Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change To Establish Procedures for the Allocation of Cabinets to Its Co-Located Users, 59568-59572 [2020-20836]
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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Notices
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ADAMS Accession No./Web link
SECY–20–0041, ‘‘Request by Exelon Generation Company, LLC for Exemptions
from Certain Emergency Planning Requirements for the Three Mile Island Nuclear Station,’’ May 5, 2020.
Staff Requirements Memorandum to SECY-20-0041, ‘‘Request by Exelon Generation Company, LLC for Exemptions from Certain Emergency Planning Requirements for the Three Mile Island Nuclear Station,’’ July 27, 2020.
NUREG–1437, Supplement 37, ‘‘Generic Environmental Impact Statement for License Renewal of Nuclear Plants: Regarding Three Mile Island Nuclear Station, Unit 1,’’ June 2009.
Dated: September 17, 2020.
For the Nuclear Regulatory Commission.
Bruce Watson,
Chief, Reactor Decommissioning Branch,
Division of Decommissioning, Uranium
Recovery, and Waste Programs, Office of
Nuclear Material Safety and Safeguards.
[FR Doc. 2020–20858 Filed 9–21–20; 8:45 am]
BILLING CODE 7590–01–P
POSTAL REGULATORY COMMISSION
[Docket Nos. MC2020–246 and CP2020–276;
MC2020–247 and CP2020–277]
New Postal Products
Postal Regulatory Commission.
Notice.
AGENCY:
ACTION:
The Commission is noticing a
recent Postal Service filing for the
Commission’s consideration concerning
negotiated service agreements. This
notice informs the public of the filing,
invites public comment, and takes other
administrative steps.
DATES: Comments are due: September
24, 2020.
ADDRESSES: Submit comments
electronically via the Commission’s
Filing Online system at https://
www.prc.gov. Those who cannot submit
comments electronically should contact
the person identified in the FOR FURTHER
INFORMATION CONTACT section by
telephone for advice on filing
alternatives.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
David A. Trissell, General Counsel, at
202–789–6820.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
II. Docketed Proceeding(s)
I. Introduction
The Commission gives notice that the
Postal Service filed request(s) for the
Commission to consider matters related
to negotiated service agreement(s). The
request(s) may propose the addition or
removal of a negotiated service
agreement from the market dominant or
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ML19311C762 (Package).
ML20209A439.
ML091751063.
the competitive product list, or the
modification of an existing product
currently appearing on the market
dominant or the competitive product
list.
Section II identifies the docket
number(s) associated with each Postal
Service request, the title of each Postal
Service request, the request’s acceptance
date, and the authority cited by the
Postal Service for each request. For each
request, the Commission appoints an
officer of the Commission to represent
the interests of the general public in the
proceeding, pursuant to 39 U.S.C. 505
(Public Representative). Section II also
establishes comment deadline(s)
pertaining to each request.
The public portions of the Postal
Service’s request(s) can be accessed via
the Commission’s website (https://
www.prc.gov). Non-public portions of
the Postal Service’s request(s), if any,
can be accessed through compliance
with the requirements of 39 CFR
3011.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3030, and 39
CFR part 3040, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3035, and
39 CFR part 3040, subpart B. Comment
deadline(s) for each request appear in
section II.
II. Docketed Proceeding(s)
1. Docket No(s).: MC2020–246 and
CP2020–276; Filing Title: USPS Request
to Add Priority Mail Contract 660 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: September 16, 2020;
1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
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Filing Authority: 39 U.S.C. 3642, 39 CFR
3040.130 through 3040.135, and 39 CFR
3035.105; Public Representative:
Christopher C. Mohr; Comments Due:
September 24, 2020.
2. Docket No(s).: MC2020–247 and
CP2020–277; Filing Title: USPS Request
to Add Priority Mail Express & Priority
Mail Contract 117 to Competitive
Product List and Notice of Filing
Materials Under Seal; Filing Acceptance
Date: September 16, 2020; Filing
Authority: 39 U.S.C. 3642, 39 CFR
3040.130 through 3040.135, and 39 CFR
3035.105; Public Representative:
Kenneth R. Moeller; Comments Due:
September 24, 2020.
This Notice will be published in the
Federal Register.
Erica A. Barker,
Secretary.
[FR Doc. 2020–20885 Filed 9–21–20; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–89883; File No. SR–
NYSEArca–2020–82]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change To Establish Procedures
for the Allocation of Cabinets to Its CoLocated Users
September 16, 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, NYSE Arca, Inc.
(‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 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
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
Background
Presently, Users have two options for
cabinets with power: dedicated cabinets
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. 63275 (November 8, 2010), 75 FR
70048 (November 16, 2010) (SR–NYSEArca–2010–
100).
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. 76010 (September 29, 2015), 80 FR
60197 (October 5, 2015) (SR–NYSEArca–2015–82).
As specified in the NYSE Arca Equities Fees and
Charges and the NYSE Arca Options Fees and
Charges (together, the ‘‘Fee Schedules’’), a User that
incurs co-location fees for a particular co-location
service pursuant thereto would not be subject to colocation fees for the same co-location service
charged by the Exchange’s affiliates New York
Stock Exchange LLC, NYSE American LLC, NYSE
Chicago, Inc., and NYSE National, Inc. (together,
the ‘‘Affiliate SROs’’). See Securities Exchange Act
Release No. 70173 (August 13, 2013), 78 FR 50459
(August 19, 2013) (SR–NYSEArca–2013–80). Each
Affiliate SRO has submitted substantially the same
proposed rule change to propose the changes
described herein. See SR–NYSE–2020–73, SR–
NYSEAMER–2020–66, SR–NYSECHX–2020–26,
and SR–NYSENAT–2020–28.
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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
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
6 See Securities Exchange Act Release No. 70916
(November 21, 2013), 78 FR 70989 (November 21,
2013) (SR–NYSEArca–2013–124) (‘‘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
5kW.’’).
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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
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.
10 The waitlist provisions are based on the Nasdaq
Cabinet Waitlist Procedures and the procedures in
General Note 3 of the Fee Schedules. See id. at
38861; Securities Exchange Act Release No. 79729
(January 4, 2017), 82 FR 3061 (January 10, 2017)
(SR–NYSEArca–2016–172).
11 Cabinets may become available if, for example,
a User vacates a dedicated or partial cabinet.
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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Notices
Proposed New General Notes
The Exchange proposes to add a new
General Note 7 to the Exchange’s Fee
Schedules 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 Fee
Schedules 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
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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
Fee Schedules 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.
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
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
2. Statutory Basis
a User would be allowed to buy under
The Exchange believes that the
proposed rule change is consistent with the proposed Purchasing Limits would
Section 6(b) of the Act,12 in general, and be sufficient to allow the User to use its
system to access the markets while
furthers the objectives of Sections
13
6(b)(4) and (5) of the Act, in particular, leaving a margin for potential growth.
Further, the Exchange believes that,
because it provides for the equitable
by
establishing a waitlist on the basis of
allocation of reasonable dues, fees, and
the date it receives signed orders,
other charges among its members,
limiting the size and number of orders
issuers and other persons using its
a User may have on the waitlist at any
facilities and does not unfairly
one time, and removing a User from the
discriminate between customers,
waitlist if it turns down a cabinet that
issuers, brokers or dealers. In addition,
is the size that it requested, the Cabinet
it is designed to foster cooperation and
Allocation is reasonably designed to
coordination with persons engaged in
regulating, clearing, settling, processing prevent Users from utilizing the waitlist
as a method to obtain a greater portion
information with respect to, and
of the cabinets available, thereby
facilitating transactions in securities, to
remove impediments to, and perfect the facilitating a more equitable distribution
of cabinets. Similarly, the Exchange
mechanisms of, a free and open market
believes that by requiring a 30-day delay
and a national market system and, in
before a User subject to the Purchasing
general, to protect investors and the
Limits could purchase cabinets again,
public interest and because it is not
the Cabinet Allocation is reasonably
designed to permit unfair
designed to prevent a User from
discrimination between customers,
obtaining a greater portion of the
issuers, brokers, or dealers.
cabinets available.
The Proposed Rule Change Is
The Exchange believes that the
Reasonable and Equitable
proposed change is reasonable and
equitable because the Exchange would
The Exchange believes that the
only place limits on Users’ ability to
proposed rule change is reasonable and
purchase new cabinets if cabinet
equitable for the following reasons.
inventory fell to specific thresholds.
The Exchange believes that User
Similarly, the Exchange believes that
demand for cabinets will continue. In
the proposed change is reasonable and
this context, the Exchange believes that
equitable because the waitlist would
it would be reasonable for it to put in
only be created if unallocated cabinet
place the proposed Cabinet Allocation
to establish the allocation of cabinets on inventory fell to zero, and because there
12 15
13 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
Frm 00059
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Sfmt 4703
14 See Nasdaq Cabinet Waitlist Procedures, supra
note 7.
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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Notices
would be an established threshold for
cessation of the waitlist.
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 Fee Schedules 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
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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.
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
15 15
PO 00000
Fmt 4703
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 Fee Schedules
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 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
Fee Schedules more transparent and
reduce any potential ambiguity.
For the reasons described above, the
Exchange believes that the proposed
rule change reflects this competitive
environment.
16 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
U.S.C. 78f(b)(8).
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Federal Register / Vol. 85, No. 184 / Tuesday, September 22, 2020 / Notices
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 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
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–2020–82, 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
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–20836 Filed 9–21–20; 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:
Electronic Comments
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–89898; File No. SR–
NYSEArca–2020–46]
• 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–2020–82 on the subject line.
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Instituting
Proceedings To Determine Whether To
Approve or Disapprove a Proposed
Rule Change To Amend NYSE Arca
Rule 5.2–E(j)(6) Relating to OptionsLinked Securities
Paper Comments
September 16, 2020.
• 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–2020–82. 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
VerDate Sep<11>2014
18:01 Sep 21, 2020
Jkt 250001
On June 10, 2020, NYSE Arca, Inc.
(‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend NYSE Arca Rule 5.2–
E(j)(6) to accommodate Exchange listing
and trading of Options-Linked
Securities. The proposed rule change
was published for comment in the
Federal Register on June 22, 2020.3
On July 28, 2020, pursuant to Section
19(b)(2) of the Act,4 the Commission
designated a longer period within which
to approve the proposed rule change,
disapprove the proposed rule change, or
17 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. 89073
(June 16, 2020), 85 FR 37488 (‘‘Notice’’).
4 15 U.S.C. 78s(b)(2).
1 15
PO 00000
Frm 00061
Fmt 4703
Sfmt 4703
institute proceedings to determine
whether to disapprove the proposed
rule change.5 The Commission has
received no comment letters on the
proposed rule change.
The Commission is issuing this order
to institute proceedings pursuant to
Section 19(b)(2)(B) of the Act 6 to
determine whether to approve or
disapprove the proposed rule change.
I. Description of the Proposal
Exchange Rule 5.2–E(j)(6) provides for
Exchange listing and trading of Equity
Index-Linked Securities, CommodityLinked Securities, Currency-Linked
Securities, Fixed Income Index-Linked
Securities, Futures-Linked Securities,
and Multifactor Index-Linked Securities
(collectively, ‘‘Index-Linked
Securities’’). The Exchange proposes to
amend Rule 5.2–E(j)(6) to add OptionsLinked Securities to the type of IndexLinked Securities set forth in Rule 5.2–
E(j)(6) permitted to list and trade on the
Exchange.
The proposal would also add a new
paragraph (vii) to Rule 5.2–E(j)(6) to
provide that the payment at maturity
with respect to Options-Linked
Securities is based on the performance
of U.S. exchange-traded options on any
one or combination of the following: (a)
Investment Company Units; (b)
Exchange-Traded Fund Shares; (c)
Index-Linked Securities; (d) securities
defined in Section 2 of Rule 8–E; (e) the
S&P 100 Index, the S&P 500 Index, the
Nasdaq 100 Index, the Dow Jones
Industrial Average, the MSCI EAFE
Index, the MSCI Emerging Markets
Index, the NYSE FANG Index, or the
Russell 2000 Index; or (f) a basket or
index of any of the foregoing (‘‘Options
Reference Asset’’). To the extent that the
Options Reference Asset consists of
options based on Investment Company
Units, Exchange-Traded Fund Shares,
Index-Linked Securities, or securities
defined in Section 2 of Rule 8–E, such
Investment Company Units, ExchangeTraded Fund Shares, Index-Linked
Securities, or securities defined in
Section 2 of Rule 8–E shall not seek to
provide investment results, before fees
and expenses, that correspond to the
inverse, a specific multiple, or a specific
inverse multiple of the percentage
performance on a given day of a
particular index or combination of
indexes.
5 See Securities Exchange Act Release No. 89412,
85 FR 46744 (August 3, 2020). The Commission
designated September 20, 2020 as the date by which
the Commission shall approve or disapprove, or
institute proceedings to determine whether to
disapprove, the proposed rule change.
6 15 U.S.C. 78s(b)(2)(B).
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]]>Agencies
[Federal Register Volume 85, Number 184 (Tuesday, September 22, 2020)]
[Notices]
[Pages 59568-59572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20836]
=======================================================================
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89883; File No. SR-NYSEArca-2020-82]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change To Establish Procedures for the Allocation of
Cabinets to Its Co-Located Users
September 16, 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, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
[[Page 59569]]
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to establish procedures for the allocation of
cabinets to its co-located Users. The proposed change is available on
the Exchange's website at www.nyse.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
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\
---------------------------------------------------------------------------
\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.
63275 (November 8, 2010), 75 FR 70048 (November 16, 2010) (SR-
NYSEArca-2010-100).
\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. 76010 (September 29, 2015), 80 FR 60197
(October 5, 2015) (SR-NYSEArca-2015-82). As specified in the NYSE
Arca Equities Fees and Charges and the NYSE Arca Options Fees and
Charges (together, the ``Fee Schedules''), 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 New York Stock Exchange
LLC, NYSE American LLC, NYSE Chicago, Inc., and NYSE National, Inc.
(together, the ``Affiliate SROs''). See Securities Exchange Act
Release No. 70173 (August 13, 2013), 78 FR 50459 (August 19, 2013)
(SR-NYSEArca-2013-80). Each Affiliate SRO has submitted
substantially the same proposed rule change to propose the changes
described herein. See SR-NYSE-2020-73, SR-NYSEAMER-2020-66, SR-
NYSECHX-2020-26, and SR-NYSENAT-2020-28.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 70916 (November 21,
2013), 78 FR 70989 (November 21, 2013) (SR-NYSEArca-2013-124) (``PNU
Cabinet Filing'').
---------------------------------------------------------------------------
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:
---------------------------------------------------------------------------
\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'').
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\8\ See PNU Cabinet Filing, supra note 6.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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 5kW.'').
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\10\ The waitlist provisions are based on the Nasdaq Cabinet
Waitlist Procedures and the procedures in General Note 3 of the Fee
Schedules. See id. at 38861; Securities Exchange Act Release No.
79729 (January 4, 2017), 82 FR 3061 (January 10, 2017) (SR-NYSEArca-
2016-172).
---------------------------------------------------------------------------
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.
---------------------------------------------------------------------------
\11\ Cabinets may become available if, for example, a User
vacates a dedicated or partial cabinet.
---------------------------------------------------------------------------
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.
[[Page 59570]]
Proposed New General Notes
The Exchange proposes to add a new General Note 7 to the Exchange's
Fee Schedules 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
Fee Schedules 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 Fee Schedules 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.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\14\ See Nasdaq Cabinet Waitlist Procedures, supra note 7.
---------------------------------------------------------------------------
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
[[Page 59571]]
would be an established threshold for cessation of the waitlist.
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 Fee Schedules 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.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------
Intramarket Competition
The Exchange does not believe that the proposed change would place
any burden on intramarket competition that is not necessary or
appropriate. The proposed 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 Fee Schedules 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\
---------------------------------------------------------------------------
\16\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
---------------------------------------------------------------------------
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 Fee
Schedules more transparent and reduce any potential ambiguity.
For the reasons described above, the Exchange believes that the
proposed rule change reflects this competitive environment.
[[Page 59572]]
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 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-NYSEArca-2020-82 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-2020-82. 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-NYSEArca-2020-82, 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. 2020-20836 Filed 9-21-20; 8:45 am]
BILLING CODE 8011-01-P
