Self-Regulatory Organizations; New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE National, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove Proposed Rule Changes 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, 29601-29607 [2021-11533]

Download as PDF jbell on DSKJLSW7X2PROD with NOTICES Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices advisory opinion from the Commission. See id. The registration instructions, which are available at https:// about.usps.com/what/strategic-plans/ delivering-for-america/#conference, direct interested persons to a website to register to participate using Zoom, and state that ‘‘[s]pace is limited. Unless all available spaces are taken, you will have until June 1, 2021, at 5:00 p.m. EDT to register.’’ The Commission establishes Docket No. N2021–2 to consider the Postal Service’s proposed changes to the service standards for First-Class Package Services. In conjunction with the announcement of its 10-Year Strategic Plan,2 the Postal Service proposes to revise the existing service standards for First-Class Package Services, which would ‘‘generally affect service on a nationwide or substantially nationwide basis.’’ Notice at 1 (quoting 39 U.S.C. 3661(b)). The Postal Service asserts that its proposed approach would be similar to the changes proposed to Market Dominant First-Class Mail (letter- and flat-shaped mailpieces) in Docket N2021–1, because the First-Class Package Services service standards would also be adjusted to account for additional drive time between origin and destination processing facilities. See Notice at 2. However, the actual service standards that the Postal Service proposes to apply to First-Class Package Services would diverge from those proposed for First-Class Mail. See id. Specifically, the Postal Service states that its proposal for First-Class Package Services would expand the drive time for the 2-Day service standard to allow additional drive time to certain processing facilities. See id. Additionally, within the contiguous United States, the Postal Service states that its proposal would narrow the scope of the existing 3-Day service standard; instead the 4-Day and 5-Day service standards would apply to certain First-Class Package Services traveling longer distances between origin and destination processing facilities. Id. Moreover, within the non-contiguous United States and certain territories, the Postal Service plans to increase service standards by up to one day. Id. The Postal Service adds that a 4-Day service standard would apply for certain volume, while all other volume to noncontiguous destinations would be subject to the 5-Day service standard. Id. 2 See United States Postal Service, Delivering for America: Our Vision and Ten-Year Plan to Achieve Financial Sustainability and Service Excellence, March 23, 2021, at 53, available at https:// about.usps.com/what/strategic-plans/delivering-foramerica/assets/USPS_Delivering-For-America.pdf. VerDate Sep<11>2014 17:49 Jun 01, 2021 Jkt 253001 The Postal Service must file its formal request for an advisory opinion with the Commission at least 90 days before implementing any of the proposed changes. 39 CFR 3020.112. This formal request must certify that the Postal Service has made good faith efforts to address the concerns raised at the prefiling conference and meet other content requirements. Id. section 3020.113. After the Postal Service files the formal request for an advisory opinion, the Commission will set forth a procedural schedule and provide additional information in a notice and order that will be published in the Federal Register. Id. section 3020.110. Before issuing its advisory opinion, the Commission must provide an opportunity for a formal, on-the-record hearing pursuant to 5 U.S.C. 556 and 557. 39 U.S.C. 3661(c). The procedural rules in 39 CFR part 3020 apply to Docket No. N2021–2. Pursuant to 39 U.S.C. 3661(c) and 39 CFR 3020.111(d), the Commission appoints Mallory L. Smith to represent the interests of the general public (Public Representative) in this proceeding. Pursuant to 39 CFR 3020.111(d), the Secretary shall arrange for publication of this Order in the Federal Register. It is ordered: 1. The Commission establishes Docket No. N2021–2 to consider the Postal Service’s proposed changes to the service standards for First-Class Package Services. 2. The Postal Service shall conduct a virtual pre-filing conference regarding its proposal on June 8, 2021, from 1:00 p.m. to 3:00 p.m. Eastern Daylight Time. 3. Pursuant to 39 U.S.C. 3661(c) and 39 CFR 3020.111(d), Mallory L. Smith is appointed to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this proceeding. 4. Pursuant to 39 CFR 3020.111(d), the Secretary shall arrange for publication of this order in the Federal Register. By the Commission. Erica A. Barker, Secretary. [FR Doc. 2021–11517 Filed 6–1–21; 8:45 am] BILLING CODE 7710–FW–P RAILROAD RETIREMENT BOARD Actuarial Advisory Committee With Respect to the Railroad Retirement Account; Notice of Public Meeting Notice is hereby given in accordance with Public Law 92–463 that the PO 00000 Frm 00056 Fmt 4703 Sfmt 4703 29601 Actuarial Advisory Committee will hold a virtual meeting on June 7, 2021, at 9:00 a.m. (Central Daylight Time) on the conduct of the 28th Actuarial Valuation of the Railroad Retirement System. The agenda for this meeting will include a discussion of the results and presentation of the 28th Actuarial Valuation. The text and tables that constitute the Valuation will have been prepared in draft form for review by the Committee. It is expected that this will be the last meeting of the Committee before publication of the Valuation. The meeting will be open to the public. Persons wishing to submit written statements, make oral presentations, or attend the meeting should address their communications or notices to Patricia Pruitt (Patricia.Pruitt@rrb.gov) so that information on how to join the virtual meeting can be provided. Dated: May 27, 2021. Stephanie Hillyard, Secretary to the Board. [FR Doc. 2021–11567 Filed 6–1–21; 8:45 am] BILLING CODE P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–92033; File Nos. SR–NYSE– 2021–14, SR–NYSEAMER–2021–10, SR– NYSEArca–2021–13, SR–NYSECHX–2021– 03, SR–NYSENAT–2021–04] Self-Regulatory Organizations; New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE National, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove Proposed Rule Changes 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 May 26, 2021. I. Introduction On February 12, 2021, New York Stock Exchange LLC (‘‘NYSE’’), NYSE American LLC (‘‘NYSE American’’), NYSE Arca, Inc. (‘‘NYSE Arca’’), NYSE Chicago, Inc. (‘‘NYSE Chicago’’), and NYSE National, Inc. (‘‘NYSE National’’) (collectively, the ‘‘Exchanges’’) each filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’ or ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 1 15 2 17 E:\FR\FM\02JNN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 02JNN1 jbell on DSKJLSW7X2PROD with NOTICES 29602 Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices a proposed rule change to amend their schedule of Wireless Connectivity Fees and Charges (‘‘Fee Schedule’’) to (1) add circuits for connectivity into and out of the data center in Mahwah, New Jersey (‘‘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 Fees and Charges.’’ The proposed rule changes were published for comment in the Federal Register on March 4, 2021.3 On April 7, 2021, pursuant to Section 19(b)(2) of the Act,4 the Commission designated a longer period within which to either approve the proposed rule changes, disapprove the proposed rule changes, or institute proceedings to determine whether to disapprove the proposed rule changes.5 This order institutes proceedings under Section 19(b)(2)(B) of the Exchange Act 6 to determine whether to approve or disapprove the proposed rule changes. ‘‘Wireless Connectivity Fees and Charges’’ to ‘‘Mahwah Wireless, Circuits, and Non-Colocation Connectivity Fees and Charges.’’ 8 The Exchanges expect the proposed changes to be operative 60 days after the proposed rule changes become effective.9 The Exchanges state that they make the current proposals solely as a result of their determination that the Commission’s interpretations of the Act’s definitions of the terms ‘‘exchange’’ 10 and ‘‘facility’’ 11 apply to connectivity services described herein that are offered by entities other than the Exchanges.12 The Exchanges state that they disagree with the Commission’s interpretations, deny the services covered herein are offerings of an ‘‘exchange’’ or a ‘‘facility’’ thereof, and have 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.13 II. Description of the Proposed Rule Changes The Exchanges propose to amend the Fee Schedule to add services (‘‘NCL Services’’) and related fees available to customers of the data center in Mahwah Data Center that are not colocation Users (‘‘NCL Customers’’), as well as circuits into and out of the Mahwah Data Center that are available to both colocation Users and NCL Customers.7 The Exchanges also propose changing the name of the Fee Schedule from A. Mahwah Circuits According to the Exchanges, customers can connect into and out of the Mahwah Data Center using either wireless connections or wired fiber optic circuits.14 Both ICE Data Services (‘‘IDS’’) 15 and third-party 3 See Securities Exchange Act Release Nos. 91217 (February 26, 2021), 86 FR 12715 (March 4, 2021) (SR–NYSE–2021–14) (‘‘Notice’’); 91218 (February 26, 2021), 86 FR 12744 (March 4, 2021) (SR– NYSEAMER–2021–10); 91216 (February 26, 2021), 86 FR 12735 (March 4, 2021) (SR–NYSEArca–2021– 13); 91219 (February 26, 2021), 86 FR 12724 (March 4, 2021) (SR–NYSECHX–2021–03); and 91215 (February 26, 2021), 86 FR 12752 (March 4, 2021) (SR–NYSENAT–2021–04) (collectively, the ‘‘Notices’’). Comments received on the Notices are available on the Commission’s website at: https:// www.sec.gov/comments/sr-nyse-2021-14/ srnyse202114.htm. For ease of reference, citations to the Notice(s) are to the Notice for SR–NYSE–2021– 14. 4 15 U.S.C. 78s(b)(2). 5 See Securities Exchange Act Release No. 91490 (April 7, 2021), 86 FR 19313 (April 13, 2021). The Commission designated June 2, 2021, as the date by which it should approve, disapprove, or institute proceedings to determine whether to disapprove the proposed rule changes. 6 15 U.S.C. 78s(b)(2)(B). 7 See Notice, supra note 3, at 12715. For purposes of the Exchanges’ colocation services, a ‘‘User’’ means any market participant that requests to receive colocation services directly from the Exchanges. See id. at 12715 n.4 (citing Securities Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190 (October 5, 2015) (SR–NYSE– 2015–40)). NCL Customers do not co-locate any equipment in the Mahwah Data Center. See id. at 12720 n.10. VerDate Sep<11>2014 17:49 Jun 01, 2021 Jkt 253001 8 See id. at 12715–16. id. at 12716. 10 See 15 U.S.C. 78c(a)(1) (‘‘The term ‘exchange’ means any organization, association, or group of persons, whether incorporated or unincorporated, which constitutes, maintains, or provides a market place or facilities for bringing together purchasers and sellers of securities or for otherwise performing with respect to securities the functions commonly performed by a stock exchange as that term is generally understood, and includes the market place and the market facilities maintained by such exchange.’’). 11 See 15 U.S.C. 78c(a)(2) (‘‘The term ‘facility’ when used with respect to an exchange includes its premises, tangible or intangible property whether on the premises or not, any right to the use of such premises or property or any service thereof for the purpose of effecting or reporting a transaction on an exchange (including, among other things, any system of communication to or from the exchange, by ticker or otherwise, maintained by or with the consent of the exchange), and any right of the exchange to the use of any property or service.’’). 12 See Notice, supra note 3, at 12716; see also 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’’). 13 See Notice, supra note 3, at 12716; see also Intercontinental Exchange, Inc. v. SEC, No. 20–1470 (D.C. Cir. 2020). 14 See id. at 12716. 15 IDS operates through several different Intercontinental Exchange, Inc. (‘‘ICE’’) affiliates, including NYSE Technologies Connectivity, Inc., an indirect subsidiary of NYSE. The Exchanges 9 See PO 00000 Frm 00057 Fmt 4703 Sfmt 4703 telecommunications service providers offer wired circuits into and out of the Mahwah Data Center.16 The Exchanges propose 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.17 Specifically, the Exchanges propose 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.’’ 18 First, the Exchanges propose 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 six third-party owned data centers.19 Second, the Exchanges propose 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.20 The Exchanges propose to add a chart to the Fee Schedule to include these circuits, setting forth each type of service and the associated amounts of initial plus monthly fees.21 B. Non-Colocation Services The Exchanges propose 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.’’ 22 According to the Exchanges, these are the services that IDS offers within the Mahwah Data Center that are not colocation services.23 themselves are indirect subsidiaries of ICE. See Wireless Approval Order, supra note 12, at 67045. 16 See Notice, supra note 3, at 12716. 17 See id. 18 See id. 19 These data centers include: (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. See id. 20 Optic Low Latency circuits are available in 1 Gb, 10 Gb, and 40 Gb sizes. See id. 21 The proposed types of services and amounts of charges are as follows: 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); and Optic Low Latency Circuit—40 Gb ($5,000 initial charge plus $8,250 monthly charge). See id. 22 See id. 23 See id. E:\FR\FM\02JNN1.SGM 02JNN1 Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices 1. IDS Network Ports The Exchanges propose 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.24 The Exchanges describe the ‘‘IDS Network’’ as a wide area network available in the Mahwah Data Center and other access centers.25 The Exchanges propose to add a chart to the Fee Schedule setting forth and describing each type of IDS Network Port providing NCL Customers access to IDS’s network,26 along with the associated amounts of initial plus monthly fees.27 The Exchanges also propose to add to the Fee Schedule several notes regarding these services, which they state are based on General Notes 4, 5, and 6 of the Exchanges’ Price List regarding colocation.28 Specifically, the Exchanges propose to add the heading ‘‘NCL Notes’’ after the tables in the proposed section of the Fee Schedule titled ‘‘D. Non-Colocation (‘‘NCL’’) Services.’’ 29 Proposed Note 1, titled ‘‘Note 1: IDS Network,’’ 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 Exchanges (‘‘Exchange Systems’’) as well as of the Global OTC System (‘‘Global OTC’’); 30 and (b) connectivity to any of the listed data 24 See id. id. 26 A port is connected to a circuit by using a cross connect. See id. at 12720; see also infra note 65 and accompanying text. 27 The proposed types of services and the Exchanges’ descriptions of them, along with the associated amounts of initial plus monthly fees, are as follows: NCL IDS Network Access—10 Gb, a 10 Gb IDS Network port ($10,000 initial charge plus $15,250 monthly charge); and NCL IDS Network Access—40 Gb, a 40 Gb IDS Network port ($10,000 initial charge plus $19,750 monthly charge). See Notice, supra note 3, at 12716–17. 28 See id. at 12717. 29 See id. 30 Proposed Note 1 states that 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. Proposed Note 1 also states that 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. See id. jbell on DSKJLSW7X2PROD with NOTICES 25 See VerDate Sep<11>2014 17:49 Jun 01, 2021 Jkt 253001 products (‘‘Included Data Products’’) 31 that it selects.32 2. NCL Connectivity to Third Party Systems, Data Feeds, Testing and Certification Feeds, and DTCC The Exchanges also propose 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 (each as defined below).33 a. Connectivity to Third Party Systems The Exchanges propose 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.34 According to the Exchanges, NCL Customers connect to Third Party Systems over the IDS Network.35 The 31 Proposed Note 1 provides that these ‘‘Included Data Products’’ are as follows: NMS feeds—CTS, CQS, and OPRA; NYSE; NYSE American; NYSE American Options; NYSE Arca; NYSE Arca Options; NYSE Best Quote and Trades (BQT); NYSE Bonds; NYSE Chicago; and NYSE National. See id. 32 Proposed Note 1 also states that 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. Proposed note 1 also states that 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. See id. 33 The Exchanges state that they propose to adopt substantially similar services and fees as set forth in the Exchanges’ Price List regarding colocation. See id. (citing Securities Exchange Act Release No. 80311 (March 24, 2017), 82 FR 15749 (March 30, 2017) (SR–NYSE–2016–45)). 34 See id. 35 The Exchanges state that in order to obtain access to a Third Party System, an NCL Customer enters into an agreement with the relevant thirdparty 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. According to the Exchanges, neither the Exchanges 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 Exchanges 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 PO 00000 Frm 00058 Fmt 4703 Sfmt 4703 29603 Exchanges state that IDS charges a monthly recurring fee for connectivity to a Third Party System, which the Exchanges propose to add to their Fee Schedule.36 The Exchanges propose to add a chart to the Fee Schedule setting forth a description of each type of connectivity service to Third Party Systems over the IDS Network, along with the associated amount of monthly fees per connection.37 The Exchanges also propose to add Note 2, titled ‘‘Note 2: Third Party Systems,’’ to the section of the Fee Schedule titled ‘‘D. Non-Colocation (‘‘NCL’’) Services,’’ which would provide that 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.38 Proposed Note 2 also provides that fees for the Third Party Systems are charged by the provider of such Third Party System.39 In addition, proposed Note 2 states that the Exchanges are not the exclusive method to connect to Third Party Systems.40 connection to a Third Party System is not through the Exchange’s execution system. See id. 36 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. See id. 37 The Exchanges propose the following monthly fees per connection: 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); and 1Gb, $3,500 per connection monthly charge. See id. at 12717–18. 38 See id. at 12718. 39 See id. 40 Proposed Note 2 would further provide that these ‘‘The Third Party Systems’’ are as follows: American 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 (Production); Investor 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; and TMX Group. See id. E:\FR\FM\02JNN1.SGM 02JNN1 29604 Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices b. Connectivity to Third Party Data Feeds The Exchanges propose 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.41 According to the Exchanges, NCL Customers connect to Third Party Data Feeds over the IDS Network.42 The Exchanges state that IDS charges a monthly recurring fee for connectivity to each Third Party Data Feed.43 Third Party Data Feed providers may charge redistribution fees.44 The Exchanges propose 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.45 In addition, the Exchanges propose they it would not charge NCL Customers that are third-party markets or content providers for connectivity to their own feeds, as the Exchanges maintain that 41 See id. Exchanges state that IDS receives Third Party Data Feeds from multiple national securities exchanges and other content service providers at the Mahwah Data Center, and provides connectivity to that data to NCL Customers for a fee. According to the Exchanges, 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 IDS, ICE, and Global OTC feeds, neither the Exchanges nor IDS has any affiliation with the sellers of the Third Party Data Feeds. The Exchanges and IDS 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. The Exchanges further represent that IDS receives Third Party Data Feeds via arms-length agreements and has no inherent advantage over any other distributor of such data. See id. 43 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. According to the Exchanges, depending on its needs and bandwidth, an NCL Customer may opt to receive all or some of the Third Party Data Feeds. See id. 44 See id. 45 The fee would be labeled as a pass-through of a redistribution fee on the NCL Customer’s invoice. See id. jbell on DSKJLSW7X2PROD with NOTICES 42 The VerDate Sep<11>2014 17:49 Jun 01, 2021 Jkt 253001 such parties generally receive their own feeds for purposes of diagnostics and testing.46 The Exchanges propose to add a chart to the Fee Schedule setting forth a description of each type of connectivity service to Third Party Feeds over the IDS Network, along with the associated amount of monthly fees.47 The Exchanges also propose to add Note 3, titled ‘‘Note 3: Third Party Systems,’’ to the section of the Fee Schedule titled ‘‘D. Non-Colocation (‘‘NCL’’) Services.’’ 48 Proposed Note 3 would provide that pricing for data feeds from third party markets and other service providers (Third Party Data Feeds) is for connectivity only, which is subject to any technical provisioning requirements, authorization, and licensing from the provider of the data feed, and is over the IDS Network.49 Proposed Note 3 would also state that fees for Third Party Data Feeds are charged by the provider of such data feeds,50 as well as that IDS is not the 46 See id. proposed descriptions of these services and associated amount of monthly fees are as follows: 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 (CboeBYX) ($2,000); Cboe EDGX Exchange (CboeEDGX) and Cboe EDGA Exchange (CboeEDGA) ($2,000); 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 ≤100Mb ($200); ICE Data Services Consolidated Feed Shared Farm >100 Mb to ≤1 Gb ($500); 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); Montre´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); and TMX Group ($2,500). See id. at 12718–19. 48 See id. at 12719. 49 See id. 50 Proposed Note 3 further provides that Third Party Data Feed providers may charge redistribution fees, and that 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. Proposed Note 3 also states that 47 The PO 00000 Frm 00059 Fmt 4703 Sfmt 4703 exclusive method to connect to Third Party Data Feeds.51 c. Connectivity to Third Party Data Testing and Certification Feeds The Exchanges propose to specify in the Fee Schedule that NCL Customers may obtain connectivity to third-party testing and certification feeds.52 According to the Exchanges, 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.53 The Exchanges state that such feeds, which are solely used for certification and testing and do not carry live production data, are available over the IDS Network.54 The Exchanges propose to add a $100 monthly recurring charge per feed for connectivity to Third Party Testing and Certification Feeds to the Fee Schedule.55 d. Connectivity to DTCC The Exchanges propose 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.56 IDS charges the NCL Customer for the connectivity to DTCC.57 The Exchanges IDS does not charge third party markets or content providers for connectivity to their own feeds. See id. 51 See id. 52 See id. 53 See id. 54 The Exchanges state that 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; and the Exchanges are not the exclusive method to connect to third-party testing and certification feeds. See id. 55 See id. 56 According to the Exchanges, 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. The Exchanges state that connectivity to DTCC does not provide access or order entry to the Exchanges’ execution systems, and an NCL Customer’s connection to DTCC is not through the Exchanges’ execution systems. See id. at 12719–20. 57 The Exchanges state that connectivity to DTCC is subject to any technical provisioning requirements, authorization, and licensing from DTCC; fees for such feeds are charged by DTCC; and IDS is not the exclusive provider to connect to DTCC feeds. See id. at 12720. E:\FR\FM\02JNN1.SGM 02JNN1 Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices propose to add a $500 monthly recurring charge for a 5 Mb connection to DTCC and a $2,500 monthly recurring charge for a 10 Mb connection to DTCC to the Fee Schedule.58 3. NCL NMS Network Ports The Exchanges propose to amend the Fee Schedule to add services that IDS currently offers enabling NCL Customers to connect to the NMS feeds for which the Securities Industry Automation Corporation is engaged as the securities information processor (the ‘‘NMS Network’’) in the Mahwah Data Center.59 The Exchanges propose to add a chart to the Fee Schedule setting forth and describing each type of NCL NMS Network Port providing NCL Customers access to the NCL NMS Network, along with the associated amounts of initial plus monthly fees.60 The Exchanges also propose to add Note 4, titled ‘‘Note 4: NMS Network,’’ to the section of the Fee Schedule titled ‘‘D. Non-Colocation (‘‘NCL’’) Services,’’ establishing that when an NCL Customer purchases an NMS Network port, it has the option of receiving the NMS feeds over the NMS Network.61 Proposed Note 4 would provide that 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.62 Proposed Note 4 would also state that fees for the NMS feeds are charged by the provider of such NMS feed.63 4. NCL Cross Connect The Exchanges propose to amend the Fee Schedule to specify fiber cross connect services that IDS offers NCL Customers for an initial and monthly charge.64 A cross connect is used to connect a circuit to a port, the Exchanges state, and NCL Customers 58 See id. id. 60 The Exchanges propose a $10,000 initial charge plus $11,000 monthly charge for a 10 Gb NCL NMS Network port, and a $10,000 initial charge plus $18,000 monthly charge for a 40 Gb NCL NMS Network port. See id. 61 See id. 62 Proposed Note 4 would further provide that these NMS feeds are as follows: CTS; CQS; and OPRA. See id. 63 See id. 64 See id. According to the Exchanges, because NCL Customers do not co-locate any equipment in the Mahwah Data Center, they generally require fewer fiber cross connects than colocation Users. Hence, the Exchanges do not propose amending the Fee Schedule to include bundles of 6, 12, 18, or 24 cross connects as are available to colocation Users. See id. at 12720 n.10. jbell on DSKJLSW7X2PROD with NOTICES 59 See VerDate Sep<11>2014 17:49 Jun 01, 2021 Jkt 253001 use such cross connects to connect from the IDS Network or NMS Network to a circuit connecting outside the Mahwah Data Center.65 According to the Exchanges, the proposed fees for this service would be identical to the fees for the corresponding service in colocation.66 The Exchanges propose to add a $500 initial charge plus a $600 monthly charge to furnish and install one NCL Cross Connect to the Fee Schedule.67 5. NCL Expedite Fee The Exchanges propose 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.’’ 68 If an NCL Customer wishes to obtain NCL Services earlier than the expected completion date, the NCL Customer may pay the Expedite Fee.69 The Exchanges propose to add a $4,000 per request charge for expedited installation/completion of a customer’s NCL service to the Fee Schedule.70 6. NCL Change Fee The Exchanges propose 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.71 The 65 See id. at 12720. id. 67 See id. 68 According to the Exchanges, the proposed fees would be similar to the ‘‘Expedite Fee’’ applicable to Users in colocation. See id. (citing Securities Exchange Act Release No. 67666 (August 15, 2012), 77 FR 50742 (August 22, 2012) (SR–NYSE–2012– 18). 69 The Exchanges state that 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. See id. 70 See id. 71 The Exchanges state 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. 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. According to the Exchanges, this is similar to the ‘‘Change Fee’’ applicable to Users in colocation. 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, 66 See PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 29605 Exchanges propose to add a $950 per request charge to change an NCL service that has already been installed/ completed for a customer to the Fee Schedule.72 C. Fee Schedule Name Finally, the Exchanges propose change the name of the Fee Schedule from ‘‘Wireless Connectivity Fees and Charges’’ to ‘‘Mahwah Wireless, Circuits, and Non-Colocation Connectivity Fees and Charges,’’ since the Fee Schedule will no longer be limited to wireless services.73 III. Exchanges’ Justification and Comments Received The Exchanges generally argue that the proposed rule changes are reasonable, equitable, and not unfairly discriminatory because use of the proposed services is completely voluntary and alternatives to them are available.74 According to the Exchanges, IDS operates in a highly competitive market in which exchanges, third party telecommunications providers, Hosting Users,75 and other third-party vendors offer connectivity services as a means to facilitate the trading and other market activities of market participants.76 With these proposals, the Exchanges assert that 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.77 In any case, the Exchanges state that there are currently few NCL Customers, and thus expect that the 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. See id. at 12720– 21. 72 See id. at 12721. 73 See id. 74 See id. 75 ‘‘Hosting’’ is a service offered by a User to another entity in the User’s space within the Mahwah Data Center. The Exchanges allow Users to act as Hosting Users for a monthly fee. See id. (citing Securities Exchange Act Release No. 76008 (September 29, 2015), 80 FR 60190 (October 5, 2015) (SR–NYSE–2015–40)). 76 See id. In this regard, the Exchanges maintain 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. See id. at 12722. 77 See id. at 12723. More generally, the Exchanges maintain that 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. See id. at 12722. E:\FR\FM\02JNN1.SGM 02JNN1 29606 Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices impact of the proposals would be minimal.78 With respect to the competitive environment, the Exchanges maintain generally that the proposed rule changes are reasonable because the proposed fees are constrained by competition.79 In this regard, the Exchanges argue that the proposed services are voluntary and available to all market participants on an equal basis.80 In addition, the Exchanges provide some cost-based justifications throughout for why the proposals are reasonable, claiming that offering the proposed services requires the provision, maintenance, and operation of the Mahwah Data Center, including the installation, monitoring, support, and maintenance of the proposed services.81 The Exchanges also assert that various of the proposed changes to the Fee Schedule would provide market participants with greater transparency and clarity.82 The Exchanges argue that the proposals provide for an equitable allocation of fees and are not unfairly discriminatory, again contending that the proposed services are voluntary and available to all market participants on an equal basis.83 The Exchanges claim that the proposed rule changes do not apply differently to distinct types or sizes of market participants, but rather apply to all market participants equally, and state that the Fee Schedule would be applied uniformly to all market participants.84 Lastly, the Exchanges argue that the proposed rule changes do not impose an unnecessary or inappropriate burden on competition because there are numerous other third parties that provide circuits and connectivity at the Mahwah Data Center, with whom IDS competes for the provision of such services to customers.85 According to the Exchanges, the proposals do not affect competition among national securities exchanges or among members of the Exchanges, but rather the Exchanges’ filing of the proposals puts IDS at a competitive disadvantage relative to its commercial competitors that are not subject to filing requirements of Section 19(b) of the Act.86 The Commission has received one comment letter regarding the proposed jbell on DSKJLSW7X2PROD with NOTICES 78 See id. at 12721. id. at 12721–22. 80 See id. at 12721. 81 See id. at 12721–23. 82 See id. at 12722. 83 See id. at 12723. 84 See id. 85 See id. at 12724. 86 See id. at 12723–24. 79 See VerDate Sep<11>2014 17:49 Jun 01, 2021 Jkt 253001 rule changes.87 This commenter argues that the Exchanges have failed to demonstrate that the proposed rule changes are consistent with the Act.88 The commenter asserts that the proposals are not transparent as to whether they are only prospective, or whether and to what extent they cover services and fees that are already in effect.89 This commenter further argues that the Exchanges’ competition- and costbased justifications for the proposals amount to conclusory assertions.90 The commenter maintains that the Exchanges do not specifically assert that other service providers can offer the ability to transmit data or messages into or out of the Mahwah Data Center as quickly and efficiently as IDS can.91 With respect to competition, the commenter states that the Exchanges should explain the following: Who the other competing providers are and which, if any of them, provide all of the same functionality as is provided by IDS in terms of access to exchange systems, third market systems, and market data; how the fees for the services compare to the prices charged by competing providers for the same or similar services; and whether competing providers have the ability to provide services that are equivalent to the services in terms of latency or other characteristics, and if so, the basis for that conclusion (and if not equivalent, what differences there are and how they affect the question of whether the fees charged are fair and reasonable).92 The commenter also notes the Exchanges’ claim that third-party providers of circuits in the Mahwah Data Center charge lower fees than IDS, and argues that this raises the question of why IDS is able to charge more and what benefits 87 Letter from John Ramsay, Chief Market Policy Officer, Investors Exchange LLC (‘‘IEX’’) to Vanessa Countryman, Secretary, Commission, dated March 25, 2021 (‘‘IEX Letter’’). 88 See id. at 1, 4–5. The commenter also disputes the Exchanges’ assertion that the proposed services are not offerings of an ‘‘exchange’’ or a ‘‘facility’’ thereof. See id. at 2; see also supra notes 10–13 and accompanying text. 89 This commenter states that it is important for providing informed comment on the proposals that the Exchanges be clear as to whether they are seeking retroactive approval of offerings and fees that are already in effect, and if so, understanding their history. The commenter states that the Exchanges should at a minimum explain: Which fees are already in effect and how long have they been in effect; if previously charged by an entity other than IDS, by which entity, and what the purpose was for the change in entity; and if any specific fees have increased, what the dates and amounts of the increases were, as well as the reasons for such increases. See IEX Letter at 2. 90 See id. at 3. 91 See id. at 4. 92 See id. PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 IDS may be able to provide that third parties cannot.93 Moreover, the commenter argues that the Exchanges have not provided any quantitative or other specific information to support their argument that fees for the proposed services are reasonable because of the need to recover data center costs.94 The commenter states that the following information would be relevant with respect to the Exchanges’ cost-based arguments: Which cost components the Exchanges believe are relevant to the services and why; the amount of those costs over some specified period of recent time (e.g., during the last year); and how those costs compare to the amount of fees from the services that has been collected or is expected to be collected over the same time period.95 IV. Proceedings To Determine Whether To Approve or Disapprove the Proposed Rule Changes The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act to determine whether the Exchanges’ proposed rule changes should be approved or disapproved.96 Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, the Commission seeks and encourages interested persons to provide additional comment on the proposed rule changes to inform the Commission’s analysis of whether to approve or disapprove the proposed rule changes. Pursuant to Section 19(b)(2)(B) of the Act,97 the Commission is providing notice of the grounds for possible disapproval under consideration: • Whether the Exchanges have demonstrated how the proposals are consistent with Section 6(b)(4) of the Act, which requires that the rules of a national securities exchange ‘‘provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities;’’ 98 93 See id.; see also supra note 76. IEX Letter at 3. 95 See id. 96 15 U.S.C. 78s(b)(2)(B). 97 Id. Section 19(b)(2)(B) of the Act also provides that proceedings to determine whether to disapprove a proposed rule change must be concluded within 180 days of the date of publication of notice of the filing of the proposed rule change. See id. The time for conclusion of the proceedings may be extended for up to 60 days if the Commission finds good cause for such extension and publishes its reasons for so finding, or if the exchange consents to the longer period. See id. 98 15 U.S.C. 78f(b)(4). 94 See E:\FR\FM\02JNN1.SGM 02JNN1 jbell on DSKJLSW7X2PROD with NOTICES Federal Register / Vol. 86, No. 104 / Wednesday, June 2, 2021 / Notices • Whether the Exchanges have demonstrated how the proposals are consistent with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ‘‘designed to perfect the operation of a free and open market and a national market system’’ and ‘‘protect investors and the public interest,’’ and not be ‘‘designed to permit unfair discrimination between customers, issuers, brokers, or dealers;’’ 99 and • Whether the Exchanges have demonstrated how the proposals are consistent with Section 6(b)(8) of the Act, which requires that the rules of a national securities exchange ‘‘not impose any burden on competition not necessary or appropriate in furtherance of the purposes of [the Act].’’ 100 As discussed in Section III above, the Exchanges made various arguments in support of the proposals and the Commission received a comment letter that expressed concerns regarding the proposals, including that the Exchanges did not provide sufficient information to establish that the proposals are consistent with the Act and the rules thereunder. Under the Commission’s Rules of Practice, the ‘‘burden to demonstrate that a proposed rule change is consistent with the Exchange Act and the rules and regulations issued thereunder . . . is on the self-regulatory organization [‘SRO’] that proposed the rule change.’’ 101 The description of a proposed rule change, its purpose and operation, its effect, and a legal analysis of its consistency with applicable requirements must all be sufficiently detailed and specific to support an affirmative Commission finding.102 Any failure of an SRO to provide this information may result in the Commission not having a sufficient basis to make an affirmative finding that a proposed rule change is consistent with the Act and the applicable rules and regulations.103 The Commission is instituting proceedings to allow for additional consideration and comment on the issues raised herein, including as to whether the proposals are consistent with the Act, specifically, with its requirements that the rules of a national securities exchange provide for the equitable allocation of reasonable dues, fees, and other charges among its members, issuers, and other persons 99 15 U.S.C. 78f(b)(5). U.S.C. 78f(b)(8). 101 17 CFR 201.700(b)(3). 102 See id. 103 See id. 100 15 VerDate Sep<11>2014 17:49 Jun 01, 2021 Jkt 253001 using its facilities; are designed to perfect the operation of a free and open market and a national market system, and to protect investors and the public interest; are not designed to permit unfair discrimination between customers, issuers, brokers, or dealers; and do not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act; 104 as well as any other provision of the Act, or the rules and regulations thereunder. V. Commission’s Solicitation of Comments The Commission requests written views, data, and arguments with respect to the concerns identified above as well as any other relevant concerns. Such comments should be submitted by June 23, 2021. Rebuttal comments should be submitted by July 7, 2021. Although there do not appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b–4, any request for an opportunity to make an oral presentation.105 The Commission asks that commenters address the sufficiency and merit of the Exchanges’ statements in support of the proposals, in addition to any other comments they may wish to submit about the proposed rule changes. Interested persons are invited to submit written data, views, and arguments concerning the proposed rule changes, including whether the proposals are 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 Nos. SR– NYSE–2021–14, SR–NYSEAMER–2021– 10, SR–NYSEArca–2021–13, SR– NYSECHX–2021–03, SR–NYSENAT– 2021–04 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange 104 See 15 U.S.C. 78f(b)(4), (5), and (8). U.S.C. 78s(b)(2). Section 19(b)(2) of the Act grants the Commission flexibility to determine what type of proceeding—either oral or notice and opportunity for written comments—is appropriate for consideration of a particular proposal by an SRO. See Securities Acts Amendments of 1975, Report of the Senate Committee on Banking, Housing and Urban Affairs to Accompany S. 249, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Nos. SR–NYSE–2021–14, SR– NYSEAMER–2021–10, SR–NYSEArca– 2021–13, SR–NYSECHX–2021–03, and SR–NYSENAT–2021–04. The file numbers 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 such filing also will be available for inspection and copying at the principal office of the Exchanges. 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 publicly available. All submissions should refer to File Nos. SR–NYSE–2021–14, SR–NYSEAMER– 2021–10, SR–NYSEArca–2021–13, SR– NYSECHX–2021–03, and SR– NYSENAT–2021–04 and should be submitted on or before June 23, 2021. Rebuttal comments should be submitted by July 7, 2021. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.106 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–11533 Filed 6–1–21; 8:45 am] BILLING CODE 8011–01–P 105 15 PO 00000 Frm 00062 Fmt 4703 Sfmt 9990 29607 106 17 E:\FR\FM\02JNN1.SGM CFR 200.30–3(a)(57). 02JNN1

Agencies

[Federal Register Volume 86, Number 104 (Wednesday, June 2, 2021)]
[Notices]
[Pages 29601-29607]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11533]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92033; File Nos. SR-NYSE-2021-14, SR-NYSEAMER-2021-10, 
SR-NYSEArca-2021-13, SR-NYSECHX-2021-03, SR-NYSENAT-2021-04]


Self-Regulatory Organizations; New York Stock Exchange LLC, NYSE 
American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE National, 
Inc.; Order Instituting Proceedings To Determine Whether To Approve or 
Disapprove Proposed Rule Changes 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

May 26, 2021.

I. Introduction

    On February 12, 2021, New York Stock Exchange LLC (``NYSE''), NYSE 
American LLC (``NYSE American''), NYSE Arca, Inc. (``NYSE Arca''), NYSE 
Chicago, Inc. (``NYSE Chicago''), and NYSE National, Inc. (``NYSE 
National'') (collectively, the ``Exchanges'') each filed with the 
Securities and Exchange Commission (``Commission''), pursuant to 
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Exchange 
Act'' or ``Act'') \1\ and Rule 19b-4 thereunder,\2\

[[Page 29602]]

a proposed rule change to amend their schedule of Wireless Connectivity 
Fees and Charges (``Fee Schedule'') to (1) add circuits for 
connectivity into and out of the data center in Mahwah, New Jersey 
(``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 Fees and Charges.'' The proposed rule changes 
were published for comment in the Federal Register on March 4, 2021.\3\ 
On April 7, 2021, pursuant to Section 19(b)(2) of the Act,\4\ the 
Commission designated a longer period within which to either approve 
the proposed rule changes, disapprove the proposed rule changes, or 
institute proceedings to determine whether to disapprove the proposed 
rule changes.\5\ This order institutes proceedings under Section 
19(b)(2)(B) of the Exchange Act \6\ to determine whether to approve or 
disapprove the proposed rule changes.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release Nos. 91217 (February 26, 
2021), 86 FR 12715 (March 4, 2021) (SR-NYSE-2021-14) (``Notice''); 
91218 (February 26, 2021), 86 FR 12744 (March 4, 2021) (SR-NYSEAMER-
2021-10); 91216 (February 26, 2021), 86 FR 12735 (March 4, 2021) 
(SR-NYSEArca-2021-13); 91219 (February 26, 2021), 86 FR 12724 (March 
4, 2021) (SR-NYSECHX-2021-03); and 91215 (February 26, 2021), 86 FR 
12752 (March 4, 2021) (SR-NYSENAT-2021-04) (collectively, the 
``Notices''). Comments received on the Notices are available on the 
Commission's website at: https://www.sec.gov/comments/sr-nyse-2021-14/srnyse202114.htm. For ease of reference, citations to the 
Notice(s) are to the Notice for SR-NYSE-2021-14.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 91490 (April 7, 
2021), 86 FR 19313 (April 13, 2021). The Commission designated June 
2, 2021, as the date by which it should approve, disapprove, or 
institute proceedings to determine whether to disapprove the 
proposed rule changes.
    \6\ 15 U.S.C. 78s(b)(2)(B).
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II. Description of the Proposed Rule Changes

    The Exchanges propose to amend the Fee Schedule to add services 
(``NCL Services'') and related fees available to customers of the data 
center in Mahwah Data Center that are not colocation Users (``NCL 
Customers''), as well as circuits into and out of the Mahwah Data 
Center that are available to both colocation Users and NCL 
Customers.\7\ The Exchanges also propose changing the name of the Fee 
Schedule from ``Wireless Connectivity Fees and Charges'' to ``Mahwah 
Wireless, Circuits, and Non-Colocation Connectivity Fees and Charges.'' 
\8\ The Exchanges expect the proposed changes to be operative 60 days 
after the proposed rule changes become effective.\9\
---------------------------------------------------------------------------

    \7\ See Notice, supra note 3, at 12715. For purposes of the 
Exchanges' colocation services, a ``User'' means any market 
participant that requests to receive colocation services directly 
from the Exchanges. See id. at 12715 n.4 (citing Securities Exchange 
Act Release No. 76008 (September 29, 2015), 80 FR 60190 (October 5, 
2015) (SR-NYSE-2015-40)). NCL Customers do not co-locate any 
equipment in the Mahwah Data Center. See id. at 12720 n.10.
    \8\ See id. at 12715-16.
    \9\ See id. at 12716.
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    The Exchanges state that they make the current proposals solely as 
a result of their determination that the Commission's interpretations 
of the Act's definitions of the terms ``exchange'' \10\ and 
``facility'' \11\ apply to connectivity services described herein that 
are offered by entities other than the Exchanges.\12\ The Exchanges 
state that they disagree with the Commission's interpretations, deny 
the services covered herein are offerings of an ``exchange'' or a 
``facility'' thereof, and have 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.\13\
---------------------------------------------------------------------------

    \10\ See 15 U.S.C. 78c(a)(1) (``The term `exchange' means any 
organization, association, or group of persons, whether incorporated 
or unincorporated, which constitutes, maintains, or provides a 
market place or facilities for bringing together purchasers and 
sellers of securities or for otherwise performing with respect to 
securities the functions commonly performed by a stock exchange as 
that term is generally understood, and includes the market place and 
the market facilities maintained by such exchange.'').
    \11\ See 15 U.S.C. 78c(a)(2) (``The term `facility' when used 
with respect to an exchange includes its premises, tangible or 
intangible property whether on the premises or not, any right to the 
use of such premises or property or any service thereof for the 
purpose of effecting or reporting a transaction on an exchange 
(including, among other things, any system of communication to or 
from the exchange, by ticker or otherwise, maintained by or with the 
consent of the exchange), and any right of the exchange to the use 
of any property or service.'').
    \12\ See Notice, supra note 3, at 12716; see also 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'').
    \13\ See Notice, supra note 3, at 12716; see also 
Intercontinental Exchange, Inc. v. SEC, No. 20-1470 (D.C. Cir. 
2020).
---------------------------------------------------------------------------

A. Mahwah Circuits

    According to the Exchanges, customers can connect into and out of 
the Mahwah Data Center using either wireless connections or wired fiber 
optic circuits.\14\ Both ICE Data Services (``IDS'') \15\ and third-
party telecommunications service providers offer wired circuits into 
and out of the Mahwah Data Center.\16\ The Exchanges propose 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.\17\
---------------------------------------------------------------------------

    \14\ See id. at 12716.
    \15\ IDS operates through several different Intercontinental 
Exchange, Inc. (``ICE'') affiliates, including NYSE Technologies 
Connectivity, Inc., an indirect subsidiary of NYSE. The Exchanges 
themselves are indirect subsidiaries of ICE. See Wireless Approval 
Order, supra note 12, at 67045.
    \16\ See Notice, supra note 3, at 12716.
    \17\ See id.
---------------------------------------------------------------------------

    Specifically, the Exchanges propose 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.'' \18\ First, the 
Exchanges propose 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 
six third-party owned data centers.\19\ Second, the Exchanges propose 
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.\20\ The Exchanges propose to add a chart to the 
Fee Schedule to include these circuits, setting forth each type of 
service and the associated amounts of initial plus monthly fees.\21\
---------------------------------------------------------------------------

    \18\ See id.
    \19\ These data centers include: (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. See id.
    \20\ Optic Low Latency circuits are available in 1 Gb, 10 Gb, 
and 40 Gb sizes. See id.
    \21\ The proposed types of services and amounts of charges are 
as follows: 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); and Optic Low Latency Circuit--40 Gb 
($5,000 initial charge plus $8,250 monthly charge). See id.
---------------------------------------------------------------------------

B. Non-Colocation Services

    The Exchanges propose 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.'' \22\ According to 
the Exchanges, these are the services that IDS offers within the Mahwah 
Data Center that are not colocation services.\23\
---------------------------------------------------------------------------

    \22\ See id.
    \23\ See id.

---------------------------------------------------------------------------

[[Page 29603]]

1. IDS Network Ports
    The Exchanges propose 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.\24\ The Exchanges describe the ``IDS Network'' 
as a wide area network available in the Mahwah Data Center and other 
access centers.\25\ The Exchanges propose to add a chart to the Fee 
Schedule setting forth and describing each type of IDS Network Port 
providing NCL Customers access to IDS's network,\26\ along with the 
associated amounts of initial plus monthly fees.\27\
---------------------------------------------------------------------------

    \24\ See id.
    \25\ See id.
    \26\ A port is connected to a circuit by using a cross connect. 
See id. at 12720; see also infra note 65 and accompanying text.
    \27\ The proposed types of services and the Exchanges' 
descriptions of them, along with the associated amounts of initial 
plus monthly fees, are as follows: NCL IDS Network Access--10 Gb, a 
10 Gb IDS Network port ($10,000 initial charge plus $15,250 monthly 
charge); and NCL IDS Network Access--40 Gb, a 40 Gb IDS Network port 
($10,000 initial charge plus $19,750 monthly charge). See Notice, 
supra note 3, at 12716-17.
---------------------------------------------------------------------------

    The Exchanges also propose to add to the Fee Schedule several notes 
regarding these services, which they state are based on General Notes 
4, 5, and 6 of the Exchanges' Price List regarding colocation.\28\ 
Specifically, the Exchanges propose to add the heading ``NCL Notes'' 
after the tables in the proposed section of the Fee Schedule titled 
``D. Non-Colocation (``NCL'') Services.'' \29\ Proposed Note 1, titled 
``Note 1: IDS Network,'' 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 
Exchanges (``Exchange Systems'') as well as of the Global OTC System 
(``Global OTC''); \30\ and (b) connectivity to any of the listed data 
products (``Included Data Products'') \31\ that it selects.\32\
---------------------------------------------------------------------------

    \28\ See id. at 12717.
    \29\ See id.
    \30\ Proposed Note 1 states that 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. Proposed Note 
1 also states that 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. See id.
    \31\ Proposed Note 1 provides that these ``Included Data 
Products'' are as follows: NMS feeds--CTS, CQS, and OPRA; NYSE; NYSE 
American; NYSE American Options; NYSE Arca; NYSE Arca Options; NYSE 
Best Quote and Trades (BQT); NYSE Bonds; NYSE Chicago; and NYSE 
National. See id.
    \32\ Proposed Note 1 also states that 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. 
Proposed note 1 also states that 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. See id.
---------------------------------------------------------------------------

2. NCL Connectivity to Third Party Systems, Data Feeds, Testing and 
Certification Feeds, and DTCC
    The Exchanges also propose 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 (each as defined below).\33\
---------------------------------------------------------------------------

    \33\ The Exchanges state that they propose to adopt 
substantially similar services and fees as set forth in the 
Exchanges' Price List regarding colocation. See id. (citing 
Securities Exchange Act Release No. 80311 (March 24, 2017), 82 FR 
15749 (March 30, 2017) (SR-NYSE-2016-45)).
---------------------------------------------------------------------------

a. Connectivity to Third Party Systems
    The Exchanges propose 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.\34\ According to the Exchanges, NCL 
Customers connect to Third Party Systems over the IDS Network.\35\ The 
Exchanges state that IDS charges a monthly recurring fee for 
connectivity to a Third Party System, which the Exchanges propose to 
add to their Fee Schedule.\36\ The Exchanges propose to add a chart to 
the Fee Schedule setting forth a description of each type of 
connectivity service to Third Party Systems over the IDS Network, along 
with the associated amount of monthly fees per connection.\37\
---------------------------------------------------------------------------

    \34\ See id.
    \35\ The Exchanges state that 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. According to the Exchanges, neither the 
Exchanges 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 Exchanges 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. See id.
    \36\ 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. See id.
    \37\ The Exchanges propose the following monthly fees per 
connection: 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); and 1Gb, $3,500 per connection 
monthly charge. See id. at 12717-18.
---------------------------------------------------------------------------

    The Exchanges also propose to add Note 2, titled ``Note 2: Third 
Party Systems,'' to the section of the Fee Schedule titled ``D. Non-
Colocation (``NCL'') Services,'' which would provide that 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.\38\ Proposed Note 2 also 
provides that fees for the Third Party Systems are charged by the 
provider of such Third Party System.\39\ In addition, proposed Note 2 
states that the Exchanges are not the exclusive method to connect to 
Third Party Systems.\40\
---------------------------------------------------------------------------

    \38\ See id. at 12718.
    \39\ See id.
    \40\ Proposed Note 2 would further provide that these ``The 
Third Party Systems'' are as follows: American 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 
(Production); Investor 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; and TMX Group. See id.

---------------------------------------------------------------------------

[[Page 29604]]

b. Connectivity to Third Party Data Feeds
    The Exchanges propose 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.\41\ According to the Exchanges, NCL Customers 
connect to Third Party Data Feeds over the IDS Network.\42\
---------------------------------------------------------------------------

    \41\ See id.
    \42\ The Exchanges state that IDS receives Third Party Data 
Feeds from multiple national securities exchanges and other content 
service providers at the Mahwah Data Center, and provides 
connectivity to that data to NCL Customers for a fee. According to 
the Exchanges, 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 IDS, ICE, and Global OTC feeds, neither the Exchanges nor IDS 
has any affiliation with the sellers of the Third Party Data Feeds. 
The Exchanges and IDS 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. The 
Exchanges further represent that IDS receives Third Party Data Feeds 
via arms-length agreements and has no inherent advantage over any 
other distributor of such data. See id.
---------------------------------------------------------------------------

    The Exchanges state that IDS charges a monthly recurring fee for 
connectivity to each Third Party Data Feed.\43\ Third Party Data Feed 
providers may charge redistribution fees.\44\ The Exchanges propose 
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.\45\ In addition, the Exchanges propose they 
it would not charge NCL Customers that are third-party markets or 
content providers for connectivity to their own feeds, as the Exchanges 
maintain that such parties generally receive their own feeds for 
purposes of diagnostics and testing.\46\ The Exchanges propose to add a 
chart to the Fee Schedule setting forth a description of each type of 
connectivity service to Third Party Feeds over the IDS Network, along 
with the associated amount of monthly fees.\47\
---------------------------------------------------------------------------

    \43\ 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. According to the 
Exchanges, depending on its needs and bandwidth, an NCL Customer may 
opt to receive all or some of the Third Party Data Feeds. See id.
    \44\ See id.
    \45\ The fee would be labeled as a pass-through of a 
redistribution fee on the NCL Customer's invoice. See id.
    \46\ See id.
    \47\ The proposed descriptions of these services and associated 
amount of monthly fees are as follows: 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 
(CboeBYX) ($2,000); Cboe EDGX Exchange (CboeEDGX) and Cboe EDGA 
Exchange (CboeEDGA) ($2,000); 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 <=100Mb ($200); ICE Data 
Services Consolidated Feed Shared Farm >100 Mb to <=1 Gb ($500); 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); and TMX Group ($2,500). 
See id. at 12718-19.
---------------------------------------------------------------------------

    The Exchanges also propose to add Note 3, titled ``Note 3: Third 
Party Systems,'' to the section of the Fee Schedule titled ``D. Non-
Colocation (``NCL'') Services.'' \48\ Proposed Note 3 would provide 
that pricing for data feeds from third party markets and other service 
providers (Third Party Data Feeds) is for connectivity only, which is 
subject to any technical provisioning requirements, authorization, and 
licensing from the provider of the data feed, and is over the IDS 
Network.\49\ Proposed Note 3 would also state that fees for Third Party 
Data Feeds are charged by the provider of such data feeds,\50\ as well 
as that IDS is not the exclusive method to connect to Third Party Data 
Feeds.\51\
---------------------------------------------------------------------------

    \48\ See id. at 12719.
    \49\ See id.
    \50\ Proposed Note 3 further provides that Third Party Data Feed 
providers may charge redistribution fees, and that 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. Proposed 
Note 3 also states that IDS does not charge third party markets or 
content providers for connectivity to their own feeds. See id.
    \51\ See id.
---------------------------------------------------------------------------

c. Connectivity to Third Party Data Testing and Certification Feeds
    The Exchanges propose to specify in the Fee Schedule that NCL 
Customers may obtain connectivity to third-party testing and 
certification feeds.\52\ According to the Exchanges, 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.\53\ The Exchanges state that such feeds, which are 
solely used for certification and testing and do not carry live 
production data, are available over the IDS Network.\54\ The Exchanges 
propose to add a $100 monthly recurring charge per feed for 
connectivity to Third Party Testing and Certification Feeds to the Fee 
Schedule.\55\
---------------------------------------------------------------------------

    \52\ See id.
    \53\ See id.
    \54\ The Exchanges state that 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; and the Exchanges are not the exclusive method 
to connect to third-party testing and certification feeds. See id.
    \55\ See id.
---------------------------------------------------------------------------

d. Connectivity to DTCC
    The Exchanges propose 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.\56\ IDS charges the NCL Customer for the 
connectivity to DTCC.\57\ The Exchanges

[[Page 29605]]

propose to add a $500 monthly recurring charge for a 5 Mb connection to 
DTCC and a $2,500 monthly recurring charge for a 10 Mb connection to 
DTCC to the Fee Schedule.\58\
---------------------------------------------------------------------------

    \56\ According to the Exchanges, 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. The 
Exchanges state that connectivity to DTCC does not provide access or 
order entry to the Exchanges' execution systems, and an NCL 
Customer's connection to DTCC is not through the Exchanges' 
execution systems. See id. at 12719-20.
    \57\ The Exchanges state that connectivity to DTCC is subject to 
any technical provisioning requirements, authorization, and 
licensing from DTCC; fees for such feeds are charged by DTCC; and 
IDS is not the exclusive provider to connect to DTCC feeds. See id. 
at 12720.
    \58\ See id.
---------------------------------------------------------------------------

3. NCL NMS Network Ports
    The Exchanges propose to amend the Fee Schedule to add services 
that IDS currently offers enabling NCL Customers to connect to the NMS 
feeds for which the Securities Industry Automation Corporation is 
engaged as the securities information processor (the ``NMS Network'') 
in the Mahwah Data Center.\59\ The Exchanges propose to add a chart to 
the Fee Schedule setting forth and describing each type of NCL NMS 
Network Port providing NCL Customers access to the NCL NMS Network, 
along with the associated amounts of initial plus monthly fees.\60\
---------------------------------------------------------------------------

    \59\ See id.
    \60\ The Exchanges propose a $10,000 initial charge plus $11,000 
monthly charge for a 10 Gb NCL NMS Network port, and a $10,000 
initial charge plus $18,000 monthly charge for a 40 Gb NCL NMS 
Network port. See id.
---------------------------------------------------------------------------

    The Exchanges also propose to add Note 4, titled ``Note 4: NMS 
Network,'' to the section of the Fee Schedule titled ``D. Non-
Colocation (``NCL'') Services,'' establishing that when an NCL Customer 
purchases an NMS Network port, it has the option of receiving the NMS 
feeds over the NMS Network.\61\ Proposed Note 4 would provide that 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.\62\ 
Proposed Note 4 would also state that fees for the NMS feeds are 
charged by the provider of such NMS feed.\63\
---------------------------------------------------------------------------

    \61\ See id.
    \62\ Proposed Note 4 would further provide that these NMS feeds 
are as follows: CTS; CQS; and OPRA. See id.
    \63\ See id.
---------------------------------------------------------------------------

4. NCL Cross Connect
    The Exchanges propose to amend the Fee Schedule to specify fiber 
cross connect services that IDS offers NCL Customers for an initial and 
monthly charge.\64\ A cross connect is used to connect a circuit to a 
port, the Exchanges state, and NCL Customers use such cross connects to 
connect from the IDS Network or NMS Network to a circuit connecting 
outside the Mahwah Data Center.\65\ According to the Exchanges, the 
proposed fees for this service would be identical to the fees for the 
corresponding service in colocation.\66\ The Exchanges propose to add a 
$500 initial charge plus a $600 monthly charge to furnish and install 
one NCL Cross Connect to the Fee Schedule.\67\
---------------------------------------------------------------------------

    \64\ See id. According to the Exchanges, because NCL Customers 
do not co-locate any equipment in the Mahwah Data Center, they 
generally require fewer fiber cross connects than colocation Users. 
Hence, the Exchanges do not propose amending the Fee Schedule to 
include bundles of 6, 12, 18, or 24 cross connects as are available 
to colocation Users. See id. at 12720 n.10.
    \65\ See id. at 12720.
    \66\ See id.
    \67\ See id.
---------------------------------------------------------------------------

5. NCL Expedite Fee
    The Exchanges propose 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.'' \68\ If an NCL Customer wishes to obtain 
NCL Services earlier than the expected completion date, the NCL 
Customer may pay the Expedite Fee.\69\ The Exchanges propose to add a 
$4,000 per request charge for expedited installation/completion of a 
customer's NCL service to the Fee Schedule.\70\
---------------------------------------------------------------------------

    \68\ According to the Exchanges, the proposed fees would be 
similar to the ``Expedite Fee'' applicable to Users in colocation. 
See id. (citing Securities Exchange Act Release No. 67666 (August 
15, 2012), 77 FR 50742 (August 22, 2012) (SR-NYSE-2012-18).
    \69\ The Exchanges state that 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. 
See id.
    \70\ See id.
---------------------------------------------------------------------------

6. NCL Change Fee
    The Exchanges propose 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.\71\ The 
Exchanges propose to add a $950 per request charge to change an NCL 
service that has already been installed/completed for a customer to the 
Fee Schedule.\72\
---------------------------------------------------------------------------

    \71\ The Exchanges state 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. 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. According to the Exchanges, this is similar to the 
``Change Fee'' applicable to Users in colocation. 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. See id. at 12720-21.
    \72\ See id. at 12721.
---------------------------------------------------------------------------

C. Fee Schedule Name

    Finally, the Exchanges propose change the name of the Fee Schedule 
from ``Wireless Connectivity Fees and Charges'' to ``Mahwah Wireless, 
Circuits, and Non-Colocation Connectivity Fees and Charges,'' since the 
Fee Schedule will no longer be limited to wireless services.\73\
---------------------------------------------------------------------------

    \73\ See id.
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III. Exchanges' Justification and Comments Received

    The Exchanges generally argue that the proposed rule changes are 
reasonable, equitable, and not unfairly discriminatory because use of 
the proposed services is completely voluntary and alternatives to them 
are available.\74\ According to the Exchanges, IDS operates in a highly 
competitive market in which exchanges, third party telecommunications 
providers, Hosting Users,\75\ and other third-party vendors offer 
connectivity services as a means to facilitate the trading and other 
market activities of market participants.\76\ With these proposals, the 
Exchanges assert that 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.\77\ In any case, 
the Exchanges state that there are currently few NCL Customers, and 
thus expect that the

[[Page 29606]]

impact of the proposals would be minimal.\78\
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    \74\ See id.
    \75\ ``Hosting'' is a service offered by a User to another 
entity in the User's space within the Mahwah Data Center. The 
Exchanges allow Users to act as Hosting Users for a monthly fee. See 
id. (citing Securities Exchange Act Release No. 76008 (September 29, 
2015), 80 FR 60190 (October 5, 2015) (SR-NYSE-2015-40)).
    \76\ See id. In this regard, the Exchanges maintain 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. 
See id. at 12722.
    \77\ See id. at 12723. More generally, the Exchanges maintain 
that 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. See id. at 12722.
    \78\ See id. at 12721.
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    With respect to the competitive environment, the Exchanges maintain 
generally that the proposed rule changes are reasonable because the 
proposed fees are constrained by competition.\79\ In this regard, the 
Exchanges argue that the proposed services are voluntary and available 
to all market participants on an equal basis.\80\ In addition, the 
Exchanges provide some cost-based justifications throughout for why the 
proposals are reasonable, claiming that offering the proposed services 
requires the provision, maintenance, and operation of the Mahwah Data 
Center, including the installation, monitoring, support, and 
maintenance of the proposed services.\81\ The Exchanges also assert 
that various of the proposed changes to the Fee Schedule would provide 
market participants with greater transparency and clarity.\82\
---------------------------------------------------------------------------

    \79\ See id. at 12721-22.
    \80\ See id. at 12721.
    \81\ See id. at 12721-23.
    \82\ See id. at 12722.
---------------------------------------------------------------------------

    The Exchanges argue that the proposals provide for an equitable 
allocation of fees and are not unfairly discriminatory, again 
contending that the proposed services are voluntary and available to 
all market participants on an equal basis.\83\ The Exchanges claim that 
the proposed rule changes do not apply differently to distinct types or 
sizes of market participants, but rather apply to all market 
participants equally, and state that the Fee Schedule would be applied 
uniformly to all market participants.\84\
---------------------------------------------------------------------------

    \83\ See id. at 12723.
    \84\ See id.
---------------------------------------------------------------------------

    Lastly, the Exchanges argue that the proposed rule changes do not 
impose an unnecessary or inappropriate burden on competition because 
there are numerous other third parties that provide circuits and 
connectivity at the Mahwah Data Center, with whom IDS competes for the 
provision of such services to customers.\85\ According to the 
Exchanges, the proposals do not affect competition among national 
securities exchanges or among members of the Exchanges, but rather the 
Exchanges' filing of the proposals puts IDS at a competitive 
disadvantage relative to its commercial competitors that are not 
subject to filing requirements of Section 19(b) of the Act.\86\
---------------------------------------------------------------------------

    \85\ See id. at 12724.
    \86\ See id. at 12723-24.
---------------------------------------------------------------------------

    The Commission has received one comment letter regarding the 
proposed rule changes.\87\ This commenter argues that the Exchanges 
have failed to demonstrate that the proposed rule changes are 
consistent with the Act.\88\ The commenter asserts that the proposals 
are not transparent as to whether they are only prospective, or whether 
and to what extent they cover services and fees that are already in 
effect.\89\
---------------------------------------------------------------------------

    \87\ Letter from John Ramsay, Chief Market Policy Officer, 
Investors Exchange LLC (``IEX'') to Vanessa Countryman, Secretary, 
Commission, dated March 25, 2021 (``IEX Letter'').
    \88\ See id. at 1, 4-5. The commenter also disputes the 
Exchanges' assertion that the proposed services are not offerings of 
an ``exchange'' or a ``facility'' thereof. See id. at 2; see also 
supra notes 10-13 and accompanying text.
    \89\ This commenter states that it is important for providing 
informed comment on the proposals that the Exchanges be clear as to 
whether they are seeking retroactive approval of offerings and fees 
that are already in effect, and if so, understanding their history. 
The commenter states that the Exchanges should at a minimum explain: 
Which fees are already in effect and how long have they been in 
effect; if previously charged by an entity other than IDS, by which 
entity, and what the purpose was for the change in entity; and if 
any specific fees have increased, what the dates and amounts of the 
increases were, as well as the reasons for such increases. See IEX 
Letter at 2.
---------------------------------------------------------------------------

    This commenter further argues that the Exchanges' competition- and 
cost-based justifications for the proposals amount to conclusory 
assertions.\90\ The commenter maintains that the Exchanges do not 
specifically assert that other service providers can offer the ability 
to transmit data or messages into or out of the Mahwah Data Center as 
quickly and efficiently as IDS can.\91\ With respect to competition, 
the commenter states that the Exchanges should explain the following: 
Who the other competing providers are and which, if any of them, 
provide all of the same functionality as is provided by IDS in terms of 
access to exchange systems, third market systems, and market data; how 
the fees for the services compare to the prices charged by competing 
providers for the same or similar services; and whether competing 
providers have the ability to provide services that are equivalent to 
the services in terms of latency or other characteristics, and if so, 
the basis for that conclusion (and if not equivalent, what differences 
there are and how they affect the question of whether the fees charged 
are fair and reasonable).\92\ The commenter also notes the Exchanges' 
claim that third-party providers of circuits in the Mahwah Data Center 
charge lower fees than IDS, and argues that this raises the question of 
why IDS is able to charge more and what benefits IDS may be able to 
provide that third parties cannot.\93\
---------------------------------------------------------------------------

    \90\ See id. at 3.
    \91\ See id. at 4.
    \92\ See id.
    \93\ See id.; see also supra note 76.
---------------------------------------------------------------------------

    Moreover, the commenter argues that the Exchanges have not provided 
any quantitative or other specific information to support their 
argument that fees for the proposed services are reasonable because of 
the need to recover data center costs.\94\ The commenter states that 
the following information would be relevant with respect to the 
Exchanges' cost-based arguments: Which cost components the Exchanges 
believe are relevant to the services and why; the amount of those costs 
over some specified period of recent time (e.g., during the last year); 
and how those costs compare to the amount of fees from the services 
that has been collected or is expected to be collected over the same 
time period.\95\
---------------------------------------------------------------------------

    \94\ See IEX Letter at 3.
    \95\ See id.
---------------------------------------------------------------------------

IV. Proceedings To Determine Whether To Approve or Disapprove the 
Proposed Rule Changes

    The Commission is instituting proceedings pursuant to Section 
19(b)(2)(B) of the Act to determine whether the Exchanges' proposed 
rule changes should be approved or disapproved.\96\ Institution of 
proceedings does not indicate that the Commission has reached any 
conclusions with respect to any of the issues involved. Rather, the 
Commission seeks and encourages interested persons to provide 
additional comment on the proposed rule changes to inform the 
Commission's analysis of whether to approve or disapprove the proposed 
rule changes.
---------------------------------------------------------------------------

    \96\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\97\ the Commission is 
providing notice of the grounds for possible disapproval under 
consideration:
---------------------------------------------------------------------------

    \97\ Id. Section 19(b)(2)(B) of the Act also provides that 
proceedings to determine whether to disapprove a proposed rule 
change must be concluded within 180 days of the date of publication 
of notice of the filing of the proposed rule change. See id. The 
time for conclusion of the proceedings may be extended for up to 60 
days if the Commission finds good cause for such extension and 
publishes its reasons for so finding, or if the exchange consents to 
the longer period. See id.
---------------------------------------------------------------------------

     Whether the Exchanges have demonstrated how the proposals 
are consistent with Section 6(b)(4) of the Act, which requires that the 
rules of a national securities exchange ``provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and issuers and other persons using its facilities;'' \98\
---------------------------------------------------------------------------

    \98\ 15 U.S.C. 78f(b)(4).

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[[Page 29607]]

     Whether the Exchanges have demonstrated how the proposals 
are consistent with Section 6(b)(5) of the Act, which requires, among 
other things, that the rules of a national securities exchange be 
``designed to perfect the operation of a free and open market and a 
national market system'' and ``protect investors and the public 
interest,'' and not be ``designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers;'' \99\ and
---------------------------------------------------------------------------

    \99\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

     Whether the Exchanges have demonstrated how the proposals 
are consistent with Section 6(b)(8) of the Act, which requires that the 
rules of a national securities exchange ``not impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of [the Act].'' \100\
---------------------------------------------------------------------------

    \100\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    As discussed in Section III above, the Exchanges made various 
arguments in support of the proposals and the Commission received a 
comment letter that expressed concerns regarding the proposals, 
including that the Exchanges did not provide sufficient information to 
establish that the proposals are consistent with the Act and the rules 
thereunder.
    Under the Commission's Rules of Practice, the ``burden to 
demonstrate that a proposed rule change is consistent with the Exchange 
Act and the rules and regulations issued thereunder . . . is on the 
self-regulatory organization [`SRO'] that proposed the rule change.'' 
\101\ The description of a proposed rule change, its purpose and 
operation, its effect, and a legal analysis of its consistency with 
applicable requirements must all be sufficiently detailed and specific 
to support an affirmative Commission finding.\102\ Any failure of an 
SRO to provide this information may result in the Commission not having 
a sufficient basis to make an affirmative finding that a proposed rule 
change is consistent with the Act and the applicable rules and 
regulations.\103\
---------------------------------------------------------------------------

    \101\ 17 CFR 201.700(b)(3).
    \102\ See id.
    \103\ See id.
---------------------------------------------------------------------------

    The Commission is instituting proceedings to allow for additional 
consideration and comment on the issues raised herein, including as to 
whether the proposals are consistent with the Act, specifically, with 
its requirements that the rules of a national securities exchange 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members, issuers, and other persons using its 
facilities; are designed to perfect the operation of a free and open 
market and a national market system, and to protect investors and the 
public interest; are not designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers; and do not impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act; \104\ as well as any other 
provision of the Act, or the rules and regulations thereunder.
---------------------------------------------------------------------------

    \104\ See 15 U.S.C. 78f(b)(4), (5), and (8).
---------------------------------------------------------------------------

V. Commission's Solicitation of Comments

    The Commission requests written views, data, and arguments with 
respect to the concerns identified above as well as any other relevant 
concerns. Such comments should be submitted by June 23, 2021. Rebuttal 
comments should be submitted by July 7, 2021. Although there do not 
appear to be any issues relevant to approval or disapproval that would 
be facilitated by an oral presentation of views, data, and arguments, 
the Commission will consider, pursuant to Rule 19b-4, any request for 
an opportunity to make an oral presentation.\105\
---------------------------------------------------------------------------

    \105\ 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act grants 
the Commission flexibility to determine what type of proceeding--
either oral or notice and opportunity for written comments--is 
appropriate for consideration of a particular proposal by an SRO. 
See Securities Acts Amendments of 1975, Report of the Senate 
Committee on Banking, Housing and Urban Affairs to Accompany S. 249, 
S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975).
---------------------------------------------------------------------------

    The Commission asks that commenters address the sufficiency and 
merit of the Exchanges' statements in support of the proposals, in 
addition to any other comments they may wish to submit about the 
proposed rule changes.
    Interested persons are invited to submit written data, views, and 
arguments concerning the proposed rule changes, including whether the 
proposals are 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 Nos. SR-NYSE-2021-14, SR-NYSEAMER-2021-10, SR-NYSEArca-2021-13, 
SR-NYSECHX-2021-03, SR-NYSENAT-2021-04 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 Nos. SR-NYSE-2021-14, SR-NYSEAMER-
2021-10, SR-NYSEArca-2021-13, SR-NYSECHX-2021-03, and SR-NYSENAT-2021-
04. The file numbers 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 such filing also will be 
available for inspection and copying at the principal office of the 
Exchanges. 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 publicly available. All 
submissions should refer to File Nos. SR-NYSE-2021-14, SR-NYSEAMER-
2021-10, SR-NYSEArca-2021-13, SR-NYSECHX-2021-03, and SR-NYSENAT-2021-
04 and should be submitted on or before June 23, 2021. Rebuttal 
comments should be submitted by July 7, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\106\
---------------------------------------------------------------------------

    \106\ 17 CFR 200.30-3(a)(57).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-11533 Filed 6-1-21; 8:45 am]
BILLING CODE 8011-01-P
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