Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing of Partial Amendment No. 1 To Proposed Rule Change To Establish a Wireless Fee Schedule Setting Forth Available Wireless Bandwidth Connections and Associated Fees, 47997-48001 [2020-17247]

Download as PDF Federal Register / Vol. 85, No. 153 / Friday, August 7, 2020 / Notices All other representations in the Filing remain as stated therein and no other changes are being made. III. Date of Effectiveness of the Proposed Rule Change As Modified By Partial Amendment No. 1 and Timing for Commission Action Within 180 days after the date of publication of the initial Notice of Filing in the Federal Register or within such longer period up to an additional 60 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will issue an order approving or disapproving such proposed rule change, as amended. jbell on DSKJLSW7X2PROD with NOTICES IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended by Partial Amendment No. 1, is consistent with the Act. Comments may be submitted by any of the following methods: 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–2020–05, and should be submitted on or before August 28, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–17243 Filed 8–6–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89457; File No. SR– NYSENAT–2020–03] 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–2020–05 on the subject line. Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing of Partial Amendment No. 1 To Proposed Rule Change To Establish a Wireless Fee Schedule Setting Forth Available Wireless Bandwidth Connections and Associated Fees 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–2020–05. 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 August 3, 2020. VerDate Sep<11>2014 20:25 Aug 06, 2020 Jkt 250001 I. Introduction On January 30, 2020, NYSE National, Inc. (‘‘NYSE National’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change (SR–NYSENAT– 2020–03) to establish a schedule of Wireless Connectivity Fees and Charges (‘‘Wireless Fee Schedule’’) listing available wireless bandwidth connections between the Mahwah, New Jersey data center and other data centers. The Commission published the proposed rule change for public comment in the Federal Register on February 18, 2020.3 The Commission 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 88171 (February 11, 2020), 85 FR 8930 (February 18, 2020) (SR–NYSENAT–2020–03) (‘‘Wireless I Notice’’). See also Securities Exchange Act Release Nos. 88168 (February 11, 2020), 85 FR 8938 (February 18, 2020) (SR–NYSE–2020–05); 88169 (February 11, 2020), 85 1 15 PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 47997 received several comments on the proposed rule change, and a response from the Exchange.4 On April 1, 2020, pursuant to Section 19(b)(2) of the Act,5 the Commission designated a longer period within which to either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.6 On May 18, 2020, the Commission instituted proceedings to determine whether to approve or disapprove the proposed rule change.7 The Commission received additional comments in response to the Order Instituting Proceedings.8 On July 27, 2020, the Exchange filed Partial Amendment No. 1 to the proposed rule change in response to certain comments on the proposed rule change. Partial Amendment No. 1 is described in Item II below, which has been substantially prepared by the Exchange.9 The Commission is publishing this notice to solicit comments on Partial Amendment No. 1 from interested persons.10 FR 8946 (February 18, 2020) (SR–NYSEAMER– 2020–05); 88170 (February 11, 2020), 85 FR 8956 (February 18, 2020) (SR–NYSEArca–2020–08); and 88172 (February 11, 2020), 85 FR 8923 (February 18, 2020) (SR–NYSECHX–2020–02). 4 Comments received on the Wireless I Notice and the Exchange’s response are available on the Commission’s website at: https://www.sec.gov/ comments/sr-nysenat-2020-03/ srnysenat202003.htm. 5 15 U.S.C. 78s(b)(2). 6 See Securities Exchange Act Release No. 88539 (April 1, 2020), 85 FR 19553 (April 7, 2020). The Commission designated May 18, 2020, as the date by which it should approve, disapprove, or institute proceedings to determine whether to disapprove the proposed rule changes. 7 See Securities Exchange Act Release No. 88901 (May 18, 2020), 85 FR 31273 (May 22, 2020) in which the Commission instituted proceedings (‘‘Order Instituting Proceedings’’ or ‘‘OIP’’). 8 Comments received on the Wireless I Notice following the OIP also are available on the Commission’s website at: https://www.sec.gov/ comments/sr-nysenat-2020-03/ srnysenat202003.htm. 9 The Commission has reformatted the Exchange’s presentation of the footnotes. 10 Partial Amendment No. 1 is also available on the Commission’s website at: https://www.sec.gov/ comments/sr-nysenat-2020-03/ srnysenat202003.htm. The Commission also refers interested persons to Securities Exchange Act Release No. 88241 (February 19, 2020), 85 FR 10738 (February 25, 2020) (SR–NYSENAT–2020–08) (wherein the Exchange filed a proposed rule change to amend the proposed Wireless Fee Schedule to add ‘‘Wireless Market Data Connections’’ and associated fees (‘‘Wireless II’’) and concurrently proposes to partially amend Wireless II). Partial Amendment No. 1 to Wireless II is available on the Commission’s website at: https://www.sec.gov/ comments/sr-nysenat-2020-08/ srnysenat202008.htm. E:\FR\FM\07AUN1.SGM 07AUN1 47998 Federal Register / Vol. 85, No. 153 / Friday, August 7, 2020 / Notices II. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Amendment NYSE National, Inc. (‘‘NYSE National’’ or the ‘‘Exchange’’) hereby submits this Partial Amendment No. 1 to the above-referenced filing (‘‘Filing’’), in connection with the proposed rule change to establish a schedule of Wireless Connectivity Fees and Charges (the ‘‘Wireless Fee Schedule’’) with wireless connections between the Mahwah, New Jersey data center and other data centers. With this Partial Amendment No. 1, the Exchange proposes a new rule to place restrictions on the use of a pole on the grounds of the Mahwah, New Jersey data center that is used for such wireless connections. The Exchange proposes the following amendments to the Filing: 1. The Exchange proposes to amend the first paragraph in Item 1(a) on page 3 of the Filing: The Exchange proposes to amend the first paragraph of Item 1(a) on page 3 of the Filing to add ‘‘(a)’’ before ‘‘establish’’ and add new text at the end of the paragraph to describe the proposed rule change, as follows (new text italicized): Pursuant to the provisions of Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 NYSE National, Inc. (‘‘NYSE National’’ or the ‘‘Exchange’’) proposes to (a) establish a schedule of Wireless Connectivity Fees and Charges (the ‘‘Wireless Fee Schedule’’) with wireless connections between the Mahwah, New Jersey data center and other data centers, and (b) add a new rule to place restrictions on the use of a pole on the grounds of the Mahwah, New Jersey data center that is used for such wireless connections. jbell on DSKJLSW7X2PROD with NOTICES 2. The Exchange proposes to amend the carryover paragraph on pages 3 and 4 of the Filing (second full paragraph on page 24 of the Exhibit 1): The Exchange proposes to add a sentence at the end of the carryover paragraph on pages 3 and 4 of the Filing (second full paragraph on page 24 of the Exhibit 1) to describe the proposed rule change, as follows (new text italicized): The Exchange proposes to establish the Wireless Fee Schedule with wireless connections between the Mahwah, New Jersey data center and three data centers that are owned and operated by third parties unaffiliated with the Exchange: (1) Carteret, New Jersey, (2) Secaucus, New Jersey, and (3) Markham, Canada (collectively, the ‘‘Third Party Data Centers’’). Market participants that purchase such a wireless connection (a ‘‘Wireless Connection’’) are charged an initial and monthly fee. In addition, the Exchange proposes to include a General Note to the Wireless Fee Schedule. The Exchange VerDate Sep<11>2014 20:25 Aug 06, 2020 Jkt 250001 proposes to add a new rule to place restrictions on the use of a pole on the grounds of the Mahwah, New Jersey data center that is used for the Wireless Connections. 3. The Exchange proposes to add a new section titled ‘‘Proposed New Rule’’ and accompanying footnotes after the first full paragraph on page 14 of the Filing (first full paragraph on page 39 of the Exhibit 1): The Exchange proposes a new rule to place restrictions on the use of a pole on the grounds of the Mahwah, New Jersey data center that is used for wireless connectivity services. Accordingly, the Exchange proposes to add a new section titled ‘‘Proposed New Rule’’ with accompanying footnotes (subsequent footnotes would be renumbered in a conforming change) after the first full paragraph on page 14 of the Filing (first full paragraph on page 39 of the Exhibit 1), after the end of the section titled ‘‘Proposed General Note,’’ as follows (all text is new): Proposed New Rule Since 2016, IDS has had the use of a pole on the grounds of the Mahwah data center.25/26 The data center pole is part of the network utilized for the Wireless Connections to the Carteret and Secaucus Third Party Data Centers.26/27 At the data center pole, the wireless connection to the Third Party Data Centers converts to a fiber connection, and the fiber connection travels from the data center pole into the Mahwah data center.27/28 The equipment on the data center pole belongs to IDS and Anova Technologies, LLC (‘‘Anova’’), the non-ICE entity that owns the wireless network used for the Wireless Connections to Secaucus and Carteret.28/29 Other third parties that offer wireless services utilize commercial poles located outside the grounds of the Mahwah, New Jersey data center for their wireless networks. A third party’s wireless connections to the Third Party Data Center convert to fiber connections at the commercial pole, and the fiber connects the commercial pole to the Mahwah data center. Several such third parties have objected to the use of the data center pole for the Wireless Connections. They argue that IDS has an advantage over its competitors because third parties are not allowed access to the data center pole,29/30 and the data center pole is closer to the Mahwah data center than any commercial pole.30/31 At least one third party has raised the additional concern that the Wireless Connections may benefit from ‘‘less obvious and more discreet types of latency advantages’’ due to infrastructure inside the Mahwah data center, noting that ‘‘some connections may have a longer fiber route than others within a data center or may have to go through various equipment or meet me rooms that an affiliate or preferred provider of an exchange do not.’’ 31/32 The Exchange is proposing a new Rule 3.13 (Data Center Pole Latency Restrictions— PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 Connectivity to Co-Location Space) that would require that the length of the connection from the data center pole to the network row in the space used for co-location in the Mahwah data center (i.e., the point where the Wireless Connections lead) be no less than the length of the connection from the closest commercial pole to the same point. By requiring that the compared connections both extend to the network row in the space used for co-location, the proposed rule would take distances within the Mahwah data center into account. The proposed rule would include the following definitions: • ‘‘Commercial Pole’’ would mean a pole (a) on which one or more third parties locate wireless equipment used to offer wireless connectivity to other third parties, and (b) from which a fiber connection extends from third party equipment on the pole to the Data Center. • ‘‘Data Center’’ would mean the Mahwah, New Jersey data center where the Exchange’s matching engine is located, or its successor. • ‘‘Data Center Pole’’ would mean a pole that (a) holds wireless equipment, (b) is located within the grounds of the Data Center, and (c) cannot be used by third parties other than third parties with which the Exchange or an ICE Affiliate has an agreement to provide services in the name of the Exchange or an ICE Affiliate. • ‘‘ICE Affiliate’’ would mean Intercontinental Exchange, Inc. (‘‘ICE’’) and any entity that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with ICE, where ‘‘control’’ means that one entity possesses, directly or indirectly, voting control of the other entity either through ownership of capital stock or other equity securities or through majority representation on the board of directors or other management body of such entity. The proposed rule would require that: The length of the connection between (a) the base of the Data Center Pole and (b) the network row in the space used for co-location in the Data Center shall be no less than the length of the connection between (x) the base of the closest Commercial Pole and (y) the network row in the space used for co-location in the Data Center. In a conforming change, the Exchange proposes to add a new Rule 3.12, marked ‘‘Reserved.’’ The addition would allow the numbering of the proposed Rule 3.13 to be consistent with changes proposed by the Affiliate SROs to their rules.32/33 25/26 See Securities Exchange Act Release No. 76748 (December 23, 3015), 80 FR 81609 (December 30, 2015) (SR–NYSE–2015– 52) (order approving proposed rule change to the co-location services offered by the NYSE (the offering of a wireless connection to allow users to receive market data feeds from third party markets) and to reflect changes to the NYSE’s price list related to these services). 26/27 The Wireless Connections with Markham, Canada do not use equipment E:\FR\FM\07AUN1.SGM 07AUN1 Federal Register / Vol. 85, No. 153 / Friday, August 7, 2020 / Notices on the data center pole. wireless network similarly converts to a fiber connection for its connection into the Third Party Data Centers. 28/29 Equipment for services Anova offers under its own name is not allowed on the data center pole. 29/30 IDS does not sell rights to third parties to operate wireless equipment on the data center pole due to space limitations, security concerns, and the interference that would arise between equipment placed too closely together. 30/31 See letter from Gregory Babyak, Global Head of Regulatory Affairs, Bloomberg L.P., to Ms. Vanessa Countryman, Secretary, Securities and Exchange Commission (‘‘Commission’’), dated June 12, 2020; letter from Stephen John Berger, Managing Director, Global Head of Government and Regulatory Policy, Citadel Securities, to Ms. Vanessa Countryman, Secretary, Commission, dated June 12, 2020; letter from Jim Considine, Chief Financial Officer, McKay Brothers LLC (‘‘McKay Brothers’’), to Ms. Vanessa Countryman, Secretary, Commission, dated June 12, 2020 (‘‘McKay Letter’’); and letter from Thomas M. Merritt, Deputy General Counsel, Virtu Financial, Inc. to Ms. Vanessa Countryman, Secretary, Commission, dated March 10, 2020. 31/32 McKay Letter, supra note 30/31, at 9. 32/33 See Securities Exchange Act Release Nos. 88168 (February 11, 2020), 85 FR 8938, (February 18, 2020) (SR–NYSE–2020– 05); 88169 (February 11, 2020), 85 FR 8946 February 18, 2020) (SR– NYSEAMER–2020–05); 88170 (February 11, 2020), 85 FR 8956 (February 18, 2020) (SR–NYSEArca–2020–08); and 88172 (February 11, 2020), 85 FR 8923 (February 18, 2020) (SR–NYSECHX– 2020–02); (notice of filing of proposed rule change to establish a Schedule of Wireless Connectivity Fees and Charges with wireless connections). 27/28 The jbell on DSKJLSW7X2PROD with NOTICES 4. The Exchange proposes to add new text after the second full paragraph on page 15 of the Filing (first full paragraph on page 41 of the Exhibit 1): The Exchange proposes to amend the Filing to include additional analysis of the competitive environment for wireless connections. Accordingly, the Exchange proposes to add a paragraph and accompanying footnote (subsequent footnotes would be renumbered in a conforming change) after the second full paragraph on page 15 of the Filing (first full paragraph on page 41 of the Exhibit 1), as follows (all text new): The Exchange believes that its competitors’ wireless connections provide connectivity at the same or similar speed as the Wireless Connections, and at the same or similar cost. Indeed, the McKay Letter acknowledges that McKay Brothers has the fastest wireless network.34/35 34/35 McKay Letter, supra note 30/31, at 4. 5. The Exchange proposes to amend the Statutory Basis section of the Filing VerDate Sep<11>2014 20:25 Aug 06, 2020 Jkt 250001 after the first full paragraph on page 18 of the Filing (first full paragraph on page 45 of the Exhibit 1): The Exchange proposes to include information in the Filing regarding why it believes the proposed new rule is reasonable. The Exchange proposes to amend the Statutory Basis section of the Filing to add new paragraphs and accompanying footnotes (subsequent footnotes would be renumbered in a conforming change) after the first full paragraph on page 18 of the Filing (first full paragraph on page 45 of the Exhibit 1), at the end of the section titled ‘‘The Proposed Change is Reasonable,’’ as follows (all text is new): The Exchange believes that the proposed new Rule 3.13 would be reasonable as, pursuant to the rule, the networks for the Wireless Connections, and future wireless connections that use a Data Center Pole, would ‘‘operat[e] in the same manner as competitors do today without a latency subsidy or other advantage provided by the Exchanges. . . .’’ 39/40 Accordingly, the proposed new rule would promote just and equitable principles of trade and, in general, protect investors and the public interest by ensuring that the subscribers to services using the IDS wireless network do not benefit from any physical proximity ‘‘on the segment [of the network] closest to the Exchanges’ data center that no competitor can replicate.’’ 40/41 By ending both of the compared connections at the network row in the space used for co-location, the proposed rule would take distances within the Mahwah data center into account. The proposed new rule would not apply differently to distinct types or sizes of market participants. The Exchange would be required to ensure that the length of the connection between (a) the base of the Data Center Pole and (b) the network row in the space used for co-location in the Data Center, would be no less than the length of the connection between (x) the base of the closest Commercial Pole and (y) the network row in the space used for co-location in the Data Center. The Exchange believes that the proposed definition of ‘‘Commercial Pole’’ is reasonable and would promote just and equitable principles of trade because it would encompass any pole on which a third party locates its wireless equipment in order to offer wireless connectivity to customers. The Exchange believes that such third parties are the direct competitors for the Wireless Connections, as they also offer wireless connections to customers. If a third party used a pole for a proprietary wireless network and that pole does not have one or more third parties’ wireless equipment used to offer wireless connectivity to other third parties, that pole would not fall within the scope of the definition of Commercial Pole. The Exchange believes that the proposed definition of ‘‘Data Center’’ is reasonable and would promote just and equitable principles of trade because it would capture any data center to which the Exchange locates its matching engine. PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 47999 The Exchange believes that the proposed definition of ‘‘Data Center Pole’’ is reasonable and would promote just and equitable principles of trade because it would encompass not just the current pole, but also any additional or successor pole on the grounds of the Data Center, so long as such pole could not be used by third parties other than third parties with which the Exchange or an ICE Affiliate had an agreement to provide services in the name of the Exchange or an ICE Affiliate, such as Anova. The Exchange believes that the definition of ‘‘ICE Affiliate’’ is reasonable and would promote just and equitable principles of trade because the same definition is used in Rule 3.1 (Additional Requirements for Listed Securities Issued by Intercontinental Exchange, Inc. or its Affiliates), and so using it would add transparency, clarity and internal consistency to Exchange rules. 39/40 McKay Letter, supra note 30/31, at 7. 40/41 Id., at note 33. 6. The Exchange proposes to amend the Statutory Basis section of the Filing after the fifth full paragraph on page 19 of the Filing (first full paragraph on page 48 of the Exhibit 1): The Exchange proposes to include information in the Filing regarding why it believes the proposed new rule is not unfairly discriminatory. The Exchange proposes to amend the Statutory Basis section of the Filing to add new paragraphs and accompanying footnotes (subsequent footnotes would be renumbered in a conforming change) after the fifth full paragraph on page 19 of the Filing (first full paragraph on page 48 of the Exhibit 1), immediately prior to the last paragraph of the section titled ‘‘The Proposed Change is Not Unfairly Discriminatory,’’ as follows (all text is new): The Exchange believes that the proposed new Rule 3.13 would not be unfairly discriminatory, as pursuant to the rule, the networks for the Wireless Connections, and future wireless connections that use the Data Center Pole, would ‘‘operat[e] in the same manner as competitors do today without a latency subsidy or other advantage provided by the Exchanges. . . .’’ 41/42 Accordingly, the proposed new rule would ensure that the IDS wireless network does not benefit from physical proximity ‘‘on the segment [of the network] closest to the Exchanges’ data center that no competitor can replicate.’’ 42/43 By ending both of the compared connections at the network row in the space used for colocation inside the Data Center, the proposed rule would take distances within the Mahwah data center into account. The proposed new rule would not apply differently to distinct types or sizes of market participants. The Exchange would be required to ensure that the length of the connection between (a) the base of the Data Center Pole and (b) the network row in the space used for co-location in the Data Center, would be no less than the length of the connection between (x) the base of the closest Commercial Pole and (y) the network row in E:\FR\FM\07AUN1.SGM 07AUN1 48000 Federal Register / Vol. 85, No. 153 / Friday, August 7, 2020 / Notices jbell on DSKJLSW7X2PROD with NOTICES the space used for co-location in the Data Center. The Exchange believes that the proposed definition of ‘‘Commercial Pole’’ would not be unfairly discriminatory because it would encompass any pole on which a third party locates its wireless equipment in order to offer wireless connectivity to customers. The Exchange believes that such third parties are the direct competitors for the Wireless Connections, as they also offer wireless connections to customers. If a third party used a pole for a proprietary wireless network and that pole does not have one or more third parties’ wireless equipment used to offer wireless connectivity to other third parties, that pole would not fall within the scope of the definition of Commercial Pole. The Exchange believes that the proposed definition of ‘‘Data Center’’ would not be unfairly discriminatory because it would capture any data center to which the Exchange locates its matching engine. The Exchange believes that the proposed definition of ‘‘Data Center Pole’’ would not be unfairly discriminatory because it would encompass not just the current pole, but also any additional or successor pole on the grounds of the Data Center, so long as such pole could not be used by third parties other than third parties with which the Exchange or an ICE Affiliate had an agreement to provide services in the name of the Exchange or an ICE Affiliate, such as Anova. The Exchange believes that the definition of ‘‘ICE Affiliate’’ would not be unfairly discriminatory because the same definition is used in Rule 3.1, and so using it would add transparency, clarity and internal consistency to Exchange rules. 41/42 McKay Letter, supra note 30/31, at 7. 42/43 Id., at note 33. 7. The Exchange proposes to amend the section of the Filing titled ‘‘SelfRegulatory Organization’s Statement on Burden on Competition’’ in the following two ways: The Exchange proposes to include information in the Filing regarding why it believes the proposed new rule would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of Section 6(b)(8) of the Securities Exchange Act of 1934 (the ‘‘Act’’).11 Accordingly, the Exchange proposes to amend the section of the Filing titled ‘‘Self-Regulatory Organization’s Statement on Burden on Competition’’ in the following two ways. First, to set the new text apart from the previous discussion regarding the burden on competition, the Exchange proposes to add the heading ‘‘Wireless Market Data Connectivity’’ immediately before the first full paragraph under the heading on page 20 of the Filing (page 48 of the Exhibit 1). The new heading would apply to the current text of the Filing. 11 15 U.S.C. 78f(b)(8). VerDate Sep<11>2014 20:25 Aug 06, 2020 Jkt 250001 Second, after the third full paragraph on page 21 of the Filing (first full paragraph on page 51 of the Exhibit 1), the Exchange proposes to add the heading ‘‘Proposed New Rule’’ and new paragraphs and accompanying footnotes (subsequent footnotes would be renumbered in a conforming change), as follows (all text is new): Proposed New Rule The Exchange does not believe that the proposed new rule would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of Section 6(b)(8) of the Act.46/47 With the exception of Anova, third parties do not have access to the data center pole. Under the proposed rule, the Exchange would always be obligated to ensure that the length of the connection between (a) the base of the Data Center Pole and (b) the network row in the space used for co-location in the Data Center, would be no less than the length of the connection between (x) the base of the closest Commercial Pole and (y) the network row in the space used for co-location in the Data Center. IDS, not the Exchange, provides the Wireless Connections to market participants, and so it would be IDS that would have to slow its connection down as required by the rule. Accordingly, the Exchange believes that the only burden on competition of the proposed change would be on IDS. Nonetheless, the Exchange believes that the proposed rule change would not impose any burden on competition that is not necessary or appropriate because the proposed change would ensure that the IDS wireless network did not benefit from physical proximity ‘‘on the segment [of the network] closest to the Exchanges’ data center that no competitor can replicate.’’ 47/48 The networks for the Wireless Connections, and future wireless connections that use the Data Center Pole, would ‘‘operat[e] in the same manner as competitors do today without a latency subsidy or other advantage provided by the Exchanges. . . .’’ 48/49 The proposed rule would not otherwise put a burden on competition. As noted above, access to the data center pole is not required for third parties to establish wireless networks that can compete with the Wireless Connections to the Carteret and Secaucus Third Party Data Centers, as evidenced by the existing wireless connections offered by nonICE entities.49/50 Indeed, the Exchange believes that its competitors’ wireless connections provide connectivity at the same or similar speed as the Wireless Connections, and at the same or similar cost. The McKay Letter acknowledges that McKay Brothers has the fastest wireless network.50/51 The Exchange notes that proximity to a data center is not the only determinant of a wireless network’s latency. Rather, the latency of a wireless network depends on several factors. Variables include the wireless equipment utilized; the route of, and number of towers or buildings in, the network; and the fiber equipment used at either end of the connection. Moreover, latency is not the only consideration that a customer may have in PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 selecting a wireless network to connect to for market data. Other considerations may include the amount of network uptime; the equipment that the network uses; the cost of the connection; and the applicable contractual provisions. The proposed change does not affect competition among national securities exchanges or among members of the Exchange, but rather between IDS and its commercial competitors. 46/47 15 U.S.C. 78f(b)(8). 47/48 McKay Letter, supra note 30/31, at note 33. 48/49 Id., at 7. 49/50 A market participant in any of the Third Party Data Centers or the Mahwah data center also may create a proprietary wireless market data connection, connect through another market participant, or utilize fiber connections offered by the Exchange, ICE Affiliates, and other service providers and third party telecommunications providers. 50/51 Id., at 4. 8. The Exchange proposes to add a list under ‘‘Exhibit 5—Text of the Proposed Rule Change’’ on page 22 of the Filing: The Exchange proposes to add a new Exhibit 5B. Accordingly, the Exchange proposes to add a list under ‘‘Exhibit 5—Text of Proposed Rule Change’’ on page 22 of the Filing, as follows (new text italicized): Exhibit 5—Text of the Proposed Rule Change A. Text of the Proposed Schedule of Wireless Connectivity Fees and Charges B. Text of the Proposed Rule 9. The Exchange proposes to add new text to the first full paragraph of Section I on page 23 of the Exhibit 1: The Exchange proposes to add new text to the first full paragraph of Section I on page 23 of the Exhibit 1, as follows (new text italicized): The Exchange proposes to establish a schedule of Wireless Connectivity Fees and Charges (the ‘‘Wireless Fee Schedule’’) with wireless connections between the Mahwah, New Jersey data center and other data centers and add a new rule to place restrictions on the use of a pole on the grounds of the Mahwah, New Jersey data center that is used for such wireless connections. 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. 10. The Exchange proposes to amend ‘‘Exhibit 5’’ to ‘‘Exhibit 5A’’ on page 54 of the Exhibit 5: To reflect the addition of a new Exhibit 5B, the Exchange proposes to add ‘‘A’’ to ‘‘EXHIBIT 5’’ on page 54 of the Exhibit 5, to make it to ‘‘EXHIBIT 5A’’. * * * * * All other representations in the Filing remain as stated therein and no other changes are being made. E:\FR\FM\07AUN1.SGM 07AUN1 Federal Register / Vol. 85, No. 153 / Friday, August 7, 2020 / Notices III. Date of Effectiveness of the Proposed Rule Change as Modified by Partial Amendment No. 1 and Timing for Commission Action Within 180 days after the date of publication of the initial Notice of Filing in the Federal Register or within such longer period up to an additional 60 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will issue an order approving or disapproving such proposed rule change, as amended. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change, as amended by Partial Amendment No. 1, is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSENAT–2020–03 on the subject line. jbell on DSKJLSW7X2PROD with 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–NYSENAT–2020–03. 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 VerDate Sep<11>2014 20:25 Aug 06, 2020 Jkt 250001 inspection and copying at the principal office of the Exchange. All comments received will be posted without change. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSENAT–2020–03, and should be submitted on or before August 28, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–17247 Filed 8–6–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–540, OMB Control No. 3235–0600] Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736 Extension: Rule 611 Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (‘‘Commission’’) has submitted to the Office of Management and Budget (‘‘OMB’’) a request for approval of extension of the previously approved collection of information provided for in Rule 611 (17 CFR 242.611) under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) (‘‘Exchange Act’’). On June 9, 2005, effective August 29, 2005 (see 70 FR 37496, June 29, 2005), the Commission adopted Rule 611 of Regulation NMS under the Exchange Act to require any national securities exchange, national securities association, alternative trading system, exchange market maker, over-thecounter market maker, and any other broker-dealer that executes orders internally by trading as principal or crossing orders as agent, to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the execution of a transaction in its market at a price that is inferior to a bid or offer displayed in another 12 17 PO 00000 CFR 200.30–3(a)(12). Frm 00058 Fmt 4703 Sfmt 4703 48001 market at the time of execution (a ‘‘trade-though’’), absent an applicable exception and, if relying on an exception, that are reasonably designed to assure compliance with the terms of the exception. Without this collection of information, respondents would not have a means to enforce compliance with the Commission’s intention to prevent trade-throughs pursuant to the rule. There are approximately 366 respondents 1 per year that will require an aggregate total of approximately 21,960 hours per year to comply with this Rule. It is anticipated that each respondent will continue to expend approximately 60 hours annually: Two hours per month of internal legal time and three hours per month of internal compliance time to ensure that its written policies and procedures are upto-date and remain in compliance with Rule 611. The estimated cost for an inhouse attorney is $396 per hour and the estimated cost for an assistant compliance director in the securities industry is $349 per hour. Therefore the estimated total internal cost of compliance for the annual hour burden is as follows: [(2 legal hours × 12 months × $396) × 366] + [(3 compliance hours × 12 months × $349) × 366] = $8,076,888.2 An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. The public may view background documentation for this information collection at the following website: www.reginfo.gov. Find this particular information collection by selecting ‘‘Currently under 30-day Review—Open for Public Comments’’ or by using the search function. Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to (i) www.reginfo.gov/public/do/ PRAMain and (ii) David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/ o Cynthia Roscoe, 100 F Street NE, 1 This estimate includes 17 national securities exchanges that are equity securities exchanges. The estimate also includes an estimated 318 firms that are over-the-counter market makers or exchange market makers, as well as an estimated 31 alternative trading systems that trade NMS stocks. 2 The total cost of compliance for the annual hour burden has been revised to reflect updated estimated cost figures for an in-house attorney and an assistant compliance director. These figures are from SIFMA’s Management & Professional Earnings in the Securities Industry 2017, modified by Commission staff for an 1800-hour work-year and multiplied by 5.35 to account for bonuses, firm size, employee benefits, and overhead. E:\FR\FM\07AUN1.SGM 07AUN1

Agencies

[Federal Register Volume 85, Number 153 (Friday, August 7, 2020)]
[Notices]
[Pages 47997-48001]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-17247]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89457; File No. SR-NYSENAT-2020-03]


Self-Regulatory Organizations; NYSE National, Inc.; Notice of 
Filing of Partial Amendment No. 1 To Proposed Rule Change To Establish 
a Wireless Fee Schedule Setting Forth Available Wireless Bandwidth 
Connections and Associated Fees

August 3, 2020.

I. Introduction

    On January 30, 2020, NYSE National, Inc. (``NYSE National'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Exchange Act'' or ``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change (SR-NYSENAT-2020-03) to establish 
a schedule of Wireless Connectivity Fees and Charges (``Wireless Fee 
Schedule'') listing available wireless bandwidth connections between 
the Mahwah, New Jersey data center and other data centers.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    The Commission published the proposed rule change for public 
comment in the Federal Register on February 18, 2020.\3\ The Commission 
received several comments on the proposed rule change, and a response 
from the Exchange.\4\ On April 1, 2020, pursuant to Section 19(b)(2) of 
the Act,\5\ the Commission designated a longer period within which to 
either approve the proposed rule change, disapprove the proposed rule 
change, or institute proceedings to determine whether to disapprove the 
proposed rule change.\6\ On May 18, 2020, the Commission instituted 
proceedings to determine whether to approve or disapprove the proposed 
rule change.\7\ The Commission received additional comments in response 
to the Order Instituting Proceedings.\8\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 88171 (February 11, 
2020), 85 FR 8930 (February 18, 2020) (SR-NYSENAT-2020-03) 
(``Wireless I Notice''). See also Securities Exchange Act Release 
Nos. 88168 (February 11, 2020), 85 FR 8938 (February 18, 2020) (SR-
NYSE-2020-05); 88169 (February 11, 2020), 85 FR 8946 (February 18, 
2020) (SR-NYSEAMER-2020-05); 88170 (February 11, 2020), 85 FR 8956 
(February 18, 2020) (SR-NYSEArca-2020-08); and 88172 (February 11, 
2020), 85 FR 8923 (February 18, 2020) (SR-NYSECHX-2020-02).
    \4\ Comments received on the Wireless I Notice and the 
Exchange's response are available on the Commission's website at: 
https://www.sec.gov/comments/sr-nysenat-2020-03/srnysenat202003.htm.
    \5\ 15 U.S.C. 78s(b)(2).
    \6\ See Securities Exchange Act Release No. 88539 (April 1, 
2020), 85 FR 19553 (April 7, 2020). The Commission designated May 
18, 2020, as the date by which it should approve, disapprove, or 
institute proceedings to determine whether to disapprove the 
proposed rule changes.
    \7\ See Securities Exchange Act Release No. 88901 (May 18, 
2020), 85 FR 31273 (May 22, 2020) in which the Commission instituted 
proceedings (``Order Instituting Proceedings'' or ``OIP'').
    \8\ Comments received on the Wireless I Notice following the OIP 
also are available on the Commission's website at: https://www.sec.gov/comments/sr-nysenat-2020-03/srnysenat202003.htm.
---------------------------------------------------------------------------

    On July 27, 2020, the Exchange filed Partial Amendment No. 1 to the 
proposed rule change in response to certain comments on the proposed 
rule change. Partial Amendment No. 1 is described in Item II below, 
which has been substantially prepared by the Exchange.\9\ The 
Commission is publishing this notice to solicit comments on Partial 
Amendment No. 1 from interested persons.\10\
---------------------------------------------------------------------------

    \9\ The Commission has reformatted the Exchange's presentation 
of the footnotes.
    \10\ Partial Amendment No. 1 is also available on the 
Commission's website at: https://www.sec.gov/comments/sr-nysenat-2020-03/srnysenat202003.htm. The Commission also refers interested 
persons to Securities Exchange Act Release No. 88241 (February 19, 
2020), 85 FR 10738 (February 25, 2020) (SR-NYSENAT-2020-08) (wherein 
the Exchange filed a proposed rule change to amend the proposed 
Wireless Fee Schedule to add ``Wireless Market Data Connections'' 
and associated fees (``Wireless II'') and concurrently proposes to 
partially amend Wireless II). Partial Amendment No. 1 to Wireless II 
is available on the Commission's website at: https://www.sec.gov/comments/sr-nysenat-2020-08/srnysenat202008.htm.

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[[Page 47998]]

II. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Amendment

    NYSE National, Inc. (``NYSE National'' or the ``Exchange'') hereby 
submits this Partial Amendment No. 1 to the above-referenced filing 
(``Filing''), in connection with the proposed rule change to establish 
a schedule of Wireless Connectivity Fees and Charges (the ``Wireless 
Fee Schedule'') with wireless connections between the Mahwah, New 
Jersey data center and other data centers. With this Partial Amendment 
No. 1, the Exchange proposes a new rule to place restrictions on the 
use of a pole on the grounds of the Mahwah, New Jersey data center that 
is used for such wireless connections.
    The Exchange proposes the following amendments to the Filing:
    1. The Exchange proposes to amend the first paragraph in Item 1(a) 
on page 3 of the Filing:
    The Exchange proposes to amend the first paragraph of Item 1(a) on 
page 3 of the Filing to add ``(a)'' before ``establish'' and add new 
text at the end of the paragraph to describe the proposed rule change, 
as follows (new text italicized):

    Pursuant to the provisions of Section 19(b)(1) of the Securities 
Exchange Act of 1934 (the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ 
NYSE National, Inc. (``NYSE National'' or the ``Exchange'') proposes 
to (a) establish a schedule of Wireless Connectivity Fees and 
Charges (the ``Wireless Fee Schedule'') with wireless connections 
between the Mahwah, New Jersey data center and other data centers, 
and (b) add a new rule to place restrictions on the use of a pole on 
the grounds of the Mahwah, New Jersey data center that is used for 
such wireless connections.

    2. The Exchange proposes to amend the carryover paragraph on pages 
3 and 4 of the Filing (second full paragraph on page 24 of the Exhibit 
1):
    The Exchange proposes to add a sentence at the end of the carryover 
paragraph on pages 3 and 4 of the Filing (second full paragraph on page 
24 of the Exhibit 1) to describe the proposed rule change, as follows 
(new text italicized):

    The Exchange proposes to establish the Wireless Fee Schedule 
with wireless connections between the Mahwah, New Jersey data center 
and three data centers that are owned and operated by third parties 
unaffiliated with the Exchange: (1) Carteret, New Jersey, (2) 
Secaucus, New Jersey, and (3) Markham, Canada (collectively, the 
``Third Party Data Centers''). Market participants that purchase 
such a wireless connection (a ``Wireless Connection'') are charged 
an initial and monthly fee. In addition, the Exchange proposes to 
include a General Note to the Wireless Fee Schedule. The Exchange 
proposes to add a new rule to place restrictions on the use of a 
pole on the grounds of the Mahwah, New Jersey data center that is 
used for the Wireless Connections.

    3. The Exchange proposes to add a new section titled ``Proposed New 
Rule'' and accompanying footnotes after the first full paragraph on 
page 14 of the Filing (first full paragraph on page 39 of the Exhibit 
1):
    The Exchange proposes a new rule to place restrictions on the use 
of a pole on the grounds of the Mahwah, New Jersey data center that is 
used for wireless connectivity services. Accordingly, the Exchange 
proposes to add a new section titled ``Proposed New Rule'' with 
accompanying footnotes (subsequent footnotes would be renumbered in a 
conforming change) after the first full paragraph on page 14 of the 
Filing (first full paragraph on page 39 of the Exhibit 1), after the 
end of the section titled ``Proposed General Note,'' as follows (all 
text is new):

Proposed New Rule

    Since 2016, IDS has had the use of a pole on the grounds of the 
Mahwah data center.25/26 The data center pole is part of 
the network utilized for the Wireless Connections to the Carteret 
and Secaucus Third Party Data Centers.26/27 At the data 
center pole, the wireless connection to the Third Party Data Centers 
converts to a fiber connection, and the fiber connection travels 
from the data center pole into the Mahwah data 
center.27/28 The equipment on the data center pole 
belongs to IDS and Anova Technologies, LLC (``Anova''), the non-ICE 
entity that owns the wireless network used for the Wireless 
Connections to Secaucus and Carteret.28/29
    Other third parties that offer wireless services utilize 
commercial poles located outside the grounds of the Mahwah, New 
Jersey data center for their wireless networks. A third party's 
wireless connections to the Third Party Data Center convert to fiber 
connections at the commercial pole, and the fiber connects the 
commercial pole to the Mahwah data center.
    Several such third parties have objected to the use of the data 
center pole for the Wireless Connections. They argue that IDS has an 
advantage over its competitors because third parties are not allowed 
access to the data center pole,29/30 and the data center 
pole is closer to the Mahwah data center than any commercial 
pole.30/31 At least one third party has raised the 
additional concern that the Wireless Connections may benefit from 
``less obvious and more discreet types of latency advantages'' due 
to infrastructure inside the Mahwah data center, noting that ``some 
connections may have a longer fiber route than others within a data 
center or may have to go through various equipment or meet me rooms 
that an affiliate or preferred provider of an exchange do not.'' 
31/32
    The Exchange is proposing a new Rule 3.13 (Data Center Pole 
Latency Restrictions--Connectivity to Co-Location Space) that would 
require that the length of the connection from the data center pole 
to the network row in the space used for co-location in the Mahwah 
data center (i.e., the point where the Wireless Connections lead) be 
no less than the length of the connection from the closest 
commercial pole to the same point. By requiring that the compared 
connections both extend to the network row in the space used for co-
location, the proposed rule would take distances within the Mahwah 
data center into account.
    The proposed rule would include the following definitions:
     ``Commercial Pole'' would mean a pole (a) on which one 
or more third parties locate wireless equipment used to offer 
wireless connectivity to other third parties, and (b) from which a 
fiber connection extends from third party equipment on the pole to 
the Data Center.
     ``Data Center'' would mean the Mahwah, New Jersey data 
center where the Exchange's matching engine is located, or its 
successor.
     ``Data Center Pole'' would mean a pole that (a) holds 
wireless equipment, (b) is located within the grounds of the Data 
Center, and (c) cannot be used by third parties other than third 
parties with which the Exchange or an ICE Affiliate has an agreement 
to provide services in the name of the Exchange or an ICE Affiliate.
     ``ICE Affiliate'' would mean Intercontinental Exchange, 
Inc. (``ICE'') and any entity that directly or indirectly, through 
one or more intermediaries, controls, is controlled by, or is under 
common control with ICE, where ``control'' means that one entity 
possesses, directly or indirectly, voting control of the other 
entity either through ownership of capital stock or other equity 
securities or through majority representation on the board of 
directors or other management body of such entity.

    The proposed rule would require that:

The length of the connection between (a) the base of the Data Center 
Pole and (b) the network row in the space used for co-location in 
the Data Center shall be no less than the length of the connection 
between (x) the base of the closest Commercial Pole and (y) the 
network row in the space used for co-location in the Data Center.

    In a conforming change, the Exchange proposes to add a new Rule 
3.12, marked ``Reserved.'' The addition would allow the numbering of 
the proposed Rule 3.13 to be consistent with changes proposed by the 
Affiliate SROs to their rules.32/33

25/26 See Securities Exchange Act Release No. 76748 
(December 23, 3015), 80 FR 81609 (December 30, 2015) (SR-NYSE-2015-
52) (order approving proposed rule change to the co-location 
services offered by the NYSE (the offering of a wireless connection 
to allow users to receive market data feeds from third party 
markets) and to reflect changes to the NYSE's price list related to 
these services).
26/27 The Wireless Connections with Markham, Canada do 
not use equipment

[[Page 47999]]

on the data center pole.
27/28 The wireless network similarly converts to a fiber 
connection for its connection into the Third Party Data Centers.
28/29 Equipment for services Anova offers under its own 
name is not allowed on the data center pole.
29/30 IDS does not sell rights to third parties to 
operate wireless equipment on the data center pole due to space 
limitations, security concerns, and the interference that would 
arise between equipment placed too closely together.
30/31 See letter from Gregory Babyak, Global Head of 
Regulatory Affairs, Bloomberg L.P., to Ms. Vanessa Countryman, 
Secretary, Securities and Exchange Commission (``Commission''), 
dated June 12, 2020; letter from Stephen John Berger, Managing 
Director, Global Head of Government and Regulatory Policy, Citadel 
Securities, to Ms. Vanessa Countryman, Secretary, Commission, dated 
June 12, 2020; letter from Jim Considine, Chief Financial Officer, 
McKay Brothers LLC (``McKay Brothers''), to Ms. Vanessa Countryman, 
Secretary, Commission, dated June 12, 2020 (``McKay Letter''); and 
letter from Thomas M. Merritt, Deputy General Counsel, Virtu 
Financial, Inc. to Ms. Vanessa Countryman, Secretary, Commission, 
dated March 10, 2020.
31/32 McKay Letter, supra note 30/31, at 9.
32/33 See Securities Exchange Act Release Nos. 88168 
(February 11, 2020), 85 FR 8938, (February 18, 2020) (SR-NYSE-2020-
05); 88169 (February 11, 2020), 85 FR 8946 February 18, 2020) (SR-
NYSEAMER-2020-05); 88170 (February 11, 2020), 85 FR 8956 (February 
18, 2020) (SR-NYSEArca-2020-08); and 88172 (February 11, 2020), 85 
FR 8923 (February 18, 2020) (SR-NYSECHX-2020-02); (notice of filing 
of proposed rule change to establish a Schedule of Wireless 
Connectivity Fees and Charges with wireless connections).

    4. The Exchange proposes to add new text after the second full 
paragraph on page 15 of the Filing (first full paragraph on page 41 of 
the Exhibit 1):
    The Exchange proposes to amend the Filing to include additional 
analysis of the competitive environment for wireless connections. 
Accordingly, the Exchange proposes to add a paragraph and accompanying 
footnote (subsequent footnotes would be renumbered in a conforming 
change) after the second full paragraph on page 15 of the Filing (first 
full paragraph on page 41 of the Exhibit 1), as follows (all text new):

    The Exchange believes that its competitors' wireless connections 
provide connectivity at the same or similar speed as the Wireless 
Connections, and at the same or similar cost. Indeed, the McKay 
Letter acknowledges that McKay Brothers has the fastest wireless 
network.34/35

34/35 McKay Letter, supra note 30/31, at 4.

    5. The Exchange proposes to amend the Statutory Basis section of 
the Filing after the first full paragraph on page 18 of the Filing 
(first full paragraph on page 45 of the Exhibit 1):
    The Exchange proposes to include information in the Filing 
regarding why it believes the proposed new rule is reasonable. The 
Exchange proposes to amend the Statutory Basis section of the Filing to 
add new paragraphs and accompanying footnotes (subsequent footnotes 
would be renumbered in a conforming change) after the first full 
paragraph on page 18 of the Filing (first full paragraph on page 45 of 
the Exhibit 1), at the end of the section titled ``The Proposed Change 
is Reasonable,'' as follows (all text is new):

    The Exchange believes that the proposed new Rule 3.13 would be 
reasonable as, pursuant to the rule, the networks for the Wireless 
Connections, and future wireless connections that use a Data Center 
Pole, would ``operat[e] in the same manner as competitors do today 
without a latency subsidy or other advantage provided by the 
Exchanges. . . .'' 39/40 Accordingly, the proposed new 
rule would promote just and equitable principles of trade and, in 
general, protect investors and the public interest by ensuring that 
the subscribers to services using the IDS wireless network do not 
benefit from any physical proximity ``on the segment [of the 
network] closest to the Exchanges' data center that no competitor 
can replicate.'' 40/41 By ending both of the compared 
connections at the network row in the space used for co-location, 
the proposed rule would take distances within the Mahwah data center 
into account.
    The proposed new rule would not apply differently to distinct 
types or sizes of market participants. The Exchange would be 
required to ensure that the length of the connection between (a) the 
base of the Data Center Pole and (b) the network row in the space 
used for co-location in the Data Center, would be no less than the 
length of the connection between (x) the base of the closest 
Commercial Pole and (y) the network row in the space used for co-
location in the Data Center.
    The Exchange believes that the proposed definition of 
``Commercial Pole'' is reasonable and would promote just and 
equitable principles of trade because it would encompass any pole on 
which a third party locates its wireless equipment in order to offer 
wireless connectivity to customers. The Exchange believes that such 
third parties are the direct competitors for the Wireless 
Connections, as they also offer wireless connections to customers. 
If a third party used a pole for a proprietary wireless network and 
that pole does not have one or more third parties' wireless 
equipment used to offer wireless connectivity to other third 
parties, that pole would not fall within the scope of the definition 
of Commercial Pole.
    The Exchange believes that the proposed definition of ``Data 
Center'' is reasonable and would promote just and equitable 
principles of trade because it would capture any data center to 
which the Exchange locates its matching engine.
    The Exchange believes that the proposed definition of ``Data 
Center Pole'' is reasonable and would promote just and equitable 
principles of trade because it would encompass not just the current 
pole, but also any additional or successor pole on the grounds of 
the Data Center, so long as such pole could not be used by third 
parties other than third parties with which the Exchange or an ICE 
Affiliate had an agreement to provide services in the name of the 
Exchange or an ICE Affiliate, such as Anova.
    The Exchange believes that the definition of ``ICE Affiliate'' 
is reasonable and would promote just and equitable principles of 
trade because the same definition is used in Rule 3.1 (Additional 
Requirements for Listed Securities Issued by Intercontinental 
Exchange, Inc. or its Affiliates), and so using it would add 
transparency, clarity and internal consistency to Exchange rules.

39/40 McKay Letter, supra note 30/31, at 7.
40/41 Id., at note 33.

    6. The Exchange proposes to amend the Statutory Basis section of 
the Filing after the fifth full paragraph on page 19 of the Filing 
(first full paragraph on page 48 of the Exhibit 1):
    The Exchange proposes to include information in the Filing 
regarding why it believes the proposed new rule is not unfairly 
discriminatory. The Exchange proposes to amend the Statutory Basis 
section of the Filing to add new paragraphs and accompanying footnotes 
(subsequent footnotes would be renumbered in a conforming change) after 
the fifth full paragraph on page 19 of the Filing (first full paragraph 
on page 48 of the Exhibit 1), immediately prior to the last paragraph 
of the section titled ``The Proposed Change is Not Unfairly 
Discriminatory,'' as follows (all text is new):

    The Exchange believes that the proposed new Rule 3.13 would not 
be unfairly discriminatory, as pursuant to the rule, the networks 
for the Wireless Connections, and future wireless connections that 
use the Data Center Pole, would ``operat[e] in the same manner as 
competitors do today without a latency subsidy or other advantage 
provided by the Exchanges. . . .'' 41/42 Accordingly, the 
proposed new rule would ensure that the IDS wireless network does 
not benefit from physical proximity ``on the segment [of the 
network] closest to the Exchanges' data center that no competitor 
can replicate.'' 42/43 By ending both of the compared 
connections at the network row in the space used for co-location 
inside the Data Center, the proposed rule would take distances 
within the Mahwah data center into account.
    The proposed new rule would not apply differently to distinct 
types or sizes of market participants. The Exchange would be 
required to ensure that the length of the connection between (a) the 
base of the Data Center Pole and (b) the network row in the space 
used for co-location in the Data Center, would be no less than the 
length of the connection between (x) the base of the closest 
Commercial Pole and (y) the network row in

[[Page 48000]]

the space used for co-location in the Data Center.
    The Exchange believes that the proposed definition of 
``Commercial Pole'' would not be unfairly discriminatory because it 
would encompass any pole on which a third party locates its wireless 
equipment in order to offer wireless connectivity to customers. The 
Exchange believes that such third parties are the direct competitors 
for the Wireless Connections, as they also offer wireless 
connections to customers. If a third party used a pole for a 
proprietary wireless network and that pole does not have one or more 
third parties' wireless equipment used to offer wireless 
connectivity to other third parties, that pole would not fall within 
the scope of the definition of Commercial Pole.
    The Exchange believes that the proposed definition of ``Data 
Center'' would not be unfairly discriminatory because it would 
capture any data center to which the Exchange locates its matching 
engine.
    The Exchange believes that the proposed definition of ``Data 
Center Pole'' would not be unfairly discriminatory because it would 
encompass not just the current pole, but also any additional or 
successor pole on the grounds of the Data Center, so long as such 
pole could not be used by third parties other than third parties 
with which the Exchange or an ICE Affiliate had an agreement to 
provide services in the name of the Exchange or an ICE Affiliate, 
such as Anova.
    The Exchange believes that the definition of ``ICE Affiliate'' 
would not be unfairly discriminatory because the same definition is 
used in Rule 3.1, and so using it would add transparency, clarity 
and internal consistency to Exchange rules.

41/42 McKay Letter, supra note 30/31, at 7.
42/43 Id., at note 33.

    7. The Exchange proposes to amend the section of the Filing titled 
``Self-Regulatory Organization's Statement on Burden on Competition'' 
in the following two ways:
    The Exchange proposes to include information in the Filing 
regarding why it believes the proposed new rule would impose any burden 
on competition that is not necessary or appropriate in furtherance of 
the purposes of Section 6(b)(8) of the Securities Exchange Act of 1934 
(the ``Act'').\11\ Accordingly, the Exchange proposes to amend the 
section of the Filing titled ``Self-Regulatory Organization's Statement 
on Burden on Competition'' in the following two ways.
---------------------------------------------------------------------------

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

    First, to set the new text apart from the previous discussion 
regarding the burden on competition, the Exchange proposes to add the 
heading ``Wireless Market Data Connectivity'' immediately before the 
first full paragraph under the heading on page 20 of the Filing (page 
48 of the Exhibit 1). The new heading would apply to the current text 
of the Filing.
    Second, after the third full paragraph on page 21 of the Filing 
(first full paragraph on page 51 of the Exhibit 1), the Exchange 
proposes to add the heading ``Proposed New Rule'' and new paragraphs 
and accompanying footnotes (subsequent footnotes would be renumbered in 
a conforming change), as follows (all text is new):

Proposed New Rule

    The Exchange does not believe that the proposed new rule would 
impose any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of Section 6(b)(8) of the 
Act.46/47
    With the exception of Anova, third parties do not have access to 
the data center pole. Under the proposed rule, the Exchange would 
always be obligated to ensure that the length of the connection 
between (a) the base of the Data Center Pole and (b) the network row 
in the space used for co-location in the Data Center, would be no 
less than the length of the connection between (x) the base of the 
closest Commercial Pole and (y) the network row in the space used 
for co-location in the Data Center.
    IDS, not the Exchange, provides the Wireless Connections to 
market participants, and so it would be IDS that would have to slow 
its connection down as required by the rule. Accordingly, the 
Exchange believes that the only burden on competition of the 
proposed change would be on IDS.
    Nonetheless, the Exchange believes that the proposed rule change 
would not impose any burden on competition that is not necessary or 
appropriate because the proposed change would ensure that the IDS 
wireless network did not benefit from physical proximity ``on the 
segment [of the network] closest to the Exchanges' data center that 
no competitor can replicate.'' 47/48 The networks for the 
Wireless Connections, and future wireless connections that use the 
Data Center Pole, would ``operat[e] in the same manner as 
competitors do today without a latency subsidy or other advantage 
provided by the Exchanges. . . .'' 48/49
    The proposed rule would not otherwise put a burden on 
competition. As noted above, access to the data center pole is not 
required for third parties to establish wireless networks that can 
compete with the Wireless Connections to the Carteret and Secaucus 
Third Party Data Centers, as evidenced by the existing wireless 
connections offered by non-ICE entities.49/50 Indeed, the 
Exchange believes that its competitors' wireless connections provide 
connectivity at the same or similar speed as the Wireless 
Connections, and at the same or similar cost. The McKay Letter 
acknowledges that McKay Brothers has the fastest wireless 
network.50/51
    The Exchange notes that proximity to a data center is not the 
only determinant of a wireless network's latency. Rather, the 
latency of a wireless network depends on several factors. Variables 
include the wireless equipment utilized; the route of, and number of 
towers or buildings in, the network; and the fiber equipment used at 
either end of the connection. Moreover, latency is not the only 
consideration that a customer may have in selecting a wireless 
network to connect to for market data. Other considerations may 
include the amount of network uptime; the equipment that the network 
uses; the cost of the connection; and the applicable contractual 
provisions.
    The proposed change does not affect competition among national 
securities exchanges or among members of the Exchange, but rather 
between IDS and its commercial competitors.

46/47 15 U.S.C. 78f(b)(8).
47/48 McKay Letter, supra note 30/31, at note 33.
48/49 Id., at 7.
49/50 A market participant in any of the Third Party Data 
Centers or the Mahwah data center also may create a proprietary 
wireless market data connection, connect through another market 
participant, or utilize fiber connections offered by the Exchange, 
ICE Affiliates, and other service providers and third party 
telecommunications providers.
50/51 Id., at 4.

    8. The Exchange proposes to add a list under ``Exhibit 5--Text of 
the Proposed Rule Change'' on page 22 of the Filing:
    The Exchange proposes to add a new Exhibit 5B. Accordingly, the 
Exchange proposes to add a list under ``Exhibit 5--Text of Proposed 
Rule Change'' on page 22 of the Filing, as follows (new text 
italicized):

Exhibit 5--Text of the Proposed Rule Change

A. Text of the Proposed Schedule of Wireless Connectivity Fees and 
Charges
B. Text of the Proposed Rule

    9. The Exchange proposes to add new text to the first full 
paragraph of Section I on page 23 of the Exhibit 1:
    The Exchange proposes to add new text to the first full paragraph 
of Section I on page 23 of the Exhibit 1, as follows (new text 
italicized):

    The Exchange proposes to establish a schedule of Wireless 
Connectivity Fees and Charges (the ``Wireless Fee Schedule'') with 
wireless connections between the Mahwah, New Jersey data center and 
other data centers and add a new rule to place restrictions on the 
use of a pole on the grounds of the Mahwah, New Jersey data center 
that is used for such wireless connections. 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.

    10. The Exchange proposes to amend ``Exhibit 5'' to ``Exhibit 5A'' 
on page 54 of the Exhibit 5:
    To reflect the addition of a new Exhibit 5B, the Exchange proposes 
to add ``A'' to ``EXHIBIT 5'' on page 54 of the Exhibit 5, to make it 
to ``EXHIBIT 5A''.
* * * * *
    All other representations in the Filing remain as stated therein 
and no other changes are being made.

[[Page 48001]]

III. Date of Effectiveness of the Proposed Rule Change as Modified by 
Partial Amendment No. 1 and Timing for Commission Action

    Within 180 days after the date of publication of the initial Notice 
of Filing in the Federal Register or within such longer period up to an 
additional 60 days (i) as the Commission may designate if it finds such 
longer period to be appropriate and publishes its reasons for so 
finding or (ii) as to which the self-regulatory organization consents, 
the Commission will issue an order approving or disapproving such 
proposed rule change, as amended.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended by Partial Amendment No. 1, is consistent with the 
Act. Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSENAT-2020-03 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSENAT-2020-03. 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-NYSENAT-2020-03, and should be submitted 
on or before August 28, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-17247 Filed 8-6-20; 8:45 am]
BILLING CODE 8011-01-P
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