Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Continue Offering Certain Connectivity Services That Have Been Suspended by the Securities and Exchange Commission, 26979-26982 [2021-10385]

Download as PDF Federal Register / Vol. 86, No. 94 / Tuesday, May 18, 2021 / Notices will benefit competition by enhancing the Exchange’s ability to compete by providing additional services to market participants. It is not intended to address a competitive issue. Rather, the proposal is intended to allow the Exchange to increase its inventory of MEI Ports to meet increased Member demand and increased message traffic resulting from greater marketplace volatility. The Exchange also does not believe that the proposed rule change will impose a burden on intramarket competition because additional Limited Service MEI Ports are available to all Market Makers on an equal basis. It is a business decision of each Market Maker whether to pay for the additional Limited Service MEI Ports. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,39 and Rule 19b–4(f)(2) 40 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. jbell on DSKJLSW7X2PROD with NOTICES U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). VerDate Sep<11>2014 16:40 May 17, 2021 [Release No. 34–91863; File No. SR– NYSENAT–2021–13] Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Continue Offering Certain Connectivity Services That Have Been Suspended by the Securities and Exchange Commission For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.41 J. Matthew DeLesDernier, Assistant Secretary. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change [FR Doc. 2021–10379 Filed 5–17–21; 8:45 am] BILLING CODE 8011–01–P • 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– MIAX–2021–19 on the subject line. 40 17 SECURITIES AND EXCHANGE COMMISSION All submissions should refer to File Number SR–MIAX–2021–19. 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–MIAX–2021–19 and should be submitted on or before June 8, 2021. Electronic Comments 39 15 May 12, 2021. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on May 7, 2021, NYSE National, Inc. (‘‘NYSE National’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to continue offering certain connectivity services that have been suspended by the Securities and Exchange Commission (‘‘Commission’’) at no charge, for a period of 14 days, in order to provide affected Users time to acquire substitute services before their connectivity is terminated. 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. 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. 1 15 41 17 Jkt 253001 26979 PO 00000 CFR 200.30–3(a)(12). Frm 00088 Fmt 4703 Sfmt 4703 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\18MYN1.SGM 18MYN1 26980 Federal Register / Vol. 86, No. 94 / Tuesday, May 18, 2021 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change jbell on DSKJLSW7X2PROD with NOTICES 1. Purpose The Exchange proposes to continue offering certain connectivity services that have been suspended by the Commission at no charge, for a period of 14 days, in order to provide affected Users 3 time to acquire substitute services before their connectivity is terminated. As background, on March 10, 2021, the Exchange filed with the Commission a proposed rule change for immediate effectiveness (the ‘‘Filing’’) that amended the colocation services offered by the Exchange to provide Users the option to access to the systems and data feeds of various additional third parties.4 The proposed rule change became operative on April 9, 2021. Since then, five Users have contracted to receive the services that were added in the Filing. On May 7, 2021, the Commission suspended the Filing and instituted proceedings to determine whether the proposed rule change should be approved or disapproved.5 Such action suspended the Exchange’s ability to offer access to Third Party Systems from Long Term Stock Exchange, Members Exchange, MIAX Emerald, MIAX PEARL Equities, Morgan Stanley, and TD Ameritrade, and to offer connectivity to Third Party Data Feeds from ICE Data Services—ICE TMC, Members Exchange, MIAX Emerald, and MIAX PEARL Equities (together, the ‘‘Suspended Services’’). The Commission’s suspension of such services is likely to cause disruption to the current Users of such services, who 3 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. 83351 (May 31, 2018), 83 FR 26314 (June 6, 2018) (SR–NYSENAT–2018–07). As specified in the Exchange’s Schedule of Fees and Rebates (‘‘Fee Schedule’’), a User that incurs colocation fees for a particular colocation service pursuant thereto would not be subject to colocation fees for the same colocation service charged by the Exchange’s affiliates New York Stock Exchange, LLC, NYSE American LLC, NYSE Arca, Inc., and NYSE Chicago, Inc. (together, the ‘‘Affiliate SROs’’). See id. at 26314 n.11. Each Affiliate SRO has submitted substantially the same proposed rule change to propose the changes described herein. See SR–NYSE–2021–31, SR–NYSEAMER–2021–26, SR–NYSEArca–2021–38, and SR–NYSECHX–2021– 10. 4 See Securities Exchange Act Release No. 91389 (March 23, 2021), 86 FR 16403 (March 29, 2021) (SR–NYSENAT–2021–05). 5 See Securities Exchange Act Release No. 91790 (May 7, 2021) (SR–NYSE–2021–15, SR– NYSEAMER–2021–13, SR–NYSEArca–2021–15, SR–NYSECHX–2021–04, SR–NYSENAT–2021–05). VerDate Sep<11>2014 16:40 May 17, 2021 Jkt 253001 must now acquire substitutes for the Suspended Services. As an accommodation to such current Users, the Exchange now proposes to provide the Suspended Services to all Users, at no charge, for a period of 14 days from the date of filing (‘‘Transition Period’’), to enable current Users to maintain their connectivity while establishing alternate connectivity. Specifically, the Exchange proposes to amend its Fee Schedule relating to colocation to provide: Connectivity to Suspended Third Party Systems and Suspended Third Party Data Feeds Connectivity to the Third Party Systems and Third Party Data Feeds listed below (‘‘Suspended Services’’) is available until May 24, 2021 (‘‘Transition Period’’). During the Transition Period, the Exchange will not charge any fees for the Suspended Services. At the conclusion of the Transition Period, any remaining customers of Suspended Services will have their Suspended Services terminated. Suspended Third Party Systems: Long Term Stock Exchange (LTSE) Members Exchange (MEMX) MIAX Emerald MIAX PEARL Equities Morgan Stanley TD Ameritrade Suspended Third Party Data Feeds: ICE Data Services—ICE TMC Members Exchange (MEMX) MIAX Emerald MIAX PEARL Equities Application and Impact of the Proposed Changes The proposed rule change would apply to all Users, each of which would be eligible to receive the Suspended Services, at no charge, for a period of up to 14 days. Competitive Environment The proposed changes are not intended to address any other issues relating to colocation services and/or related fees, and the Exchange is not aware of any problems that Users would have in complying with the proposed change. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,6 in general, and furthers the objectives of Section 6(b)(5) of the Act,7 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 6 15 7 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00089 Fmt 4703 Sfmt 4703 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 believes that the proposed rule change would remove impediments to and perfect the mechanism of a free and open market and a national market system, and would further the protection of investors and the public interest. Without the proposed rule change, the Suspended Services would be terminated immediately, leaving the current Users without access and connectivity to the Suspended Services. As a result, the Commission’s suspension of the services at issue is likely to cause disruption to the current Users of the Suspended Services, who must now acquire substitute services. The Exchange’s proposal to provide the Suspended Services, at no charge, to all Users during the Transition Period would give such current Users an opportunity to transition to substitute services without a gap in their service, which would mitigate the disruption and lessen the burden on such current Users. Further, the Exchange believes that providing a 14-day Transition Period would remove impediments to and perfect the mechanism of a free and open market and a national market system and would protect investors and the public interest. Current Users that wish to replace the Suspended Services will have to investigate their other options, negotiate new terms, and establish and test their new connections. The proposed Transition Period gives current Users time to complete all the steps required to make the transition without having a gap in their connectivity to the Suspended Services. The Exchange believes that its proposed rule change would perfect the mechanism of a free and open market and a national market system and, in general, protect investors and the public interest because it would highlight that the Suspended Services are only available during the Transition Period, that no fee will be charged for the Suspended Services during the Transition Period. At the end of the Transition Period, all Users will have their Suspended Services terminated. It would thereby reduce any potential E:\FR\FM\18MYN1.SGM 18MYN1 Federal Register / Vol. 86, No. 94 / Tuesday, May 18, 2021 / Notices ambiguity and provide current Users and other market participants with clarity concerning the terms and period of availability of the Suspended Services. In addition, the Exchange believes that the proposed rule change would promote just and equitable principles of trade. In light of the Commission’s suspension, the current Users of the affected services are faced with an unexpected, immediate disruption of their connectivity, while market participants that opted to obtain similar connectivity from alternate providers are is not. The Exchange’s proposal to allow all Users to receive the Suspended Services at no charge during the Transition Period would help equalize the treatment of these two groups of market participants by providing the same 14 day prospective period to both groups and giving current Users time to make the transition without having a gap in their connectivity to the third party systems and data feeds at issue. Finally, the proposed rule change is not designed to permit unfair discrimination between market participants. The proposed rule change would apply equally to all Users. All Users would be entitled to receive the Suspended Services at no charge during the Transition Period. At the conclusion of the Transition Period, any remaining customers of Suspended Services would have their Suspended Services terminated. For all these reasons, the Exchange believes that the proposal is consistent with the Act. jbell on DSKJLSW7X2PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,8 the Exchange believes that the proposed rule change will not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange believes that the proposed rule change would not place any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is not designed to address any competitive issues but rather is designed to give current Users time to make a fair and orderly transition to substitute services without the disruptions to their operations and, potentially, to the markets that would be caused by an immediate termination of the Suspended Services. 8 15 U.S.C. 78f(b)(8). VerDate Sep<11>2014 16:40 May 17, 2021 Jkt 253001 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 9 and Rule 19b–4(f)(6) thereunder.10 Because the proposed rule change does not: (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder. A proposed rule change filed under Rule 19b–4(f)(6) 11 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),12 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest, as it will allow the 14 day period to take effect immediately. For this reason, the Commission designates the proposed rule change to be operative upon filing.13 At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the 9 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 11 17 CFR 240.19b–4(f)(6). 12 17 CFR 240.19b–4(f)(6)(iii). 13 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 10 17 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 26981 Commission shall institute proceedings under Section 19(b)(2)(B) 14 of the Act to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSENAT–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–NYSENAT–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–NYSENAT–2021–13, and 14 15 E:\FR\FM\18MYN1.SGM U.S.C. 78s(b)(2)(B). 18MYN1 26982 Federal Register / Vol. 86, No. 94 / Tuesday, May 18, 2021 / Notices should be submitted on or before June 8, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–10385 Filed 5–17–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–91875; File No. SR– CboeBZX–2021–036] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Exclude a National Best Bid or Offer From the Calculation of the BZX Official Closing Price, as Provided in Rule 11.23(c)(2)(B)(ii)(b), That Is Outside the Bands Provided Under the Plan To Address Extraordinary Market Volatility May 12, 2021. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 29, 2021, Cboe BZX Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the 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 Cboe BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) is filing with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change to exclude an National Best Bid or Offer 3 (‘‘NBBO’’) from the calculation of the BZX Official Closing Price, as provided in Rule 11.23(c)(2)(B)(ii)(b), that is outside the bands provided under the Plan to Address Extraordinary Market Volatility (the ‘‘Limit Up-Limit Down’’ or ‘‘LULD’’ Plan).4 The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s 15 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See BZX Rule 1.5(o). 4 See Securities Exchange Act No. 88704 (April 21, 2020) 85 FR 23383 (April 27, 2020) (File No. 4– 634) (Amendment No. 20 Approval Order). 1 15 2 17 VerDate Sep<11>2014 16:40 May 17, 2021 Jkt 253001 website (https://markets.cboe.com/us/ equities/regulation/rule_filings/bzx/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend BZX Rule 11.23, Auctions, to modify how the BZX Official Closing Price, which is the price disseminated to the consolidated tape as the market center closing trade,5 would be determined for any BZX-listed security that is not a corporate security (i.e., an ExchangeTraded Product (‘‘ETP’’) as provided in Exchange Rule 14.11, also referred to as a ‘‘Derivative Securities Product’’) when the time-weighted average price of the NBBO midpoint is used to calculate the BZX Official Closing Price, as set forth in Rule 11.23(c)(2)(B)(ii)(b). This provision of Rule 11.23(c)(2)(B)(ii)(b) is only used to determine the BZX Official Closing Price and does not impact any executions in the Closing Auction. Such provision also only applies where there is less than one round lot executed in the Closing Auction and where there has not been a trade that would qualify as a Final Last Sale Eligible Trade within the final five minutes before the end of Regular Trading Hours. The Exchange is proposing instead to exclude from this midpoint calculation under Rule 11.23(c)(2)(B)(ii)(b) any NBBO when either the NBB is lower than the Lower Price Band or the NBO is higher than the Upper Price Band, as further described below. Excluding such NBBOs from the calculation will ensure that only those quotes in which both the NBB and NBO are actually executable will be included in determining the BZX Official Closing Price. 5 See PO 00000 Exchange Rule 11.23(a)(3). Frm 00091 Fmt 4703 Sfmt 4703 Rule 11.23(c)(2)(B)(i) through (iii) sets forth how the BZX Official Closing Price for Derivative Securities Products is determined. Paragraph (B)(i) provides that where at least one round lot is executed in the Closing Auction, the Closing Auction price will be the BZX Official Closing Price. Paragraph (B)(ii) provides that in the event that the BZX Official Closing Price cannot be determined under paragraph (B)(i), the BZX Official Closing Price for such security will depend on when the last consolidated last-sale trade occurs. Specifically, if a trade that would qualify as a Final Last Sale Eligible Trade 6 occurred (a) within the final five minutes before the end of Regular Trading Hours,7 the Final Last Sale Eligible Trade will be the BZX Official Closing Price; or (b) prior to five minutes before the end of Regular Trading Hours, the time-weighted average price of the NBBO midpoint measured over the last five minutes before the end of Regular Trading Hours will be the BZX Official Closing Price. Paragraph (B)(iii) provides that if the BZX Official Closing Price cannot be determined under paragraphs (B)(i) or (B)(ii), the Final Last Sale Eligible Trade will be the BZX Official Closing Price. The Exchange proposes to amend Rule 11.23(c)(2)(B)(ii)(b) in order to change how the BZX Official Closing Price is calculated using the timeweighted average price of the NBBO midpoint measured over the last five minutes before the end of Regular Trading Hours. Under current functionality, the Exchange uses all NBBO quotes during the last five minutes of Regular Trading Hours to determine the BZX Official Closing Price under Rule 11.23(c)(2)(B)(ii)(b). Certain market conditions may result in setting a BZX Official Closing Price that is not necessarily reflective of a Derivative Securities Product’s reasonable market value. For example, if during a particular period of time in the last five minutes of Regular Trading Hours, a Derivative Securities Product has an NBO that is reasonably reflective 6 The term ‘‘Final Last Sale Eligible Trade’’ shall mean the last round lot trade occurring during Regular Trading Hours on the Exchange if the trade was executed within the last one second prior to either the Closing Auction or, for Halt Auctions, trading in the security being halted. Where the trade was not executed within the last one second, the last round lot trade reported to the consolidated tape received by the Exchange during Regular Trading Hours and, where applicable, prior to trading in the security being halted will be used. If there is no qualifying trade for the current day, the BZX Official Closing Price from the previous trading day will be used. See BZX Rule 11.23(a)(9). 7 The term ‘‘Regular Trading Hours’’ means the time between 9:30 a.m. and 4:00 p.m. Eastern Time. See BZX Rule 1.5(w). E:\FR\FM\18MYN1.SGM 18MYN1

Agencies

[Federal Register Volume 86, Number 94 (Tuesday, May 18, 2021)]
[Notices]
[Pages 26979-26982]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10385]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91863; File No. SR-NYSENAT-2021-13]


Self-Regulatory Organizations; NYSE National, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Continue 
Offering Certain Connectivity Services That Have Been Suspended by the 
Securities and Exchange Commission

May 12, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on May 7, 2021, NYSE National, Inc. (``NYSE National'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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 continue offering certain connectivity 
services that have been suspended by the Securities and Exchange 
Commission (``Commission'') at no charge, for a period of 14 days, in 
order to provide affected Users time to acquire substitute services 
before their connectivity is terminated. 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.

[[Page 26980]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to continue offering certain connectivity 
services that have been suspended by the Commission at no charge, for a 
period of 14 days, in order to provide affected Users \3\ time to 
acquire substitute services before their connectivity is terminated.
---------------------------------------------------------------------------

    \3\ 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. 83351 (May 31, 2018), 83 FR 26314 (June 6, 
2018) (SR-NYSENAT-2018-07). As specified in the Exchange's Schedule 
of Fees and Rebates (``Fee Schedule''), a User that incurs 
colocation fees for a particular colocation service pursuant thereto 
would not be subject to colocation fees for the same colocation 
service charged by the Exchange's affiliates New York Stock 
Exchange, LLC, NYSE American LLC, NYSE Arca, Inc., and NYSE Chicago, 
Inc. (together, the ``Affiliate SROs''). See id. at 26314 n.11. Each 
Affiliate SRO has submitted substantially the same proposed rule 
change to propose the changes described herein. See SR-NYSE-2021-31, 
SR-NYSEAMER-2021-26, SR-NYSEArca-2021-38, and SR-NYSECHX-2021-10.
---------------------------------------------------------------------------

    As background, on March 10, 2021, the Exchange filed with the 
Commission a proposed rule change for immediate effectiveness (the 
``Filing'') that amended the colocation services offered by the 
Exchange to provide Users the option to access to the systems and data 
feeds of various additional third parties.\4\ The proposed rule change 
became operative on April 9, 2021. Since then, five Users have 
contracted to receive the services that were added in the Filing.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 91389 (March 23, 
2021), 86 FR 16403 (March 29, 2021) (SR-NYSENAT-2021-05).
---------------------------------------------------------------------------

    On May 7, 2021, the Commission suspended the Filing and instituted 
proceedings to determine whether the proposed rule change should be 
approved or disapproved.\5\ Such action suspended the Exchange's 
ability to offer access to Third Party Systems from Long Term Stock 
Exchange, Members Exchange, MIAX Emerald, MIAX PEARL Equities, Morgan 
Stanley, and TD Ameritrade, and to offer connectivity to Third Party 
Data Feeds from ICE Data Services--ICE TMC, Members Exchange, MIAX 
Emerald, and MIAX PEARL Equities (together, the ``Suspended 
Services'').
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 91790 (May 7, 2021) 
(SR-NYSE-2021-15, SR-NYSEAMER-2021-13, SR-NYSEArca-2021-15, SR-
NYSECHX-2021-04, SR-NYSENAT-2021-05).
---------------------------------------------------------------------------

    The Commission's suspension of such services is likely to cause 
disruption to the current Users of such services, who must now acquire 
substitutes for the Suspended Services. As an accommodation to such 
current Users, the Exchange now proposes to provide the Suspended 
Services to all Users, at no charge, for a period of 14 days from the 
date of filing (``Transition Period''), to enable current Users to 
maintain their connectivity while establishing alternate connectivity.
    Specifically, the Exchange proposes to amend its Fee Schedule 
relating to colocation to provide:

Connectivity to Suspended Third Party Systems and Suspended Third Party 
Data Feeds

    Connectivity to the Third Party Systems and Third Party Data 
Feeds listed below (``Suspended Services'') is available until May 
24, 2021 (``Transition Period''). During the Transition Period, the 
Exchange will not charge any fees for the Suspended Services. At the 
conclusion of the Transition Period, any remaining customers of 
Suspended Services will have their Suspended Services terminated.

Suspended Third Party Systems:
    Long Term Stock Exchange (LTSE)
    Members Exchange (MEMX)
    MIAX Emerald
    MIAX PEARL Equities
    Morgan Stanley
    TD Ameritrade
Suspended Third Party Data Feeds:
    ICE Data Services--ICE TMC
    Members Exchange (MEMX)
    MIAX Emerald
    MIAX PEARL Equities
Application and Impact of the Proposed Changes
    The proposed rule change would apply to all Users, each of which 
would be eligible to receive the Suspended Services, at no charge, for 
a period of up to 14 days.
Competitive Environment
    The proposed changes are not intended to address any other issues 
relating to colocation services and/or related fees, and the Exchange 
is not aware of any problems that Users would have in complying with 
the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\7\ 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.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and would further the protection of investors 
and the public interest. Without the proposed rule change, the 
Suspended Services would be terminated immediately, leaving the current 
Users without access and connectivity to the Suspended Services. As a 
result, the Commission's suspension of the services at issue is likely 
to cause disruption to the current Users of the Suspended Services, who 
must now acquire substitute services. The Exchange's proposal to 
provide the Suspended Services, at no charge, to all Users during the 
Transition Period would give such current Users an opportunity to 
transition to substitute services without a gap in their service, which 
would mitigate the disruption and lessen the burden on such current 
Users.
    Further, the Exchange believes that providing a 14-day Transition 
Period would remove impediments to and perfect the mechanism of a free 
and open market and a national market system and would protect 
investors and the public interest. Current Users that wish to replace 
the Suspended Services will have to investigate their other options, 
negotiate new terms, and establish and test their new connections. The 
proposed Transition Period gives current Users time to complete all the 
steps required to make the transition without having a gap in their 
connectivity to the Suspended Services.
    The Exchange believes that its proposed rule change would perfect 
the mechanism of a free and open market and a national market system 
and, in general, protect investors and the public interest because it 
would highlight that the Suspended Services are only available during 
the Transition Period, that no fee will be charged for the Suspended 
Services during the Transition Period. At the end of the Transition 
Period, all Users will have their Suspended Services terminated. It 
would thereby reduce any potential

[[Page 26981]]

ambiguity and provide current Users and other market participants with 
clarity concerning the terms and period of availability of the 
Suspended Services.
    In addition, the Exchange believes that the proposed rule change 
would promote just and equitable principles of trade. In light of the 
Commission's suspension, the current Users of the affected services are 
faced with an unexpected, immediate disruption of their connectivity, 
while market participants that opted to obtain similar connectivity 
from alternate providers are is not. The Exchange's proposal to allow 
all Users to receive the Suspended Services at no charge during the 
Transition Period would help equalize the treatment of these two groups 
of market participants by providing the same 14 day prospective period 
to both groups and giving current Users time to make the transition 
without having a gap in their connectivity to the third party systems 
and data feeds at issue.
    Finally, the proposed rule change is not designed to permit unfair 
discrimination between market participants. The proposed rule change 
would apply equally to all Users. All Users would be entitled to 
receive the Suspended Services at no charge during the Transition 
Period. At the conclusion of the Transition Period, any remaining 
customers of Suspended Services would have their Suspended Services 
terminated.
    For all these reasons, the Exchange believes that the proposal is 
consistent with the Act.

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

    In accordance with Section 6(b)(8) of the Act,\8\ the Exchange 
believes that the proposed rule change will not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act.
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    \8\ 15 U.S.C. 78f(b)(8).
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    The Exchange believes that the proposed rule change would not place 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed rule change is not 
designed to address any competitive issues but rather is designed to 
give current Users time to make a fair and orderly transition to 
substitute services without the disruptions to their operations and, 
potentially, to the markets that would be caused by an immediate 
termination of the Suspended Services.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
Because the proposed rule change does not: (i) significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\12\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing.
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest, as 
it will allow the 14 day period to take effect immediately. For this 
reason, the Commission designates the proposed rule change to be 
operative upon filing.\13\
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    \13\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \14\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \14\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSENAT-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-NYSENAT-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-NYSENAT-2021-13, and

[[Page 26982]]

should be submitted on or before June 8, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-10385 Filed 5-17-21; 8:45 am]
BILLING CODE 8011-01-P
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