Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend Its NYSE American Equities Price List and Fee Schedule and the NYSE American Options Fee Schedule To Extend for One Year a Fee Discount for the Partial Cabinet Solution Bundles Offered in Connection With the Exchange's Co-location Services, 71982-71986 [2019-28169]

Download as PDF 71982 Federal Register / Vol. 84, No. 249 / Monday, December 30, 2019 / Notices application may be inspected by interested parties at the Permit Office, address below. ADDRESSES: Comments should be addressed to Permit Office, Office of Polar Programs, National Science Foundation, 2415 Eisenhower Avenue, Alexandria, Virginia 22314. FOR FURTHER INFORMATION CONTACT: Nature McGinn, ACA Permit Officer, at the above address, 703–292–8030, or ACApermits@nsf.gov. SUPPLEMENTARY INFORMATION: The National Science Foundation, as directed by the Antarctic Conservation Act of 1978 (Pub. L. 95–541, 45 CFR 671), as amended by the Antarctic Science, Tourism and Conservation Act of 1996, has developed regulations for the establishment of a permit system for various activities in Antarctica and designation of certain animals and certain geographic areas a requiring special protection. The regulations establish such a permit system to designate Antarctic Specially Protected Areas. Erika N. Davis, Program Specialist, Office of Polar Programs. [FR Doc. 2019–28097 Filed 12–27–19; 8:45 am] khammond on DSKJM1Z7X2PROD with NOTICES BILLING CODE 7555–01–P POSTAL SERVICE Product Change—Priority Mail Express and Priority Mail Negotiated Service Agreement Postal ServiceTM. 20:00 Dec 27, 2019 The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. DATES: Date of required notice: December 30, 2019. FOR FURTHER INFORMATION CONTACT: Sean Robinson, 202–268–8405. SUPPLEMENTARY INFORMATION: The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on December 20, 2019, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Express & Priority Mail Contract 110 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2020–80, CP2020–79. SUMMARY: Sean Robinson, Attorney, Corporate and Postal Business Law. BILLING CODE 7710–12–P Permit Application: 2020–026 1. Applicant: Brandon Savory, 662 Ash St, Prescott, AZ 86305. Activity for Which Permit Is Requested: Waste management. Applicant requests that the yacht SV Cool Change be allowed to operate in the Antarctic Treaty area, to cruise along the Antarctic Peninsula for tourism and sightseeing purposes. Applicant proposes to make select stops at nonprotected area landings, for day-time sightseeing. Garbage and food waste would be stored onboard the vessel and disposed of outside Antarctica. Human waste generated during shore excursions would be contained, stored on the vessel, and disposed of outside Antarctica. Should it be absolutely necessary, greywater and blackwater would be released at least 12 miles offshore and while the vessel maintains a speed of at least four knots. Location: Antarctic Peninsula region. Dates of Permitted Activities: January 1–February 28, 2020. VerDate Sep<11>2014 Notice. [FR Doc. 2019–28047 Filed 12–27–19; 8:45 am] Application Details AGENCY: ACTION: Jkt 250001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87841; File No. SR– NYSEAMER–2019–58] Self-Regulatory Organizations; NYSE American LLC; Notice of Filing and Immediate Effectiveness of Proposed Change To Amend Its NYSE American Equities Price List and Fee Schedule and the NYSE American Options Fee Schedule To Extend for One Year a Fee Discount for the Partial Cabinet Solution Bundles Offered in Connection With the Exchange’s Colocation Services December 23, 2019. 19(b)(1) 1 Pursuant to Section of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on December 16, 2019, NYSE American LLC (‘‘NYSE American’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory 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). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its NYSE American Equities Price List and Fee Schedule (‘‘Price List’’) and the NYSE American Options Fee Schedule (‘‘Fee Schedule’’) to extend for one year a fee discount for the Partial Cabinet Solution bundles offered in connection with the Exchange’s co-location services. The proposed change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Price List and Fee Schedule related to co-location 4 services to extend a fee discount for the Partial Cabinet Solution (‘‘PCS’’) bundles that the Exchange offers Users.5 There are four PCS bundles, each of which includes a partial cabinet; access 4 The Exchange initially filed rule changes relating to its co-location services with the Securities and Exchange Commission (‘‘Commission’’) in 2010. See Securities Exchange Act Release No. 62961 (September 21, 2010), 75 FR 59299 (September 27, 2010) (SR–NYSEAmex–2010– 80). The Exchange operates a data center in Mahwah, New Jersey (the ‘‘data center’’) from which it provides co-location services to Users. 5 For purposes of the Exchange’s co-location services, a ‘‘User’’ means any market participant that requests to receive co-location services directly from the Exchange. See Securities Exchange Act Release No. 76009 (September 29, 2015), 80 FR 60213 (October 5, 2015) (SR–NYSEMKT–2015–67). As specified in the Price List and Fee Schedule, a User that incurs co-location fees for a particular colocation service pursuant thereto would not be subject to co-location fees for the same co-location service charged by the Exchange’s affiliates the New York Stock Exchange LLC, NYSE Arca, Inc., NYSE Chicago, Inc. and NYSE National, Inc. (collectively, the ‘‘Affiliate SROs’’). See Securities Exchange Act Release No. 70176 (August 13, 2013), 78 FR 50471 (August 19, 2013) (SR–NYSEMKT–2013–67). E:\FR\FM\30DEN1.SGM 30DEN1 Federal Register / Vol. 84, No. 249 / Monday, December 30, 2019 / Notices to the Liquidity Center Network (‘‘LCN’’) and internet protocol (‘‘IP’’) network, the local area networks available in the data center; two fiber cross connections; and connectivity to one of two time feeds.6 The PCS bundles were designed to attract smaller Users, including those with minimal power or cabinet space demands or those for which the costs attendant with having a dedicated cabinet or greater network connection bandwidth are too burdensome.7 The Exchange offers Users that purchase a PCS bundle on or before December 31, 2019 a 50% reduction in the monthly recurring charges (‘‘MRC’’) for the first 24 months.8 The Exchange proposes to extend the 50% fee reduction to those Users that purchase a PCS bundle on or before December 31, 2020.9 The Exchange does not propose to amend the length of the discount period. The amended portions of the Price List and Fee Schedule would read as follows: Type of service Description Amount of charge 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. $7,500 initial charge per bundle plus monthly charge per bundle as follows: • For Users that order on or before December 31, 2020: $3,000 monthly for first 24 months of service, and $6,000 monthly thereafter. • For Users that order after December 31, 2020: $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, 2020: $3,500 monthly for first 24 months of service, and $7,000 monthly thereafter. • For Users that order after December 31, 2020: $7,000 monthly. $10,000 initial charge per bundle plus monthly charge per bundle as follows: • For Users that order on or before December 31, 2020: $7,000 monthly for first 24 months of service, and $14,000 monthly thereafter. • For Users that order after December 31, 2020: $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, 2020: $7,500 monthly for first 24 months of service, and $15,000 monthly thereafter. • For Users that order after December 31, 2020: $15,000 monthly. 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. Option C: 1 kW partial cabinet, 1 LCN connection (10 Gb LX), 1 IP network connection (10 Gb), 2 fiber cross connections and either the Network Time Protocol Feed or Precision Timing Protocol. Option D: 2 kW partial cabinet, 1 LCN connection (10 Gb LX), 1 IP network connection (10 Gb), 2 fiber cross connections and either the Network Time Protocol Feed or Precision Timing Protocol. Application and Impact of the Proposed Change The proposed change would apply to all PCS bundles. The proposed change would not apply differently to distinct types or sizes of market participants. Rather, it would apply to all Users equally. Users that require other sizes or combinations of cabinets, network connections and cross connects could still request them. As is currently the case, the purchase of any colocation service, including PCS bundles, is completely voluntary and the Price List and Fee Schedule are applied uniformly to all Users. Competitive Environment A User may host another entity in its space within the data center. Such Users khammond on DSKJM1Z7X2PROD with NOTICES 71983 6 See Securities Exchange Act Release No. 77071 (February 5, 2016), 81 FR 7382 (February 11, 2016) (SR–NYSEMKT–2015–89). 7 Id., at 7384. 8 See Securities Exchange Act Release No. 84925 (December 21, 2018), 83 FR 67754 (December 31, 2019) (SR–NYSEAMER–2018–55). 9 The Exchange previously extended the MRC reduction for one year. See Securities Exchange Act Release Nos. 82224 (December 6, 2017), 82 FR VerDate Sep<11>2014 20:00 Dec 27, 2019 Jkt 250001 are called ‘‘Hosting Users,’’ and their customers are ‘‘Hosted Customers.’’ 10 Based on conversations with Users and potential customers, the Exchange believes that Hosting Users offer bundles (‘‘Hosting User Bundles’’) that include cabinet space and space on shared LCN and IP network connections—and that the Hosting User Bundles provide their end users with a service similar to that of the PCS bundles, but with a lower cost and latency.11 The Exchange believes that, by extending the existing eligibility for a 50% MRC reduction for another year, the proposed change may make PCS bundles more competitive with the services that Hosting Users offer. Importantly, the proposed extension would provide potential Users with a wider range of choices for the period of the extension, which would be especially beneficial for potential Users with minimal power or cabinet space demands or those for which the costs attendant with having a dedicated cabinet or greater network connection bandwidth are too burdensome.12 The Exchange operates in a highly competitive market in which exchanges and other vendors (i.e., Hosting Users) 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. 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 recognized that current 58465 (December 12, 2017) (SR–NYSEAmer–2017– 35); and 79717 (December 30, 2016), 82 FR 1767 (January 6, 2017) (SR–NYSEMKT–2016–123). 10 A Hosting User is required to be a User, but because only Users can be Hosting Users, a Hosted Customer is not able to provide hosting services to any other entities in the space in which it is hosted. The Exchange allows Users to act as Hosting Users for a monthly fee. See Securities Exchange Act Release No. 76009 (September 29, 2015), 80 FR 60213 (October 5, 2015) (SR–NYSEMKT–2015–67). 11 Because Hosting Users’ services are not regulated, they may offer differentiated pricing and are not required to make their pricing public or disclose it to the Exchange. The Exchange therefore does not have direct visibility into the specific range of options, or cost thereof, offered by Hosting Users, and relies on third parties for information. 12 See supra note 7. PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 E:\FR\FM\30DEN1.SGM 30DEN1 71984 Federal Register / Vol. 84, No. 249 / Monday, December 30, 2019 / Notices 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.’’ 13 General As is the case with all Exchange colocation arrangements, (i) neither a User nor any of the User’s customers would be permitted to submit orders directly to the Exchange unless such User or customer is a member organization, a Sponsored Participant or an agent thereof (e.g., a service bureau providing order entry services); (ii) use of the colocation services proposed herein would be completely voluntary and available to all Users on a non-discriminatory basis; 14 and (iii) a User would only incur one charge for the particular colocation service described herein, regardless of whether the User connects only to the Exchange or to the Exchange and one or more of the Affiliate SROs.15 khammond on DSKJM1Z7X2PROD with NOTICES 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,16 in general, and furthers the objectives of Section 6(b)(5) of the Act,17 in particular, because it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, to protect investors and the public interest and does not unfairly discriminate between customers, issuers, brokers, or dealers. The 13 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 14 As is currently the case, Users that receive colocation services from the Exchange will not receive any means of access to the Exchange’s trading and execution systems that is separate from, or superior to, that of other Users. In this regard, all orders sent to the Exchange enter the Exchange’s trading and execution systems through the same order gateway, regardless of whether the sender is co-located in the data center or not. In addition, co-located Users do not receive any market data or data service product that is not available to all Users, although Users that receive co-location services normally would expect reduced latencies, as compared to Users that are not co-located, in sending orders to, and receiving market data from, the Exchange. 15 See 78 FR 50471, supra note 5, at 50471. Each of the Affiliate SROs has submitted substantially the same proposed rule change to propose the changes described herein. See SR–NYSE–2019–72, SR–NYSEArca–2019–97, SR–NYSECHX–2019–27, and SR–NYSENAT–2019–32. 16 15 U.S.C. 78f(b). 17 15 U.S.C. 78f(b)(5). VerDate Sep<11>2014 20:00 Dec 27, 2019 Jkt 250001 Exchange also believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,18 because it provides for the equitable allocation of reasonable dues, fees, and other charges among its members, issuers and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers. The Proposed Change Is Not Unfairly Discriminatory The Exchange believes its proposal is not unfairly discriminatory. The proposed change would not apply differently to distinct types or sizes of market participants. Rather, it would apply to all Users equally. The Exchange would continue to offer the four different PCS bundles with different cabinet footprints and network connections options. Users that require other sizes or combinations of cabinets, network connections and cross connects could still request them. As is currently the case, the purchase of any colocation service, including PCS bundles, would be completely voluntary. The proposed change would ensure that all Users that order a bundle on or before December 31, 2020 would have their MRC reduced by 50% for the first 24 months. Extending the period would make it more cost effective for current or potential Users to utilize co-location by offering a cost effective, convenient way to create a colocation environment, through the choice among PCS bundles with different cabinet footprints and network connections options. The Exchange expects that such Users would include those with minimal power or cabinet space demands and Users for which the costs attendant with having a dedicated cabinet or greater network connection bandwidth are too burdensome. The Proposed Change Is Reasonable The Exchange believes its proposal is reasonable. The Exchange believes that it is reasonable to extend the period of eligibility for a 50% MRC reduction as an incentive to Users to utilize PCS bundles. Extending the existing eligibility for a 50% MRC reduction for another year would provide smaller current or potential Users with minimal power or cabinet space demands with additional time to purchase a PCS bundle at a discounted rate. The Exchange believes that, by extending the existing eligibility for a 50% MRC reduction for another year, the proposed change may make PCS bundles more competitive with the 18 15 PO 00000 U.S.C. 78f(b)(4). Frm 00095 Fmt 4703 services that Hosting Users offer. The proposed extension would continue to provide potential Users with a wider range of choices for the period of the extension. The Proposed Change Is an Equitable Allocation of Fees and Credits The Exchange believes its proposal equitably allocates its fees among its market participants. The proposed change would not apply differently to distinct types or sizes of market participants. Rather, it would apply to all Users equally. The Exchange would continue to offer the four different PCS bundles with different cabinet footprints and network connections options. Users that require other sizes or combinations of cabinets, network connections and cross connects could still request them. As is currently the case, the purchase of any colocation service, including PCS bundles, would be completely voluntary. Having the change apply to all PCS bundles would ensure that all Users that order a bundle on or before December 31, 2020 would have their MRC reduced by 50% for the first 24 months. Extending the period would make it more cost effective for current or potential Users to utilize co-location by continuing to offer a cost effective, convenient way to create a colocation environment, through the choice among PCS bundles with different cabinet footprints and network connections options. The Exchange expects that such Users would include those with minimal power or cabinet space demands and Users for which the costs attendant with having a dedicated cabinet or greater network connection bandwidth are too burdensome. Without this proposed rule change, potential Users choosing between a PCS bundle and a Hosting User Bundle would have fewer attractive options. This would be a detriment for them, especially for potential Users with minimal power or cabinet space demands or those for which the costs attendant with having a dedicated cabinet or greater network connection bandwidth are too burdensome.19 Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchange’s statement regarding the burden on competition. For the reasons above, the proposed changes do not unfairly discriminate between or among market participants that are otherwise capable of satisfying any applicable co-location fees, requirements, terms and conditions 19 See Sfmt 4703 E:\FR\FM\30DEN1.SGM supra note 7. 30DEN1 Federal Register / Vol. 84, No. 249 / Monday, December 30, 2019 / Notices established from time to time by the Exchange. For these reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule changes will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of Section 6(b)(8) of the Act.20 khammond on DSKJM1Z7X2PROD with NOTICES Intramarket Competition The Exchange does not believe that the proposed change would place any burden on intramarket competition that is not necessary or appropriate. The proposed changes would enhance competition by extending the period of eligibility for a 50% MRC reduction to all Users that order a bundle on or before December 31, 2020. Such change would make it more cost effective for current or potential Users to utilize colocation by offering a cost effective, convenient way to create a colocation environment, through the choice among PCS bundles with different cabinet footprints and network connections options. The Exchange believes that, by extending the period of eligibility, the proposed change may make PCS bundles more attractive to potential Users who might otherwise opt to become Hosted Customers, and thus enhance the competitive environment for potential Users (who would then have more options from which to select). Importantly, the proposed extension would provide potential Users with a wider range of choices for the period of the extension, which would be especially beneficial for potential Users with minimal power or cabinet space demands or those for which the costs attendant with having a dedicated cabinet or greater network connection bandwidth are too burdensome. At the same time, however, no potential User would be obligated to purchase a PCS bundle, and it would still have the options offered by Hosting Users. PCS bundles allow Users to select their desired cabinet footprint and network connections at a reduced MRC for the first 24 months. Such Users may choose, in turn, to pass on such cost savings to their customers. In addition to the proposed services being completely voluntary, they are available to all Users on an equal basis (i.e. the same products and services are available to all Users, and the extension of the 20 15 U.S.C. 78f(b)(8). VerDate Sep<11>2014 20:00 Dec 27, 2019 Jkt 250001 50% reduction for the MRC for the PCS bundles, would apply to all Users). Intermarket Competition The Exchange does not believe that the proposed fee would impose any burden on intermarket competition that is not necessary or appropriate. The proposed change is not meant to affect competition among national securities exchanges. Rather, the Exchange believes that the proposed change is a reasonable attempt to maintain a more level playing field between the Exchange and the Hosting Users, who compete for Hosted Customer business. Because Hosting Users’ services are not regulated, they may offer differentiated pricing and are not required to make their pricing public. The Exchange believes that the proposed change may make PCS bundles more attractive to potential Users who might otherwise opt to become Hosted Customers. The Exchange operates in a highly competitive market in which exchanges offer co-location services as a means to facilitate the trading and other market activities of those market participants who believe that co-location enhances the efficiency of their operations. Accordingly, fees charged for colocation services are constrained by the active competition for the order flow of, and other business from, such market participants. If a particular exchange charges excessive fees for co-location services, affected market participants will opt to terminate their co-location arrangements with that exchange, and adopt a possible range of alternative strategies, including placing their servers in a physically proximate location outside the exchange’s data center (which could be a competing exchange), or pursuing strategies less dependent upon the lower exchange-toparticipant latency associated with colocation. Accordingly, the exchange charging excessive fees would stand to lose not only co-location revenues but also the liquidity of the formerly colocated trading firms, which could have additional follow-on effects on the market share and revenue of the affected exchange. In such an environment, the Exchange must continually review, and consider adjusting, its services and related fees and credits to remain competitive with other exchanges. 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 PO 00000 Frm 00096 Fmt 4703 Sfmt 4703 71985 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.’’ 21 For the reasons described above, the Exchange believes that the proposed rule changes reflect 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 foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 22 of the Act and subparagraph (f)(2) of Rule 19b–4 23 thereunder, because it establishes a due, fee, or other charge imposed by the Exchange. 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) 24 of the Act to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEAMER–2019–58 on the subject line. 21 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 22 15 U.S.C. 78s(b)(3)(A). 23 17 CFR 240.19b–4(f)(2). 24 15 U.S.C. 78s(b)(2)(B). E:\FR\FM\30DEN1.SGM 30DEN1 71986 Federal Register / Vol. 84, No. 249 / Monday, December 30, 2019 / Notices 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–NYSEAMER–2019–58. 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 (http://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–NYSEAMER–2019–58 and should be submitted on or before January 21, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.25 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–28169 Filed 12–27–19; 8:45 am] khammond on DSKJM1Z7X2PROD with NOTICES BILLING CODE 8011–01–P 25 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 20:00 Dec 27, 2019 Jkt 250001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–87837; File No. SR–FINRA– 2019–028] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving Proposed Rule Change To Allow FINRA To Publish or Distribute Aggregated Transaction Information and Statistics on U.S. Treasury Securities December 20, 2019. I. Introduction On November 12, 2019, the 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 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend FINRA Rule 6750 to allow FINRA to publish or distribute aggregated transaction information and statistics on U.S. Treasury Securities. The proposed rule change was published for comment in the Federal Register on November 20, 2019.3 The Commission received no comment letters on the proposed rule change. This order approves the proposed rule change. II. Description of the Proposal Existing FINRA Rule 6750(a) provides that FINRA will publicly disseminate information regarding a transaction in a TRACE-Eligible Security 4 immediately upon receipt of a transaction report, unless an exception applies. FINRA Rule 6750(c)(5) specifies that FINRA will not disseminate information on a transaction in a TRACE-Eligible Security that is a U.S. Treasury Security.5 Currently, Supplementary 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 87540 (November 14, 2019), 84 FR 64147 (November 20, 2019) (‘‘Notice’’). 4 FINRA Rule 6710(a) defines a ‘‘TRACE-Eligible Security’’ as a debt security that is U.S. dollardenominated and is: (1) Issued by a U.S. or foreign private issuer, and, if a ‘‘restricted security’’ as defined in Securities Act of 1933 Rule 144(a)(3), sold pursuant to Securities Act of 1933 Rule 144A; (2) issued or guaranteed by an Agency, as defined in FINRA Rule 6710(k) or a Government-Sponsored Enterprise as defined in FINRA Rule 6710(n); or (3) a U.S. Treasury Security, as defined in FINRA Rule 6710(p). ‘‘TRACE-Eligible Security’’ does not include a debt security that is issued by a foreign sovereign or a Money Market Instrument, as defined in FINRA Rule 6710(o). 5 ‘‘U.S. Treasury Security’’ means a security, other than a savings bond, issued by the U.S. Department of the Treasury (‘‘Treasury Department’’) to fund the operations of the federal government or to retire such outstanding securities. The term also includes 2 17 PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 Material .01 to FINRA Rule 6750 provides that, notwithstanding FINRA Rule 6750(c), FINRA may publish or distribute aggregated transaction information and statistics on nondisseminated TRACE-Eligible Securities other than U.S. Treasury Securities at no charge, unless FINRA submits a rule filing to the Commission imposing a fee for such data. FINRA has proposed to amend Supplementary Material .01 to FINRA Rule 6750 to provide that FINRA may publish or distribute weekly aggregated transaction information and statistics on non-disseminated TRACE-Eligible Securities that are U.S. Treasury Securities. Pursuant to the proposed rule change, the aggregated U.S. Treasury Securities data would not be published or distributed by individual security, except for aggregated data that includes on-the-run U.S. Treasury Securities that may have had only one on-the-run security during the aggregated period.6 In addition, the aggregated data would not identify individual market participants or transactions. FINRA has proposed to provide the aggregated data on U.S. Treasury Securities at no charge, unless FINRA first establishes a fee for such data by submitting an appropriate rule filing, as is the case with the aggregated data for TRACE-Eligible Securities that are not U.S. Treasury Securities. FINRA has stated that the proposed rule change will become effective on the date of Commission approval.7 III. Discussion and Commission Findings After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities association.8 In particular, the Commission finds that the proposed rule change is consistent with Section 15A(b)(6) of the Act,9 separate principal and interest components of a U.S. Treasury Security that have been separated pursuant to the Separate Trading of Registered Interest and Principal of Securities (STRIPS) program operated by the Treasury Department. See FINRA Rule 6710(p). 6 In the Notice, FINRA stated that it intends to publish weekly volume information aggregated by U.S. Treasury Security subtype (e.g., Bills, Floating Rate Notes, Treasury Inflation-Protected Securities, and Nominal Coupons). FINRA further stated that the volume information may be grouped within dealer-to-customer, ATS and dealer-to-dealer, remaining years to maturity, or other categories. See Notice, 84 FR at 64148. 7 See id. 8 In approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 9 15 U.S.C. 78o–3(b)(6). E:\FR\FM\30DEN1.SGM 30DEN1

Agencies

[Federal Register Volume 84, Number 249 (Monday, December 30, 2019)]
[Notices]
[Pages 71982-71986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-28169]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87841; File No. SR-NYSEAMER-2019-58]


Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Change To Amend Its NYSE 
American Equities Price List and Fee Schedule and the NYSE American 
Options Fee Schedule To Extend for One Year a Fee Discount for the 
Partial Cabinet Solution Bundles Offered in Connection With the 
Exchange's Co-location Services

December 23, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on December 16, 2019, NYSE American LLC (``NYSE American'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
II, and III below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its NYSE American Equities Price 
List and Fee Schedule (``Price List'') and the NYSE American Options 
Fee Schedule (``Fee Schedule'') to extend for one year a fee discount 
for the Partial Cabinet Solution bundles offered in connection with the 
Exchange's co-location services. The proposed change is available on 
the Exchange's website at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Price List and Fee Schedule 
related to co-location \4\ services to extend a fee discount for the 
Partial Cabinet Solution (``PCS'') bundles that the Exchange offers 
Users.\5\
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    \4\ The Exchange initially filed rule changes relating to its 
co-location services with the Securities and Exchange Commission 
(``Commission'') in 2010. See Securities Exchange Act Release No. 
62961 (September 21, 2010), 75 FR 59299 (September 27, 2010) (SR-
NYSEAmex-2010-80). The Exchange operates a data center in Mahwah, 
New Jersey (the ``data center'') from which it provides co-location 
services to Users.
    \5\ For purposes of the Exchange's co-location services, a 
``User'' means any market participant that requests to receive co-
location services directly from the Exchange. See Securities 
Exchange Act Release No. 76009 (September 29, 2015), 80 FR 60213 
(October 5, 2015) (SR-NYSEMKT-2015-67). As specified in the Price 
List and Fee Schedule, a User that incurs co-location fees for a 
particular co-location service pursuant thereto would not be subject 
to co-location fees for the same co-location service charged by the 
Exchange's affiliates the New York Stock Exchange LLC, NYSE Arca, 
Inc., NYSE Chicago, Inc. and NYSE National, Inc. (collectively, the 
``Affiliate SROs''). See Securities Exchange Act Release No. 70176 
(August 13, 2013), 78 FR 50471 (August 19, 2013) (SR-NYSEMKT-2013-
67).
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    There are four PCS bundles, each of which includes a partial 
cabinet; access

[[Page 71983]]

to the Liquidity Center Network (``LCN'') and internet protocol 
(``IP'') network, the local area networks available in the data center; 
two fiber cross connections; and connectivity to one of two time 
feeds.\6\ The PCS bundles were designed to attract smaller Users, 
including those with minimal power or cabinet space demands or those 
for which the costs attendant with having a dedicated cabinet or 
greater network connection bandwidth are too burdensome.\7\
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    \6\ See Securities Exchange Act Release No. 77071 (February 5, 
2016), 81 FR 7382 (February 11, 2016) (SR-NYSEMKT-2015-89).
    \7\ Id., at 7384.
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    The Exchange offers Users that purchase a PCS bundle on or before 
December 31, 2019 a 50% reduction in the monthly recurring charges 
(``MRC'') for the first 24 months.\8\ The Exchange proposes to extend 
the 50% fee reduction to those Users that purchase a PCS bundle on or 
before December 31, 2020.\9\ The Exchange does not propose to amend the 
length of the discount period.
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    \8\ See Securities Exchange Act Release No. 84925 (December 21, 
2018), 83 FR 67754 (December 31, 2019) (SR-NYSEAMER-2018-55).
    \9\ The Exchange previously extended the MRC reduction for one 
year. See Securities Exchange Act Release Nos. 82224 (December 6, 
2017), 82 FR 58465 (December 12, 2017) (SR-NYSEAmer-2017-35); and 
79717 (December 30, 2016), 82 FR 1767 (January 6, 2017) (SR-NYSEMKT-
2016-123).
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    The amended portions of the Price List and Fee Schedule would read 
as follows:

------------------------------------------------------------------------
         Type of service              Description      Amount of charge
------------------------------------------------------------------------
Partial Cabinet Solution bundles  Option A: 1 kW      $7,500 initial
Note: A User and its Affiliates    partial cabinet,    charge per bundle
 are limited to one Partial        1 LCN connection    plus monthly
 Cabinet Solution bundle at a      (1 Gb), 1 IP        charge per bundle
 time. A User and its Affiliates   network             as follows:
 must have an Aggregate Cabinet    connection (1       For Users
 Footprint of 2 kW or less to      Gb), 2 fiber        that order on or
 qualify for a Partial Cabinet     cross connections   before December
 Solution bundle. See Note 2       and either the      31, 2020: $3,000
 under ``General Notes.''.         Network Time        monthly for first
                                   Protocol Feed or    24 months of
                                   Precision Timing    service, and
                                   Protocol.           $6,000 monthly
                                                       thereafter.
                                                       For Users
                                                       that order after
                                                       December 31,
                                                       2020: $6,000
                                                       monthly.
                                  Option B: 2 kW      $7,500 initial
                                   partial cabinet,    charge per bundle
                                   1 LCN connection    plus monthly
                                   (1 Gb), 1 IP        charge per bundle
                                   network             as follows:
                                   connection (1       For Users
                                   Gb), 2 fiber        that order on or
                                   cross connections   before December
                                   and either the      31, 2020: $3,500
                                   Network Time        monthly for first
                                   Protocol Feed or    24 months of
                                   Precision Timing    service, and
                                   Protocol.           $7,000 monthly
                                                       thereafter.
                                                       For Users
                                                       that order after
                                                       December 31,
                                                       2020: $7,000
                                                       monthly.
                                  Option C: 1 kW      $10,000 initial
                                   partial cabinet,    charge per bundle
                                   1 LCN connection    plus monthly
                                   (10 Gb LX), 1 IP    charge per bundle
                                   network             as follows:
                                   connection (10      For Users
                                   Gb), 2 fiber        that order on or
                                   cross connections   before December
                                   and either the      31, 2020: $7,000
                                   Network Time        monthly for first
                                   Protocol Feed or    24 months of
                                   Precision Timing    service, and
                                   Protocol.           $14,000 monthly
                                                       thereafter.
                                                       For Users
                                                       that order after
                                                       December 31,
                                                       2020: $14,000
                                                       monthly.
                                  Option D: 2 kW      $10,000 initial
                                   partial cabinet,    charge per bundle
                                   1 LCN connection    plus monthly
                                   (10 Gb LX), 1 IP    charge per bundle
                                   network             as follows:
                                   connection (10      For Users
                                   Gb), 2 fiber        that order on or
                                   cross connections   before December
                                   and either the      31, 2020: $7,500
                                   Network Time        monthly for first
                                   Protocol Feed or    24 months of
                                   Precision Timing    service, and
                                   Protocol.           $15,000 monthly
                                                       thereafter.
                                                       For Users
                                                       that order after
                                                       December 31,
                                                       2020: $15,000
                                                       monthly.
------------------------------------------------------------------------

Application and Impact of the Proposed Change
    The proposed change would apply to all PCS bundles. The proposed 
change would not apply differently to distinct types or sizes of market 
participants. Rather, it would apply to all Users equally.
    Users that require other sizes or combinations of cabinets, network 
connections and cross connects could still request them. As is 
currently the case, the purchase of any colocation service, including 
PCS bundles, is completely voluntary and the Price List and Fee 
Schedule are applied uniformly to all Users.
Competitive Environment
    A User may host another entity in its space within the data center. 
Such Users are called ``Hosting Users,'' and their customers are 
``Hosted Customers.'' \10\
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    \10\ A Hosting User is required to be a User, but because only 
Users can be Hosting Users, a Hosted Customer is not able to provide 
hosting services to any other entities in the space in which it is 
hosted. The Exchange allows Users to act as Hosting Users for a 
monthly fee. See Securities Exchange Act Release No. 76009 
(September 29, 2015), 80 FR 60213 (October 5, 2015) (SR-NYSEMKT-
2015-67).
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    Based on conversations with Users and potential customers, the 
Exchange believes that Hosting Users offer bundles (``Hosting User 
Bundles'') that include cabinet space and space on shared LCN and IP 
network connections--and that the Hosting User Bundles provide their 
end users with a service similar to that of the PCS bundles, but with a 
lower cost and latency.\11\
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    \11\ Because Hosting Users' services are not regulated, they may 
offer differentiated pricing and are not required to make their 
pricing public or disclose it to the Exchange. The Exchange 
therefore does not have direct visibility into the specific range of 
options, or cost thereof, offered by Hosting Users, and relies on 
third parties for information.
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    The Exchange believes that, by extending the existing eligibility 
for a 50% MRC reduction for another year, the proposed change may make 
PCS bundles more competitive with the services that Hosting Users 
offer. Importantly, the proposed extension would provide potential 
Users with a wider range of choices for the period of the extension, 
which would be especially beneficial for potential Users with minimal 
power or cabinet space demands or those for which the costs attendant 
with having a dedicated cabinet or greater network connection bandwidth 
are too burdensome.\12\
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    \12\ See supra note 7.
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    The Exchange operates in a highly competitive market in which 
exchanges and other vendors (i.e., Hosting Users) 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. 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 recognized that current

[[Page 71984]]

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.'' \13\
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    \13\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
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General
    As is the case with all Exchange co-location arrangements, (i) 
neither a User nor any of the User's customers would be permitted to 
submit orders directly to the Exchange unless such User or customer is 
a member organization, a Sponsored Participant or an agent thereof 
(e.g., a service bureau providing order entry services); (ii) use of 
the co-location services proposed herein would be completely voluntary 
and available to all Users on a non-discriminatory basis; \14\ 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.\15\
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    \14\ As is currently the case, Users that receive co-location 
services from the Exchange will not receive any means of access to 
the Exchange's trading and execution systems that is separate from, 
or superior to, that of other Users. In this regard, all orders sent 
to the Exchange enter the Exchange's trading and execution systems 
through the same order gateway, regardless of whether the sender is 
co-located in the data center or not. In addition, co-located Users 
do not receive any market data or data service product that is not 
available to all Users, although Users that receive co-location 
services normally would expect reduced latencies, as compared to 
Users that are not co-located, in sending orders to, and receiving 
market data from, the Exchange.
    \15\ See 78 FR 50471, supra note 5, at 50471. Each of the 
Affiliate SROs has submitted substantially the same proposed rule 
change to propose the changes described herein. See SR-NYSE-2019-72, 
SR-NYSEArca-2019-97, SR-NYSECHX-2019-27, and SR-NYSENAT-2019-32.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\16\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\17\ in particular, because it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to, and 
perfect the mechanisms of, a free and open market and a national market 
system and, in general, to protect investors and the public interest 
and does not unfairly discriminate between customers, issuers, brokers, 
or dealers. The Exchange also believes that the proposed rule change is 
consistent with Section 6(b)(4) of the Act,\18\ because it provides for 
the equitable allocation of reasonable dues, fees, and other charges 
among its members, issuers and other persons using its facilities and 
does not unfairly discriminate between customers, issuers, brokers or 
dealers.
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    \16\ 15 U.S.C. 78f(b).
    \17\ 15 U.S.C. 78f(b)(5).
    \18\ 15 U.S.C. 78f(b)(4).
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The Proposed Change Is Not Unfairly Discriminatory
    The Exchange believes its proposal is not unfairly discriminatory.
    The proposed change would not apply differently to distinct types 
or sizes of market participants. Rather, it would apply to all Users 
equally. The Exchange would continue to offer the four different PCS 
bundles with different cabinet footprints and network connections 
options. Users that require other sizes or combinations of cabinets, 
network connections and cross connects could still request them. As is 
currently the case, the purchase of any colocation service, including 
PCS bundles, would be completely voluntary.
    The proposed change would ensure that all Users that order a bundle 
on or before December 31, 2020 would have their MRC reduced by 50% for 
the first 24 months. Extending the period would make it more cost 
effective for current or potential Users to utilize co-location by 
offering a cost effective, convenient way to create a colocation 
environment, through the choice among PCS bundles with different 
cabinet footprints and network connections options. The Exchange 
expects that such Users would include those with minimal power or 
cabinet space demands and Users for which the costs attendant with 
having a dedicated cabinet or greater network connection bandwidth are 
too burdensome.
The Proposed Change Is Reasonable
    The Exchange believes its proposal is reasonable.
    The Exchange believes that it is reasonable to extend the period of 
eligibility for a 50% MRC reduction as an incentive to Users to utilize 
PCS bundles. Extending the existing eligibility for a 50% MRC reduction 
for another year would provide smaller current or potential Users with 
minimal power or cabinet space demands with additional time to purchase 
a PCS bundle at a discounted rate.
    The Exchange believes that, by extending the existing eligibility 
for a 50% MRC reduction for another year, the proposed change may make 
PCS bundles more competitive with the services that Hosting Users 
offer. The proposed extension would continue to provide potential Users 
with a wider range of choices for the period of the extension.
The Proposed Change Is an Equitable Allocation of Fees and Credits
    The Exchange believes its proposal equitably allocates its fees 
among its market participants.
    The proposed change would not apply differently to distinct types 
or sizes of market participants. Rather, it would apply to all Users 
equally. The Exchange would continue to offer the four different PCS 
bundles with different cabinet footprints and network connections 
options. Users that require other sizes or combinations of cabinets, 
network connections and cross connects could still request them. As is 
currently the case, the purchase of any colocation service, including 
PCS bundles, would be completely voluntary.
    Having the change apply to all PCS bundles would ensure that all 
Users that order a bundle on or before December 31, 2020 would have 
their MRC reduced by 50% for the first 24 months. Extending the period 
would make it more cost effective for current or potential Users to 
utilize co-location by continuing to offer a cost effective, convenient 
way to create a colocation environment, through the choice among PCS 
bundles with different cabinet footprints and network connections 
options. The Exchange expects that such Users would include those with 
minimal power or cabinet space demands and Users for which the costs 
attendant with having a dedicated cabinet or greater network connection 
bandwidth are too burdensome.
    Without this proposed rule change, potential Users choosing between 
a PCS bundle and a Hosting User Bundle would have fewer attractive 
options. This would be a detriment for them, especially for potential 
Users with minimal power or cabinet space demands or those for which 
the costs attendant with having a dedicated cabinet or greater network 
connection bandwidth are too burdensome.\19\
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    \19\ See supra note 7.
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    Finally, the Exchange believes that it is subject to significant 
competitive forces, as described below in the Exchange's statement 
regarding the burden on competition.
    For the reasons above, the proposed changes do not unfairly 
discriminate between or among market participants that are otherwise 
capable of satisfying any applicable co-location fees, requirements, 
terms and conditions

[[Page 71985]]

established from time to time by the Exchange.
    For these reasons, the Exchange believes that the proposal is 
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule changes will not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
Section 6(b)(8) of the Act.\20\
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    \20\ 15 U.S.C. 78f(b)(8).
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Intramarket Competition
    The Exchange does not believe that the proposed change would place 
any burden on intramarket competition that is not necessary or 
appropriate. The proposed changes would enhance competition by 
extending the period of eligibility for a 50% MRC reduction to all 
Users that order a bundle on or before December 31, 2020. Such change 
would make it more cost effective for current or potential Users to 
utilize co-location by offering a cost effective, convenient way to 
create a colocation environment, through the choice among PCS bundles 
with different cabinet footprints and network connections options. The 
Exchange believes that, by extending the period of eligibility, the 
proposed change may make PCS bundles more attractive to potential Users 
who might otherwise opt to become Hosted Customers, and thus enhance 
the competitive environment for potential Users (who would then have 
more options from which to select).
    Importantly, the proposed extension would provide potential Users 
with a wider range of choices for the period of the extension, which 
would be especially beneficial for potential Users with minimal power 
or cabinet space demands or those for which the costs attendant with 
having a dedicated cabinet or greater network connection bandwidth are 
too burdensome. At the same time, however, no potential User would be 
obligated to purchase a PCS bundle, and it would still have the options 
offered by Hosting Users.
    PCS bundles allow Users to select their desired cabinet footprint 
and network connections at a reduced MRC for the first 24 months. Such 
Users may choose, in turn, to pass on such cost savings to their 
customers. In addition to the proposed services being completely 
voluntary, they are available to all Users on an equal basis (i.e. the 
same products and services are available to all Users, and the 
extension of the 50% reduction for the MRC for the PCS bundles, would 
apply to all Users).
Intermarket Competition
    The Exchange does not believe that the proposed fee would impose 
any burden on intermarket competition that is not necessary or 
appropriate. The proposed change is not meant to affect competition 
among national securities exchanges. Rather, the Exchange believes that 
the proposed change is a reasonable attempt to maintain a more level 
playing field between the Exchange and the Hosting Users, who compete 
for Hosted Customer business. Because Hosting Users' services are not 
regulated, they may offer differentiated pricing and are not required 
to make their pricing public. The Exchange believes that the proposed 
change may make PCS bundles more attractive to potential Users who 
might otherwise opt to become Hosted Customers.
    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. In such an environment, the Exchange must 
continually review, and consider adjusting, its services and related 
fees and credits to remain competitive with other exchanges.
    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.'' \21\
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    \21\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
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    For the reasons described above, the Exchange believes that the 
proposed rule changes reflect 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 foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \22\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \23\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
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    \22\ 15 U.S.C. 78s(b)(3)(A).
    \23\ 17 CFR 240.19b-4(f)(2).
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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) \24\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \24\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEAMER-2019-58 on the subject line.

[[Page 71986]]

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-NYSEAMER-2019-58. 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 (http://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-NYSEAMER-2019-58 and should be submitted 
on or before January 21, 2020.
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    \25\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\25\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-28169 Filed 12-27-19; 8:45 am]
BILLING CODE 8011-01-P