Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change To Amend the Schedule of Wireless Connectivity Fees and Charges To Add Circuits for Connectivity Into and Out of the Data Center in Mahwah, New Jersey, 12735-12744 [2021-04423]
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Federal Register / Vol. 86, No. 41 / Thursday, March 4, 2021 / Notices
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
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.
[FR Doc. 2021–04411 Filed 3–3–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91216; File No. SR–
NYSEArca–2021–13]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change To Amend the Schedule
of Wireless Connectivity Fees and
Charges To Add Circuits for
Connectivity Into and Out of the Data
Center in Mahwah, New Jersey
February 26, 2021.
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 February
12, 2021, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
jbell on DSKJLSW7X2PROD with NOTICES
The Exchange proposes to amend the
schedule of Wireless Connectivity Fees
and Charges (the ‘‘Fee Schedule’’) to (1)
add circuits for connectivity into and
out of the data center in Mahwah, New
Jersey (the ‘‘Mahwah Data Center’’); (2)
add services available to customers of
the Mahwah Data Center that are not
colocation Users; and (3) change the
name of the Fee Schedule to ‘‘Mahwah
Wireless, Circuits, and Non-Colocation
Connectivity Fee Schedule.’’ 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
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Fee Schedule to add services (‘‘NCL
Services’’) and related fees available to
customers of the Mahwah Data Center
that are not colocation Users (‘‘NCL
Customers’’),4 as well as circuits into
and out of the Mahwah Data Center that
are available to both colocation Users
and NCL Customers. In addition, in a
conforming change, because the Fee
Schedule would no longer be limited to
wireless services, the Exchange
proposes to change the name of the Fee
Schedule from ‘‘Wireless Connectivity
Fee Schedule’’ to ‘‘Mahwah Wireless,
Circuits, and Non-Colocation
Connectivity Fee Schedule.’’ 5
The Exchange makes the current
proposal solely as a result of its
determination that the Commission’s
recent interpretations of the Act’s
definitions of the terms ‘‘exchange’’ and
‘‘facility,’’ as expressed in the Wireless
Approval Order,6 apply to connectivity
services described herein that are
offered by entities other than the
Exchange. The Exchange disagrees with
the Commission’s interpretations,
denies the services covered herein (and
in the Wireless Approval Order) are
offerings of an ‘‘exchange’’ or a
‘‘facility’’ thereof, and has sought review
of the Commission’s interpretations, as
4 For purposes of the Exchange’s colocation
services, a ‘‘User’’ means any market participant
that requests to receive colocation 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).
5 Each of the Exchange’s affiliates (New York
Stock Exchange LLC, NYSE American LLC, NYSE
Chicago, Inc., and NYSE National, Inc.) (the
‘‘Affiliate SROs’’) has submitted substantially the
same proposed rule change to propose the changes
described herein. See SR–NYSE–2021–14, SR–
NYSEAMER–2021–10, SR–NYSECHX–2021–03,
and SR–NYSENAT–2021–04.
6 See Securities Exchange Act Release No. 90209
(October 15, 2020), 85 FR 67044 (October 21, 2020)
(SR–NYSE–2020–05, SR–NYSEAMER–2020–05,
SR–NYSEArca–2020–08, SR–NYSECHX–2020–02,
SR–NYSENAT–2020–03, SR–NYSE–2020–11, SR–
NYSEAMER–2020–10, SR–NYSEArca–2020–15,
SR–NYSECHX–2020–05, SR–NYSENAT–2020–08)
(‘‘Wireless Approval Order’’).
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12735
expressed in the Wireless Approval
Order, in the Court of Appeals for the
District of Columbia Circuit.7 Pending
resolution of such appeal, however, the
Exchange is making this proposal in
recognition that the Commission’s
current interpretation brings certain
offerings of the Exchange’s affiliates into
the scope of the terms ‘‘exchange’’ or
‘‘facility.’’
The Exchange expects the proposed
change to be operative 60 days after the
present filing becomes effective.
Mahwah Circuits
Customers can connect into and out of
the Mahwah Data Center using either
wireless connections or wired fiber
optic circuits. Both IDS and numerous
third-party telecommunications service
providers offer wired circuits into and
out of the Mahwah Data Center. The
circuits that IDS offers are described
below. Such IDS circuits are available to
all colocation Users and NCL
Customers, but such customers are not
obligated to use them; rather, both
colocation Users and NCL Customers
may instead choose to contract directly
with third-party telecom carriers for
circuits into and out of the Mahwah
Data Center.
The Exchange proposes to add to the
Fee Schedule the circuit options offered
by IDS to both colocation Users and
NCL Customers to connect into and out
of the Mahwah Data Center.
Specifically, the Exchange proposes to
amend the Fee Schedule to add two
different types of circuits, each available
in three different sizes, under the new
heading ‘‘C. Mahwah Circuits.’’
First, the Exchange proposes to
amend the Fee Schedule to add ‘‘Optic
Access’’ circuits, which are circuits that
IDS operates and that customers can use
to connect between the Mahwah Data
Center and IDS access centers at the
following six third-party owned data
centers: (1) 111 Eighth Avenue, New
York, NY; (2) 32 Avenue of the
Americas, New York, NY; (3) 165
Halsey, Newark, NJ; (4) Secaucus, NJ
(the ‘‘Secaucus Access Center’’); (5)
Carteret, NJ (the ‘‘Carteret Access
Center’’); and (6) Weehawken, NJ. Optic
Access circuits are available in 1 Gb, 10
Gb, and 40 Gb sizes.
Second, the Exchange proposes to
amend the Fee Schedule to add lowerlatency Optic Low Latency circuits that
IDS operates and that customers can use
to connect between the Mahwah Data
Center and IDS’s Secaucus Access
Center or Carteret Access Center. Optic
7 Intercontinental Exchange, Inc. v. SEC, No. 20–
1470 (D.C. Cir. 2020).
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Low Latency circuits are available in 1
Gb, 10 Gb, and 40 Gb sizes.
The Exchange proposes to add the
following chart to the Fee Schedule to
include these circuits, as follows:
Type of service
Optic
Optic
Optic
Optic
Optic
Optic
Amount of charge
Access Circuit—1 Gb ........................................................................................................
Access Circuit—10 Gb ......................................................................................................
Access Circuit—40 Gb ......................................................................................................
Low Latency Circuit—1 Gb ...............................................................................................
Low Latency Circuit—10 Gb .............................................................................................
Low Latency Circuit—40 Gb .............................................................................................
$1,500
$5,000
$5,000
$1,500
$5,000
$5,000
available in the Mahwah Data Center
and other access centers—and ports to
a dedicated network to access the NMS
feeds for which the Securities Industry
Automation Corporation is engaged as
the securities information processor (the
‘‘NMS Network’’).8 The Fee Schedule
would also specify the data products
and data feeds to which an NCL
Customer could connect via these ports.
The Exchange also proposes to amend
the Fee Schedule to enable NCL
Customers to purchase cross connects
Non-Colocation Services
The Exchange proposes to amend the
Fee Schedule to add several services
available to NCL Customers as well as
several notes, under the new heading
‘‘D. Non-Colocation (‘‘NCL’’) Services.’’
These are the services that IDS offers
within the Mahwah Data Center that are
not colocation services. The Exchange
proposes to amend the Fee Schedule to
add services that include ports to the
IDS Network—a wide area network
initial
initial
initial
initial
initial
initial
charge
charge
charge
charge
charge
charge
plus
plus
plus
plus
plus
plus
$1,500
$2,500
$6,000
$2,750
$3,950
$8,250
monthly
monthly
monthly
monthly
monthly
monthly
charge.
charge.
charge.
charge.
charge.
charge.
and to request services subject to an
‘‘Expedite Fee’’ or ‘‘Change Fee.’’
1. IDS Network Ports
The Exchange proposes to amend the
Fee Schedule to add services that IDS
offers enabling NCL Customers to
connect to the IDS Network in the
Mahwah Data Center.
The Exchange proposes to add the
following fees and language to the Fee
Schedule:
IDS NETWORK PORTS *
Type of service
Description
Amount of charge
NCL IDS Network Access—10 Gb ..............
NCL IDS Network Access—40 Gb ..............
10 Gb IDS Network port ..............................
40 Gb IDS Network port ..............................
$10,000 initial charge plus $15,250 monthly charge.
$10,000 initial charge plus $19,750 monthly charge.
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* See Note 1.
The Exchange also proposes to add to
the Fee Schedule several notes
regarding these services that are based
on General Notes 4, 5, and 6 of the
Exchange’s Price List regarding
colocation.
Specifically, the Exchange proposes to
add the heading ‘‘NCL Notes’’ after the
tables in the proposed section of the Fee
Schedule titled ‘‘D. Non-Colocation
(‘‘NCL’’) Services.’’ Note 1 would
establish that when an NCL Customer
purchases access to the IDS Network,
the NCL Customer would receive (a) the
ability to access the trading and
execution systems of the Exchange and
Affiliate SROs (‘‘Exchange Systems’’) as
well as of the Global OTC System
(‘‘Global OTC’’), and (b) connectivity to
any of the listed data products
(‘‘Included Data Products’’) that it
selects. References in the proposed Fee
Schedule would refer customers to the
applicable note.
Proposed Note 1 would be titled
‘‘Note 1: IDS Network’’ and would
provide:
When an NCL Customer purchases access
to the IDS Network, it receives the ability to
8 See Securities Exchange Act Release Nos. 88837
(May 7, 2020), 85 FR 28671 (May 13, 2020) (SR–
NYSE–2019–46, SR–NYSEAMER–2019–34, SR–
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access the trading and execution systems of
the NYSE, NYSE American, NYSE Arca,
NYSE Chicago, and NYSE National (together,
the Exchange Systems) as well as of Global
OTC (the Global OTC System), subject, in
each case, to authorization by the NYSE,
NYSE American, NYSE Arca, NYSE Chicago,
NYSE National, or Global OTC, as applicable.
Each Exchange listed above offers access to
its Exchange Systems to its members and
Global OTC offers access to the Global OTC
System to its subscribers, such that an NCL
Customer does not have to purchase a service
that includes access to the IDS Network to
obtain access to Exchange Systems or the
Global OTC System.
When an NCL Customer purchases access
to the IDS Network, it receives connectivity
to any of the Included Data Products that it
selects, subject to any necessary technical
provisioning requirements, authorization,
and licensing by the provider of the Included
Data Feed. Fees for the Included Data
Products are charged by the provider of such
Included Data Products. An NCL Customer
can change the Included Data Products to
which it receives connectivity at any time,
subject to authorization from the provider of
such Included Data Product. Because access
to the IDS Network is not the exclusive
method to connect to the Included Data
Products, an NCL Customer does not have to
purchase a service that includes access to the
IDS Network to connect to such Included
Data Products. The Included Data Products
are as follows:
NMS feeds
CTS
CQS
OPRA
NYSE
NYSE American
NYSE American Options
NYSE Arca
NYSE Arca Options
NYSE Best Quote and Trades (BQT)
NYSE Bonds
NYSE Chicago
NYSE National
NYSEArca–2019–61, SR–NYSENAT–2019–19)
(‘‘NMS Network Approval Order’’) and 88972 (May
29, 2020), 85 FR 34472 (June 4, 2020) (‘‘NYSE
Chicago NMS Network Approval Order’’).
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2. NCL Connectivity to Third Party
Systems, Data Feeds, Testing and
Certification Feeds, and DTCC
The Exchange also proposes to amend
the Fee Schedule to provide for the
connectivity services that IDS offers for
NCL Customers to Third Party Systems,
Third Party Data Feeds, third party
testing and certification feeds, and
DTCC. The Exchange proposes to adopt
substantially similar services and fees as
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set forth in the Exchange’s Price List
regarding colocation.9
Connectivity to Third Party Systems:
The Exchange proposes to specify in the
Fee Schedule services that IDS offers
NCL Customers to access the trading
and execution services of Third Party
markets and other content service
providers (‘‘Third Party Systems’’) for a
fee. NCL Customers connect to Third
Party Systems over the IDS Network.
In order to obtain access to a Third
Party System, an NCL Customer enters
into an agreement with the relevant
third-party content service provider,
pursuant to which the third-party
content service provider charges the
NCL Customer for access to the Third
Party System. When such services are
requested, IDS establishes a connection
between the NCL Customer and the
relevant third party content service
provider over the IDS Network. IDS
charges the NCL Customer for the
connectivity to the Third Party System.
An NCL Customer only receives, and is
only charged by IDS for, connectivity to
each Third Party System for which the
customer enters into an agreement with
the third-party content service provider.
Neither the Exchange nor IDS has an
affiliation with the providers of the
Third Party Systems. Establishing an
NCL Customer’s access to a Third Party
System does not give either IDS or the
Exchange any right to use the Third
Party Systems. Connectivity to a Third
12737
Party System does not provide access or
order entry to the Exchange’s execution
system, and an NCL Customer’s
connection to a Third Party System is
not through the Exchange’s execution
system.
IDS charges a monthly recurring fee
for connectivity to a Third Party System,
which the Exchange proposes to add to
its Fee Schedule. Specifically, when an
NCL Customer requests access to a
Third Party System, IDS identifies the
applicable third-party market or other
content service provider and the
bandwidth connection it requires.
The Exchange proposes to add the
following fees and language to the Fee
Schedule:
CONNECTIVITY TO THIRD PARTY SYSTEMS OVER IDS NETWORK *
Description
Amount of charge
1Mb ..........................................................................................................................................................
3Mb ..........................................................................................................................................................
5Mb ..........................................................................................................................................................
10Mb ........................................................................................................................................................
25Mb ........................................................................................................................................................
50Mb ........................................................................................................................................................
100Mb ......................................................................................................................................................
200Mb ......................................................................................................................................................
1Gb ...........................................................................................................................................................
$200 per connection monthly charge.
$400 per connection monthly charge.
$500 per connection monthly charge.
$800 per connection monthly charge.
$1,200 per connection monthly charge.
$1,800 per connection monthly charge.
$2,500 per connection monthly charge.
$3,000 per connection monthly charge.
$3,500 per connection monthly charge.
* See Note 2.
Third Party Systems
Euronext Optiq Cash and Derivatives Unicast
(EUA)
Euronext Optiq Cash and Derivatives Unicast
(Production)
Investors Exchange (IEX)
ITG TriAct Matchnow
Long Term Stock Exchange (LTSE)
Members Exchange (MEMX)
MIAX Options, MIAX PEARL Options, MIAX
PEARL Equities, and MIAX Emerald
Morgan Stanley
Nasdaq
NASDAQ Canada (CXC, CXD, CX2)
NASDAQ ISE
Neo Aequitas
NYFIX Marketplace
Omega
OneChicago
OTC Markets Group
TD Ameritrade
TMX Group
Americas Trading Group (ATG)
BM&F Bovespa
Boston Options Exchange (BOX)
Canadian Securities Exchange (CSE)
Cboe BYX Exchange (CboeBYX), Cboe BZX
Exchange (CboeBZX), Cboe EDGA
Exchange (CboeEDGA), and Cboe EDGX
Exchange (CboeEDGX)
Cboe Exchange (Cboe) and Cboe C2 Exchange
(C2)
Chicago Mercantile Exchange (CME Group)
Credit Suisse
Connectivity to Third Party Data
Feeds: The Exchange proposes to
specify in the Fee Schedule connectivity
services that IDS offers NCL Customers
to connect to data feeds from third-party
markets and other content service
providers (‘‘Third Party Data Feeds’’) for
a fee. IDS receives Third Party Data
Feeds from multiple national securities
exchanges and other content service
providers at the Mahwah Data Center.
The Exchange proposes to add Note 2
to the section of the Fee Schedule titled
‘‘D. Non-Colocation (‘‘NCL’’) Services.’’
Proposed Note 2 would be titled ‘‘Note
2: Third Party Systems’’ and would
provide:
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When an NCL Customer purchases a
connection that includes access to Third
Party Systems, it receives access to Third
Party Systems it selects subject to any
technical provisioning requirements,
authorization, and licensing from such Third
Party System. Fees for the Third Party
Systems are charged by the provider of such
Third Party System. The Exchange is not the
exclusive method to connect to Third Party
Systems. The Third Party Systems are as
follows:
IDS provides connectivity to that data to
NCL Customers for a fee. NCL
Customers connect to Third Party Data
Feeds over the IDS Network.
In order to connect to a Third Party
Data Feed, an NCL Customer enters into
a contract with the relevant third-party
market or other content service
provider, pursuant to which the content
service provider charges the NCL
Customer for the Third Party Data Feed.
IDS receives the Third Party Data Feed
over its fiber optic network and, after
the data provider and NCL Customer
enter into an agreement and IDS
receives authorization from the data
provider, IDS retransmits the data to the
NCL Customer over the NCL Customer’s
IDS Network port. IDS charges the NCL
Customer for the connectivity to the
Third Party Data Feed. An NCL
Customer only receives, and is only
charged for, connectivity to the Third
Party Data Feeds for which it entered
into contracts.
With the exception of the ICE Data
Services, ICE, and Global OTC feeds,
neither the Exchange nor IDS has any
affiliation with the sellers of the Third
Party Data Feeds. The Exchange and IDS
9 See Securities Exchange Act Release No. 80310
(March 24, 2017), 82 FR 15763 (March 30, 2017)
(SR–NYSEArca–2016–89).
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Federal Register / Vol. 86, No. 41 / Thursday, March 4, 2021 / Notices
have no right to use the Third Party Data
Feeds other than as a redistributor of the
data. The Third Party Data Feeds do not
provide access or order entry to the
Exchange’s execution system. With the
exception of the ICE feed, the Third
Party Data Feeds do not provide access
or order entry to the execution systems
of the third party generating the feed.
IDS receives Third Party Data Feeds via
arms-length agreements and has no
inherent advantage over any other
distributor of such data.
IDS charges a monthly recurring fee
for connectivity to each Third Party
Data Feed. The monthly recurring fee is
per Third Party Data Feed, with the
exception that the monthly recurring fee
for the ICE Data Services Consolidated
Feeds (including the ICE Data Services
Consolidated Feed Shared Farm feeds),
Vela—SuperFeeds, and MSCI feeds vary
by the bandwidth of the connection.
Depending on its needs and bandwidth,
an NCL Customer may opt to receive all
or some of the Third Party Data Feeds.
Third Party Data Feed providers may
charge redistribution fees. The Exchange
proposes that, when IDS is charged a
redistribution fee by the Third Party
Data Feed provider, IDS would pass
through the charge to the NCL
Customer, without change to the fee.
The fee would be labeled as a passthrough of a redistribution fee on the
NCL Customer’s invoice.
The Exchange proposes that it would
not charge NCL Customers that are
third-party markets or content providers
for connectivity to their own feeds, as it
understands that such parties generally
receive their own feeds for purposes of
diagnostics and testing.
The Exchange proposes to add the
following fees and language to the Fee
Schedule:
CONNECTIVITY TO THIRD PARTY DATA FEEDS OVER THE IDS NETWORK *
Description
Monthly charge
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BM&F Bovespa ................................................................................................................................................................................
Boston Options Exchange (BOX) ....................................................................................................................................................
Canadian Securities Exchange (CSE) ............................................................................................................................................
Cboe BZX Exchange (CboeBZX) and Cboe BYX Exchange (CboeBYX) ......................................................................................
Cboe EDGX Exchange (CboeEDGX) and Cboe EDGA Exchange (CboeEDGA) .........................................................................
Cboe Exchange (Cboe) and Cboe C2 Exchange (C2) ...................................................................................................................
CME Group ......................................................................................................................................................................................
Euronext Optiq Compressed Cash ..................................................................................................................................................
Euronext Optiq Compressed Derivatives ........................................................................................................................................
Euronext Optiq Shaped Cash ..........................................................................................................................................................
Euronext Optiq Shaped Derivatives ................................................................................................................................................
Financial Industry Regulatory Authority (FINRA) ............................................................................................................................
Global OTC ......................................................................................................................................................................................
ICE Data Services Consolidated Feed ≤100 Mb ............................................................................................................................
ICE Data Services Consolidated Feed >100 Mb to ≤1 Gb .............................................................................................................
ICE Data Services Consolidated Feed >1 Gb ................................................................................................................................
ICE Data Services Consolidated Feed Shared Farm ≤100Mb .......................................................................................................
ICE Data Services Consolidated Feed Shared Farm >100 Mb to ≤1 Gb ......................................................................................
ICE Data Services Consolidated Feed Shared Farm >1 Gb ..........................................................................................................
ICE Data Services—ICE TMC .........................................................................................................................................................
ICE Data Services PRD ..................................................................................................................................................................
ICE Data Services PRD CEP ..........................................................................................................................................................
Intercontinental Exchange (ICE) ......................................................................................................................................................
Investors Exchange (IEX) ................................................................................................................................................................
ITG TriAct Matchnow .......................................................................................................................................................................
Members Exchange (MEMX) ..........................................................................................................................................................
MIAX Emerald ..................................................................................................................................................................................
MIAX Options/MIAX PEARL Options ..............................................................................................................................................
MIAX PEARL Equities .....................................................................................................................................................................
Montre´al Exchange (MX) .................................................................................................................................................................
MSCI 5 Mb .......................................................................................................................................................................................
MSCI 25 Mb .....................................................................................................................................................................................
NASDAQ Stock Market ...................................................................................................................................................................
NASDAQ OMX Global Index Data Service .....................................................................................................................................
NASDAQ UQDF & UTDF ................................................................................................................................................................
NASDAQ Canada (CXC, CXD, CX2) ..............................................................................................................................................
NASDAQ ISE ...................................................................................................................................................................................
Neo Aequitas ...................................................................................................................................................................................
Omega .............................................................................................................................................................................................
OneChicago .....................................................................................................................................................................................
OTC Markets Group ........................................................................................................................................................................
Vela—SuperFeed <500 Mb .............................................................................................................................................................
Vela—SuperFeed >500 Mb to <1.25 Gb ........................................................................................................................................
Vela—SuperFeed >1.25 Gb ............................................................................................................................................................
TMX Group ......................................................................................................................................................................................
$3,000
1,000
1,000
2,000
2,000
2,000
3,000
900
600
1,200
900
500
100
200
500
1,000
200
500
1,000
200
200
400
1,500
1,000
1,000
3,000
3,500
2,000
2,500
1,000
500
1,200
2,000
100
500
1,500
1,000
1,200
1,000
1,000
1,000
250
800
1,000
2,500
* See Note 3.
The Exchange proposes to add Note 3
to the section of the Fee Schedule titled
‘‘D. Non-Colocation (‘‘NCL’’) Services.’’
Proposed Note 3 would be titled ‘‘Note
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3: Third Party Systems’’ and would
provide:
Pricing for data feeds from third party
markets and other service providers (Third
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Party Data Feeds) is for connectivity only.
Connectivity to Third Party Data Feeds is
subject to any technical provisioning
requirements, authorization, and licensing
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from the provider of the data feed.
Connectivity to Third Party Data Feeds is
over the IDS Network. Fees for Third Party
Data Feeds are charged by the provider of
such data feeds. Third Party Data Feed
providers may charge redistribution fees.
When IDS is charged a redistribution fee, IDS
passes the charge through to the customer,
without change to the fee. The fee is labeled
as a pass-through of a redistribution fee on
the customer’s invoice. IDS does not charge
third party markets or content providers for
connectivity to their own feeds. IDS is not
the exclusive method to connect to Third
Party Data Feeds.
Connectivity to Third Party Data
Testing and Certification Feeds: The
Exchange proposes to specify in the Fee
Schedule that NCL Customers may
obtain connectivity to third-party testing
and certification feeds. Certification
feeds are used to certify that an NCL
Customer conforms to any of the
relevant content service provider’s
requirements for accessing Third Party
Systems or receiving Third Party Data
Feeds, while testing feeds would
provide NCL Customers an environment
in which to conduct tests with non-live
data. Such feeds, which are solely used
for certification and testing and do not
Connectivity to Third Party Testing and Certification Feeds ...............
Connectivity to DTCC: The Exchange
proposes to specify in the Fee Schedule
services that IDS provides to connect
NCL Customers to Depository Trust &
Clearing Corporation (‘‘DTCC’’) for
clearing, fund transfer, insurance, and
settlement services.
In order to connect to DTCC, an NCL
Customer enters into a contract with
DTCC, pursuant to which DTCC charges
the NCL Customer for the services
provided. IDS receives the DTCC feed
12739
carry live production data, are available
over the IDS Network.
Connectivity to third party testing and
certification feeds would be subject to
any technical provisioning
requirements, authorization, and
licensing from the provider of the data
feed. Fees for such feeds are charged by
the provider of the feed. The Exchange
is not the exclusive method to connect
to third-party testing and certification
feeds.
The Exchange proposes to add the
following fees and language to the Fee
Schedule:
$100 monthly recurring charge per feed.
over its fiber optic network and, after
DTCC and the NCL Customer entered
into the services contract and IDS
received authorization from DTCC, IDS
provides connectivity to DTCC to the
NCL Customer over the NCL Customer’s
IDS Network port. IDS charges the NCL
Customer for the connectivity to DTCC.
Connectivity to DTCC does not
provide access or order entry to the
Exchange’s execution system, and an
NCL Customer’s connection to DTCC is
not through the Exchange’s execution
system.
Connectivity to DTCC is subject to
any technical provisioning
requirements, authorization, and
licensing from DTCC. Fees for such
feeds are charged by DTCC. IDS is not
the exclusive provider to connect to
DTCC feeds.
The Exchange proposes to add the
following fees and language to the Fee
Schedule:
CONNECTIVITY TO DTCC
Description
Amount of charge
5 Mb connection to DTCC ........................................................................
50 Mb connection to DTCC ......................................................................
3. NCL NMS Network Ports
The Exchange proposes to amend the
Fee Schedule to add services that IDS
$500 monthly recurring charge.
$2,500 monthly recurring charge.
currently offers enabling NCL
Customers to connect to the NMS
Network in the Mahwah Data Center.
The Exchange proposes to add the
following fees and language to the Fee
Schedule:
NCL NMS NETWORK PORTS *
Type of service
Description
Amount of charge
NCL NMS Network Access—10 Gb ...................
10 Gb NCL NMS Network port ........................
NCL NMS Network Access—40 Gb ...................
40 Gb NCL NMS Network port ........................
$10,000 initial charge plus $11,000 monthly
charge.
$10,000 initial charge plus $18,000 monthly
charge.
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* See Note 4.
The Exchange also proposes to add
Note 4 to the section of the Fee
Schedule titled ‘‘D. Non-Colocation
(‘‘NCL’’) Services,’’ to establish that,
when an NCL Customer purchases an
NMS Network port, it has the option of
receiving the NMS feeds over the NMS
Network.
Proposed Note 4 would be titled
‘‘Note 4: NMS Network’’ and would
provide:
When an NCL Customer purchases access
to the NMS Network, upon its request, it will
receive connectivity to any of the NMS feeds
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that it selects, subject to any necessary
technical provisioning requirements,
authorization, and licensing from the
provider of such NMS feed. Fees for the NMS
feeds are charged by the provider of such
NMS feed. The NMS feeds are as follows:
NMS feeds
CTS
CQS
OPRA
4. NCL Cross Connect
The Exchange proposes to amend the
Fee Schedule to specify fiber cross
connect services that IDS offers NCL
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Fmt 4703
Sfmt 4703
Customers for an initial and monthly
charge.10 A cross connect is used to
connect a circuit to a port. NCL
Customers use such cross connects to
connect from the IDS Network or NMS
Network to a circuit connecting outside
the Mahwah Data Center. The Exchange
10 Because NCL Customers do not co-locate any
equipment in the Mahwah Data Center, they
generally require fewer fiber cross connects than
colocation Users. Accordingly, the Exchange does
not propose amending the Fee Schedule to include
bundles of 6, 12, 18, or 24 cross connects as are
available to colocation Users.
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proposes that the fees for this service
would be identical to the fees for the
corresponding service in colocation.
The Exchange proposes to add the
following fees and language to the Fee
Schedule:
Type of service
Description
Amount of charge
NCL Cross Connect ...........................................
Furnish and install one cross-connect .............
$500 initial charge plus $600 monthly charge.
5. NCL Expedite Fee
The Exchange proposes to amend the
Fee Schedule to specify optional
services that IDS offers NCL Customers
to expedite the completion of services
purchased or ordered by the NCL
Customer, for which IDS charges an
Type of service
Description
NCL Expedite Fee ..............................................
Expedited installation/completion of a customer’s NCL service.
6. NCL Change Fee
The Exchange proposes to amend the
Fee Schedule to specify the ‘‘Change
Fee’’ that IDS charges an NCL Customer
if the NCL Customer requests a change
to one or more existing NCL Services
that IDS has already established or
completed for the NCL Customer.
In this regard, the Exchange notes that
several of the proposed services that
would be added to the Fee Schedule
include an initial fee in addition to an
ongoing monthly fee. These initial fees
are related to IDS’s initial cost of
establishing or installing a particular
service for the NCL Customer. Similar to
the ‘‘Change Fee’’ applicable to Users in
colocation,12 IDS charges a fee of $950
per order if the NCL Customer requests
a change to one or more existing NCL
Services that IDS has already
established or completed for the NCL
Customer. For example, the initial
installation of an IDS Network
connection would include establishing
and configuring market data services
requested by the NCL Customer, which
would be covered by the initial install
fee. However, if the NCL Customer
Description
NCL Change Fee ...............................................
Change to an NCL service that has already
been installed/completed for a customer.
In addition, the Exchange proposes to
change the name of the ‘‘Wireless
Connectivity Fee Schedule’’ to
‘‘Connectivity Fee Schedule.’’ [sic]
Because the Fee Schedule will no longer
be limited to wireless services, the
Exchange proposes to change the name
of the Fee Schedule from ‘‘Wireless
Connectivity Fee Schedule’’ [sic] to
‘‘Mahwah Wireless, Circuits, and NonColocation Connectivity Fee Schedule.’’
Application and Impact of the Proposed
Changes
There are currently few NCL
Customers. Accordingly, the Exchange
11 See Securities Exchange Act Release No. 67669
(August 15, 2012), 77 FR 50746 (August 22, 2012)
(SR–NYSEArca–2012–62) and No. 67667 (August
15, 2012), 77 FR 50743 (August 22, 2012) (SR–
NYSEArca–2012–63).
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id.
13 ‘‘Hosting’’
is a service offered by a User to
another entity In the User’s space within the
Mahwah Data Center. The Exchange allows Users
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Sfmt 4703
$4,000 per request.
requests that IDS establish and
configure additional market data
services for its IDS Network connection,
the NCL Customer would be charged a
one-time Change Fee of $950 for that
request. If an NCL Customer orders two
or more services at one time (for
example, through submitting an order
form requesting multiple services), the
NCL Customer would be charged a onetime Change Fee of $950, which would
cover the multiple services.
The Exchange proposes to add the
following fees and language to the Fee
Schedule:
Amount of charge
expects that the impact of the proposed
change would be minimal.
The proposed change is not targeted
at, or expected to be limited in
applicability to, a specific segment of
market participant. The Mahwah
Circuits are available for purchase for
any potential customer requiring a
circuit between the Mahwah Data
Center and a remote location. The NCL
Services are available for purchase by
any customer. The proposed changes do
not apply differently to distinct types or
sizes of customers. Rather, they apply to
all customers equally.
Use of the services proposed in this
filing are completely voluntary and
12 See
ordered, but the Expedite Fee would
always be a flat $4,000, allowing the
NCL Customer to determine if the
expected time savings warrants payment
of the fee.
The Exchange proposes to add the
following fees and language to the Fee
Schedule:
Amount of charge
Type of service
Fee Schedule Name
jbell on DSKJLSW7X2PROD with NOTICES
‘‘Expedite Fee.’’ Similar to the
‘‘Expedite Fee’’ applicable to Users in
colocation,11 if an NCL Customer
wishes to obtain NCL Services earlier
than the expected completion date, the
NCL Customer may pay the Expedite
Fee. The time saved would vary
depending on the type(s) of service(s)
$950 per request.
available to all market participants on a
non-discriminatory basis.
Competitive Environment
IDS operates in a highly competitive
market in which exchanges, third party
telecommunications providers, Hosting
Users,13 and other third-party vendors
offer connectivity services as a means to
facilitate the trading and other market
activities of 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
to act as Hosting Users for a monthly fee. See
Securities Exchange Act Release No. 76010
(September 29, 2015), 80 FR 60197 (October 5,
2015) (SR–NYSEArca–2015–82).
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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.’’ 14
The proposed changes are not
otherwise intended to address any other
issues relating to services related to the
Mahwah Data Center and/or related
fees, and the Exchange is not aware of
any problems that market participants
would have in complying with the
proposed change.
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2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,15 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,16 in particular, because it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest and because it is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers. The
Exchange further believes that the
proposed rule change is consistent with
Section 6(b)(4) of the Act,17 because it
provides for the equitable allocation of
reasonable dues, fees, and other charges
among its members and issuers and
other persons using its facilities and
does not unfairly discriminate between
customers, issuers, brokers, or dealers.
The Proposed Change Is Reasonable
The Exchange believes that the
proposed rule change is reasonable and
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.
General: Only the market participants
that voluntarily select to receive the IDS
services described herein are charged
for them, and those services are
available to all market participants.
Furthermore, the IDS services described
14 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
15 15 U.S.C. 78f(b).
16 15 U.S.C. 78f(b)(5).
17 15 U.S.C. 78f(b)(4).
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in this filing are available to all market
participants on an equal basis (i.e., the
same products and services are available
to all market participants). All market
participants that voluntarily select a
specific proposed IDS service would be
charged the same amount for that
service as all other market participants
purchasing that service.
In addition, the Exchange believes
that the proposed rule change is
reasonable because the IDS services
described herein are offered as a
convenience to market participants, but
offering them requires the provision,
maintenance, and operation of the
Mahwah Data Center, including the
installation, monitoring, support, and
maintenance of the services.
Mahwah Circuits: The Exchange
believes the fees proposed herein for
IDS’s Mahwah Circuits are reasonable.
The market for circuits into and out of
the Mahwah Data Center is competitive,
and the proposed IDS offerings are
merely one of several options from
which market participants can choose.
Each of the third-party
telecommunications providers that has a
presence in the Mahwah Data Center’s
‘‘Meet Me Rooms’’ offers similar circuits
to market participants, in competition
with the IDS offerings proposed here.
Each market participant considering
whether to purchase a circuit directly
can weigh that option against similar
circuits offered by those third-party
carriers, and can choose which circuit to
purchase based on which combination
of latency, bandwidth, price, and other
factors best meets its business needs.
Indeed, the Exchange understands that
most of the third-party
telecommunications providers that
provide circuits do so at fees lower than
those proposed herein, and that most
NCL Customers and colocation Users
use such third party telecommunication
circuits into and out of the Mahwah
Data Center.
IDS Network Ports: The Exchange
believes that the IDS Network ports
proposed herein are reasonable. The
market for connecting with the
Exchange’s trading and execution
systems is competitive, and the
proposed IDS Network ports that IDS
provides are merely one of several
options that market participants may
choose. As alternatives to the IDS
Network ports, a market participant
would be able to access or connect to
Exchange Systems, Third Party Systems,
Included Data Products, Third Party
Data Feeds, third party testing and
certification feeds, and DTCC through
(a) a connection to an IDS access center
outside of the Mahwah Data Center, (b)
a third-party access center, (c) a third-
PO 00000
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12741
party vendor, (d) a Hosting User, or (e)
colocation.
Market participants consider various
factors in determining which
connectivity options to choose,
including latency; bandwidth size;
amount of network uptime; the
equipment that the network uses; the
cost of the connection; and the
applicable contractual provisions. IDS’s
offering of connectivity services via IDS
Network ports gives market participants
another service to evaluate and
consider, thereby broadening their
options for connectivity to the Exchange
Systems and allowing them to tailor
their connectivity options to their
specific needs.
The Exchange further believes that the
proposed fees for IDS Network ports for
NCL Customers are reasonable because
such prices are constrained by
competition with the numerous other
providers that offer connectivity to the
Exchange Systems. If IDS were to
attempt to offer such ports at a supracompetitive price, potential customers
would likely respond by seeking out
less expensive substitutes from other
providers.
NCL NMS Network Ports: The
Exchange believes that the proposed
fees for NMS Network ports for NCL
Customers are reasonable to recoup the
costs of building the NMS Network.
Until 2019, SIAC was required to
provide connectivity to the NMS feeds
only via the IP network. Although the
operating committees for the CTA/CQ
Plans authorized SIAC to offer
connectivity to the NMS feeds in the
Mahwah Data Center via an alternate,
dedicated, low-latency NMS Network,
the operating committee did not assume
the costs of creating such a network;
instead, the Exchange and the Affiliate
SROs funded the capital and operational
expenses to build and operate the NMS
Network. The implementation costs of
approximately $3.8 million are
applicable only to the NMS Network,
which is used for the sole purpose of
providing access to the NMS feeds.
None of the implementation costs are
applicable to any other Exchange
services. As of the date of this filing,
only one customer has contracted with
IDS for an NCL NMS Network port, and
the Exchange expects that demand for
NMS Network ports outside of
colocation will be very low. The service
is nevertheless available, and so the
Exchange proposes to add it to the Fee
Schedule.
NCL Notes: With respect to proposed
NCL Notes 1, 2, 3, and 4, the Exchange
believes they are reasonable because
they provide detailed descriptions of the
access and connectivity that NCL
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Customers receive when they purchase
IDS Network or NMS Network ports.
Such detailed descriptions remove
impediments to, and perfect the
mechanisms of, a free and open market
and a national market system and, in
general, protect investors and the public
interest because they provide market
participants with transparency and
clarity as to what connectivity is
included in the purchase of IDS
Network or NMS Network ports by NCL
Customers.18 The notes would also
make clear that all NCL Customers that
voluntarily select to access the IDS
Network or NMS Network receive the
same access and connectivity, and are
not subject to a charge above and
beyond the fee paid for the relevant IDS
Network or NMS Network ports. The
notes further make clear that NCL
Customers are not required to use any
of their bandwidth to access Exchange
systems or connect to an Included Data
Product unless they wish to do so;
rather, an NCL Customer only receives
the access and connectivity that it
selects, and can change what access or
connectivity it receives at any time,
subject to authorization from the data
provider or the relevant Exchange or
Affiliate SRO.19 Notes 1, 2, 3, and 4 are
all based on similar provisions in the
Exchange’s Price List for colocation.
Other NCL Services: The Exchange
believes it is reasonable to specify in the
Fee Schedule NCL Services that IDS
offers including NCL cross connects, the
NCL Expedite Fee, the NCL Change Fee,
and NCL connectivity to Third Party
Systems, Third Party Data Feeds, thirdparty testing and certification feeds, and
DTCC.
The Exchange believes that the
specific fees it has proposed for NCL
cross connects, the NCL Expedite Fee,
and the NCL Change Fee are reasonable.
As noted above, IDS faces competition
in the market for connectivity from
Hosting Users, IDS access centers
outside of the Mahwah Data Center,
third-party access centers, and thirdparty vendors. Market participants can
consider IDS’s proposed fees for the
specific services listed above in the
context of this competition, and choose
18 See Securities Exchange Act Release Nos.
79730 (January 4, 2017), 82 FR 3045 (January 10,
2017) (SR–NYSE–2016–92); 79728 (January 4,
2017), 82 FR 3035 (January 10, 2017) (SR–
NYSEMKT–2016–126); 79729 (January 4, 2017), 82
FR 3061 (January 10, 2017) (SR–NYSEArca–2016–
172).
19 The General Note on page 1 of the Fee
Schedule would also apply to all of the services
proposed herein. A market participant that incurs
fees for NCL connectivity or other NCL Services
from the Exchange or one of the Affiliate SROs
would not be subject to fees for the same service
charged by the other Affiliate SROs.
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the connectivity provider that offers the
services the market participant needs at
the optimal cost. As such, the proposed
fees for these IDS services are
constrained by competition.
The Exchange believes that charging
distinct fees for different NCL Services
is reasonable because not all market
participants need or wish to utilize the
same NCL Services. The proposed
choice of services allows market
participants to select which NCL
Services to use, based on their business
needs, and market participants are only
charged for the services that they select.
By charging only those market
participants that utilize an NCL Service
the related fee, those market
participants that directly benefit from a
service support its cost.
In addition, the Exchange believes
that the proposed fees are reasonable
because they allow the costs associated
with offering different NCL Services to
be defrayed or covered while providing
market participants the benefit of such
services. The Exchange believes that the
proposed charges are reasonable
because IDS offers NCL Services as
conveniences to market participants, but
in order to do so must provide,
maintain, and operate the Mahwah Data
Center facility hardware and technology
infrastructure. IDS needs to provide
network infrastructure that keeps pace
with the number of services available to
NCL Customers, including any
increasing demand for bandwidth, and
handle the installation, administration,
monitoring, support, and maintenance
of such services, including by
responding to any production issues. In
addition, in order to provide
connectivity to Third Party Data Feeds,
Third Party Systems, third party testing
and certification feeds, and DTCC, IDS
must establish and maintain multiple
connections to each Third Party Data
Feed, Third Party System, and DTCC,
allowing IDS to provide resilient and
redundant connections, adapt to any
changes made by the relevant third
party, and cover any applicable fees
(other than redistribution fees) charged
by the relevant third party, such as port
fees.
The Exchange believes it is reasonable
for redistribution fees charged by
providers of Third Party Data Feeds to
be passed through to NCL Customers,
without change to the fee. If not passed
through, the cost of the redistribution
fees would be factored into the
proposed fees for connectivity to Third
Party Data Feeds. The Exchange believes
that passing through the fees makes
them more transparent to the NCL
Customer, allowing the NCL Customer
to better assess the cost of the
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Fmt 4703
Sfmt 4703
connectivity to a Third Party Data Feed
by seeing the individual components of
the cost, i.e., IDS’s fee and redistribution
fee.
The Exchange believes that it is
reasonable to not charge third-party
markets or content providers for
connectivity to their own Third Party
Data Feeds, as the Exchange
understands that such parties generally
receive their own feeds for purposes of
diagnostics and testing. The Exchange
believes that facilitating such
diagnostics and testing removes
impediments to, and perfects the
mechanisms of, a free and open market
and a national market system and, in
general, protects investors and the
public interest.
Finally, the Exchange believes it is
reasonable to make available third party
testing and certification feeds to enable
customers to test and certify their
connections to third party data feeds.
The Proposed Change Is Equitable
The Exchange believes that its
proposal equitably allocates its fees
among market participants.
The Exchange believes that the
proposed change is equitable because it
would not apply differently to distinct
types or sizes of market participants.
Rather, it would apply to all NCL
Customers equally.
In addition, the Exchange believes
that the proposal is equitable because
only the market participants that
voluntarily select to receive the services
described herein would be charged for
them. The services described in this
filing are available to all market
participants on an equal basis (i.e., the
same products and services are available
to all market participants), and all
market participants that voluntarily
select a specific proposed service are
charged the same amount for that
service as all other market participants
purchasing that service.
IDS faces competition from numerous
other providers that offer market
participants choices for connectivity to
the Mahwah Data Center, Exchange
Systems, Third Party Systems, Included
Data Products, Third Party Data Feeds,
third party testing and certification
feeds, and DTCC. Without this proposed
rule change, market participants seeking
such connectivity would have fewer
options. With this proposal, market
participants would have more choices
with respect to the form and price of the
services they use, allowing market
participants to select the services and
connectivity options that better suit
their needs, thereby helping them tailor
their connectivity operations to the
requirements of their businesses.
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The Exchange believes that the
proposed NCL Notes 1 and 4 are
equitable because they specify that NCL
Customers that voluntarily select to
access the IDS Network or NMS
Network would not be subject to charges
above and beyond the fee paid for the
relevant IDS Network or NMS Network
port. Further, Notes 1, 2, 3, and 4
specify that NCL Customers will not be
charged for any access or connectivity
that they had not selected.
The Proposed Change Is Not Unfairly
Discriminatory
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The Exchange believes its proposal is
not unfairly discriminatory. The
proposed change does not apply
differently to distinct types or sizes of
market participants. Rather, it applies to
all market participants equally. The
purchase of any proposed service is
completely voluntarily and the Fee
Schedule will be applied uniformly to
all market participants.
IDS faces competition from numerous
other providers that offer market
participants choices for connectivity to
the Mahwah Data Center, Exchange
Systems, Third Party Systems, Included
Data Products, Third Party Data Feeds,
third party testing and certification
feeds, and DTCC. Without this proposed
rule change, market participants seeking
such connectivity would have fewer
options. With this proposal, market
participants would have more choices
with respect to the form and price of the
services they use, allowing market
participants to select the services and
connectivity options that better suit
their needs, thereby helping them tailor
their connectivity operations to the
requirements of their businesses.
The Exchange believes that the
proposed NCL Notes 1 and 4 are not be
unfairly discriminatory because they
specify that NCL Customers that
voluntarily select to access the IDS
Network or NMS Network are not be
subject to charges above and beyond the
fee paid for the relevant IDS Network or
NMS Network port. Further, Notes 1, 2,
3, and 4 specify that NCL Customers
will not be charged for any access or
connectivity that they had not
selected.20
For these reasons, the Exchange
believes that the proposal is consistent
with the Act.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The proposed change does not affect
competition among national securities
20 In addition, the General Note on page 1 of the
Fee Schedule would apply to all of the services
proposed herein. See supra note 19.
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exchanges or among members of the
Exchange, but rather between IDS and
its commercial competitors.
As noted above, the Exchange is
making the current proposal solely as a
result of the Commission’s recent
interpretation of the definitions of
‘‘exchange’’ and ‘‘facility’’ in the
Wireless Approval Order, which the
Exchange is presently challenging on
appeal to the Court of Appeals for the
District of Columbia Circuit.21 The
Exchange has nevertheless proposed
this rule change in order to preserve the
ability of IDS to offer the services at
issue herein. If IDS were compelled to
stop offering such services, consumers
would have fewer service providers to
choose from for their connectivity
needs, which would be a detriment to
competition overall.
Notwithstanding the foregoing, the
Exchange notes that there are numerous
other third parties that provide circuits
and connectivity at the Mahwah Data
Center, and that IDS competes with
those third parties for the provision of
such services to customers. None of
these third parties have been compelled
to file their services or fees with the
Commission, and requiring IDS to do so
puts IDS at a competitive disadvantage
vis-a`-vis its competitors. Requiring the
Exchange to file IDS services and fees
herein is therefore a burden on
competition.
The Exchange believes competition
would be best served by allowing IDS to
freely compete with the other providers
of connectivity services, without the
additional burden on IDS alone to file
any proposed changes to services and
fees with the Commission.
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 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
21 Intercontinental Exchange, Inc. v. SEC, No. 20–
1470 (D.C. Cir. 2020).
PO 00000
Frm 00151
Fmt 4703
Sfmt 4703
12743
(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–2021–13 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–2021–13. 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–2021–13, and
should be submitted on or before March
25, 2021.
E:\FR\FM\04MRN1.SGM
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12744
Federal Register / Vol. 86, No. 41 / Thursday, March 4, 2021 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–04423 Filed 3–3–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91218; File No. SR–
NYSEAMER–2021–10]
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing of
Proposed Rule Change To Amend the
Schedule of Wireless Connectivity
Fees and Charges To Add Circuits for
Connectivity Into and Out of the Data
Center in Mahwah, New Jersey
February 26, 2021.
Pursuant to Section 19(b)(1) 1of the
Securities Exchange Act of 1934
(‘‘Act’’),2 and Rule 19b–4 thereunder,3
notice is hereby given that on February
12, 2021, NYSE American LLC (‘‘NYSE
American’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
jbell on DSKJLSW7X2PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
schedule of Wireless Connectivity Fees
and Charges (the ‘‘Fee Schedule’’) to (1)
add circuits for connectivity into and
out of the data center in Mahwah, New
Jersey (the ‘‘Mahwah Data Center’’); (2)
add services available to customers of
the Mahwah Data Center that are not
colocation Users; and (3) change the
name of the Fee Schedule to ‘‘Mahwah
Wireless, Circuits, and Non-Colocation
Connectivity Fee Schedule.’’ 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
22 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
VerDate Sep<11>2014
20:27 Mar 03, 2021
Jkt 253001
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 amend the
Fee Schedule to add services (‘‘NCL
Services’’) and related fees available to
customers of the Mahwah Data Center
that are not colocation Users (‘‘NCL
Customers’’),4 as well as circuits into
and out of the Mahwah Data Center that
are available to both colocation Users
and NCL Customers. In addition, in a
conforming change, because the Fee
Schedule would no longer be limited to
wireless services, the Exchange
proposes to change the name of the Fee
Schedule from ‘‘Wireless Connectivity
Fee Schedule’’ to ‘‘Mahwah Wireless,
Circuits, and Non-Colocation
Connectivity Fee Schedule.’’ 5
The Exchange makes the current
proposal solely as a result of its
determination that the Commission’s
recent interpretations of the Act’s
definitions of the terms ‘‘exchange’’ and
‘‘facility,’’ as expressed in the Wireless
Approval Order,6 apply to connectivity
services described herein that are
offered by entities other than the
Exchange. The Exchange disagrees with
the Commission’s interpretations,
denies the services covered herein (and
in the Wireless Approval Order) are
offerings of an ‘‘exchange’’ or a
‘‘facility’’ thereof, and has sought review
of the Commission’s interpretations, as
4 For purposes of the Exchange’s colocation
services, a ‘‘User’’ means any market participant
that requests to receive colocation services directly
from the Exchange. See Securities Exchange Act
Release No. 76009 (September 29, 2015), 80 FR
60213 (October 5, 2015) (SR–NYSEMKT–2015–67).
5 Each of the Exchange’s affiliates (New York
Stock Exchange LLC, NYSE Arca, Inc., NYSE
Chicago, Inc., and NYSE National, Inc.) (the
‘‘Affiliate SROs’’) has submitted substantially the
same proposed rule change to propose the changes
described herein. See SR–NYSE–2021–14, SR–
NYSEArca–2021–13, SR–NYSECHX–2021–03, and
SR–NYSENAT–2021–04.
6 See Securities Exchange Act Release No. 90209
(October 15, 2020), 85 FR 67044 (October 21, 2020)
(SR–NYSE–2020–05, SR–NYSEAMER–2020–05,
SR–NYSEArca-2020–08, SR–NYSECHX–2020–02,
SR–NYSENAT–2020–03, SR–NYSE–2020–11, SR–
NYSEAMER–2020–10, SR–NYSEArca-2020–15,
SR–NYSECHX–2020–05, SR–NYSENAT–2020–08)
(‘‘Wireless Approval Order’’).
PO 00000
Frm 00152
Fmt 4703
Sfmt 4703
expressed in the Wireless Approval
Order, in the Court of Appeals for the
District of Columbia Circuit.7 Pending
resolution of such appeal, however, the
Exchange is making this proposal in
recognition that the Commission’s
current interpretation brings certain
offerings of the Exchange’s affiliates into
the scope of the terms ‘‘exchange’’ or
‘‘facility.’’
The Exchange expects the proposed
change to be operative 60 days after the
present filing becomes effective.
Mahwah Circuits
Customers can connect into and out of
the Mahwah Data Center using either
wireless connections or wired fiber
optic circuits. Both IDS and numerous
third-party telecommunications service
providers offer wired circuits into and
out of the Mahwah Data Center. The
circuits that IDS offers are described
below. Such IDS circuits are available to
all colocation Users and NCL
Customers, but such customers are not
obligated to use them; rather, both
colocation Users and NCL Customers
may instead choose to contract directly
with third-party telecom carriers for
circuits into and out of the Mahwah
Data Center.
The Exchange proposes to add to the
Fee Schedule the circuit options offered
by IDS to both colocation Users and
NCL Customers to connect into and out
of the Mahwah Data Center.
Specifically, the Exchange proposes to
amend the Fee Schedule to add two
different types of circuits, each available
in three different sizes, under the new
heading ‘‘C. Mahwah Circuits.’’
First, the Exchange proposes to
amend the Fee Schedule to add ‘‘Optic
Access’’ circuits, which are circuits that
IDS operates and that customers can use
to connect between the Mahwah Data
Center and IDS access centers at the
following six third-party owned data
centers: (1) 111 Eighth Avenue, New
York, NY; (2) 32 Avenue of the
Americas, New York, NY; (3) 165
Halsey, Newark, NJ; (4) Secaucus, NJ
(the ‘‘Secaucus Access Center’’); (5)
Carteret, NJ (the ‘‘Carteret Access
Center’’); and (6) Weehawken, NJ. Optic
Access circuits are available in 1 Gb, 10
Gb, and 40 Gb sizes.
Second, the Exchange proposes to
amend the Fee Schedule to add lowerlatency Optic Low Latency circuits that
IDS operates and that customers can use
to connect between the Mahwah Data
Center and IDS’s Secaucus Access
Center or Carteret Access Center. Optic
7 Intercontinental Exchange, Inc. v. SEC, No. 20–
1470 (D.C. Cir. 2020).
E:\FR\FM\04MRN1.SGM
04MRN1
]]>Agencies
[Federal Register Volume 86, Number 41 (Thursday, March 4, 2021)]
[Notices]
[Pages 12735-12744]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-04423]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91216; File No. SR-NYSEArca-2021-13]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change To Amend the Schedule of Wireless Connectivity
Fees and Charges To Add Circuits for Connectivity Into and Out of the
Data Center in Mahwah, New Jersey
February 26, 2021.
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 February 12, 2021, NYSE Arca, Inc. (``NYSE Arca'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\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 amend the schedule of Wireless
Connectivity Fees and Charges (the ``Fee Schedule'') to (1) add
circuits for connectivity into and out of the data center in Mahwah,
New Jersey (the ``Mahwah Data Center''); (2) add services available to
customers of the Mahwah Data Center that are not colocation Users; and
(3) change the name of the Fee Schedule to ``Mahwah Wireless, Circuits,
and Non-Colocation Connectivity Fee Schedule.'' 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 amend the Fee Schedule to add services
(``NCL Services'') and related fees available to customers of the
Mahwah Data Center that are not colocation Users (``NCL
Customers''),\4\ as well as circuits into and out of the Mahwah Data
Center that are available to both colocation Users and NCL Customers.
In addition, in a conforming change, because the Fee Schedule would no
longer be limited to wireless services, the Exchange proposes to change
the name of the Fee Schedule from ``Wireless Connectivity Fee
Schedule'' to ``Mahwah Wireless, Circuits, and Non-Colocation
Connectivity Fee Schedule.'' \5\
---------------------------------------------------------------------------
\4\ For purposes of the Exchange's colocation services, a
``User'' means any market participant that requests to receive
colocation 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).
\5\ Each of the Exchange's affiliates (New York Stock Exchange
LLC, NYSE American LLC, NYSE Chicago, Inc., and NYSE National, Inc.)
(the ``Affiliate SROs'') has submitted substantially the same
proposed rule change to propose the changes described herein. See
SR-NYSE-2021-14, SR-NYSEAMER-2021-10, SR-NYSECHX-2021-03, and SR-
NYSENAT-2021-04.
---------------------------------------------------------------------------
The Exchange makes the current proposal solely as a result of its
determination that the Commission's recent interpretations of the Act's
definitions of the terms ``exchange'' and ``facility,'' as expressed in
the Wireless Approval Order,\6\ apply to connectivity services
described herein that are offered by entities other than the Exchange.
The Exchange disagrees with the Commission's interpretations, denies
the services covered herein (and in the Wireless Approval Order) are
offerings of an ``exchange'' or a ``facility'' thereof, and has sought
review of the Commission's interpretations, as expressed in the
Wireless Approval Order, in the Court of Appeals for the District of
Columbia Circuit.\7\ Pending resolution of such appeal, however, the
Exchange is making this proposal in recognition that the Commission's
current interpretation brings certain offerings of the Exchange's
affiliates into the scope of the terms ``exchange'' or ``facility.''
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 90209 (October 15,
2020), 85 FR 67044 (October 21, 2020) (SR-NYSE-2020-05, SR-NYSEAMER-
2020-05, SR-NYSEArca-2020-08, SR-NYSECHX-2020-02, SR-NYSENAT-2020-
03, SR-NYSE-2020-11, SR-NYSEAMER-2020-10, SR-NYSEArca-2020-15, SR-
NYSECHX-2020-05, SR-NYSENAT-2020-08) (``Wireless Approval Order'').
\7\ Intercontinental Exchange, Inc. v. SEC, No. 20-1470 (D.C.
Cir. 2020).
---------------------------------------------------------------------------
The Exchange expects the proposed change to be operative 60 days
after the present filing becomes effective.
Mahwah Circuits
Customers can connect into and out of the Mahwah Data Center using
either wireless connections or wired fiber optic circuits. Both IDS and
numerous third-party telecommunications service providers offer wired
circuits into and out of the Mahwah Data Center. The circuits that IDS
offers are described below. Such IDS circuits are available to all
colocation Users and NCL Customers, but such customers are not
obligated to use them; rather, both colocation Users and NCL Customers
may instead choose to contract directly with third-party telecom
carriers for circuits into and out of the Mahwah Data Center.
The Exchange proposes to add to the Fee Schedule the circuit
options offered by IDS to both colocation Users and NCL Customers to
connect into and out of the Mahwah Data Center. Specifically, the
Exchange proposes to amend the Fee Schedule to add two different types
of circuits, each available in three different sizes, under the new
heading ``C. Mahwah Circuits.''
First, the Exchange proposes to amend the Fee Schedule to add
``Optic Access'' circuits, which are circuits that IDS operates and
that customers can use to connect between the Mahwah Data Center and
IDS access centers at the following six third-party owned data centers:
(1) 111 Eighth Avenue, New York, NY; (2) 32 Avenue of the Americas, New
York, NY; (3) 165 Halsey, Newark, NJ; (4) Secaucus, NJ (the ``Secaucus
Access Center''); (5) Carteret, NJ (the ``Carteret Access Center'');
and (6) Weehawken, NJ. Optic Access circuits are available in 1 Gb, 10
Gb, and 40 Gb sizes.
Second, the Exchange proposes to amend the Fee Schedule to add
lower-latency Optic Low Latency circuits that IDS operates and that
customers can use to connect between the Mahwah Data Center and IDS's
Secaucus Access Center or Carteret Access Center. Optic
[[Page 12736]]
Low Latency circuits are available in 1 Gb, 10 Gb, and 40 Gb sizes.
The Exchange proposes to add the following chart to the Fee
Schedule to include these circuits, as follows:
----------------------------------------------------------------------------------------------------------------
Type of service Amount of charge
----------------------------------------------------------------------------------------------------------------
Optic Access Circuit--1 Gb............. $1,500 initial charge plus $1,500 monthly charge.
Optic Access Circuit--10 Gb............ $5,000 initial charge plus $2,500 monthly charge.
Optic Access Circuit--40 Gb............ $5,000 initial charge plus $6,000 monthly charge.
Optic Low Latency Circuit--1 Gb........ $1,500 initial charge plus $2,750 monthly charge.
Optic Low Latency Circuit--10 Gb....... $5,000 initial charge plus $3,950 monthly charge.
Optic Low Latency Circuit--40 Gb....... $5,000 initial charge plus $8,250 monthly charge.
----------------------------------------------------------------------------------------------------------------
Non-Colocation Services
The Exchange proposes to amend the Fee Schedule to add several
services available to NCL Customers as well as several notes, under the
new heading ``D. Non-Colocation (``NCL'') Services.'' These are the
services that IDS offers within the Mahwah Data Center that are not
colocation services. The Exchange proposes to amend the Fee Schedule to
add services that include ports to the IDS Network--a wide area network
available in the Mahwah Data Center and other access centers--and ports
to a dedicated network to access the NMS feeds for which the Securities
Industry Automation Corporation is engaged as the securities
information processor (the ``NMS Network'').\8\ The Fee Schedule would
also specify the data products and data feeds to which an NCL Customer
could connect via these ports. The Exchange also proposes to amend the
Fee Schedule to enable NCL Customers to purchase cross connects and to
request services subject to an ``Expedite Fee'' or ``Change Fee.''
---------------------------------------------------------------------------
\8\ See Securities Exchange Act Release Nos. 88837 (May 7,
2020), 85 FR 28671 (May 13, 2020) (SR-NYSE-2019-46, SR-NYSEAMER-
2019-34, SR-NYSEArca-2019-61, SR-NYSENAT-2019-19) (``NMS Network
Approval Order'') and 88972 (May 29, 2020), 85 FR 34472 (June 4,
2020) (``NYSE Chicago NMS Network Approval Order'').
---------------------------------------------------------------------------
1. IDS Network Ports
The Exchange proposes to amend the Fee Schedule to add services
that IDS offers enabling NCL Customers to connect to the IDS Network in
the Mahwah Data Center.
The Exchange proposes to add the following fees and language to the
Fee Schedule:
IDS Network Ports *
----------------------------------------------------------------------------------------------------------------
Type of service Description Amount of charge
----------------------------------------------------------------------------------------------------------------
NCL IDS Network Access--10 Gb 10 Gb IDS $10,000 initial charge plus $15,250 monthly charge.
Network port.
NCL IDS Network Access--40 Gb 40 Gb IDS $10,000 initial charge plus $19,750 monthly charge.
Network port.
----------------------------------------------------------------------------------------------------------------
* See Note 1.
The Exchange also proposes to add to the Fee Schedule several notes
regarding these services that are based on General Notes 4, 5, and 6 of
the Exchange's Price List regarding colocation.
Specifically, the Exchange proposes to add the heading ``NCL
Notes'' after the tables in the proposed section of the Fee Schedule
titled ``D. Non-Colocation (``NCL'') Services.'' Note 1 would establish
that when an NCL Customer purchases access to the IDS Network, the NCL
Customer would receive (a) the ability to access the trading and
execution systems of the Exchange and Affiliate SROs (``Exchange
Systems'') as well as of the Global OTC System (``Global OTC''), and
(b) connectivity to any of the listed data products (``Included Data
Products'') that it selects. References in the proposed Fee Schedule
would refer customers to the applicable note.
Proposed Note 1 would be titled ``Note 1: IDS Network'' and would
provide:
When an NCL Customer purchases access to the IDS Network, it
receives the ability to access the trading and execution systems of
the NYSE, NYSE American, NYSE Arca, NYSE Chicago, and NYSE National
(together, the Exchange Systems) as well as of Global OTC (the
Global OTC System), subject, in each case, to authorization by the
NYSE, NYSE American, NYSE Arca, NYSE Chicago, NYSE National, or
Global OTC, as applicable. Each Exchange listed above offers access
to its Exchange Systems to its members and Global OTC offers access
to the Global OTC System to its subscribers, such that an NCL
Customer does not have to purchase a service that includes access to
the IDS Network to obtain access to Exchange Systems or the Global
OTC System.
When an NCL Customer purchases access to the IDS Network, it
receives connectivity to any of the Included Data Products that it
selects, subject to any necessary technical provisioning
requirements, authorization, and licensing by the provider of the
Included Data Feed. Fees for the Included Data Products are charged
by the provider of such Included Data Products. An NCL Customer can
change the Included Data Products to which it receives connectivity
at any time, subject to authorization from the provider of such
Included Data Product. Because access to the IDS Network is not the
exclusive method to connect to the Included Data Products, an NCL
Customer does not have to purchase a service that includes access to
the IDS Network to connect to such Included Data Products. The
Included Data Products are as follows:
NMS feeds
CTS
CQS
OPRA
NYSE
NYSE American
NYSE American Options
NYSE Arca
NYSE Arca Options
NYSE Best Quote and Trades (BQT)
NYSE Bonds
NYSE Chicago
NYSE National
2. NCL Connectivity to Third Party Systems, Data Feeds, Testing and
Certification Feeds, and DTCC
The Exchange also proposes to amend the Fee Schedule to provide for
the connectivity services that IDS offers for NCL Customers to Third
Party Systems, Third Party Data Feeds, third party testing and
certification feeds, and DTCC. The Exchange proposes to adopt
substantially similar services and fees as
[[Page 12737]]
set forth in the Exchange's Price List regarding colocation.\9\
---------------------------------------------------------------------------
\9\ See Securities Exchange Act Release No. 80310 (March 24,
2017), 82 FR 15763 (March 30, 2017) (SR-NYSEArca-2016-89).
---------------------------------------------------------------------------
Connectivity to Third Party Systems: The Exchange proposes to
specify in the Fee Schedule services that IDS offers NCL Customers to
access the trading and execution services of Third Party markets and
other content service providers (``Third Party Systems'') for a fee.
NCL Customers connect to Third Party Systems over the IDS Network.
In order to obtain access to a Third Party System, an NCL Customer
enters into an agreement with the relevant third-party content service
provider, pursuant to which the third-party content service provider
charges the NCL Customer for access to the Third Party System. When
such services are requested, IDS establishes a connection between the
NCL Customer and the relevant third party content service provider over
the IDS Network. IDS charges the NCL Customer for the connectivity to
the Third Party System. An NCL Customer only receives, and is only
charged by IDS for, connectivity to each Third Party System for which
the customer enters into an agreement with the third-party content
service provider.
Neither the Exchange nor IDS has an affiliation with the providers
of the Third Party Systems. Establishing an NCL Customer's access to a
Third Party System does not give either IDS or the Exchange any right
to use the Third Party Systems. Connectivity to a Third Party System
does not provide access or order entry to the Exchange's execution
system, and an NCL Customer's connection to a Third Party System is not
through the Exchange's execution system.
IDS charges a monthly recurring fee for connectivity to a Third
Party System, which the Exchange proposes to add to its Fee Schedule.
Specifically, when an NCL Customer requests access to a Third Party
System, IDS identifies the applicable third-party market or other
content service provider and the bandwidth connection it requires.
The Exchange proposes to add the following fees and language to the
Fee Schedule:
Connectivity to Third Party Systems Over IDS Network *
----------------------------------------------------------------------------------------------------------------
Description Amount of charge
----------------------------------------------------------------------------------------------------------------
1Mb......................................... $200 per connection monthly charge.
3Mb......................................... $400 per connection monthly charge.
5Mb......................................... $500 per connection monthly charge.
10Mb........................................ $800 per connection monthly charge.
25Mb........................................ $1,200 per connection monthly charge.
50Mb........................................ $1,800 per connection monthly charge.
100Mb....................................... $2,500 per connection monthly charge.
200Mb....................................... $3,000 per connection monthly charge.
1Gb......................................... $3,500 per connection monthly charge.
----------------------------------------------------------------------------------------------------------------
* See Note 2.
The Exchange proposes to add Note 2 to the section of the Fee
Schedule titled ``D. Non-Colocation (``NCL'') Services.'' Proposed Note
2 would be titled ``Note 2: Third Party Systems'' and would provide:
When an NCL Customer purchases a connection that includes access
to Third Party Systems, it receives access to Third Party Systems it
selects subject to any technical provisioning requirements,
authorization, and licensing from such Third Party System. Fees for
the Third Party Systems are charged by the provider of such Third
Party System. The Exchange is not the exclusive method to connect to
Third Party Systems. The Third Party Systems are as follows:
Third Party Systems
Americas Trading Group (ATG)
BM&F Bovespa
Boston Options Exchange (BOX)
Canadian Securities Exchange (CSE)
Cboe BYX Exchange (CboeBYX), Cboe BZX Exchange (CboeBZX), Cboe EDGA
Exchange (CboeEDGA), and Cboe EDGX Exchange (CboeEDGX)
Cboe Exchange (Cboe) and Cboe C2 Exchange (C2)
Chicago Mercantile Exchange (CME Group)
Credit Suisse
Euronext Optiq Cash and Derivatives Unicast (EUA)
Euronext Optiq Cash and Derivatives Unicast (Production)
Investors Exchange (IEX)
ITG TriAct Matchnow
Long Term Stock Exchange (LTSE)
Members Exchange (MEMX)
MIAX Options, MIAX PEARL Options, MIAX PEARL Equities, and MIAX
Emerald
Morgan Stanley
Nasdaq
NASDAQ Canada (CXC, CXD, CX2)
NASDAQ ISE
Neo Aequitas
NYFIX Marketplace
Omega
OneChicago
OTC Markets Group
TD Ameritrade
TMX Group
Connectivity to Third Party Data Feeds: The Exchange proposes to
specify in the Fee Schedule connectivity services that IDS offers NCL
Customers to connect to data feeds from third-party markets and other
content service providers (``Third Party Data Feeds'') for a fee. IDS
receives Third Party Data Feeds from multiple national securities
exchanges and other content service providers at the Mahwah Data
Center. IDS provides connectivity to that data to NCL Customers for a
fee. NCL Customers connect to Third Party Data Feeds over the IDS
Network.
In order to connect to a Third Party Data Feed, an NCL Customer
enters into a contract with the relevant third-party market or other
content service provider, pursuant to which the content service
provider charges the NCL Customer for the Third Party Data Feed. IDS
receives the Third Party Data Feed over its fiber optic network and,
after the data provider and NCL Customer enter into an agreement and
IDS receives authorization from the data provider, IDS retransmits the
data to the NCL Customer over the NCL Customer's IDS Network port. IDS
charges the NCL Customer for the connectivity to the Third Party Data
Feed. An NCL Customer only receives, and is only charged for,
connectivity to the Third Party Data Feeds for which it entered into
contracts.
With the exception of the ICE Data Services, ICE, and Global OTC
feeds, neither the Exchange nor IDS has any affiliation with the
sellers of the Third Party Data Feeds. The Exchange and IDS
[[Page 12738]]
have no right to use the Third Party Data Feeds other than as a
redistributor of the data. The Third Party Data Feeds do not provide
access or order entry to the Exchange's execution system. With the
exception of the ICE feed, the Third Party Data Feeds do not provide
access or order entry to the execution systems of the third party
generating the feed. IDS receives Third Party Data Feeds via arms-
length agreements and has no inherent advantage over any other
distributor of such data.
IDS charges a monthly recurring fee for connectivity to each Third
Party Data Feed. The monthly recurring fee is per Third Party Data
Feed, with the exception that the monthly recurring fee for the ICE
Data Services Consolidated Feeds (including the ICE Data Services
Consolidated Feed Shared Farm feeds), Vela--SuperFeeds, and MSCI feeds
vary by the bandwidth of the connection. Depending on its needs and
bandwidth, an NCL Customer may opt to receive all or some of the Third
Party Data Feeds.
Third Party Data Feed providers may charge redistribution fees. The
Exchange proposes that, when IDS is charged a redistribution fee by the
Third Party Data Feed provider, IDS would pass through the charge to
the NCL Customer, without change to the fee. The fee would be labeled
as a pass-through of a redistribution fee on the NCL Customer's
invoice.
The Exchange proposes that it would not charge NCL Customers that
are third-party markets or content providers for connectivity to their
own feeds, as it understands that such parties generally receive their
own feeds for purposes of diagnostics and testing.
The Exchange proposes to add the following fees and language to the
Fee Schedule:
Connectivity to Third Party Data Feeds Over the IDS Network *
------------------------------------------------------------------------
Description Monthly charge
------------------------------------------------------------------------
BM&F Bovespa.......................................... $3,000
Boston Options Exchange (BOX)......................... 1,000
Canadian Securities Exchange (CSE).................... 1,000
Cboe BZX Exchange (CboeBZX) and Cboe BYX Exchange 2,000
(CboeBYX)............................................
Cboe EDGX Exchange (CboeEDGX) and Cboe EDGA Exchange 2,000
(CboeEDGA)...........................................
Cboe Exchange (Cboe) and Cboe C2 Exchange (C2)........ 2,000
CME Group............................................. 3,000
Euronext Optiq Compressed Cash........................ 900
Euronext Optiq Compressed Derivatives................. 600
Euronext Optiq Shaped Cash............................ 1,200
Euronext Optiq Shaped Derivatives..................... 900
Financial Industry Regulatory Authority (FINRA)....... 500
Global OTC............................................ 100
ICE Data Services Consolidated Feed <=100 Mb.......... 200
ICE Data Services Consolidated Feed >100 Mb to <=1 Gb. 500
ICE Data Services Consolidated Feed >1 Gb............. 1,000
ICE Data Services Consolidated Feed Shared Farm 200
<=100Mb..............................................
ICE Data Services Consolidated Feed Shared Farm >100 500
Mb to <=1 Gb.........................................
ICE Data Services Consolidated Feed Shared Farm >1 Gb. 1,000
ICE Data Services--ICE TMC............................ 200
ICE Data Services PRD................................. 200
ICE Data Services PRD CEP............................. 400
Intercontinental Exchange (ICE)....................... 1,500
Investors Exchange (IEX).............................. 1,000
ITG TriAct Matchnow................................... 1,000
Members Exchange (MEMX)............................... 3,000
MIAX Emerald.......................................... 3,500
MIAX Options/MIAX PEARL Options....................... 2,000
MIAX PEARL Equities................................... 2,500
Montr[eacute]al Exchange (MX)......................... 1,000
MSCI 5 Mb............................................. 500
MSCI 25 Mb............................................ 1,200
NASDAQ Stock Market................................... 2,000
NASDAQ OMX Global Index Data Service.................. 100
NASDAQ UQDF & UTDF.................................... 500
NASDAQ Canada (CXC, CXD, CX2)......................... 1,500
NASDAQ ISE............................................ 1,000
Neo Aequitas.......................................... 1,200
Omega................................................. 1,000
OneChicago............................................ 1,000
OTC Markets Group..................................... 1,000
Vela--SuperFeed <500 Mb............................... 250
Vela--SuperFeed >500 Mb to <1.25 Gb................... 800
Vela--SuperFeed >1.25 Gb.............................. 1,000
TMX Group............................................. 2,500
------------------------------------------------------------------------
* See Note 3.
The Exchange proposes to add Note 3 to the section of the Fee
Schedule titled ``D. Non-Colocation (``NCL'') Services.'' Proposed Note
3 would be titled ``Note 3: Third Party Systems'' and would provide:
Pricing for data feeds from third party markets and other
service providers (Third Party Data Feeds) is for connectivity only.
Connectivity to Third Party Data Feeds is subject to any technical
provisioning requirements, authorization, and licensing
[[Page 12739]]
from the provider of the data feed. Connectivity to Third Party Data
Feeds is over the IDS Network. Fees for Third Party Data Feeds are
charged by the provider of such data feeds. Third Party Data Feed
providers may charge redistribution fees. When IDS is charged a
redistribution fee, IDS passes the charge through to the customer,
without change to the fee. The fee is labeled as a pass-through of a
redistribution fee on the customer's invoice. IDS does not charge
third party markets or content providers for connectivity to their
own feeds. IDS is not the exclusive method to connect to Third Party
Data Feeds.
Connectivity to Third Party Data Testing and Certification Feeds:
The Exchange proposes to specify in the Fee Schedule that NCL Customers
may obtain connectivity to third-party testing and certification feeds.
Certification feeds are used to certify that an NCL Customer conforms
to any of the relevant content service provider's requirements for
accessing Third Party Systems or receiving Third Party Data Feeds,
while testing feeds would provide NCL Customers an environment in which
to conduct tests with non-live data. Such feeds, which are solely used
for certification and testing and do not carry live production data,
are available over the IDS Network.
Connectivity to third party testing and certification feeds would
be subject to any technical provisioning requirements, authorization,
and licensing from the provider of the data feed. Fees for such feeds
are charged by the provider of the feed. The Exchange is not the
exclusive method to connect to third-party testing and certification
feeds.
The Exchange proposes to add the following fees and language to the
Fee Schedule:
Connectivity to Third Party Testing and $100 monthly recurring charge
Certification Feeds. per feed.
Connectivity to DTCC: The Exchange proposes to specify in the Fee
Schedule services that IDS provides to connect NCL Customers to
Depository Trust & Clearing Corporation (``DTCC'') for clearing, fund
transfer, insurance, and settlement services.
In order to connect to DTCC, an NCL Customer enters into a contract
with DTCC, pursuant to which DTCC charges the NCL Customer for the
services provided. IDS receives the DTCC feed over its fiber optic
network and, after DTCC and the NCL Customer entered into the services
contract and IDS received authorization from DTCC, IDS provides
connectivity to DTCC to the NCL Customer over the NCL Customer's IDS
Network port. IDS charges the NCL Customer for the connectivity to
DTCC.
Connectivity to DTCC does not provide access or order entry to the
Exchange's execution system, and an NCL Customer's connection to DTCC
is not through the Exchange's execution system.
Connectivity to DTCC is subject to any technical provisioning
requirements, authorization, and licensing from DTCC. Fees for such
feeds are charged by DTCC. IDS is not the exclusive provider to connect
to DTCC feeds.
The Exchange proposes to add the following fees and language to the
Fee Schedule:
Connectivity to DTCC
------------------------------------------------------------------------
Description Amount of charge
------------------------------------------------------------------------
5 Mb connection to DTCC................ $500 monthly recurring charge.
50 Mb connection to DTCC............... $2,500 monthly recurring
charge.
------------------------------------------------------------------------
3. NCL NMS Network Ports
The Exchange proposes to amend the Fee Schedule to add services
that IDS currently offers enabling NCL Customers to connect to the NMS
Network in the Mahwah Data Center.
The Exchange proposes to add the following fees and language to the
Fee Schedule:
NCL NMS Network Ports *
------------------------------------------------------------------------
Type of service Description Amount of charge
------------------------------------------------------------------------
NCL NMS Network Access--10 10 Gb NCL NMS $10,000 initial
Gb. Network port. charge plus $11,000
monthly charge.
NCL NMS Network Access--40 40 Gb NCL NMS $10,000 initial
Gb. Network port. charge plus $18,000
monthly charge.
------------------------------------------------------------------------
* See Note 4.
The Exchange also proposes to add Note 4 to the section of the Fee
Schedule titled ``D. Non-Colocation (``NCL'') Services,'' to establish
that, when an NCL Customer purchases an NMS Network port, it has the
option of receiving the NMS feeds over the NMS Network.
Proposed Note 4 would be titled ``Note 4: NMS Network'' and would
provide:
When an NCL Customer purchases access to the NMS Network, upon
its request, it will receive connectivity to any of the NMS feeds
that it selects, subject to any necessary technical provisioning
requirements, authorization, and licensing from the provider of such
NMS feed. Fees for the NMS feeds are charged by the provider of such
NMS feed. The NMS feeds are as follows:
NMS feeds
CTS
CQS
OPRA
4. NCL Cross Connect
The Exchange proposes to amend the Fee Schedule to specify fiber
cross connect services that IDS offers NCL Customers for an initial and
monthly charge.\10\ A cross connect is used to connect a circuit to a
port. NCL Customers use such cross connects to connect from the IDS
Network or NMS Network to a circuit connecting outside the Mahwah Data
Center. The Exchange
[[Page 12740]]
proposes that the fees for this service would be identical to the fees
for the corresponding service in colocation.
---------------------------------------------------------------------------
\10\ Because NCL Customers do not co-locate any equipment in the
Mahwah Data Center, they generally require fewer fiber cross
connects than colocation Users. Accordingly, the Exchange does not
propose amending the Fee Schedule to include bundles of 6, 12, 18,
or 24 cross connects as are available to colocation Users.
---------------------------------------------------------------------------
The Exchange proposes to add the following fees and language to the
Fee Schedule:
------------------------------------------------------------------------
Type of service Description Amount of charge
------------------------------------------------------------------------
NCL Cross Connect........... Furnish and install $500 initial charge
one cross-connect. plus $600 monthly
charge.
------------------------------------------------------------------------
5. NCL Expedite Fee
The Exchange proposes to amend the Fee Schedule to specify optional
services that IDS offers NCL Customers to expedite the completion of
services purchased or ordered by the NCL Customer, for which IDS
charges an ``Expedite Fee.'' Similar to the ``Expedite Fee'' applicable
to Users in colocation,\11\ if an NCL Customer wishes to obtain NCL
Services earlier than the expected completion date, the NCL Customer
may pay the Expedite Fee. The time saved would vary depending on the
type(s) of service(s) ordered, but the Expedite Fee would always be a
flat $4,000, allowing the NCL Customer to determine if the expected
time savings warrants payment of the fee.
---------------------------------------------------------------------------
\11\ See Securities Exchange Act Release No. 67669 (August 15,
2012), 77 FR 50746 (August 22, 2012) (SR-NYSEArca-2012-62) and No.
67667 (August 15, 2012), 77 FR 50743 (August 22, 2012) (SR-NYSEArca-
2012-63).
---------------------------------------------------------------------------
The Exchange proposes to add the following fees and language to the
Fee Schedule:
------------------------------------------------------------------------
Type of service Description Amount of charge
------------------------------------------------------------------------
NCL Expedite Fee............ Expedited $4,000 per request.
installation/
completion of a
customer's NCL
service.
------------------------------------------------------------------------
6. NCL Change Fee
The Exchange proposes to amend the Fee Schedule to specify the
``Change Fee'' that IDS charges an NCL Customer if the NCL Customer
requests a change to one or more existing NCL Services that IDS has
already established or completed for the NCL Customer.
In this regard, the Exchange notes that several of the proposed
services that would be added to the Fee Schedule include an initial fee
in addition to an ongoing monthly fee. These initial fees are related
to IDS's initial cost of establishing or installing a particular
service for the NCL Customer. Similar to the ``Change Fee'' applicable
to Users in colocation,\12\ IDS charges a fee of $950 per order if the
NCL Customer requests a change to one or more existing NCL Services
that IDS has already established or completed for the NCL Customer. For
example, the initial installation of an IDS Network connection would
include establishing and configuring market data services requested by
the NCL Customer, which would be covered by the initial install fee.
However, if the NCL Customer requests that IDS establish and configure
additional market data services for its IDS Network connection, the NCL
Customer would be charged a one-time Change Fee of $950 for that
request. If an NCL Customer orders two or more services at one time
(for example, through submitting an order form requesting multiple
services), the NCL Customer would be charged a one-time Change Fee of
$950, which would cover the multiple services.
---------------------------------------------------------------------------
\12\ See id.
---------------------------------------------------------------------------
The Exchange proposes to add the following fees and language to the
Fee Schedule:
------------------------------------------------------------------------
Type of service Description Amount of charge
------------------------------------------------------------------------
NCL Change Fee.............. Change to an NCL $950 per request.
service that has
already been
installed/completed
for a customer.
------------------------------------------------------------------------
Fee Schedule Name
In addition, the Exchange proposes to change the name of the
``Wireless Connectivity Fee Schedule'' to ``Connectivity Fee
Schedule.'' [sic] Because the Fee Schedule will no longer be limited to
wireless services, the Exchange proposes to change the name of the Fee
Schedule from ``Wireless Connectivity Fee Schedule'' [sic] to ``Mahwah
Wireless, Circuits, and Non-Colocation Connectivity Fee Schedule.''
Application and Impact of the Proposed Changes
There are currently few NCL Customers. Accordingly, the Exchange
expects that the impact of the proposed change would be minimal.
The proposed change is not targeted at, or expected to be limited
in applicability to, a specific segment of market participant. The
Mahwah Circuits are available for purchase for any potential customer
requiring a circuit between the Mahwah Data Center and a remote
location. The NCL Services are available for purchase by any customer.
The proposed changes do not apply differently to distinct types or
sizes of customers. Rather, they apply to all customers equally.
Use of the services proposed in this filing are completely
voluntary and available to all market participants on a non-
discriminatory basis.
Competitive Environment
IDS operates in a highly competitive market in which exchanges,
third party telecommunications providers, Hosting Users,\13\ and other
third-party vendors offer connectivity services as a means to
facilitate the trading and other market activities of 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
[[Page 12741]]
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.'' \14\
---------------------------------------------------------------------------
\13\ ``Hosting'' is a service offered by a User to another
entity In the User's space within the Mahwah Data Center. The
Exchange allows Users to act as Hosting Users for a monthly fee. See
Securities Exchange Act Release No. 76010 (September 29, 2015), 80
FR 60197 (October 5, 2015) (SR-NYSEArca-2015-82).
\14\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------
The proposed changes are not otherwise intended to address any
other issues relating to services related to the Mahwah Data Center
and/or related fees, and the Exchange is not aware of any problems that
market participants 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,\15\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\16\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest
and because it is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers. The Exchange further believes
that the proposed rule change is consistent with Section 6(b)(4) of the
Act,\17\ because it provides for the equitable allocation of reasonable
dues, fees, and other charges among its members and issuers and other
persons using its facilities and does not unfairly discriminate between
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
\17\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
The Proposed Change Is Reasonable
The Exchange believes that the proposed rule change is reasonable
and 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.
General: Only the market participants that voluntarily select to
receive the IDS services described herein are charged for them, and
those services are available to all market participants. Furthermore,
the IDS services described in this filing are available to all market
participants on an equal basis (i.e., the same products and services
are available to all market participants). All market participants that
voluntarily select a specific proposed IDS service would be charged the
same amount for that service as all other market participants
purchasing that service.
In addition, the Exchange believes that the proposed rule change is
reasonable because the IDS services described herein are offered as a
convenience to market participants, but offering them requires the
provision, maintenance, and operation of the Mahwah Data Center,
including the installation, monitoring, support, and maintenance of the
services.
Mahwah Circuits: The Exchange believes the fees proposed herein for
IDS's Mahwah Circuits are reasonable. The market for circuits into and
out of the Mahwah Data Center is competitive, and the proposed IDS
offerings are merely one of several options from which market
participants can choose. Each of the third-party telecommunications
providers that has a presence in the Mahwah Data Center's ``Meet Me
Rooms'' offers similar circuits to market participants, in competition
with the IDS offerings proposed here. Each market participant
considering whether to purchase a circuit directly can weigh that
option against similar circuits offered by those third-party carriers,
and can choose which circuit to purchase based on which combination of
latency, bandwidth, price, and other factors best meets its business
needs. Indeed, the Exchange understands that most of the third-party
telecommunications providers that provide circuits do so at fees lower
than those proposed herein, and that most NCL Customers and colocation
Users use such third party telecommunication circuits into and out of
the Mahwah Data Center.
IDS Network Ports: The Exchange believes that the IDS Network ports
proposed herein are reasonable. The market for connecting with the
Exchange's trading and execution systems is competitive, and the
proposed IDS Network ports that IDS provides are merely one of several
options that market participants may choose. As alternatives to the IDS
Network ports, a market participant would be able to access or connect
to Exchange Systems, Third Party Systems, Included Data Products, Third
Party Data Feeds, third party testing and certification feeds, and DTCC
through (a) a connection to an IDS access center outside of the Mahwah
Data Center, (b) a third-party access center, (c) a third-party vendor,
(d) a Hosting User, or (e) colocation.
Market participants consider various factors in determining which
connectivity options to choose, including latency; bandwidth size;
amount of network uptime; the equipment that the network uses; the cost
of the connection; and the applicable contractual provisions. IDS's
offering of connectivity services via IDS Network ports gives market
participants another service to evaluate and consider, thereby
broadening their options for connectivity to the Exchange Systems and
allowing them to tailor their connectivity options to their specific
needs.
The Exchange further believes that the proposed fees for IDS
Network ports for NCL Customers are reasonable because such prices are
constrained by competition with the numerous other providers that offer
connectivity to the Exchange Systems. If IDS were to attempt to offer
such ports at a supra-competitive price, potential customers would
likely respond by seeking out less expensive substitutes from other
providers.
NCL NMS Network Ports: The Exchange believes that the proposed fees
for NMS Network ports for NCL Customers are reasonable to recoup the
costs of building the NMS Network. Until 2019, SIAC was required to
provide connectivity to the NMS feeds only via the IP network. Although
the operating committees for the CTA/CQ Plans authorized SIAC to offer
connectivity to the NMS feeds in the Mahwah Data Center via an
alternate, dedicated, low-latency NMS Network, the operating committee
did not assume the costs of creating such a network; instead, the
Exchange and the Affiliate SROs funded the capital and operational
expenses to build and operate the NMS Network. The implementation costs
of approximately $3.8 million are applicable only to the NMS Network,
which is used for the sole purpose of providing access to the NMS
feeds. None of the implementation costs are applicable to any other
Exchange services. As of the date of this filing, only one customer has
contracted with IDS for an NCL NMS Network port, and the Exchange
expects that demand for NMS Network ports outside of colocation will be
very low. The service is nevertheless available, and so the Exchange
proposes to add it to the Fee Schedule.
NCL Notes: With respect to proposed NCL Notes 1, 2, 3, and 4, the
Exchange believes they are reasonable because they provide detailed
descriptions of the access and connectivity that NCL
[[Page 12742]]
Customers receive when they purchase IDS Network or NMS Network ports.
Such detailed descriptions remove impediments to, and perfect the
mechanisms of, a free and open market and a national market system and,
in general, protect investors and the public interest because they
provide market participants with transparency and clarity as to what
connectivity is included in the purchase of IDS Network or NMS Network
ports by NCL Customers.\18\ The notes would also make clear that all
NCL Customers that voluntarily select to access the IDS Network or NMS
Network receive the same access and connectivity, and are not subject
to a charge above and beyond the fee paid for the relevant IDS Network
or NMS Network ports. The notes further make clear that NCL Customers
are not required to use any of their bandwidth to access Exchange
systems or connect to an Included Data Product unless they wish to do
so; rather, an NCL Customer only receives the access and connectivity
that it selects, and can change what access or connectivity it receives
at any time, subject to authorization from the data provider or the
relevant Exchange or Affiliate SRO.\19\ Notes 1, 2, 3, and 4 are all
based on similar provisions in the Exchange's Price List for
colocation.
---------------------------------------------------------------------------
\18\ See Securities Exchange Act Release Nos. 79730 (January 4,
2017), 82 FR 3045 (January 10, 2017) (SR-NYSE-2016-92); 79728
(January 4, 2017), 82 FR 3035 (January 10, 2017) (SR-NYSEMKT-2016-
126); 79729 (January 4, 2017), 82 FR 3061 (January 10, 2017) (SR-
NYSEArca-2016-172).
\19\ The General Note on page 1 of the Fee Schedule would also
apply to all of the services proposed herein. A market participant
that incurs fees for NCL connectivity or other NCL Services from the
Exchange or one of the Affiliate SROs would not be subject to fees
for the same service charged by the other Affiliate SROs.
---------------------------------------------------------------------------
Other NCL Services: The Exchange believes it is reasonable to
specify in the Fee Schedule NCL Services that IDS offers including NCL
cross connects, the NCL Expedite Fee, the NCL Change Fee, and NCL
connectivity to Third Party Systems, Third Party Data Feeds, third-
party testing and certification feeds, and DTCC.
The Exchange believes that the specific fees it has proposed for
NCL cross connects, the NCL Expedite Fee, and the NCL Change Fee are
reasonable. As noted above, IDS faces competition in the market for
connectivity from Hosting Users, IDS access centers outside of the
Mahwah Data Center, third-party access centers, and third-party
vendors. Market participants can consider IDS's proposed fees for the
specific services listed above in the context of this competition, and
choose the connectivity provider that offers the services the market
participant needs at the optimal cost. As such, the proposed fees for
these IDS services are constrained by competition.
The Exchange believes that charging distinct fees for different NCL
Services is reasonable because not all market participants need or wish
to utilize the same NCL Services. The proposed choice of services
allows market participants to select which NCL Services to use, based
on their business needs, and market participants are only charged for
the services that they select. By charging only those market
participants that utilize an NCL Service the related fee, those market
participants that directly benefit from a service support its cost.
In addition, the Exchange believes that the proposed fees are
reasonable because they allow the costs associated with offering
different NCL Services to be defrayed or covered while providing market
participants the benefit of such services. The Exchange believes that
the proposed charges are reasonable because IDS offers NCL Services as
conveniences to market participants, but in order to do so must
provide, maintain, and operate the Mahwah Data Center facility hardware
and technology infrastructure. IDS needs to provide network
infrastructure that keeps pace with the number of services available to
NCL Customers, including any increasing demand for bandwidth, and
handle the installation, administration, monitoring, support, and
maintenance of such services, including by responding to any production
issues. In addition, in order to provide connectivity to Third Party
Data Feeds, Third Party Systems, third party testing and certification
feeds, and DTCC, IDS must establish and maintain multiple connections
to each Third Party Data Feed, Third Party System, and DTCC, allowing
IDS to provide resilient and redundant connections, adapt to any
changes made by the relevant third party, and cover any applicable fees
(other than redistribution fees) charged by the relevant third party,
such as port fees.
The Exchange believes it is reasonable for redistribution fees
charged by providers of Third Party Data Feeds to be passed through to
NCL Customers, without change to the fee. If not passed through, the
cost of the redistribution fees would be factored into the proposed
fees for connectivity to Third Party Data Feeds. The Exchange believes
that passing through the fees makes them more transparent to the NCL
Customer, allowing the NCL Customer to better assess the cost of the
connectivity to a Third Party Data Feed by seeing the individual
components of the cost, i.e., IDS's fee and redistribution fee.
The Exchange believes that it is reasonable to not charge third-
party markets or content providers for connectivity to their own Third
Party Data Feeds, as the Exchange understands that such parties
generally receive their own feeds for purposes of diagnostics and
testing. The Exchange believes that facilitating such diagnostics and
testing removes impediments to, and perfects the mechanisms of, a free
and open market and a national market system and, in general, protects
investors and the public interest.
Finally, the Exchange believes it is reasonable to make available
third party testing and certification feeds to enable customers to test
and certify their connections to third party data feeds.
The Proposed Change Is Equitable
The Exchange believes that its proposal equitably allocates its
fees among market participants.
The Exchange believes that the proposed change is equitable because
it would not apply differently to distinct types or sizes of market
participants. Rather, it would apply to all NCL Customers equally.
In addition, the Exchange believes that the proposal is equitable
because only the market participants that voluntarily select to receive
the services described herein would be charged for them. The services
described in this filing are available to all market participants on an
equal basis (i.e., the same products and services are available to all
market participants), and all market participants that voluntarily
select a specific proposed service are charged the same amount for that
service as all other market participants purchasing that service.
IDS faces competition from numerous other providers that offer
market participants choices for connectivity to the Mahwah Data Center,
Exchange Systems, Third Party Systems, Included Data Products, Third
Party Data Feeds, third party testing and certification feeds, and
DTCC. Without this proposed rule change, market participants seeking
such connectivity would have fewer options. With this proposal, market
participants would have more choices with respect to the form and price
of the services they use, allowing market participants to select the
services and connectivity options that better suit their needs, thereby
helping them tailor their connectivity operations to the requirements
of their businesses.
[[Page 12743]]
The Exchange believes that the proposed NCL Notes 1 and 4 are
equitable because they specify that NCL Customers that voluntarily
select to access the IDS Network or NMS Network would not be subject to
charges above and beyond the fee paid for the relevant IDS Network or
NMS Network port. Further, Notes 1, 2, 3, and 4 specify that NCL
Customers will not be charged for any access or connectivity that they
had not selected.
The Proposed Change Is Not Unfairly Discriminatory
The Exchange believes its proposal is not unfairly discriminatory.
The proposed change does not apply differently to distinct types or
sizes of market participants. Rather, it applies to all market
participants equally. The purchase of any proposed service is
completely voluntarily and the Fee Schedule will be applied uniformly
to all market participants.
IDS faces competition from numerous other providers that offer
market participants choices for connectivity to the Mahwah Data Center,
Exchange Systems, Third Party Systems, Included Data Products, Third
Party Data Feeds, third party testing and certification feeds, and
DTCC. Without this proposed rule change, market participants seeking
such connectivity would have fewer options. With this proposal, market
participants would have more choices with respect to the form and price
of the services they use, allowing market participants to select the
services and connectivity options that better suit their needs, thereby
helping them tailor their connectivity operations to the requirements
of their businesses.
The Exchange believes that the proposed NCL Notes 1 and 4 are not
be unfairly discriminatory because they specify that NCL Customers that
voluntarily select to access the IDS Network or NMS Network are not be
subject to charges above and beyond the fee paid for the relevant IDS
Network or NMS Network port. Further, Notes 1, 2, 3, and 4 specify that
NCL Customers will not be charged for any access or connectivity that
they had not selected.\20\
---------------------------------------------------------------------------
\20\ In addition, the General Note on page 1 of the Fee Schedule
would apply to all of the services proposed herein. See supra note
19.
---------------------------------------------------------------------------
For these reasons, the Exchange believes that the proposal is
consistent with the Act.
B. Self-Regulatory Organization's Statement on Burden on Competition
The proposed change does not affect competition among national
securities exchanges or among members of the Exchange, but rather
between IDS and its commercial competitors.
As noted above, the Exchange is making the current proposal solely
as a result of the Commission's recent interpretation of the
definitions of ``exchange'' and ``facility'' in the Wireless Approval
Order, which the Exchange is presently challenging on appeal to the
Court of Appeals for the District of Columbia Circuit.\21\ The Exchange
has nevertheless proposed this rule change in order to preserve the
ability of IDS to offer the services at issue herein. If IDS were
compelled to stop offering such services, consumers would have fewer
service providers to choose from for their connectivity needs, which
would be a detriment to competition overall.
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\21\ Intercontinental Exchange, Inc. v. SEC, No. 20-1470 (D.C.
Cir. 2020).
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Notwithstanding the foregoing, the Exchange notes that there are
numerous other third parties that provide circuits and connectivity at
the Mahwah Data Center, and that IDS competes with those third parties
for the provision of such services to customers. None of these third
parties have been compelled to file their services or fees with the
Commission, and requiring IDS to do so puts IDS at a competitive
disadvantage vis-[agrave]-vis its competitors. Requiring the Exchange
to file IDS services and fees herein is therefore a burden on
competition.
The Exchange believes competition would be best served by allowing
IDS to freely compete with the other providers of connectivity
services, without the additional burden on IDS alone to file any
proposed changes to services and fees with the Commission.
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 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 [email protected]. Please include
File Number SR-NYSEArca-2021-13 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-2021-13. 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-2021-13, and should be
submitted on or before March 25, 2021.
[[Page 12744]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-04423 Filed 3-3-21; 8:45 am]
BILLING CODE 8011-01-P
