Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Establish Procedures for the Allocation of Cabinets to its Co-Located Users, 59361-59365 [2020-20703]

Download as PDF Federal Register / Vol. 85, No. 183 / Monday, September 21, 2020 / Notices jbell on DSKJLSW7X2PROD with NOTICES the Shares will be available via the CTA high-speed line. Information regarding the VIIV will be widely disseminated in one second intervals throughout the Core Trading Session by the Reporting Authority and/or one or more major market data vendors. The website for the Funds will include a prospectus for the Funds that may be downloaded, and additional data relating to NAV and other applicable quantitative information, updated on a daily basis. Moreover, prior to the commencement of trading, the Exchange will inform its members in an Information Bulletin of the special characteristics and risks associated with trading the Shares. In addition, as noted above, investors will have ready access to the VIIV, and quotation and last sale information for the Shares. The Shares will conform to the initial and continued listing criteria under Rule 8.900–E. Each Fund’s investments, including derivatives, will be consistent with its investment objective and will not be used to enhance leverage (although certain derivatives and other investments may result in leverage). That is, the Fund’s investments will not be used to seek performance that is the multiple or inverse multiple (e.g., 2X or ¥3X) of the Fund’s primary broad-based securities benchmark index (as defined in Form N–1A). The Exchange also believes that the proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of actively-managed exchange-traded products that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, the Exchange has in place surveillance procedures relating to trading in the Shares and may obtain information via ISG from other exchanges that are members of ISG or with which the Exchange has entered into a comprehensive surveillance sharing agreement. In addition, as noted above, investors will have ready access to information regarding the VIIV and quotation and last sale information for the Shares. For the above reasons, the Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The VerDate Sep<11>2014 19:59 Sep 18, 2020 Jkt 250001 Exchange believes the proposed rule change would permit the listing and trading of additional actively-managed exchange-traded products, thereby promoting competition among exchange-traded products to the benefit of investors and the marketplace. 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 Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 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: (A) By order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be 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– NYSEArca-2020–80 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–NYSEArca-2020–80. 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 PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 59361 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–NYSEArca-2020–80 and should be submitted on or before October 13, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.27 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–20696 Filed 9–18–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89879; File No. SR–NYSE– 2020–73] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change To Establish Procedures for the Allocation of Cabinets to its CoLocated Users September 15, 2020. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’),2 and Rule 19b–4 thereunder,3 notice is hereby given that on September 2, 2020, New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘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 Exchange. The Commission is publishing this notice to solicit comments on the 27 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\21SEN1.SGM 21SEN1 59362 Federal Register / Vol. 85, No. 183 / Monday, September 21, 2020 / Notices proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to establish procedures for the allocation of cabinets to its co-located Users. 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 Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to establish procedures for the allocation of cabinets to its co-located 4 Users.5 jbell on DSKJLSW7X2PROD with NOTICES Background Presently, Users have two options for cabinets with power: Dedicated cabinets and partial cabinets. Both options use power and house Users’ servers and 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 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 New York Stock Exchange Price List (‘‘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 Arca, Inc., NYSE Chicago, Inc., and NYSE National, Inc. (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– 2020–66, SR–NYSEArca–2020–82, SR–NYSECHX– 2020–26, and SR–NYSENAT–2020–28. VerDate Sep<11>2014 19:59 Sep 18, 2020 Jkt 250001 other equipment. When a User purchases a new cabinet, whether dedicated or partial, the Exchange provides the cabinet with power, and the User pays an initial fee and a monthly fee based on the number of kilowatts (‘‘kW’’) contracted for the cabinet. The Exchange allocates cabinets on a first-come/first-serve basis. The Exchange also offers a third cabinet option, cabinets for which power is not utilized (‘‘PNU cabinets’’). PNU cabinets are reserved cabinet space that can be converted to a dedicated cabinet when the User requests it.6 Proposed Cabinet Allocation Procedure The Exchange believes that it would be prudent for it to put in place measures for the allocation of cabinets (the ‘‘Cabinet Allocation’’) that could be used if, in the future, a situation arises where the Exchange cannot satisfy all User demand for cabinets.7 The proposed Cabinet Allocation is as follows: 1. Cabinet Purchasing Limits: a. The Exchange would place the following limits on Users’ ability to purchase new cabinets (‘‘Purchasing Limits’’) if the Exchange’s unallocated cabinet inventory is at or below 40 cabinets (the ‘‘Cabinet Threshold’’): i. A User with PNU cabinets would be required to either convert its PNU cabinets into dedicated cabinets or relinquish its PNU cabinets before being permitted to purchase new cabinets.8 ii. The Exchange would limit the purchase of new cabinets (dedicated and partial) to a maximum of four dedicated cabinets, each with a maximum of 8 kW, per User.9 iii. A User would have to wait 30 days from the date of its signed order form before purchasing new cabinets again. 6 See Securities Exchange Act Release No. 70913 (November 21, 2013), 78 FR 70987 (November 27, 2013) (SR–NYSE–2013–74) (‘‘PNU Cabinet Filing’’). 7 The Exchange believes that the proposed procedures are consistent with the Nasdaq procedures for allocating cabinets if Nasdaq’s inventory shrinks to zero. See Securities Exchange Act Release No. 62397 (June 28, 2010), 75 FR 38860 (July 6, 2010) (SR–NASDAQ–2010–019) (‘‘Nasdaq Cabinet Waitlist Procedures’’). 8 See PNU Cabinet Filing, supra note 6. 9 A User may opt to purchase a mixture of dedicated and partial cabinets. In such a case, it would still be subject to the maximum, whether expressed in dedicated cabinets, partial cabinets, or a mixture thereof. The maximum is the equivalent of eight partial cabinets, at 2 kW each. The Nasdaq procedures similarly limit the purchase of cabinets if available cabinet inventory falls to 40 cabinets or fewer. Nasdaq Cabinet Waitlist Procedures, supra note 7, at 38861 (‘‘Should available cabinet inventory shrink to 40 cabinets or less, the Exchange will limit new cabinet orders to a maximum of 4 cabinets each, and all new cabinets will be limited to a maximum power level of 5 kW.’’). PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 b. If the Cabinet Threshold is reached, the Exchange would cease offering new PNU cabinets to all Users. 2. Waitlist: a. The Exchange would create a waitlist if the available cabinet inventory is zero, or if a User requests, in writing, a number of cabinets that, if provided, would cause the available cabinet inventory to be below zero. b. The Exchange would place Users seeking cabinets on a waitlist, as follows: 10 i. A User with PNU cabinets would not be placed on the waitlist if the User could meet its new cabinet request by converting its PNU cabinets to dedicated cabinets. A User would only be placed on the waitlist for the portion of its new cabinet request that exceeds its existing PNU cabinets, subject to the Purchasing Limitations. ii. A User would be placed on the waitlist based on the date its signed order is received. A User may only have one order for new cabinets on the waitlist at a time, and the order would be subject to the Purchasing Limits. iii. As cabinets become available,11 the Exchange would offer them to the User at the top of the waitlist. If the User’s order is completed, it would be removed from the waitlist. If the User’s order is not completed, it would remain at the top of the waitlist. iv. A User would be removed from the waitlist (a) at the User’s request or (b) if the User turns down an offer of a cabinet of the same size it requested in its order. If the Exchange offers the User a cabinet of a different size than the User requested in its order, the User may turn down the offer and remain at the top of the waitlist until its order is completed. v. A User that is removed from the waitlist but subsequently submits a new written order for cabinets would be added to the bottom of the waitlist. 3. Termination of Purchasing Limits and Waitlist: When unallocated cabinet inventory is more than 10 cabinets, the Exchange would cease use of the waitlist. When unallocated cabinet inventory is more than 40 cabinets, the Exchange would discontinue the Purchasing Limits. Proposed New General Notes The Exchange proposes to add a new General Note 7 to the Exchange’s Price 10 The waitlist provisions are based on the Nasdaq Cabinet Waitlist Procedures and the procedures in General Note 3 of the Price List. See id. at 38861; Securities Exchange Act Release No. 79730 (January 4, 2017), 82 FR 3045 (January 10, 2017) (SR–NYSE– 2016–92). 11 Cabinets may become available if, for example, a User vacates a dedicated or partial cabinet. E:\FR\FM\21SEN1.SGM 21SEN1 jbell on DSKJLSW7X2PROD with NOTICES Federal Register / Vol. 85, No. 183 / Monday, September 21, 2020 / Notices List setting forth the proposed Purchasing Limits, as follows: 7. Cabinet Purchasing Limits. If unallocated cabinet inventory is at or below 40 cabinets (‘‘Cabinet Threshold’’), the following limits on the purchase of new cabinets (‘‘Purchasing Limits’’) will apply: • A User with PNU cabinets will be required to either convert its PNU cabinets into dedicated cabinets or relinquish its PNU cabinets before being permitted to purchase new cabinets. • The Exchange will limit a User’s purchase of new cabinets (dedicated and partial) to a maximum of four dedicated cabinets, each with a maximum of 8 kW. • A User will have to wait 30 days from the date of its signed order form before purchasing new cabinets again. • If the Cabinet Threshold is reached, the Exchange will cease offering new PNU cabinets to all Users. • When unallocated cabinet inventory is more than 40 cabinets, the Exchange will discontinue the Purchasing Limits. The Exchange proposes to add a new General Note 8 to the Exchange’s Price List setting forth the proposed Waitlist, as follows: 8. Cabinet Waitlist. The Exchange will create a waitlist if the available cabinet inventory is zero, or if a User requests, in writing, a number of cabinets that, if provided, would cause the available cabinet inventory to be zero. The Exchange will place Users seeking cabinets on a waitlist, as follows: • A User with PNU cabinets will not be placed on the waitlist if the User could meet its new cabinet request by converting its PNU cabinets to dedicated cabinets. A User will only be placed on the waitlist for the portion of its new cabinet request that exceeds its existing PNU cabinets, subject to the Purchasing Limitations. • A User will be placed on the waitlist based on the date its signed order is received. A User may only have one order for new cabinets on the waitlist at a time, and the order is subject to the Purchasing Limits. • As cabinets become available, the Exchange will offer them to the User at the top of the waitlist. If the User’s order is completed, it will be removed from the waitlist. If the User’s order is not completed, it will remain at the top of the waitlist. • A User will be removed from the waitlist (a) at the User’s request or (b) if the User turns down an offer of a cabinet of the same size it requested in its order. If the Exchange offers the User a cabinet of a different size than the User requested in its order, the User VerDate Sep<11>2014 19:59 Sep 18, 2020 Jkt 250001 59363 may turn down the offer and remain at the top of the waitlist until its order is completed. • A User that is removed from the waitlist but subsequently submits a new written order for cabinets will be added back to the bottom of the waitlist. • When unallocated cabinet inventory is more than 10 cabinets, the Exchange will cease use of the waitlist. The proposed change would apply the same way to all types and sizes of market participants. As is currently the case, the purchase of any colocation service is completely voluntary and the Price List is applied 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. applied uniformly by the Exchange to all Users that requested new cabinets. The Exchange believes that the Cabinet Allocation’s two-tier structure of establishing, first, a purchasing limitation on order size, and second, a waitlist, would be a reasonable method to respond to increasing demand for cabinets in the future, and would be consistent with the Nasdaq procedures for allocating cabinets if Nasdaq’s cabinet inventory shrinks to zero.14 The Exchange believes that the proposed Cabinet Threshold is reasonable and equitable. Based on experience, the Exchange believes that the Cabinet Threshold is sufficiently low that it would not be triggered easily. The Exchange believes that the proposed Purchasing Limits are reasonable and equitable. Based on its experience with co-location and purchasing trends over the last few 2. Statutory Basis years, the Exchange believes that in most cases the number of cabinets that The Exchange believes that the proposed rule change is consistent with a User would be allowed to buy under Section 6(b) of the Act,12 in general, and the proposed Purchasing Limits would be sufficient to allow the User to use its furthers the objectives of Sections 6(b)(4) and (5) of the Act,13 in particular, system to access the markets while leaving a margin for potential growth. because it provides for the equitable Further, the Exchange believes that, allocation of reasonable dues, fees, and by establishing a waitlist on the basis of other charges among its members, the date it receives signed orders, issuers and other persons using its limiting the size and number of orders facilities and does not unfairly a User may have on the waitlist at any discriminate between customers, one time, and removing a User from the issuers, brokers or dealers. In addition, waitlist if it turns down a cabinet that it is designed to foster cooperation and is the size that it requested, the Cabinet coordination with persons engaged in regulating, clearing, settling, processing Allocation is reasonably designed to prevent Users from utilizing the waitlist information with respect to, and as a method to obtain a greater portion facilitating transactions in securities, to remove impediments to, and perfect the of the cabinets available, thereby facilitating a more equitable distribution mechanisms of, a free and open market of cabinets. Similarly, the Exchange and a national market system and, in believes that by requiring a 30-day delay general, to protect investors and the before a User subject to the Purchasing public interest and because it is not Limits could purchase cabinets again, designed to permit unfair the Cabinet Allocation is reasonably discrimination between customers, designed to prevent a User from issuers, brokers, or dealers. obtaining a greater portion of the The Proposed Rule Change Is cabinets available. Reasonable and Equitable The Exchange believes that the The Exchange believes that the proposed change is reasonable and proposed rule change is reasonable and equitable because the Exchange would equitable for the following reasons. only place limits on Users’ ability to The Exchange believes that User purchase new cabinets if cabinet demand for cabinets will continue. In inventory fell to specific thresholds. this context, the Exchange believes that Similarly, the Exchange believes that it would be reasonable for it to put in the proposed change is reasonable and place the proposed Cabinet Allocation equitable because the waitlist would to establish the allocation of cabinets on only be created if unallocated cabinet an equitable basis. The Cabinet inventory fell to zero, and because there Allocation would establish a rational, would be an established threshold for objective procedure that would be cessation of the waitlist. 12 15 13 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(4) and (5). Frm 00085 Fmt 4703 Sfmt 4703 14 See Nasdaq Cabinet Waitlist Procedures, supra note 7. E:\FR\FM\21SEN1.SGM 21SEN1 59364 Federal Register / Vol. 85, No. 183 / Monday, September 21, 2020 / Notices The Proposed Rule Change Would Protect Investors and the Public Interest 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 for the following reasons. The Exchange believes that User demand for cabinets will continue. In this context, the proposed rule change would allow the Exchange to protect investors and the public interest, first, by setting limits on Users’ ability to purchase cabinets, and second, by using a waitlist to allocate any unallocated cabinets on a first come-first served rolling basis. Based on experience, the Exchange believes that the Cabinet Threshold is sufficiently low that it would not be triggered easily, which would protect investors and the public interest. Similarly, the Exchange believes that in most cases the number of cabinets that a User would be allowed to buy under the proposed Purchasing Limits would be sufficient to allow the User to use its system to access the markets while leaving a margin for potential growth, which would protect investors and the public interest. In addition, the proposed Cabinet Allocation would protect investors and the public interest in that it is designed to prevent Users from utilizing the Purchasing Limit and waitlist procedures to obtain a greater portion of the cabinets available, thereby facilitating a more equitable distribution. The proposed rule change would protect investors and the public interest because the proposed new General Notes would articulate rational, objective procedures and would serve to reduce any potential for confusion on how cabinets would be allocated if a shortage in unallocated cabinets were to arise in the future, and would thereby make the Price List more transparent and reduce any potential ambiguity. jbell on DSKJLSW7X2PROD with NOTICES The Proposed Change Is Not Unfairly Discriminatory The Exchange believes that the proposed change is not unfairly discriminatory for the following reasons. The proposed change would apply equally to all types and sizes of market participants. If the Cabinet Allocation were in place, all Users would be able to identify the permitted cabinet options and the procedures that would apply to them in the event that unallocated cabinet supply runs low in the future. The Cabinet Allocation would assist the VerDate Sep<11>2014 19:59 Sep 18, 2020 Jkt 250001 Exchange in accommodating demand for co-location services, and cabinets in particular, on an equitable basis. For the reasons above, the proposed changes do not unfairly discriminate between or among market participants that are otherwise capable of satisfying any applicable co-location fees, requirements, terms and conditions established from time to time by the Exchange. For these reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,15 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 change would not apply differently to distinct types or sizes of market participants. Rather, it would apply to all Users equally. The Exchange believes that, if triggered, the imposition of the Cabinet Allocation would not impose a burden on a User’s ability to compete that is not necessary or appropriate. The Exchange believes that User demand for cabinets will continue in the future. In this context, the Exchange believes that it would be reasonable for it to put in place the proposed Cabinet Allocation to establish a method for allocating cabinets on an equitable basis. The Exchange would only follow the Cabinet Allocation and place limits on Users’ ability to purchase new cabinets if unallocated cabinet inventory fell to the proposed Cabinet Threshold. Similarly, the Exchange would only create the waitlist if unallocated cabinet inventory fell to zero. Based on its experience with co-location and purchasing trends over the last few years, the Exchange believes that in most cases the number of cabinets that a User would be allowed to buy under the proposed Purchasing Limits would be sufficient to allow the User to use its system to access the markets while leaving a margin for potential growth. The Exchange believes that the proposed new General Notes would articulate rational, objective procedures and would serve to reduce any potential for confusion on how cabinets would be 15 15 PO 00000 Fmt 4703 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 operates in a highly competitive market in which exchanges and other vendors (i.e., Hosting Users) offer co-location services as a means to facilitate the trading and other market activities of those market participants who believe that co-location enhances the efficiency of their operations. Accordingly, fees charged for colocation services are constrained by the active competition for the order flow of, and other business from, such market participants. The Commission has repeatedly expressed its preference for competition over regulatory intervention in determining prices, products, and services in the securities markets. Specifically, in Regulation NMS, the Commission highlighted the importance of market forces in determining prices and SRO revenues and, also, recognized that current regulation of the market system ‘‘has been remarkably successful in promoting market competition in its broader forms that are most important to investors and listed companies.’’ 16 The proposed rule change would protect investors and the public interest because the proposed new General Notes would articulate rational, objective procedures and would serve to reduce any potential for confusion on how cabinets would be treated in the case of a shortage in unallocated cabinets, and would thereby make the Price List more transparent and reduce any potential ambiguity. 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. 16 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). U.S.C. 78f(b)(8). Frm 00086 allocated if a shortage in unallocated cabinets were to arise in the future, and would thereby make the Price List more transparent and reduce any potential ambiguity. Use of any co-location service is completely voluntary, and each market participant is able to determine whether to use co-location services based on the requirements of its business operations. Sfmt 4703 E:\FR\FM\21SEN1.SGM 21SEN1 Federal Register / Vol. 85, No. 183 / Monday, September 21, 2020 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or up to 90 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: (A) By order approve or disapprove the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments 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–2020–73 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–NYSE–2020–73. 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 19:59 Sep 18, 2020 Jkt 250001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–20703 Filed 9–18–20; 8:45 am] 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: VerDate Sep<11>2014 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–2020–73, and should be submitted on or before October 13, 2020. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [SEC File No. 270–148, OMB Control No. 3235–0133] Proposed Collection; 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 17a–19 and Form X–17A–19 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’’) is soliciting comments on the existing collection of information provided for in Rule 17a–19 (17 CFR 240.17a–19) and Form X–17A–19 under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). The Commission plans to submit this existing collection of information to the Office of Management and Budget (‘‘OMB’’) for extension and approval. Rule 17a–19 requires every national securities exchange and registered national securities association to file a Form X–17A–19 with the Commission and the Securities Investor Protection Corporation (‘‘SIPC’’) within 5 business days of the initiation, suspension, or termination of any member and, when terminating the membership interest of any member, to notify that member of its obligation to file financial reports as required by Exchange Act Rule 17a–5(b) (17 CFR 240.17a–5(b)). There are currently a total of 10 national securities exchanges and registered national 17 17 PO 00000 CFR 200.30–3(a)(12). Frm 00087 Fmt 4703 Sfmt 4703 59365 securities associations that are potential respondents under the rule. Commission staff anticipates that the national securities exchanges and registered national securities associations collectively will make 408 total filings annually pursuant to Rule 17a–19 and that each filing will take approximately 15 minutes. The total reporting burden is estimated to be approximately 102 total annual hours. Written comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information shall have practical utility; (b) the accuracy of the Commission’s estimates of the burden of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication. 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. Please direct your written comments to: David Bottom, Director/Chief Information Officer, Securities and Exchange Commission, c/o Cynthia Roscoe, 100 F Street NE, Washington, DC 20549, or send an email to: PRA_ Mailbox@sec.gov. Dated: September 15, 2020. J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–20710 Filed 9–18–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–89880; File No. SR– NYSEAMER–2020–66] Self-Regulatory Organizations; NYSE American LLC; Notice of Filing of Proposed Rule Change To Establish Procedures for the Allocation of Cabinets to Its Co-Located Users September 15, 2020. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 1 15 E:\FR\FM\21SEN1.SGM U.S.C. 78s(b)(1). 21SEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 85, Number 183 (Monday, September 21, 2020)]
[Notices]
[Pages 59361-59365]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20703]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-89879; File No. SR-NYSE-2020-73]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change To Establish Procedures for 
the Allocation of Cabinets to its Co-Located Users

September 15, 2020.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on September 2, 2020, New York Stock Exchange LLC (``NYSE'' or 
``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 Exchange. The 
Commission is publishing this notice to solicit comments on the

[[Page 59362]]

proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to establish procedures for the allocation of 
cabinets to its co-located Users. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to establish procedures for the allocation of 
cabinets to its co-located \4\ Users.\5\
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    \4\ The Exchange initially filed rule changes relating to its 
co-location services with the Securities and Exchange Commission 
(``Commission'') in 2010. See Securities Exchange Act Release No. 
62960 (September 21, 2010), 75 FR 59310 (September 27, 2010) (SR-
NYSE-2010-56).
    \5\ For purposes of the Exchange's co-location services, a 
``User'' means any market participant that requests to receive co-
location services directly from the Exchange. See Securities 
Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190 
(October 5, 2015) (SR-NYSE-2015-40). As specified in the New York 
Stock Exchange Price List (``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 
Arca, Inc., NYSE Chicago, Inc., and NYSE National, Inc. (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-2020-66, SR-NYSEArca-2020-82, SR-NYSECHX-2020-26, and 
SR-NYSENAT-2020-28.
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Background
    Presently, Users have two options for cabinets with power: 
Dedicated cabinets and partial cabinets. Both options use power and 
house Users' servers and other equipment. When a User purchases a new 
cabinet, whether dedicated or partial, the Exchange provides the 
cabinet with power, and the User pays an initial fee and a monthly fee 
based on the number of kilowatts (``kW'') contracted for the cabinet. 
The Exchange allocates cabinets on a first-come/first-serve basis.
    The Exchange also offers a third cabinet option, cabinets for which 
power is not utilized (``PNU cabinets''). PNU cabinets are reserved 
cabinet space that can be converted to a dedicated cabinet when the 
User requests it.\6\
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    \6\ See Securities Exchange Act Release No. 70913 (November 21, 
2013), 78 FR 70987 (November 27, 2013) (SR-NYSE-2013-74) (``PNU 
Cabinet Filing'').
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Proposed Cabinet Allocation Procedure
    The Exchange believes that it would be prudent for it to put in 
place measures for the allocation of cabinets (the ``Cabinet 
Allocation'') that could be used if, in the future, a situation arises 
where the Exchange cannot satisfy all User demand for cabinets.\7\ The 
proposed Cabinet Allocation is as follows:
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    \7\ The Exchange believes that the proposed procedures are 
consistent with the Nasdaq procedures for allocating cabinets if 
Nasdaq's inventory shrinks to zero. See Securities Exchange Act 
Release No. 62397 (June 28, 2010), 75 FR 38860 (July 6, 2010) (SR-
NASDAQ-2010-019) (``Nasdaq Cabinet Waitlist Procedures'').
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    1. Cabinet Purchasing Limits:
    a. The Exchange would place the following limits on Users' ability 
to purchase new cabinets (``Purchasing Limits'') if the Exchange's 
unallocated cabinet inventory is at or below 40 cabinets (the ``Cabinet 
Threshold''):
    i. A User with PNU cabinets would be required to either convert its 
PNU cabinets into dedicated cabinets or relinquish its PNU cabinets 
before being permitted to purchase new cabinets.\8\
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    \8\ See PNU Cabinet Filing, supra note 6.
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    ii. The Exchange would limit the purchase of new cabinets 
(dedicated and partial) to a maximum of four dedicated cabinets, each 
with a maximum of 8 kW, per User.\9\
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    \9\ A User may opt to purchase a mixture of dedicated and 
partial cabinets. In such a case, it would still be subject to the 
maximum, whether expressed in dedicated cabinets, partial cabinets, 
or a mixture thereof. The maximum is the equivalent of eight partial 
cabinets, at 2 kW each. The Nasdaq procedures similarly limit the 
purchase of cabinets if available cabinet inventory falls to 40 
cabinets or fewer. Nasdaq Cabinet Waitlist Procedures, supra note 7, 
at 38861 (``Should available cabinet inventory shrink to 40 cabinets 
or less, the Exchange will limit new cabinet orders to a maximum of 
4 cabinets each, and all new cabinets will be limited to a maximum 
power level of 5 kW.'').
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    iii. A User would have to wait 30 days from the date of its signed 
order form before purchasing new cabinets again.
    b. If the Cabinet Threshold is reached, the Exchange would cease 
offering new PNU cabinets to all Users.
    2. Waitlist:
    a. The Exchange would create a waitlist if the available cabinet 
inventory is zero, or if a User requests, in writing, a number of 
cabinets that, if provided, would cause the available cabinet inventory 
to be below zero.
    b. The Exchange would place Users seeking cabinets on a waitlist, 
as follows: \10\
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    \10\ The waitlist provisions are based on the Nasdaq Cabinet 
Waitlist Procedures and the procedures in General Note 3 of the 
Price List. See id. at 38861; Securities Exchange Act Release No. 
79730 (January 4, 2017), 82 FR 3045 (January 10, 2017) (SR-NYSE-
2016-92).
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    i. A User with PNU cabinets would not be placed on the waitlist if 
the User could meet its new cabinet request by converting its PNU 
cabinets to dedicated cabinets. A User would only be placed on the 
waitlist for the portion of its new cabinet request that exceeds its 
existing PNU cabinets, subject to the Purchasing Limitations.
    ii. A User would be placed on the waitlist based on the date its 
signed order is received. A User may only have one order for new 
cabinets on the waitlist at a time, and the order would be subject to 
the Purchasing Limits.
    iii. As cabinets become available,\11\ the Exchange would offer 
them to the User at the top of the waitlist. If the User's order is 
completed, it would be removed from the waitlist. If the User's order 
is not completed, it would remain at the top of the waitlist.
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    \11\ Cabinets may become available if, for example, a User 
vacates a dedicated or partial cabinet.
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    iv. A User would be removed from the waitlist (a) at the User's 
request or (b) if the User turns down an offer of a cabinet of the same 
size it requested in its order. If the Exchange offers the User a 
cabinet of a different size than the User requested in its order, the 
User may turn down the offer and remain at the top of the waitlist 
until its order is completed.
    v. A User that is removed from the waitlist but subsequently 
submits a new written order for cabinets would be added to the bottom 
of the waitlist.
    3. Termination of Purchasing Limits and Waitlist: When unallocated 
cabinet inventory is more than 10 cabinets, the Exchange would cease 
use of the waitlist. When unallocated cabinet inventory is more than 40 
cabinets, the Exchange would discontinue the Purchasing Limits.
Proposed New General Notes
    The Exchange proposes to add a new General Note 7 to the Exchange's 
Price

[[Page 59363]]

List setting forth the proposed Purchasing Limits, as follows:
    7. Cabinet Purchasing Limits. If unallocated cabinet inventory is 
at or below 40 cabinets (``Cabinet Threshold''), the following limits 
on the purchase of new cabinets (``Purchasing Limits'') will apply:
     A User with PNU cabinets will be required to either 
convert its PNU cabinets into dedicated cabinets or relinquish its PNU 
cabinets before being permitted to purchase new cabinets.
     The Exchange will limit a User's purchase of new cabinets 
(dedicated and partial) to a maximum of four dedicated cabinets, each 
with a maximum of 8 kW.
     A User will have to wait 30 days from the date of its 
signed order form before purchasing new cabinets again.
     If the Cabinet Threshold is reached, the Exchange will 
cease offering new PNU cabinets to all Users.
     When unallocated cabinet inventory is more than 40 
cabinets, the Exchange will discontinue the Purchasing Limits.
    The Exchange proposes to add a new General Note 8 to the Exchange's 
Price List setting forth the proposed Waitlist, as follows:
    8. Cabinet Waitlist. The Exchange will create a waitlist if the 
available cabinet inventory is zero, or if a User requests, in writing, 
a number of cabinets that, if provided, would cause the available 
cabinet inventory to be zero. The Exchange will place Users seeking 
cabinets on a waitlist, as follows:
     A User with PNU cabinets will not be placed on the 
waitlist if the User could meet its new cabinet request by converting 
its PNU cabinets to dedicated cabinets. A User will only be placed on 
the waitlist for the portion of its new cabinet request that exceeds 
its existing PNU cabinets, subject to the Purchasing Limitations.
     A User will be placed on the waitlist based on the date 
its signed order is received. A User may only have one order for new 
cabinets on the waitlist at a time, and the order is subject to the 
Purchasing Limits.
     As cabinets become available, the Exchange will offer them 
to the User at the top of the waitlist. If the User's order is 
completed, it will be removed from the waitlist. If the User's order is 
not completed, it will remain at the top of the waitlist.
     A User will be removed from the waitlist (a) at the User's 
request or (b) if the User turns down an offer of a cabinet of the same 
size it requested in its order. If the Exchange offers the User a 
cabinet of a different size than the User requested in its order, the 
User may turn down the offer and remain at the top of the waitlist 
until its order is completed.
     A User that is removed from the waitlist but subsequently 
submits a new written order for cabinets will be added back to the 
bottom of the waitlist.
     When unallocated cabinet inventory is more than 10 
cabinets, the Exchange will cease use of the waitlist.
    The proposed change would apply the same way to all types and sizes 
of market participants. As is currently the case, the purchase of any 
colocation service is completely voluntary and the Price List is 
applied 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,\12\ in general, and furthers the 
objectives of Sections 6(b)(4) and (5) of the Act,\13\ 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.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(4) and (5).
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The Proposed Rule Change Is Reasonable and Equitable
    The Exchange believes that the proposed rule change is reasonable 
and equitable for the following reasons.
    The Exchange believes that User demand for cabinets will continue. 
In this context, the Exchange believes that it would be reasonable for 
it to put in place the proposed Cabinet Allocation to establish the 
allocation of cabinets on an equitable basis. The Cabinet Allocation 
would establish a rational, objective procedure that would be applied 
uniformly by the Exchange to all Users that requested new cabinets.
    The Exchange believes that the Cabinet Allocation's two-tier 
structure of establishing, first, a purchasing limitation on order 
size, and second, a waitlist, would be a reasonable method to respond 
to increasing demand for cabinets in the future, and would be 
consistent with the Nasdaq procedures for allocating cabinets if 
Nasdaq's cabinet inventory shrinks to zero.\14\
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    \14\ See Nasdaq Cabinet Waitlist Procedures, supra note 7.
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    The Exchange believes that the proposed Cabinet Threshold is 
reasonable and equitable. Based on experience, the Exchange believes 
that the Cabinet Threshold is sufficiently low that it would not be 
triggered easily.
    The Exchange believes that the proposed Purchasing Limits are 
reasonable and equitable. Based on its experience with co-location and 
purchasing trends over the last few years, the Exchange believes that 
in most cases the number of cabinets that a User would be allowed to 
buy under the proposed Purchasing Limits would be sufficient to allow 
the User to use its system to access the markets while leaving a margin 
for potential growth.
    Further, the Exchange believes that, by establishing a waitlist on 
the basis of the date it receives signed orders, limiting the size and 
number of orders a User may have on the waitlist at any one time, and 
removing a User from the waitlist if it turns down a cabinet that is 
the size that it requested, the Cabinet Allocation is reasonably 
designed to prevent Users from utilizing the waitlist as a method to 
obtain a greater portion of the cabinets available, thereby 
facilitating a more equitable distribution of cabinets. Similarly, the 
Exchange believes that by requiring a 30-day delay before a User 
subject to the Purchasing Limits could purchase cabinets again, the 
Cabinet Allocation is reasonably designed to prevent a User from 
obtaining a greater portion of the cabinets available.
    The Exchange believes that the proposed change is reasonable and 
equitable because the Exchange would only place limits on Users' 
ability to purchase new cabinets if cabinet inventory fell to specific 
thresholds. Similarly, the Exchange believes that the proposed change 
is reasonable and equitable because the waitlist would only be created 
if unallocated cabinet inventory fell to zero, and because there would 
be an established threshold for cessation of the waitlist.

[[Page 59364]]

The Proposed Rule Change Would Protect Investors and the Public 
Interest
    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 for the 
following reasons.
    The Exchange believes that User demand for cabinets will continue. 
In this context, the proposed rule change would allow the Exchange to 
protect investors and the public interest, first, by setting limits on 
Users' ability to purchase cabinets, and second, by using a waitlist to 
allocate any unallocated cabinets on a first come-first served rolling 
basis.
    Based on experience, the Exchange believes that the Cabinet 
Threshold is sufficiently low that it would not be triggered easily, 
which would protect investors and the public interest. Similarly, the 
Exchange believes that in most cases the number of cabinets that a User 
would be allowed to buy under the proposed Purchasing Limits would be 
sufficient to allow the User to use its system to access the markets 
while leaving a margin for potential growth, which would protect 
investors and the public interest.
    In addition, the proposed Cabinet Allocation would protect 
investors and the public interest in that it is designed to prevent 
Users from utilizing the Purchasing Limit and waitlist procedures to 
obtain a greater portion of the cabinets available, thereby 
facilitating a more equitable distribution.
    The proposed rule change would protect investors and the public 
interest because the proposed new General Notes would articulate 
rational, objective procedures and would serve to reduce any potential 
for confusion on how cabinets would be allocated if a shortage in 
unallocated cabinets were to arise in the future, and would thereby 
make the Price List more transparent and reduce any potential 
ambiguity.
The Proposed Change Is Not Unfairly Discriminatory
    The Exchange believes that the proposed change is not unfairly 
discriminatory for the following reasons.
    The proposed change would apply equally to all types and sizes of 
market participants. If the Cabinet Allocation were in place, all Users 
would be able to identify the permitted cabinet options and the 
procedures that would apply to them in the event that unallocated 
cabinet supply runs low in the future. The Cabinet Allocation would 
assist the Exchange in accommodating demand for co-location services, 
and cabinets in particular, on an equitable basis.
    For the reasons above, the proposed changes do not unfairly 
discriminate between or among market participants that are otherwise 
capable of satisfying any applicable co-location fees, requirements, 
terms and conditions established from time to time by the Exchange.
    For these reasons, the Exchange believes that the proposal is 
consistent with the Act.

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

    In accordance with Section 6(b)(8) of the Act,\15\ 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.
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    \15\ 15 U.S.C. 78f(b)(8).
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Intramarket Competition
    The Exchange does not believe that the proposed change would place 
any burden on intramarket competition that is not necessary or 
appropriate. The proposed change would not apply differently to 
distinct types or sizes of market participants. Rather, it would apply 
to all Users equally.
    The Exchange believes that, if triggered, the imposition of the 
Cabinet Allocation would not impose a burden on a User's ability to 
compete that is not necessary or appropriate. The Exchange believes 
that User demand for cabinets will continue in the future. In this 
context, the Exchange believes that it would be reasonable for it to 
put in place the proposed Cabinet Allocation to establish a method for 
allocating cabinets on an equitable basis. The Exchange would only 
follow the Cabinet Allocation and place limits on Users' ability to 
purchase new cabinets if unallocated cabinet inventory fell to the 
proposed Cabinet Threshold. Similarly, the Exchange would only create 
the waitlist if unallocated cabinet inventory fell to zero. Based on 
its experience with co-location and purchasing trends over the last few 
years, the Exchange believes that in most cases the number of cabinets 
that a User would be allowed to buy under the proposed Purchasing 
Limits would be sufficient to allow the User to use its system to 
access the markets while leaving a margin for potential growth.
    The Exchange believes that the proposed new General Notes would 
articulate rational, objective procedures and would serve to reduce any 
potential for confusion on how cabinets would be allocated if a 
shortage in unallocated cabinets were to arise in the future, and would 
thereby make the Price List more transparent and reduce any potential 
ambiguity.
    Use of any co-location service is completely voluntary, and each 
market participant is able to determine whether to use co-location 
services based on the requirements of its business operations.
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 operates in a highly competitive market in which 
exchanges and other vendors (i.e., Hosting Users) offer co-location 
services as a means to facilitate the trading and other market 
activities of those market participants who believe that co-location 
enhances the efficiency of their operations. Accordingly, fees charged 
for co-location services are constrained by the active competition for 
the order flow of, and other business from, such market participants.
    The Commission has repeatedly expressed its preference for 
competition over regulatory intervention in determining prices, 
products, and services in the securities markets. Specifically, in 
Regulation NMS, the Commission highlighted the importance of market 
forces in determining prices and SRO revenues and, also, recognized 
that current regulation of the market system ``has been remarkably 
successful in promoting market competition in its broader forms that 
are most important to investors and listed companies.'' \16\
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    \16\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
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    The proposed rule change would protect investors and the public 
interest because the proposed new General Notes would articulate 
rational, objective procedures and would serve to reduce any potential 
for confusion on how cabinets would be treated in the case of a 
shortage in unallocated cabinets, and would thereby make the Price List 
more transparent and reduce any potential ambiguity.
    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.

[[Page 59365]]

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or up to 90 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:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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 [email protected]. Please include 
File Number SR-NYSE-2020-73 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-2020-73. 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-2020-73, and should be submitted on 
or before October 13, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-20703 Filed 9-18-20; 8:45 am]
BILLING CODE 8011-01-P

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