Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change for an Extension of the Temporary Waiver of the Co-Location “Hot Hands” Fee, 19187-19190 [2020-07073]

Download as PDF Federal Register / Vol. 85, No. 66 / Monday, April 6, 2020 / Notices from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. Intra-Market Competition The proposed amendments do not impose an undue burden on intramarket competition. jbell on DSKJLSW7X2PROD with NOTICES Section 8, Membership Fees The Exchange’s proposal to waive the Floor Broker Permit Fee, the Clerk Fee, SQT Fee and the Floor Facility Fee during the month of April 2020, and for the month of May 2020, in the event that open outcry trading is unavailable as of May 1, 2020 does not impose an undue burden on competition as the Exchange will apply these proposed waivers uniformly to all member organizations on the Trading Floor. Phlx continues to permit electronic trading and therefore fees associated with electronic trading have not been waived. Credits for Clerks The Exchange’s proposal to pay a credit in April 2020 (and potentially May 2020) to Trading Floor member organizations based on the number of Clerks those member organizations have registered as of April 1, 2020 (and potentially May 1, 2020) does not impose an undue burden on competition. The Exchange proposes to pay all member organizations a credit for each Clerk the firm has registered as of April 1, 2020 (and potentially May 1, 2020) in a uniform manner. The Exchange believes that paying a credit to member organizations for each Clerk would alleviate some of the financial burden for each member organization. Clerks are any registered on-floor person employed by or associated with a member or member organization who is not a member and is not eligible to effect transactions on the Options Floor as a Lead Market Maker, Floor Market Maker, or Floor Broker. As such, Clerks are employees of Phlx Trading Floor member organizations that would not otherwise be able to transact an options business as a Lead Market Maker, Floor Market Maker, or Floor Broker. The Exchange believes that paying a credit to member organizations for each Clerk registered as of April 1, 2020 (and potentially May 1, 2020) will assist member organizations in continuing to employee Clerks during the closure of open outcry trading. VerDate Sep<11>2014 17:47 Apr 03, 2020 Jkt 250001 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.16 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule 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– Phlx–2020–12 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–Phlx–2020–12. 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 16 15 PO 00000 U.S.C. 78s(b)(3)(A)(ii). Frm 00056 Fmt 4703 Sfmt 4703 19187 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–Phlx–2020–12 and should be submitted on or before April 27, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–07081 Filed 4–3–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–88518; File No. SR–NYSE– 2020–25] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change for an Extension of the Temporary Waiver of the Co-Location ‘‘Hot Hands’’ Fee March 31, 2020. 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 March 27, 2020, New York Stock Exchange LLC (‘‘NYSE’’ 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. 17 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 E:\FR\FM\06APN1.SGM 06APN1 19188 Federal Register / Vol. 85, No. 66 / Monday, April 6, 2020 / Notices I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes an extension of the temporary waiver of the colocation ‘‘Hot Hands’’ fee. 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 jbell on DSKJLSW7X2PROD with NOTICES 1. Purpose The Exchange proposes an extension of the temporary waiver of the colocation 4 ‘‘Hot Hands’’ fee through the earlier of the reopening of the Mahwah, New Jersey data center (‘‘Data Center’’) or May 15, 2020. The waiver of the Hot Hands fee was originally through March 29, 2020.5 The Exchange is an indirect subsidiary of Intercontinental Exchange, Inc. (‘‘ICE’’). Through its ICE Data Services (‘‘IDS’’) business, ICE operates the Mahwah, New Jersey data center (‘‘Data Center’’), from which the Exchange provides co-location services to Users.6 Among those services is a 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. 62960 (September 21, 2010), 75 FR 59310 (September 27, 2010) (SR–NYSE–2010–56). 5 See Securities Exchange Act Release No. 88397 (March 17, 2020), 85 FR 16406 (March 23, 2020) (SR–NYSE–2020–18). 6 For purposes of the Exchange’s co-location services, a ‘‘User’’ means any market participant that requests to receive co-location services directly from the Exchange. See Securities Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190 (October 5, 2015) (SR–NYSE–2015–40). As specified in the Price List, a User that incurs colocation fees for a particular co-location service pursuant thereto would not be subject to co-location fees for the same co-location service charged by the Exchange’s affiliates NYSE American LLC (‘‘NYSE American’’), NYSE Arca, Inc. (‘‘NYSE Arca’’), NYSE VerDate Sep<11>2014 17:47 Apr 03, 2020 Jkt 250001 ‘‘Hot Hands’’ service, which allows 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).7 The Hot Hands fee is $100 per half hour. ICE originally announced that the Data Center would be closed to third parties for the period from March 16, 2020 through March 29, 2020 (the ‘‘Initial Closure’’), to help avoid the spread of COVID–19, which could negatively impact Data Center functions. Prior to the closure of the Data Center, the Chief Executive Officer of the Exchange took the actions required under NYSE Rule 7.1 to close the colocation facility of the Exchange to third parties. ICE has now announced to Users that, because the concerns that led to the Initial Closure still apply, the closure of the Data Center will be extended to the earlier of the reopening of the Mahwah, New Jersey data center (‘‘Data Center’’) or May 15, 2020. The date will be announced through a customer notice. If a User’s equipment requires work while a Rule 7.1 closure is in effect, the User has to use the Hot Hands service and, absent a waiver, incurs Hot Hands fees for the work. Given that, the Exchange waived all Hot Hands fees for the duration of the Initial Closure.8 Because the period has been extended, the Exchange proposes to extend the waiver of the Hot Hands Fee for the length of the period. To that end, the Exchange proposes to revise the footnote to the Hot Hands Fee in the Price List as follows (deletions bracketed, additions italicized): † Fees for Hot Hands Services will be waived beginning on March 16, 2020 through [March 29, 2020]the earlier of the reopening of the Mahwah, New Jersey data center or May 15, 2020. The Exchange believes that there will be sufficient Data Center staff on-site to comply with User requests for Hot Hands service. The proposed extension of the waiver would apply equally to all Users. The Chicago, Inc. (‘‘NYSE Chicago’’), and NYSE National, Inc. (‘‘NYSE National’’ and together, the ‘‘Affiliate SROs’’). See Securities Exchange Act Release No. 70206 (August 15, 2013), 78 FR 51765 (August 21, 2013) (SR–NYSE–2013–59). Each Affiliate SRO has submitted substantially the same proposed rule change to propose the changes described herein. See SR–NYSEAmer–2020–23, SR–NYSEArca–2020–26, SR–NYSECHX–2020–10, and SR–NYSENAT–2020–14. 7 See Securities Exchange Act Release No. 72721 (July 30, 2014), 79 FR 45562 (August 5, 2014) (SR– NYSE–2014–37). 8 See 85 FR 16406, supra note 5. PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 proposed extension of the fee waiver would not apply differently to distinct types or sizes of market participants. Rather, it would continue to apply uniformly to all Users. The proposed change is not otherwise intended to address any other issues relating to co-location services and/or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,9 in general, and furthers the objectives of Sections 6(b)(4) and (5) of the Act,10 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. The Proposed Rule Change Is Reasonable The Exchange believes that the proposed rule change is reasonable for the following reasons. Given that the closure of the Data Center has been extended, the Exchange believes that it is reasonable to grant the proposed corresponding extension of the waiver of the Hot Hands Fee. While a Rule 7.1 closure is in effect, User representatives are not allowed access to the Data Center. If a User’s equipment requires work during such period, the User has to use the Hot Hands service. Absent a waiver, the User would incur Hot Hands fees for the work. The proposed extension of the waiver would allow a User to have work carried out on its equipment notwithstanding the closure of the Data Center without incurring Hot Hands fees. The Proposed Rule Change Is Equitable The Exchange believes the proposed rule change is an equitable allocation of 9 15 U.S.C. 78f(b). U.S.C. 78f(b)(4) and (5). 10 15 E:\FR\FM\06APN1.SGM 06APN1 Federal Register / Vol. 85, No. 66 / Monday, April 6, 2020 / Notices its fees and credits for the following reasons. The proposed extension of the waiver would apply equally to all Users. The proposed extension would not apply differently to distinct types or sizes of market participants. Rather, it would apply uniformly to all Users. The Exchange believes that the proposal is equitable because the extension of the waiver would mean that for the duration of the closure of the Data Center all similarly-situated Users would not be charged a fee to use the Hot Hands service. The Proposed Change Is Not Unfairly Discriminatory and Would Protect Investors and the Public Interest The Exchange believes that the proposed change is not unfairly discriminatory for the following reasons. The proposed extension of the waiver would not apply differently to distinct types or sizes of market participants. Rather, all Users whose equipment requires work during the extension of the Data Center closure would have the resulting fees waived, and the extension of the waiver would apply uniformly to all Users during the period. For the reasons above, the proposed changes do not unfairly discriminate between or among market participants. In addition, the Exchange believes that the proposed rule change would perfect the mechanisms of a free and open market and a national market system and, in general, protect investors and the public interest because it would allow a User to have work carried out on its equipment notwithstanding a Rule 7.1 closure without incurring Hot Hands fees. Accordingly, the Exchange believes that the requested extension of the waiver is designed to perfect the mechanisms of a free and open market and a national market system and, in general, protect investors and the public interest by facilitating the uninterrupted availability of Users’ equipment. For all of the above reasons, the Exchange believes that the proposal is consistent with the Act. jbell on DSKJLSW7X2PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,11 the Exchange believes that the proposed rule change will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 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 extension of the waiver is not designed to affect competition, but rather to provide relief to Users that, while a Rule 7.1 closure is in effect, have no option but to use the Hot Hands service. The proposed extension of the waiver would not apply differently to distinct types or sizes of market participants. Rather, all Users whose equipment requires work during the extension of the Data Center closure would have the resulting fees waived, and the extension of the waiver would apply uniformly to all Users during the period. Intermarket Competition The Exchange does not believe that the proposed change would impose any burden on intermarket competition that is not necessary or appropriate. The Exchange believes that the proposed change would not affect the competitive landscape among the national securities exchanges, as the Hot Hands service is solely charged within co-location to existing Users, and would be temporary. 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 foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 12 of the Act and subparagraph (f)(2) of Rule 19b–4 13 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 12 15 11 15 U.S.C. 78f(b)(8). VerDate Sep<11>2014 17:47 Apr 03, 2020 13 17 Jkt 250001 PO 00000 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(2). Frm 00058 Fmt 4703 Sfmt 4703 19189 Commission shall institute proceedings under Section 19(b)(2)(B) 14 of the Act to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSE–2020–25 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSE–2020–25. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street, NE, Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSE–2020–25 and should 14 15 E:\FR\FM\06APN1.SGM U.S.C. 78s(b)(2)(B). 06APN1 19190 Federal Register / Vol. 85, No. 66 / Monday, April 6, 2020 / Notices be submitted on or before April 27, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–07073 Filed 4–3–20; 8:45 am] BILLING CODE 8011–01–P Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose SECURITIES AND EXCHANGE COMMISSION [Release No. 34–88527; File No. SR-Phlx2020–16] Self-Regulatory Organizations; Nasdaq PHLX LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Temporarily Extend Certain Filing Requirements March 31, 2020. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 27, 2020, Nasdaq PHLX LLC (‘‘Phlx’’ 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 Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. jbell on DSKJLSW7X2PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to temporarily extend the filing requirements for certain written reports, currently due April 1, 2020 pursuant to Options 10, Section 7, to June 1, 2020. The text of the proposed rule change is available on the Exchange’s website at https://nasdaqphlx.cchwallstreet.com/, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The 15 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 17:47 Apr 03, 2020 Jkt 250001 Given current market conditions, the Exchange proposes to provide its members temporary relief from filing certain supervision-related reports pursuant to Options 10, Section 7 (Supervision of Accounts). In December 2019, COVID–19 began to spread and disrupt company operations and supply chains and impact consumers and investors, resulting in a dramatic slowdown in production and spending.3 By March 11, 2020, the World Health Organization characterized COVID–19 as a pandemic.4 To slow the spread of the disease, federal and state officials implemented social-distancing measures, placed significant limitations on large gatherings, limited travel, and closed non-essential businesses. These measures have affected the U.S. markets.5 In the United States, Level 1 market wide circuit breaker halts were triggered on March 9, March 12, March 16, and March 18, 2020. While markets have seen significant declines, governments around the world are undertaking efforts to stabilize the 3 See, e.g., Chairman Jay Clayton, Proposed Amendments to Modernize and Enhance Financial Disclosures; Other Ongoing Disclosure Modernization Initiatives; Impact of the Coronavirus; Environmental and Climate-Related Disclosure (Jan. 30, 2020), available at https:// www.sec.gov/news/public-statement/clayton-mda2020-01-30. (‘‘Yesterday, I asked the staff to monitor and, to the extent necessary or appropriate, provide guidance and other assistance to issuers and other market participants regarding disclosures related to the current and potential effects of the coronavirus. We recognize that such effects may be difficult to assess or predict with meaningful precision both generally and as an industry- or issuer-specific basis. This is an uncertain issue where actual effects will depend on many factors beyond the control and knowledge of issuers.’’). 4 See WHO Director-General’s Opening Remarks at the Media Briefing on COVID–19 (March 11, 2020), available at https://www.who.int/dg/ speeches/detail/who-director-general-s-openingremarks-at-the-media-briefing-on-covid-19-11march-2020. 5 ‘‘Analysts showed that we saw the fastest ‘correction’ in history (down 10% from a high), occurring in a matter of days. In the last week of February, the Dow fell 12.36% with notional trading of $3.6 trillion.’’ See Phil Mackintosh, Putting the Recent Volatility in Perspective, available at https://www.nasdaq.com/articles/ putting-the-recent-volatility-in-perspective-2020-0305. PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 economy and assist affected companies and their employees.6 Amidst this market uncertainty, the Exchange is seeking to address potential challenges that members may face in timely meeting their obligations to submit to the Exchange annual supervision-related reports under Options 10, Sections 7(g) and (h) (‘‘Supervision Reporting Requirements’’), especially in light of unforeseen and uncertain demands on resources required to respond to COVID–19. Options 10, Section 7(g) requires each Exchange member that conducts a non-member customer business to submit to the Exchange a written report on the member’s supervision and compliance effort during the preceding year and on the adequacy of the member’s ongoing compliance processes and procedures. Each member that conducts a public customer options business is also required to specifically include its options compliance program in the report.7 The Section 7(g) report is due on April 1 of each year. Options 10, Section 7(h) requires that each member submit, by April 1 of each year, a copy of the Section 7(g) report to one or more control persons or, if the member has no control person, to the audit committee of its board of directors or its equivalent committee or group.8 Accordingly, the Exchange proposes to provide temporary relief for members from the Supervision Reporting Requirements by extending the April 1, 2020 filing deadlines described above to June 1, 2020. The Exchange believes that this temporary relief will permit members to focus on running their businesses and the immediate health crisis caused by the COVID–19 pandemic, including its impact on their employees, customers, and communities. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,9 in general, and furthers the objectives of Section 6(b)(5) of the Act,10 in particular, in that it is designed to promote just and equitable principles of trade; to remove impediments to and 6 See, e.g., the list of actions undertaken by the Board of Governors of the Federal Reserve System at https://www.federalreserve.gov/covid-19.htm. See also Families First Coronavirus Response Act, Public Law 116–127. 7 The report shall include, but not be limited to, the information set out in Options 10, Section 7(g)(i)–(v). 8 See Options 10, Section 7(h) for the meaning of the term ‘‘control person’’ and requirements in the case of a control person that is an organization. 9 15 U.S.C. 78f(b). 10 15 U.S.C. 78f(b)(5). E:\FR\FM\06APN1.SGM 06APN1

Agencies

[Federal Register Volume 85, Number 66 (Monday, April 6, 2020)]
[Notices]
[Pages 19187-19190]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-07073]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88518; File No. SR-NYSE-2020-25]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
for an Extension of the Temporary Waiver of the Co-Location ``Hot 
Hands'' Fee

March 31, 2020.
    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 March 27, 2020, New York Stock Exchange LLC (``NYSE'' 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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[[Page 19188]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes an extension of the temporary waiver of the 
co-location ``Hot Hands'' fee. 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 an extension of the temporary waiver of the 
co-location \4\ ``Hot Hands'' fee through the earlier of the reopening 
of the Mahwah, New Jersey data center (``Data Center'') or May 15, 
2020. The waiver of the Hot Hands fee was originally through March 29, 
2020.\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. 
62960 (September 21, 2010), 75 FR 59310 (September 27, 2010) (SR-
NYSE-2010-56).
    \5\ See Securities Exchange Act Release No. 88397 (March 17, 
2020), 85 FR 16406 (March 23, 2020) (SR-NYSE-2020-18).
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    The Exchange is an indirect subsidiary of Intercontinental 
Exchange, Inc. (``ICE''). Through its ICE Data Services (``IDS'') 
business, ICE operates the Mahwah, New Jersey data center (``Data 
Center''), from which the Exchange provides co-location services to 
Users.\6\ Among those services is a ``Hot Hands'' service, which allows 
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).\7\ The Hot Hands fee is $100 per half hour.
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    \6\ For purposes of the Exchange's co-location services, a 
``User'' means any market participant that requests to receive co-
location services directly from the Exchange. See Securities 
Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190 
(October 5, 2015) (SR-NYSE-2015-40). As specified in the Price List, 
a User that incurs co-location fees for a particular co-location 
service pursuant thereto would not be subject to co-location fees 
for the same co-location service charged by the Exchange's 
affiliates NYSE American LLC (``NYSE American''), NYSE Arca, Inc. 
(``NYSE Arca''), NYSE Chicago, Inc. (``NYSE Chicago''), and NYSE 
National, Inc. (``NYSE National'' and together, the ``Affiliate 
SROs''). See Securities Exchange Act Release No. 70206 (August 15, 
2013), 78 FR 51765 (August 21, 2013) (SR-NYSE-2013-59). Each 
Affiliate SRO has submitted substantially the same proposed rule 
change to propose the changes described herein. See SR-NYSEAmer-
2020-23, SR-NYSEArca-2020-26, SR-NYSECHX-2020-10, and SR-NYSENAT-
2020-14.
    \7\ See Securities Exchange Act Release No. 72721 (July 30, 
2014), 79 FR 45562 (August 5, 2014) (SR-NYSE-2014-37).
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    ICE originally announced that the Data Center would be closed to 
third parties for the period from March 16, 2020 through March 29, 2020 
(the ``Initial Closure''), to help avoid the spread of COVID-19, which 
could negatively impact Data Center functions. Prior to the closure of 
the Data Center, the Chief Executive Officer of the Exchange took the 
actions required under NYSE Rule 7.1 to close the co-location facility 
of the Exchange to third parties.
    ICE has now announced to Users that, because the concerns that led 
to the Initial Closure still apply, the closure of the Data Center will 
be extended to the earlier of the reopening of the Mahwah, New Jersey 
data center (``Data Center'') or May 15, 2020. The date will be 
announced through a customer notice.
    If a User's equipment requires work while a Rule 7.1 closure is in 
effect, the User has to use the Hot Hands service and, absent a waiver, 
incurs Hot Hands fees for the work. Given that, the Exchange waived all 
Hot Hands fees for the duration of the Initial Closure.\8\ Because the 
period has been extended, the Exchange proposes to extend the waiver of 
the Hot Hands Fee for the length of the period. To that end, the 
Exchange proposes to revise the footnote to the Hot Hands Fee in the 
Price List as follows (deletions bracketed, additions italicized):
---------------------------------------------------------------------------

    \8\ See 85 FR 16406, supra note 5.
---------------------------------------------------------------------------

    [dagger] Fees for Hot Hands Services will be waived beginning on 
March 16, 2020 through [March 29, 2020]the earlier of the reopening of 
the Mahwah, New Jersey data center or May 15, 2020.
    The Exchange believes that there will be sufficient Data Center 
staff on-site to comply with User requests for Hot Hands service.
    The proposed extension of the waiver would apply equally to all 
Users. The proposed extension of the fee waiver would not apply 
differently to distinct types or sizes of market participants. Rather, 
it would continue to apply uniformly to all Users.
    The proposed change is not otherwise intended to address any other 
issues relating to co-location services and/or related fees, and the 
Exchange is not aware of any problems that Users would have in 
complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\9\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\10\ 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.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 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.
    Given that the closure of the Data Center has been extended, the 
Exchange believes that it is reasonable to grant the proposed 
corresponding extension of the waiver of the Hot Hands Fee. While a 
Rule 7.1 closure is in effect, User representatives are not allowed 
access to the Data Center. If a User's equipment requires work during 
such period, the User has to use the Hot Hands service. Absent a 
waiver, the User would incur Hot Hands fees for the work.
    The proposed extension of the waiver would allow a User to have 
work carried out on its equipment notwithstanding the closure of the 
Data Center without incurring Hot Hands fees.
The Proposed Rule Change Is Equitable
    The Exchange believes the proposed rule change is an equitable 
allocation of

[[Page 19189]]

its fees and credits for the following reasons.
    The proposed extension of the waiver would apply equally to all 
Users. The proposed extension would not apply differently to distinct 
types or sizes of market participants. Rather, it would apply uniformly 
to all Users.
    The Exchange believes that the proposal is equitable because the 
extension of the waiver would mean that for the duration of the closure 
of the Data Center all similarly-situated Users would not be charged a 
fee to use the Hot Hands service.
The Proposed Change Is Not Unfairly Discriminatory and Would Protect 
Investors and the Public Interest
    The Exchange believes that the proposed change is not unfairly 
discriminatory for the following reasons.
    The proposed extension of the waiver would not apply differently to 
distinct types or sizes of market participants. Rather, all Users whose 
equipment requires work during the extension of the Data Center closure 
would have the resulting fees waived, and the extension of the waiver 
would apply uniformly to all Users during the period. For the reasons 
above, the proposed changes do not unfairly discriminate between or 
among market participants.
    In addition, the Exchange believes that the proposed rule change 
would perfect the mechanisms of a free and open market and a national 
market system and, in general, protect investors and the public 
interest because it would allow a User to have work carried out on its 
equipment notwithstanding a Rule 7.1 closure without incurring Hot 
Hands fees. Accordingly, the Exchange believes that the requested 
extension of the waiver is designed to perfect the mechanisms of a free 
and open market and a national market system and, in general, protect 
investors and the public interest by facilitating the uninterrupted 
availability of Users' equipment.
    For all of the above 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,\11\ the Exchange 
believes that the proposed rule change will not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

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 extension of the waiver is not designed to affect 
competition, but rather to provide relief to Users that, while a Rule 
7.1 closure is in effect, have no option but to use the Hot Hands 
service.
    The proposed extension of the waiver would not apply differently to 
distinct types or sizes of market participants. Rather, all Users whose 
equipment requires work during the extension of the Data Center closure 
would have the resulting fees waived, and the extension of the waiver 
would apply uniformly to all Users during the period.
Intermarket Competition
    The Exchange does not believe that the proposed change would impose 
any burden on intermarket competition that is not necessary or 
appropriate.
    The Exchange believes that the proposed change would not affect the 
competitive landscape among the national securities exchanges, as the 
Hot Hands service is solely charged within co-location to existing 
Users, and would be temporary.
    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 foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \12\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \13\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSE-2020-25 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2020-25. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street, NE, Washington, 
DC 20549 on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSE-2020-25 and should

[[Page 19190]]

be submitted on or before April 27, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-07073 Filed 4-3-20; 8:45 am]
 BILLING CODE 8011-01-P
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