note 6, at 26320.
40 See note 7, supra.
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58785
Fees are subject to a 30-day testing period,
during which the monthly charge per connection is waived.
$3,000 monthly charge per port, excluding
first port.
$200 monthly charge.
$400 monthly charge.
$500 monthly charge.
$800 monthly charge.
$1,200 monthly charge.
$1,800 monthly charge.
$2,500 monthly charge.
$1,000 monthly charge per cabinet per
Hosted Customer for each cabinet in which
such Hosted Customer is hosted.
$500 initial charge plus $600 monthly charge.
$500 initial charge plus $1,800 monthly
charge.
$500 initial charge plus $3,000 monthly
charge.
$500 initial charge plus $3,840 monthly
charge.
$500 initial charge plus $4,680 monthly
charge
See General Note 3.
$300 initial charge plus $100 monthly charge.
$1,000 initial charge plus $250 monthly
charge.
$3,000 initial charge plus $400 monthly
charge.
$4,000 per request.
permanent data center site access badge
for a User representative. 41
External Cabinet Cable Tray: As in the
Affiliate SRO Price Lists, the Exchange
proposes to offer to engineer, furnish
and install a Rittal 5″H x 12″W cable
tray on a cabinet for a flat fee per
tray.42
Custom External Cabinet Cable Tray:
As in the Affiliate SRO Price Lists, the
Exchange proposes to offer to engineer,
furnish and install 4″ H x 24″ W custom
basket cable tray above a client’s cabinet
rows for a fee per linear foot. 43
Visitor Security Escort: As in the
Affiliate SRO Price Lists, the Exchange
proposes that User representatives be
required to be accompanied by a visitor
security escort during visits to the data
center, unless visiting the User’s cage. A
fee per visit would be charged.44 The
proposed requirement would include
User representatives who have a
permanent data center site access badge.
In order to be able to meet its
obligation to accommodate demand, and
in particular to make available more
contiguous, larger spaces for new and
existing Users, if necessary, the
Exchange would exercise its right to
move some Users’ equipment within the
41 Id.
42 Id.
43 Id.
44 See
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data center (‘‘Migration’’). To manage
the process for a future Migration, the
Exchange proposes to put the same
Migration procedures in place as the
Affiliate SROs, as follow: 45
• First, the Exchange would identify
Users that would be required to move in
the Migration based on (a) the current
location of the User and its current
equipment and power requirements and
(b) the availability of another location in
the Data Center that would
accommodate the equipment and power
requirements for which such User
currently subscribes. No User would be
required to move more than once within
any 12-month period.
• Second, the Exchange would notify
a User in writing (the ‘‘Notice’’) that the
User’s equipment and network
connections in the Data Center were to
be moved as part of the Migration. The
Notice would identify the 90-day period
during which the User must move its
equipment, which period would
commence at least 60 days from the date
of the Notice. The exact date or dates for
the move for each User would be agreed
upon between the User and the
Exchange. If a move date or dates cannot
be agreed on, the Exchange would
schedule the move for a date or dates no
later than 180 days after the date of the
Notice.
• Third, each User’s move would be
facilitated by the Exchange in
cooperation with the User, including the
un-racking and re-racking of all of the
User’s equipment, and the reinstallation of the User’s networking
connections, and the Exchange would
make reasonable efforts to ensure that
the moves take place outside of the
Exchange’s hours for business.
• Fourth, in connection with
facilitating each User’s move, the
Exchange proposes to waive certain
fees. Specifically, the Exchange
proposes to waive:
Æ The monthly recurring fees for the
User’s existing space, based on the rate
of the monthly recurring fees that the
User is paying as of the date of the
Notice, for the month during which the
User’s move takes place. This waiver of
the monthly recurring fees would mean
that the User would not incur these fees
for the period of overlapping use of the
equipment and services in the old and
the new locations, as long as the move
is completed within one month.
Æ all Service-Related Fees that the
User would incur if such a move were
to take place at a User’s request with
respect to the User’s existing services
and equipment.
Æ for the month following the
completion of a User’s move, the
monthly recurring charges for that User,
based on the rate of the monthly
recurring fees that the User is paying as
of the date of the Notice, in
consideration for the Migration.
The Exchange proposes to add a note
to each Service-Related Fee outlining
the Migration process, as in the Affiliate
SRO Price Lists.46 The Exchange
proposes to add the following fees and
note to its Fee Schedule:
Type of service
Description
Change Fee *** ................................
Change to a co-location service that has already been installed/completed for a User.
Dedicated Cabinet: Includes initial racking of equipment in cabinet
and provision of cables (4 hrs)..
Partial Cabinet: Includes initial racking of equipment in cabinet and
provision of cables (2 hrs)..
Allows Users to use on-site data center personnel to maintain User
equipment, support network troubleshooting, rack and stack, power
recycling, and install and document cable..
Receipt of one shipment of goods at data center from User/supplier.
Includes coordination of shipping and receiving..
Request for provision of a permanent data center site access badge
for a User representative..
Engineer, furnish and install Rittal 5‘‘H x 12‘‘W cable tray on cabinet.
Engineer, furnish and install 4’’ H x 24’’ W custom basket cable tray
above client’s cabinet rows..
All User representatives are required to be accompanied by a visitor
security escort during visits to the data center, unless visiting the
User’s cage. Requirement includes User representatives who have
a permanent data center site access badge..
Initial Install Services *** (Required
per cabinet).
Hot Hands Service *** .....................
Shipping and Receiving *** .............
Badge Request *** ...........................
External Cabinet Cable Tray *** ......
Custom External Cabinet Cable
Tray ***.
Visitor Security Escort *** ................
Amount of charge
$950 per request.
$800 per dedicated cabinet.
$400 per eight-rack unit in a partial cabinet.
$100 per half hour.
$100 per shipment.
$50 per badge.
$400 per tray.
$100 per linear foot.
$75 per visit.
*** These fees are waived for the move of a User’s equipment within the Data Center when incurred in connection with such a move required
by the Exchange (‘‘Migration Move’’). A User selected by the Exchange for a Migration Move will receive written notice (the ‘‘Notice’’). The Notice
will identify the 90-day period during which a User must move its equipment, which period would commence at least 60 days from the date of the
Notice. Monthly recurring fees for the User’s existing space based on the rate of the monthly recurring fees that the User was paying as of the
date of the Notice are also waived for the month during which a User’s Migration Move takes place, so the User would not incur these fees for
the period of overlapping use of equipment and services in the old and new locations. In addition, the monthly recurring charges are waived for
the month following the completion of a User’s Migration Move, based on the rate of the monthly recurring fees that the User was paying as of
the date of the Notice. No User will be required to move more than once within any 12-month period.
Connectivity to Third Party Systems,
Data Feeds, Testing and Certification
Feeds, and DTCC
The Exchange proposes to adopt the
same services and fees set forth in the
Affiliate SRO Price Lists under
45 See Securities Exchange Act Release Nos.
76269 (October 26, 2015), 80 FR 66942 (October 30,
2015) (SR–NYSE–2015–42); 76268 (October 26,
2015), 80 FR 66944 (October 30, 2015) (SR–
NYSEMKT–2015–70); and 76270 (October 26,
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‘‘Connectivity to Third Party Systems,
Data Feeds, Testing and Certification
Feeds, and DTCC.’’ 47
Connectivity to Third Party Systems:
As in the Affiliate SRO Price Lists, the
Exchange proposes to provide that 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
2015), 80 FR 66958 (October 30, 2015) (SR–
NYSEArca–2015–85); and NYSE National Colocation Notice, supra note 6, at 26321.
46 The Exchange notes that, while the other
Affiliate SRO Price Lists use three asterisks to
identify the Service-Related Fees and the
corresponding note, the NYSE Amex Options Fee
Schedule uses the numeral ‘‘1’’. The Exchange
proposes to use three asterisks.
47 See note 32, supra.
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content service providers for a fee.48
Users would connect to Third Party
Systems over the IP network.
In order to obtain access to a Third
Party System, a User would enter into
an agreement with the relevant third
party content service provider, pursuant
to which the third party content service
provider would charge the User for
access to the Third Party System. The
Exchange would then establish a unicast
connection between the User and the
relevant third party content service
provider over the IP network. The
Exchange would charge the User for the
connectivity to the Third Party System.
A User would only receive, and would
only be charged for, access to Third
Party Systems for which it enters into
agreements with the third party content
service provider.
With the exception of the ICE feed,
the Exchange would have no ownership
interest in the Third Party Systems.
Establishing a User’s access to a Third
Party System would not give the
Exchange any right to use the Third
Party Systems. Connectivity to a Third
Party System would not provide access
or order entry to the Exchange’s
execution system, and a User’s
connection to a Third Party System
would not be through the Exchange’s
execution system.
The Exchange would charge a
monthly recurring fee for connectivity
to a Third Party System. Specifically,
when a User requested access to a Third
Party System, it would identify the
applicable third party market or other
content service provider and what
bandwidth connection it required.
The Exchange proposes to add the
following fees and language to its Fee
Schedule:
Connectivity to Third Party Systems
Pricing for access to the execution
systems of third party markets and other
service providers (Third Party Systems)
is for connectivity only. Connectivity to
Third Party Systems is subject to any
technical provisioning requirements and
authorization from the provider of the
data feed. Connectivity to Third Party
Systems is over the IP network. Any
applicable fees are charged
independently by the relevant third
party content service provider. The
Exchange is not the exclusive method to
connect to Third Party Systems.
48 See id. See also Securities Exchange Release
Nos. 83706 (July 25, 2018), 83 FR 37033 (July 31,
2018) (SR–NYSE–2018–32; 83707 (July 25, 2018),
83 FR 36985 (July 31, 2018) (SR–NYSEAmer–2018–
35); 83708 (July 25, 2018), 83 FR 36980 (July 31,
2018) (SR–NYSEArca–2018–52); and 83709 (July
25, 2018), 83 FR 37028 (July 31, 2018) (SR–
NYSENat–2018–15).
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Bandwidth of connection to Third Party
System
1 Mb ..........................
3 Mb ..........................
5 Mb ..........................
10 Mb ........................
25 Mb ........................
50 Mb ........................
100 Mb ......................
200 Mb ......................
1 Gb ..........................
Monthly
recurring
fee per connection
to Third
Party
System
$200
400
500
800
1,200
1,800
2,500
3,000
3,500
Third Party Systems
Americas Trading Group (ATG)
BM&F Bovespa
Boston Options Exchange (BOX)
Canadian Securities Exchange (CSE)
Cboe BYX Exchange (CboeBYX), Cboe
BZX Exchange (CboeBZX), Cboe
EDGA Exchange (CboeEDGA), and
Cboe EDGX Exchange (CboeEDGX)
Cboe Exchange (Cboe) and Cboe C2
Exchange (C2)
Chicago Mercantile Exchange (CME
Group)
Credit Suisse
Euronext Optiq Cash and Derivatives
Unicast (EUA)
Euronext Optiq Cash and Derivatives
Unicast (Production)
Investors Exchange (IEX)
ITG TriAct Matchnow
Miami International Securities
Exchange
MIAX PEARL
Nasdaq
NASDAQ Canada (CXC, CXD, CX2)
NASDAQ ISE
Neo Aequitas
NYFIX Marketplace
Omega
OneChicago
OTC Markets Group
TMX Group
Connectivity to Third Party Data
Feeds: As in the Affiliate SRO Price
Lists, the Exchange proposes to provide
that Users may obtain connectivity to
data feeds from third party markets and
other content service providers (‘‘Third
Party Data Feeds’’) for a fee.49 The
Exchange would receive Third Party
Data Feeds from multiple national
securities exchanges and other content
service providers at its data center. It
would then provide connectivity to that
data to Users for a fee. With the
exceptions of Global OTC and ICE Data
Global Index, Users would connect to
Third Party Data Feeds over the IP
network.
In order to connect to a Third Party
Data Feed, a User would enter into a
49 Id.
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58787
contract with the relevant third party
market or other content service
provider, pursuant to which the content
service provider would charge the User
for the Third Party Data Feed. The
Exchange would receive the Third Party
Data Feed over its fiber optic network
and, after the data provider and User
enter into the contract and the Exchange
receives authorization from the data
provider, the Exchange would retransmit the data to the User over the
User’s port. The Exchange would charge
the User for the connectivity to the
Third Party Data Feed. A User would
only receive, and would only be charged
for, connectivity to the Third Party Data
Feeds for which it entered into
contracts.
With the exception of the ICE Data
Services, ICE and Global OTC feeds, the
Exchange would have no affiliation with
the sellers of the Third Party Data Feeds.
It would have no right to use the Third
Party Data Feeds other than as a
redistributor of the data. The Third
Party Data Feeds would not provide
access or order entry to the Exchange’s
execution system. With the exception of
the ICE feeds, the Third Party Data
Feeds would not provide access or order
entry to the execution systems of the
third party generating the feed. The
Exchange would receive Third Party
Data Feeds via arms-length agreements
and would have no inherent advantage
over any other distributor of such data.
The Exchange would charge a
monthly recurring fee for connectivity
to each Third Party Data Feed. The
monthly recurring fee would be per
Third Party Data Feed, with the
exception that the monthly recurring fee
for the ICE Data Services Consolidated
Feeds (including the ICE Data Services
Consolidated FeedsShared Farm feeds),
SR Labs–SuperFeeds and MSCI feeds
would vary by the bandwidth of the
connection. Depending on its needs and
bandwidth, a User may opt to receive all
or some of the feeds or services
included in a Third Party Data Feed.
Third Party Data Feed providers may
charge redistribution fees. The Exchange
proposes that, when it receives a
redistribution fee, it pass through the
charge to the User, without change to
the fee. The fee would be labeled as a
pass-through of a redistribution fee on
the User’s invoice. As in the Affiliate
SRO Price Lists, the Exchange proposes
to add language to the Fee Schedule
accordingly.
The Exchange proposes that it not
charge Users that are third party markets
or content providers for connectivity to
their own feeds, as it understands that
such parties generally receive their own
feeds for purposes of diagnostics and
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testing. As in the Affiliate SRO Price
Lists, the Exchange proposes to add
language to the Fee Schedule
accordingly.
The Exchange proposes to add the
following fees and language to its Fee
Schedule:
Connectivity to Third Party Data Feeds
Pricing for data feeds from third party
markets and other content service
providers (Third Party Data Feeds) is for
connectivity only. Connectivity to Third
Party Data Feeds is subject to any
technical provisioning requirements and
authorization from the provider of the
data feed. Connectivity to Third Party
Data Fees is over the IP network, with
the exception that Users can connect to
Global OTC and ICE Data Global Index
over the IP network or LCN. Market data
fees are charged independently by the
relevant third party market or content
service provider. The Exchange is not
the exclusive method to connect to
Third Party Data Feeds.
Third Party Data Feed providers may
charge redistribution fees. When the
Exchange receives a redistribution fee, it
passes through the charge to the User,
without change to the fee. The fee is
labeled as a pass-through of a
redistribution fee on the User’s invoice.
The Exchange does not charge third
party markets or content providers for
connectivity to their own feeds.
Monthly
recurring
connectivity
fee per
third party
data feed
Third party data feed
BM&F Bovespa ....................................................................................................................................................................................
Boston Options Exchange (BOX) ........................................................................................................................................................
Canadian Securities Exchange (CSE) ................................................................................................................................................
Cboe BZX Exchange (CboeBZX) and Cboe BYX Exchange (CboeBYX) ..........................................................................................
Cboe EDGX Exchange (CboeEDGX) and Cboe EDGA Exchange (CboeEDGA) .............................................................................
Cboe Exchange (Cboe) and Cboe C2 Exchange (C2) .......................................................................................................................
CME Group ..........................................................................................................................................................................................
Euronext Optiq Compressed Cash ......................................................................................................................................................
Euronext Optiq Compressed Derivatives ............................................................................................................................................
Euronext Optiq Shaped Cash ..............................................................................................................................................................
Euronext Optiq Shaped Derivatives ....................................................................................................................................................
Financial Industry Regulatory Authority (FINRA) ................................................................................................................................
Global OTC ..........................................................................................................................................................................................
ICE Data Global Index .........................................................................................................................................................................
ICE Data Services Consolidated Feed ≤100 Mb ................................................................................................................................
ICE Data Services Consolidated Feed >100 Mb to ≤1 Gb .................................................................................................................
ICE Data Services Consolidated Feed >1 Gb ....................................................................................................................................
ICE Data Services Consolidated Feed Shared Farm ≤100Mb ...........................................................................................................
ICE Data Services Consolidated Feed Shared Farm >100 Mb to ≤1 Gb ..........................................................................................
ICE Data Services Consolidated Feed Shared Farm >1 Gb ..............................................................................................................
ICE Data Services PRD ......................................................................................................................................................................
ICE Data Services PRD CEP ..............................................................................................................................................................
Intercontinental Exchange (ICE) ..........................................................................................................................................................
Investors Exchange (IEX) ....................................................................................................................................................................
ITG TriAct Matchnow ...........................................................................................................................................................................
Miami International Securities Exchange/MIAX PEARL .....................................................................................................................
Montre´al Exchange (MX) .....................................................................................................................................................................
MSCI 5 Mb ...........................................................................................................................................................................................
MSCI 25 Mb .........................................................................................................................................................................................
NASDAQ Stock Market .......................................................................................................................................................................
NASDAQ OMX Global Index Data Service .........................................................................................................................................
NASDAQ OMDF ..................................................................................................................................................................................
NASDAQ UQDF & UTDF ....................................................................................................................................................................
NASDAQ Canada (CXC, CXD, CX2) ..................................................................................................................................................
NASDAQ ISE .......................................................................................................................................................................................
Neo Aequitas .......................................................................................................................................................................................
Omega .................................................................................................................................................................................................
OneChicago .........................................................................................................................................................................................
OTC Markets Group ............................................................................................................................................................................
SR Labs—SuperFeed <500 Mb ..........................................................................................................................................................
SR Labs—SuperFeed >500 Mb to <1.25 Gb ......................................................................................................................................
SR Labs—SuperFeed >1.25 Gb .........................................................................................................................................................
TMX Group ..........................................................................................................................................................................................
Connectivity to Third Party Testing
and Certification Feeds: As in the
Affiliate SRO Price Lists, the Exchange
proposes to provide that Users may
obtain connectivity to third party testing
and certification feeds.50 Certification
50 Id.
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feeds would be used to certify that a
User conforms to any of the relevant
content service provider’s requirements
for accessing Third Party Systems or
receiving Third Party Data, while testing
feeds would provide Users an
environment in which to conduct tests
with non-live data. Such feeds, which
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$3,000
1,000
1,000
2,000
2,000
2,000
3,000
900
600
1,200
900
500
100
100
200
500
1,000
200
500
1,000
200
400
1,500
1,000
1,000
2,000
1,000
500
1,200
2,000
100
100
500
1,500
1,000
1,200
1,000
1,000
1,000
250
800
1,000
2,500
would solely be used for certification
and testing and do not carry live
production data, would be available
over the IP network.
The Exchange proposes to add the
following fees and language to its Fee
Schedule:
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Connectivity to Third Party Testing and
Certification Feeds
The Exchange provides connectivity
to third party testing and certification
feeds provided by third party markets
and other content service providers.
Pricing for third party testing and
certification feeds is for connectivity
only. Connectivity to third party testing
and certification feeds is subject to any
technical provisioning requirements and
authorization from the provider of the
data feed. Connectivity to third party
testing and certification feeds is over the
IP network. Any applicable fees are
charged independently by the relevant
third party market or content service
provider. The Exchange is not the
exclusive method to connect to third
party testing and certification feeds.
Connectivity to third
party certification
and testing feeds.
$100 monthly recurring fee per feed.
Connectivity to DTCC: As in the
Affiliate SRO Price Lists, the Exchange
proposes to provide Users connectivity
to Depository Trust & Clearing
Corporation (‘‘DTCC’’) for clearing, fund
transfer, insurance, and settlement
services.51
In order to connect to DTCC, a User
would enter into a contract with DTCC,
pursuant to which DTCC would charge
the User for the services provided. The
Exchange would receive the DTCC feed
over its fiber optic network and, after
DTCC and the User entered into the
services contract and the Exchange
received authorization from DTCC, the
Exchange would provide connectivity to
DTCC to the User over the User’s IP
network port. The Exchange would
charge the User for the connectivity to
DTCC.
Connectivity to DTCC would not
provide access or order entry to the
Exchange’s execution system, and a
User’s connection to DTCC would not
be through the Exchange’s execution
system.
The Exchange proposes to add the
following fees and language to its Fee
Schedule:
Connectivity to DTCC
Pricing for connectivity to DTCC feeds
is for connectivity only. Connectivity to
DTCC feeds is subject to any technical
provisioning requirements and
authorization from DTCC. Connectivity
to DTCC feeds is over the IP network.
Any applicable fees are charged
independently by DTCC. The Exchange
is not the exclusive method to connect
to DTCC feeds.
5 Mb connection to
DTCC.
$500 monthly recurring fee.
51 Id.
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50 Mb connection to
DTCC.
$2,500 monthly recurring fee.
Application of Proposed Change
As noted above, none of the proposed
services and fees are new or novel.
Current Users would not incur any new
fees and the Exchange does not expect
to attract any new Users as a result of
the proposed change, for the following
reasons.
First, as stated in the proposed Fee
Schedule, a User that incurs co-location
fees for a particular co-location service
would not be subject to fees for the same
service charged by the Affiliate SROs.52
In other words, even though all four
Affiliate SROs and the Exchange would
offer co-location services, a User that
purchased services would only be
charged once. This would be true
irrespective of whether the User were a
member of all, some, or none of the
Affiliate SROs and the Exchange.
Second, the Exchange expects that a
current User that starts to trade on the
Exchange or connect to its market data
as a result of the proposed change
would not incur any new fees. Access
to trade on the Exchange and
connectivity to its data products comes
with connections to the local area
networks in the data center for no
additional fee 53—and Users that trade
or connect to market data would already
have a connection to the local area
networks, either directly or through
another User.
Third, the Exchange does not expect
any market participants to become Users
in order to connect to the Exchange’s
data feed. Under the proposed change
any authorized User would be able to
obtain a lower latency connection to the
Exchange’s data feeds. However, in the
first eight months of 2019, the Exchange
averaged less than 0.6% market share of
executed volume of non-auction equity
trading.54 Given the small volume of
trades on the Exchange and the fact that
the NMS feeds include NYSE Chicago
data, the Exchange does not believe that
52 Co-location fees already work in this manner.
See Securities Exchange Act Release Nos. 70206
(August 15, 2013), 78 FR 51765 (August 21, 2013)
(SR–NYSE–2013–59); 70176 (August 13, 2013), 78
FR 50471 (August 19, 2013) (SR–NYSEMKT–2013–
67); and 70173 (August 13, 2013), 78 FR 50459
(August 19, 2013) (SR–NYSEArca–2013–80); and
NYSE National Co-location Notice, supra note 6, at
26314.
53 See 84 FR 10152, 84 FR 10164, 84 FR 10159,
and 84 FR 10154, supra note 17.
54 Based on Cboe U.S. Equities Market Volume
Summary, the Exchange’s market share of intraday
trading (excluding auctions) for the months of
January 2019, February 2019, March 2019, April
2019, May 2019, June 2019, July 2019 and August
2019 was 0.52%, 0.52%, 0.56%, 0.50%, 0.50%,
0.48%, 0.46% and 0.43%, respectively. See https://
markets.cboe.com/us/equities/market_share/.
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a lower latency connection to Exchange
data would be sufficient reason for a
firm to become a User.
Finally, the Exchange believes that, as
a practical matter, only Participants 55
would be interested in becoming new
Users in order to trade on the Exchange,
as non-Participants cannot trade on the
Exchange. The pool of relevant
Participants is small: Only nine
Participants are not also members of one
or more of the Affiliate SROs.56 Of those
nine Participants, two are already Users,
and therefore, as explained above,
would not be subject to any new or
different fees as a result of this filing.
The Exchange does not expect that any
of the remaining seven Participants
would opt to become Users in order to
trade on the Exchange.57 Simply put,
the Exchange does not expect that low
latency access to such a small market
would be sufficient reason for a firm to
become a User.
The proposed change is not targeted
at, or expected to be limited in
applicability to, a specific segment of
market participant, as co-location is
available to any market participant that
wishes to be a User. If, contrary to the
Exchange’s beliefs, a market participant
elects to co-locate in response to the
proposed change, that new User would
be subject to the same fees as all other
Users—the same fees it would be subject
to today, irrespective of what type or
size of market participant it is.
55 A ‘‘Participant’’ is, except as otherwise
described in the Rules of the Exchange, ‘‘any
Participant Firm that holds a valid Trading Permit
and any person associated with a Participant Firm
who is registered with the Exchange under Articles
16 and 17 as a Market Maker Authorized Trader or
Institutional Broker Representative, respectively.’’
Article I, Rule 1(s). A Participant is considered a
‘‘member’’ of the Exchange for purposes of the Act.
‘‘Institutional Broker’’ means a member of the
Exchange who is registered as an Institutional
Broker pursuant to the provisions of Article 17 and
has satisfied all Exchange requirements to operate
as an Institutional Broker on the Exchange. Article
1, Rule 1(n). See 84 FR 44654, note 6, supra, at
notes 7 and 11.
56 The other Participants are a member of one or
more of the Affiliate SROs. The Exchange believes
that if such a Participant’s business model required
co-location, that Participant would already be colocated, given its membership in one or more
Affiliate SROs.
57 The seven Participants are all either
Institutional Brokers or trade through a third party
clearing firm. Institutional Brokers’ usage of the
Exchange is largely conducted in a non-automated
fashion through manual tools such as the
Exchange’s Brokerplex interface. See Article 17,
Rule 3, Interpretations and Policies .01
(‘‘Institutional Brokers essentially are order-entry
firms that act primarily as brokers for other brokerdealers or institutional customers’’); and 84 FR
44654, note 6, supra, at 44661–44662 and 44666.
The remaining Participants trade through a third
party, which increases latency, suggesting that colocation is not a priority for their business model.
For these reasons, the Exchange does not expect the
seven Participants to opt to become Users in order
to trade on the Exchange.
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As with the Affiliate SROs’ colocation services, Users that receive colocation services from the Exchange
would not receive any means of access
to the Exchange’s trading and execution
systems that is separate from or superior
to that of Users that do not receive colocation services.58 All orders sent to
the Exchange would enter the
Exchange’s trading and execution
systems through the same order gateway
regardless of whether the sender is colocated in the Exchange’s data center or
not. In addition, co-located Users would
not receive any market data or data
service product that is not available to
all Users. However, Users that receive
co-location services normally would
expect reduced latencies in sending
orders to the Exchange and receiving
market data from the Exchange.
As with the co-location services of the
Affiliate SROs, (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
proposed co-location services would be
completely voluntary and available to
all Users on a non-discriminatory basis;
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.59
The proposed changes are not
otherwise intended to address any other
issues, and the Exchange is not aware of
any problems that member
organizations would have in complying
with the proposed change.
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 Proposed Rule Change Is
Reasonable
The Exchange believes that the
proposed rule change is reasonable for
the following reasons.
As noted above, the Exchange
operates in a highly competitive market.
The Commission has repeatedly
expressed its preference for competition
over regulatory intervention in
determining prices, products, and
services in the securities markets.
Specifically, in Regulation NMS, the
Commission highlighted the importance
of market forces in determining prices
and SRO revenues and, also, recognized
that current regulation of the market
system ‘‘has been remarkably successful
in promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 62
With respect to co-location, 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 would be 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
colocation services, affected market
participants will opt to terminate their
2. Statutory Basis
colocation arrangements with that
exchange, and adopt a possible range of
The Exchange believes that the
proposed rule change is consistent with alternative strategies, including placing
Section 6(b) of the Act,60 in general, and their servers in a physically proximate
location outside the exchange’s data
furthers the objectives of Sections
6(b)(4) and (5) of the Act,61 in particular, center (which could be a competing
exchange), or pursuing strategies less
because it provides for the equitable
dependent upon the lower exchange-toallocation of reasonable dues, fees, and
participant latency associated with coother charges among its members,
location. Accordingly, the exchange
issuers and other persons using its
charging excessive fees would stand to
facilities and does not unfairly
lose not only co-location revenues but
discriminate between customers,
also the liquidity of the formerly coissuers, brokers or dealers. In addition,
located trading firms, which could have
it is designed to foster cooperation and
additional follow-on effects on the
coordination with persons engaged in
regulating, clearing, settling, processing market share and revenue of the affected
exchange.
information with respect to, and
Importantly, with respect to cofacilitating transactions in securities, to
location services and fees, all market
58 See note 52, supra.
participants can be Users, irrespective of
59 Id.
60 15
61 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
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62 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
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whether or not they are Participants or
members of any of the Affiliate SROs.63
In addition, the proposed changes are
neither new nor novel, as the Exchange
proposes to adopt the same services and
fees set forth in the Affiliate SRO Price
Lists, with the non-substantive
differences described above. As a result,
the proposed rule change would simply
offer market participants the same
services and fees to which they already
have access. The sole substantive
change that would result from the
Exchange offering co-location services
would be that Users would be able to
have low latency connections to the
Exchange. In other words, the sole
change would be a benefit to market
participants, with no change in the
related costs. If the proposed rule
change is not operative, the Exchange
will not offer co-location, and market
participants will not be able to receive
that benefit.
In addition, the Exchange believes
that the proposed rule change is
reasonable because, for the reasons
discussed above, current Users would
not incur any new fees and the
Exchange does not expect to attract any
new Users as a result of the proposed
change. Even though all four Affiliate
SROs and the Exchange would offer colocation services, a User that purchased
services would only be charged once.
This would be true irrespective of
whether the User were a member of all,
some, or none of the Affiliate SROs and
the Exchange. As noted above, the
Exchange expects that a current User
that starts to trade on the Exchange or
connects to its market data as a result of
the proposed change would not incur
any new fees. With respect to market
participants that are not current Users,
the Exchange does not expect any of
them to become Users in order to
connect to the Exchange’s data feed or
trade on the Exchange.
The Exchange believes that the
proposed co-location services and fees
are reasonable because under the
proposed change the Exchange would
provide market participants with the
option to co-locate, but would not
require it. The co-location services,
including various options for cabinets,
LCN and IP network access,
connectivity to Included Data Products,
Third Party Data Feeds, third party
testing and certification feeds, DTCC
and Wireless Third Party Data
(collectively, ‘‘Connectivity’’), access to
Exchange Systems and Third Party
Systems (together, ‘‘Access’’), hosting,
and services, would be provided as
conveniences to Users.
63 See
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As is true now, use of any co-location
service would be completely voluntary,
and each market participant would be
able to determine whether to use colocation services based on the
requirements of its business operations.
If it chose to co-locate, it would be able
to determine what size of cabinet, form,
and latency of network, would best suit
its needs. Users would not be required
to use any of their bandwidth for Access
or Connectivity unless they wished to
do so. Rather, a User would only receive
the services it selected, and a User could
change what services it receives at any
time, subject, in the case of Access and
Connectivity, to authorization from the
relevant third party system or data
provider, Affiliate SRO or the Exchange.
As alternatives to using co-location, a
market participant would be able to
access or connect to Exchange Systems,
Third Party Systems, Included Data
Products, Third Party Data Feeds, third
party testing and certification feeds,
DTCC and Wireless Third Party Data
through a Hosting User or a connection
to an Exchange access center outside the
data center, third party access center, or
third party vendor. The market
participant could make such connection
through a third party
telecommunication provider, third party
wireless network, the Secure Financial
Transaction Infrastructure (‘‘SFTI’’)
network, or a combination thereof.
The proposed Fee Schedule would set
forth: (a) The relevant definitions and
General Notes, including a detailed
description of the Access and
Connectivity Users receive with their
purchase of access to the LCN or IP
network; (b) the Cabinet-Related Fees;
(c) the Access and Service Fees; (d) the
Service-related Fees; (e) a description of
the Migration; and (f) information
regarding connectivity to Third Party
Systems, Third Party Data Feeds, third
party testing and certification feeds, and
DTCC. Such Fee Schedule text would
make the description of co-location
services and fees accessible and
transparent, providing market
participants with clarity as to what
services were offered within co-location
and what the related fees would be.
The Exchange believes that charging
distinct fees for different co-location
services would be reasonable because
not all Users would need, or wish, to
utilize the same co-location services.
The proposed variety of services would
allow Users to select which co-location
services to use, based on their business
needs, and Users would only be charged
for the services that they selected. By
charging only those Users that utilize a
co-location service the related fee, those
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Users that directly benefit from a service
would support its cost.
Similarly, the Exchange believes the
proposed fees are reasonable because
they would allow the Exchange to
defray or cover the costs associated with
offering different co-location services
while providing Users the benefit of
such services, including the benefits of,
among other things, choosing among the
array of different options for cabinets,
power, LCN and IP network access,
Connectivity, Access, hosting and
services; having an efficient connection
to clearing, fund transfer, insurance, and
settlement services; and having an
environment in which to conduct tests
with nonlive data and to certify
conformance to any applicable technical
requirements.
The Exchange believes that the
proposed charges are reasonable
because the Exchange would offer colocation services as conveniences to
Users, but in order to do so would have
to provide, maintain and operate the
data center facility hardware and
technology infrastructure. The Exchange
would need to expand the network
infrastructure to keep pace with the
number of services available to Users,
including any increasing demand for
bandwidth, and to establish any
additional administrative controls. The
Exchange would have to handle the
installation, administration, monitoring,
support and maintenance of such
services, including by responding to any
production issues. In addition, in order
to provide connectivity to Third Party
Data Feeds, Third Party Systems, third
party testing and certification feeds and
DTCC, the Exchange would have to
maintain multiple connections to each
Third Party Data Feed, Third Party
System, and DTCC, allowing the
Exchange to provide resilient and
redundant connections; adapt to any
changes made by the relevant third
party; and cover any applicable fees
(other than redistribution fees) charged
by the relevant third party, such as port
fees.
The Exchange believes it is reasonable
that redistribution fees charged by
providers of Third Party Data Feeds
would be passed through to the User,
without change to the fee. If not passed
through, the cost of the re-distribution
fees would be factored into the
proposed fees for connectivity to Third
Party Data Feeds. The Exchange believes
that passing through the fees makes
them more transparent to the User,
allowing the User to better assess the
cost of the connectivity to a Third Party
Data Feed by seeing the individual
components of the cost, i.e., the
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58791
Exchange’s fee and the redistribution
fee.
The Exchange believes that it is
reasonable to not charge third party
markets or content providers for
connectivity to their own Third Party
Data Feeds, as the Exchange
understands that such parties generally
receive their own feeds for purposes of
diagnostics and testing. The Exchange
believes that facilitating such
diagnostics and testing 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.
The Proposed Rule Change Is Equitable
The Exchange believes the proposed
rule change is an equitable allocation of
its fees and credits for the following
reasons.
The Exchange believes that the
proposed co-location services and fees
are reasonable because under the
proposed change the Exchange would
provide market participants with the
option to co-locate, but would not
require it. The co-location services,
including various options for cabinets,
LCN and IP network access,
Connectivity, Access, hosting, and
services, would be provided as
conveniences to Users.
As is true now, use of any co-location
service would be completely voluntary,
and each market participant would be
able to determine whether to use colocation services based on the
requirements of its business operations.
If it chose to co-locate, it would be able
to determine what size of cabinet, form,
and latency of network, would best suit
its needs. Users would not be required
to use any of their bandwidth for Access
or Connectivity unless they wished to
do so. Rather, a User would only receive
the services it selected, and a User could
change what services it receives at any
time, subject, in the case of Access and
Connectivity, to authorization from the
relevant third party system or data
provider, Affiliate SRO or the Exchange.
In addition to the co-location services
being completely voluntary, they would
be available to all Users on an equal
basis (i.e., the same co-location services
would be available to all Users). All
Users that voluntarily elected to receive
a co-location service would be charged
the same amount for the same service.
Further, by having the Fee Schedule
set forth the same co-location services
and fees offered by the Affiliate SROs,
with only non-substantive differences
from the Affiliate SRO Price Lists, Users
would benefit from having consistent
products and pricing across the
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Exchange and the four Affiliate SROs.
As is true for the Affiliate SROs and as
specified in the proposed Fee Schedule,
a User that incurred co-location fees for
a particular co-location service pursuant
thereto would not be subject to colocation fees for the same co-location
service charged by the Affiliate SROs.
The Exchange believes that the
proposal to establish procedures and
waive certain fees in connection with
the movement of equipment at the data
center in a Migration would provide for
the equitable allocation of reasonable
fees because, pursuant to the proposed
procedures for selecting which Users
would be required to move within the
data center, a User would be required to
move only if the Exchange would be
able to accommodate such User’s
current space and power requirements
at the new location, so as to minimize
the disruption to the User. The
Exchange believes that the waiver of
overlapping monthly recurring charges,
the waiver of the Service-Related Fees,
and the waiver of one month of monthly
recurring charges in a Migration would
be reasonable because Users would be
moving at the Exchange’s request and
the waivers would help to alleviate the
burden on the Users that are required to
move.
The Exchange believes that the
proposed charges are not unfairly
discriminatory because the Exchange
would offer co-location services as
conveniences to Users, but in order to
do so would have to provide, maintain
and operate the data center facility
hardware and technology infrastructure.
The Exchange would need to expand
the network infrastructure to keep pace
with the number of services available to
Users, including any increasing demand
for bandwidth, and to establish any
additional administrative controls. The
Exchange would have to handle the
installation, administration, monitoring,
support and maintenance of such
services, including by responding to any
production issues. In addition, in order
to provide connectivity to Third Party
Data Feeds, Third Party Systems, third
party testing and certification feeds and
DTCC, the Exchange would have to
maintain multiple connections to each
Third Party Data Feed, Third Party
System, and DTCC, allowing the
Exchange to provide resilient and
redundant connections; adapt to any
changes made by the relevant third
party; and cover any applicable fees
(other than redistribution fees) charged
by the relevant third party, such as port
fees.
The Proposed Rule Change Is Not
Unfairly Discriminatory
The Exchange believes that the
proposed change is not unfairly
discriminatory for the following
reasons.
As is true now, use of any co-location
service would be completely voluntary,
and each market participant would be
able to determine whether to use colocation services based on the
requirements of its business operations.
In addition to the co-location services
being completely voluntary, they would
be available to all Users on an equal
basis (i.e., the same co-location services
would be available to all Users). All
Users that voluntarily elected to receive
a co-location service would be charged
the same amount for the same service.
The Exchange believes that charging
distinct fees for different co-location
services is not unfairly discriminatory
because not all Users would need, or
wish, to utilize the same co-location
services. The proposed variety of
services would allow Users to select
which co-location services to use, based
on their business needs, and Users
would only be charged for the services
that they selected. By charging only
those Users that utilize a co-location
service the related fee, those Users that
directly benefit from a service would
support its cost.
The Proposed Rule Change Would
Protect Investors and the Public Interest
The Exchange believes that the
proposed rule change relating to colocation would perfect the mechanisms
of a free and open market and a national
market system and, in general, protect
investors and the public interest for the
following reasons.
The proposed Fee Schedule would set
forth: (a) The relevant definitions and
General Notes, including a detailed
description of the Access and
Connectivity Users receive with their
purchase of access to the LCN or IP
network; (b) the Cabinet-Related Fees;
(c) the Access and Service Fees; (d) the
Service-related Fees; (e) a description of
the Migration; and (f) information
regarding connectivity to Third Party
Systems, Third Party Data Feeds, third
party testing and certification feeds, and
DTCC. Such Fee Schedule text would
make the description of co-location
services and fees accessible and
transparent, providing market
participants with clarity as to what
services were offered within co-location
and what the related fees would be.
Providing connectivity to testing and
certification feeds would provide Users
an environment in which to conduct
tests with non-live data, including
testing for upcoming releases and
product enhancements or the User’s
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own software development, and allow
Users to certify conformance to any
applicable technical requirements.
The Exchange believes that it is
reasonable to not charge third party
markets or content providers for
connectivity to their own Third Party
Data Feeds, as the Exchange
understands that such parties generally
receive their own feeds for purposes of
diagnostics and testing. Similarly,
providing connectivity to DTCC would
provide efficient connection to clearing,
fund transfer, insurance, and settlement
services.
Finally, the Exchange believes that
the proposal to establish procedures and
waive certain fees in connection with
the movement of equipment at the data
center in a Migration would allow the
Exchange to have sufficient space in the
data center to accommodate demand on
an equitable basis for the foreseeable
future. The Exchange believes that the
waiver of overlapping monthly
recurring charges, the waiver of the
Service-Related Fees, and the waiver of
one month of monthly recurring charges
in a Migration would be reasonable
because Users would be moving at the
Exchange’s request and the waivers
would help to alleviate the burden on
the Users that are required to move.
*
*
*
*
*
For the foregoing 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,64 the Exchange believes that the
proposed rule change would not impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act because all of
the proposed services are completely
voluntary.
In accordance with Section 6(b)(8) of
the Act,65 the Exchange believes that the
proposed rule change would not impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
Intramarket Competition
The Exchange believes that the
proposed rule change would not have
an impact on intramarket competition
because the proposed rule change
would simply offer market participants
the same services and fees to which they
already have access. The sole
substantive change that would result
from the Exchange offering co-location
services would be that Users would be
64 15
65 15
E:\FR\FM\01NON1.SGM
U.S.C. 78f(b)(8).
U.S.C. 78f(b)(8).
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able to have low latency connections to
the Exchange. In other words, the only
change would be a benefit to market
participants, with no change in the
related costs. If the proposed rule
change is not operative, the Exchange
will not offer co-location, and market
participants will not be able to receive
that benefit.
Further, current Users would not
incur any new fees and the Exchange
does not expect to attract any new Users
as a result of the proposed change.
Accordingly, the proposed rule change
would not have an impact on
intramarket competition. Even though
all four Affiliate SROs and the Exchange
would offer co-location services, a User
that purchased services would only be
charged once. This would be true
irrespective of whether the User were a
member of all, some, or none of the
Affiliate SROs and the Exchange. As
noted above, the Exchange expects that
a current User that starts to trade on the
Exchange or connects to its market data
as a result of the proposed change
would not incur any new fees. With
respect to market participants that are
not current Users, the Exchange does
not expect any of them to become Users
in order to connect to the Exchange’s
data feed or trade on the Exchange.
Finally, as noted above, the Exchange
believes that, as a practical matter, only
Participants would be interested in
becoming new Users in order to trade on
the Exchange, as non-Participants
cannot trade on the Exchange. The pool
of relevant Participants is small: Only
nine Participants are not also members
of one or more of the Affiliate SROs.66
Of those nine Participants, two are
already Users, and therefore, as
explained above, would not be subject
to any new or different fees as a result
of this filing. The Exchange does not
expect that any of the remaining seven
Participants would opt to become Users
in order to trade on the Exchange.67
Simply put, the Exchange does not
expect that low latency access to such
a small market would be sufficient
reason for a firm to become a User.
The proposed co-location services
would be available to all Users on an
equal basis. All Users that voluntarily
selected to receive co-location services,
including cabinets, LCN and IP network
access, Connectivity, Access and other
services, would be charged the same
amount for the same services. In the
case of a Migration, all Users would be
subject to the same proposed procedures
for selecting which Users would be
66 See
67 See
note 56, supra.
note 57, supra.
VerDate Sep<11>2014
19:23 Oct 31, 2019
required to move within the data center
and what fees would be affected.
The proposed co-location services
would provide market participants with
the option to co-locate, but would not
require it. Use of any co-location
services would be completely voluntary,
and each market participant would be
able to determine whether to use colocation services based on the
requirements of its business operations.
In this way, the proposed changes
would enhance competition by
providing market participants with
additional options for their business
operations.
Intermarket Competition
As noted above, the proposed rule
change would simply offer market
participants the same services and fees
to which they already have access, as
currently a User that purchases access to
the LCN or IP network receives the
ability to access the trading and
execution systems of the Exchange and
connectivity to the Included Data
Products of the Exchange. The sole
substantive change that would result
from the Exchange offering co-location
services would be that Users would be
able to have low latency connections to
the Exchange. As a result, there would
be no material burden on competition
with respect to other national securities
exchanges.
In addition, there would be no
material burden on intermarket
competition because, for the reasons
discussed above, current Users would
not incur any new fees and the
Exchange does not expect to attract any
new Users as a result of the proposed
change. In the first eight months of
2019, the Exchange averaged less than
0.6% market share of executed volume
of non-auction equity trading.68 Given
the small market share of the Exchange,
it does not believe that the proposed
rule change would affect the
competitive landscape among the
national securities exchanges.
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
68 See
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58793
arrangements with that exchange, and
adopt a possible range of alternative
strategies, including placing their
servers in a physically proximate
location outside the exchange’s data
center (which could be a competing
exchange), or pursuing strategies less
dependent upon the lower exchange-toparticipant latency associated with colocation. Accordingly, the exchange
charging excessive fees would stand to
lose not only co-location revenues but
also the liquidity of the formerly colocated trading firms, which could have
additional follow-on effects on the
market share and revenue of the affected
exchange.
For the reasons described above, the
Exchange believes that the proposed
rule change reflects this competitive
environment.
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 69 and Rule
19b–4(f)(6) thereunder.70 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.71
A proposed rule change filed under
Rule 19b–4(f)(6) 72 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),73 the
69 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
71 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of 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.
72 17 CFR 240.19b–4(f)(6).
73 17 CFR 240.19b–4(f)(6)(iii).
70 17
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Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has requested
that the Commission waive the 30-day
operative delay. The Exchange asserts
that waiver of the operative delay would
be consistent with the protection of
investors and the public interest
because it would allow the Exchange to
provide the proposed co-location
services immediately upon the
Exchange’s migration to Pillar. For the
same reason, 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.74
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) 75 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–
NYSECHX–2019–12 on the subject line.
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–NYSECHX–2019–12 and
should be submitted on or before
November 22, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.76
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–23862 Filed 10–31–19; 8:45 am]
BILLING CODE 8011–01–P
VerDate Sep<11>2014
19:23 Oct 31, 2019
Jkt 250001
[Release No. 34–87407; File No. SR–FINRA–
2019–012]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Designation
of a Longer Period for Commission
Action on Proceedings To Determine
Whether To Approve or Disapprove a
Proposed Rule Change To Amend
FINRA Rule 5110 (Corporate Financing
Rule—Underwriting Terms and
Arrangements) To Make Substantive,
Organizational and Terminology
Changes, as Modified by Partial
Amendment No. 1
October 28, 2019.
On April 11, 2019, Financial Industry
Regulatory Authority, Inc. (‘‘FINRA’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Exchange
Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to amend FINRA
Rule 5110 (Corporate Financing Rule—
Underwriting Terms and Arrangements)
(‘‘Rule’’ or Rule 5110) to make
substantive, organizational and
terminology changes to the Rule.
The proposed rule change was
published for comment in the Federal
Register on May 1, 2019.3 On June 12,
2019, the Commission extended to July
30, 2019, the time period in which to
approve the proposed rule change,
disapprove the proposed rule change, or
institute proceedings to determine
whether to approve or disapprove the
proposed rule change.4 The Commission
received six comment letters on the
proposal.5
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 85715
(April 25, 2019), 84 FR 18592 (May 1, 2019)
(‘‘Notice’’).
4 See Securities Exchange Act Release No. 34–
86091 (June 12, 2019), 84 FR 28371 (June 18, 2019).
5 See letter from Suzanne Rothwell, Managing
Member, Rothwell Consulting LLC, to Secretary,
Commission, dated May 14, 2019; letter from Stuart
J. Kaswell, Esq., to Vanessa Countryman, Acting
Director, Commission, dated May 17, 2019; letter
from Eversheds Sutherland (US) LLP, on behalf of
the Committee of Annuity Insurers, to Brent J.
Fields, Secretary, Commission, dated May 21, 2019;
letter from Aseel Rabie, Managing Director and
Associate General Counsel, Securities Industry and
Financial Markets Association, to Vanessa
Countryman, Acting Secretary, Commission, dated
May 30, 2019 (‘‘SIFMA’’); letter from Robert E.
Buckholz, Chair, Federal Regulation of Securities
Committee, ABA Business Law Section, American
Bar Association, to Vanessa Countryman, Acting
Secretary, Commission, dated May 30, 2019; letter
from Davis Polk & Wardwell LLP, to Vanessa
Countryman, Acting Secretary, Commission, dated
June 5, 2019.
2 17
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–NYSECHX–2019–12. This
file number should be included on the
subject line if email is used. To help the
74 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
75 15 U.S.C. 78s(b)(2)(B).
SECURITIES AND EXCHANGE
COMMISSION
76 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00119
Fmt 4703
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01NON1
]]>Agencies
[Federal Register Volume 84, Number 212 (Friday, November 1, 2019)]
[Notices]
[Pages 58778-58794]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-23862]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87408; File No. SR-NYSECHX-2019-12]
Self-Regulatory Organizations; NYSE Chicago, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the
Fee Schedule of NYSE Chicago, Inc.
October 28, 2019.
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 October 15, 2019 the NYSE Chicago, Inc. (``NYSE Chicago'' 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 the Fee Schedule of NYSE Chicago,
Inc. to provide for co-location services and fees in connection with
its expected migration to the NYSE Pillar platform in the fourth
quarter of 2019. 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 Fee Schedule to provide for co-
location services and fees in connection with its expected migration to
the NYSE Pillar platform (``Pillar'') in the fourth quarter of 2019.\4\
Pillar is an integrated trading technology platform designed to use a
single specification for connecting to the equities and options markets
operated by the Exchange's affiliates New York Stock Exchange LLC
(``NYSE''), NYSE American LLC (``NYSE American''), NYSE Arca, Inc.
(``NYSE Arca''), and NYSE National, Inc. (``NYSE National'' and,
together, the ``Affiliate SROs'').\5\ As detailed below, current Users
\6\ would not incur any new fees and no incremental co-location revenue
is expected under this proposal.
---------------------------------------------------------------------------
\4\ Subject to rule approvals, the migration to Pillar is
currently anticipated to be on November 4, 2019. See Exchange Act
Release Nos. 85297 (March 12, 2019), 84 FR 9854 (March 18, 2019)
(SR-CHX-2018-03), and 86709 (August 20, 2019), 84 FR 44654 (August
26, 2019) (SR-CHX-2019-08).
\5\ In July 2018, the Exchange and its direct parent company
were acquired by NYSE Group, Inc. As a result, the Exchange and the
Affiliate SROs are direct or indirect subsidiaries of NYSE Group,
Inc. and, indirectly, Intercontinental Exchange, Inc. See Exchange
Act Release No. 83635 (July 13, 2018), 83 FR 34182 (July 19, 2018)
(SR-CHX-2018-004); see also Exchange Act Release No. 83303 (May 22,
2018), 83 FR 24517 (May 29, 2018) (SR-CHX-2018-004).
\6\ Consistent with the Affiliate SRO Price Lists, for purposes
of the Exchange's co-location services, a ``User'' shall mean any
market participant that requests to receive co-location services
directly from the Exchange. See Securities Exchange Act Release Nos.
76008 (September 29, 2015), 80 FR 60190 (October 5, 2015) (SR-NYSE-
2015-40); 76009 (September 29, 2015), 80 FR 60213 (October 5, 2015)
(SR-NYSEMKT-2015-67); and 76010 (September 29, 2015), 80 FR 60197
(October 5, 2015) (SR-NYSEArca-2015-82); and 83351 (May 31, 2018),
83 FR 26314 (June 6, 2018) (SR-NYSENAT-2018-07) (``NYSE National Co-
location Notice'').
---------------------------------------------------------------------------
The Affiliate SROs offer co-location services.\7\ When a User
purchases a co-
[[Page 58779]]
location service, it is charged once for the service, despite the
service being offered by all the Affiliate SROs. Under this proposal,
Users purchasing co-location services would continue to pay once, even
though all four Affiliate SROs and the Exchange would offer co-location
services, and would receive access to the Affiliate SROs and the
Exchange in the Mahwah, New Jersey data center (the ``data center'').
---------------------------------------------------------------------------
\7\ With the exception of NYSE National, the Affiliate SROs
initially filed rule changes relating to their co-location services
and related fees with the Commission in 2010. See Securities
Exchange Act Release Nos. 62960 (September 21, 2010), 75 FR 59310
(September 27, 2010) (SR-NYSE-2010-56); 62961 (September 21, 2010),
75 FR 59299 (September 27, 2010) (SR-NYSEAmex-2010-80); and 63275
(November 8, 2010), 75 FR 70048 (November 16, 2010) (SR-NYSEArca-
2010-100). NYSE National initially filed rule changes relating to
its co-location services and related fees with the Commission on May
18, 2018. See NYSE National Co-location Notice, supra note 6. If any
change to the Affiliate SROs' colocation services become operative
after the present filing is made but before it becomes operative,
the Exchange would make an additional rule filing implementing the
change, with the intention that the Exchange would offer the same
co-location services offered by the Affiliate SROs.
---------------------------------------------------------------------------
The Exchange proposes that the additions to the Fee Schedule to
provide for co-location services would become operative upon the
Exchange's migration to Pillar.
Currently, the Exchange's trading and execution systems are not in
the data center. Once the migration to Pillar is completed, the trading
of all securities on the Exchange will have moved to the data center.
As a result of the migration, Users will be able to have low latency
connections to the Exchange over the Liquidity Center Network
(``LCN''), a local area network available in the data center, and so
would be able to co-locate in the data center by ``rent[ing] space on
premises controlled by the Exchange in order that they may locate their
electronic servers in close physical proximity to the Exchange's
trading and execution systems.'' \8\ Absent this proposal to offer co-
location services, market participants' access to the Exchange would
solely be available outside of co-location, even after the migration of
the Exchange's trading and execution systems to Pillar, and so they
would not be able to ``reduce latency in transmitting market data and
order messages'' to the Exchange.\9\
---------------------------------------------------------------------------
\8\ See 75 FR 59310, supra note 7.
\9\ See Securities Exchange Act Release No. 61358 (January 14,
2010), 75 CFR 3594 (January 21, 2010), at 3598 (concept release on
equity market structure).
---------------------------------------------------------------------------
The Exchange operates in a highly competitive environment. The
Commission has repeatedly expressed its preference for competition over
regulatory intervention in determining prices, products, and services
in the securities markets. Specifically, in Regulation National Market
System (``NMS''), the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \10\
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------
Proposed Services and Fees
The Exchange proposes the same services and fees set forth in the
price lists and fee schedules of its Affiliate SROs (collectively, the
``Affiliate SRO Price Lists''),\11\ with the non-substantive
differences described below. No new or novel services or fees are
proposed and, as described below, current Users of the Affiliate SROs'
co-location services would not incur any new fees.
---------------------------------------------------------------------------
\11\ See ``Co-Location Fees'' in ``New York Stock Exchange Price
List 2019'' (``NYSE Price List'') at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf; ``NYSE American
Equities Price List'' (``NYSE American Equities Price List'') at
https://www.nyse.com/publicdocs/nyse/markets/nyse-american/NYSE_America_Equities_Price_List.pdf; ``NYSE American Options Fee
Schedule'' (``NYSE American Options Fee Schedule'') at https://www.nyse.com/publicdocs/nyse/markets/american-options/NYSE_American_Options_Fee_Schedule.pdf; ``NYSE Arca Equities Fees
and Charges'' (``NYSE Arca Equities Fee Schedule'') at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf; ``NYSE Arca Options Fees and
Charges'' (``NYSE Arca Options Fee Schedule'') at https://www.nyse.com/publicdocs/nyse/markets/arca-options/NYSE_Arca_Options_Fee_Schedule.pdf; and ``NYSE National, Inc.
Schedule of Fees and Rebates'' (``NYSE National Fee Schedule'') at
https://www.nyse.com/publicdocs/nyse/regulation/nyse/NYSE_National_Schedule_of_Fees.pdf.
---------------------------------------------------------------------------
Definitions
The Exchange proposes to adopt the definitions of ``Affiliate,''
``Aggregate Cabinet Footprint,'' ``Hosted Customer,'' ``Hosting User,''
and ``User'' as set forth in the Affiliate SRO Price Lists.
Specifically, the Exchange proposes the following definitions:
An ``Affiliate'' of a User is any other User or Hosted
Customer that is under 50% or greater common ownership or control of
the first User.
``Aggregate Cabinet Footprint'' of a User or Hosted
Customer is (a) for a User, the total kW of the User's cabinets,
including both partial and dedicated cabinets, and (b), for a Hosted
Customer, the total kW of the portion of the Hosting User's cabinet,
whether partial or dedicated, allocated to such Hosted Customer.
A ``Hosted Customer'' means a customer of a Hosting User
that is hosted in a Hosting User's co-location space.
A ``Hosting User'' means a User of co-location services
that hosts a Hosted Customer in the User's co-location space.
A ``User'' means any market participant that requests to
receive co-location services directly from the Exchange.
As in the Affiliate SRO Price Lists, the Exchange would specify
that the definitions were for purposes of the co-location fees only.
General Notes
The Exchange proposes to adopt General Notes 1 through 4 as set
forth in the Affiliate SRO Price Lists, subject to the differences
discussed below.
General Note 1: General Note 1 of the Affiliate SRO Price Lists
provides that a User that incurs co-location fees for a particular co-
location service would not be subject to co-location fees for the same
co-location service charged by the other Affiliate SROs. The wording of
General Note 1 differs among the Affiliate SRO Price Lists both where
it references the relevant price list or fee schedule and where it
lists the relevant exchange's affiliates.\12\
---------------------------------------------------------------------------
\12\ For example, the NYSE Arca Options Fee Schedule provides
that ``[a] User that incurs co-location fees for a particular co-
location service pursuant to this Fee Schedule shall not be subject
to co-location fees for the same co-location service charged
pursuant to the NYSE Arca Equities Fee Schedule or by the Exchange's
affiliates NYSE American LLC (NYSE American), New York Stock
Exchange LLC (NYSE) and NYSE National, Inc. (NYSE National)''
(emphasis added) while the NYSE Price List provides that ``[a] User
that incurs co-location fees for a particular co-location service
pursuant to this Price List shall not be subject to co-location fees
for the same co-location service charged by the Exchange's
affiliates NYSE American LLC (NYSE American) and NYSE Arca, Inc.
(NYSE Arca), and NYSE National, Inc. (NYSE National).'' (emphasis
added) The Exchange's proposed text for General Note 1 is consistent
with the wording of General Note 1 in the NYSE Price List, with the
exception that it will use ``this Fee Schedule'' instead of ``this
Price List.''
---------------------------------------------------------------------------
The Exchange proposes to adopt the following General Note 1: \13\
---------------------------------------------------------------------------
\13\ The Exchange expects that each Affiliate SRO will submit a
proposed rule change to update General Note 1 to include NYSE
Chicago as a provider of co-location services and to remove the
definition of NYSE Chicago from General Note 4.
---------------------------------------------------------------------------
A User that incurs co-location fees for a particular co-location
service pursuant to this Fee Schedule shall not be subject to co-
location fees for the same co-location service charged by the
Exchange's affiliates the New York Stock Exchange LLC (NYSE), NYSE
American LLC (NYSE American), NYSE Arca, Inc. (NYSE Arca) and NYSE
National (NYSE National).
General Note 2: The Exchange proposes the same General Note 2 as in
the Affiliate SRO Price Lists, setting forth the requirements for
qualifying for a ``Partial Cabinet Solution'' bundle.\14\ The proposed
text is as follows:
---------------------------------------------------------------------------
\14\ See Securities Exchange Act Release Nos. 77072 (February 5,
2016), 81 FR 7394 (February 11, 2016) (SR-NYSE-2015-53); 77071
(February 5, 2016), 81 FR 7382 (February 11, 2016) (SR-NYSEMKT-2015-
89); and 77070 (February 5, 2016), 81 FR 7401 (February 11, 2016)
(SR-NYSEArca-2015-102); and NYSE National Co-location Notice, supra
note 6, at 26315.
---------------------------------------------------------------------------
To qualify for a Partial Cabinet Solution bundle, a User must meet
the following conditions: (1) It must purchase only one Partial Cabinet
[[Page 58780]]
Solution bundle; (2) the User and its Affiliates must not currently
have a Partial Cabinet Solution bundle; and (3) after the purchase of
the Partial Cabinet Solution bundle, the User, together with its
Affiliates, will have an Aggregate Cabinet Footprint of no more than 2
kW.
A User requesting a Partial Cabinet Solution bundle will
be required to certify to the Exchange (a) whether any other Users or
Hosted Customers are Affiliates of the certificating User, and (b) that
after the purchase of the Partial Cabinet Solution bundle, the User,
together with its Affiliates, would have an Aggregate Cabinet Footprint
of no more than 2 kW. The certificating User will be required to inform
the Exchange immediately of any event that causes another User or
Hosted Customer to become an Affiliate. The Exchange shall review
available information regarding the entities and may request additional
information to verify the Affiliate status of a User or Hosted
Customer. The Exchange shall approve a request for a Partial Cabinet
Solution bundle unless it determines that the certification is not
accurate.
If a User that has purchased a Partial Cabinet Solution
bundle becomes affiliated with one or more other Users or Hosted
Customers and thereby no longer meets the conditions for access to the
Partial Cabinet Solution bundle, or if the User otherwise ceases to
meet the conditions for access to the Partial Cabinet Solution bundle,
the Exchange will no longer offer it to such User and the User will be
charged for each of the services individually, at the price for each
such service set out in the Fee Schedule. Such price change would be
effective as of the date that the User ceased to meet the conditions.
In addition, a User that changes its Partial Cabinet Solution
bundle from one option to another will not be subject to a second
initial charge, but will be required to pay the difference, if any,
between the bundles' initial charges.
General Note 3: The Exchange proposes the same General Note 3 as in
the Affiliate SRO Price Lists, setting forth the provisions relating to
the use of a waitlist.\15\ The proposed text is as follows:
---------------------------------------------------------------------------
\15\ See Securities Exchange Act Release Nos. 77681 (April 21,
2016), 81 FR 24915 (April 27, 2016 (SR-NYSE-2016-13); 77680 (April
21, 2016), 81 FR 24905 (April 27, 2016) (NYSEMKT-2016-17); and 77682
(April 21, 2016), 81 FR 24913 (April 27, 2016 (NYSEArca-2016-21);
and NYSE National Co-location Notice, supra note 6, at 26315.
---------------------------------------------------------------------------
The initial and monthly charge for 2 bundles of 24 cross connects
will be waived for a User that is waitlisted for a cage for the
duration of the waitlist period, provided that the cross connects may
only be used to connect the User's non-contiguous cabinets. The charge
will no longer be waived once a User is removed from the waitlist.
If a waitlist is created, a User seeking a new cage will
be placed on the waitlist based on the date a signed order for the cage
is received.
A User that turns down a cage because it is not the
correct size will remain on the waitlist. A User that requests to be
removed or that turns down a cage that is the size that it requested
will be removed from the waitlist.
A User that is removed from the waitlist but subsequently
requests a cage will be added back to the bottom of the waitlist,
provided that, if the User was removed from the waitlist because it
turned down a cage that is the size that it requested, it will not
receive a second waiver of the charge.
General Note 4: Proposed General Note 4 would establish that, when
a User purchases access to the Liquidity Center Network (``LCN'') or
the internet protocol (``IP'') network, the two local area networks
available in the data center,\16\ a User would receive (a) the ability
to access the trading and execution systems of the Exchange and
Affiliate SROs (``Exchange Systems'') as well as of Global OTC (the
``Global OTC System'') and (b) connectivity to any of the listed data
products (``Included Data Products'') that it selects. The proposed
General Note 4 would be the same as the General Note 4 in the Affiliate
SRO Price Lists.\17\
---------------------------------------------------------------------------
\16\ See Securities Exchange Act Release Nos. 79730 (January 4,
2017), 82 FR 3045 (January 10, 2017) (SR-NYSE-2016-92); 79728
(January 4, 2017), 82 FR 3035 (January 10, 2017) (SR-NYSEMKT-2016-
126); and 79729 (January 4, 2017), 82 FR 3061 (January 10, 2017)
(SR-NYSEArca-2016-172); and NYSE National Co-location Notice, supra
note 6, at 26316.
\17\ See Securities Exchange Act Release Nos. 85952 (May 29,
2019), 84 FR 25880 (June 4, 2019) (SR-NYSE-2019-31); 85960 (May 29,
2019), 84 FR 25848 (June 4, 2019) (SR-NYSEAmer-2019-21); 85958 (May
29, 2019), 84 FR 25858 (June 4, 2019) (SR-NYSEArca-2019-40); and
85959 (May 29, 2019), 84 FR 25887 (June 4, 2019) (SR-NYSENat-2019-
13); see also Securities Exchange Act Release Nos. 85300 (March 13,
2019), 84 FR 10152 (March 19, 2019) (SR-NYSE-2019-11); 85302 (March
13, 2019), 84 FR 10164 (March 19, 2019) (SR-NYSEAmer-2019-02); 85306
(March 13, 2019), 84 FR 10159 (March 19, 2019) (SR-NYSEArca-2019-
11); 85305 (March 13, 2019), 84 FR 10154 (March 19, 2019) (SR-
NYSENat-2019-05; 83404 (June 11, 2018), 83 FR 28048 (June 15, 2018)
(SR-NYSE-2018-23); 83402 (June 11, 2018), 83 FR 28041 (June 15,
2018) (SR-NYSEAmer-2018-23); and 83403 (June 11, 2018), 83 FR 28053
(June 15, 2018) (SR-NYSEArca-2018-36).
---------------------------------------------------------------------------
The Exchange proposes to adopt the following 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 NYSE,
NYSE American, NYSE Arca, NYSE Chicago, Inc. (NYSE Chicago), and NYSE
National (together, the Exchange Systems) as well as of Global OTC (the
``Global OTC System''), subject, in each case, to authorization by the
NYSE, NYSE American, NYSE Arca, NYSE Chicago, NYSE National or Global
OTC, as applicable. Such access includes access to the customer
gateways that provide for order entry, order receipt (i.e. confirmation
that an order has been received), receipt of drop copies and trade
reporting (i.e. whether a trade is executed or cancelled), as well as
for sending information to shared data services for clearing and
settlement. A User can change the access it receives at any time,
subject to authorization by NYSE, NYSE American, NYSE Arca, NYSE
Chicago, NYSE National or Global OTC. NYSE, NYSE American, NYSE Arca,
NYSE Chicago and NYSE National also offer access to Exchange Systems to
their members, such that a User does not have to purchase access to the
LCN or IP network to obtain access to Exchange Systems. 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.
When a User purchases access to the LCN or IP network it receives
connectivity to any of the Included Data Products that it selects,
subject to any technical provisioning requirements and authorization
from the provider of the data feed. Market data fees for the Included
Data Products are charged by the provider of the data feed. A User can
change the Included Data Products to which it receives connectivity at
any time, subject to authorization from the provider of the data feed.
The Exchange is not the exclusive method to connect to the Included
Data Products.
The Included Data Products are as follows:
NMS feeds
NYSE:
NYSE Alerts
NYSE BBO
NYSE Integrated Feed
NYSE OpenBook
NYSE Order Imbalances
NYSE Trades
NYSE American:
NYSE American Alerts
NYSE American BBO
NYSE American Integrated Feed
NYSE American OpenBook
NYSE American Order Imbalances
NYSE American Trades
[[Page 58781]]
NYSE American Options
NYSE Arca:
NYSE ArcaBook
NYSE Arca BBO
NYSE Arca Integrated Feed
NYSE Arca Order Imbalances
NYSE Arca Trades
NYSE Arca Options
NYSE Best Quote and Trades (BQT)
NYSE Bonds
NYSE Chicago
NYSE National
Cabinet-Related Fees
The Exchange proposes the same services and fees set forth in the
Affiliate SRO Price Lists under ``Initial Fee per Cabinet''; ``Monthly
Fee per Cabinet''; ``Cabinet Upgrade Fee''; ``PNU Cabinet''; and ``Cage
Fees'' (collectively, the ``Cabinet-Related Fees'').
Initial Fee per Cabinet and Monthly Fee per Cabinet: As in the
Affiliate SRO Price Lists, the Exchange proposes that, to house its
servers and other equipment in the data center, a User have the option
of an entire cabinet dedicated solely to that User (``dedicated
cabinet'') or a partial cabinet alternative (``partial cabinet'').\18\
Partial cabinets would be made available in increments of eight-rack
units of space. Users would pay an initial fee and a monthly fee based
on the number of kilowatts (``kW'').
---------------------------------------------------------------------------
\18\ See Securities Exchange Act Release Nos. 71122 (December
18, 2013), 78 FR 77739 (December 24, 2013) (SR-NYSE-2013-81); 71131
(December 18, 2013), 78 FR 77750 (December 24, 2013) (SR-NYSEMKT-
2013-103); and 71130 (December 18, 2013), 78 FR 77765 (December 24,
2013) (SR-NYSEArca-2013-143) and NYSE National Co-location Notice,
supra note 6, at 26316.
---------------------------------------------------------------------------
Cabinet Upgrade Fee: Users that require additional power allocation
may prefer to maintain their hardware within one of their existing
cabinets rather than add an additional cabinet. Specifically, Users may
develop their hardware infrastructure within a particular cabinet in
such a way that, if expansion of such hardware is needed, it can be
accomplished within the space constraints of that particular cabinet.
If this type of User requires additional power allocation, it would
likely want to modify its existing cabinet in this manner, rather than
taking an additional dedicated cabinet due to the expense of re-
developing its infrastructure within such additional dedicated cabinet.
Accordingly, as in the Affiliate SRO Price Lists, the Exchange would
offer Users the option of a ``Cabinet Upgrade'' and related fee,
pursuant to which the Exchange would accommodate requests for
additional power allocation beyond the typical amount that the Exchange
allocates per dedicated cabinet, at which point the Exchange must
upgrade the cabinet's power capacity.\19\
---------------------------------------------------------------------------
\19\ See id.
---------------------------------------------------------------------------
The Exchange notes that the Cabinet Upgrade Fees in the Affiliate
SRO Price Lists have a parenthetical setting forth lower fees for a
User that submitted a written order for a Cabinet Upgrade by January
31, 2014, provided that the Cabinet Upgrade became fully operational by
March 31, 2014. Because a User that incurs co-location fees for a
particular co-location service would not be subject to co-location fees
for the same co-location service charged by the Affiliate SROs and such
Users may already be subject to this different charge based on the
Price List of an Affiliate SRO, the Exchange proposes to maintain the
information regarding the lower price on its Fee Schedule.
PNU Fee: As in the Affiliate SRO Price Lists, the Exchange proposes
to offer Users the option of an unused cabinet for which power is not
utilized (``PNU cabinet'') and charge a monthly fee.\20\ A User may
wish to have a PNU cabinet it reserves for future use. Although PNU
cabinets do not use power, when the Exchange establishes a PNU cabinet,
it would include wiring, circuitry, and hardware and allocate kWs of
unused power capacity. This would allow the PNU cabinet to be powered
and used promptly upon the User's request.
---------------------------------------------------------------------------
\20\ See Securities Exchange Act Release Nos. 70913 (November
21, 2013), 78 FR 70987 (November 27, 2013 (SR-NYSE-2013-74); 70914
(November 21, 2013), 78 FR 71000 (November 27, 2013) (SR-NYSEMKT-
2013-93); and 70916 (November 21, 2013), 78 FR 70989 (November 21,
2013) (SR-NYSEArca-2013-124) and NYSE National Co-location Notice,
supra note 6, at 26316.
---------------------------------------------------------------------------
Cage Fee: As in the Affiliate SRO Price Lists, the Exchange
proposes to offer Users the use of cages to house their cabinets within
the data center, with initial and monthly charges based on the size of
the cage.\21\ A cage would typically be purchased by a User that has
several cabinets within the data center and that wishes to enhance
privacy around its cabinets, e.g., so that other Users cannot see what
type of hardware is being utilized.
---------------------------------------------------------------------------
\21\ See Securities Exchange Act Release Nos. 67666 (August 15,
2012), 77 FR 50742 (August 22, 2012) (SR-NYSE-2012-18); 67665
(August 15, 2012), 77 FR 50734 (August 22, 2012) (SR-NYSEMKT-2012-
11); 67669 (August 15, 2012), 77 FR 50746 (August 22, 2012) (SR-
NYSEArca-2012-62); and 67667 (August 15, 2012), 77 FR 50743 (August
22, 2012) (SR-NYSEArca-2012-63); and NYSE National Co-location
Notice, supra note 6, at 26316.
---------------------------------------------------------------------------
The Exchange proposes to add the following fees and language to its
Fee Schedule:
------------------------------------------------------------------------
------------------------------------------------------------------------
Initial Fee per Cabinet
------------------------------------------------------------------------
Dedicated Cabinet...................... $5,000
8-Rack Unit of a Partial Cabinet....... $2,500
------------------------------------------------------------------------
Monthly Fee per Cabinet
------------------------------------------------------------------------
Dedicated Cabinet:
Number of kWs Per kW Fee Monthly
4-8 $1,200
9-20 $1,050
21-40 $950
41+ $900
8-Rack Unit of a Partial Cabinet:
Number of kWs Total Fee Monthly
1 $1,500
2 $2,700
------------------------------------------------------------------------
Cabinet Upgrade Fee
------------------------------------------------------------------------
Dedicated Cabinet...................... $9,200 ($4,600 for a User that
submitted a written order for
a Cabinet Upgrade by January
31, 2014, provided that the
Cabinet Upgrade became fully
operational by March 31,
2014).
------------------------------------------------------------------------
[[Page 58782]]
PNU Cabinet............................ monthly charge of $360 per kW
allocated to PNU Cabinet.
------------------------------------------------------------------------
Cage Fees
------------------------------------------------------------------------
2-14 Cabinets.......................... $5,000 initial charge plus
$2,700 monthly charge.
15-28 Cabinets......................... $10,000 initial charge plus
$4,100 monthly charge.
29+ Cabinets........................... $15,000 initial charge plus
$5,500 monthly charge.
------------------------------------------------------------------------
Access and Service Fees
The Exchange proposes to adopt the same services and fees set forth
in the Affiliate SRO Price Lists under ``LCN Access''; ``Bundled
Network Access''; ``Partial Cabinet Solution bundles''; ``IP Network
Access''; ``Testing and Certification IP Network Access''; ``Wireless
Connections for Third Party Data''; ``Virtual Control Circuit between
two Users''; ``Hosting Fee''; ``Data Center Fiber Cross Connect'';
``Connection to Time Protocol Feed'' and ``Expedite Fee''
(collectively, the ``Access and Service Fees'').
LCN Access: As in the Affiliate SRO Price Lists, the Exchange
proposes to offer Users the option to purchase 1 Gb, 10 Gb, 40 Gb, and
10 Gb LX LCN circuits, with initial and monthly charges.\22\ As in the
Affiliate SRO Price Lists, the Exchange proposes that a User that
purchases five 10 Gb LCN connections would only be charged the initial
fee for a sixth 10 Gb LCN connection and would not be charged the
monthly fee that would otherwise be applicable. This would apply to a
User that purchases six 10 Gb LCN connections at one time as well as to
a User that purchases six 10 Gb LCN connections at separate times.\23\
---------------------------------------------------------------------------
\22\ See note 16, supra.
\23\ See note 21, supra.
---------------------------------------------------------------------------
Bundled Network Access: As in the Affiliate SRO Price Lists, the
Exchange proposes to offer Users two ``Bundled Network Access''
options, with initial and monthly charges.\24\ Both bundles would
include two LCN connections, two IP network connections, and two optic
connections to outside access centers. One bundle would have 1 Gb
connections, and the other 10 Gb connections.
---------------------------------------------------------------------------
\24\ See note 16, supra.
---------------------------------------------------------------------------
Partial Cabinet Solution Bundles: As in the Affiliate SRO Price
Lists, the Exchange proposes to offer Users four ``Partial Cabinet
Solution'' bundles.\25\ Each Partial Cabinet Solution bundle option
would include a one or two kW partial cabinet, one LCN connection, one
IP network connection, two fiber cross connections, and connectivity to
either the Network Time Protocol (``NTP'') or Precision Timing Protocol
(``PTP'') time feed. The power of the partial cabinet and Gb of the
network connections would vary by bundle.\26\ A User and its Affiliates
would be limited to one Partial Cabinet Solution bundle at a time, and
must have an Aggregate Cabinet Footprint of 2 kW or less to qualify. As
noted above, such requirements would be set forth in General Note
2.\27\ Finally, a User purchasing a Partial Cabinet Solution bundle
would be subject to a 90-day minimum commitment, after which period it
would be subject to the 60-day rolling time period.
---------------------------------------------------------------------------
\25\ See note 14, supra; Securities Exchange Act Release Nos.
84893 (December 20, 2018), 83 FR 67455 (December 28, 2018) (SR-NYSE-
2018-63); 84925 (December 21, 2018), 83 FR 67754 (December 31, 2018)
(SR-NYSEAmer-2018-55); 84893 (December 20, 2018), 83 FR 67455
(December 28, 2018) (SR-NYSEArca-2018-93); and 84895 (December 20,
2018), 83 FR 67405 (December 28, 2018) (SR-NYSENat-2018-26).
\26\ The Affiliate SROs have filed to amend two of the Partial
Cabinet Solution bundles by replacing the 10 Gb LCN connection with
a LCN 10 Gb LX connection. According to the Affiliate SROs, the
change is expected to become operative during the fourth quarter of
2019, and the implementation date will be announced through a
customer notice. See Securities Exchange Act Release Nos. 86550
(August 1, 2019), 84 FR 38696 (August 7, 2019) (SR-NYSE-2019-41);
86548 (August 1, 2019), 84 FR 38704 (August 7, 2019) (SR-NYSEAmer-
2019-28); 86547 (August 1, 2019), 84 FR 38708 (August 7, 2019) (SR-
NYSEArca-2019-54); and 86549 (August 1, 2019), 84 FR 38700 (August
7, 2019) (SR-NYSENat-2019-17). The Exchange proposes to include
notes to the Partial Cabinet Solution bundles in the Fee Schedule
indicating the expected change.
\27\ See text accompanying note 14, supra.
---------------------------------------------------------------------------
IP Network Access: As in the Affiliate SRO Price Lists, the
Exchange proposes to offer Users the option to purchase 1 Gb, 10 Gb,
and 40 Gb IP network circuits, with initial and monthly charges.\28\
---------------------------------------------------------------------------
\28\ See note 16, supra. See also Securities Exchange Act
Release Nos. 74222 (February 6, 2015), 80 FR 7888 (February 12, 2015
(SR-NYSE-2015-05); 74220 (February 6, 2015), 80 FR 7894 (February
12, 2015) (SR-NYSEMKT-2015-08); and 74219 (February 6, 2015), 80 FR
7899 (February 12, 2015) (SR-NYSEArca-2015-03) and NYSE National Co-
location Notice, supra note 6, at 26317.
---------------------------------------------------------------------------
Testing and Certification IP Network Access: As in the Affiliate
SRO Price Lists, the Exchange proposes to offer Users access to an IP
network circuit for testing and certification at no charge.\29\ The
circuit could only be used for testing and certification, and the
testing and certification period would be limited to three months.
---------------------------------------------------------------------------
\29\ See id. 80 FR at 7888, 80 FR at 7894, 80 FR at 7899, and
NYSE National Co-location Notice, supra note 6, at 26318.
---------------------------------------------------------------------------
Wireless Connections for Third Party Data: As in the Affiliate SRO
Price Lists, the Exchange proposes to offer Users a means to receive
market data feeds from third party markets (``Wireless Third Party
Data'') through a wireless connection, for an initial and monthly
fee.\30\ Fees would be subject to a 30-day testing period, during which
the monthly charge per connection would be waived. The wireless
connections would include the use of one port for connectivity to the
Wireless Third Party Data. If a User that has more than one wireless
connection wishes to use more than one port to connect to the Wireless
Third Party Data, the Exchange proposes to make such additional ports
available for a monthly fee per port.\31\
---------------------------------------------------------------------------
\30\ See Securities Exchange Act Release Nos. 76748 (December
23, 2015), 80 FR 81609 (December 30, 2015) (SR-NYSE-2015-52); 76750
(December 23, 2015), 80 FR 81648 (December 30, 2015) (SR-NYSEMKT-
2015-85); and 76749 (December 23, 2015), 80 FR 81640 (December 30,
2015) (SR-NYSEArca-2015-99); and NYSE National Co-location Notice,
supra note 6, at 26318.
\31\ Id.
---------------------------------------------------------------------------
Virtual Control Circuit between two Users: As in the Affiliate SRO
Price Lists, the Exchange proposes to offer Users ``Virtual Control
Circuits'' (``VCCs'') between two Users for a monthly charge based on
the size of the VCC. \32\ VCCs are connections between two points over
dedicated bandwidth using the IP network. A VCC is a two-way connection
which the two participants can use for any purpose. The Exchange would
bill the User requesting the VCC, but would not set up a VCC until the
other User confirmed that it wishes to have the VCC set up.
---------------------------------------------------------------------------
\32\ See Securities Exchange Act Release Nos. 80311 (March 24,
2017), 82 FR 15749 (March 30, 2017) (SR-NYSE-2016-45); 80309 (March
24, 2017), 82 FR 15725 (March 30, 2017) (SR-NYSEMKT-2016-63); and
80310 (March 24, 2017), 82 FR 15763 (March 30, 2017) (SR-NYSEArca-
2016-89); and NYSE National Co-location Notice, supra note 6, at
26318.
---------------------------------------------------------------------------
Hosting Fee: As in the Affiliate SRO Price Lists, the Exchange
proposes to offer Users a hosting service for a monthly fee per cabinet
per Hosted Customer for each cabinet in which such Hosted Customer is
hosted.\33\ ``Hosting'' would be a service offered by a User to another
entity in the User's
[[Page 58783]]
space within the data center and could include, for example, a User
supporting such other entity's technology, whether hardware or
software, through the User's co-location space. A Hosting User would be
required to be a User pursuant to the definition of User proposed
above. Since only Users could be Hosting Users, a Hosted Customer would
not be able to provide hosting services to any other entities in the
space in which it is hosted.
---------------------------------------------------------------------------
\33\ See note 6, supra.
---------------------------------------------------------------------------
Data Center Fiber Cross Connect: As in the Affiliate SRO Price
Lists, the Exchange proposes to offer Users fiber cross connects for an
initial and monthly charge.\34\ A User would be able to use cross
connects between its cabinets or between its cabinet(s) and the
cabinets of separate Users within the data center. A cross connect
would be used to connect cabinets of separate Users when, for example,
a User receives technical support, order routing, and/or market data
delivery services from another User in the data center. Cross connects
may be bundled (i.e., multiple cross connects within a single sheath)
such that a single sheath can hold either one cross connect or several
cross connects in multiples of six (e.g., six or 12 cross connects).
The Exchange is proposing fees for bundled cross connects[thinsp]that
correspond to the number of cross connects in the bundle.
---------------------------------------------------------------------------
\34\ See note 21, supra.
---------------------------------------------------------------------------
Connection to Time Protocol Feed: As in the Affiliate SRO Price
Lists, the Exchange proposes to offer Users the option to purchase
connectivity to one or more of three time feeds, with monthly and
initial charges.\35\ Each proposed time feed would provide a feed with
the current time of day using one of three different time protocols:
GPS Time Source, the Network Time Protocol Feed (``NTP''), and the
Precision Time Protocol (``PTP''). Users may make use of time feeds to
receive time and to synchronize clocks between computer systems or
throughout a computer network, and time feeds may assist Users in other
functions, including record keeping or measuring response times. Only
the NTP and PTP time feeds would be available to partial cabinet Users,
whereas dedicated cabinet Users would have access to all three time
feeds. The NTP feed would only be available on the LCN.
---------------------------------------------------------------------------
\35\ See note 14, supra.
---------------------------------------------------------------------------
Expedite Fee: As in the Affiliate SRO Price Lists, the Exchange
proposes to offer Users the option to expedite the completion of co-
location services purchased or ordered by the User, for which the
Exchange would charge an ``Expedite Fee.'' \36\
---------------------------------------------------------------------------
\36\ See note 21, supra.
---------------------------------------------------------------------------
The Exchange proposes to add the following fees and language to its
Fee Schedule:
------------------------------------------------------------------------
Type of service Description Amount of charge
------------------------------------------------------------------------
LCN Access.................. 1 Gb Circuit........ $6,000 per
connection initial
charge plus $5,000
monthly per
connection.
LCN Access.................. 10 Gb Circuit....... $10,000 per
connection initial
charge plus $14,000
monthly per
connection. A User
that purchases 5 10
GB LCN Circuits
will receive the
6th 10 GB LCN
Circuit without an
additional monthly
charge.
LCN Access.................. 10 Gb LX Circuit.... $15,000 per
connection initial
charge plus $22,000
monthly per
connection.
LCN Access.................. 40 Gb Circuit....... $15,000 per
connection initial
charge plus $22,000
monthly per
connection.
Bundled Network Access (2 1 Gb Bundle......... $25,000 initial
LCN connections, 2 IP .................... charge plus $13,000
network connections, and 2 10 Gb Bundle........ monthly charge.
optic connections to $50,000 initial
outside access center). charge plus $53,000
monthly charge.
Partial Cabinet Solution Option A: 1 kW $7,500 initial
bundles. partial cabinet, 1 charge per bundle
Note: A User and its LCN connection (1 plus monthly charge
Affiliates are limited to Gb), 1 IP network per bundle as
one Partial Cabinet connection (1 Gb), follows:
Solution bundle at a time. 2 fiber cross For Users
A User and its Affiliates connections and that order on or
must have an Aggregate either the Network before December 31,
Cabinet Footprint of 2 kW Time Protocol Feed 2019: $3,000
or less to qualify for a or Precision Timing monthly for first
Partial Cabinet Solution Protocol. 24 months of
bundle. See Note 2 under .................... service, and $6,000
``General Notes.''. .................... monthly thereafter.
.................... For Users
Option B: 2 kW that order after
partial cabinet, 1 December 31, 2019:
LCN connection (1 $6,000 monthly.
Gb), 1 IP network $7,500 initial
connection (1 Gb), charge per bundle
2 fiber cross plus monthly charge
connections and per bundle as
either the Network follows:
Time Protocol Feed For Users
or Precision Timing that order on or
Protocol. before December 31,
2019: $3,500
monthly for first
24 months of
service, and $7,000
monthly thereafter.
For Users
that order after
December 31, 2019:
$7,000 monthly.
[[Page 58784]]
Option C: 1 kW $10,000 initial
partial cabinet, 1 charge per bundle
LCN connection (10 plus monthly charge
Gb),* 1 IP network per bundle as
connection (10 Gb), follows:
2 fiber cross For Users
connections and that order on or
either the Network before December 31,
Time Protocol Feed 2019: $7,000
or Precision Timing monthly for first
Protocol. 24 months of
* The LCN connection service, and
(10 Gb) will be $14,000 monthly
replaced with an thereafter.
LCN connection (10 For Users
Gb LX) on a date to that order after
be announced by December 31, 2019:
customer notice, $14,000 monthly.
expected to be $10,000 initial
during the fourth charge per bundle
quarter of 2019. plus monthly charge
per bundle as
follows:
For Users
that order on or
before December 31,
2019: $7,000
monthly for first
24 months of
service, and
$14,000 monthly
thereafter.
For Users
that order after
December 31, 2019:
$14,000 monthly.
Option D: 2 kW $10,000 initial
partial cabinet, 1 charge per bundle
LCN connection (10 plus monthly charge
Gb),* 1 IP network per bundle as
connection (10 Gb), follows:
2 fiber cross For Users
connections and that order on or
either the Network before December 31,
Time Protocol Feed 2019: $7,500
or Precision Timing monthly for first
Protocol. 24 months of
* The LCN connection service, and
(10 Gb) will be $15,000 monthly
replaced with an thereafter.
LCN connection (10 For Users
Gb LX) on a date to that order after
be announced by December 31, 2019:
customer notice, $15,000 monthly.
expected to be
during the fourth
quarter of 2019.
IP Network Access........... 1 Gb Circuit........ $2,500 per
connection initial
charge plus $2,500
monthly per
connection.
IP Network Access........... 10 Gb Circuit....... $10,000 per
connection initial
charge plus $11,000
monthly per
connection.
IP Network Access........... 40 Gb Circuit....... $10,000 per
connection initial
charge plus $18,000
monthly per
connection.
Testing and certification IP IP network circuit No charge.
Network Access. for testing and
certification.
Circuit can only be
used for testing
and certification
and testing and
certification
period is limited
to three months.
Wireless Connection for Wireless connection $5,000 per
Third Party Data. of Cboe Pitch BZX connection initial
Gig shaped data and charge plus monthly
Cboe Pitch BYX Gig charge per
shaped data. connection of
$6,000.
Fees are subject to
a 30-day testing
period, during
which the monthly
charge per
connection is
waived.
Wireless Connection for Wireless connection $5,000 per
Third Party Data. of Cboe EDGX Gig connection initial
shaped data and charge plus monthly
Cboe EDGA Gig charge per
shaped data. connection of
$6,000.
Fees are subject to
a 30-day testing
period, during
which the monthly
charge per
connection is
waived.
Wireless Connection for Wireless connection $5,000 per
Third Party Data. of NASDAQ Totalview- connection initial
ITCH data. charge plus monthly
charge per
connection of
$8,500.
Fees are subject to
a 30-day testing
period, during
which the monthly
charge per
connection is
waived.
Wireless Connection for Wireless connection $5,000 per
Third Party Data. of NASDAQ BX connection initial
Totalview-ITCH data. charge plus monthly
charge per
connection of
$6,000.
Fees are subject to
a 30-day testing
period, during
which the monthly
charge per
connection is
waived.
Wireless Connection for Wireless connection $5,000 per
Third Party Data. of NASDAQ Totalview connection initial
Ultra (FPGA). charge plus monthly
charge per
connection of
$11,000.
Fees are subject to
a 30-day testing
period, during
which the monthly
charge per
connection is
waived.
Wireless Connection for Wireless connection $5,000 per
Third Party Data. of NASDAQ Totalview- connection initial
ITCH and BX charge plus monthly
Totalview-ITCH data. charge per
connection of
$12,000.
Fees are subject to
a 30-day testing
period, during
which the monthly
charge per
connection is
waived.
Wireless Connection for Wireless connection $5,000 per
Third Party Data. of NASDAQ Totalview connection initial
Ultra (FPGA) and BX charge plus monthly
Totalview-ITCH data. charge per
connection of
$14,500.
Fees are subject to
a 30-day testing
period, during
which the monthly
charge per
connection is
waived.
Wireless Connection for Wireless connection $5,000 per
Third Party Data. of Toronto Stock connection initial
Exchange (TSX). charge plus monthly
charge per
connection of
$8,500.
[[Page 58785]]
Fees are subject to
a 30-day testing
period, during
which the monthly
charge per
connection is
waived.
Wireless Connection for Port for wireless $3,000 monthly
Third Party Data. connection. charge per port,
excluding first
port.
Virtual Control Circuit 1Mb................. $200 monthly charge.
between two Users.
3Mb................. $400 monthly charge.
5Mb................. $500 monthly charge.
10Mb................ $800 monthly charge.
25Mb................ $1,200 monthly
charge.
50Mb................ $1,800 monthly
charge.
100Mb............... $2,500 monthly
charge.
Hosting Fee................. .................... $1,000 monthly
charge per cabinet
per Hosted Customer
for each cabinet in
which such Hosted
Customer is hosted.
Data Center Fiber Cross Furnish and install $500 initial charge
Connect. 1 cross connect. plus $600 monthly
charge.
Furnish and install $500 initial charge
bundle of 6 cross plus $1,800 monthly
connects. charge.
Furnish and install $500 initial charge
bundle of 12 cross plus $3,000 monthly
connects. charge.
Furnish and install $500 initial charge
bundle of 18 cross plus $3,840 monthly
connects. charge.
Furnish and install $500 initial charge
bundle of 24 cross plus $4,680 monthly
connects. charge
See General Note 3.
Connection to Time Protocol Network Time $300 initial charge
Feed. Protocol Feed plus $100 monthly
(Note: LCN only). charge.
Precision Time $1,000 initial
Protocol. charge plus $250
monthly charge.
GPS Time Source $3,000 initial
(Note: dedicated charge plus $400
cabinets only). monthly charge.
Expedite Fee................ Expedited $4,000 per request.
installation/
completion of a
User's co-location
service.
------------------------------------------------------------------------
Service-Related Fees
The Exchange proposes to adopt the same services and fees set forth
in the Affiliate SRO Price Lists under ``Change Fee''; ``Initial
Install Services''; ``Hot Hands Service''; ``Shipping and Receiving'';
``Badge Request''; ``External Cabinet Cable Tray''; ``Custom External
Cabinet Cable Tray'' and ``Visitor Security Escort'' (collectively, the
``Service-related Fees'') and related note, as follows.
Change Fee: As in the Affiliate SRO Price Lists, the Exchange
proposes to charge a User a ``Change Fee'' if the User requests a
change to one or more existing co-location services that the Exchange
has already established or completed for the User.\37\ The Change Fee
would be charged per order. If a User ordered two or more services at
one time (for example, through submitting an order form requesting
multiple services) the User would be charged a one-time Change Fee,
which would cover the multiple services.
---------------------------------------------------------------------------
\37\ See id.
---------------------------------------------------------------------------
Initial Install Services: As in the Affiliate SRO Price Lists, the
Exchange proposes to charge a User an ``Initial Install Services'' fee
for the installation of a dedicated or partial cabinet.\38\ The
proposed fee would be lower for a partial cabinet. The Initial Install
Services fee would include initial racking of equipment in the cabinet,
provision of cables and labor. The number of hours would depend on
whether the cabinet was partial or dedicated.
---------------------------------------------------------------------------
\38\ See note 18, supra.
---------------------------------------------------------------------------
Hot Hands Service: As in the Affiliate SRO Price Lists, the
Exchange proposes to offer Users a ``Hot Hands'' service, which would
allow Users to use on-site data center personnel to maintain User
equipment, support network troubleshooting, rack and stack a server in
a User's cabinet; power recycling; and install and document the fitting
of cable in a User's cabinet(s).\39\ The Hot Hands fee would be charged
per half hour.
---------------------------------------------------------------------------
\39\ See Securities Exchange Act Release Nos. 72721 (July 30,
2014), 79 FR 45562 (August 5, 2014) (SR-NYSE-2014-37); 72719 (July
30, 2014), 79 FR 45502 (August 5, 2014) (SR-NYSEMKT-2014-61); and
72720 (July 30, 2014), 79 FR 45577 (August 5, 2014) (SR-NYSEArca-
2014-81); and NYSE National Co-location Notice, supra note 6, at
26320.
---------------------------------------------------------------------------
Shipping and Receiving: As in the Affiliate SRO Price Lists, the
Exchange proposes to offer Users shipping and receiving services, with
a per shipment fee for the receipt of one shipment of goods at the data
center from the User or supplier.\40\
---------------------------------------------------------------------------
\40\ See note 7, supra.
---------------------------------------------------------------------------
Badge Request: As in the Affiliate SRO Price Lists, the Exchange
proposes to offer Users the option to obtain a permanent data center
site access badge for a User representative. \41\
---------------------------------------------------------------------------
\41\ Id.
---------------------------------------------------------------------------
External Cabinet Cable Tray: As in the Affiliate SRO Price Lists,
the Exchange proposes to offer to engineer, furnish and install a
Rittal 5''H x 12''W cable tray on a cabinet for a flat fee per
tray.\42\
---------------------------------------------------------------------------
\42\ Id.
---------------------------------------------------------------------------
Custom External Cabinet Cable Tray: As in the Affiliate SRO Price
Lists, the Exchange proposes to offer to engineer, furnish and install
4'' H x 24'' W custom basket cable tray above a client's cabinet rows
for a fee per linear foot. \43\
---------------------------------------------------------------------------
\43\ Id.
---------------------------------------------------------------------------
Visitor Security Escort: As in the Affiliate SRO Price Lists, the
Exchange proposes that User representatives be required to be
accompanied by a visitor security escort during visits to the data
center, unless visiting the User's cage. A fee per visit would be
charged.\44\ The proposed requirement would include User
representatives who have a permanent data center site access badge.
---------------------------------------------------------------------------
\44\ See note 15, supra.
---------------------------------------------------------------------------
In order to be able to meet its obligation to accommodate demand,
and in particular to make available more contiguous, larger spaces for
new and existing Users, if necessary, the Exchange would exercise its
right to move some Users' equipment within the
[[Page 58786]]
data center (``Migration''). To manage the process for a future
Migration, the Exchange proposes to put the same Migration procedures
in place as the Affiliate SROs, as follow: \45\
---------------------------------------------------------------------------
\45\ See Securities Exchange Act Release Nos. 76269 (October 26,
2015), 80 FR 66942 (October 30, 2015) (SR-NYSE-2015-42); 76268
(October 26, 2015), 80 FR 66944 (October 30, 2015) (SR-NYSEMKT-2015-
70); and 76270 (October 26, 2015), 80 FR 66958 (October 30, 2015)
(SR-NYSEArca-2015-85); and NYSE National Co-location Notice, supra
note 6, at 26321.
---------------------------------------------------------------------------
First, the Exchange would identify Users that would be
required to move in the Migration based on (a) the current location of
the User and its current equipment and power requirements and (b) the
availability of another location in the Data Center that would
accommodate the equipment and power requirements for which such User
currently subscribes. No User would be required to move more than once
within any 12-month period.
Second, the Exchange would notify a User in writing (the
``Notice'') that the User's equipment and network connections in the
Data Center were to be moved as part of the Migration. The Notice would
identify the 90-day period during which the User must move its
equipment, which period would commence at least 60 days from the date
of the Notice. The exact date or dates for the move for each User would
be agreed upon between the User and the Exchange. If a move date or
dates cannot be agreed on, the Exchange would schedule the move for a
date or dates no later than 180 days after the date of the Notice.
Third, each User's move would be facilitated by the
Exchange in cooperation with the User, including the un-racking and re-
racking of all of the User's equipment, and the re-installation of the
User's networking connections, and the Exchange would make reasonable
efforts to ensure that the moves take place outside of the Exchange's
hours for business.
Fourth, in connection with facilitating each User's move,
the Exchange proposes to waive certain fees. Specifically, the Exchange
proposes to waive:
[cir] The monthly recurring fees for the User's existing space,
based on the rate of the monthly recurring fees that the User is paying
as of the date of the Notice, for the month during which the User's
move takes place. This waiver of the monthly recurring fees would mean
that the User would not incur these fees for the period of overlapping
use of the equipment and services in the old and the new locations, as
long as the move is completed within one month.
[cir] all Service-Related Fees that the User would incur if such a
move were to take place at a User's request with respect to the User's
existing services and equipment.
[cir] for the month following the completion of a User's move, the
monthly recurring charges for that User, based on the rate of the
monthly recurring fees that the User is paying as of the date of the
Notice, in consideration for the Migration.
The Exchange proposes to add a note to each Service-Related Fee
outlining the Migration process, as in the Affiliate SRO Price
Lists.\46\ The Exchange proposes to add the following fees and note to
its Fee Schedule:
---------------------------------------------------------------------------
\46\ The Exchange notes that, while the other Affiliate SRO
Price Lists use three asterisks to identify the Service-Related Fees
and the corresponding note, the NYSE Amex Options Fee Schedule uses
the numeral ``1''. The Exchange proposes to use three asterisks.
------------------------------------------------------------------------
Type of service Description Amount of charge
------------------------------------------------------------------------
Change Fee ***................ Change to a co- $950 per
location service that request.
has already been
installed/completed
for a User.
Initial Install Services *** Dedicated Cabinet: $800 per
(Required per cabinet). Includes initial dedicated
racking of equipment cabinet.
in cabinet and
provision of cables
(4 hrs)..
Partial Cabinet: $400 per eight-
Includes initial rack unit in a
racking of equipment partial
in cabinet and cabinet.
provision of cables
(2 hrs)..
Hot Hands Service ***......... Allows Users to use on- $100 per half
site data center hour.
personnel to maintain
User equipment,
support network
troubleshooting, rack
and stack, power
recycling, and
install and document
cable..
Shipping and Receiving ***.... Receipt of one $100 per
shipment of goods at shipment.
data center from User/
supplier. Includes
coordination of
shipping and
receiving..
Badge Request ***............. Request for provision $50 per badge.
of a permanent data
center site access
badge for a User
representative..
External Cabinet Cable Tray Engineer, furnish and $400 per tray.
***. install Rittal 5``H x
12``W cable tray on
cabinet..
Custom External Cabinet Cable Engineer, furnish and $100 per linear
Tray ***. install 4'' H x 24'' foot.
W custom basket cable
tray above client's
cabinet rows..
Visitor Security Escort ***... All User $75 per visit.
representatives are
required to be
accompanied by a
visitor security
escort during visits
to the data center,
unless visiting the
User's cage.
Requirement includes
User representatives
who have a permanent
data center site
access badge..
------------------------------------------------------------------------
*** These fees are waived for the move of a User's equipment within the
Data Center when incurred in connection with such a move required by
the Exchange (``Migration Move''). A User selected by the Exchange for
a Migration Move will receive written notice (the ``Notice''). The
Notice will identify the 90-day period during which a User must move
its equipment, which period would commence at least 60 days from the
date of the Notice. Monthly recurring fees for the User's existing
space based on the rate of the monthly recurring fees that the User
was paying as of the date of the Notice are also waived for the month
during which a User's Migration Move takes place, so the User would
not incur these fees for the period of overlapping use of equipment
and services in the old and new locations. In addition, the monthly
recurring charges are waived for the month following the completion of
a User's Migration Move, based on the rate of the monthly recurring
fees that the User was paying as of the date of the Notice. No User
will be required to move more than once within any 12-month period.
Connectivity to Third Party Systems, Data Feeds, Testing and
Certification Feeds, and DTCC
The Exchange proposes to adopt the same services and fees set forth
in the Affiliate SRO Price Lists under ``Connectivity to Third Party
Systems, Data Feeds, Testing and Certification Feeds, and DTCC.'' \47\
---------------------------------------------------------------------------
\47\ See note 32, supra.
---------------------------------------------------------------------------
Connectivity to Third Party Systems: As in the Affiliate SRO Price
Lists, the Exchange proposes to provide that 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
[[Page 58787]]
content service providers for a fee.\48\ Users would connect to Third
Party Systems over the IP network.
---------------------------------------------------------------------------
\48\ See id. See also Securities Exchange Release Nos. 83706
(July 25, 2018), 83 FR 37033 (July 31, 2018) (SR-NYSE-2018-32; 83707
(July 25, 2018), 83 FR 36985 (July 31, 2018) (SR-NYSEAmer-2018-35);
83708 (July 25, 2018), 83 FR 36980 (July 31, 2018) (SR-NYSEArca-
2018-52); and 83709 (July 25, 2018), 83 FR 37028 (July 31, 2018)
(SR-NYSENat-2018-15).
---------------------------------------------------------------------------
In order to obtain access to a Third Party System, a User would
enter into an agreement with the relevant third party content service
provider, pursuant to which the third party content service provider
would charge the User for access to the Third Party System. The
Exchange would then establish a unicast connection between the User and
the relevant third party content service provider over the IP network.
The Exchange would charge the User for the connectivity to the Third
Party System. A User would only receive, and would only be charged for,
access to Third Party Systems for which it enters into agreements with
the third party content service provider.
With the exception of the ICE feed, the Exchange would have no
ownership interest in the Third Party Systems. Establishing a User's
access to a Third Party System would not give the Exchange any right to
use the Third Party Systems. Connectivity to a Third Party System would
not provide access or order entry to the Exchange's execution system,
and a User's connection to a Third Party System would not be through
the Exchange's execution system.
The Exchange would charge a monthly recurring fee for connectivity
to a Third Party System. Specifically, when a User requested access to
a Third Party System, it would identify the applicable third party
market or other content service provider and what bandwidth connection
it required.
The Exchange proposes to add the following fees and language to its
Fee Schedule:
Connectivity to Third Party Systems
Pricing for access to the execution systems of third party markets
and other service providers (Third Party Systems) is for connectivity
only. Connectivity to Third Party Systems is subject to any technical
provisioning requirements and authorization from the provider of the
data feed. Connectivity to Third Party Systems is over the IP network.
Any applicable fees are charged independently by the relevant third
party content service provider. The Exchange is not the exclusive
method to connect to Third Party Systems.
------------------------------------------------------------------------
Monthly recurring fee per
Bandwidth of connection to Third Party connection to Third Party
System System
------------------------------------------------------------------------
1 Mb...................................... $200
3 Mb...................................... 400
5 Mb...................................... 500
10 Mb..................................... 800
25 Mb..................................... 1,200
50 Mb..................................... 1,800
100 Mb.................................... 2,500
200 Mb.................................... 3,000
1 Gb...................................... 3,500
------------------------------------------------------------------------
Third Party Systems
Americas Trading Group (ATG)
BM&F Bovespa
Boston Options Exchange (BOX)
Canadian Securities Exchange (CSE)
Cboe BYX Exchange (CboeBYX), Cboe BZX Exchange (CboeBZX), Cboe EDGA
Exchange (CboeEDGA), and Cboe EDGX Exchange (CboeEDGX)
Cboe Exchange (Cboe) and Cboe C2 Exchange (C2)
Chicago Mercantile Exchange (CME Group)
Credit Suisse
Euronext Optiq Cash and Derivatives Unicast (EUA)
Euronext Optiq Cash and Derivatives Unicast (Production)
Investors Exchange (IEX)
ITG TriAct Matchnow
Miami International Securities Exchange
MIAX PEARL
Nasdaq
NASDAQ Canada (CXC, CXD, CX2)
NASDAQ ISE
Neo Aequitas
NYFIX Marketplace
Omega
OneChicago
OTC Markets Group
TMX Group
Connectivity to Third Party Data Feeds: As in the Affiliate SRO
Price Lists, the Exchange proposes to provide that Users may obtain
connectivity to data feeds from third party markets and other content
service providers (``Third Party Data Feeds'') for a fee.\49\ The
Exchange would receive Third Party Data Feeds from multiple national
securities exchanges and other content service providers at its data
center. It would then provide connectivity to that data to Users for a
fee. With the exceptions of Global OTC and ICE Data Global Index, Users
would connect to Third Party Data Feeds over the IP network.
---------------------------------------------------------------------------
\49\ Id.
---------------------------------------------------------------------------
In order to connect to a Third Party Data Feed, a User would enter
into a contract with the relevant third party market or other content
service provider, pursuant to which the content service provider would
charge the User for the Third Party Data Feed. The Exchange would
receive the Third Party Data Feed over its fiber optic network and,
after the data provider and User enter into the contract and the
Exchange receives authorization from the data provider, the Exchange
would re-transmit the data to the User over the User's port. The
Exchange would charge the User for the connectivity to the Third Party
Data Feed. A User would only receive, and would only be charged for,
connectivity to the Third Party Data Feeds for which it entered into
contracts.
With the exception of the ICE Data Services, ICE and Global OTC
feeds, the Exchange would have no affiliation with the sellers of the
Third Party Data Feeds. It would have no right to use the Third Party
Data Feeds other than as a redistributor of the data. The Third Party
Data Feeds would not provide access or order entry to the Exchange's
execution system. With the exception of the ICE feeds, the Third Party
Data Feeds would not provide access or order entry to the execution
systems of the third party generating the feed. The Exchange would
receive Third Party Data Feeds via arms-length agreements and would
have no inherent advantage over any other distributor of such data.
The Exchange would charge a monthly recurring fee for connectivity
to each Third Party Data Feed. The monthly recurring fee would be per
Third Party Data Feed, with the exception that the monthly recurring
fee for the ICE Data Services Consolidated Feeds (including the ICE
Data Services Consolidated FeedsShared Farm feeds), SR Labs-SuperFeeds
and MSCI feeds would vary by the bandwidth of the connection. Depending
on its needs and bandwidth, a User may opt to receive all or some of
the feeds or services included in a Third Party Data Feed.
Third Party Data Feed providers may charge redistribution fees. The
Exchange proposes that, when it receives a redistribution fee, it pass
through the charge to the User, without change to the fee. The fee
would be labeled as a pass-through of a redistribution fee on the
User's invoice. As in the Affiliate SRO Price Lists, the Exchange
proposes to add language to the Fee Schedule accordingly.
The Exchange proposes that it not charge Users that are third party
markets or content providers for connectivity to their own feeds, as it
understands that such parties generally receive their own feeds for
purposes of diagnostics and
[[Page 58788]]
testing. As in the Affiliate SRO Price Lists, the Exchange proposes to
add language to the Fee Schedule accordingly.
The Exchange proposes to add the following fees and language to its
Fee Schedule:
Connectivity to Third Party Data Feeds
Pricing for data feeds from third party markets and other content
service providers (Third Party Data Feeds) is for connectivity only.
Connectivity to Third Party Data Feeds is subject to any technical
provisioning requirements and authorization from the provider of the
data feed. Connectivity to Third Party Data Fees is over the IP
network, with the exception that Users can connect to Global OTC and
ICE Data Global Index over the IP network or LCN. Market data fees are
charged independently by the relevant third party market or content
service provider. The Exchange is not the exclusive method to connect
to Third Party Data Feeds.
Third Party Data Feed providers may charge redistribution fees.
When the Exchange receives a redistribution fee, it passes through the
charge to the User, without change to the fee. The fee is labeled as a
pass-through of a redistribution fee on the User's invoice. The
Exchange does not charge third party markets or content providers for
connectivity to their own feeds.
------------------------------------------------------------------------
Monthly
recurring
connectivity
Third party data feed fee per third
party data
feed
------------------------------------------------------------------------
BM&F Bovespa............................................ $3,000
Boston Options Exchange (BOX)........................... 1,000
Canadian Securities Exchange (CSE)...................... 1,000
Cboe BZX Exchange (CboeBZX) and Cboe BYX Exchange 2,000
(CboeBYX)..............................................
Cboe EDGX Exchange (CboeEDGX) and Cboe EDGA Exchange 2,000
(CboeEDGA).............................................
Cboe Exchange (Cboe) and Cboe C2 Exchange (C2).......... 2,000
CME Group............................................... 3,000
Euronext Optiq Compressed Cash.......................... 900
Euronext Optiq Compressed Derivatives................... 600
Euronext Optiq Shaped Cash.............................. 1,200
Euronext Optiq Shaped Derivatives....................... 900
Financial Industry Regulatory Authority (FINRA)......... 500
Global OTC.............................................. 100
ICE Data Global Index................................... 100
ICE Data Services Consolidated Feed <=100 Mb............ 200
ICE Data Services Consolidated Feed >100 Mb to <=1 Gb... 500
ICE Data Services Consolidated Feed >1 Gb............... 1,000
ICE Data Services Consolidated Feed Shared Farm <=100Mb. 200
ICE Data Services Consolidated Feed Shared Farm >100 Mb 500
to <=1 Gb..............................................
ICE Data Services Consolidated Feed Shared Farm >1 Gb... 1,000
ICE Data Services PRD................................... 200
ICE Data Services PRD CEP............................... 400
Intercontinental Exchange (ICE)......................... 1,500
Investors Exchange (IEX)................................ 1,000
ITG TriAct Matchnow..................................... 1,000
Miami International Securities Exchange/MIAX PEARL...... 2,000
Montr[eacute]al Exchange (MX)........................... 1,000
MSCI 5 Mb............................................... 500
MSCI 25 Mb.............................................. 1,200
NASDAQ Stock Market..................................... 2,000
NASDAQ OMX Global Index Data Service.................... 100
NASDAQ OMDF............................................. 100
NASDAQ UQDF & UTDF...................................... 500
NASDAQ Canada (CXC, CXD, CX2)........................... 1,500
NASDAQ ISE.............................................. 1,000
Neo Aequitas............................................ 1,200
Omega................................................... 1,000
OneChicago.............................................. 1,000
OTC Markets Group....................................... 1,000
SR Labs--SuperFeed <500 Mb.............................. 250
SR Labs--SuperFeed >500 Mb to <1.25 Gb.................. 800
SR Labs--SuperFeed >1.25 Gb............................. 1,000
TMX Group............................................... 2,500
------------------------------------------------------------------------
Connectivity to Third Party Testing and Certification Feeds: As in
the Affiliate SRO Price Lists, the Exchange proposes to provide that
Users may obtain connectivity to third party testing and certification
feeds.\50\ Certification feeds would be used to certify that a User
conforms to any of the relevant content service provider's requirements
for accessing Third Party Systems or receiving Third Party Data, while
testing feeds would provide Users an environment in which to conduct
tests with non-live data. Such feeds, which would solely be used for
certification and testing and do not carry live production data, would
be available over the IP network.
---------------------------------------------------------------------------
\50\ Id.
---------------------------------------------------------------------------
The Exchange proposes to add the following fees and language to its
Fee Schedule:
[[Page 58789]]
Connectivity to Third Party Testing and Certification Feeds
The Exchange provides connectivity to third party testing and
certification feeds provided by third party markets and other content
service providers. Pricing for third party testing and certification
feeds is for connectivity only. Connectivity to third party testing and
certification feeds is subject to any technical provisioning
requirements and authorization from the provider of the data feed.
Connectivity to third party testing and certification feeds is over the
IP network. Any applicable fees are charged independently by the
relevant third party market or content service provider. The Exchange
is not the exclusive method to connect to third party testing and
certification feeds.
Connectivity to third party certification $100 monthly recurring fee
and testing feeds. per feed.
Connectivity to DTCC: As in the Affiliate SRO Price Lists, the
Exchange proposes to provide Users connectivity to Depository Trust &
Clearing Corporation (``DTCC'') for clearing, fund transfer, insurance,
and settlement services.\51\
---------------------------------------------------------------------------
\51\ Id.
---------------------------------------------------------------------------
In order to connect to DTCC, a User would enter into a contract
with DTCC, pursuant to which DTCC would charge the User for the
services provided. The Exchange would receive the DTCC feed over its
fiber optic network and, after DTCC and the User entered into the
services contract and the Exchange received authorization from DTCC,
the Exchange would provide connectivity to DTCC to the User over the
User's IP network port. The Exchange would charge the User for the
connectivity to DTCC.
Connectivity to DTCC would not provide access or order entry to the
Exchange's execution system, and a User's connection to DTCC would not
be through the Exchange's execution system.
The Exchange proposes to add the following fees and language to its
Fee Schedule:
Connectivity to DTCC
Pricing for connectivity to DTCC feeds is for connectivity only.
Connectivity to DTCC feeds is subject to any technical provisioning
requirements and authorization from DTCC. Connectivity to DTCC feeds is
over the IP network. Any applicable fees are charged independently by
DTCC. The Exchange is not the exclusive method to connect to DTCC
feeds.
5 Mb connection to DTCC................... $500 monthly recurring fee.
50 Mb connection to DTCC.................. $2,500 monthly recurring
fee.
Application of Proposed Change
As noted above, none of the proposed services and fees are new or
novel. Current Users would not incur any new fees and the Exchange does
not expect to attract any new Users as a result of the proposed change,
for the following reasons.
First, as stated in the proposed Fee Schedule, a User that incurs
co-location fees for a particular co-location service would not be
subject to fees for the same service charged by the Affiliate SROs.\52\
In other words, even though all four Affiliate SROs and the Exchange
would offer co-location services, a User that purchased services would
only be charged once. This would be true irrespective of whether the
User were a member of all, some, or none of the Affiliate SROs and the
Exchange.
---------------------------------------------------------------------------
\52\ Co-location fees already work in this manner. See
Securities Exchange Act Release Nos. 70206 (August 15, 2013), 78 FR
51765 (August 21, 2013) (SR-NYSE-2013-59); 70176 (August 13, 2013),
78 FR 50471 (August 19, 2013) (SR-NYSEMKT-2013-67); and 70173
(August 13, 2013), 78 FR 50459 (August 19, 2013) (SR-NYSEArca-2013-
80); and NYSE National Co-location Notice, supra note 6, at 26314.
---------------------------------------------------------------------------
Second, the Exchange expects that a current User that starts to
trade on the Exchange or connect to its market data as a result of the
proposed change would not incur any new fees. Access to trade on the
Exchange and connectivity to its data products comes with connections
to the local area networks in the data center for no additional fee
\53\--and Users that trade or connect to market data would already have
a connection to the local area networks, either directly or through
another User.
---------------------------------------------------------------------------
\53\ See 84 FR 10152, 84 FR 10164, 84 FR 10159, and 84 FR 10154,
supra note 17.
---------------------------------------------------------------------------
Third, the Exchange does not expect any market participants to
become Users in order to connect to the Exchange's data feed. Under the
proposed change any authorized User would be able to obtain a lower
latency connection to the Exchange's data feeds. However, in the first
eight months of 2019, the Exchange averaged less than 0.6% market share
of executed volume of non-auction equity trading.\54\ Given the small
volume of trades on the Exchange and the fact that the NMS feeds
include NYSE Chicago data, the Exchange does not believe that a lower
latency connection to Exchange data would be sufficient reason for a
firm to become a User.
---------------------------------------------------------------------------
\54\ Based on Cboe U.S. Equities Market Volume Summary, the
Exchange's market share of intraday trading (excluding auctions) for
the months of January 2019, February 2019, March 2019, April 2019,
May 2019, June 2019, July 2019 and August 2019 was 0.52%, 0.52%,
0.56%, 0.50%, 0.50%, 0.48%, 0.46% and 0.43%, respectively. See
https://markets.cboe.com/us/equities/market_share/.
---------------------------------------------------------------------------
Finally, the Exchange believes that, as a practical matter, only
Participants \55\ would be interested in becoming new Users in order to
trade on the Exchange, as non-Participants cannot trade on the
Exchange. The pool of relevant Participants is small: Only nine
Participants are not also members of one or more of the Affiliate
SROs.\56\ Of those nine Participants, two are already Users, and
therefore, as explained above, would not be subject to any new or
different fees as a result of this filing. The Exchange does not expect
that any of the remaining seven Participants would opt to become Users
in order to trade on the Exchange.\57\ Simply put, the Exchange does
not expect that low latency access to such a small market would be
sufficient reason for a firm to become a User.
---------------------------------------------------------------------------
\55\ A ``Participant'' is, except as otherwise described in the
Rules of the Exchange, ``any Participant Firm that holds a valid
Trading Permit and any person associated with a Participant Firm who
is registered with the Exchange under Articles 16 and 17 as a Market
Maker Authorized Trader or Institutional Broker Representative,
respectively.'' Article I, Rule 1(s). A Participant is considered a
``member'' of the Exchange for purposes of the Act. ``Institutional
Broker'' means a member of the Exchange who is registered as an
Institutional Broker pursuant to the provisions of Article 17 and
has satisfied all Exchange requirements to operate as an
Institutional Broker on the Exchange. Article 1, Rule 1(n). See 84
FR 44654, note 6, supra, at notes 7 and 11.
\56\ The other Participants are a member of one or more of the
Affiliate SROs. The Exchange believes that if such a Participant's
business model required co-location, that Participant would already
be co-located, given its membership in one or more Affiliate SROs.
\57\ The seven Participants are all either Institutional Brokers
or trade through a third party clearing firm. Institutional Brokers'
usage of the Exchange is largely conducted in a non-automated
fashion through manual tools such as the Exchange's Brokerplex
interface. See Article 17, Rule 3, Interpretations and Policies .01
(``Institutional Brokers essentially are order-entry firms that act
primarily as brokers for other broker-dealers or institutional
customers''); and 84 FR 44654, note 6, supra, at 44661-44662 and
44666. The remaining Participants trade through a third party, which
increases latency, suggesting that co-location is not a priority for
their business model. For these reasons, the Exchange does not
expect the seven Participants to opt to become Users in order to
trade on the Exchange.
---------------------------------------------------------------------------
The proposed change is not targeted at, or expected to be limited
in applicability to, a specific segment of market participant, as co-
location is available to any market participant that wishes to be a
User. If, contrary to the Exchange's beliefs, a market participant
elects to co-locate in response to the proposed change, that new User
would be subject to the same fees as all other Users--the same fees it
would be subject to today, irrespective of what type or size of market
participant it is.
[[Page 58790]]
As with the Affiliate SROs' co-location services, Users that
receive co-location services from the Exchange would not receive any
means of access to the Exchange's trading and execution systems that is
separate from or superior to that of Users that do not receive co-
location services.\58\ All orders sent to the Exchange would enter the
Exchange's trading and execution systems through the same order gateway
regardless of whether the sender is co-located in the Exchange's data
center or not. In addition, co-located Users would not receive any
market data or data service product that is not available to all Users.
However, Users that receive co-location services normally would expect
reduced latencies in sending orders to the Exchange and receiving
market data from the Exchange.
---------------------------------------------------------------------------
\58\ See note 52, supra.
---------------------------------------------------------------------------
As with the co-location services of the Affiliate SROs, (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
proposed co-location services would be completely voluntary and
available to all Users on a non-discriminatory basis; 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.\59\
---------------------------------------------------------------------------
\59\ Id.
---------------------------------------------------------------------------
The proposed changes are not otherwise intended to address any
other issues, and the Exchange is not aware of any problems that member
organizations 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,\60\ in general, and furthers the
objectives of Sections 6(b)(4) and (5) of the Act,\61\ 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. In addition, it is designed 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.
---------------------------------------------------------------------------
\60\ 15 U.S.C. 78f(b).
\61\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Proposed Rule Change Is Reasonable
The Exchange believes that the proposed rule change is reasonable
for the following reasons.
As noted above, the Exchange operates in a highly competitive
market. The Commission has repeatedly expressed its preference for
competition over regulatory intervention in determining prices,
products, and services in the securities markets. Specifically, in
Regulation NMS, the Commission highlighted the importance of market
forces in determining prices and SRO revenues and, also, recognized
that current regulation of the market system ``has been remarkably
successful in promoting market competition in its broader forms that
are most important to investors and listed companies.'' \62\
---------------------------------------------------------------------------
\62\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------
With respect to co-location, 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 would be 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 colocation
services, affected market participants will opt to terminate their
colocation 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.
Importantly, with respect to co-location services and fees, all
market participants can be Users, irrespective of whether or not they
are Participants or members of any of the Affiliate SROs.\63\ In
addition, the proposed changes are neither new nor novel, as the
Exchange proposes to adopt the same services and fees set forth in the
Affiliate SRO Price Lists, with the non-substantive differences
described above. As a result, the proposed rule change would simply
offer market participants the same services and fees to which they
already have access. The sole substantive change that would result from
the Exchange offering co-location services would be that Users would be
able to have low latency connections to the Exchange. In other words,
the sole change would be a benefit to market participants, with no
change in the related costs. If the proposed rule change is not
operative, the Exchange will not offer co-location, and market
participants will not be able to receive that benefit.
---------------------------------------------------------------------------
\63\ See note 6, supra.
---------------------------------------------------------------------------
In addition, the Exchange believes that the proposed rule change is
reasonable because, for the reasons discussed above, current Users
would not incur any new fees and the Exchange does not expect to
attract any new Users as a result of the proposed change. Even though
all four Affiliate SROs and the Exchange would offer co-location
services, a User that purchased services would only be charged once.
This would be true irrespective of whether the User were a member of
all, some, or none of the Affiliate SROs and the Exchange. As noted
above, the Exchange expects that a current User that starts to trade on
the Exchange or connects to its market data as a result of the proposed
change would not incur any new fees. With respect to market
participants that are not current Users, the Exchange does not expect
any of them to become Users in order to connect to the Exchange's data
feed or trade on the Exchange.
The Exchange believes that the proposed co-location services and
fees are reasonable because under the proposed change the Exchange
would provide market participants with the option to co-locate, but
would not require it. The co-location services, including various
options for cabinets, LCN and IP network access, connectivity to
Included Data Products, Third Party Data Feeds, third party testing and
certification feeds, DTCC and Wireless Third Party Data (collectively,
``Connectivity''), access to Exchange Systems and Third Party Systems
(together, ``Access''), hosting, and services, would be provided as
conveniences to Users.
[[Page 58791]]
As is true now, use of any co-location service would be completely
voluntary, and each market participant would be able to determine
whether to use co-location services based on the requirements of its
business operations. If it chose to co-locate, it would be able to
determine what size of cabinet, form, and latency of network, would
best suit its needs. Users would not be required to use any of their
bandwidth for Access or Connectivity unless they wished to do so.
Rather, a User would only receive the services it selected, and a User
could change what services it receives at any time, subject, in the
case of Access and Connectivity, to authorization from the relevant
third party system or data provider, Affiliate SRO or the Exchange.
As alternatives to using co-location, a market participant would be
able to access or connect to Exchange Systems, Third Party Systems,
Included Data Products, Third Party Data Feeds, third party testing and
certification feeds, DTCC and Wireless Third Party Data through a
Hosting User or a connection to an Exchange access center outside the
data center, third party access center, or third party vendor. The
market participant could make such connection through a third party
telecommunication provider, third party wireless network, the Secure
Financial Transaction Infrastructure (``SFTI'') network, or a
combination thereof.
The proposed Fee Schedule would set forth: (a) The relevant
definitions and General Notes, including a detailed description of the
Access and Connectivity Users receive with their purchase of access to
the LCN or IP network; (b) the Cabinet-Related Fees; (c) the Access and
Service Fees; (d) the Service-related Fees; (e) a description of the
Migration; and (f) information regarding connectivity to Third Party
Systems, Third Party Data Feeds, third party testing and certification
feeds, and DTCC. Such Fee Schedule text would make the description of
co-location services and fees accessible and transparent, providing
market participants with clarity as to what services were offered
within co-location and what the related fees would be.
The Exchange believes that charging distinct fees for different co-
location services would be reasonable because not all Users would need,
or wish, to utilize the same co-location services. The proposed variety
of services would allow Users to select which co-location services to
use, based on their business needs, and Users would only be charged for
the services that they selected. By charging only those Users that
utilize a co-location service the related fee, those Users that
directly benefit from a service would support its cost.
Similarly, the Exchange believes the proposed fees are reasonable
because they would allow the Exchange to defray or cover the costs
associated with offering different co-location services while providing
Users the benefit of such services, including the benefits of, among
other things, choosing among the array of different options for
cabinets, power, LCN and IP network access, Connectivity, Access,
hosting and services; having an efficient connection to clearing, fund
transfer, insurance, and settlement services; and having an environment
in which to conduct tests with nonlive data and to certify conformance
to any applicable technical requirements.
The Exchange believes that the proposed charges are reasonable
because the Exchange would offer co-location services as conveniences
to Users, but in order to do so would have to provide, maintain and
operate the data center facility hardware and technology
infrastructure. The Exchange would need to expand the network
infrastructure to keep pace with the number of services available to
Users, including any increasing demand for bandwidth, and to establish
any additional administrative controls. The Exchange would have to
handle the installation, administration, monitoring, support and
maintenance of such services, including by responding to any production
issues. In addition, in order to provide connectivity to Third Party
Data Feeds, Third Party Systems, third party testing and certification
feeds and DTCC, the Exchange would have to maintain multiple
connections to each Third Party Data Feed, Third Party System, and
DTCC, allowing the Exchange to provide resilient and redundant
connections; adapt to any changes made by the relevant third party; and
cover any applicable fees (other than redistribution fees) charged by
the relevant third party, such as port fees.
The Exchange believes it is reasonable that redistribution fees
charged by providers of Third Party Data Feeds would be passed through
to the User, without change to the fee. If not passed through, the cost
of the re-distribution fees would be factored into the proposed fees
for connectivity to Third Party Data Feeds. The Exchange believes that
passing through the fees makes them more transparent to the User,
allowing the User to better assess the cost of the connectivity to a
Third Party Data Feed by seeing the individual components of the cost,
i.e., the Exchange's fee and the redistribution fee.
The Exchange believes that it is reasonable to not charge third
party markets or content providers for connectivity to their own Third
Party Data Feeds, as the Exchange understands that such parties
generally receive their own feeds for purposes of diagnostics and
testing. The Exchange believes that facilitating such diagnostics and
testing 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.
The Proposed Rule Change Is Equitable
The Exchange believes the proposed rule change is an equitable
allocation of its fees and credits for the following reasons.
The Exchange believes that the proposed co-location services and
fees are reasonable because under the proposed change the Exchange
would provide market participants with the option to co-locate, but
would not require it. The co-location services, including various
options for cabinets, LCN and IP network access, Connectivity, Access,
hosting, and services, would be provided as conveniences to Users.
As is true now, use of any co-location service would be completely
voluntary, and each market participant would be able to determine
whether to use co-location services based on the requirements of its
business operations. If it chose to co-locate, it would be able to
determine what size of cabinet, form, and latency of network, would
best suit its needs. Users would not be required to use any of their
bandwidth for Access or Connectivity unless they wished to do so.
Rather, a User would only receive the services it selected, and a User
could change what services it receives at any time, subject, in the
case of Access and Connectivity, to authorization from the relevant
third party system or data provider, Affiliate SRO or the Exchange.
In addition to the co-location services being completely voluntary,
they would be available to all Users on an equal basis (i.e., the same
co-location services would be available to all Users). All Users that
voluntarily elected to receive a co-location service would be charged
the same amount for the same service.
Further, by having the Fee Schedule set forth the same co-location
services and fees offered by the Affiliate SROs, with only non-
substantive differences from the Affiliate SRO Price Lists, Users would
benefit from having consistent products and pricing across the
[[Page 58792]]
Exchange and the four Affiliate SROs. As is true for the Affiliate SROs
and as specified in the proposed Fee Schedule, a User that incurred 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.
The Exchange believes that the proposal to establish procedures and
waive certain fees in connection with the movement of equipment at the
data center in a Migration would provide for the equitable allocation
of reasonable fees because, pursuant to the proposed procedures for
selecting which Users would be required to move within the data center,
a User would be required to move only if the Exchange would be able to
accommodate such User's current space and power requirements at the new
location, so as to minimize the disruption to the User. The Exchange
believes that the waiver of overlapping monthly recurring charges, the
waiver of the Service-Related Fees, and the waiver of one month of
monthly recurring charges in a Migration would be reasonable because
Users would be moving at the Exchange's request and the waivers would
help to alleviate the burden on the Users that are required to move.
The Proposed Rule Change Is Not Unfairly Discriminatory
The Exchange believes that the proposed change is not unfairly
discriminatory for the following reasons.
As is true now, use of any co-location service would be completely
voluntary, and each market participant would be able to determine
whether to use co-location services based on the requirements of its
business operations. In addition to the co-location services being
completely voluntary, they would be available to all Users on an equal
basis (i.e., the same co-location services would be available to all
Users). All Users that voluntarily elected to receive a co-location
service would be charged the same amount for the same service.
The Exchange believes that charging distinct fees for different co-
location services is not unfairly discriminatory because not all Users
would need, or wish, to utilize the same co-location services. The
proposed variety of services would allow Users to select which co-
location services to use, based on their business needs, and Users
would only be charged for the services that they selected. By charging
only those Users that utilize a co-location service the related fee,
those Users that directly benefit from a service would support its
cost.
The Exchange believes that the proposed charges are not unfairly
discriminatory because the Exchange would offer co-location services as
conveniences to Users, but in order to do so would have to provide,
maintain and operate the data center facility hardware and technology
infrastructure. The Exchange would need to expand the network
infrastructure to keep pace with the number of services available to
Users, including any increasing demand for bandwidth, and to establish
any additional administrative controls. The Exchange would have to
handle the installation, administration, monitoring, support and
maintenance of such services, including by responding to any production
issues. In addition, in order to provide connectivity to Third Party
Data Feeds, Third Party Systems, third party testing and certification
feeds and DTCC, the Exchange would have to maintain multiple
connections to each Third Party Data Feed, Third Party System, and
DTCC, allowing the Exchange to provide resilient and redundant
connections; adapt to any changes made by the relevant third party; and
cover any applicable fees (other than redistribution fees) charged by
the relevant third party, such as port fees.
The Proposed Rule Change Would Protect Investors and the Public
Interest
The Exchange believes that the proposed rule change relating to co-
location would perfect the mechanisms of a free and open market and a
national market system and, in general, protect investors and the
public interest for the following reasons.
The proposed Fee Schedule would set forth: (a) The relevant
definitions and General Notes, including a detailed description of the
Access and Connectivity Users receive with their purchase of access to
the LCN or IP network; (b) the Cabinet-Related Fees; (c) the Access and
Service Fees; (d) the Service-related Fees; (e) a description of the
Migration; and (f) information regarding connectivity to Third Party
Systems, Third Party Data Feeds, third party testing and certification
feeds, and DTCC. Such Fee Schedule text would make the description of
co-location services and fees accessible and transparent, providing
market participants with clarity as to what services were offered
within co-location and what the related fees would be.
Providing connectivity to testing and certification feeds would
provide Users an environment in which to conduct tests with non-live
data, including testing for upcoming releases and product enhancements
or the User's own software development, and allow Users to certify
conformance to any applicable technical requirements.
The Exchange believes that it is reasonable to not charge third
party markets or content providers for connectivity to their own Third
Party Data Feeds, as the Exchange understands that such parties
generally receive their own feeds for purposes of diagnostics and
testing. Similarly, providing connectivity to DTCC would provide
efficient connection to clearing, fund transfer, insurance, and
settlement services.
Finally, the Exchange believes that the proposal to establish
procedures and waive certain fees in connection with the movement of
equipment at the data center in a Migration would allow the Exchange to
have sufficient space in the data center to accommodate demand on an
equitable basis for the foreseeable future. The Exchange believes that
the waiver of overlapping monthly recurring charges, the waiver of the
Service-Related Fees, and the waiver of one month of monthly recurring
charges in a Migration would be reasonable because Users would be
moving at the Exchange's request and the waivers would help to
alleviate the burden on the Users that are required to move.
* * * * *
For the foregoing 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,\64\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act because all of the proposed services are completely
voluntary.
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\64\ 15 U.S.C. 78f(b)(8).
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In accordance with Section 6(b)(8) of the Act,\65\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act.
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\65\ 15 U.S.C. 78f(b)(8).
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Intramarket Competition
The Exchange believes that the proposed rule change would not have
an impact on intramarket competition because the proposed rule change
would simply offer market participants the same services and fees to
which they already have access. The sole substantive change that would
result from the Exchange offering co-location services would be that
Users would be
[[Page 58793]]
able to have low latency connections to the Exchange. In other words,
the only change would be a benefit to market participants, with no
change in the related costs. If the proposed rule change is not
operative, the Exchange will not offer co-location, and market
participants will not be able to receive that benefit.
Further, current Users would not incur any new fees and the
Exchange does not expect to attract any new Users as a result of the
proposed change. Accordingly, the proposed rule change would not have
an impact on intramarket competition. Even though all four Affiliate
SROs and the Exchange would offer co-location services, a User that
purchased services would only be charged once. This would be true
irrespective of whether the User were a member of all, some, or none of
the Affiliate SROs and the Exchange. As noted above, the Exchange
expects that a current User that starts to trade on the Exchange or
connects to its market data as a result of the proposed change would
not incur any new fees. With respect to market participants that are
not current Users, the Exchange does not expect any of them to become
Users in order to connect to the Exchange's data feed or trade on the
Exchange. Finally, as noted above, the Exchange believes that, as a
practical matter, only Participants would be interested in becoming new
Users in order to trade on the Exchange, as non-Participants cannot
trade on the Exchange. The pool of relevant Participants is small: Only
nine Participants are not also members of one or more of the Affiliate
SROs.\66\ Of those nine Participants, two are already Users, and
therefore, as explained above, would not be subject to any new or
different fees as a result of this filing. The Exchange does not expect
that any of the remaining seven Participants would opt to become Users
in order to trade on the Exchange.\67\ Simply put, the Exchange does
not expect that low latency access to such a small market would be
sufficient reason for a firm to become a User.
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\66\ See note 56, supra.
\67\ See note 57, supra.
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The proposed co-location services would be available to all Users
on an equal basis. All Users that voluntarily selected to receive co-
location services, including cabinets, LCN and IP network access,
Connectivity, Access and other services, would be charged the same
amount for the same services. In the case of a Migration, all Users
would be subject to the same proposed procedures for selecting which
Users would be required to move within the data center and what fees
would be affected.
The proposed co-location services would provide market participants
with the option to co-locate, but would not require it. Use of any co-
location services would be completely voluntary, and each market
participant would be able to determine whether to use co-location
services based on the requirements of its business operations. In this
way, the proposed changes would enhance competition by providing market
participants with additional options for their business operations.
Intermarket Competition
As noted above, the proposed rule change would simply offer market
participants the same services and fees to which they already have
access, as currently a User that purchases access to the LCN or IP
network receives the ability to access the trading and execution
systems of the Exchange and connectivity to the Included Data Products
of the Exchange. The sole substantive change that would result from the
Exchange offering co-location services would be that Users would be
able to have low latency connections to the Exchange. As a result,
there would be no material burden on competition with respect to other
national securities exchanges.
In addition, there would be no material burden on intermarket
competition because, for the reasons discussed above, current Users
would not incur any new fees and the Exchange does not expect to
attract any new Users as a result of the proposed change. In the first
eight months of 2019, the Exchange averaged less than 0.6% market share
of executed volume of non-auction equity trading.\68\ Given the small
market share of the Exchange, it does not believe that the proposed
rule change would affect the competitive landscape among the national
securities exchanges.
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\68\ See note 54, supra.
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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 \69\ and Rule 19b-4(f)(6) thereunder.\70\
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.\71\
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\69\ 15 U.S.C. 78s(b)(3)(A)(iii).
\70\ 17 CFR 240.19b-4(f)(6).
\71\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of 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) \72\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\73\ the
[[Page 58794]]
Commission may designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay. The
Exchange asserts that waiver of the operative delay would be consistent
with the protection of investors and the public interest because it
would allow the Exchange to provide the proposed co-location services
immediately upon the Exchange's migration to Pillar. For the same
reason, 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.\74\
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\72\ 17 CFR 240.19b-4(f)(6).
\73\ 17 CFR 240.19b-4(f)(6)(iii).
\74\ For purposes only of waiving the 30-day operative delay,
the Commission also 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) \75\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\75\ 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-NYSECHX-2019-12 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-NYSECHX-2019-12. 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-NYSECHX-2019-12 and should be submitted
on or before November 22, 2019.
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\76\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\76\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-23862 Filed 10-31-19; 8:45 am]
BILLING CODE 8011-01-P
